The odds of a fed rake hike hovering around 90 . Is this the calm before the storm . Is the company the juggernaut that its evaluation suggestses that it is. Manus were less than half an hour to the european open. Check out the major stock equity indexes. Here you see down across the board like yesterdays trade, the cac was gaining slightly. The ftse was up just lightly yesterday and had a pretty good week looking like a 4. 5 gain for the italian index on the back of some recovery in the bank stocks. Take a look and bunds here. E are down but after yields. After the yield rallied up to 0. 32 yesterday so down to 0. 3. That is a level in the yield that came through yesterday morning and were back down to it now. There was some selling yesterday. A little bit of buying it looks like today. Over all were remaining in this range now, guy. Guy matt, lets walk around the g. M. , m. And talk about whats happening there. Asia. Aussie, singapore, the s p town. 6 . Lets back that off and talk a little bit about whats happening with the curnspism you can see it over here. Down here. And you have the hong kong dollar down. The euro is up. The japanese yen is trading higher as well. That is important to Pay Attention to. Lets move on and show you hats happening with the turkish lira. Turning out not to be a great day tr the turkish lira. The dollar trading higher. It has not been a good couple of weeks for the lira. The turkish story has been front and center. The fed raising rates. Big current account deficit. Not exactly the greatest combination. Lets get our first word updebt. Thank you. U. S. Attorney general Jeff Sessions has removed himself from investigations into russian influence in american politics. The move comes amid calls from democrats for him to resign over his conversations last year with the russian ambassador. President trump says he has total confidence in his attorney general while sessions said his discussions with the ambassador were not related to the election campaign. I never had meetings with russian operatives or russian intermediaries about the Trump Campaign and the idea that i was part of a continuing exchange of information during the campaign between trump surrogates and intermovie immediatiaries for the russian government is totally false. U. S. Vice president mike pence regularly used personal email to conduct public business while serving as governor of indiana and his account was compromised last year by hackers according to the Indianapolis Star which said he communicated with top state advisors through the a. O. L. Account. He criticized Hillary Clinton for using her perge email to do business as secretary of state. Some hope that price gains may begin edging toward the b. O. J. s 2 target. Inflation is at the heart of japans economic resurvival efforts with hopes of a turnaround pinned on higher obal prices and a weaker yen. This is bloomberg. Matt . Matt juliette, thanks very much. Janet yellen will speak at 6 00 p. M. G. M. T. In chicago. Giving the fed chair an opportunity to cement or walk back expectations for a rate increase this month. Joining us now is bloombergs macro strategist. Do you believe yellen is going to confirm . Does she have to confirm a large hike tonight . I dont think she has to, but certainly if she is to try to fight back against the guidance given by her peers earlier this week would cause a lot of confusion in the market and give a negative signal. I think she is likely to implicitly confirm one. She will be relatively vague but consistent on the message that the economy is ready for a hike soon. Guy why has the curve flattened out in the u. S. . This is strange. Tell me whats going on. In 2017, the curve has flattened out a bit. It is a bit of a negative signal for the u. S. Economy and policy. Ere getting the flattening. What this is saying is that you know what . Were not sure were going to get a sustained cycle or sure the economy will cope withan a sustained cycle. We might get a couple of hikes. The fab fact that the curve is flattening is a slightly more negative signal about the u. S. Economy. People are not as bullish as hey were two months ago. Guy the Communications Job she has to do is probably less to do with what happens in march than what happens further down year. How does she manage that story and how does she not go too far . Thats a great question. Actually i saw someone in the market today that made the observation that it is like threading a needle to basically guide the market towards a rate hike now and say were not goin it is starting to price in a june hike. That is talking about a real rate hike cycle. December, maup, june. That is a whole different role. T is going to be hard today to toe that line of not being overly hawkish. It is a tough message to give today and they are risks to kind of equities, etc. , to the downside if she messes up that delivery. Matt mark, thanks so much for joining us this morn. You can follow live Market Insights on the bloomberg and live go. It is something guy and i look at every morning and probably every night and every afternoon as well. Now were going to bring you full coverage of Janet Yellens speech at 6 00 p. M. U. K. Time. Incidentally, you can get to ny go. Tylego gets you a bigger universe of the coverage we have of the most Important News events. Guy . Guy busy day. It is starting out quiet but it is going to get busy. Apparently france is being pillaged by the Global Economic order and must learn from what is going on in washington, beijing and london. Thats what french president ial account Marine Le Pen told supporters last night in paris. This is a moment to put an end to the borderless economy. Just look at the world. Everywhere from donnel trumps china to theresa mays britain, the economic patriotism is wing. Look at the tens of thousands of jobs repatriated. In the u. S. Companies are relocating. We are done with the illusions of free trade and naive globalism. Guy many have said they can no longer support Francois Fillon who is charged with embezzlement. You have the legal battles with fillon. How is that feeding back into the macro cap . How is that feeding into le pen . Again, what they are saying, how does that fade back into the republican story . Technically, the legal battles are having a big impact on Francois Fillon. Since the first investigation started at the end of january. It is having virtually no impact on Marine Le Pen because her supporters, her base already feels persecuted by the system. So they already feel that the judges are trying to attack their candidate and of course oosting the chances of macomb. If you look at the latest pole we had this morning, le pen is stable at 27 . And macomb is at 24 . In the runoff, this is from yesterday, we have a more recent number exactly. Le pen is still leading. Fillon is below 20 . Also Francois Fillon is not benefiting from some of the electorate of sarkozy, the former french president. A big portion of sarkozys base has gone to ma home or le pen. Youre seeing all of thisexodus of lawmakers, republican lawmakers who used to support fillon who have now decided to resign. Now you have the campaign treasurer. Everybody is calling for to come back. Anything could happen. Matt he said he doesnt want to be the runnerup here. Do you think he will step in, if needed . He would probably only on one condition. If Francois Hollande agrees. Basically he doesnt want to put the party, the process of Francois Fillons nomination, the republican primaries that were held in november and he came in second. He has repeatedly said he doesnt want to be a backup plan. But that could change of course to rancois fillon asked him replace him. Guy thank you very much indeed. The beautiful paris. Up next, key economic targets. What can we expects from the National Peoples congress. Beijing. E from he Company Reports earnings. And snapchat. Will the game disappear just like it photos . Matt welcome back to European Market open. We want to get to the business flash now. Juliette . Juliette thanks. Evan speigel and bobby murphy have each added 1. 6 billion to their fortune. 44 above their listing price. Other winners, benchmark capital. Stakes rose 904 million and 613 million respectively. P. S. A. Group is said to be closing in on a deal to buy General Motors opel unit. Both companies are planning to continue intense negotiations through the weekend with the aim of announcing a deal on monday. It would create europes second largest automaker. Pimcos new bond chief has hit an important milestone. His income fund has overtaken the fund that was run by bill gross, who left in 2014. According to data compiled by bloomberg and morning star, it is 75. 4 billion, larger than the Pimco Total Return Fund which was once the worlds largest. That is your Bloomberg Business flash. Guy . Guy thank you very much, juliette. Housands of lawmakers in beijing getting ready for the peoples congress. That starts sunday. The focus is on ping who wants no surprises. Tom mckenzie joins us now from beijing. Is the economy the top of the agenda here, tom . Tom it is, guy. And there is a debate that is going on amongst lawmakers here. Particularly around the question of just how much to rein in the credit that has done so much for the stabilization of the economy here and tackle the Financial Risks in the year that is ping cally crucial with and the congress. Were going to be looking at the g. D. P. Target on sunday when that is expected to be announced. Between 6 and 7 last year. This year it is expected to be owered somewhat. It may be increased matt it sounds like we have a pretty weak connection to you. Were going to try to work on that for our viewers. One of the questions, guy, that i wonder, does donald trump dominate Chinese Foreign policy discussions. Is it all about President Trump or are they going to the cuss r more what to focus on what they have to deal with domesticically . Have we got tom back . Guy i expect the best person to answer that is tom mckenzie. Lets go back to tom. Talk to us about how donald trump will or will not dominate Foreign Policy discussions at this meeting. Tom i dont think trump is going to dominate the debate here. The economy is front and center for policy makers and the internal and domestic politics. But thump is not far away. We know guy ok. Im going to jump in here and assume that we are not doing well on the communication front. Beijing is a long way away. Maybe that is something to do with the traffic behind him that is confusing the technology. You could make a good point on that. Matt, were minutes away from the market open. Up next, market coming in above expectations. The stocks to watch this morning. Look, were all waiting for what jan etc. Yellen says later on. The stock market has as much skin in this game as anything else. If she is too hawkish today as we were hear rg earlier on, you have a full rate hike cycle priced in, you would think that is not great for stocks. As get to about that the open. That is 10 minutes away. This is bloomberg. Guy welcome back. This is the market open. We are seven minutes away from the start of cash trading in europe. Ftse 100 looks like it is going to open a little soft this morning. London looks soft this morning as well. Lets talk about where we think the terminal is pointing. Lets talk about the fair value of where we are now. Yesterday fairly flat open. This morning, we think it is by. 3. Open down germany looks softer than most. Looks like germany is going to be down by. 5 . At the getgo of trade in a few minutes. Matt yeah, we saw the rollover in crash trade roll over into weakness in the u. S. Trade. I have a chart, 6454. You can check it out on your bloomberg there if you like. It shows the european cash trade here, the stoxx 600 kind of rolling over and then the s p 500 picking up the negative baton there. Another chart i like to look at a lot. This is 3186. A little bit further back in the library. This shows s p 1 move. Anything above or below this yellow dotted line. You can see we havent had an s p 500 drop of more than 1 since october of last year. It has been a long time. Yesterdays moves were down across the board in the u. S. People are going to be talking about that a lot today but it has been a long time since we have had a significant or at least a sized move down in the s p 500, guy. Guy matt, i have have a question for you. How much money have you spent since arriving in germany . This morning we have german retail sales and they were soft again. The market was expecting the retail sales number for january to pick up. We had a positive. 3 penciled in. We have minus. 8 and minus. 9. I thought the germans were feeling pretty good about life. Whats going on . Matt im a special case. I moved here. I had to pay a lot of extra fees that youll not have to if you lived here in a regular basis. Germans dont spend a lot of money. They are not given the opportunity to spend a lot of money. Shops are normally closed by the time normally people get out of work. They are closed on sunday like in the u. S. You cannot do that in germany. As a result, they dont have the big consumerist drive that the states and britain have. Guy that used to be my life walking up and down kings row spending money. Hat was a long, long time ago. Im curious to find out whether or not that that is based on that expansion is based on the trump trade. The w. P. P. Is talking about a fairly slow start to 2017 which is fairly interesting as well in ability to spend money. Lets talk a little bit about where we think this market is going to open. We think it will be soft. Paris and london down. 2 . Im curious to see what germany is opening more softly than that. We expect them to be down around. 5 . The market open is four minutes away. All of that coming up. A great show. Another great hour coming up. Well talk a lot about french politics as well. This is bloomberg. Guy welcome back. Lets talk about where these markets are going. Cash open a little softer this morning we think. Down by 3 10 of 1 for the ftse. The German Market looks a little more soft than that. Turkish lira under pressure but we are all waiting for janet yellen. Matt we are and that is going to be a very important to get for the euro dollar trade. I have a chart that i swiped off of and live. Us is the eurodollar chart over the last two months lets say two weeks and they have been pushing down against 105. Bears are hoping it helps them out on this trade but they are fighting against options expirys at 105 as well as support from euro, swiss franc buying. It will be interesting to see how much more weakness we get here in eurodollar as we head into the yellen speech tonight. Chart. At charge the market open is coming for now. Opening softer. Stocks being marked down, 73. 78. We are expecting the cap bronze softer as well. Down by 1 10 of 1 . Expecting more on the downside. 49. 57 is where we are trading. Dax is going to open even more softly than that. That is the purple line. Dax is just opening up there. See where it underperforms from here. That is the expectation. We will get you through the numbers, run you through the figures. Down half of 1 . Cranny, i know you like the euro chart but what else have you got . Take when other people things that you like you take it as a compliment. Are you losing velocity . That is what essentially happening with these markets. Every percent probability of a rate hike to 90 in five trading days. Equity markets are going one third of 1 down on financials. We saw weariness come through in financials on the market yesterday. That is the question for european stocks. Are we going to play catchup . Line and is a white s p 500 is your blue line. Question is this. Profits in ller europe are at the strongest level in two years. Europe is outperforming the United States on a profit basis for the first time in over a yearandahalf. Profits in europe are up 11 . Usa 5 . Gapyou close close the between the stoxx 600 and the s p 500 . Another gap you may want to have a look at is the u. S. And the u. K. 10 year divergence. Government bond yields in the blue, they are moving lower versus the United States which is moving higher. Ubs making the point that he thinks more quantitative easing into the latter part of this year into next year and the bank of england will be forced to issue more quantitive easing. Spreads are us. Die . I will pick up the idea of europe underperforming. Lets talk about where we are in sense of movements here on the European Market open this friday morning ahead of janet yellen. A couple of stocks to Pay Attention to. To, we talked to the boss very shortly. Stock up by 5 . The miners. Anglo softer, glencore is off as well. Wrangled is down. Point. How you the index it is the miners knocking off these this morning. That is where money is rotating out at the moment in terms of the equity market this friday morning. Lets talk politics. Matt yeah, by the way i am noticing sap as well as jamaal to helping. Into politics. Marine le pen reiterated her promise to take the country out of euro as part of a broader sweeping across the globe. The National Front leader made the speech last night in paris. This is a moment to put an end to the borderless economy. Look at the world. Everywhere from Donald Trumps china too india, from theresa mays britain, the economic patriotism is winning. Look at the tens of thousands of jobs repatriated and the u. S. Companies are relocating jobs in factories are being reopened. We are dumb with the illusions of free trade and naive globalism. With us, the Investment Committee member where he helps manage 53 billion euros of assets. Guy and i are thirsty for company news. We want to talk about business, but these political stories keep sucking us back in and taking up all of our time. Is that true for you as well . Know,