manus: a beautiful day in tokyo. there the emperor's palace. we are looking at the market on the back of the fed and mr. trump. kobe steel. the beleaguered company. they are cutting their operating profits 6.2%. .hey cut their plan dividends they are giving us an update on

and-year net sales operating income. many people are raising the question, how can they have any idea about the cost around this until customers affected by the scandal decide they are going to see or not. there are withdrawing their full-year forecasts and giving us this renewed guidance. it's 525 companies that may have been affected but didn't find safety problems. nissan. subaru. subaru may call back a couple of hundred thousand cars. we will get an update on japan later in the program. let's get an update on the live market action. it's nejra cehic.

gains, butre seeing the shanghai market breaking that trend. dropping the most since early august. yields move higher, i have the 10 year generic units year. those are moving higher on the concerns over deleveraging. keeping an eye on the u.s. can you yields as well. managing to hold about 2.4%. a lot that could drive these this week. you have a fed decision, jobs data, a fed chair, tax reform. lots going on in these bond markets. the dollar a little bit weaker after friday. the worst performer against the greenback was new zealand dollar. you are seeing here theort showing that perhaps

kiwi dollar is vulnerable. above $60 ang barrel for the first time in more than two years. is it going to hold? the u.s. output versus what we heard from opec. manus: thank you very much. separatists declared independence from spain. the central government in madrid is taking steps for direct control over the region. anna: thousands of people person -- protested in favor of national unity. we have maria on the ground in barcelona. what was the sentiment over the weekend? it was overall a quiet weekend.

the leader cap a low profile. for his left barcelona hometown, he made a prerecorded televised speech on saturday. the word republic did not come up a single time. theidn't make reference to new country but the word republic was not used. wrote that in the future they are going to have to make difficult decisions. both of them cap a very low profile. i did want to mention a little bit of breaking news. thatis unconfirmed reports the central government is about theress charges against catalonian leader but not issuing arrest warrant. a reaction that madrid

takes can be seen almost as provocation. do you think that will add to what we are seeing, called scenes? could that rally situation? called scenes and a massive demonstration in favor of unity. hundreds of thousands of people took to the streets. the key thing is the report is unconfirmed. the question is what kind of charges. some charges can carry 15 years, but rebellion would cover 30 years. we will see if it is confirmed over the course of the day and if we get that arrest warrant. mariathank you very much, tadeo in barcelona.

politics part of the story here. how much can you put politics aside, david? david: at the moment it is isolated. it's important to distinguish between the equity market in the bond market. you don't even have to forecast the equity market. this is an issue where spain will lose some momentum. for the banks, they are dependent on ecb financing. that's an issue for them. when you think about the bond market, the ecb is at the back of the system. there's a lot more momentum behind the recovery story. spain reinvestment's role off the balance sheet. the ecb announced last week it is going to be buying over 30 billion euros of spanish bonds. .ut they are going to reinvest

in the case of spain, that could be a meaningful number. there's a lot of flow in that market. you may have a scenario where its elite rates through spain next year. that's possible. italyould be dependent on going to the upside or spain disappointing. belowhas been yielding and the economy goes slow rapidly, and italy surprises on the upside, they might trade through spain. market is an issue, the equity market is a big problem. look at it, this is the dominant thing. .his is european growth it far exceeds the u.s. in projection.

low interest rates well past the horizon. the reinvestment story, you've got quantitive easing with an open end. but also a promise that it's going to be low for a long. of time. mario draghi is leaving the ecb in 20,019. 2019. manus: do you think he wants to get to zero before he goes? david: yes. if he does, job done. they can go to alyssa cycle are perhaps now in a position they are coming through with a passive investment policy. weeks,y, in the next few we are going to have to hold portuguese paper.

there athanging out that issue. the ecb does have the back of the system at the moment. i think that's important. how much did this come back to the amount of money that german corporate subsisting on and not investing? how much is that part of the story? the situation for the ecb is it doesn't really know at one point germany will fire up. germany is running this monumental surplus. again ands got bigger that should really be happening. companies invest. in germany their running about

to have percentage points of their gdp. at some point, germans companies hopefully see a reason to invest. the eurozone could be growing at almost was 3% year-over-year. strange but true. if germany steps up to the plate , we could be looking at that sort of picture. manus: they said that germany has saved approximately 109 inos -- 109 billion euros trading on debt by 2020. this possibility of an accelerator. sustainedst of europe in a go to normalization? how much of a break would go on the rest of the european success story? some countries would have an issue. italy is suddenly gaining at

2%, then the markets won't worry concern aboutl of government. especially if the ecb is talking about reinvesting portfolios. this potential health of a tight market as well. anna: thank you ray much, david owens. traveling to work, there is bloomberg radio. you will find it on your mobile device or digital radio in london. our expert on macroeconomics is about to join the team. manus: coming up on the show, one and done? the bank of england is set to raise rates this month but could be the only hike until after brexit? u.s. the president of the becomes keyboard warrior. who will be charged in the

russian investigation? we analysis. this is bloomberg. ♪

♪ manus: it is 2:45 a.m. in the city of new york. equities are trading a little lower. the fed chair the tax bill coming at you. it was a chunky week. the second chunky week in the u.s. equity markets. chunky. a technical term. hsbc has reported a third consecutive quarterly increase in revenue and has boosted income in three of its main businesses. income to $13

billion, beating analysts projections. returning -- improving our return equity. we didn't quite hit the target we set of 10% by the end of 2017, but we are getting there and making good progress. we expect to get the threshold and in progress from there. the dutch company has conservationsve about a merging of equals. its return to shareholders remains on track of -- for april of next year. the bank reported a price that is inflated.

according to people familiar with the matter, some of the conditions the italian bank will , could be inflating the price. in a 900 million euros deal, approvals,military owens might buy power up -- paroc. it is expected to add to earnings expectations next year. manus: thank you very much. kobe steel has abandoned its net .ncome forecast you cannot estimate how the quality control schedule has affected its earnings. the company is part of the growing corporate governance crisis in japan. let's get to tokyo with our bureau chief.

kazunori takada. great to see you this morning. what do we learn from cobain? they join the list. kazunori: they have withdrawn the four-year garden -- guidance and dropped the dividend payment but it speaks to the seriousness of the issue. the business condition is just too hard to predict going forward. know, clients have said they might seek compensation from kobe steel if they are faced with a need to replace parts that were using kobe steel parts. they have not had any safety issues as of now, but if that does happen, the magnitude of the problem will increase infinitely and the impact of a

earnings will be much much more dire. why are we seeing this wave of corporate scandals now coming from japan? manus: it's very -- k azunori: it's hard to draw one conclusion. the shortage of labor workers and factories, rising , and in the same time simple awareness of what the workers were doing. they were not aware that what they were doing was not right. this time it is hard to draw any sort of a conclusion, unfortunately. usus: thank you for joining on the very latest with kobe still that steel. let's talk about the bank of england.

they have their policy meeting. will they have their first increase rate in a decade? three out of nine members will vote against the move up. markets see an 80% chance of a rate increase, though. let's get back to david owens. englandill the bank of go for this rate hike? that be the right move? will it be one and done? thed: we knew after inflation report that the chance of raising rates was very high. yes, it's going to go this week. if you get two or three dissenters, markets will start worrying about, do they know

something we don't? is there a real concern here? weak growth versus the rest of the g7, isn't that enough? david: the february meeting is quite key. that is when they are going to potential ofssess the u.k.. what is the equilibrium of employment? the u.k. is growing at one half percent. has that eroded? they may raise rates in february or they may wait. see ankets don't improvement in the u.k.. strike. buyers the currency could fall.

rates could rise more than the markets are discounting. for now, the market is probably right to assume you'll get one this week and one or two next year. manus: what could provoke a buyers strike? that's probably more to do with politics. hikeing really needs this to get a bit back. what can provoke that buyers strike? current.k. is running a account surplus of about 75 billion sterling. of 2016, it has been financed by the gold market. partially due to the ecb and qe. the current deficit and get smaller, a got wider. we need to see accounts improve here. it's more important of the budget deficit.

-- than the budget deficit. in this environment of brexit negotiations potentially breaking down, tory party uncertainty, that point you might imagine a strike occurring. in regards was going on with mps, but what he keeping the most focus on? is it foreign direct investment? the amount of money coming into the country? david: it held up incredibly well after the referendum. the first office is actually pretty weak. ends, even more companies will be locating away from the u.k.. much moreoming

reliant on short-term capital flows. the gilt market in particular is one of the ways. an e y survey over the called the global capital confidence barometer, in this barometer, the u.k. still comes in at number three behind the u.s. and china. that's despite all the brexit fears. intellectual property and technology, those conditions still make it a terrible place to invest according to the survey. the world law here in the u.k. is a powerful conduit for english. all of these things the matter. fdi the case fairly slowed. what i saw, they are not in the big scheme of things, going to the u.k..

all u.k. businesses relocate? even of fdi comes and you will have more if going the opposite direction. budget coming the up. top $90et deficit could million. abandon plans in the public sector, the that mean d budget concerns have topped it? how important is that? david: it's much less important than of the u.k. still seems to be growing. need for structural improvements in the u.k. which will require public spending. the markets can live with this. we believe the budget deficit in the u.k. get to about one to two

points of the gdp. prior to the referendum, some of the numbers were better the next rotations. we have flipped around. we are the worst the g7. we were the strongest. is that just media hype? it's not so surprising. counterfactual he, we don't know if the u.k. would be doing even if we wanted to remain a year. -- even if we remained in the eu. manus: thanks so much. anna: you can watch the show not just regular tv but the tv function on the bloomberg. you can influence the conversation by asking the guest the question. manus: up next, keyboard warrior president trump unleashes a tweet storm ahead of a possible russia probe and the charges

today. it is a big week for markets. we're going to find out who will run the federal reserve. the inflation numbers in the u.s.. in a tax vote. anyone for tax relief? ♪

dollars. reasonably happy with where we -- focused.used and anna: prosecutor investigating russian meddling may announce first charges today. manus: a big week for bonds. awaiting a slew of markets, moving news out of the u.s. from the new fed chair to tax

legislation. that's only as collision course. separatist lawmakers reject madrid taking control. manus: a flagship morning show here in london. anna: welcome to the program, breaking news from a host of corporate spray glencore. , guidance marketing up up and away. 2.6-2.8 oh yen dollars and in terms of the breakdown of some of the commodities, nine-month copper production at 946,500. with thech in line

comparative period. 946,000 tons. copper approaching $7,000 in aluminum jumping 30% this year. backdrop for the renaissance. for these metal and mining companies. nintendo numbers boosting, citing higher. in terms of the forward-looking billionorecast the ¥85 net income. they embraced the revenue forecast model raised the 27 operating profit forecast, the i billionor it -- if yen. -- billion yen.

they have increased the switch hardware sales at 2 million, upping the guidance on that one. improve outlook, making more switches which have been in strong demand. this is a new game console that got good reviews. thes: london indicating lower, there is nintendo up 75% year-to-date. this is how the markets are looking. euro stock set for a better opening. london down by either 1%. but such a small turnaround more to do with the dollar story. spanish gdp you can't mortgage up .7%., the data is you are seeing the market begin to take -- begin.

a huge week for markets. a whole host of issues. anna: a busy agenda on the front, is where we have seen. by 8/10 of a percent. are in positive territory. suggesting will be lower at the start of the trading day. a new record on friday. the fed really hones in on jerome powell. moment, as at the grand jury improving charges from special counsel mueller. the earnings story also key. the momentum builds in terms of the perception of what the new in ministration is going

to do. employment objective , let's have a look at the job markets for the federal reserve. ,.s. treasury trading at 2.40 it will drop rack -- a little drawback. we will see what happens this week in catalonia. that could have a consequence into the market. >> let's get update. in barcelona yesterday, separatist lawmakers rejected madrid's proclamation of control. the are dissolved parliament, put the ministration in the hands of his beauty had called elections on the december 21.

speculation about the next federal reserve chair tweaking a video saying his decision will come in days. nominatingng towards jerome powell to succeed janet on. the president has said he will make his preference known before he leaves for asia friday. iran is complying with the nuclear deal and calling on all refused tofrom recertify the deal two weeks ago and washington imposed new sanctions on tehran. the iranian president rejected the chance of talks on the sidelines at the un's general assembly. the kurdish leader is stepping down as president of the oil-rich semiautonomous region. overseeing a push for independence, has drawn the anger of baghdad and neighboring countries.

supporters forced their way into the building to her test against the treatment. global news 24 hours a day powered by more than 2700 journalists and analysts in more , you can findries more stories on the bloomberg at top . the nikkei closed 22,000 points for the first hurdle -- time friday. a switch out of chinese stocks and bonds today. supporting the overall regional and market index. having a look at stocks in income forecast as we can the outlook. it is the -- it has dumped its dividend, looking better than before. manus: first charges in the

probe investigating russian involvement in last year's u.s. election should be announced today. trump went to twitter to attack hillary clinton. russia talk right when the republicans are making to push for historic tax cuts, the white house said it trumps tweets were not triggered by the russian investigation. who or what might be implicated in these charges? we don't know what it is or who evenvolved in reporter: lawmakers on capitol hill in washington don't know. we have heard from adam schiff on the intelligence committee in the house and he said it would not be appropriate for robert mueller to let them know. it is a guessing game.

it is consuming washington and the world right now. it will probably be somebody who will not be close to the president of the white house. they will start several steps ahead -- away and move more quickly and. what is important is the first step that shows that robert mueller and the folks who are investigating this are taking this very seriously. manus: if you have a sense of where the fallout could be? we don't know who will be charged, what he will be charged with you sources speculating to --. fourth --ts on the four light? start would think if they , they could moving into an inner circle. that is what the white house has been concerned about. the president tweeting his

thoughts about this. again trying to raise these issues about hillary clinton rather than his administration also talks about potential pardons. jerseyhristie from new indicating it is inappropriate what mueller is doing. clearly trump is concerned about this and we will see where this goes. the president coming to asia at the end of the week. going to be working about -- talking about a couple of things on the agenda but this happening in washington will consume everyone's attention. anna: the next five trading days

will be market moving information for treasury traders. hisp is set to announce editor nominee. manus: the jobs numbers on friday. big thisd you just a would be. you said this will be huge. how huge? >> sterling huge. i think that that's her nomination is going to overshadow this week. when we look at it it looks like there's this goldilocks here and what we expect is a continuity candidate sticking to the script here. especially when the president , less ofstock markets risk than a big spike that might come.

we expect the dollar to the lower -- to move lower. you said it tinker or taylor or soldier on. easy making a choice between one dollar and strong equity markets. do you think that is how it is starting to crystallize? is do we need to change but -- fed policy? the answer is no here. you will beer towards a continuity candidate rather than taking a risk. you have to ask yourself would fed chair taylor be a game changer. you can actually change the ideology. , ipped around this narrative think that is embedded. you say you are less hope

all on tax reform. all the talk of the weekend is quite bullish to move the long. theere mistaken to buy trumpflation trade. dollar-yen traders are going to be disappointed. we started about 10 year yields rising. the strongest since 2007. the traders could be very wrong. moving, webreakout just think we are making the same mistakes we did earlier this year. the --ing attention to manus: 2.6% would not drive a dollar resurgence. >> i think it would.

whether it will land on the president's desk soon here. we will see a lot of back, complications when it comes to the tax bill. anyone thanksgiving day tax bill -- 30 -- there might not be turkey on thanks giving. >> liking the catalyst to move forward. without tax reform we don't get to 2.6%. < we're going to tax reforms, nomination, the secular low inflation, as well as the fact we put it in perspective that last -- months dogs reports -- jobs report, all hard todifficult, it's

see the field. a facingu are almost fully once tax reforms chairman you, will be -- asas we look at this we look at this, the global growth story seems to be quite strong and improvised from u.s. companies. in the global growth scenario how do you want to be positions -- positioned? do it to be long, where do you want to belong on a story? >> risk currencies like the willing markets, eventually do well when global growth picks up. that might be a genuine story for 2018. the dollar placed second in here unless we get you up -- u.s.

growth. you want to be commodity-based relative? >> that is the key. the aussie dollar looks pretty undervalued relative to where it should be. anna: thank you very much. ago into thehour european open. earnings beat estimates. a very strongly the aftermath of for the lunch break in hong kong. now up .4% at the end of the day in hong kong. deal, novartis doing a $3.9 billion so as to intimidate song, $4 his swan

billion in cash by the way. -- the biggest shareholder was on friday, but his story. we got confirmation that they are in talks in amsterdam. with more on that story up next.

manus: welcome back. strategist is with us. -- fx ethics strategist strategist is with us. isr top line with the euro is, you've been listening to george michael, have faith. integration. --t is going to drive euro

the euro? >> the integration story. real money investors are here when it comes to politics. -- cap to land -- catalan. when it comes to draghi and the ecb, sort of avoided for now. now it is about the rate hike. when will the first rate hike come through? here it is all about underlying inflation and effect and move towards 2% this week area if , calls for an earlier rate hike may be called. we see that is a story for next summer. corey: interesting you mustn't

--anna: interesting u.s. and -- the leaderse story, standing in front of their own a flag and the eu flag in contrast to what we see in italy which is anti-e u. when we get a rate rise -- he was saying it was interesting that a lot of conversation was around that at the press conference. not 2018.9 and 2020, you are suggesting we can see rate hikes next year. the pricing that we saw with the bank of england, as soon as the cat is out of the bag, the currency market is key. manus: the bank of japan meeting at the moment, there you go. anna: that was easy. manus: the bank of england, how

does carney raise rates? our story is that is the only thing that is going to save sterling. 2% so far this month. the change rate has not moved that much. there are a number of factors. >> we don't think he will say it is one and done. probably effective the bank to say it is one and done. whether indirect or directly they are thinking about it. we need to -- talk of a rate hike has put a flaw as you mentioned due to politics. if you take away that support you are only fueling inflation pressure you're so concerned

about. thank you officials really quite to -- .2 persistence. anna: you seem to be paul -- pointing towards a hawkish hike. >> wiki easily see sterling back up to 1.35 to we are not shooting for the stars because we know brexit will be the key thing. deal or no deal. here is the december eu summit. that is the make or break moment. manus: thank you very much. i think we have had everything. george michael, game shows, the lot. novell has confirmed it is in discussions of the merger with the u.s. rival ask all the -- u.s. rival. manus: good to see you.

the top flight of the story is this is a buy back to stay independent. >> no. the first,s december the profit warnings in the last , when it months outlined its new financial goals, those are way too ambitious to is going to be strange to think they will be pressured to stay independent. anna: what does this mean for a potential return? --t a deal, in time to say would a deal come in time to save them? >> can you repeat the question? >> i was asking if ppg are going to come back?

>> bp will come back to some of the first. is can it feel so quickly. is it a secure deal is the question. you could say the challenges much higher to reach the deal. quite successful with the chemicals division. in a recent interview the ceo has said there is quite interest from people parties as industry players. ipo's should also not be ruled out. thank you very much. a reporter in amsterdam. that is it for the daybreak team. the rest of europe is higher at

hsbc, keep an eye on that stock. anna: keep an eye on a just easy. london just waking up for another trading week. this is number. -- bloomberg. who knew that phones would start doing everything?

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manus: your first rate coming up very shortly. we will bring you the first train of the day. week,iller's office politics take center stage. be charged in the russia probe and how will the white house react? it is a huge week for the bond market. hundreds of thousands of pro-unity demonstrators,

-- live in president barcelona on that story. third consecutive rise in portly revenue. he tells bloomberg he's very happy with progress in asia. less than half an hour away until the start of cash trading. what we looking at? wei. the rest of europe looks like it is going to be traded sideways except for one critical markets. the ibex 35. 1.6%, we have already seem reaction this morning. yields have come down. prices have come up. the big story this morning is what is happening in spain and you can's -- in spain. you can see that clearly.

there is the s&p, there is the move we saw friday. another record coming through there. wellts generally did friday. let's show you what is happening , we have seen a little bit of a move in chinese affect overnight -- assets overnight. look at that area flashing the yields, trading nearly 12 basis points higher. week is likelyis coming out of the united rates. so much that is going to happen this week, it feels like it will be a week to remember. juliette: thank you. dollar trump has unleashed a flurry of tweets attacking hillary clinton and the democrats amid reports that the first charges in russian election meddling inquiry begins today. trump accused is a local

opponents of a witchhunt. gathering in barcelona yesterday as impetus lawmakers reject madrid's proclamation of control. the prime minister has dissolved the parliament, put the administration and the hands of his deputy, and called elections december 21. the next test comes when the government workers decide whether to strike in favor of independence. the prime minister has said sexual-harassment cannot be tolerated any longer to theresa may has supposed -- proposed a set of laws and and ordered an amid allegations of inappropriate behavior.

the kurdish leader is stepping down as president of these semi-autonomous region, he has been under pressure since a push for independence that has drawn the anger of baghdad. parliament debated his decision to stand down, supporters force their way in the building to protest. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries, this is bloomberg. guy: thank you very much indeed. the next five trading days will bring a torrent of market moving information. president told from poised to announce his nominee. he said he will do it before he goes off to asia. the house committee is set to release the tax bill. then of course there is the issue of the russia investigation. so much could happen so quickly.

what we going to be looking like when it comes to friday? mark cudmore joins us now. all -- as youn -- look at the week ahead what is your best guess as to where treasury yields are going? >> the risks are skewed to be quite lower in one week's time. there is a lot of risks both way. each one is setup to be more likely to shift yields lower. most importantly is the fed nominee. there is a rate premium priced in the curb -- curve. it is erroneous to do so because even if taylor is picked, he will be more hawkish but that means more hikes and the curb may get pleasure. there's an argument to say even if he is the pick, the 10 year yield might even fall further than if it were yellen or powell. premium, howrate

old also cause the 10 year yield yieldp you the 10 year might drop regardless. there is an 85% chance of a hike in december. they would not want to guarantee that which means if there is a surprise that can only really surprised devilishly. late -- dovish late -- dovishly. manus: how does politics and the data interact? -- you canlitics and also put it in the economic said as well. how does the russia probe and fed story interact? >> therezie at the thing. there are also possibly the

treasury getting high yields coming low at the end of the week. that would mean a bit of a safe haven play them are coming out of equities and moving in treasuries. side, withlitics trump in asia as well, we see a chance for him to tweet headlines about unfair trade. these are skewed. that is the more likely way we are going to get this in. the final component is tax reform. that is the one reason the move up seems justified. , it can is a tax deal change the whole outlook on inflation going forward. there is an early stage, it does not mean it will get past, if we have a house bill this week tomorrow it will be looking to see how viable is this plan? with optimism quite high, skewed

to have a negative risk, that is the one case which could go fully either way depending on what is revealed. manus: washington post talking about how the house bills are not happy to the politics apparently -- happy -- the politics hazy. what about the data? it is not amazing but a fairly decent clip friday. pce coming through. the payrolls friday may come back. can the data provide a reason for the yield higher? >> data is always important. but it is important that data is part of a trend. it is rare traders get too carried away. a very strong labor market. we have not seen sustained inflation. there have to be real shock this week.

willxpectation is the pce commit. it will have to be one point percent to get people excited for more than 24 hours 48 hours. the news scroll be more important than the economics this week. i have a bid on spanish government this morning. i have dispensed equity market by 1.6%. traders seem to be signaling the all clear. is that the right reaction? >> i still remain worried but i think what we have got his past the most -- i don't think that will happen for a long time. there's likely to be protest going forward. we may have gotten past the worst chance of the catastrophic event and that is really

important. i think this continues to erode growth in spain. it is eroding the spanish trade and spanish growth. does factor into projections for next year and will probably continue to be the case the next couple of months. guy: this is the question i keep acting. is the ecb locked in the monetary policy story for the next few months? we are kind of done for you the data does not matter, politics doesn't matter, the ecb is what matters at it has made its intentions very very clear. >> is very clear. -- that is very clear. both banks have made clear what they want do and are ignoring the data. the fed is determined to normalize. ecb has said he don't care what the data is, we are very set to keep on supporting's economy. that is why the euro-dollar will remain under pressure. the data has less importance in

the immediate term. it will need to be a change in trend to get traders excited. guy: as well as your colleagues this morning. story comethe s&p through friday. was the selloff in china just a blip? not been a good enough explanation as to why it is happening. the thing about markets is post .onference, got carried away that is the standard sales expectation. it does what we seem to have had here. overall i'm not too concerned for chinese equities are doing ok. yes bond yields are going higher but that is partially because the chinese government has emphasized they're willing to keep the pressure on growth. guy: thank you for much indeed.

mark cudmore joining us on the team. the politics could be just as important. guys and their fantastic coverage, that is the blog on your bloomberg. they into periphery, he is markets team leader. take a look at italy, spain, the fact that the spanish market equities are higher by 1.6%. hsbc pivots to asia, focusing on third-quarter numbers from europe's biggest bank. this is bloomberg.

guy: let's get your business flash. here is juliette. juliette: thanks. in talks over a potential merger with the u.s. rival, the dutch company says it is in constructive discussions regarding a merger of equals. it added that the separation of the chemicals unit remains on track for april next year. , itdrawing the net income said it will not pay its -- falsified data will affect earnings.

go a steal has announced -- to heavy plated metals. the european central bank is examining unicredit loan of 17.7 billion euros to assess -- it is inflated. according to people familiar with the matter, some of the commissions the italian bank will pay to manage the loans could be inflating the price. that is your business flash. guy: thank you very much. rising,e warning data europe's biggest bank saw adjusted revenue rise more than 2% to $13 billion. income rose across all three main businesses. spoke we spoke to bloomberg

earlier. >> largely completing the positioning, the ceo has been hard at work over the course of the last few years to really shipping the portfolio to better match that or other businesses. of synergies between our private bank and we reallyk market you see that in terms of -- key markets. we will start to see that coming through the revenues in the coming quarters. guy: that was the cfo, i just want to tell you what was happening overnight with hong kong, the honest answer is not a lot. let's find out why.

yet >> theyg on have been buying back so much of their stocks. maybe investors were waiting to hear if any more was going to be brought, not a bad performance, they just thought have shared --guy: the year to date chart looks pretty impressive to shifting management teams. what is the remuneration team got left and what are the meeting for the new team? >> they have to go through six pretty tough years. conduct scandals in the u.s. across the world, still paying ppi, now showing revenue growth. fix, with down a little bit as they paid $300

million to manage for good performance. the return on equity is round 7%, they've shown greta -- good revenue, they need profitability. they have had their targets that they set them as well. in terms of going forward -- guy: terms of going forward, i'm looking at who else is on the picture and what they are doing. focus, that isa allowing it to have been a different place. cracks thursday last week we were talking about work please, 34% decline in trading revenue. hsbc, same measure was only 5% to focus on the asian markets, seeing increased growth is serving him well. there are gaining market share in europe.

teamthe senior management be replaced, you spoke to the remaining one this morning. is that the third musketeer? >> he came in at the same time i checked him, he said he wanted to hit targets by the end of 2017 for a while. as for the future he did not give guarantees on that. guy: thank you very much indeed area we do get a fairly good indication because we can see what was happening in hong kong. we can price that into london this morning. a few minutes away talking about one stock to watch this morning. discussions of a potential -- an with excel the

american rival. london set to open ok this morning. doesn't look like it will be terrible but nonetheless the u.s. politics story is going to dominate. it is a fantastic start to the day. but that, london looking for a was. -- glorious. this is bloomberg.

♪ go: we have six minutes to

until the start of european trading. stocks to watch, they just ec. keep an eye on that. -- hsbc. had a very good run coming into these numbers. xalta moved a very strongly friday on the news we could be going, i think it was a 17% pop in the u.s. session for the business. a share price, there you go, 16.9%. i was close. theseeing mixed response to guidance on glencore. certain divisions are doing ok, other divisions against expectation. i'm quite serious to see how glencore opens this morning.

the german retail stocks this morning. you see the german retail numbers, clothing was a very strong component of that number. you make it stocks, zalando, trading up quite strongly. watch out for spanish banks. exhibit a, i have the fair value here. equity markets of spain are up by 1.6%. the rest of europe doing absolutely nothing this morning to -- morning. you would probably argue with spanish banks and you may see them absolutely flying. the party in the periphery this morning becomes the bond markets, i think we are going to see that replicated when it comes to the ibex this morning as well.

the market open is coming up next. on d of stories to focus on, the politics is never far away. this is bloomberg. the open formats away. -- four minutes away.

>> one minutes ago until the start of cash equity trading here in europe. let's talk about the numbers. spain firmly in front. we're about to get data out of spain and the politics in catalonia. this is the fair value you're looking at. up by 1.6%. you're going to see a big move in spanish equities this morning. you may see the banks outperforming. hsbc was number out this morning. it did ok. keep an eye on the german data this morning on retail numbers.

clothing did well. keep an eye on german retailers as well. we will get the spanish dropping as well in a couple of seconds. i am focused on the spanish markets. i think is going to be fascinating start of the week. everything is beginning to drop. the gdp numbers look in line out of spain. the ftse 100 is going to take its time to figure out where we're going to go. everything else is still waiting. i want to see what's going down here at the bottom. there you go, spain's open. by 1.2% of the moment. there is the gdp number coming through in terms of the data. beingsee a discount applied because of politics? the cac is down by