Anna a very warm welcome to bloomberg daybreak, our flagship morning show in london. Im anna edwards. Manus and i am manus cranny. Lets kick it off with some red hot headlines. Anna we have numbers coming through from deutsche telecoms. Of course, to rise about 4 , so says the company this morning. They have given us the numbers for the Fourth Quarter. Revenue at 19. 5 billion euros. That is ahead of the estimate of 19. 1 billion euros. Giving us their numbers. Missing estimates, the dividend coming in at 0. 6 euros per share. That is one of the big stories around Deutsche Telekom at the moment. Back in their home market, prices are under pressure because of competition from vodafone. Better news out of the u. S. Unit. We heard from tmobile, with 1. 2 million monthly Wireless Subscribers, more than any other Wireless Subscriber in the u. S. This is a bond based business. Manus a couple more red hot headlines. Lets jump into standardbanks four year adjusted earnings per share. This is an african lender at 14. 4 rand. The market had estimated 14 point. 82 last year they earned 22. 2 billion rand. Teh equity comes in 15. 3 . Dividends, if you are a m 675 from a up fro year ago. That is the other red headline. Lets talk about one of the worlds biggest brewers. They spent over 100 billion purchasing s p miller. This is a pretty colossal miss. What we happy or is organic Revenue Growth, coming in at. 2 . The market was looking at a Revenue Growth of 3. 1 . They missed on the headline earnings as well. The market had penciled in 5. 64 billion. They have got issues in mexico, in terms of the currency. They have got problems in latin america. The organic volumes are down 3. 3 on the year. The market estimated those would drop by. 8 . These are considerably worse than the market expected. Anna we have some breaking news coming through. I am going to delve into these numbers. The m a story over at henkel, the german business. They have made a binding offer for the Packaging Technologies business. This offer is for the direct unit. ,cp applied technologies listed that whole business has a market cap around 1. 8 billion u. S. And this henkel making an offer at 1. 05 billion. That is the packaging, technologies business. Manus i am going to jump into the lassange. Lets keep an eye on rush, because we have a flow of news coming through from the pharma mega. Lets talk about lafargeholcim. They have all that good news coming in from the u. S. The market estimated 5. 71 billion. Who said medicine could not be sexy . That is nice for them in terms of the Fourth Quarter operating number, coming at one point zero 3 billion. Net income 6. 53 billion. This is a nice before lafargehol cim. That wave of spending around construction. Anna and the construction about donald trump, everyone is keeping a close eye on who would be involved in working on the wall in between the United States and mexico. We have breaking news coming through from roche as well. Manus one lifeline there is a newsline coming in from lafargeholcim. They appear to be on this list. It would appear from a news source we have is they are on the list. Be a huge wall, if they ever do build a. Anna briefly, roche says mark foras met the Breast Cancer studies. Manus macquarie lets talk about the risk radar. The dow traveled about 1000 points, the fastest rocketing rally for the dow jones. There are two things in play. Look, there is the fed story. He has gone from madove to moderate hawk. Anna that is enough to give the dollar a little bit more of a boost this morning. This week we saw the possibility of a rate hike in march going above 80 . How much of that dollar rally is dependent on higher Interest Rates . The u. S. Two year, 1. 29 . It went over 1. 3 for the first time in years. We have the trump story, and that is once again, lifting stocks. Manus you saw financials really pump a lot higher. You can see records in the big names, like goldman sachs. One last line on lafargeholcim, synergies from the deal, 638 million swiss francs was delivered. Anna lets get to the bloomberg first word news with shery ahn. Shery good morning. The u. S. Justice department has confirmed the attorney general Jeff Sessions had conversations with the Russian Ambassador to the u. S. When he was a prominence rated for donald trump during the when he was a prominent surrogate for donald trump during the campaign. Sessions said he never met with russian officials to discuss the campaign. He said, i have no idea what what this allegation is about. It is false. That revelation has prompted Top Democrats in congress to call for him to be ousted. President trumps new travel raq from going to drap i the list of muslim nations who will be barred from the u. S. For 90 days. T according according to two white house officials, donald trump has delayed the director. The order is a revision of the travel ban imposed on january 27. Snapchats Parent Company is going public with the valuation. Inc. Sold 200 million shares in the initial Public Offering at 17 each. At that time, they had a market value of 20 billion, based on the 1. 1 6 billion shares outstanding after the ipo. The stock will start trading today on the New York Stock Exchange under the ticker snap. The u. K. Government has suffered its first parliamentary defeat on the brexit law with the house of lords rejecting a plea to leave the bill intact. The upper house voted for an amendment that protects the rights of eu national to remain in britain. Prime mr. Theresa may Prime Minister theresa may would like to trigger brexit by her own deadline by the end of this month. Global news 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries around the world. You can find more stories on the bloomberg at top. Ahn. Shery this is bloomberg. Manus thank you very much for the round up. Lets get to juliette saly. So, the dove goes to hawk and the market is relieved. I was aged taking i how is asia taking it all . A lot of people out there are saying that what we saw in asia was in response to Donald Trumps speech, but many more agree with you, that it was braieynards comments. The nikkei closed higher by 1 . The hang seng, up by 1 3 of 1 . Takata had a great day, australia having its first win in six sessions. In terms of equities we have been looking at today, alumina getting a strong boost in sydney on the back of those reports that china is curbing the aluminum and steel output. The hsbc Share Buyback announced in london, sending the Hong Kong Based shares up by 1. 6 . This is on reports that the chinese website was hacked. Have a look at this graph because as i mentioned, the nikkei was briefly at that 19,600 point mark after the dow hit 21,000. The topix, that is actually now at its best level since december, 2015. Certainly some very strong movement, of course, a weaker yen not hurting things in the japanese equity market either. Anna thank you, juliette saly. We have heard from yet another official at the federal reserve. Even governor earl bernard echoed the more hawkish tone we have heard from several officials this week. We are closing in on full employment. Inflation is moving towards the target. Foreign growth is on more solid footing and risks to the outlook are as close to balanced as they have been for some time. It will likely be appropriate for him to remove additional a ,accommodations continuing on a gradual path. Manus and as before we get the chairs comments on friday. With us now, the global head of g10 fx strategy of bank of America Merrill lynch. Lael brainard goes from one of the most of his voices to absolutely sounding as if she is ready to move. We have not been at this level. We have not been at these short datesd rates since 2008. March is locked, live, and 100 . I think they will hike in march. The u. S. Economy, global asset prices, the Global Economy were in a much better place than in december. Until this week however, the fed seemed reluctant. This is the big change this week. All the speakers have given a strong signal that the fed will hike soon, which means march. We have to wait of course, for tomorrow. Yellen is going to speak. But i think we will hear a very similar message. We started the week with a Market Pricing of 35 looking at the hike and now we are closer to 75 . By the end of the week we will be close to 90 . Anna how much is the rally in the dollar returning a little bit of late, how much does that rely on higher yields from here . Socgen said yesterday that you needed to see higher yields to justify the more recent euphoria in the dollar. To a large extent, this is the case. Many people believe that Donald Trumps speech contributed. I doubt it. Get any new information, any new details. I think the big change was the town from the fed. Looking forward, i think it is important to see what is happening to the dot plot. If they hike in march, will be revised the dot plot from three hikes to four . Manus this has been the debate, and this has been on mlive this morning. Do you think they will be slightly more aggressive . The debate this morning is the new rate could be up around 2 . You stretch further than that . It depends on whether we get fiscal stimulus and how large this fiscal stimulus is going to be. The fed is in a sweet spot because just one year ago the market was very concerned about fed hikes, not because the market expected some kind of fiscal stimulus. The fed can normalize monetary policies. The fed can hike faster. Rate can be higher. Otherwise, it will continue cautiously. Anna what do you make of the comings and goings regarding mexico . Bloomberg has a story that the Mexican Central Bank is considering requesting a line form the federal reserve. That was denied, it was denied that they were even considering it. What are your thoughts on mexico . It is a strange turn of events, to be asking, i guess. Call on mexico . I think the mexican peso is definitely undervalued. In a way, the market is pricing the highest risks related to the donald trump policies. And i this is what anna were looking at this morning, which is, there is the victory moment. Here is the retracement. You say there is potentially more value to come . If we dont get something aggressive on trade protection from the new demonstration. The mexican peso has been affected by the em rally. There are some trade protection risks. We dont expect something strong from the u. S. In this direction. I think most likely, there are still buying opportunities in the peso. Thank you. Some highlights from your day ahead. Voters in Northern Ireland go to the polls today to vote for a new assembly. Anna and snap inc. Makes its wall street debut later. And then we have the u. S. Jobless claims. Manus coming up, we discuss the latest setback for brexit as the u. K. Government loses a key vote. Anna then, we take a look at snaps ipo. From aholdhe ceo delhaize banks joined anna and i. Anna welcome back, 6 19 in london. The hang seng is up by 0. 3 . We saw new benchmarks in yesterdays session. Thank you. Stiff competition. Deutsche telekom has predicted 2017 earnings that trailed analyst estimates. The company protected adjusted growth down to 4 to 22. 2 billion euros. There is tough competition in the german home phone carriers market. And Deutsche Telekoms ceo joins us on bloomberg at 11 20 a. M. U. K. Time. Wells fargo has warned investors it might find more victims of the accounts kindle that shook the company last year. It said u. S. Authorities are examining whether other phones have used the technology to violent international sanctions. The company said it will withhold 2016 cash bonuses from eight Senior Executives and call back compensation received in 2014. Blackrock reduced annual employee bonuses by an average of 2 to 4 last year, the first cut since 2011. Bonuses were slashed overall one year earlier. A blackrock spokesperson declined to comment. The Asset Management business is under increasing pressure as money flows from active strategies into cheaper offerings. That is your Bloomberg Business flash. Manus thank you. Bill will gorexit back to the commons after theresa may suffered the first parliamentary defeat on the lordslaw as the house of voted in favor of an amendment which protects the rights of eu nationals living and working in britain. Anna the commons will debate the amended bill from march 13th to march 15. Watching the timetable here, arent they. I mean, the deadline is at the end of march, but there has been a lot of expectation about what that eu meeting might involve. Now it looks as if, at least according to one government official, we are talking about maybe a little bit later in march. We still could meet the deadline, but moving a little later in the month. It is a mistake to activate it right now. I would wait until after the german elections. Earlyis is the promise march, late march. Anna when they made that decision activatethey ar article 50, uncertainty will increase. This will be relatively negative for spending. We are not going to see any progress until the end of the year. And the only thing that we know is that the eu is asking the u. K. To contribute six 2 billion to the budget. Manus that is the worst case of the budget. It is almost terry picking which things you will do it is a must cherry picking which things he will do. You either send me to a very happy land, or you at 6 at asphyxiate me. What are the breakpoints for you . Need tos this market move . If you have the transition period, you buy time. Goyou dont have it, you through the cliff, which is the worst possible trade deal between the u. K. And eu. That is extremely important. We are not going to get any information on the transition until the german elections, but when the negotiations start, any progress will be stalled. We know the u. K. Want they transition period, but in their mind, the period will be relatively short. I think we need a much longer transition period. They should want a transition period. But it depends, if when he the transition period pretty early in the negotiations. Anna why does the transition period need to belong . To smooth the path . Basically, it is what you need between the brexit negotiations in the final trade deal. A trade agreement usually takes many years. The deal between the eu took seven years. Anna he made the point in your notes that the pound is diverse from the data. You said that is not sustainable. We are talking about big changes with the u. K. s biggest trading partner. Maybe it is sustainable. Data,n you look at the the market is focusing on the brexit uncertainty. If you do get the transition agreement, the data will come back. If you dont, the data will start worsening,w hich will weaken sterling further. Manus there is no sight of any potential rate hike on the cards from the ecb from the bank of england, nor from the bank of japan. Where does that leave sterling, as it were . Where will sterling trade in terms of weakness through this volatile period . I was looking at one month volatility and nobody really cares about one month volatility. It is dropping away. There is no great disconcert ing moves in the market. Anna number 15. Manus there we go. That was a foolish move. One month implied volatility, there we go. Who cares . Nobody cares about article 50. Fx traders dont think to care about article 50. Sterling volatility is definitely underpriced at this stage. The negotiations start, we will have a lot of headline risk. They are likely to start with a tough position. And then they will have to convert to somewhere in the middle. Uncertainty will increase and when the negotiations start, everybody will realize that this will be a difficult thing. Anna lets see what one month volatility does the next time you come. Athanasios vamvakidis stays with us for a little bit more from bank of America Merrill lynch. Anna up next, fans love the filters, but will the disappearing photo app shares get snapped up . Plenty more to talk about. Snapchat and snap inc, how do those valuations compare to twitter . Manus you are looking at a shot of the emperors palace. It is a misty, wet day there and 3 30 in the afternoon in tokyo. The dollar is marching higher and the yen lower, the fourth day in a row of the decline in the yen. We have not seen that since november 10. You are going to Say Something about the weather now, arent you . Anna no. Now, a new addition of daybreak is available on your bloomberg and mobile. That was a good stat on the dollaryen. Markets on fire. The dollar extending gains and asian stocks joining the global reflation rally after the dow he 1000. The yen and aussi declined against the greenback, while the pound held below 1. 23. Manus if you believe in global growth, you go with those. The next areas about brexits speedbump. Theresa may suffered her first parliamentary defeat on a draft after the house of lords rebuffed the order to leave it intact. Chamberthe unelected challenging the elected chambers view. Anna how much appetite will either of the chambers have for this socalled pingpong . We will watch the timetable very closely. And we focus on the earnings as Deutsche Telekom reported numbers that morning. 6 00 a. M. D that at u. K. Manus lets see how the market prices ab inbev. One woman in the house can dissect these markets and tell us about the fastest rally in history of 1000 points int he the dow. Nejra the Global Equity market continues in asia and the topix hit its highest since december of 2015. You can see broadbased gains across asian equities, australia jumping the most in three months. South korea is higher as well as the nikkei closed higher, up 0. 9 . Looking at the fx space, the bloomberg dollar index is up for a fifth straight day. 114. 09. Is down. 3 , 10 year treasury yields are pretty steady after climbing six basis points yesterday. You can see a mixed p