Today is the worst today. Is the worst behind this now . Behind us now . Iss than an hour from open, lets take you to the bloomberg and show you what is happening in terms of expectation. This could all change later on. At the moment we are called down in europe. Your stocks down. 6 . Euro stoxx down. 6 . Dax is off. 4 . Payrolls could change everything. Lets take you to the other assets around the world. Clearly the aussie is focused, down 1 . 53. 90 is where we are trading. How far behind the curve is the aussie gain . Are we going to see further cuts . Brent trading down. Shanghai down 1. 64. Barely flat. What do you need to know . Heres earthward news with juliette saly. Juliette the aussie dollar has dropped to a record after it reduced its outlook for core inflation. Underlying inflation of 1 to 2 , down from the 2 to 3 forecast in february. It will be a challenge for governor phillip low. U. K. Voters have given their first verdict on germany kormans Jeremy Corbyns labour party. It sustained losses across england. The brightest spot for labor may. E the london Mayoral Election con has run a probusiness campaign. The Election Results may also give him the Voter Sentiment ahead of junes referendum. Japan may be able may not be able to ignore the yen growing the the yens growing strength much longer. He says the Exchange Rate us be stabilized and japan must carefully watch and respond to these movements as necessary. It weaker yen has been a linchpin. Id cameron has used japan speaking at a News Conference cameron said britain could benefit to the tune of 5 billion pounds. Ask we want to see more we want to see more for our two great countries. We both agree that the way to do that is through a comprehensive japaneu trade agreement. This deal to be worth 5 billion pounds a year to u. K. Economy, that is 200 pounds per household. Prime minister abe have agreed to redouble our efforts to get this signed as quickly as possible so that we can all start reaping the benefits. Juliette Goldman Sachs is cutting more jobs extending reductions in fixed income operations. 2 of workers there that is according to people with knowledge. Targeted had already fixed income personnel through last month. Global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. You can find more stories on the bloomberg at top. Guy thank you very much. It is payroll friday. The report is out at 1 30 u. K. Time. 200,000 jobs, the forecast. A strong number could make the case for a june meeting. Many defend are talking about this being a live many in the fed are talking about this being a live meeting. Lets talk to mom and a key set ronan amin macky sall ramin that had a effect on commodities. If they do hike, that will continue. We think we are expecting to hikes. Thats expecting two hikes. Hikes. Cting two i think the market is too pessimistic. The fed governors have pointed that out. There has to be some kind of reckoning here. It could be rapid. Markets will rise to increase the probability toward the end of the year. That will be the guidance that we get from fed governors. the nonvoting members ask line the market was based can too much of the probability. Was basing in too much of the probability. Story. E weights it is a story that we see around the world. It is a story in europe, japan and the United States. The falling unemployment story. This is a stagnant story. You wonder whether or not Monetary Policy could solve what is going on. Whether or not the fed will be how do you deal with that echoed it is a conundrum that is being faced worldwide. Ramin it seems to be flatter. The question is whether you are going to reach a point where he searches the acceleration . In germany we have seen signs of growth. Out i would not rule i would not say the phillips curve is dead, that is a bit premature. Guy do we get a much more hawkish figure . Only getting this gaggle are we getting this . Ramin that would be a big policy shift from the fed. To hike more aggressively. That is not our expectation that we do think the phillips curve i think we will see some signs of wage improvement in the u. S. Toward the end of this year. Guy ramin is going to stay with us joining us from ubs. Up next, the donald backs the brexit. He says u. K. Would be better off outside of the eu. The things but in favor of those voting to leave . Or remain . We will talk about that. Guy 20 minutes until the European Market open. Lets get you caught up. Here is juliette saly. Juliette First Quarter profit dropped 33 , that is the World Biggest dealmaker that with a slump and a decline in iron ore. It maintained its fullyear earnings profit. 40 million air bag inflators will be added to that recall. Takata said it will cooperate but it is not aware of any risks from the products in question. The time bank seeking a buyer to shore up its finance is. Its finances. The income fell to 93. 2 million 143 million a year earlier. Up toand sap are joining deliver software for iphones and ipads. It opens a new avenue to apple to reach businesses at a time where cells have tapered. Where sales have tapered. That is your Bloomberg Business flash. Guy juliette, thank you very much indeed. Delivered their first verdict on Jeremy Corbyns labour party. Losses across england the scott just scotland. England and scotland. Lets get more from alan crawford. He joins us out of edinburgh. If i am watching in berlin, paris, is there anything i could take away in terms of the political story developing toward the brexit . Arguably with the results of the English Council elections and across scotland and wales, it doesnt feel like a country on the verge of revolution. Gains theid see antieu party in england, they were relatively modest, Something Like 20 seats out of 2500 that were up for election. The results are not filling in. Also present stand to gain every seat in scotland. More than 13 of the vote in wales. , but very hard to predict i thought we would be looking at. A far bigger u. K. Vote that wouldve caused concern on behalf of the par minister. On behalf of the Prime Minister. Guy is that good campaigning for the brexit is that good for those campaigning for the brexit vacco brexit . We had to take trump seriously now. Of president ion obama on the other side arguing very strongly that the u. K. Would be better to stay in the eu. Join thent, it would back of the queue for any trade deal. That suggests that had some modest impact on the Voter Sentiment. I imagine trumps intervention would not have any particular impact. He made very clear that America First so any weakening of the eu would play into that narrative. The Prime Minister has been article of trumps comments on muslims and reinforce that message yesterday. The timing looks somewhat predictable. Stuff. An, interesting on crawford joining us out of edinburgh on the latest coming out of the u. K. Regional elections. Were looking for to getting results later here in london. Joining me now is ramin the keys nakisa. Talk to me about what you just saw about the u. K. Ramin we saw conservatives gain a lot of ground. Think the key for the u. K. , passing a very good brexit age on bloomberg also the volatility which you have thrown up on the chart. We have seen a fall in volatility and a reduction in the skew as looks more likely that the u. K. Is going to stay in the eu as polls have shifted toward the direction. This is probably the best barometer to look at. Guy the market has lost a lot of money on a trade. Buyection on the hot on that side. Up. Es that was up, up, a lot of people came out and said you are insane if you are buying the stuff. Did the pendulum swing too far pendulumn 24 wing too far vacco exit, we we do get an think it could be up to 30 fall in the trade weighted value of sterling. Guy what if it doesnt go that way . You look at where money is going at the moment. It is pretty convincing that u. K. Is going to remain. Not always the best indicator but it has proved reliable. What happened to the u. K. Decides to stay . Ramin we think the effect is going to be on the currency. You look at what is happening to the equity market, it is hardly changed at all. It is hardly shifted. It has hardly shifted. That is where we see the we will see the big impact. Strengthening in sterling versus the dollar. 159 is our call for the end of year. That do for mark carney . Mark carney dancing around the elephant in the room. When is the first rate hike coming in echo is the Market Pricing it in correctly coming in . Is the Market Pricing it incorrectly . Ramin there are various ways to think of this. If we do have the exit, they will be very cautious. They are much less likely to hike in the nearterm, unless we see large outflows. There would be weakening of growth in the u. K. And that is what we would expect. In that case, what the bank of england would have to do. If we do stay in, there is much more like an likelihood there is a hike. That is a primary effect on the market. Guy the u. K. Economy is slowing, isnt it . People byre seeing yield buy gild. It is a global problem. That is why we are looking for assets where they dont give you the extra growth in this low, nominal growth world. That is equity in europe. Guy we will come back and talk about what that is in a moment. We are moments away from the start of european trading. 11 minutes to go. We need to take a look. The italian bank firmly in focus today. We have 10 minutes until the market open. Sterling is very flat. We are going to have a cautious morning in terms of assets. We do have payroll out a little bit later on today. Guy seven minutes until the market open. Payroll day in the United States. Lets check on the markets in asia. Juliette saly standing by. Juliette not such a great end to the trading week in asia. A little bit of nervousness from investors ahead of that u. S. Nonfarm payrolls number. Then the track to be longest weekly loss and their biggest weekly drop since february. We are nearing the close. The shanghai market down by 2. 6 , extending the losses from earlier in the session. The hang seng down 1. 4 . We have seen five sessions of losses on the hong kong market. We have seen investors bailed out in china and hong kong. Elsewhere, were seeing a pickup in new zealand and heading to the close from australia as well. Japan coming back on for the First Time Since monday and adding to that 3 drop that we saw on monday. By. 5 . Ei down. 25 . Friday, oilm and gas as has financials. The regional index excluding japan, eight sessions of losses. That is its longest losing streak since december of last year. King about the cost to takata down by 9 in trade today. Macquarrie came through with his four years numbers. Uy guy liette saly juliette saly, thank you very much indeed. The mps out talking about shoring up its finances, posting its firstquarter profits beating analyst estimates. Dealing with slumping prices and what is happening in china. A whole bunch of markets were closed yesterday. Some are still closed today. As a result of which you may see some outside moves from those markets as they play catchup. Pay attention to that. From ramin. Comment , buyern equity markets ramin byy or sell . The mystically by the domestic companies. We go to the cyclical sectors. That is media, autos and television. Those are the three sectors and credit that we like. Financials we would like based on fundamentals but they are so highly correlated to oil which i do not like because they drown out the fundamentals. That is not what you want at this point. Guy stairway from anything with an oil by. Open, we, the market are four minutes away. If you little quirks with to make life a few little quirks they can make life interesting. Guy welcome. You are watching on the move. Moments away from the start of european trading. Alive . Will todays payroll figure change the mind about a hike at the june fed meeting . Inflation down under. The aussie dollar drops to an eightweek low after core inflation is likely to reach the bottom of its target this year. A beat at the italian lenders, surging. Out today is the worst behind us for the italian banking story . Lets tell you what we think will happen. Likely to be fairly negative start, and youre likely to see fairly light volume. Markets are playing catchup. In austria,case which had yesterday off. The markets are back. Lets get into this market open with nejra cehic. Nejra thanks. We saw a broadbased selloff in asia, futures looking like we could see losses in europe. We are just seeing the sectors open up on the stoxx 600. I will come back when they had a chance to settle, but we are definitely seeing more red than green. European stocks gain for the first time in five days, it looks like the rebound may not hold. Most Industry Groups in the red. In currency markets, you have to follow on the aussie dollar. Forecast, inflation the worst performer out of major currencies against the greenback, dropping to a twomonth low. And of course, a lot of focus on the dollar ahead of that jobs data. The bloomberg dollar index is unchanged today, but it is heading for a weekly gain, headed for its biggest weekly gain, in fact, in six months. Lets take a look at how the markets are shaping up in europe here at the open. You can see that the stoxx 600 is off by 5 10 of 1 , the f tse and dax down, leaving the losses in futures markets, down almost 8 10 of 1 . In terms of some of the stock that we are watching, the individual movers, looking at profit, which is dropping 33 of the worlds biggest steelmaker. It has been contending with sloping steel and iron ore prices although it did maintain its fouryear earnings target, it still that stock is down. Intercontinental hotels group what we saw here is the First Quarter revenue rising even as weaker oil markets hit the middle east travel and an early Easter Holiday slow demand in europe. We are seeing that stock down at the open despite that rare part number coming in. A bank with profit surpassing estimates on a bad loan provisions to the lowest in four years. A lot of focus on italian banks today, of course. Come back to me quickly on the eye. It is Energy Stocks leading the losses, down almost 1 . Guy thank you. As. Aggard in secure it if you take a look at the board then you see those stocks, thats the reason why just be aware. Lets talk about the italian banking sector. Mps posted its First Quarter profit that beat analyst estimates. Declining to a fouryear low. Deadlyjoined bydanle thing. Im not sure most people would agree with that. Analystsrs were good; we saw this morning are positive because the bank was able to lower the loanloss provisions, as the ceo emphasized late yesterday on a Conference Call after the earnings release, that maybe the worst is behind. In the First Quarter, which is really turbulent, markets are going down negative Interest Rates and deposits flowing out. They are on the road to stabilization of this issue of the nonperforming loans. At the same time, the reason for caution is this bank has been searching for a merger partner for more than a year now and there is still no solution in sight. Guy is that the biggest challenge . Is that really what management will spend its time focusing on . We know that npls are a problem for italian banks is that we should focus . What is the challenge . Viola on theceo of Conference Call certainly emphasized missed half the house before him to reduce the incidence of nonperforming loans. He says that banks are on track to meet this target of 3. 5 billion euros of leverages over the next two years until 2018. He didnt really talk a lot about finding a merger partner. Perhaps he is betting that this will take care of itself. Once the bank shows continued improvement on this theme, in this quarter, then obviously the banks chances of finding a partner will increase. This is a bank that lost half its market value so far this year, if you remember. Guy yeah. Great stuff. Thank you. Dan leaf. Thats the story, but it is only part of the banking story. If the big week for european banks. We have had earnings from many, many of the big players in europe, in what was a fairly harrowing Bank Earnings season. We are seeing a very challenging environment, because none of the issues we have had in the last few quarters are disappearing. We had a very difficult First Quarter, like almost all of their peers. The start of the year was very awkward. On the economy, on the oil price, on china. But of course it was a particularly Unfavorable Market environment, particularly at the start of the year. You see a lot of factors that may affect markets, and in that sense, you see volatility, but it is not the kind of volatility that is transient. Guy thats the voices of the executives that run the institutions. Ubs, 10. 4 over the week; socgen, bnp 14 ; paribas, down 4 , 5 . Painful, painful numbers. I will go to much about whats going on there, but nevertheless, harrowing is the right word. Things we all knew, because they told us this would be a bad quarter. My question when do they get better . This q2 start to improve . Q3 . Is in a reverse of 2015 . How does it work . It does seem doom and gloom in europe. If you look at the earnings revisions, or at least the broker forecasts, there were downward revisions starting in the middle of last year, a very sharp move. Its been negative ever since. But if you look at last months numbers, it started to inverse upwards. Upwardsn inflection which means it is less negative. We lookthat sounds at the leading indicators and i was will we always look for. We are seeing a reduction of the downgrades; we are seeing a peak in npls, even in italy. Back at point to the market that has been crushed, maybe oversold, so i think that could actually guy what is it going to take for people to stop wa