Asset for you. Futures are a bit softer. Down 0. 1 . The story in europe is a stronger euro. Alex on the short end of the curve, you continue to see the yield grinding higher. A big move. Dollar is a little softer. Gold also softer but crude on the rebound from right around the moving average. See what has happened in the last 24 hours. Snap is still trading. Up about 24 . The high was 41 from the offer price. We are now down here. What will it look like today . It will tell us about technical and momentum trading. The real story has to do with the fed. Janet yellen today at 1 00 p. M. All eyes on what she may say about march. You can see what the market is saying about march. The implied probability of a rate hike is now add 90 . Is now at 90 . What will be the word that signals march from janet yellen today . She does not have to prepare markets for march anymore. If she does not like the idea, she has to lean massively against it. If you want to take march off the table. There are various options. Say that she would like to see more evidence. We are not quite there yet and all of that stuff. But she has to tell it very clearly to the market that it went a little ahead of itself. Even what we have heard in the last three days, since the late tuesday interview. All of the Board Members are aligned saying march looks likely. Jon what were they doing last weekend . Harm it is curious that a committee that has been pounding the table saying we should he looking at the data, has made this uturn within a couple of days without better data. Financial conditions look good things to stocks that the hard data has not improved in the last will in the last week. Outlook is ok. Jon the big question. May2017 journey for the fed start a little earlier. Has the ultimate destination for the Federal Reserve has that changed at all . At the banc of america, we have revised our call so we are expecting a march retype. Hike. Arch rate cognizance of financial technicians. Cognizance of Financial Conditions. This has been a key theme for u. S. Economists as well. The double whammy of financial tightening coming up with the tightening of policy rates and also the tapering of the balance sheets. We do plead reports will be released in the near term and the risk is somewhat overplayed. David talking about a balancing act. Is their ballots at this point is their balance at this point . Fmoc were looking at the minutes to give us guidance. After that, it suggested that the march rate hike was off the table. The job of yellen and fisher has been made easier by williams and dudley. The bar is asymmetric. She can either follow through with a confirmation or she can challenge the current Market Pricing where the fed has arathi got it too. Feels like they have already had their meeting. They seem to be so much on the same page. They claim that they are not taking into account the trump administration. Do we believe them . Harm the stock market is up because of the stimulus indices. We have not seen any details. Speech was good in terms of tone but there was no substance. I think the risk is the stimulus will come later than what we have hoped for. In our baseline scenario, we thought we would get something through by the middle of the year and growth would pick up at that point. Steven mnuchin and is suggesting that they will get something through in august which puts us to the third quarter. Indirectly, the fed is already taking stimulus into affect. Alex perfect for the chart im going to bring up. Q why so much great this is the. Loomberg thank you so much looking at how the extension has played out. The market can lead the fed. What happens if there is a selloff . Does the fed have to back off . View. I will give my we were expecting five rate hikes between now and the end of 2018. Maybe we have to pull forward. Our call is june. We wanted to wait for yellen in case she threw a curveball. But i am feeling pretty good about saying that we will have five rate hikes. That they will want to do more. Four hikes. Ees maybe the fed wanted to tell a little bit want to do tell the market but it was a little bit too cautious. The fed has been burned in the last two years. When they were ready, suddenly, something popped up. Right now, the red carpet is rolled out. A say they are happy to take this opportunity. And it gives them some flexibility to give three hikes. I think it is very important that they have this great opportunity right now and they want to take it. Jon looking at the fx market. 215 basis points and the euro was weak you would probably say that we would not see a fed move anytime soon. Kamal the Global Economy is improving. We have animal spirits. The presidency of donald trump is going to overlay that with potential fiscal stimulus. The world looks a much better place than potentially a year ago. China is growing. Still some Downside Risks they are in our view. Ultimately, the fed is taking the view that if it hikes in march, or if it didnt, it would have to potentially hike in june where you still have a potential fallout from an adverse political reaction from france. Potentially, that is what is driving the position behind hiking in march. Only recently have they decided that this is the time to pull the trigger on a rate hike. Alex looking at the dollar index. 102. It is high but not as high as it was at the end of december. Is that because the market is not repricing the total retype probability in the next two years . Kamal the other thing that is important is the market needs to thisnto the donald trump gold stimulus plan. That is why we have pulled back a little bit. Post the into the donald trump economic stimulus plan. We thought he was going to lay out a significant fiscal stimulus plan. The market may be waiting for that. Trumpll think there is a risk premium being priced into the market. And the broad portfolio of our is looking at the dollar and the yen. David who is leading . Is it yellen leading or the markets . It looks like a combination of the markets and the fed. Harm the easing of the Financial Condition was an important factor in the feds signaling to potentially shift the rate hike further. That is the sense that the market is leading. But there was a concerted effort by the fed members to telegraph to the market what they were going to do. If yellen conference today. Offers, and the fed takes. If the market had not reactive, it would be a much harder job for yellen. I do not inc. There is a clear leadership your. It is both and it is not in balance. Our guests are going to stay with us. We want to welcome our twitter viewers watching this when. Nowmberg daybreak asia streaming live from 7 00 until 9 00 every morning. Ou can catch that at bloomberg twitter. Com. We will have special coverage of Janet Yellens speech in chicago today. This is bloomberg. Jon more trouble for francois oflon over 60 politicians his own party are disowning him with a claim that they can no longer support and when facing charges for embezzlement. First round election voting on april 21. Chief joins usau from paris. Great to have you on the program. The situation in the last couple of hours. A new poll showing macron ahead of the pen in the first round. Talk to me about that. Mark aull is poll is just a pull. Symbolically important though. The pen has been i had in the voting intentions for well over a year. Here we are, two months away. This is quite a big deal. That symbolically, macron is pulling ahead. Is within the margin of error of the pull but it is showing what strong momentum this independent candidate, who did not even have a party a year ago, has. There is a lot to play for in this election. Fillon and the other candidate, how do those two names come together or separate in the coming months . Mark on the centerright come it is just a mess right now. In an defeated jupet primary contest in december. He defeated him soundly. And then fillon was hit with this scandal relating to the employment of his wife as a Parliamentary Assistant and whether she did any work and so on and so forth and now it has been a drip feed of news since january. Feel it has been relegated firmly to third place in the polls. I do not party say his entire party but a number of important politicians are deserting him saying they can no longer support him if he is in fact charged with embezzlement. His opponent is coming back into the limelight. He has not said anything yet. I think the party needs to sort itself out of the centerright needs to sort itself out but it does not have much time. It is not easy. Jon for in investor base. And the probability of Marine Le Pen. For the opponent to come into the race, what needs to happen in the next two weeks . Mark for investors, the thing to keep in mind is that if that opponent and up being the candidate on the centerright, that will widen the possibilities again. He could well take a few points from macron. In this race, a movement of three or four points can move things substantially. Of centerright voters. We wrote about this earlier this week. It will not be an easy thing to deal with. The poll out today in the se that this referendum is this election as a referendum of Marine Le Pen and her desire to pull france out of the euro i still think things are wide open. We have had no end of surprises every couple of hours. Anything could still happen. Jon still with us is harm of unicredit and kamal from merrill lynch. When a client calls you up and asks you what is happening in france, in 30 seconds, what you tell them . What do you tell them . Kamal uncertainty. Everything is still to play for. The narrative after the Eu Referendum in particular was not to trust the polls. There is a large degree of skepticism. Pen may be underrepresented which was suggested by the leave campaign. Ultimately, this is about an uncertainty environment. The market is on the alert for a potential move in the polls. And that could continue into the march president ial debate. Euroon the left, the capturing the uncertainty in france. And on the other side, the mess in the u. K. And the relations with europe over brexit. What do you do with eurosterling through the rest of 2017 . Kamal we believe it will come under nearterm pressure under article 50ion that will be triggered in the next few weeks. It crystallization of the risk a crystallization of the risk. A theresa may version of the negotiating process. The white paper will be readily agreed by the eu. We are looking for the initial response by the eu, the response to this divorce which could bring some stark reality to the market about the gap between britains negotiating stance and the European Unions negotiating stance. We ultimately think it will head higher. Pointingerentials are to a higher eurosterling. David the lesson of 2016 was, black swan will happen in economics and politics. It may not mean as much as we thought it did. Could that apply to france as well . In the uack swan k, the Market Reaction was not nasty in the beginning that now there may be a ripple effect. The market took it relatively easy easily initially. But now, we are seeing signs that there is pain. As a german who works for a european bank, we have been watching the anglosaxon skepticism about the eurozone project for a long time and yet we are looking at these polls in germany and france, the two biggest countries in the eurozone, and it looks like we are ending up with a centrist candidate in france and certainly one in germany. Merkel or schwartz. The extreme outcomes of elections. To weill have cannot let you go without that call. 122. 30ere we are now what gets us down to 115 . Kamal as much as the u. K. Has its redline, so does the eu. The job of the eu is selfpreservation. Throughave of populism the European Union. I would agree with harm in that we have been looking at opportunities to start saving the moves in the euro. The dutch elections could prove to be an important signal movecularly if the polls in a similar manner to what they are now. Where getting to a stage the worst of the eurosterling has been seen. Alex is that the most bearish call for the next month . Jon i have heard when hundred 10. Alex jon i have heard when hundred 110. Markets, this is where we stack up. As if you futures a little softer on the day. The euro around the highs of the session. Across the curve when it comes to the u. S. , you see the 10 year to basis point brent crude up two basis points. Crude is having its worst week in two months. This is bloomberg. David this is bloomberg. President trump keeps think he is focusing on growing the economy what those around him keep providing distractions. The National Security adviser was talking to the russians and now Jeff Sessions. Joining us now for more on the drama is our washington correspondent, kevin. How bad a problem is this for the white house . Kevin they are trying to put it behind them but all eyes will be on President Trumps nominee to be Deputy Attorney general because now that sessions has recused himself, the responsibility to look into these investigations is going to go to his nominee for the Deputy Attorney general. He has not been confirmed yet and that hearing is next week. Said he president has i cannot get my team together. You will not come from people. Will this bog down the confirmation process . Tevin coleman the Senate Judiciary committee next week latestk him about this development, particularly, how he himself will investigate his boss, the attorney general, Jeff Sessions. Republicans have said now for quite some time that they want the democrats to speed up the process but democrats of course have argued that they need to take their time. Of thisay, the politics will continue and the story will continue. Back at the ranch, the ridge being the economy and growing it again, if you watched cable news, you would say that is all they are doing at the white house. Jeff sessions and the russians. Are they going ahead with plans . Kick started an meeting on Infrastructure Spending creek the president said he wanted to have that 1 trillion infrastructure plan to kickstart the economy. How they are going to pay for it is the big question. There is a proposal in the house byrepresentatives led representative bill shuster from pennsylvania who wants to utilize the funds from rate the repatriated funds from lowering the Corporate Tax rate as a mechanism to pay for Infrastructure Spending. Thought youstly were talking about maralago. Here is the situation in the markets. Futures are a little bit softer this morning. The Dow Jones Industrial is heading for the the next straight week of gains. Morning, stronger this up one third of 1 . You are watching bloomberg. City, this isyork bloomberg. Here to check the markets for you quickly. Yesterday the biggest pop of the year was followed by the biggest drop since january this morning. Futures softer on the s p 500, down 1 10 of 1 . The dax in Frankfurt Germany down by 1 10 of 1 . The bond market, it really theresting week for frontend come with a twoyear, popping up at 132. It has meant a stronger dollar story through the week to read the rate differentials collide with a more optimistic view of what happens in the French Elections. Macron gains in the polls. Of persia on second familiar with the matter say there could be an agreement early next week. Psa group would create the second largest automaker in europe. The ropes largest Advertising Company has had a slow start to the year and doesnt expectings to get better. The chairman said low inflation, technical logical focus on costsa are having an adverse effect on spending. Revenue is expected to grow 2 in 2017. Investors gave snapchat a vote of confidence. The company was valued at more than 28 million. Snap started with a mobile app to send disappearing photo messages. That is your Bloomberg Business flash. David we will stay on the subject. A big start for snap. We are joined by the cofounder. Inestigating investing Huffington Post and others. You actually thought they were a 17, a lot ofd at people thought it was rich. It is true. I looked at the monetization of the company. David what kind of numbers are they going to have to put up to justify this . I think one thing to analyze here is the average revenue per daily active user. This in days revenue, not quarterly or annual revenue. For a company like snapchat, when you think about this metric, that is about 1 10 of what a typical free to play at is generating. I think it is completely under monetized for the user basing gauge meant that they have. Demonstrated to you that they are taking steps to get that 1 10 up to the full sure, they had zero advertising 36 months ago. In in App Purchases and virtual goods that could generate significantly more revenue. David talk about the Growth Potential because there has been a lot of talk about the slowing growth rate of users on snapchat. If they arent going to grow as fast that way, how are they going to grow . Im not sure they are not going to grow as fast going forward. What is happening in the market now is headtohead competition between instagram and snapchat. They are fighting over the exact same user base, Young Millennials and folks under 30 into under 30. What is going on is snapchat will invent a feature and instagram will copy it. They are fighting back and forth or filters orries whatnot. Snapchat is leading. It is hard to be a leader and sustain that, but as they continue to work on it, a have a chance of stretching beyond the millennial demographic and to generation x and y. That could double their users. Ok, you offered to get and him when it was still private . Ian well, yes but at a valuation that is not in our best interests. When you look at the company then, what was the potential . Did you know we were going to see this kind of valuation now . Ian if i had known, i wouldve invested a billion sure. But the