There is t minus one year and 11 months to hash out a deal. This is bloomberg surveillance. Im Francine Lacqua. We are joined by the head of all the assets. We will be speaking to Aberdeen Asset managements martin gilbert. If you have any questions and are a bloomberg customers, just hit tv. We can ask the guests a question on your behalf. This is the eurozone data and eurozone manufacturing pmi, coming in at 56. 7, a touch below what economists were expecting. Anything below 50 indicates an expansion and it is a touch above what we had the previous month. This is for april, for the euro area. We are waiting for the breakdown to give us the strength and weaknesses of each country. This is the picture for the markets and i would point to global stocks overall rallying. European stocks, gaining 0. 2 , heading for fresh highs. Investors are focusing on stronger corporate earnings. The yen, extending losses. A second. T to the and first, lets get straight to the bloomberg first word news. Nejra donald trump says he would meet with kim jong un, if the circumstances were right. This comes amid heightened tensionsover north Koreas Nuclear weapons program. Under the right circumstances, i would absolutely made with him. Most political people would never admit that. Sayster theresa may brexit talks will not be easy, but she alluded to the elite details with her disastrous dinner with junker. The european president left talks last week, shocked at mays reluctance to compromise. In france, president ial candidate macron has mocked le pens plan to create a new national currency, calling it monopoly money. Her plan would impoverish the country. Meanwhile, le pen attacked macron as somebody who worked closely with Francois Hollande during his five years in office. Cronlatest polls show ma with 59 of the vote on sunday, a fall of one percentage point from the previous poll. Global news 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries around the world. This is bloomberg. Francine thank you. President donald trump is actively considering a breakup of giant wall street banks, giving a push to efforts to revive the era separating consumer and Investment Banking. He spoke to bloomberg at the oval office. The are lucky. There are some people who want to go back to the old system. So, we are going to look at that. And doddfrank is going to be very, very seriously changed, so the banks can go back to loaning money. Francine meanwhile, speaking to bloombergs editor in chief, Steve Mnuchin all weighed in on banking regulations. We are determined to make sure we have proper regulations so we do not put taxpayers at risk, but also do not have overlapping regulations and have clarity so banks and Insurance Companies know what they can do. Francine ken griffin told bloomberg he would be really excited to see a breakup of the big banks to increase competition and boost to the economy. I believe that when a market becomes overly concentrated, you reduce competition and competition is the lifeblood of what makes a free economy work. When you have many firms competing to get ahead, that is when creativity happens, when innovation takes place, when consumers win. Francine lets bring in michael moore. You covered u. K. Banks for 10 years. We are also joined by trevor, the head of london Asset Management. Michael, lets start with you. What have we learned from the president . Are we serious about him wanting to break up the banks . He had some Campaign Rhetoric last year, but this is the First Time Since he took office he has specifically addressed this element of perhaps breaking them up. We have had some people in this administration talking about that, but the fact that they are looking at it is stronger than what we had heard before. Francine who are the winners and losers . We assume all wall street banks would lose in this. I think the industry would be very much against it. It would be a costly and complicated process. Jpmorgan and bank of america, two of the largest, perhaps would be under pressure from this. ,ou saw from the banks stock they went down at first, but recovered a little bit. People know if this were to happen it would be a long, drawn out process that needs congressional backing. Francine trevor, your thoughts and the odds of this happening. I think this is why the market recovered. The first initial shock about the idea of breaking up the banks and then the realization that this could be like the mexican wall. It is talked about, but difficult to get through congress. There is a general feeling that this is not in the top 10 priorities of the administration. Francine if it were, what would it mean for portfolios . What impact the way, and i dont specifically, right . Of course. We do want you to keep your job. But does this have an impact on Portfolio Managers and the way banks . U would be buying up the most important thing for the continuation of the recovery we are seeing is the continuation of the flow of credit. Flo credit in the state is slightly reduced around the time of the year. Anything that reinforces the flow of credit in this economy has to be a good thing. The most important thing for us is a continuation of global synchronized growth. Wereine michael, if this to happen, what does it mean for european banks . Perhaps. In some cases they have had a little bit of a funding disadvantage. This could narrow that gap. It is yet to be seen how the u. S. Operations would be affected. Trumpsmany of donald statements, the details that come later could be what matter most. Francine meanwhile, Steve Mnuchin hasnt spoken out about the prospect of ultralong bonds. We are studying ultralong bonds. We have a working group, looking at it. We think it is something that could absolutely makes sense for us at treasury. Francine i guess, the problem, as soon as you Start Talking about the possibility, you saw a huge repricing of the yield curve, and the going back and little bit. Is the Trump Administration looking at all possibilities . I think so and we are learning how the politics has been conducted over the last 12 to 24 months. First, you plant a flag on an extreme, and then you challenge your opponents, talking you back from that position. We see this with President Trump. He favors this as a way of engaging. We see this with the European Union and the u. K. Government at the moment with the brexit negotiations. Francine trevor . I think it is obvious why the government at the moment would love to have ultralong bonds. Duration,uch a long liability hedging. There is massive demand. If you are trying to Fund Government debt, why not issue longer . It does have an impact in the shortterm, affecting the yield curve, but it makes sense at the moment with Interest Rates this low, that governments would want to lock in longduration bonds. Francine thank you, michael moore, our u. K. Finance team leader there. We are back with stephen macklowsmith and Trevor Greetham. Aberdeen Asset Management has reported slows and the most recent sixmonth period as markets recovered. Asset management climbed to 308 billion pounds, while cost saving boosted profits ahead of the merger. Lets speak to the ceo and cofounder of Aberdeen Asset management, martin gilbert. I am losing my voice. This is how excited i am about your earnings. It is his first interview since the results. Martin, give me a sense of how the merger is taking place. Are clients sticking around and asking questions about the merger, martin . Martin thank you. I hope your voice recovers. Clients so far have seen the sense in this merger. The reaction has been very positive. Francine positive in any aspects . What do they want to know the most . The strategy, will a change . The strategy, will it change . The strategy, will a they wane people managing their money now will be managing it in the future. This is why we have put this retention package in place, to make sure the people managing the money stick around for the longterm. Francine how much savings are you expected to do with this merger . Martin the overlaps will result in savings of about 200 million over the next three year period. Duplicatehat is offices, duplicate systems, all of the things Fund Managers have. People, buty, some i think that will be easily absorbed by the market. As i said, this is about creating Something Big that can compete with the big global u. S. Giants. Francine overall, and i know you said this has had a very limited impact on your clients. Have they been adding money and head of the merger, or have they been holding back to better understand the exact terms . Martin i think the encouraging thing is, especially in emerging markets, they have then adding money. So, since the first quarter, we have had about four years where we have seen positive flows into emerging markets and emergingmarket debt. And obviously, being overweight emergingmarket debt in our Global Portfolio has helped performance there as well. It has been a very positive quarter for us, probably the best for three or four years. Francine do you think the trend will continue . Martin i think so. People are beginning to see value in emerging markets, compared to develop markets. We have seen a big rise in the u. S. Market, u. K. Market, european market. People are looking at places like india with the growth rate it has got and investing their in equities and bonds and more generally in emerging markets globally, looking for value. Francine are you confident you will be holding on to the cash you have invested four Scottish Widows . Invested for Scottish Widows . Martin client very confident. We have a very good relationship. Hopefully, we can make them see the benefit of this transaction, this merger of the two Asset Management operations because they are the type of client i am speaking about who can see the benefit of having a larger Team Managing their money with broader capabilities. Things one of the key this merger gives us, broader capabilities. Francine martin, give me a sense, assets under management climbed about 5 to 308 billions pounds. Are you going to get a lot more new clients, or is it the same clients adding more funds . Martin it is a mixture of existing clients adding more funds and the other. We saw the worlds biggest banks withdraw cash from bthe emergingmarket funds. That is those clients we are seeing coming back into the fu nds, as well as new institutional clients allocating more to emerging markets. That coupled with the improvement and performance, because we were overweight emerging markets in our Global Portfolio, has meant performance has improved dramatically and clients are encouraged i the performance. Encouraged by the performance. Francine how many Asset Managers do you think you will end up with in five to 10 years from now . Martin globally, you mean. I think, as i have said, the market is moving towards both ends of the spectrum. There is going to be more boutiques, more Asset Managers at the smaller end of the range, very profitable with very good fees. At the other end, there is going fund 20, 30, 40 of the big managers that have been global capability to run a global organization, as we will have with 50 officers around the world. That is how i see the market going. And both will do a very good job, i think. Francine what do you make of the first 100 days of donald trump . I think you were one of the first ones i spoke to the day after he got elected because you knew him from golf courses in scotland. Has he delivered a little bit . Martin no, i think he has found, like most political leaders and theresa may is known different the difficulty is with her own par ty, rather than with the opposition. I think he is finding that probably more difficult than he did running golf courses. I think thats probably the thing that would have surprised him the most but i think most of the things he is doing are good for growth and if the u. S. Grows the global emerging markets, the Global Economy grows as well. Francine he spoke to Bloomberg News yesterday and says he is considering breaking up the giant wall street banks, going back to glasssteagall. What do you make of that . Martin gosh, i have not seen that. That would be a surprise to the market. But the banks have had great rises in their stock prices since he got elected. I think that run was overly optimistic. So, im not really in a position to comment on whether that would get through or not. Francine i think that is what we are trying to figure out. You hold a lot of european banks. Would that help with european banks . Martin certainly the european banks have suffered at the hands of the big u. S. Investment banks. That has been a trend we have seen over the last since the financial crisis. The rise and power of the big u. S. Investment banks. That has been at the expense of some of the big european banks, the deutsche banks of this road. Barclays has done well in Investment Banking and lloyds has done best of all by exiting and becoming a pure play in teh he u. K. Market. Theres arguments both ways to whether that would be beneficial banks. Fo rbr francine martin, thank you for joining us. Lets get straight to the Bloomberg Business flash. Bp reported firstquarter earnings that Beat Estimates as oil prices climbed. Profit adjusted for one time items a most tripled from one year earlier to 1. 51 billion. That might help ease investor concern about the companys ability to maintain the dividend without increasing debt. Pimcos new ceo plans to add 100 new employees over the next year. Speaking to bloomberg at the Milken Institute global n says the, the manuaroma company intends to spend on hiring and technology to become better. We want to be the best at what we do. We dont think we can be the biggest. We think we can be good at managing conflicts and deliver. It gives us plenty to do and we once the results of the firm to be focused. Twitter says it will not attribute a bump in activity to President Trumps use of the social network, but chief operating officer says the company would love it it every world leader used tweets as the primary way of talking to their constituenties. That will not translate right into increased revenue. We dont today have visibility on seeing the revenue trend improve. First, we need advertisers to recognize the significant rioi. Ase in and so, not only is our audience our prices are , down 60 . That is the Bloomberg Business flash. Francine as the race enters its final five days, the candidates for the french presidency are laying out stark futures for the future of the company. National party has not changed. It carries hatred, dividing of the country and carries especially and can greatly. That is what i fight against and what i said during this is a project of weakening the country, of the purchasing power of our citizens. An industrial weakening because the exit of the euro is a weakening for france. Francine meanwhile, le pen accused her party of being the candidate of the unpopular president Francois Hollande. Macron is the outgoing candidate. Since december, people thought they had gotten rid of Francois Hollande, the president who failed france, who never presided for the people. You saw him leaving through the door, and there he is, back through the window. Francine lets get more with stephen macklowsmith and tre vor. What do you think about france . I think the first thing to note about france, the first round, he absolutely nailed it. One of the reasons for that is the National Friend is not a new political stance. The is good for adjusting what could be a less popular political party, that people are less willing to admit they support. If we run the into the second leading, 6040. S 6040. That would be good news because with having le pe havingn previously endorsing the referendum, it drives up funding costs. The removal of the concern would remove yet another impediment to towards european equities in general. Francine trevor . I say this in the context of the political shocks that affect markets. We had may day yesterday and the average stock markets were flat and bumpy. Usually there are two or three reason stock markets sell off. I think summer came early. The first round of the french reasonns were the first for a panic. I would agree that this polling for the second round, 6040 thereabouts, is nowhere near as tight as things were for brexit and trump, which were quite close to 5050. Francine which means we can go back to worrying about greece. Greece is a potential problem. We have not found out what kind of structural deficit greece has to pursue. The most difficult thing, in terms of pensions being cut or removed. It could be geopolitics. Arguably, donald trump, a populist leader. We had that week where we had the missile in syria, the bomb in afghanistan and the ships going towards north korea. We could have standoffs over the summer. Secondly, the main thing would be growth and there are signs of growth becoming weaker in china. Some of the global pmis are close to peaking. I think we will get more stimulus and things will pick up again. Summer could be when we go from a strong upswing to a correction and growth and therefore, requiring more support. Francine does that mean more volatility . , as long as said the growth picture holds up around the world, that propels revenue and earnings. Then, volatility you work your way through. Francine what would you be buy ing . I volatility what you would be