And covestro. And President Trump promises tax relief but doesnt ignite markets by providing concrete measures. Well speak to john w. Snow in about 30 minutes time. Good morning. Welcome to the show. The french president ial candidate, Francois Fillon has reportedly been summoned by investigating magistrates. His team will make a statement noon cet. Earlier this morning he postponed his visit to the paris agricultural salon, an important fixture on the campaign trail. Yields are pointing higher, but spreads have been widening in general on political uncertainty. On top of that also this morning im seeing the french german tenyear yield gap is narrowing after the news that fillon was summoned. Were seeing a narrowing of the yield gop thap that has been wig over the past few weeks over perceived Political Risks out of france. Joining us on the phone is a Political Science professor from paris good to have you with us. Explain to us why its such a big deal that a french president ial candidate would cancel going to an agricultural fair. Reporter first, this agricultural salon is an annual meeting where most of the politicians show up, they show how they are caring about the agriculture obviously, but this year in particular theres a president ial election, and in the case of fillon we could get two explanations. The first is the cancellation of today is not the only unexpected change in the agenda for Francois Fillon. The campaign has become almost impossible to carry out since the revelation about the and people go there to demonstrate what he did. The second explanation could be that the judges are going to announce something very big, it could be a formal investigation. It is there already, but it could be the next step, a formal accusation it could be that Francois Fillon will be presented to the judges today also. Hes indicated in the past if it went to a deeper formal investigation involving his wife in particular that he wouldnt be interested in this happening. Are we thinking he will be pulling out if thats the case . Yes, in the beginning this was one of the first statements of Francois Fillon, if im under formal investigation, i will step down, drop my candidacy. More eventually, though, fillon gets very sharp, very tough position, which is i will go to the end whatever. So it is just that the party, they have not a plan b, and it looks like Francois Fillon is under formal accusation it will be a cadisaster for the party. What if he is forced to pull out, if we get the confirmation of the more formal investigation. Who would benefit the most . It could be that the most benefit would be for Marine Le Pen. Marine le pen, shes leading the voting, more eventually she got 27 for the first round of the election and the climate, the mood of the campaign, which is obviously in the benefit of Marine Le Pen, shes claiming the system is against them, the system has a conspiracy against them. The second who could benefit from that is emanuel macron. Bruno, thank you very much. Bruno cautres a Political Science professor. Here to talk more about whats taking place is carolyn simmons, deputy head of the uk office of wealth management. How does Something Like this factor into your uk investment prospects when looking at Political Risks coming from europe . The main way the politics has been playing out through the equity markets is on the currency side and the impact that has on companies if there were expectations that Marine Le Pen were to get in, you would want to probably be expecting a weaker euro, which means you would be avoiding the uk companies with a high youeuro exposure. Thats something youre advising at the moment . We have a 40 probability of le pen. The best case is that she doesnt get n but theres a 40 probability that she could. What about europe in general . Everyone has been overrating the u. S. , overweight global. Where does europe fit into all of this given the Political Risk . Its really important, despite the political noise, not to lose track of the fundamentals and the economics. And the Global Recovery has been led by the u. S. Thats one reason why were overweight the u. S. Things are improving in europe, but the earnings outlook linked to the Growth Outlook in the eurozone is slightly less certain. Youve done some work on dividend stocks. With bond yields being all over the place, rising, falling, one day a safe haven, one day theyre following the reflation trade higher. What do you want to do with dividend stocks . We have seen a pick up in bond volatility, so taking a diversified approach is the best way at the moment. So across a wide range of sectors. We do think that a dif den strategy can outperform the market. Caroline, thank you for that. Lets get to some corporate news. Bayers gain is covestros pain. The german maker of aspirin has placed 22 million covestro shares after the stock nearly tripled since the spinoff of the business this will allow bayer to reduce its debt and help funded monsanto. Take a look at whats happening to shares of covestro. Off by 7 almost. And shares in man group not doing much better. They hit the bottom of the stoxx 600 after they posted a fullyear pretax loss of 272 million. The company was pushed into the red by steep decline and performance fees and oneoff impairment charges. However man groups inflows did rise to 1. 9 billion. Shares off by 4. 9 . At one point they were down by 9 . Gemma has joined us around the desk. Whats the problem with man group . Inflows are healthy. Is it really just specific to the glg fund . There are a couple problems. Inflows are healthy for 2016 as a whole. They disappointed over the last three months. If you look into there are net outflows for the Fourth Quarter. If you look to where they were, what was slightly concerning is the strategies on the long side did face some outflows. Thats one of the strategies theyre focused on, moving more towards as they move away from the more discretionary funds. There was some concern there. Also a big writedown and implications for glg surrounding that. Generally speaking fees are a big issue. Not a big issue for just man group but broadly across the injury. If we look at data from last september, talking about the average management and performance fee, its gone down from 2 in 20 structure to more like 1. 5 on the management side and 19. Not a huge change but it stacks up when you talk about billions of dollars under management. Lets get out to annette who is at a gathers of the fund world in berlin. Annette . Hi. Yes. Its exciting here. Everybody is talking about trump, of course. The speech he delivered yesterday night, what that all means for the markets. Im joined by the ceo of oak hill advisers. I will directly put that question to you. What are you making of that speech . I thought it was a pretty impressive performance. I think the first six weeks have had some ups and downs in the trump administration. But i thought last night was unifying. I thought it was president ial. And i think that it has a pro growth agenda. Thats what the markets have liked since the election. So i thought if he could actually execute what he talked about last night, obviously some have criticized not enough specifics, but i thought that the spirit, the tone, the way he delivered the speech was positive. For your markets, they like the distressed market, its not a positive that the economy is doing better than expected. Clearly the u. S. Market has greater Growth Prospects today. With the Energy Markets turning in the u. S. Theres less distress than a year ago. That being said, theres a lot of pressure in europe. Were seeing lots of opportunities in the italian banking sector. Were seeing opportunities in german banks selling portfolios, shipping, renewables, real estate. Were seeing opportunities in spain. While the u. S. , i think, is on a better growth trajectory today, i think theres a fair amount of uncertainty in europe. To boot, theres the back drop of what happens in french elections and german elections so still uncertainty in europe. Lets talk a bit about italy. Youre looking on nonperforming loans as well, yeah . Yes. There is more pressure today on the italian Banking System from the ecb to sell assets. And its almost sell assets at whatever price you can realize. As a distress investor opportunities are the greatest when there are forced sellers, but we think theres lots of opportunity in the italian banking market. Were looking at a number of real estate transactions in italy, and we think theres enough dislocation in the italian Banking System that there will be good opportunities for investors like ourselves. Moving on to germany and the shipping loans, is that the same situation . Are the banks in better position to offer better prices . The german banks have been reluctant to sell over the last couple years. What were starting to see, maybe because equity prices have bounced and because of ecb pressures, were seeing a willingness to sell some of those portfolios. Theres some large multibillion dollar portfolios across shipping, real estate, we new e renewables that weve been deeply involved in reserves are getting close enough to a level where transactions can happen. We think theres Good Opportunity there. One last question on 2017. What is the overriding theme for the market . Thats a big question. The first thing id say is really whether or not trumps pro Growth Initiative is successful. If it is, the next question is how much do Interest Rates rise . I think there could be a positive scenario from having good Growth Without too many rate increases in the u. S. The offset in the u. S. Side for a theme is whether or not theres any major geopolitical events which brings you to europe. I think the elections in europe are significant if theres a frexit like a brexit, that could be destabilizing around the world. The Chinese Government has some elections not elections, but changes perhaps in some leadership towards the end of the year. I think its geopolitical versus domestic u. S. Growth and how rates stabilize. Theres Good Opportunity. The only thing i would say from our perspective is that the markets have noticed this opportunity. The markets have appreciated quite a bit. The question from our perspective at this moment, as a general matter across the credit markets is has it already priced in a lot of those gains . The upsidedown from our perspective today away from distressed and broader credit, were derisk portfolios. Thank you very much for your insight. Carolyn, you see a lot of topics here at super return. Nor come from us later during the show. Annette, thank you very much for that. By all means, get involved. Email the show. For those of who are longer winded. The address is streetsignseurope cnbc. Com. For those of who are concise, you can find us on twitter, streetsignseurope cnbc and louisabojesen. And carolincnbc. Still to come, greece resume bailouts talks as the Prime Minister takes a swipe at banks. Thats after this. Dont go away. Runs on intel . That ride share . You actually rode here on the cloud. Did not feel like a cloud. That driverless car . I have seen it all. Intels driving. The future traffic lights, street lamps. Business runs on the cloud. And the cloud runs on intel. I wonder what the other 2 runs on. car horn markets are generally higher today. One stock trading lower is zalando which announced its first move into physical stores. They are acquiring basketball chain kickz and says it expects to invest 200 Million Euros and create 2,000 jobs this year. The announcement came as they reported a 26 rise in Fourth Quarter sales and forecast a 5 to 6 ebit margin range. And moncler sales were boosted by Strong Performance in china, south korea and the u. S. With revenues coming in line with expectations, the luxury outerwear maker proposed it would pay a dividend of 1. 08 euros per share. Greece is braced for fresh austerity measures in a bid to unlike further bailout funds after talks with lenders resumed yesterday. The greek government announced cuts to income tax breaks and pensions after negotiations stalled between the eu and imf, this in part due to a disagreement of the countrys fiscal goals. Prime minister Alexis Tsipras blamed the economic crisis on the lenders. Translator the crisis started from banks inability to provide liquidity to the economy and will finish and end with inability. This is the framework as we see how we, banks, governments, social agencies, professional bodies, chambers can work effectivelimey me effectively. Now we have to work together. Is it fair to blame the lenders on a big part of the Current Crisis that greece is facing . You have a problem. When the austerity measures and they were in the program for seven years. This is a world record. This made our society feel tired. Mistakes have been made from both sides. From our side, we never really implemented all the reforms. And from the lenders sides because they didnt understand how the economy was working and what they could really do and what they could not do. For us its not important who has the blame. For us, what is important is how our country will exit the crisis. How are people are going to have a better future. I hear mr. Tsipras say imf is to be blamed. Lets say imf is to be blamed. But will this make our life better . We say no. We have to find the solution and exit the crisis. Thats what the new democracy is proposing to the greek people. Is new democracy willing to take on quite a bit more austerity in order to continued to get some of the bailout funds still needed . Greece doesnt need more austerity. Greece needs real liberal reforms. We need to transform our country to a business friendly country. When you hear Elections Come to greece, you have to expect that the new Prime Minister will transform the country to the most business friendly greece was ever. If you want to buy greece, by greece now. Its cheap. When the new Prime Minister comes, our economy will go much, much better. Your party is doing well in the polls. Youre leading by double. I do wonder isnt this another protest vote . One that weve seen two, three years ago . Isnt this a vote against everything that has gone wrong and not a yes for you . During this crisis, all the old parties of greece melt down. Only new democracy survived. Why . We have some voters that trust us, even in the hard times. So now we feel confident that if we take their vote again and take the government as we think we can do this job, we will really change the fate of our country. Our people need a vision, have hope, and feel better about greece. Greece is a wonderful country. Im not saying that because im greek, but its a wonderful country. We have to do miracles. We have to believe in ourselves, liberate our country from all the bad economical diseases of the past. We thought we could do everything from the state. We thought that we could take money from the state and not be worried about how the country would find this money. We will change that. New democracy will change that. How do you feel about comments coming from the german finance minister, mr. Schauble, who says greece will never be able to fulfill the reforms . All the discussion about frexit is over. Greece will stay in the eurozone. Im sure mr. Schauble understands that. Maybe some people in germany say that to pressure greece, maybe. In the real world nobody believes that greece will exit the eurozone. Greece is a member of the eurozone and will stay in the eurozone. You say this and i look at the charts of the ft posting about how much money greece has pulled out of banks. Are you certain you can avoid a new round of banking crisis . Mr. Tsipras has a responsibility to close the review as quickly as possible. Maybe hes right, the lenders have many responsibilities, but the truth is the truth. We have to close the review as fast as possible. As long as mr. Tsipras is the Prime Minister, i hope not for a long time, he has the responsibility to close this review as fast as possible. If he will not close the review, there are our economy will face problems. The uncertainty is something nobody likes when it happens for his money. Given the delicate situation youre in now, and debt repayments that are needed, trying to get the next bailout, are you worried about a possible populist backlash happening from within europe with these general elections coming up in france, holland, germany . Is that going to have an impact on greece . We should have closed the review before entering 2017. Everybody knew that the neth netherland elections, france elections, german elections will complicate things. But unfortunately mr. Tsipras and the lenders were unable to find a common solution in 2016 it worries us, but at the end, logic will prevail. Nobody would like to let greece, after all this effort, all these loans, to be bankrupt in july. I think at the end there will be a review. Greece, we hope, will enter the qe program and we will be able to stable our economy. How much of a difference would that make for greece to enter the qe program . The qe program is important for our economy it will give us a chance to exit the markets faster and to be able to take the money we need ourselves without a new program. Its very crucial for our economy to enter the qe program. Were already too late to enter the qe. I think mr. Draghi wants to help greece. I read this morning in an important greek newspaper that mrs. Merkel wants to help greece to enter the qe. I hope this is true. Thank you so much for that. Well have to go for a break. Check out World Markets live, our blog which runs throughout the european trading day.