A tech selloff, disappointing amazon earnings weigh on asian stock. The euro rallies against the frank for the highest level since 2050. 2015. Everyone welcome to bloomberg daybreak europe, our flagship morning show from london. I am anna edwards. We have so much news from the Banking Sector. We brought some of it to you in our headlines. Lets get into samsung. We are getting numbers from this from from the spanish bank right now. That is the head of the estimate of 1. 73. This is the business in transition at the moment. They added a portfolio that did not look as favorable as their own. This is a Company Moving ahead with its plans to digest the failing bank popular as the largest ranks have an working to sell 30 billion euros in real estate assets. They are trying to sell these real estate assets. They have until the end of this month to submit their offers. Sale is the the current topic of conversation e up we are getting these cell is the current topic of conversation. We are getting these numbers in. Lets stick with the banking scene. We get the numbers through from that bank of it q2 Second Quarter, 2. 4 billion, ahead of the estimates which was for 1. 9 billion. This is because the equity and prime Services Revenue jumped 26 and surging demand for derivative problems while provisions for bad debt fell. At the same time as other european banks are getting out of Investment Banking, this is a bank that games to become frances largest lender. One of the top three trading and Corporate Banking players across the continent. Lots to talk about in terms of bnp and the rest of the banking it lets get to the Swiss Banking story because ubs has reported that that the estimates. Exceedingion francs, 800. 3 million francs expectations. It also noted pressure on margins, stemming from low rates in switzerland and eurozone. Matt miller has wrapped up an interview the ceo and here is what he had to say about the results. We had strong money for the first half of the year and usually in the u. S. We see some outflows in the Second Quarter for our clients come up paying taxes out of their asses and there is a big component for that. We have growth in our International Businesses of 6. 6 on a very high base and this in construct with the fact we have been reducing client advisory accounts. Demonstrating weaken grow demonstrating we can grow, focusing on quality not quantity. Are on know cost cuts track for 2017, 1. 8 lean francs of cost cuts, net cost savings. The 2. 1 billion looks achievable. Do you think you can over should that . Overshoot that . I think we are confident we can achieve our target, but it is not an easy journey. We are talking about a net cost savings target, so we are absorbing a huge amount of cost coming in from a regulatory changes and Technology Investment that we need to do to keep our competitive edition. In order to offset that, we need to work hard on the actual costbased. Im confident we can get there by the end of the year. Out thatre d. C. Taking further 300 million . Its not a matter of headcount. We focus on optimizing our front infrastructure and announcing productivity and its a mix of different initiatives. When you get down to them last 10 , it is about every single dollar counts and we are focusing on the best. We are also making a lot of investments. It is not about costcutting. Costcutting is not something you can do forever. You cut costs in order to create more capacity to invest in the future. The you mentioned institutional client activity slowing down. I noticed the pretax profit is down 6 in the Second Quarter. This is not surprising considering what we have seen out of u. S. Banks. When do you think that will pick up again . When using Hedge Fund Clients will go back in . We are pleased with the performance of the investment tank, that delivered despite the market condition, a return of 80 on its allocated capital. 18 on its allocated capital. Institutional clients have been on the sidelines and a pickup their and volatilities, its difficult to see a change in behaviors by our clients. We are in the middle of the summer time, which from a seasonal standpoint, not the best time. Im confident, most important for us is to show with our Investment Bank, under any market conditions, we are able to perform, not only to shareholders, but to our clients. Matt let me ask you about brexit. I was fascinating to hear what banks are planning on doing. You are still considering madrid and amsterdam, but you have infrastructure in frankfurt. Think we need to build up different infrastructure and at this stage, its tough to make a call on what we will do. The three options on the table are the ones you mentioned and we will make a decision later, q3 early q4. The good news is we have flexibility and we do not feel when it to put pressure on the withg and find ourselves having done some kind of regrettable moves. Matt what do you think about ballpark figures . About the size of Balance Sheet moves they want to make and balance counts. Weand the last few months, have been reducing the amount of options on the table. The number of headcount at the of the day will very on vary on how much front and back unique to move and this is a consequence of not only your legal set up in london and in the continent, but also the kind of the regulatory requirements and Political Solutions that will be found. That is the reason im talking about, not triggering regrettable moves. You start to move or not move and you find out after a few months that Political Solutions or Regulatory Solutions were found to minimize not only the banks,c consequences for but its very important to understand what are the systemic and market distortions you may moves that areg not sustainable longterm. Matt we still have optimism for softer brexit at least as far as it impacts financials . Im optimistic both sides will find a winwin solution or rather lose lose situation. Notpe the ideology will prevail versus Pragmatic Solutions that takes into consideration the needs of both parties. Anna talking about the hopes for a winwin situation to come out of the brexit talks. We will see if his insight proves to be accurate. Much more through the day. Thell show you where you on asia equity story and other stories that have been developing overnight. Fascinating stories around the currency. We will get more details in the moment from juliet. With the amazon earnings, cost of growth being an inordinate amount of investments, seems to be something that has taken a shine off the tech center, which has led to weakness in tech stocks, being affected in the s p futures. We are down 3 10 of a percent south in u. S. Traits. We saw a rebound in trade because of the trade. A lot of it had to do with aviation. We are seeing a hold in that and the dollar is basically flat this morning. There is news in the currency market. The euro against the swiss is the highest since january 2015 for the euro. The highest since the fnb removed its minimal rate. That crashed down will miss all the s p remove that rate. Then they climbed from one of 52 110, now 1. 13. What a difference a few years make. Lets get to bloomberg first word news with juliette saly. Several key republicans said they are ready to vote for a strict down Obamacare Repeal stripped down Obamacare Repeal program after they received assurances from paul ryan that his chamber would not pass the measure. Mitch mcconnells skinny repeal the wood and the requirements that individuals by health tourance and suspended it 2026 that companies provided to their workers. The senate is given final approval to strengthening legislations on russia. It gives congress the power to block donald trump from lifting them. It goes to the white house, which was given mixed messages about whether the president will sign the legislation. Written aaramucci has profane tirade. He gives an exclusive as he describes him as a paranoid schizophrenic. That he madeeeted a mistake and it will not happen again. Japans key price gauge was unchanged in june. Core Consumer Prices, which belowe fresh food, is far the 2 target. Household spending rose 2. 2 from a year ago, the first gain in more than a year. Japans defense minister has quit over a coverup involving the military report. And peacekeeping activities. The move comes as Prime Minister shinzo abe prepares to reshuffle his cabinet. In the u. K. , please investigating the deadly grip tower fire. Grenfeld senior investigators from the council that round the block could be interviewed under caution. Organizations guilty of corporate manslaughter are liable to an unlimited fine, but individuals cannot be charged. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. You can find more stories on the bloomberg at top. This rally had to come to a breather at some point and we have seen asia equity markets retreat from that december 2007 high we saw reached yesterday. The nikkei down 6 10 of a percent of some weakness in hong kong. The cost me is leading the declines at 1. 16 percent. Coming off those record highs in south korea. The kospi having its biggest oneday fall since november. Lets have a look at some of the sox in the region. Samsung on the back of the tech selloff, on the back of these earnings, came through with good numbers yesterday, 4. 3 drop today, dragging on the kospi. Toshiba taking its weekly loss to 12 . The u. S. Court is to rule on an injunction regarding the sale of a chip unit to what it digital. 13. Pore up space. Ook at g we mentioned japanese cpi stall. Up 14 . Ing that is when you strip out french food. That is below the 2 target. Thinking theomists tight labor market could start to help inflation, but we are very much off those loads of 2 . Anna thank you very much. Juliette saly with latest from hong kong. 6 16 in london. We have numbers from klm secondquarter net jumping. The company sees a lower fullyear unit cost in the Second Quarter net profits coming up. Just a few of the details here. Took to the helm of this company around a year ago. His mandate to increase profitability, he is trying to counter the competition. We got news of a Keeper Alliance involving delta, 10 eastern come up a complex web of stakeholder relationships here in the sky team alliance. In all speak to the cfo few minutes time about all of that strategy and the latest numbers. A quick word on what is coming up in your day ahead, you have a busy one if you are trading today. We have a policy decision from russias central night. Two hours later, secondquarter gdp out of the United States. What would that look like that of the goods number of yesterday. Then saturday, elon musk lunches that tesla model three. We have heard a lot about that this week. We are looking at live pictures of the senate floor in washington where republicans are debating the Health Care Bill. We have been running this story overnight that Mitch Mcconnell had been wanting to bring in a skinny repeal as momentum among republicans have been building. Several key republicans were set to support that, but john mccain that is the no standing in the way of that Skinny Health. We will monitor that. This is bloomberg. Anna this is bloomberg daybreak europe. Secondquarter revenue at air france helen has come in just ahead of estimates after the companys biggest shareholder said it fully supports the purchase of a 31 stake in virginia atlantic. Cfo, whoak to the joins us now by phone. Great to have you on the program. You have done very well in the First Quarter against estimates, beating those estimates. How much does that set the cap for the rest of the year . Does this Strong Performance continue . Guest yes, of course we know, the situation in the market as relatively good. First quarterhe positive, which is great for our airline and we expect that to be the case in the third quarter. Also probably for the last quarter of the year. Reading thisting depths of relationships you are establishing with the rest of your sky team owners with delta, the chinese airline, virgin, and others. If you are able to all merge, if authorities around the world that you come up you be doing that right now . Guest we have to go slowly. First of all, we are clearly creating a stronger link between delta, we are entering the state into virgin. We are also making the link stronger. Airlines industry is fiction the fragmented. Legislation and the rules for the traffic rights. Preparation, we have announced a positive step the Industry Needs to be consolidated and the links we create with the partners is something positive. The are excited we have that deal. We are close to virgin. Do you need to focus for emergence to fight effectively against the gulf carriers . Resultsou have seen the theegative, 5 billion gulf carriers institution is not always easy. We are just looking for a fair competition, many we want the gulf carrier to apply the same rules we have accepted in europe or the u. S. And that is white we continue to advocate for little playthings everyone is expecting that is positive in the industry. Anna you set up a Lowcost Airline within Air France Klm in june. Update us on where you are going to fly and whether you want to get a better deal with the pilots. You achieved it with cap increase. You want Something Better from the pilots . Guest i think it is great. Als and one deal with unions of the cabin crew, so we are ready to launch these new projects for longhaul and medium haul into air france. It is great news. We are moving fast, we are changing progressively, improving yearoveryear and that is what we have to do in and weo be a positive are excited to continue on that track. And to continue to move. Anna this is a lower cost brace within alm. Klm how much d. C. Projected into the future . Aest we plan to have aircraft in the medium haul and 10 aircraft in the longhaul. By 2020, the company with 20 aircraft, two thirds in the middle more, we are seeing more hype. We want to be a bit more long in the spirits. Its great for the cabin groups. Anna that is interesting to hear. Do you think there is a risk for too much capacity in aviation . We heard this from other airlines in the sectors quarter. The sector this quarter. Intense demand and supply. We see that when you look at the different revenue. I have indicated in the Second Quarter we have a positive revenue. That will be true for the third quarter. Activity, but if you have a balance between demand and supply, it is more difficult during the winter and fall. This is of course one of the problems we had. Its a result of this industry. Todays is a muscle modest positive. Coming up on the program, we will bring you the interview. This is bloomberg. Anna welcome back, everybody, this is bloomberg daybreak europe. This is tokyo at 2 30 in the afternoon. Move on dollaryen of 02 . Lets jump back to europe. We have news breaking out of france. , have adp specifically percent created in the Second Quarter. This is exactly in line with the consensus estimate. A quarter on quarter number. The year on your number coming in stronger at 1. 8 . That is a stronger number than expected. The data has been stronger. Bloomberg intelligence when he an expansion in business surveys. We are looking pretty buoyant. It should be giving the ecb more confidence in the recovery of the eurozone as a whole. See, thehat we strengthening of the gdp number. Isengthening of the number more than a percent. We will see if that is indeed the case. We saw strength coming through in the consumer story in the election of emmanuel macron. That is the french story. Lets stick with france but move to the corporate agenda, specifically with the auto sector. Lifting their russia market forecast, saying they could grow up more than 5 in 2017. Up 2. 41 net profits billion 2. 41 6 billion euros. Market five 54 . Us an upbeat data on brazil and russia just earlier this month. Perhaps this is probably in line with what they have said. In terms of financial targets, they are confirming those. That is quiteness demand. The ceo reaping the benefits of a sustained coverage recovery in demand in the auto sector, highregistration going this year. From the euro, we will bring those up and bring the euro numbers for you. The Exchange Operator commitment 137. 3 54 Million Euros, Million Euros of Second Quarter revenue. Lets the French Exchange story. We want to talk about banking. Has outmatched deutsche bank. Second quarter profit was 2. 4 billion euros, surpassing the 1. 1 9 billion euro compiled by bloomberg. To the man in paris. We speak to the man in paris. At the messick markets, commercial activity has been doing well in a low interest environment. International has been firing on all cylinders. We should look at civ. And willn doing well continue to grab market share spirit fixed market share. Share market guest are civ is a tribute to our diversified approach. It is well capitalized. Trade diversified so it has Corporate Banking and Security Services has all this activity, revenues up 5 . Costs are down. It is a good result which allowed us to continue to capture market shares in this situation. Fixed income was difficult. Its true if you look at our civ, it goes with the demand. As a moment in time there can be higher demand than others. We compared to last year weather was probably more demand. That is basically how it goes. It is