Is set up. Futures in the United States a little bit softer. The euro tracing lower for the Third Straight day. Take a look at dollar range. But that 6 10 of 1 . We had a stronger dollar up by 2. 5 , but the rand still getting hit. Since 2015. Loss dollar, oil, bates, they pretty much go nowhere. Signaled the eu theresa may will have a year to work on a trade deal. Joining us now is bloomberg executive edit from london. Great have you with us. As you said, the eu cannot the two play hardball with the u. K. They will not negotiate a freetrade agreement until an the bill that the u. K. Owes the eu. That, if you look at donald trump, he talks about we will talk to you about your freetrade agreement if we see progress on these issues like the bill. He does not say everything needs to be wrapped up before he going to trade. Think it outlines what an actual roadmap could look. For Business Leaders, they want to understand what commercial ties look like. How long will it take to a bit of an outlook on what the budget and brexit bill looks like . It looks like negotiations will start until the end of may. That will be a major step in the sense we will have the eu sitting around. In the runup, thats when you would expect to see the outline of the red lines coming into closer focus and maybe we will see some give and take a listen as the end of may when it comes to a question of the bill. Jonathan looking ahead, the prospects of a transition agreement, what is the appetite for the other side of the channel . Theresa may in her speech to parliament made it clear she would be interested in a transition. If you look at her from the eu side, and kill back some of the rhetoric and the process of a transition are not bad. Pastinly, the nude in the two or three days is as good as you probably could have hoped. Great to have you with us. London,us now from chris we want to begin with you. The want to invest in trade around the mood music question mark i dont think so. The market has been sure currency for an awful long time. I think it is interesting. I think selling is a stale thing to do. The reality is i think the more we work our way through, ultimately in the end we will be at somelook through it stage. The reality is the british economy will continue on largely as before and in the medium term personally, i think the offer an of a deal economy that has a better half in the medium term than the european union. I think investors are starting to realize this. I think it is a pretty robust level and i think there is upside for the sterling versus the dollar. Consumere saw today is spending slowing. With a going higher from here . Yes. We think the noise will quiet down a little bit for negotiations it is not going to happen in public. I think the market is already short sterling quite a bit. Evenink sterling is cheap assuming a worstcase scenario for capitalscenario flows. For us, if youre going to get a shift back, the data has held up well. Swell. Ct things to up a little bit, the k has to hike in we think sterling is stable versus a strong dollar this year and that means outperformance of a euro. What are we come a day three of these negotiations . On wednesday, we talked about the mood earlier. How do you want up investing around a conflict will never see in the shorter term even if you are a believer in the immediate term . Has her guest said, this is just negotiating noise. What you need to do is think about the art reality of what the deal may come out. A lot have been saying for a number of months the reality is it is not help anyone if we end up with a cliff edge. The u. K. Is the secondbiggest economy in europe. Invest as youy to are saying is ignore the noise. Also, think about the u. K. Economy absent all of that. The fundamentals are reasonably good. Party you saying the brexiteers were right . Oft the value of the asset england not go down as a separate from the eu . I think what people have not the mprehended is if you look at the track record of the freetrade deals, youll see it is quite poor. We saw only recently how hard it was to conclude a deal with canada. The reality is a protected trademark in the u. K. Inside of it is not allowed to negotiate its own freetrade deals. Missed with the u. K. Has is being a very strong trading nation. We have done it in some areas, but not across the board. Im encouraged. Europeanutside of the union, the u. K. Can prosper. We caught up with the chief of the Investment Bank in this is what he had to say about londons financial center. Quite we have short list a number of locations. Madrid is one of them. It is early to determine where. Comes ank it competitive advantage if you are in a location where most of your employees want to go. You will have less disruption and you will be able to attract more talent. It has not materialized yet. Are you as confident about the city and Financial Services as you are about the United Kingdom and its totality . No. I think there are three sectors that struggle the most in the kind of deal we are likely to get. Having said that, i think london sectormain the financial of the europe. I think people exaggerate the demise of london as a financial center. London has been to this many times and it keeps picking itself up. Ofhink it will remain one the biggest Financial Centers in the world. Both stickingare with us. Thank you. Coming up, d. C. A conversation with Peter Navarro global trade. Week with thext resident of china. You are watching bloomberg. Jonathan South African assets are crumbling with the brand having its biggest slide since 2015. Toant to cross over johannesburg. Great to have you on the program. It has been a soap opera ever since that weekend in december a threeime ago when we had finance members and then it carried on. What led to this in the last 24 hours . It has come indeed. Quite an eventful 12 hours. One that could be a myriad of regions. Dynamics. Power he has hired the former financial minister, also made changes including the energy portfolio. Quite a lot of drama. A lot at stake at this point. The Credit Rating agency as well. Is a downgrade inevitable and what is the past for the next move at this point . Weve had news commend. They have not really said anything in terms of their assessment of the next few months. What we do know is they say they will be keeping a close eye on development that will be emanating from the reshuffle that came from jacob zuma. He came up also in the statement saying he believed that south africa is not for sale. Advice to his successor saying he hopes they will managers the treasury in the countrys credibility in a way that a good Credit Rating avoids download. The Market Reaction as well as political indications will affect the countrys Credit Rating. Jonathan thank you. We talk about people with difficult jobs. Amazing it is amazing anyone would take the job at this point. This really encompasses the issue with em. You have a Political Risk and search for yield. Hows this work clark does this where out . I think the interesting thing is for investors is the bottom of story is generally not so great so investors have to pick pickse and decide your poison. I think if the rand weakened more we will have a. Of volatility because people need yield and there is not a lot of good options, especially in the region where theres no bottom. F noise you have to take a view on Commodity Prices if youre thinking about south africa. The beneficiary in the last 12 months globally has held the rand and emergingmarket currencies. I think with the fed trying to raise rates, i would be slightly for somea commodity of these Commodity Prices. I think we would be less inclined to jump into em currencies and i think the rand with this finance minister around the currency has had a tod run, maybe it is time take some chips off the table. Trades put aside the here. You see this with a company and you have really good assets and bad as rent. Do you invest in the assets for the management or the management . You need a roadmap on what you think will happen. If you have that view, clearly it does not make sense to come back in. For those that think the fed is there iswly enough, mostly outside the case is still good. Like it ist looks incredibly difficult to establish in 2017. That you just rips. Reentero decide when to at this point and this is enough. I think you will see that kind of mentality dominate for the next few months. If you are worried about taking too much risk, where do you go for yield . Regardless of how much the fed actually hikes . For yield iot go would go for trade. We see an acceleration of u. S. Volatility. That saying since 2007 throughout the crisis in the end the velocity of money is trending up which means the yield trade is over, basically there will be phases where i would not be reaching for yield. The search for yield is over . We appreciate that. An extensive interview with bill dudley. Plus, more fed speak. All ahead, this is bloomberg. This is bloomberg. Im david westin. Be sitting with us. This dudley interview in the broader context of this week. Theres a time we do not know where the fed was going. Is this all correlated at this point . They talk to each other on a regular basis and have a good idea of what each other is thinking. Of billrticularly true dudley. He is vice chairman of the open , who setmmittee Monetary Policy. By tradition, the new york the the questiont now has shifted on wall street from when will the raise rates to how far and how fast . Those are questions we will put to mr. Dudley this morning. David we be curious about what is happening this year or at the endpoint . What would like to know the endpoint is because then you can back off and try to figure out the timing. The other question is not just and what they do about the Balance Sheet. He has a little bit different idea of how you approach bringing the Balance Sheet down. We will want him to explain that to everyone today. This go withes what janet yellen or Stanley Fischer said . The three of them are the core of the dead. Withn came out this week his speech had nothing to do with Monetary Policy. Can get something out of dudley you will have a good idea of where she is. David we are about to get to out of therders white house in regards to trade. It is interesting because the fed with task with trying to figure out what would happen to the economy on the fiscal side, but the potential for trade disruption is huge. That is a cloud hanging over. The question for Peter NavarroGoing Forward is what do you actually want . Do you want a situation where we rip up all of our treaties and do bilateral treaties . How would that help us . Hases no question china unfair trade advantages. Do you attack those with a scalpel is a here are the things you must change or put out a broad tariffs and risk retaliation . David thank you. We look for to the interview in about 90 minutes. Jonathan that interview Peter Navarro coming up right here. The focus is on d. C. And the markets still very much the story. From thent, two hours futures. Youre watching bloomberg. Jonathan this is bloomberg daybreak. If i told you treasures bflat on the quarter and the dollar would be down, what would you have said to me . Alix you are crazy. That says its not. Investors come in. Jonathan thats been supportive of emerging markets as well. About two hours away from the update, futures are looted softer. S p had its biggest weekly gain since february. That is the best quarter since 2015. Stocks have performed in a way that may be many anticipated. Elsewhere, not so much. Treasuries start of the year at 244 on a 10 year. This came in to the market a couple of weeks. We rolled from 262 down to 2. 4. Yields are lower on the margin by single basis points. The dollar index shows some strength again this morning. Its the fourth straight day, the longest streak since february. That is pretty much dead flat. The euro is up one spot. That is. 1 . Its a reflection of its happening in germany as well. Later this morning, President Trump will two executive orders on trade. Joining us on both Bloomberg Television and radio to take us through these orders is the director of the National Trade council. Welcome back to the program. We have had some preview of these two orders. I would like to talk about them. The one its going to review country by country unfair trade practices, is that based on trade deficit with those countries . Peter thats correct. There are 16 countries with which we have significant trade deficits. The Bigger Picture here is the United States is the freest trade are in the world. Lets be clear about that. On balance, we have the lowest tariffs and the lowest non terror barriers. We have the largest trade deficit. Loss,ts are causing job causing our factories to move offshore. They are a reflection of that. Historically whats going to happen with this investigation into trade abuses is the secretary of commerce with the u. S. Trade representative will take a comprehensive look at all of the different ways the trade deficit might be happening. Were going to look at tariffs, nontariff barriers, forced technology transfer, all of these things in 90 days, wilbur ross will deliver a report to the president. The information will basically be the foundation which will guide our future trade policy. The purpose of this investigation is basically to both the labor fulfill a promise to the American People to look into the trade abuses and correct them and do smart new deals in a way that will put our people back to work and bring our factories back offshore. David trade deficits or something to take a look at. Trade deficit does not necessarily equate to unfair trade practices. There are lots of reasons you may have a deficit. Will you take a look and decide there are other factors . And thats a great question and youre right. Take 10. We run a treaded trade but that is them, driven by oil and energy. That is no big deal. We have other countries which are cheating us blind. Problem withtemic relativee tax system to the rest of the world which runs and creates a disadvantage for us for our country. These are all the things we need to look at. Trade deficits are not bad per se. When you run a large and persistent trade deficit fors proxys we have, its a for all of the job loss, slow economic growth, low wages that we suffered over the last 15 years. President trump will deliver on this promise to turn that around and this will be a first step. No american president has ever looked at this problem and committed to solving it. The secretary of commerce is going to deliver a report in 90 days. We will start moving. David what is the proper remedy in so far as you find unfair practices . Is it to enforce the existing laws more effectively . ,his goes to the second order countervailing duty enforcement. We havent been enforcing them effectively . Great segue. A let me describe that for your viewers. There are two ways that we can enforce against cheating. One is antidumping. That is defending our manufacturers and workers dumpst countries that products into our markets below cost. The other part of that is what called countervailing duties. Thats when foreign governments unfairly subsidize their industries and we get products essentially at cost lower than they should be. The department of commerce has been able to find these cases. We have 400 them active right now, covering 40 countries. The problem is the duties we are supposed to collect, we havent always been collect in. Since 2001, the have failed to collect 2. 8 billion in duties. Its not just the revenue we lose when we fail to collect them, its the fact that our industries dont get the kind of relief that they were promised when they filed their cases. Protection,border the are giving them the tools to turn that situation around. This order decided been a great order on trade in the economy, its a beautiful example of interagency coordination. The commissioner of customs and border protection, they all Work Together on this. Nowhere is this more clear than what has already happened over the last few years in charge of china and steel. I did it did wind up in a fit in the Steel Industry here. Are you looking at those kind of tariffs . What about retaliation . You manage to go off in a direction has nothing to do with what we are talking about today. We talking today about two orders. One will look it trade abuses and in a conference of way we will collect customs duties. The principle here for the Trump Administration is tough trade negotiations. The information we are going to get from the investigation will inform that. The second pillar of the trade policy is enforcement and compliance. When you have cheaters sending after we have already had duties assessed and they dont pay them, thats not the behavior we are going to tolerate. Dont even go there. Were not talking about trade wards wars. Nontariffs and tariff barriers. Thats exactly what we are talking about. Peter exactly. What we are going to do with this report is lay a Strong Foundation for measures and analyticallybased steps to fight what is happening with unfair trade practices in this world. I go back to the beginning of what i said. We are the freest trade or the world. We have the lowest tariffs and the lowest barriers. Thats not fair to the American People. We are going to look at the causes of these deficits. There are some that are unrelated to trade per se. But its trade and when there are unfair or nonreciprocal i can assure you President Trump is going to take action. Jonathan how significant are distortions youre talking about currently . Are distortions to the problem youre talking about currently . You are familiar with foreignexchange . Peter secretary ross is going to look carefully at many factors. Currency misal