Welcome to bloomberg daybreak europe, our flagship warning show from here in the city of london. I am an edwards. Anna edwards. Manus cranny. 13 million dutch people go to the polls, the open in just under 13 minutes. Immigration, integration, and islam are the key issues in this debate. The issue is populism goes to the polls in europe today and the dutch put a firewall. The exit polls will be at adequate p. M. Tonight, we will be live in the hague. Manus on the ground to cover the dutch elections. With us throughout the program. Is coming in. News coming in. Bitda shy the 1. 4 billion that was estimated. Sales were up by 13 . Giving us some guidance on the picture as a report the fullyear numbers. 1. 6fullyear net profit billion. That is in line with the 1. 6 billion that had been estimated. Lets leave the retailer there for the moment and watch shares at the start of trade. We need to talk about volatility and in a number of places. Oil is increasingly one of those. Give uti soaring overnight. All of that mixing in here. Were up by 1. 7 on the price of a barrel of crude at 48. 56. We have down by 2. 7 in the asian session. We are back above 48 a barrel. We had a reported drop in u. S. Stockpiles that countered the earlier news of an increase in output from saudi arabia. Things moving around pretty quickly on the oil friend. The msci asiapacific is flat. Were waiting for the fed. Hong kong stocks during their losses. The premier talking about china pushing hard to cut financial risks. Stocks helping lift the in the hong kong market. The dollar is flat, down by. 1 of 1 . The s p futures, we had a week session in the u. S. Yesterday as a result of Energy Stocks and Airline Stocks being hit by the storm activity in the united states. Futures could be a little bit stronger at the open. That is a quick look at where the markets stand. The euro volatility spiked little bit but nowhere near where we saw over that brexit scenario. Lets get the first word news with Juliette Saly standing by in hong kong. Good morning. Juliette thank you. President out trump made more million and paid 38. 4 Million Dollars in federal taxes in 2005. That is according to two pages of his federal income tax returns that year that were revealed by msnbc. The white house confirmed those amounts. The figures suggest trump paid a tax rate of 25 . Trump has refused to make his tax returns public. Of adent trumps choice trade representative has said china is high on the list of what the u. S. Should worry about. At his confirmation hearing he said although china was a substantial currency manipulator in the past to it is not yet clear that this is still the case. Trump will shake up relations between the two countries. Between now and the time i bob, you were say right. He really is going to change the paradigm on chana. China. If you look at our problems, china is right up there. In beijing that chinese prepare has downplayed tensions between his country and the u. S. Speaking at a press conference at the annual National Peoples conference, he said they share koren comment interests like foreign exchange. Chinau. S. Relations have in spite oforward various twists and turns in the past several decades. I am optimistic about the future of this relationship. No matter who gets elected. Juliette the European Union is said to be consider forcing the u. K. To wait until june for formal negotiations to begin on the terms of brexit. The 27 other members of the eu have pinpointed a meeting of government ministers in luxembourg on june 20 as them moment to authorize the opening of stocks cutting into the two years the british Prime Minister has to strike a deal. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. You can find more stories on the bloomberg at top. In asia the nikkei closed down by. 2 of 1 . Hong kong stocks during those earlier losses on the back of the premieres china comments on china. And also reversing ground as we saw some buying coming through in commodity related stocks and down after its solid run. General to shiva coming under pressure under that after that press conference. Missing its earnings, delaying its earnings. The nikkei said it will remain on its index. Ore sword once again in the asian session. Alibaba pictures up by over 5 as alibaba is set to begin giving preference in some of its entertainment businesses. This came through with its numbers today. You can see this by these broken downgrades on cathay, share price is soaring and nearing that overboard signal. Anna thank you. It is fed day. Ides of march meeting is one marked by remarkable turnarounds inexpectations in high expectations. Officials adjusted as struck an increasingly hawkish tones. The question now, how hawkish will they be Going Forward . Conference cut takes place tournaments after the decision. Jamie dimon says the focus on the rate hike do not focus on the rate hike. The why is more important than the web. The fed is raising rates into a stronger environment, the stronger environment the more rates go up 20 basis points. Anna Oil Takes Center Stage as the pricedata sent soaring. Wti trades above 48. And countering a boost in output from saudi arabia. Oour ourw, guest. Lets talk about the fed via oil. Lets start with the overnight news. Things seemed pretty call him, a lack of volatility. And then oil more than four times more volatile than the stocks. This is something that comes back to haunt Central Banks globally, do we have any stability . Has been in a range for some time. If we are thinking about the longterm fluctuations. Ago, 150 aat long barrel and movements in the range of 40 to 55. Not that great in historical context. The price of oil is a balancing thatetween huge concepts have to fluctuate very much to make good difference, the concepts being the Global Supply of oil and the Global Demand for oil. Those things in my judgment have not really moved rematch, certainly not in the last couple of days. Manus good morning. When we talk about the supplyside we have been covering opec and the rhetoric is that they have a sixmonth deal, opec and nonopec. Do think to rebalance the market you have to see some kind of substantial extension from opec and nonopec Going Forward . Guest theres always this conflict between opec suppliers of oil and nonopec suppliers of oil as you rightly identify. The shale suppliers in the u. S. Being part of that. Quite how that plays out in the coming months and years to my obviously is unknown. I do not know how that will play Going Forward. My hunch is that the deals struck by opec which are deals about restricting the supply of oil and support the price will not be stuck. If the past is any guide. Been stuck for a few months at most and after that, 70 always breaks the deal. It is in their interest to do so and i imagine something one have been like that in the future. Anna Goldman Sachs has this great graphic to show you. Which shows returns and various Asset Classes since 2008. You see here european highyield, s p five 500 doing well. You can make that link if you like to. On the other hand Consumer Prices in the u. S. And in the euro area are a little bit sluggish. You would not expect them to be in the same 200 inflation or wage grade. Trying to make the point that inflation has been surprisingly elusive perhaps despite all of the qe. Guest there is other effects that have been there 20 or 15 years and that has to do with globalization, the role of developing economies such as china in bidding down prices globally. Down factors have pushed on wage settlements and inflation across the developed world, the last 15 years or so. It is possible the new relationship with china between the u. S. And china will slightly change that game Going Forward, maybe slightly. Youre right to identify the impact that qe has had an various ultralow Interest Rates have had on acid prices. Economicsnd bit of for you, you cannot change anything real but changing something in the short run can do that. If you change the Interest Rate and prevailing stock of liquidity that is out there through qe you could have effects on the way the prices are such as asset prices and bond prices. Can you change real outcomes like the real economy . You cannot. That is the disconnect that you are seeing between the asset price. Goldman sachs were right in the note on that this morning on the bloomberg terminal. They talk about the efficacy of qe. If you look at the size of the Balance Sheets, 17. 5 percent of gdp. Have a look at the longerterm chart we have for you on 10 year Government Bond yields. The last two hikes that we had from the fed which was december 2015 and december just gone, those were the moments. I am wondering if we are fully priced for three hikes in terms of the bond market area do a top out, to ever make it to 3 . Guest there is a distinction to be drawn between the u. S. And every other developed economy. We will make it 3 yields within the course of the next 18 months. And in other developed economies, no, i do not think so. The u. S. Is pulling away in terms of Interest Rates and growth, in terms of Wage Inflation and cpi inflation. From every other developed country over the next two years. The fed is tightening, that is what we have and what are the markets what the markets are calling for. Even as it goes as far as at three and four, we do not see the fed funds rate rising above the prevailing inflation rate. It is a negative real Interest Rate, short end of the curve. For the next couple of years, a very accommodative start. Anna accommodative with three and four. Thank you. Stays with us on daybreak. We will bring special coverage of all that happens at the fed including reaction and analysis from the former fed governor and former richmond fed president al broadus. Coming up on the program. The dutch decide. Manus is on the ground in less than 20 minutes. Cold open in the netherlands. We ask what the result could mean for the populist wave. We will focus on the race for the french presidency. Chinas premier said his country does not want to have a trade war with u. S. We will report live from beijing at the conclusion of the National Peoples congress. This is bloomberg. Manus welcome back to daybreak europe live from amsterdam am the netherlands. 28 parties are going to the polls, 13 million dutch people will vote. 14 parties will make it into parliament but who is going to form the potentially the next coalition . Ouring me now, we have guests running mate. Great to have you with us. Thanks for getting up early before you go to vote. Tell me what your latest polls suggest, we have had a number of different indicators but what is the latest thinking from center data . Yes what we see right now is the liberals are slightly ahead. There used to be they used to be close but we have you have four parties, it in have no idea who will be the third or fourth party. Thes so close and that is christian democrats and the other party. That significantly them . Gainst there was this haranguing match between the two of them. Give me a sense of what kind of shift there has been in as a result of the turkishdutch spat. Guest this is from left to will right wing agreed in a way to what the dutch government did on the weekend and you can see slightly going up support for the liberals. I think there was some influence this situation needs statement ship and. Eadership they do not need a person sitting on the couch and sending tweets into the world. Manus this is a statement statement ship moment in terms of peeling across the country. One of the facets of marine le her backerss and have been that they are solid, her support is rocksolid. Do the builders support, are they as tied as they have been in the Le Pen Campaign . Guess we have mediumsized parties. Even the Largest Party does not have 20 . Solid the voters is a base. Give another five to 10 percent that is shifting between liberals and right wing. No party has a solid group of voters behind them. Manus there is no doubt about it, integration. This is an election by integration, immigration. Those are the central issues. This entire campaign lurched to the right which took out a frontpage ad in the National Press is if you do not like it here, go home. This is irrevocably changed the landscape. It definitely has. This was not to be imagined 10 years ago that we would talk like that and that the session would be like that. I think that over time, you see changes anyway. The climate debate was not 10 years ago as it is now. It is change and it has changed the dutch landscape. Because it is mediumsized parties and the landscape is so equalized in a way. It is, you do not have a huge right or huge left. There is a lot of medium and between types of discussion. Manus were looking at an average of 70 two days to form a coalition. It will be a battle of negotiations. How many parties do think will be in this new coalition, this coalescing of minds . Say. it is difficult to at least four parties will be needed and probably five. This has to do with what the outcome will be. You have so many salt small parties. With the one specific thing apart from the turkishnetherlands spat in your polling that has peaked in terms of the key issues. It is economics, not the classical economics the feel heard. T people feel the government has let them down. We have come out of the crisis but we do not have all the citizens comfort. We have not given them the feeling that government is listening to them. Manus they have their opportunities to put their x in the box today. Joining us from centerdata as the dutch go to the polls in under 15 minutes. See it is such a close run race as we have just heard. It will be a bit of a shift in terms of what the exit polls show. Anna thank you very much. Manus with the conversation. Lets keep with this conversation and bring eric britton in. I just pulled up this while manus was talking. This is dutch risk falling. This is dutch yields over german yields falling as some of the polling data is suggesting. We have to point out the very small spreads that this is over german bunds anyway. Guess it is peanuts. The suggestion is there is no risk your. That german yields will depart radically from dutch yields and that is a judgment call about the ecb put, the idea that the ecb stands behind the sovereign debt of all the Member States in principle. The speech of do whatever it takes, that guarantee applies to state suffering debt. The moment comes when people think the whole european project, the euro made may be in danger. I would expect to see the spreads explode. Wilderset is suggesting is not sufficient to change the view. The International Perspective has changed. Guest the issue that is fighting anybody is the prospect is inhe march of wilders lockstep with the march of other popular authoritarian nationalists the world over. And if that tendency wins, that is a terrible outcome for the global economy. Wilders is not enough to do that. See what it tells us about how the left fares in terms of populism which seems to be a theme we are picking up internationally. The euro dollar overnight, the druggie comments still supporting the market. We have seen an uptick but nothing like what we saw around the brexit vote. Of all the reasons we have discussed it does not seem quite is significant but it could tell us a few things about france and germany. Guest the important ones are yet to come. They could have dramatically different impacts on these types of issues and spreads and so forth. I am talking about france, italy, and the elections and both of those countries. If they deliver surprise results, if Marine Le Pen were to win, not just get to the second round but win and she can win from here. Is in range for that victory. Anna we will discuss that further. Lets look at what is happening to the pound against the dollar. We were talking yesterday about catchup toaying the downside, slumping. It is up by. 5 of 1 . Against the dollar. The french residential hopeful is charged with misuse of public funds. We talk about that. This is bloomberg. Anna welcome back. It is 6 30 a. M. In london, 7 30 a. M. If you are in harris or berlin. It is later than that in the afternoon over in tokyo. 3 30 p. M. In tokyo. The dollar against the end pretty flat. 77. We have numbers coming through from the german utility beyond. They have posted a record fullyear net loss of 8. 4 5 billion euros. Proposing a dividend for 2017 of 0. 30 per share. Following the dividend for 2016 of zero point 21 . 17 adjusted net income for a , 1. 2 billion to 1. 4 5 billion above the estimate of 1. 11. Whats that one at the open. Munich, retargeting 600 Million Euros in ergo profit and targeting of fullyear profit of 2 billion to 2. 4 billion. We will be speaking to the ceo about those earnings at 10 35 a. M. U. K. Time. Gets everyone knows how to it. It is daybreak, covering the story on your terminal. It is on your mobile. It is a great concoction here in amsterdam. The front story is oil and it has been quite a wild ride in oil. You have a real rally on your hands, the market up by as much as 2. 4 . Wellis a pretty big move above the 48 a barrel after the api report showed u. S. Stocks fell last week and that raised the losses from yesterday. When prices slumped into the lowest level since november. Saudi arabia increased its output. Anna the netherlands become will the netherlands become the next country swept up in the populist wave . It may hold the key to the future of the euro. Euro area. The u. S. Will raise borrowing costs on wednesday in washington. A lot of people will be very surprised if they do not. We have an Interest Rate hike almost certain. Investors are focused on any hint of a change in the number of increases. The central bank for sees this year. Were talking about the dutch political backdrop. Lets talk about france. Fillon was charged with financial malfeasance.