You are welcome. It is bloomberg daybreak europe. Our flagship show in london. Breaking news in the past 15 minutes, coming from you bf switzerland, a bonus pool reduction. Be cut in the bonus pool. Poolas reduced the bonus to 2. 9 billion swiss francs. The ceo remains the highestpaid executive, earning 13. 7 million swiss francs. Are going to to reflect in agreement in principle. This on the retail mortgagebacked securities. Net income will be restated by some 102 million swiss francs. Those are the headlines in terms of pay and bonus pool over at ubs. When it comes to markets, the bond market, the whites in the eyes. This is the personification of what the market challenges are permitted the blue line are the ratcheting higher bond yields. We have indeed double that. Breaking 2. 6 . For bill gross, that means there is a technical indicator of a fair market set to kick in. Bear market set to kick in. Not since Richard Nixon, Richard Nixon in 1974 have we seen 10 gains best 10 days of gains in yields. Run of gains in yields since 1974. Have a look at the risk radar as we go into jobs data. The numbers from the market, 200,000. Thats what we are looking for. The bloomberg dollar index, up 0. 75 percent. The fifth day of a rally. That is what the market is talking about. Not about whether it is hikes this year but next year. Gold is also in there. The has been dropping for fifth day in a row. Finalized,peachment the korean won, will it do any good . David ingles is standing by. Constitutional court the koreano impeach president. It opens the door for her to face jail time. It also triggers a president ial election within 60 days opposition figures leading in the polls. China, the opposition governor even as rates contribute rates will mainly be based on the economy. He added the currency markets are sensitive and difficult to forecast. The u. K. Has been warned of postbrexit trade deal could take more than a decade to complete. Speaking in brussels, the Danish Foreign minister suggests it could take up to 15 years to strike an agreement. Theresa may says she is still the timetable for negotiations. Global news, powered by global journalists and analysts. You can find more stories. This is bloomberg. Thank you very much. Markets are moving. The bond market, how is dollaryen looking . It is fairly positive. The nikkei has been stronger all day on the back of the yen. Closing high. Korea also in focus. You did see a big plunge before that announcement from the court. Lets have a look at some of the south korean stocks. Samsung is going to be a focus with the vice chair also been called in relation to the influence scandal. Some of these chinese related stocks getting a boost. This is after the Parent Company said it will not be pumping more funds into the cable company. Lets have a look at this chart in terms of that trade. It shows the divergence between the white line in the blue line. Bonds sliding across the globe since President Trump took office. Saying, japanese stocks look like they are the way forward in terms of trade. Manus well wrapped up. With the latest on the markets. Futures, pricing in a 100 probability of a fed hike in under a week. What could make the market pass mettle . Markets to have is estimated added 200,000 jobs in the economy. Bonds, government yields, hitting the highest level since 2014. Seniorley is the currency strategist. Is there anything at all in your mind todays data that could unseat us from being in a march hike. Not justgot to watch the headline figure at the earnings number prevent that is going to be really crucial permitted markets expecting it to rise. Remember, at this point in the economic cycle, we have been looking at a number with a 4 handle. Soft,gs data, relatively given the low unemployment rates. Week Earnings Data in many countries. Keeping Wage Inflation down. Keep an eye on that one. Really, i think this is more of a done deal. Manus i am wondering if we are getting ahead of ourselves. Hikes, it is about three whether it could be for bank. Are perhaps overly aggressive. I want to try to get your opinion. The dollar spot index, the white line. The blue lines a twoyear treasury yields. I dont think you are getting as much bnag for your buck. Are wetion for you, fully priced on the dollar . I think yields are rich. I think they will bring people back in. I think they will top out the dollar. Do hold a hugeds amount of the story. If yields were to suddenly lurch higher, that would drag the dollar to higher levels. But we dont really believe that story. As long as you dont believe this story, it is difficult to get bullish on the dollar. Looking on the bloomberg terminal, ppp estimates, the , fair value, it is 134. We are down at 106 read i many academic measures, the dollar is very overvalued at these sorts of levels. In the second half of 2014, the dollar really did move higher on expectations of Interest Rate differentials moving in favor of the dollar. The fed pushing Interest Rates up relative to everybody else. Yesterdays story, we saw the ecb, the markets beginning to may taper quantitative easing even further. The markets again different leave out europe. That could give the euro a little bit of support. Formcularly if they cannot governments in the netherlands or france. Manus another spoiler could be what trump says about it. Dollaryen. Want to close with this. Had the ability to break substantially 115. That is what makes me think it has run and done. This,ou have a look at dollaryen, it doesnt have the ability to break parity. Is it running out of steam as well . Go back to that end, after the election. The market has become a little bit more wary. The market is concerned about the fiscal hawks. The ability to get through the inflation this year. The market is concerned about other impacts, impacts on growth. If we look at dollaryen particularly, there are concerns about chinese growth. There are dynamics. Jane foley, we have a lot of issues to get into. One of these is the jobs numbers. With the u. S. Economic National EconomicCouncil Director director. Joining us. Coming up, the south korean president almost did ousted from office. We are live to seoulk. Europeanstic tone on economy. N friends again, erdogan meets putin. One of the ceos comes out of one of these meetings and says, we have never had such a pro business president since the founding fathers. Consumernce confidence all sky rocketed. Lets get a business flash with juliette. Julia thank you. Ubs has reduced its bonus pool in a year where profits plunge. Income. Restated net to bonus pool dropped 17 2. 9 billion. He remains the highestpaid executive with a total compensation of 13 5 million. 13. 5 million. This comes as a westinghouse appears to be assembling a team of lawyers and advisers this issue bill reels from the breakdown of the Nuclear Power operations. A representative declined to comment. Property Development Stocks have soared. Authorities will adjust a framework that limits the amount home buyers can borrow. Will also be shortened. That is your Bloomberg Business flash. You very much. The south korean court has backed parliaments decision to raisingo the president , the possibility of a prison sentence. It also triggers president ial elections within 60 days really good to see you. How did the courts explain this decision . What kind of language that they use to uphold the impeachment motion . Reporter the court just said she committed a grave violation classifiedby leaking information to her friend. The protests dont look like they are ending anytime soon. Im surrounded by police where the ruling took lace. Still,ric ruling but South Koreans out on the streets. This morning, we have already heard once a order was killed in the demonstration. Still, the acting Court President says she hid the influence and abused her president ial power. Theoing so, she betrayed trust of the people. Happens now in the electoral process . 60 days, is that deliverable . Days, it would be until may 9. It has to happen. That is according to law. Acting president will have to announce a date for the elections. Opposition gears are currently leading the polls. The Democratic Party seems to be the front runner. 30 or moree has support according to the latest gallup poll. Viable viable no candidate has come out from the ruling party. Rebranded the liberty korea party. Manus what are the challenges the new leader will face . Where do i start . , threats north korea all over. Missile launches. Retaliatory launches. Most importantly, corporate reform. Improving corporate governance. That was a key part of the scandal that led to the downfall of the president. She has to leave the blue house. Now that she is losing what not that she is losing power but she is losing immunity so she can be arrested and charged. Manus great reporting in seoul. Lets bring james foley back into the conversation. The release at certain moments. Samsung rated. Arrested. Mark critz change a dynasty story. We see the same story in the corian juan. Korean won. List ofheard a whole problems. Issues with north korea, of course the concerns about china, too. Which the changes market is hoping can go through. None of this can go through until we have a new president in place. The idea there could be is a positiveay 9 factor. The economy can move on. Manus lets see where we end up. Up against the pound. 4. 39 . Number two. To that momentum continue for you . A lot of the better news will be priced in. It will be back to more daytoday activity. What sort of progress can the new government make . What sort of regulatory reforms . Get to a pointd where it begins to run out of steam. Manus we have had two conversations. The recurrent theme is china. Global geopolitics. Talk about the pboc. We had the governor of the pboc on the tape this morning. I find it fascinating. He talked about Interest Rate differentials. They can motivate traders to make shortterm satisfactions. In the meantime, every countrys rate is determined by domestic economic conditions. I take umbrage with that. Of relative a sense calm. Is he hoping all the money flows into the dollar . Not necessarily. The reason they have to do that, theyre as or has been a weight. Money flowing out of china and back into the u. S. Dollar. I think it is problematic in terms of donald trumps. Ttitudes toward china china istands intervening to support them, not the other way around. If very much depends on the markets perception. There are still a lot of structural issues to be faced in china. Again, i watched that chinese currency closely. The senior fx manager. The ceo of the largest internet Search Engine says they are more open that ever. They talked about how they cracked the crackdown might benefit Tech Companies in china. Right now, there is a the Trump Administration is antiimmigrant. You get a clear sense is more open than ever, especially for global tell it. It is willing to take on the responsibility as a large, faster growing economy. I think a high growth rate will generate a lot of alternatives. People naturally want to go to a market where there are more opportunities than elsewhere. Chinese, people naturally go up words. Water naturally flows down. It is naturally like that. Past, china was not a country known for embracing immigrants. Global talents. Policies wets of need to improve. We also need to make it more clear and let more people know ofna welcomes all kinds talent and nationalities. At what will you be doing as baidu toof by do attract that talent . What steps are you going to take . We already have a Research Center in silicon valley. With scientists and engineers. Lots ofdy attract bright talent. In china, we have more than 10,000 engineers. Greatr people attract people. We already have a good talent pool. Great conversation there. We have more conversations for you right here in bloomberg rate i will and you and exclusive interview. He joins guy johnson and myself. That will be available on bloomberg tv. Tapof course, you want to in. We are also speaking to the luxembourg finance minister. Draghi keeps qe unchanged. The european recovery gaining momentum. How do markets interpret it . Is the move done . Pictures of seoul where protesters have taken to the street. The president has been removed from power. She loses immunity and there will be elections in 60 days. Opposition figures are leading in the polls. Violationed a grave of the law, leaking classified documents. The president margin the rule of law and Representative Democracy with her anticost the two shall antitilegal and antilegal beads. It is employment day in america. If we start with what is happening in asia, asian equities rebounding from a drop. Resilient in south korea, despite park being removed from office. Weaker yen, down 0. 4 . You can see the south korean a juan won higher. 10tralian 10 year yield, up basis points. 10 year treasury yields moving higher. Gold down for a fifth day. The longest losing streak since october. You get the trend. Oil rebounding, staying below 50 a barrel. The 10 year yield, 2. 61 . It is about the threshold where bill gross says there is going if ita bear market continues on a weekly basis. We did move higher yesterday. 10th day. Is up for a the last time that happened, 1974. I tracked it against the bloomberg dollar index, the dollar at its strongest. Coming back to oil, i mentioned it was rebounding today. Still below 50 a barrel. The price rally triggered by opec cuts has vanished on those concerns about u. S. Stockpiles. We are seeing a little recovery, but still below 50 a barrel. And finally, then you juan the yuan will be stable this year. The Market Pricing in the least then ability volatility. There is a new version of daybreak on your mobile. Unibody get there. Lets have a look. Payrolls, we have been talking about it for the past 40 minutes. Could provide the final about whether the reserve can safely raise rates. The next story all about brexit. Theresa may saying it is time to leaving the European Union and attended the summit in brussels. Brexit means brexit. Focuses on theak ousting of the south korean president. Protesters taking to the streets. A president ialrs election in the next 60 days. To the ecb. Mario draghi struck an optimistic town. Are Monetary Policy has been successful. Headline inflation has increased, largely on account of food prices and inflation. Underlying inflation pressures continue to remain subdued. The ongoing economic expansion will continue to farm and brought in from april 2017. The net asset purchases are at aded to continue monthly pace until the end of december, 2017 or beyond if necessary. You probably, like everybody else, listen to every new wants. I want to get your review in terms of the buyout, the shift. Im not to the hawks . A nod to the hawks . We have something new he didnt say before. For aquite noticeable double like draghi. He said the market has found some support on that. Mix, thealso, in the Economic Data we have been having. There is also political news in that story. End of the last year, when we had the italian referendum, the market was very concerned about european politics. Opinion polln even beat, they may the fed in the first round. All opinion polls have suggested he cannot win the presidency. That is the difference between the polls regarding the French Election and trump and brexit. They were much closer. If le pen doesnt get the presidency, there could be a relief rally. Election, the market was quite concerned. It is very difficult. Impossible for the far right to form a coalition government. The politics is potentially not going to be as bad as the market was fearing. The ecb is recognizing that. Weve got the 100 Day Moving Average in the green. This is the Bloomberg Euro index. I am not going to say the dutch election has been downgraded, but the risks have been downgraded. Still touch and go. Im going to plagiarize tom keene. In the the velocity euro . If we clear the hurl . Eurodollar, euro yen. I think it is going to be eurodollar. If we did see a result combined with an ecb that is going to be tapering from next month or so, that is very much part of the eurodollar story. Many people are looking at this story, expecting inflation. Story is this euro very important in the outlook. Short less than last year. There is scope for the euro to go higher. That is going to prevent the eurodollar from going lower. Many people are anticipating the inflation story will do that. That creates a flaw for us. We begin the technical reduction. Do you see any shift in rates at all . Some people saying we could go two native. 3. Was that me being overly optimistic . It might be too soon. If you look at the inflation, the fouryear high, it hasnt lost that much at all. Core inflation is a better proxy of demand. I think it might be a little bit too fancy. Weve got a lot of the structural issues with respect to Wage Inflation. High levels of unemployment. Issues in greece. We are seeing better Economic Data, but i think it may be too early to talk about hiking Interest Rates just yet. Manus the seniors currency strategist. Creditors have left athens after 10 days of talks. Failing to reach an agreement. Negotiations will resume next week. He will not support demand for additional hikes. He spoke exclusively to bloomberg. Creditors are requesting what programs which go beyond what we are expecting. We made that very clear. Measures,ese fiscal are the cost greece has to pay for the incompetence of this government. If anything, we have been advocating the government to move faster in that direction. Liberalization or hybridization. Unfortunately, on that front, we have seen little progress. The government calls for the opposition to support the measures to avoid grexit. How would you react . I dont even want to contemplate that scenario. We think it is inconceivable ve what itl reli experienced. He shoulde it clear complete the review as quickly as possible. It should have