guy: you are watching bloomberg markets. this is the european open. i'm guy johnson. i'm in london. matt miller is in berlin. erik schatzker joining us from davos. what are we watching? the trump era begins. the president-elect takes office at 5:00 p.m. u.k. time. what will the next four years old? treasury secretary nominee steven mnuchin takes on wall street, weighing the return of a law that split the banks. and china's economy accelerates

for the first time in two years. could a trade war with trump derail all of this? live in davos, i'm erik schatzker. warns, brace for the trump slump. he tells bloomberg the president-elect will fail and so will markets. the billionaire investor didn't hold back. him as andescribed and aer and con man would-be dictator. bullish on the united states. toyota's chairman said the automaker has full confidence in the u.s. market. and the view from inside the ecb. we speak to the governor of the bank of france at 11:45 london time.

♪ matt: thanks very much for that. looking forward to all the coverage out of davos. we've got a lot coming up with tom keene as well. definitely stay tuned. just a half hour until the european open. let's look at where futures are trading. we were down across the board yesterday. the ftse down the most of the european indexes, half a percent. looks like the ftse is the only one trading up in futures today with the exception of the ftse mib in italy. it doesn't look like the markets are prepared for a lot movement at the open. guy: going to be fascinating to see what happens.

watching what is going to be happening in washington today. the book is going nowhere. take a look at your dow jones industrial average chart. look at the range. it has been a really tight range of late. what will the first 100 days deliver from the trump presidency? will we learn anything today that is going to give us a clue what the first 100 days of the trump residency is going to look like? that is what the market is look for, a sense of direction. bloomberg first word update. here is juliette saly. juliette: thank you. george soros has called donald trump a calm man and said he will fail because his ideas are contradictory and the new white house team will fight with each other. the billionaire investor also warned that the stock market rallies since the election spurred by promises to slash

regulations and boost spending will come to a halt. janet yellen has backed a strategy for gradually raising interest rates. in a speech at stanford university, she argued the central bank hasn't been behind the curve, but admitted it can't afford to let the economy run too hot. donald trump is set to enter the white house. yellen said fiscal policy is one of the many uncertainties the fed has to deal with. the u.k. prime minister has offered her strongest support yet for the city of london has brexit moves closer. theresa may's comments come as large banks prepare to move staff abroad after the u.k. leaves the e.u. i financial services in the city of london. i want to ensure that we can keep financial services in the city of london. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. matt: thanks very much for that.

it is inauguration day in washington, d.c. at noon eastern time, donald be sworn in as the 45th president of the united states. speaking last night, the president-elect vowed to unify the country and of course make america great again. >> it is a movement that started and it is a movement like we've never seen anywhere in the world, they say, there's never been a movement like this, and it is something very, very special. and we're going to unify our country. and our phrase, you all know it, half of you are wearing the hat, make america great again. oft: megan murphy, editor "bloomberg businessweek" joins us for more. formerly you were the washington bureau chief.

we go to you on all things political. certainly donald trump seems correct. there's never been anything like this. it seems incredibly unique. >> it is certainly unique. there's never been a movement like this in recent times in america. you would have to go to the prior century to look at this populist sentiment. today is going to be a unique day in washington. you have a president-elect taking office who has struggled to get some of his cabinet members, and he still got a long way to go, and we are to get a little more flesh on the bones about what he's going to do by executive order to make his mark on the first 100 days. expect a lot of economic policy. today is about the pomp and circumstance, but you are going to see a lot of protests as well. it is going to be a really interesting weekend to watch.

shortest speech ever was 135 words. washington'ss second. he's also going to be looking, i'm told, at ragan, and maybe kennedy, for inspiration. what is he going to say today? how many clues do we have? >> that is an interesting smashup of presidents in kennedy and reagan. donald trump comes in with pretty low approval rating numbers. hovering below 50, even below 40 in some recent polling. contrast that with president obama, who exits office with really high approval ratings. donald is going to have to make his case for uniting america. he uses the phrase, make america great again. you will see red hat's today for sure.

but what he really needs to do is lay out his vision for how he's going to bring together the entire country behind him in what has been quite divisive, quite perl arising -- quite polarizing, and quite brutal elections. bill and hillary clinton will be in the audience today. what donald trump is going to try to do today is outlined a vision in pretty brief format for how he wants to bring the country together behind his vision for an economic and domestic future as well as international one. matt: you are in davos right now. you spend most of your time in washington, d.c. have you heard about the protests being planned? what kind of presence do you think protesters are going to have? is that unique as well or do we always have that for these inaugurations? 2008, there wasn't a big protest their when he swept in with a mantle of hope and change.

the big protest is saturday with the planned women's march on washington. the numbers are high. we hear over 100,000, near 200,000 women are sending on washington. it is going to be interesting times. donald trump is pushing ivanka out there and his family out there to set this family presence. on saturday, we're going to see women say how that agenda remains important, how some of the things donald trump has said in the past, they find disturbing. how a republican administration, through congress, mike pence as vice president, who has said controversial things as well, that they are going to press the agenda for women's rights, equality, and the lgbt agenda. that is going to be an interesting contrast. hopefully things will remain calm in washington. no one wants to see the sort of uproar that we saw mark some

rallies early in the election season. there is going to be a heavy protest presence in washington. guy: thank you very much indeed. megan murphy joining us out of davos. coming up on bloomberg, we will bring you special coverage of donald trump's inauguration as the 45th president of the united states of america. remember, 20th amendment, it is at noon. that is the event. we will be on air before that, making sure everybody is up to speed. let's get a view from argentina. nicolas dujovne is the treasury minister for argentina. how does the world change for argentina as a result of what is going to happen in washington today? soon to know too yet. we have to await they announcements of the new president trump. we look forward to hear that. we think it is too soon to know

yet. guy: do you think we will see a more protectionist world? that can happen. for the statements that the new elected president made before his appointment, it is likely that we will see some movement on that direction. for argentina, that comes from a totally closed economy, we had a very closed economy during the last 15 years -- i think that marginalould be because we are still opening up our economy. we will have to see. but definitely what we're seeing is the possibility of some movement towards a little more protectionist u.s. argentina was one of a

number of companies -- countries that decided to go to the bond market before the inauguration. you weren't alone. can i ask what you're thinking was? why did you feel you need it to get this in before the an operation happened? basically, we adopted a conservative stance. we still don't know the policies the u.s. is going to implement. we decided to take advantage of the ample liquidity that still is in the market. argentina decided to complete most of its financial problem that is going to be done in this early part of the year. so just to be conservative. guy: ok. you've gone 7%, 6%. do you think we're going to see a further compression of borrowing costs for argentina?

what is the direction of travel. you've still got to raise some dollar-denominated debt as well. argentina think that will continue to compress it spreads. we are in the process of fiscal consolidation. our reforms are gaining traction. the economy is showing early signs of recovery after all the effort that argentina did last year towards its fiscal consolidation and with all the reforms that we passed in the congress. i think there's still a lot of room for argentina to compress its spreads and to converge to something more similar to the yields that we see. guy: the imf has said it expects slower growth for argentina. are you still sticking by your

projections, which are talking about the economy exited recession, i think the fourth quarter, and 3.5% growth in 2017, are those numbers still valid? nicolas yes. we're pretty confident the economy will grow in 2017 close to 3.5%. that is the figure that was included in the budget. 7% inflation, 3.5% growth. we think we are on track to achieve those objectives. on the side of growth, we're seeing early signs of a recovery in the labor market, with jobs growing since the month of august, and with growth in job positions in september and october. on wages, the deceleration of inflation rate is stabilizing

the power of wages. on the investment side, we have a very ambitious infrastructure program to be developed in this year, and that, coupled with the recovery in construction, in the private sector, will drive up investment. we're also going to have a lot of investment on the energy sector, in which argentina is normalizing the prices paid to the producers, and the legal framework under which the companies operate there, and on the exports, the stabilization of brazil will also help us boost our industrial exports. that will be coupled with a very , which is important in our country. guy: one final question. connectionpersonal with donald trump. have you spoken to him since the election? nicolas what?

guy: have you spoken to donald trump since his election? nicolas no, i haven't. guy: ok. i'm sure you will. nicolas dujovne, thank you so much for your time. coming up, the european equity market open. we've got a great interview lined up, including mmg investments, and suntory holdings. stay tuned for all of that. this is bloomberg. ♪

it is 7:49 in london, 8:49 in berlin, so just 11 minutes to go until markets open across the continent and in the u.k. let's get your bloomberg business flash. we go to juliette saly. juliette: donald trump has promised to unify america as he prepares to move into the white house. speaking on the eve of his inauguration, the president-elect vowed to carry out his campaign pledges to harden america's borders and strengthen the military. >> it is a movement that started and it is a movement like we've never seen anywhere in the world, they say, there's never been a movement like this, and it's something very, very special.

and we're going to unify our country and our phrase, you all know it, you half of you are wearing the hat, make america great again. china's growth accelerated for the first time in two years in the final quarter of 2016. gdp increased 6.8% from a year earlier. full year extension of 6.7% was in the official target range, but the slowest since 1990. economic stabilization is giving readers a buffer amid potential trade tensions with donald's incoming administration. toyota's chairman says he has full confidence in his comforting -- his company's prospects in america. his comments came in the wake of criticism from president-elect trump over the carmakers plans for a new plant in mexico. we were a bit surprised that our name was mentioned by mr. trump. what he's trying to do is expand

jobs and gain competitiveness of the u.s. industries. we have many factories in the u.s. and we've been increasing employment there, so i believe our contribution in the u.s. is quite significant. juliette: lloyds banking group creating neworta a sorr role advise on cost control ahead of a strategic update this year. that is according to people familiar with the matter. they said the former customer services director will lead cost management. she will also probably help prepare a three-year business plan, due to the announced in the first quarter. jpmorgan has given its ceo a $1 million raise after the bank's stock climbed last year. jamie dimon that a $28 million compensation package for 2016, 3.7% more than a year earlier.

jpmorgan became the most valuable u.s. lender by market cap last year, overtaking wells fargo, which stumble because of a bogus customer account scandal. that is your bloomberg business flash. guy: thank you very much indeed. let's get back to that george soros theme. francine lacqua spoke to the billionaire. he told her he expects the that theo slump and european union is disintegrating. >> i did overstate slightly. the danger facing the european union, namely that it is facing disintegration, that was a slight exaggeration because wanter putin nor china europe to disintegrate. each have their own reasons.

china needs year as a market. provide therope to capacity to produce something. because the putin regime is only capable of exploiting natural resources, they can't produce, and they need europe to provide that capacity. therefore, europe is not going to disintegrate, but coming under the dominance of srovisions russia -- putin' russia would be a distraction, undermining all the values that europe stands for. ,o it is really not much better coming under the dominance of putin's russia, then to disintegrate.

francine: you have said that open society needs defending. why is it such under attack? >> because, basically, it is threatened by a different model. two as auish between broad generalization, but basically there are two forms of government, one where the leaders are elected in a democratic process, and they are supposed to serve the interest of the people elected them. obviously i say supposed because there's an element of hypocrisy there, but it is much preferable to the other model, where the rulers are manipulating the .eople to serve their purposes

this is the other model. currently, unfortunately, that other model is on the rise. both in russia, many otheribly, and countries, including my own. so i hope that we can get people who believe in an open society together and defend the principles of open society. matt: george soros there, chairman and founder of soros fund management, speaking to francine lacqua in davos. he made comments about donald trump. "the wall street journal" said that soros has lost $1 billion since the trump election, and

see made some comments about china. he said china was in for a hard landing. we are back in davos with anne richards. this is bloomberg. ♪

guy: good morning and welcome. this is bloomberg market. i am in london and matt miller is in berlin. we are moments away from the start of morning trading. trump era begins. the president-elect takes office at noon in the u.s. what will the next four years old. cannot always get what you want. the treasury secretary nominee takes on wall street weighing the return of a law that split banks. china's of economy accelerates for the first time in two years but could a trade war with

donald trump derail it all. guy: your impure and markets are about to open. london markets look like they will open in the green. the first 100 days kicks off at 5:00 p.m. london time. take a look at the markets. you can see that we are firming a little bit. london softening up a little bit. flat is the honest answer. not a great sense of direction coming out of that market. opens, see how the cac unchanged at 4841. i suspect willie -- i suspect we will not get a clear sense of direction until later this friday. is us talk about what else happening with the stocks we are watching so carefully. london is going in a slightly different direction in terms of

what else is happening. let us check in with some of the other movers. let me tell you that at the miners -- the drug stocks are softer. royal dutch shell is bouncing back. naomie: -- nejra: apologies for the on of changefor the lack on the stocks at the moment. we are waiting for numbers to come out from detwiler. looks like it is opening up slightly higher. analysts are saying that it is because of a positive read through from the u.s. competitor , of -- a semiconductor company. detwiler is down 0.7%. adjusted organic growth at 1.4%.

wanted to look at another company, fresno low -- fresnilo. today, for ar fourth consecutive week, moving in the opposite direction of the dollar. fresnilo is up. it was the worst performer yesterday out of the resources. i wanted to talk for a second about the dollar. i think one of the most interesting things that happened last night was the janet yellen speech in san francisco. we have not talked about it too much. she seemed so hawkish the other day. last night, she seemed a little more dovish. there is a push and pull going

on with the greenback that will affect trading today. davos.t us head out to francine: thank you. m: with everyone looking to washington. thes amazing how inauguration has dropped upon us. secretary kissinger doing a remote from new york to the people of davos later today. francine: and what it means for the markets. we have no better person to talk to about the markets then ann richardson, the chief executive at m and g investments. congratulations on a fantastic panel. what do you see happening in the markets in the next six months? donald trump will be inaugurated today, are we expecting more volatility? if you look at what is

happening in europe, we are expecting big surprises. will that affect your which could mean more dollar strength. that could have an effect on the u.s. markets. all eyes on europe and on the currency markets in terms of in the equityens markets and the bond markets. tom: the money question is if p-flation, can you bring up your guesstimate of investment return? >> there is a lot of confidence in business. people are concerned about protectionism but business is trying to be resolutely confident and it is looking

forward to potentially being able to channel more money into real investments. i think if you put that as a backdrop, equity markets especially regarding bond markets are looking better places. we have traveled quite far quite fast particularly in the u.s. tom: i wanted to suggest that it was literally a trump jump situation. francine: you expect equities to do better from here. what it -- what if donald trump does not deliver on the infrastructure plan? >> i think the congressional thing is potentially a big thing. people are downplaying it. -- i clearly do not leave a republican congress will want to block plans that it approves of but i do think mr. trumps plans will receive more

scrutiny. tom: what is great about friday in davos is we get such diversity. mostoing to guess republicans in congress and even democrats could not find a silk road. you have a twisted channel here on this strange idea of the silk road. are we just following marco polo to china? takes you out of the comfort zone. i chaired a panel on the new silk road which was partly about one policy.one belt how you create an economic area between europe and china and the countries in between. i had georgia and mongolia talking about it. it is a huge potential trading block. they are looking at how they can get visa and free travel and reduce tariff barriers between

them. we were talking about the very large breaches of the world can do collectively and beginning the journey that the european union went on 40 or 50 years ago. it was interesting to hear about the confidence some of these -- countries have about themselves. francine: pessimism about the prospects for the u.s. and worry about security worldwide. the best trading partner for the eu would be something that looks quite similar. and a lot of these countries are looking at associations. and how do you stabilize china? is that the big risk that the and -- are worried about is that the big risk and how do you stabilize china? not think china is a

source of instability in the world. think the president's speech here at double as this week was masterful. francine: you are not worried about chinese banks? they have a weakening renminbi and reserve currencies are going down. is there a policy mishap? >> i agree on both of those points. there are some tensions within the chinese economy. where peopleings say the chinese economy is balancing away from manufacturing and towards the consumer. and you look objectively at the level of consumer debt in china versus virtually any other developed market and they are way better. i think that is unfair. on the chinese, i think they are

looking at it. are interested in exporting their capital surpluses. they want to create new markets are around them. i think that is a logical assessment. it is not all about the u.s. tom: back to the real world of m and g investments. u.s.,a simplistic, british investment or are you overweight in international stocks? >> it is complicated by the fact that as you know the u.k. stock market is an international stock market. you let me rephrase it, do work through u.s. international multinationals? you need a pretty diversified international strategy this year because i think the dynamics we are seeing are very stock specific in nature. the big shift that we saw from

the middle of last year has been oft the bond proxy type stocks regardless of the market you are in started to underperform relative to more value oriented, more stock specific, more individual situation stocks. we see that as the opportunity. where less worried about those stocks are situated than the story that goes along with those stocks and takes them forward. that is where we are seeing the market begin to move after about five years of the opposite. francine: and what is your call on brexit? we spoke to theresa may and philip hammond. a lot more volatility in sterling or will the trend be down? currency forf 2017, the story will be more u.s. the euro and the dollar and sterling will be the

residual along that. the thing that struck us about the prime minister's speech was that she clearly does not like the term hard brexit. it --e is trying to make to make a clear distinction between hard brexit being isolationist or protectionist. she says we want to be more global and we are open for business. there is some tension about the whole issue of the free movement of labor, immigration which is there polemic issue and is a tension and a contradiction there but that was her message. outward looking notwithstanding how brexit seems to be the opposite. tom: is london going to survive or are people going to move to foreign nations like dublin, amsterdam, or edinburgh?

on.he world does go we have had hundreds and thousands of years of adapting and shifting and changing and that will carry on. the world will be a different place in 10 years time, that is for sure. francine: thank you for joining us. guy, back to you and we have plenty more great interviews coming throughout the day. guy: thank you francine and tom. is richardson believes china stable. we will watch exactly the effect this has. is part and parcel of the story. we're going to carry on the conversation about china. flush middle class. we will get the country's latest gdp data. that is up next.

this is bloomberg. ♪

matt: welcome back to the european market open. i am matt miller in berlin. let us take a quick look at what the markets are doing. the stoxx 600 down 0.3%. the dax and the cac both down

about 0.3%. treading water. seem to be making a little bit of a comeback and that could be helping out stocks in london. mrr functionthe telling you what is going on in percentage terms on the stoxx 600. rio is softening up. tesco is giving back a little bit of ground. as matt often likes to point out, there is more interesting -- this damage. rio tinto is pulling the london market down. novartis is affecting what is happening in switzerland. daimler, snp.

bp is adding to the upside. seeing a little bit of outperformance coming through from london. we just heard china's central bank has allowed the countries five biggest lenders to hold in reserve for 28 days. what does that mean? we'll we sat -- we also have chinese gdp coming out, that economy accelerated. gdp is up 6.8%. economicsasia correspondent joins us now out of hong kong. let us talk about what is happening with the pboc. why this decision to lower the rrr? >> the chinese new year holiday is coming up next week. the biggest holiday of the year. typically, the chinese focusities make sure to

on liquidity. it does not necessarily mean there is a u-turn five the central bank on easing monetary policy because let us not forget they are happy where the economy is. -- they said they are in neutral territory. is if anything we will be looking at is if anything wel be looking at tightening of the monetary policy at some point this year. this move today is more about the excitement over the chinese new year rather than the pboc stepping in to stimulate the economy. matt: it is not a panic or a rescue, it is really to fund cash needs for the lunar new year, a seasonal phenomenon. growthtalk about the gdp number we saw. 6.8%. it is kind of punchy. what is driving that kind of growth? a very good result for

them if you consider where we were a year ago. you talk about a hard landing in china. along the way we had a property issue, troubles with the yuan and then we landed comfortably within the government target. the costs have been yet more debt. the activity has been backed up by public spending through the state banks around the country funding local governments and infrastructure works and state owned enterprises that are not necessarily making profit. in the old growth sectors like coal and steel and so on. they have stabilized the economy quite nicely but they are having to turn their attention to the debt issue in china and that is why the authorities will tolerate a slower pace of growth going forward if it means reigning in the debt. the other point to remember is that we are in a year of big political change in china.

changes in the communist party. the reformers will want to pull in debt and get a grip on things. but they will not be able to move too hard without choking investment and that will be the llc act we will see play out in china for the rest of the year. point andg that taking a step back. we have seen private consumption picking up. if you take a step back and think about where china wants to take its economy, maybe the debt story is a cost of making this happen. are they comfortable where they are right now? >> it should be pointed out that -- there are plenty of positives in this. you can see rebalancing is happening. services are driving the economy. figures are growing. the biggest growth drivers. the issue is that the consumer

still has not reached a spending power level which is enough to offset the gap being left by the big smokestacks being shut down. sector isthe services not big enough or mature enough to fill that gap either. while rebounding is happening and there is a maturing consumer who is buying everything from starbucks coffee to apple iphones at a clip, we are still a long way off of china being able to balance out based on internal, domestic demand alone and that is why public spending is still so important. matt: thank you so much. great to get that update from you from hong kong on the chinese economy. one of the big issues we are following this morning. let us get the bloomberg first word news. sebastian: george soros has called donald trump a failure because his ideas are contradictory and the white house team will fight with each other.

he also expected a stock market rally. >> right now, uncertainty is at and actually uncertainty is the enemy of long-term investment. i don't think the markets are going to do very well. right now, they are still celebrating but when reality comes, it will prevail. sebastian: federal reserve chair janet yellen has backed a strategy of gradually raising interest rates. at his speech at stanford university, she said the central bank has not been behind the curve but said they have a tendency to let the economy run too hot.

fiscal policy is an uncertainty the fed has to deal with. brexit is moving closer. theresa may's comments in davos is up -- is in support of london. services ininancial london and i want to make sure that we can keep those services in london and i believe global britain will do just that. sebastian: global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. this is bloomberg. guy: thank you. month trump earlier this criticized plans to create a factory in mexico. chairman sat down with an exclusive interview with bloomberg in davos. francine asked him if he had spoken about donald trump with other ceos. have not shared any

concerns about a donald trump presidency a among other carmakers. we have already announced at the detroit auto show recently that we will invest 10 billion u.s. dollars in the next five years. can you give me a sense of more specific plans underway to increase production and what time --what is your timetable? we have full confidence in our market in the u.s. if it means more growth for us, we are willing to spend more in the u.s. francine: are you confident about the u.s. economy? through tax reform and infrastructure spending, will people purchase more of your cars in the united states? >> what the new president is aiming for is to create more jobs and raise gdp in the u.s. if that works well, i believe spending will increase and we can see more growth in the u.s. on that note, it is

inauguration day in washington, d.c. at noon in the capital, at 5:00 p.m. in london donald trump will be sworn in as the 45th states.t of the united let us bring in stephanie baker. what are we expecting today amidst all of the protests and the fans and the voters? .> quite a few protests they are expecting 800,000 people which is half the number that attended president obama's 2009 inauguration. also, a slightly more locate -- low key affair. despite the fact that donald trump has raised more than double what president obama raised in his two inaugurations. -- people will see will be watching what donald trump will say in his inauguration speech.

we have been told that the theme will be unity, american renewal. he will probably focus on american jobs as we understand and mention the fight against isis in terms of his foreign-policy agenda. guy: he is only heading three balls -- hitting three balls. something he is going to talk about today. will he be able to deliver up on that? that? >> does he understand what he is up against. and the fact that many mainstream republicans do not agenda.th some of his they agree on some things. he has come in with a rather agendaonal republican taking a few pages out of the ronald reagan playbook, lower taxes, stronger military, higher

military spending but he will need to have bipartisan support on a number of issues. p.m. under the 20th amendment is when he well become the next president. coverage coming up on that. this is bloomberg. ♪

matt: welcome back to bloomberg markets, this is the european market open. i am matt miller. we are 30 minutes into the trading day. here is a picture of the markets. down across the board although not big moves. it is friday and there is a lot to react to in the form of janet yellen, and take names speaking out at davos including theresa may that markets are not moving that much today. even after that chinese data we got this morning. we will continue to keep an eye on this. so much going on in switzerland.

erik schatzker is joined by a guest. eric: i am here with the president of santorini borings -- santori holdings. >> thank you. it is spectacular. eric: yours is a global company. are you worried about the rise in protectionism and the breakdown of free trade? >> we are worried because there is uncertainty. we are worried about what to do in the future. and particularly protectionism should not be implemented. i am optimistic but still worried. eric: what do you do? differently as a company if this continues? we enhance to each country's

production to serve more the local customers. in addition to that, we will concentrate more production into that -- and because of because it is the biggest market for us. you are moving more into the u.s. >> we did from mexico. move into kentucky. that happened six months ago. eric: it had nothing to do with donald trump and the threat he companies to foreign producing and mexico rather than in the u.s. >> exactly. but i try to concentrate in kentucky. that means that the u.s. should have the majority of globalization go further. that is why i concentrate tuesday in the u.s., simply. eric: will donald trump be good

for your business? >> i don't know yet. we will have to be careful. we will analyze the data. and what implementation will happen so we do not know yet. eric: it has been almost three beam since the been -- the deal. does santori today have the capacity operationally or financially to do another big deal? >> we have to concentrate on the integrate with the beam center. the priority. after succeeding, we will have a lot of options. i believe two years from now we will be able to say that we did it. so we have to concentrate. eric: what kinds of options are you considering? >> we can go into this more, our positions but we definitely have

to work on integration now. until we have the options. but i do not think we are o because weip want to control 100 -- we want to control 100%. i don't think ipo is an option. eric: how else might you make the company more flexible? how will you raise growth? >> because of the success of the integration and it is beyond our plan. so i think if we can increase our cash from the beam business as well as from the beverage business and other businesses also. m&a, how do through you get your 2020 revenue target. you set a target of ¥4 trillion.

you are at 2.7 right now. that is a big gap to close. however, what we have to seek is we have to be fully equipped with the expertise to do business across border. we definitely have to have the expertise to be able to a choir businesses especially cross-border. option why we have the to be able to a choir cross-border again after. eric: it seems based on what you are seeing that more m&a is definitely something you want to do you are just not in a position to do it now. exactly, we have to concentrate on integration. we are seeing what is happening in the world and we will catch up. do we have to study what to after the success of the integration. eric: you have a broad portfolio

of alcoholic and nonalcoholic beverages but it is not complete. there are gaps. what you need to fill those gaps? succeed is that there are not any prerequisites. we have to have expertise. human resources and the change of culture to fit in with global competition. eric: should more companies do what you did, japanese companies that is, make acquisitions in the u.s. to a choir the culture, the culture of risk taking and growth. would you recommend it for other ceos? >> i think so. eric: more japanese companies should do that. huge challenge.

japan and the u.s. have completely different cultures. especially in terms of .hort-term versus long-term the people have been brought up in very different cultures. eric: let us talk a little bit about abenomics. there are three arrows. fiscal stimulus. which japanmulus has had more than anyone else and it continues. structural reform. not enough has happened on the structural reform. what else would you like to see the prime minister do? >> social security reform. more mobility. and people from abroad should be accepted more. eric: more immigration into japan. >> but people in japan do not call it immigration. and the laborers need to be skilled.

we definitely need people from abroad to the sake of diversity. diversity is key to success. eric: moore did -- more diversity than demographics? >> not only women but for people. eric: thank you very much. guy: thank you very much indeed. more coverage coming out of doubles. a bit of breaking news related to greece and the imf. the imf has said we want to make a decision by the end of the year regarding continuing our relationship with europe and greece. it seems like we are getting details. the imf is saying that to remain fully engaged in the greek discussion, the imf wants greek debt to be sustainable.

the germans want the greek -- want the imf to be on board with a great program. welcomedschaeuble has the imf assurances on greece. we are going to be talking to george soros and getting his views on what is happening in europe. he is not optimistic let us put it that way to what happens next in europe. that is one of the things that came out in the conversation with francine lock while. lacqua.h -- francine we will be speaking to the president of the financial group coming up next. as bloomberg. -- this is bloomberg. ♪

a.m. in london. let us talk about what is happening in your. large sores spoke exclusively to bloomberg in davos and he struck a gloomy tone when it comes to europe. is in theopean union process of disintegrating. brexit -- last year was a and otherith brexit of elections. the italian election and so on. guy: stating the obvious in many

ways. there is disintegration, there isbrexit, the eu disintegrating. it is not a hard line to draw. this morningews out related to greece. coming back to the disintegration dean. the imf will stick with greece for now. how good is that news? it is significant for greece but less significant for the broader markets. significant in the sense that there was a big dispute between germany and the imf on how to deal with the issue of the greek debt. and the fact that it the imf had substantial disagreements with the european approach, they would have to move out which means in the europe elections, the germans and the dutch would have to go to the parliament and bring a new great package. extend the wanted to

current greek package. guy: are you more with george soros regarding the future of europe? we had a series of big u.s. investors. there seems to be a concern in north america about what is going to happen in europe in 2017. >> european assets have underperformed. yields in europe are very low. extremelys trading low fair value. put of fair value metrics it at 125 and it is now trading at 106.60. massively underperforming across sectors. there is european skepticism. but the signposts so far are not that bad. notdelta of the news is that bad. the italian referendum has played out better than people

would of thought. got reasonably good popularity votes without destabilizing be status quo regarding the senate. elections, the candidates are coming forward from the republican party and the independent candidates seem to have a decent chance in the french elections. the surveys, the economic data are extremely strong in europe. much stronger it then surveys even in the u.s. regarding industrial competence. i am not saying things are blooming but i am saying that the market does price that cautiousness and there is some scope for surprises. matt: you are a macro strategist. you are looking down at this end seeing everyone from george soros and jamie dimon predicting disintegration. the euro is off of 3% or 4%.

the pound is down 6.5% in the last six months. do you use this opportunity to go in and buy low with the expectation of selling higher later? >> it depends. on what we are talking about. but in terms of the euro for instance, we think that a lot of of them is in the price dollar in terms of potential growth acceleration in the u.s. at the same time, even that cannot explain the low levels of the euro. we have to use some of the arguments that you just mentioned in terms of fears of political risk and disintegration and they are real. it predicts -- if we get a bad outcome in the french election that is a real risk. does take 75% outcome place and we have a smooth outcome in the french election, we think the euro could claim

some of its losses back. and at the same time, some of the optimism is already in the price. lines alongmending the euro. for sterling, i am not particularly convinced that this resilience will extend. --do have a lot of news out a lot of what has to be said has been said and is in the price but the current account situation is quite challenging and for whatever reason, brexit turns out to be more punitive in terms of the trade relationships expected,is expected, particularly when it comes to services, the current account deficit is vulnerable to the downside and the exchange rate, the british pound, could see a bigger selloff. we are not in devising the pound. let me bring you back to

germany. i was in frankfurt yesterday at the ecb meeting. mario draghi seemed more dovish than i think a lot of analysts and economists expected. meanwhile, janet yellen seemed more hawkish than people expected. -- thesee diversions vergence- di growing? to pointe are trying out to our investors is that the expectations matter and what is priced in matters a lot. yes, the ecb is staying the course and they probably will stay the course for the rest of the year. policy scalingir down to the end of 2017 but a lot of that is already in the price. on the other hand, when you are , ining at the u.s. curve

terms of the full path of normalization is priced to take place in the next few years and will see industries rise in the u.s. to record levels in real terms relative to european interest rates. gence is in the price. despite the fact that the ecb was dovish and a lot of people were commenting that the fed word janet yellen was on the hawkish side, the euro is actually higher. guy: she says she is not behind the curve. is she on the curve? this is what people are trying to figure out. if she in front of the curve? what is the glide path for the fed? think that if you look at the underlying pace of

inflation, let us say if you strip out shelter and commodities, you are seeing inflationary pressures are not accelerating. job growth is strong but it has lost momentum. the real estate market is not accelerating in terms of momentum. rates have gone up in terms of yields. the dollar has gone up. i think they are doing the right thing in terms of trying to strike an appropriate tone so the market does not outpace them. guy: thank you very much for your time. andill be joining us continuing the conversation with us on bloomberg radio. that conversation continues. let us get back to davos. francine: thank you so much. i am joined by the ceo and president of mizuho financial.

we talk a lot about the japanese companies and the impact that the negative interest rates by the bank of japan have had. how are financials coping? >> the bank of japan introduced a negative interest rate at the beginning of last year. that was negative to the banking industry. in terms of businesses. in our case, we have many businesses. that, this is negative but we are ok. we will be able to overcome the situation. francine: is the bank of japan listening to your concerns? believe that because of the

positive economic condition in japan, i do not believe that the bank of japan will take a harder problem.epening the francine: how are you dealing with brexit? >> we have a huge amount of clients in the u.k. and we have a big branch on the banking side. and one section of the security side. in our case, the banking is in the branch network so we do not care. haven the security side we an issue. we have to take action. there is a heavy brexit -- francine: what is that action? how many jobs will move? >> we have not decided. francine: ballpark? >> 1000.

more importantly, the u.k.,riate place from the london, to the continental area. there are so many candidates. luxembourg and amsterdam. we have not decided yet. we have not decided yet. francine: how do you decide? do you speak to governments? >> we have to find out the benefits to be in an area. many places now are approaching me. but we have to understand the benefits. francine: i am trying to understand your thinking. wouldn't dublin be the natural place because they speak english? >> it is one of the candidates.

we have to consider infrastructure of the financial industries which means personnel, human resources, the educational system, and infrastructure in terms of the i.t. infrastructure. dublin is also one of the candidates. are you speaking to other ceos from the banking world? talking to other banks to decide if frankfurt, or dublin, will it be a concerted effort? >> we have had many discussions among the international bankers. almost all of them have not decided their place at this moment. francine: how will donald trump affect your business? [laughter] what the u.s.

operation is huge. activityquired the rbs in the u.s. last march. amount ofreased the business in terms of the market. we are growing quite rapidly the u.s. operation. francine: if they deregulate that will be great news for you. >> that is the truth but we have to be careful. the situation is getting better. interconnectivity of the new banking rules are quite confusing to us -- is quite confusing to us. trump does some easing, that will be good news

for us. francine: no doubt, as you model it, how much can it impact your revenue -- the deregulation? >> it will depend. but it will be significant. i cannot say the number. but probably quite positive for us. you see the rally that was exacerbated by donald trump -- was it justified in the market? >> yes. iferest rate increase -- they increase it three times this year. they caused the higher dollar. i have some concern on that -- that mr. trump will be able to accept the high dollar ratio. are some of the things we heard yesterday. thank you so much.

that is it for the european open. more from all those up next. it is bloomberg surveillance. be talking later on with philipp hildebrand. this is bloomberg. ♪

francine: it is trump time. the president-elect takes office eight hours from now. what will the next four years old? george soros calls trump a con in and would-be dictator but an exclusive interview, he says the new president will be kept in check or the u.s. political system. janet yellen backs a strategy for gradual rises and insist the fed is not behind the curve. this is bloomberg "surveillance ." day four from the world economic forum.