Central Bank Governor mario draghi strike a hawkish tone to the market anticipates, and what will this mean for peripheral bonds. As earnings season hits. In swing, we will speak to an interview Deutsche Bank cfo at 10 00 cet. Ecb andtalk about the Deutsche Bank. Lets talk about where we are with markets. Focus on the since of direction. At this point in time there isnt much. But off with calculations for europe. Down a bit but not by much. Anbe we will see underperformance and peripheral markets, but no clear sense of direction coming through from equity markets. We are digesting what is happening, plus we will figure out whether or not draghi will provide a surprise later on. They start to the week, market feels like a distracting now. Stock little bit about what we are seeing around the world. Gmm at the moment pointing to come again, not a lot. We are watching whats happening with the nafta story. Drift in thea markets, donald trump providing a few surprises. Both points not exactly providing a great deal of detail. Lets catch up on what we need to do. Heres first word news with david england. Lets get started with Deutsche Bank. Investors kept waiting for that return to growth. Is groups largest investor in the First Quarter. Revenue first trading bouncing currencies is largest source of income for the back bank 11 in the First Quarter. A your back is less than half and 24 increase in their revenue reported by the five biggest u. S. Investment banks. The bank of japan has kept its stimulus policies unchanged. The central bank said it will continue to use policy rates and added purchases. This all underscores the few that any exit from his unprecedented months or easing remains far way. Dha also made a small increase to its growth forecast for this fiscal year and next. You play policy decisions,12 45 u. K. Time followed by Mario Draghis news conference. Onn follow all of that tv. To the u. S. , the Trump Administration hads its opening bids for officials have described as quote, the biggest tax cut in u. S. History. It calls for slashing of the federal income tax rate to 15 for corporations, small businesses, and partnerships of all sizes. Here than 250 offers little in the way of detail including whether per bones proposed cuts will increase the deficit. Thehis is about growing economy, grading jobs, the economy. As they started, president trumps comes in every day in talks the two of us about economic growth, prosperity, and jobs and orderly doing to stimulate economic growth. Thats how we are looking at this plan. News 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Thank you very much. President trump spoke with the canadian Prime Minister in the mexican president yesterday. Trump agree not to terminate the trade deal, but to bring it up to date through renegotiation, we did see a sharp reaction in the peso and and loony. The new chart for year. Of trend has been kind Dollar StrengthDollar Strength, then this key reversal. Technicians getting excited, could be a reversal. Nevertheless, what to be decided. Know exactly what happens next with tax. We have a onepage memo, and he is ambition is great, but details are small. We dont exactly know how nafta will be renegotiated. A lot to think about. Tv out offrom singapore. Mark, typist a big market moves. Obviously have been front and center in office. Walk us through the market position. Usually get much activity in the Canadian Dollar or mexican peso during asian time, but mother that both are big swings today. The idea that the United States still seems to be happy with nafta, they willing to continue go negotiating seems to be quite a big surprise to pick one from exchange markets. As you say, Canadian Dollar potentially will have a reversal day to day. Well under 130 six heading towards 135. Delegates, mexico below a 19, quite a big threshold. Setting up for an interesting day in north america. Maybe we will see some of the come through london later on as well. I need to talk about the ecb. The question to me is, has michael change draghis feels the world . Does not open the door for mario draghi to turn more hawkish . Possibly. If you were suggesting europe is doing pretty well. Thats take it away bump one big risk factor, assuming the France Election poster quietly. Inflation is not picking up just yet. Draghi probably wants to tread carefully. Also should be mindful of the fact that he his predecessor there is a mixup when the tightened early in the market when overexcited and he had to reverse it. Draghi really wanted to do that. He will be extremely cautious. He may want groundwork for next year, but will be carefully chosen. Great to hear take, thank you very much. On smart analysis of whats happening in the market, theres a number of tialavea goes today, including big corporate reports. To four z to know today, tia like, mliv. With is now head of micro strategies. Lets talk about the ecb. Will get a draghi or sell the banks based on that is not as well. One thing i would say that wese expectations, draghi seem to have forgotten that there is a hawkish Market Reaction to last policy statement. To speakers were very quick to quite extensively trying wrote back. Have had sincee then, ok, yes, we may have removed some of the tail risks and france, but actually, inflation data is disappointed on the downside. It could be that april dated as of once on the downside as well. Im not quite sure why expectations have been built in that youll be hawkish. We will talk about that more detail in a moment. Come back to donald trump. Petitions are raised, then dashed on a lack of detail. How do i deal with this as an investor . The expectation is that well see tax reform in the United States, but the reflation tape trade is fading quite quickly. Of the markets given up on donald trump . Is there an expectation that he will deliver something, along with lines, and whats the timing . One of the things to look at is how much you think the market has big bacon for this. He said is still; we have been waiting hundred days, we get some of the detail on tax policy. If the Health Care Act to go through, means theres an execution risk in this. Thats why we are neck getting the reaction. Theres things like the premium in the states. Its no back flow zero. That suggests that markets are built and little in terms of future growth and inflation. Equities, probably there some expectations sultan. But in fixed income with nothing priced in. Isnt it a mistake to believe theres nothing coming . You assume its come to her the economy is in will raise wages, thats working on assumption. Anything on top of that from trump, in theory and then you put the Balance Sheets on as well the curves should shake differently. Yet, so rather than mistake i was saying that that tells what what your riskreward is. And that if if were at the point where expectations are quite low, and we will see what happens with the gdp data this week. If the economy seems to be still doing ok. You know what the risks are skewed because expectations and selves are so low. Would we go from here . Do you believe will get rate hikes in the fed . Are you going to get with adults are indicating at the moment . Inin, the market is pricing a spend markets. And, we have been hit before. We have never been anywhere else. [laughter] the market will be near lows. I think its quite interesting, telling that we started off talking but with different election meant the ecb. Actual u. S. Rate expectations in the shortterm this weekend move further than in the eurozone. Its not that the fed has been talking about such elections is a risk, but a think the removal of the global tail risk like le pen and the fact that the u. S. Economy is still doing ok the probabilities for june is not quite yet to certain, but rampials are now able to up expectations quickly, as they did at the end of february. All within a couple days. Ou will stick around coming up, more on what we think about what draghi will deliver today. Is playinglection into French Election is playing into the linking. Are we underplaying le pen . Exclusive speak to a ceo after its Company Raised the forecast, courtroom corporate reports as well. Russia is a big name. This is bloomberg. 17 minutes away from the start of castrating in europe. Press conference policies unchanged as an inflation forecast, talking about the fact that the exit has been very is a long way away. Earlier discussed specific exit strategy, thats an understatement. Depends on economic and exist. Al conditions that premature discussion of exit would confuse markets. Dont think about it seems to be the message. Is of the same story for the ecb . Draghi faces increasing pressure from hawkish fringes. It is a big fringe. Story is one i think you will have to deal a very carefully. Language will be important here. Economy looks better than it has in years. Applicant the survey data, the pmi, the data is really strong. The problem is core inflation remains firmly males on the floor. I suspect he doesnt want to make the same mistake trichet did, but i dont understand the incentive to move at this stage despite what banking will be saying. Look,re they will say this is what our economy is doing. Ou saw this this morning Consumer Confidence is high, economy has virtually no out at cap. I hear but i dont listen, was the phrase. Think there are couple of things to consider. Is, right now there is a big gap between survey data and hard data. You have this animal spirit thing going on, which is real, but isnt there yet. The second point is just that the inflation is nowhere strong as it was a month ago. Yes, theres Energy Prices and core inflation has moved it all. One thing we are concerned about is at the list meeting you are looking at Inflation Expectations rising, headline inflation close to 2 . All of a sudden headline is at 1. 5, somef expectations it might bounce this month. Hasnt, sostions it the inflation outlook isnt as good as it was a month ago. There are reasons why and similar way to mr. Corroded there will be neutral. One thing people have spoken about is the idea that we are seeing political risks removed in the form of the French Election, the polling numbers the secondar round polling suggests back wrong will walk it. Hat stuff makes people nervous Market Reaction on monday was huge. Was it overdone, are people underplaying le pen, does that make you nervous . Was a surprise, even though the last threemonth three months they were the two candidate expected to get to the second round. Shown any signs of movement. But that suggests is le pen remains a genuine tail risk. Come couldnlikely have massive implications. Still very unlikely. Dont think thats changed. Its interesting that you had this large thing on monday when actually that was the result is expected. So the questions coming in that she is the i. B. Function to get in touch and mike ask michael a question how to markets perform, the banks . We have seen the market rally sharply. Let me bring up a chart, the 600. It makes interesting viewing from a technical point of view. We are well if of the moving averages. Technical indicators point to an upside. To european exit markets gradually leave higher from here, or sharply . Is there a political story unwinding . Maybe risk is there but you get past the French Election fully, then uncoil the spring . We have unfortunately had the caner part of the rally lower there was a defensive position, partly politics, partly growth. This year would have we have had better growth a few as you have said. The underwear is not there anymore. Much strongere growth, better earnings to to support the rally. Michael will stick around. Cb day. We are watching whats happening with mr. Corroded. Later on we will watch mr. Draghi. . Ill he say anything today u. K. Time, press conference 1 30. We will live blog what is happening. You can listen on bloomberg radio, some of the options, worth paying attention to. Minutes away from the market open, we will look at todays trading. Deutsche Bank Litigation numbers are down, but while society Deutsche Bank is the question. German lenders revenue line missing expectation. Other thing to note is, 31 stocks today in the stoxx 600. Thats worth paying attention to. Opening statement ways eight minutes away. This is bloomberg. 8 53 inin london, frankfurt. Estimates coming out of 5 531 million euros. Lets bring in Michael Metcalf was from state street. Promises growth. They things dont happen overnight. It trade issign of there any sign that john return of growth is green shoot suture . A couple green shoots. Vic trading was up versus last year. It was up half as much as rivals, but still little bit. He still had some of the issues you have the fourth quarter, which is prime brokerage down. Revenue down equities brought down. Advisory was down more than rivals. Elements, signs of clients not fully engaging. , litigationstion down. Shadow has been over Deutsche Bank for a long time. Like for now. There are still things in overdone on litigation. A lot of the big pieces that wont be as much of a story. You can look at other costs and how they are doing and cutting there. Time because, sadly. Im genuinely sad about that. Think you both very much. The with Deutsche Bank is coming up shortly. Thats why matt is in frankfurt. Guy one minutes ago until the european open. Lets talk about where we expect that to go. This is the picture we find ourselves with at the moment. Not really any clear sense of direction. A lot of earnings to digest. What is happening in the United States. We have the ecb, plus weve got some out of the states to think about. The market is sitting on its hands on a big rally on monday. What is going on with dividends today . Bdbd is the index. 31 stocks go ex dividend today. The games in there. Really big names going through on that. That is one to Pay Attention to as well. Alsos the picture refiners again, we are not expecting a great clear sense of direction to emerge. The caps softening up, the 5100 the this morning we are carrying on with that. The london market as you can see is dropping. Just sort of go back a bit and we try to get the monday rally. Droppingn see, we are back down to the session lows yesterday after the rally later in the day. Details please. Anus two roads diverse, which one do you trouble on . Do you fancy china . Your under pressure. What we have here is a very clear story. Threemonth lows in shanghai. Xi jinping meets with Bureau Members to talk about curbing leverage, a plot the moves. Engines mes within inches. What is happening in europe . Three stocks in total as you have said have gone ex dividend and some of the big bulwarks in that. , numbers, you will talk more to match about that. Provisionslitigation seems to be a lot less in the market than anticipated. Down. 5 . All that lower this morning. Overall concern in terms of what is happening in the market now. The macron rally, that does not happen that often. What you have is breaking trend about this. Hi, 2015 high. If it isnt dollar canada or elsewhere. Yet again that nobody wants to see my iv. Ib. Why does it come up at 10 00 . I love a 3d version of what is going on. We have this softening in the curb. It is pretty much global. Gilt yields unchanged. We are be go next in terms of that disappointing information from donald trump . What does that do to the bond market because that has got a global im off to bloomberg radio. If you are driving you can multitask. Thank you for a much credit that he run you through what is happening on my screen this morning. I have it set up with index points. I will refresh it. You will see a quick bit of black and it will come back. Deutsche bank is down by 3 . That is the takeaway this morning for the the stock. I think it is the revenue topline that is upsetting people. Interesting stuff over the last few days. A little bit of them is there at the inches are caused the problems with the the three 50s are causing there. S p on the upside. Nokia is up five point the secondbest performing stock at he most weight to the upside on it european markets is they are bayer. The giant has raised its outlook saying it sees substantial sales, increasing significantly this year. Lets talk to the ceo. He joins us out of germany. Congratulations on the numbers. You have a lot to think about right now. Is the condition of the alleged giving you a little bit of room for maneuver in terms of what youre seeing in your numbers . We talked to patrick thomas, he seems like a a happy man. Good morning. Results for the First Quarter, i can assure you that we have commercial tech quarters. A lot of pepe evil. We have done very well across all of our businesses. Course as the main shareholder of covestro we do benefit. That has led to an upgrade for the full year of 2017. Guy are you on track with these monsanto deal . Because the timeline you anticipate . What is going on . We are on track with the filings. We have filed in most of the 30 to resistance jurisdictions. On track versus the perspective of closing by the end of the year. Overall we are making very Good Progress. Bothnews, we have seen from the transaction that it is supposedly going to close within the next few weeks. Trusto often to clearance. Behindw expect to close the third quarter. With that i think there is also strong testimony to our prospective of closing by the end of the year. Guy what are u. S. Relators telling you right now . Regulators telling you right now . Constructive discussions. We have received the second , still left to file in quarter two. The only thing i can share with you is you are making progress, constructive. You cannot preempt the final positions of the most rele