Will the president elect deliver on elevated expectations . The pound tumbles and the chancellor Philip Hammond repairs to attend a conference with Angela Merkel today. How hard will the conversation the . Be . Than one half hour away from the european open. Lets look at futures. Outlierooking at a ftse once again. Yesterday we had the ftse close up, the dax closed down. Today we have ftse futures up of 1 . Hundredths unchanged there across the board. Not a lot of actions. A lot of news today though. Is interesting is the commodity space, what is happening with gold, what is happening with copper overnight. That is an interesting story. The dollar dipping a little bit and that is understandable, given what is happening. A bit of nervousness in advance to wednesday with donald trump. Hear from janet yellen thursday as well. That is something to bear in mind. The bloomberg dollar index down one 2 10 of 1 this morning. The euro is up, we like to see the swiss franc up just to make it more bearable. Some big gains. Iron ore out of china up. Zinc trading strongly as well. The front foot. It is a dollar trade. That is what we watching carefully at the moment. U. S. Week for the a lot of politics surrounding this. A lot of politics in europe as well, but the u. S. Is dominating. Here is the first word news. President elect Donald Trumps soninlaw to be a senior but unpaid white house adviser. Jared kushner played a leading role in the campaign and will work with chief of staff Reince Priebus and chief strategist stephen bannon. He will divest his various business assets to comply with conflict of interest rules. A statement from the Transition Team described him as a tremendous asset and a trusted advisor. Meanwhile, toyota has become the latest major carmaker to offer insurance is over its commitment to the u. S. In the wake of attacks by donald trump, the Japanese Company says it plans to invest 10 billion in america over the next five years. We understand what the president wants to do. Wed all agree with the president that we want to make america strong. We want to have good paying jobs, a good economy and eventually, that helps is this. If i am selling cars in a stronger economy. Helps us sustain volumes in the future. Some senior volkswagen executives in germany have been warned by their lawyers not to leave the country. That is according to a person familiar with the matter. Us as u. S. Prosecutors are said to be parent to charge for highlevel employees over in missions cheating. Vw executive was arrested in miami and faces charges of misleading regulators. The company says it continues to operate with the u. S. Department of justice. Yahoo has announced sweeping Management Changes as it transitions to an investment company. The ceo and five others will leave the board on completion of the sale of its main internet businesses to verizon. The board will then be reduced to five directors. A shareholder in alibaba and japan global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Matt a quick note on an acquisition breaking right now. Isreal, the makeup giant buying acne free from valiant for 1. 3 million 1. 3 billion. Targets are more attractive than the suitor. Valiant foruy from 1. 3 billion. China poised to export inflation around the globe. In 2016. Mp the fastest pace in more than five years. I will have an effect that drives global inflation higher. Asiaf Asian Correspondent is live in hong kong. Why are we seeing factory prices their jump higher . The scene quite a significant spike in factory prices here, no doubt. Only four months ago, chinas factories and did a four year streak of deflation. A lot of this is down to higher commodity prices, higher oil prices. Rather than any kind of sudden upsurge in demand or seven cut back incapacity that we all know is such a drag on chinas economy. Nonetheless, it is a positive and producers in china are complaining about higher costs, they are wanting to pass on those higher costs. It is the worlds biggest exporter. So while we wouldnt want to the carried by away over what it means for the global reflationary story. Some of this will spill over to the rest guy of the world. Put that guy what happens when you put the two of those together . On one hand, the pboc are in neutral, they dont want to have to cut new rates more. If we see ppi flowing downstream to cpi, and we are seeing the currency come under continue rusher, downward pressure, and the neutral updater might suddenly start shifting to when they start to hike rates. To keep a lid on cpi, but we are not quite there. Depends on public spending rather than private investment. No doubt on the back their minds, china authorities are going to be watching, will be i flow down street ppi flow downstream and hurt consumers. Im sure that debate will be held in the coming months. Guy thank you very much. The latest data out of china had global ink occasions implications. Ppi andlueline, china on the other white line, u. S. Core pce, the feds favorite measure of inflation. Look at the correlations and how these two Work Together. Pcet run by the ppi print, falling along tidily. If it goes higher, what does that mean in fed policy . Do you want to buy more of that . Are we going to see more coming from the Federal Reserve this year . We have a fund manager and head us some of good morning. We have an inflation problem . Not yet. Things are starting that as we see here on the chart with china, it is interesting because you see ppi go higher. But dont forget, china is climbing the ladder of technology today. It is going to sell more and more products. Industry, the drone then beating gopro with advanced products. Gopro is struggling. Chinese technology is there. The rubber Factory Automation producer biting. Buying. They are climbing the ladder and they are going to come up and produce they are going to bring deflation on the top of the market as well. Not only on cheap products like they used to. For me, the story is not over yet with the huge wave of deflation coming from china. Especially where the currency is where it is today. Guy i Deflationary Force you are talking about that will still be present and not going to go away. What implications does that happen terms of fed policy and ecb policy . If there is a lid on inflation, loweres not go as high, than some are pricing now . The case. At could be but what the fed does and what inflation is our two different things. We are not convinced inflation is there yet. Almost seven on the dollar. Do you think that trends down even if china is fixing at an aboutface and putting currency higher to stop an outflow . Im not sure china needs to continue devaluation. Looking in many sectors, china products are becoming more competitive, especially at current rates. You have huge pressure in the as. With minimum wage at 16, lot of states have signed up. We think china doesnt need to devalue more from here. Matt so even if the currency were to hold or get stronger, it wouldnt prohibit chinas competitive advantage in increasingly higher tech spaces . Look at the solar industry. The price keeps coming down every day. Aboutis a misperception technology, same with korea for example. Matt were going to talk more about this, he will stay with us. We just got china data out showing the ppi up five point 5 . He says they are still putting a Deflationary Force across the globe at the top because they are moving up in the technology ladder. Coming up on the show, all in the family. Trumps soninlaw is poised to get a white house role while confirmation hearings start today for the new administration. The latest from washington. There is a lot going on. Plus, what is in a name . Yahoo reveals plans to change its name and shrink its board after the verizon deal. Also, one woman will no longer be working with the company. Later, driving the Auto Industry. Showed the detroit auto and hear from ceos of the biggest Auto Companies about the Incoming Trump administration and the donald effect on carmakers. This is bloomberg. Guy 7 44 in london. Here is juliet with the business flash. Supplier haslisted said alibaba wants to take it private. The company is valued at 2. 5 billion dollars. It is part of alibabas strategy to integrate with brick and mortal stores brickandmortar stores. According to people with knowledge of the matter, discussions fell through after the wall street journal the orchid than last month. A 5 jump in Energy Transfer partners shares in the wake of that report hurt the economics of the potential deal. Carlyle group is preparing to u. S. Real estate fund in the first half of the year. That is according to people with knowledge of the matter. They say the washingtonbased private equity firm is planning to target 5. 5 billion. Is 100rt of a planter billion over the next four years. A representative declined to comment. That is your Bloomberg Business flash. Matt thanks. President elect Donald Trumps soninlaw Jared Kushner will be named Senior Adviser to the president. For a preview of what to expect this week at washington, lets ring and kevin. Bring in kevin. Would be ashner Senior Adviser within Donald Trumps white house, this comes more than a day before trump gets a press conference where he will discuss how to divide his business assets in his organization. Johnsonol hill, boris met with key republican members of congress, including paul ryan. And majority leader kevin mccartney. It comes as appointees to the cap it are set to begin confirmation hearings this week. Including rex tillerson, the former exxon mobil ceo who trump has chosen to be his secretary of state. Kevin cirilli, bloomberg, washington. Us, alexis. This is going to be a long couple of weeks of confirmation hearings. The democrats plan to make a real show out of it, they cannot stop any of the confirmations. They dont have the numbers. Is it a distraction for wall street . The global wall street . Im not sure it is a distraction. I think people are not questioning the fact that donald trump will start on the 20th of june. A review is on the fact that we are a little more cautious on u. S. Equities for other reasons because we think a lot of good news is pricing in the markets. We think protectionism is probably the major risk that not many people talk about, more than the Political Risk currently. We keep bumping up against doubt 20,000, not quite crossing the line. Do you think the trunk euphoria that we saw is that stimulus money already priced in an protectionism, angola is what is holding us back . Alexis definitely in some sectors. If you look at infrastructure linked sectors like trucking, steel, you see huge rallies coming back and also in the banks, i think you have to be courageous to follow banks at these levels, when you look at where Goldman Sachs or bank of americas stock rises are today as opposed to six months ago. On the other side, you still have this large allocator, we start the year in january and need to go into u. S. Equities because he knew residents business friendly. These flows take time as well. I think the market is very expensive. If we are going to reach the doubt 20,000, i dont know. 20,000, i dont know. We are trying to go where we can find value. Dont find much value in currency markets. Guy are they going to be am i going to make money more elsewhere than in u. S. Equities . Alexis in the fiveyear horizon, yes. Guy what about one year . Alexis hard to say. Yes, public you would make more money elsewhere. Speaksnet yellen thursday. You said, i dont care what Central Banks do. Most people have been investing every2008 on the basis of utterance from the federal bank. Someone said something earlier on. Donald trumps tweets have more fromtance than any missive them. Is that the story no . Our Central Banks the . Trump on fall on twitter. So i agree with you. You have to know what he is saying and how that impacts your investments. I am taking these tweets in consideration. I am not acting on them immediately or individually, but what the picture is. Guy plenty of conversation still to come with alexis. Next, a look at morrisons with a holiday sale that beat estimates. This is bloomberg. Than open is nine minutes away. Matt we are minutes from the open. We want to bring you stocks to watch. Keeping an eye on metro ag, a german retailer that runs media market. Some electronics businesses. It says sales in the First Quarter were below estimates. We were looking for 17. 1, they got 17. Analysts said it was helped by christmas falling on a sunday and normally, everything shuts down on sundays in germany. But in december, we had three sundays that were open for shopping. So, a treat for people who live here and for metro shareholders as well. Guy everybody wins. Maybe the german consumer could do more of a boost. Lets talk about morrison stock. Looks like a solid trade on the upside. Beaten expectations. There is a call as we speak, the business saying it is in the thick space of the recovery. Price deflation narrowing. 2 in q3, but 1 a year ago. Look at the recovery phase, a 50 point an impressive performance. Miller, lets say our guests in the consumer range, loreal, what is going on there . Matt loreal buying three 41. 3esses from valient billion dollars. One of them is called acne free. Feel like that is the second biggest moneymaker in the world, what do you think . Guy i suspect history would dictate you are right there. Matt i would be happy for either. One or the other. Guy well we all get older. Lets talk about where these markets are going to go today. We are expecting a positive start in london. Less positive elsewhere. Interesting to see how commodities read. The market open is next. Guy you are watching bloomberg markets. I am guy johnson. I am in london. Matt miller in berlin. Your morning brief. Surge, factory to the world. China sees ppi rise the fastest in five years. The dollar is down again. Investors turn nervous ahead of Donald Trumps a briefing on wednesday. Will the president elect deliver on elevated expectations. British diplomacy. As the pound tumbles, the chancellor of the exchequer todayes for a conference with Angela Merkel. How hard will that conversation the . How hard will that conversation be . Guy it is expected to be a reasonably caution open this morning. The dollar is in focus. The ftse 100. A little more positive. 7240. We will strip out what happens to commodities when it comes to the ftse and we will play around with the pound as well. A mildly positive start. Not a bad trade for the ftse. Let us happen let us find out what is happening below the surface. Reinforcing that boom is going to get more momentum. Theort of deflation exporter of deflation turns into the exporter of inflation. Our guest said at the end of the year you could hear the rhetoric changing. European financials opening down 0. 6 . Materials travel a little higher. This is what im talking about when it comes to great global reflation. Said that the consequences of the reflationary trade are numerous. The euro is relatively undervalued. That is within the european context. This is a great global reflation trade. Theu. K. Is outpacing country cousins in the united states. Here is the pound. She speaks. She speaks again. And she wreaks havoc with the currency. We are talking about brexit. The reaction to her Party Conference speech was clear. The pound was down by over 1 . After her new years speech, the pound went down 0. 9 . That direction of the thumb continues. There is a big options trade in asian trade. Around 120. Is the Market Positioning up for a hard brexit . A german retailer, metro. Crv which is a skincare business. They spent 1. 3 billion. The market likes it but is it worth it. . Crackinge they had a business, morris said. Sales up 9. 9 . The guiding consensus is higher in terms of profitability. Handing it back to matt miller and i am off to radio. Matt is that a scottish thing . The way you say pound . Thing. It is an irish stick with it. Matt i could listen to you all day. When i am done here, i will listen to you on bloomberg radio. Let us turn now to our guest. Speaking of the pound and theresa may, i wonder what you think when she tries to deny that there will be a hard right sick. Isnt that the only choice . Riskah, i think there is a definitely that the European Union they show an example by being quite tough but the u. K. This is a risk to try to encourage other countries to leave. But on the other hand, i think this may also be beneficiary to the u. K. On certain sectors. The u. K. Cut taxes dramatically. Will it try to do things differently and become a safe haven within a troubled europe . It is a lot of talk. At the end of the day, the u. K. Is still a small country when you look at it globally. Investors, theal size of the u. K. Is less and less important. Note i read through your this morning. And some of the stocks you have on the books in terms of the longs and the shorts with a smile on my face. You like a mexican real estate. You like mexican toll roads. You dont like american pizzas. Nd you do not like u. S. Steel walk me through what is going on. What is going on is trying to find value. These are many valuation calls. Is equity portfolio trade based around fundamental valuations of individual stocks. Initiated mp has for example, real estate in mexico is down 45 in dollar terms since last may. This is very cheap. It is still a country where you have strong demographics, a middleclass that is growing, you have good assets. Real estate in mexico is not dead. Matt it will not become cheaper. They had the same tenants. Walmart, ford. If everyone leaves and you do a huge trading war, then it is the end of the u. S. 45 of the revenues of the s p 500 are coming from outside the united states. U. S. Protectionism is a huge risk for the u. S. Economy and people do not talk much about that. You only see lower taxes. Repatriation of cash and so on. All of the