It very bruised apple. 45 billion in market cap is lost as a 50 onequarter growth streak is shattered. Has peaked iphone come and gone . We are going to talk about apple and the fed, but its all about the banks. Were going to talk to santander. My assessment of the banking reporting season is expectations were so low that actually trying to make a beat happened and isnt as hard as you would of thought. A good think thats point. Its a lot like the show. Expectations are low. People may watch it. Santander and barclays, even though we did have a difference onbarclays had a big loss the estimates, and santander Beat Estimates one thing they have in common, they are losing loans on commodity loans. That get us back to the oil and gas sector. We need to press them on how bad are their Energy Sector loans. Guy its going to be fascinating to hear what they say about the low Interest Rate environment. What was interesting about barclays, they cut the retail part of the business, which now makes more money than the investment part. Thats a factoid we will bring out later. We are half an hour away from the european open. Let me take you to the bloomberg and show you what is going on. To be honest, its all about the stocks rather than the stock market, and its going to be interesting how everything changes throughout the morning. We are a little bit higher on the euro stocks. Cac flat, and the dax, a little bit firmer. It does seem as if everybody is going to be staying in germany today because of the lufthansa strikes. Hans you may be staying in frankfurt to her that is where much of the strike is located. Onsaw a big move overnight u. S. Inventories. Brent is still up higher. Namely the big story for me is what is happening with the australian dollar. Its down there at the bottom, big loser, down almost 2 . We basically see a flat dollaryen. Lets get to bloomberg first word news with david inglis. David lets get started with donald trump, because he has declared himself the presumptive nominee for the Republican Party. Victorye as he swept to in all five northeastern States Holding primaries tuesday. On the other side, Democrat Hillary Clinton beating Bernie Sanders in four out of the five states. The winds had pressure on their challengers to show they remain viable. Spain is heading for new elections in june after parliament failed to select a Prime Minister for the first time in its democratic history. King philippe a halt to the efforts to forge a governing majority last month. He concluded that none of the candidates had enough support to win. Marks the date as the likely date for a new poll. As we just showed you, the aussie dollar has weekend after inflation unexpectedly dropped during the First Quarter. The Consumer Price index fell 0. 2 . Were expecting a 0. 2 gain according to a bloomberg survey. The shares of apple have slumped in after hours trading, that after Second Quarter sales fell 13, 13 from the year earlier. The tech china is also predicting a further sales slump as growth in china stumbles. Dayal news 24 hours a powered by our 2400 journalists and 150 news bureaus around the world. You can find more stories on the bloomberg top. Guy thank you very much indeed. Lets just talk about what weve got coming up. Earnings, butrate really, its all about the fed. We get the outcome of the fed local meeting at 7 00 p. M. U. K. Time. Economists see no chance of a hike today, but investors will be looking for clues as for the possibility of a rate rise as soon as june. That may be somewhat overeager. Expects as market hike in september. Joining us is first word strategist richard jones. His june 2 soon . To richard i think june is too soon. I expect the fed to play a steady hand, but a lot of change from the previous statement, and i also think i know we tend to be obsessed about brexit in the u. K. , but we have also had the fed saying, and i believe it was Dennis Lockhart saying, that brexit is on their radar, and they are concerned that any sort concerns may feed into the u. S. Economy. With the fed meeting in june a week before the brexit vote, it might be too soon. Guy compare and contrast the domestic story. You talked about the brexit story and what is happening with the boj and ecb. Domestically, things are taking along pretty nicely. Richard for a datadependent fed, and im a bit of the data that has come down considerably since two weeks ago. 2 was the estimate for gdp. Now its about 0. 4 . It has come down considerably. I think a lot of economists are saying, the fed can discount a soft patch in the First Quarter. For a datadependent fed, the most recent data they look at was quite a bit softer than what even as of sixed weeks ago. Im going to think you from berlin. Im also going to apologize i cant be with you in london. Up next, we are joined by the chief Financial Officer of bank go santander. Firstl discuss the banks Quarter Results and the outlook for European Banking. That is coming up next. Guy welcome back. It is 40 minutes past the hour. This is what london looks like. Absolutely freezing this morning, but beautiful. The sun is out. We dont often see that in london. Heres the Bloomberg Business flash. Heres david inglis. David thanks, guy. Lets get started with lufthansa and air berlin, canceling more than 900 flights this week alone, Public Workers demanding a 6 pay increase. Cancer sick cancel 60 of those flights today lufthansa will cancel 60 of those flights today. First quarter adjusted earnings for the energy producer, 1. 64 billion. Thats more than 1. 25 billion seen in a bloomberg survey. Profit was about 37 lower than a previous figure amid a slump in crude prices. Statoil has reported a First Quarter profit surprising analysts who expected a loss. The oil Company Announced adjusted profits of 122 million to the market predicted the Norwegian Energy producer would be 125 million the opposite way in the red. Adidas has raised its profit forecast. Income up 15 to 18 this year. Also raised its 2016 sales outlook. Now to check twitter, taking a tumble after missing estimates for revenue projections. It is expecting secondquarter sales to be lower than 610 million. Analysts were projecting 677 million. It is for going to add new which has affected advertising sales. Thats her Bloomberg Business flash. Back to you. Guy thank you very muchguy indeed. Quartert new first European Bank earnings, creating a mixed picture for the industry. Yesterdayhartered reported a beat of profits. Capital told bloomberg levels improved. Barclays reported a drop in pretax profit of 25 . Analysts predicted a figure of 846 million dollars. I think analysts are seeing numbers they like. Santander posted a drop but Beat Estimates. Net income came in at 1. 6 3 billion euros, more than the 1. 5 expected from bloomberg surveys. Joining us on the phone exclusively is jose garcia contera. Good morning to you, sir. Thank you for taking the time to join us. Clearly, the numbers have been affected by the Foreign Exchange story, so im going to move past that. Int im seeing is a 5 drop net q1 interest income. How much of that is you rolling 23 program across spain, and how much is due to mario draghi . For the thank you opportunity. The 5 drop in Net Interest Income is mostly explained by particularlyrate, the drop of the pound relative to the euro. Excluding that, Net Interest Income is up 6 in the quarter compared to the First Quarter last year. In spain, we had a slight negative Net Interest Income, but again come its mostly due to the competition on the asset side. Guy jeff bailey at barclays saidguy hes feeling cautious ahead of the referendum in the u. K. The u. K. Come as you indicated, somewhat of a driver of the profitability line. Are you feeling cautious ahead of that moment, as well . Mr. Cantera i think our business in the u. K. Is doing very well. On thegaining clients onetothree account. 123 account. One billion pounds of deposits per month in the First Quarter. Our business is doing very well in the quarter. Obviously, we felt market due to the Eu Referendum in the exchange rate. In the u. K. , our business is doing very well. S hans nichols in berlin im glad you mentioned eu politics. I wanted to ask you about the ecb program. Do you plan to participate in the . Mr. Cantera we are analyzing that. The Technical Paper is not out yet. Once we know the details, we will decide whether we will participate or not. I think its too premature to make any estimates at this point. Hans you have announced some job cuts in spain. Where else might we see job cuts for the bank . I mr. Cantera think searching for efficiency, operating efficiency, is a constant for santander. We have one of the best efficiency levels in the industry at 48 . Right now, our target is to get to 45 . Were looking to reach that target in our geographies. The search for more efficient business processes is a constant. Dont have any specific plans similar to the ones we announced in spain, but again, its a constant strategic goal we have in our day to day. Guy weve dealt with europe and the u. K. Can i take you to the other side of the atlantic . Were going to start south and work our way north. You have seen a significant decline in npl in latin america. Is that sustainables . Mr. Cantera the main problem there is brazil. The brazilian economy is challenging at the moment. Its estimated that the gdp might drop around 4 this year. 4 lastfter another year. We think we are going to see pressures coming from that in the next few quarters. Doing a greate management of the situation in brazil through the changes our business has made and cost controls and the spread increases. I think its a challenging environment, but i think over the next couple years, the cost of credit in latin america will go down. Guy let me take you further north. Lets talk about north america. You have a stress test coming up. You have failed it a couple times. Are we going to see a third fail , or is it a pass . Mr. Cantera we dont have any indication from the fed yet. We had an exercise a couple weeks ago. We havent heard anything from them. More important than passing or to see if weits are making significant progress toward setting up a Robust Foundation for our business longterm in the u. S. One year later, its not important. What is important given our commitment to the u. S. And our longterm goals in the u. S. , what is important is for us to build a strong foundation. We want to make sure we are making progress towards that. Hans we saw bad commodity loans really affect the results of barclays and Standard Chartered. Where are you positioned on that, and how much do you see the slowdown in commodities and loans affecting your business . We mr. Cantera have a relatively small portfolio in oil and gas. However, in the u. S. , we decided to make prudential provisions in the quarter that amounted to 100 million. Right now, we have 8 of our oil and gas portfolio in the u. S. Provisioned for. We feel comfortable with that. A lot of what we have in the u. S. Is reservebased lending, highquality names, very good quality names, and elsewhere, we mostly work with semistate Oil Companies in latin american countries. Oilintrinsic risk of our and gas portfolio is very low, on top of the fact that we have a relatively small portfolio. Guy i asked you a political question earlier on. Let me ask you another one. We have seen the news related to the fact that we are likely to see another election in spain. Can i ask you two questions first of all, how do you think the economy is being affected by the political instability, and is there any impact you are seeing into your business as a result . Mr. Cantera i think its the last elections, we had them in december. The economy in spain is doing very well. It grew at 3 last year. Its expected to grow at 2. 8 this year. So far, the impact is not significant. Inwill have elections again june. Hopefully, we will be able to form a government after that. The real impact in terms of the economy, i think, is going to be negligible or relatively small. In our business, we are not seeing that. Just to give you a few numbers, new mortgage production is up 25 . Business lending is up 13 year on year. That tells you that the spanish economy really is thriving at the moment. Guy excellent. We will leave it on that note. Thank you very much indeed for your time, the cfo of banco santander. Up next, we are going to look at potential corporate movers, including barclays. Yes, the bank may have missed estimates, but it looks as if there might be stability in the Investment Bank that the markets liking. Its a similar story may be with what we saw yesterday with Standard Chartered. There are no horror stories. Maybe thats enough to keep the market on board. We are eight minutes away from the market open. We will run you through the financials next. Hans it is 7 53 in london. That means it is 8 53 in berlin. What are you watching in london . The ring gynt is rising, the new central bank governors. We watching two things this morning. Were watching what is happening with the fed. Thats going to be the big story, but in advance of that, European Banks are in focus. We were speaking with the ceo of santander, interesting conversation talking about the spanish economy and with what is happening in the u. K. F and barclays is an interesting call. Caroline hyde has the details about the banks. Caroline we actually could see barclays pop on the open despite the fact we are seeing profit down 25 . It looks like a miss. This is barclays share price over the course of 12 months. Many expected it could fall. We could see 2 or 3 higher. Theyve got big credit impairments coming from the oil and gas area. Perhaps also some of the charges come into their corporate and Investment Banking unit that they are winding down if you strip away that charge, it looks like profit before tax beat according to certain analysts. Watch the barclays shares. Could it rise on the open despite a 25 slump in its firstquarter profit . This is total in the white. This is the oil and gas 600 stock index. Total beat firstquarter estimates, one, . 6 billion helped by costcutting. Lastly, i give you adidas. The open asw on adidas beats in terms of its forecast. That looks a little bit like a [indiscernible] coming up, it is the market open. How will barclays start the day . We will find out in four minutes and eight seconds. Councilmember mckeown good evening i am guy johnson. Hans nichols is in berlin. Where moments away at the start of european trading and you have the morning brief. Ans no fireworks expected but investors await a risk assessment. As barclays falls 25 of the First Quarter of the Investment Bank is relatively resilient. And a bruised apple. Lets head to caroline for the latest. Caroline we are starting to see 0. 2 . Day stoxx 600 up barclaystale and come out with earnings. You see a slump for the first time in 14 years. Here is the euro stoxx 50. Completely flat. Waiting for the cac 40 to open, for the dax to open. It is a Tech Industry feeling the pain. And the fact that apples earning missed forecast. No huge moves. We want to dig into the individual movers once again. Oil guiding energy higher. If you dig into the imap function, you can dig into what is happening on and industry basis. Those suppliers of apple saw a lets move on to what is happening in currency markets. This is your world currency. Down 1. 8 . That is what happens when your inflation falls through the floor. Weve got weighted median cpi, your Consumer Price index, gaining 0. 1 . It was the weakest on record for australias inflation. Does that mean more Interest Rate cuts are to come . Elsewhere, the u. S. Dollar weakening ahead of the federal reserve. Lets get on to those stocks. Lets get into barclays. In terms of its impact on share price, or was it indeed that we were seeing barclays post a 25 drop in their share price . Its up 3. 5 . Missed, but its in the bad bank area. The corporate Investment Banking unit saw a decrease in its pretax profit, but it was oil and gas. Underlying this, it looks good. Total, up more than 1 . The First Quarter beat even though profit fell 37 . Adidas, unchanged. German stocks are a bit slow to open. Adidas, forecast to jump 2 to 3 . Y lets talk barclays. We have michael morrow, our u. K. Finance editor. What are we up now . Days, 4. 72r three percent. The daily session chart, maybe not so amazing. Three point 65 . Walk me through this. Michael you saw yesterday with Standard Chartered a bit of a relief rally. 25 ,you have profit down but its not as bad as it could have been. The Investment Bank seemed to hold up better than some of the u. S. Peers. They had a week quarter a year ago, so its an easier held up. N, but trading creditrating did better than expected. There are some nuggets of good news, and a lot of the bad news came from the businesses they are exiting. Investors can say, if i believe they are connected out of these, i can look past that. Guy most of the bad news is in the rearview mirror. He mcfarlanes court that can deliver a share price doubling in three years, we are doubling we