vonnie: we take you from new york to london and cover stories paris and. and beijing. here at the top stories we are following. a global rally is underway as macron is the french presidential front-runner. u.s. markets higher. we also look at the chances for marine le pen to pull off a re-examine what is next for china's bank. tenure bond digitally regulatory high. vonnie: and budget talks intensify as trump pushes house republicans to restart work on a

health care replacement bill. what can actually get done in washington this week? find out, ahead. hyman is here with the news that we haven't had in a while. julie: gains of 1% across the board. all of this on relief associated with the french election and the perception that macron will be victorious in the second round of the election over marine le pen and there is optimism that there won't be a french brexit. we're definitely seeing risk on. it is playing out in the cyclical. doing well in today's session. industrials are also on the list. all of these are cyclical and classic risk on type of things. real estate is lower.

utilities take a hit. we have a big medical device distribution merger here. is one of the biggest world's health care suppliers. this is the latest deal. that is as well as ppg, raising $28.8 billion. as we see the risk on affect in the market, we see it play out in other assets. that means the vix is sharply lower. that is for folks who are trying

to buy protection. now they are selling it in a big way. we see gold selloff. the dollar rising versus the japanese yen. and the selling of the yen, traditionally viewed as a haven. them -- up byg of four basis points. a classicricks on -- risk on scenario. the biggest gain since june 29 last year. .he highest level the dax is at a record. it comes after the biggest weekly drop since january. macron is now the favorite to win the second-round runoff against marine le pen, removing the that france will leave

euro. triggering its disintegration and forcing banks to redenominate their assets. more positive on the banking industry today. lenders are more sensitive to traders in foreign spending. all 19 industry groups are rising after the french election results. what a rally. this is the highest level for the french benchmark since 2008, that was the height of the global financial crisis. volatility is falling. the lowest level now since early march. after rising to the highest since june.

youe is a lot more to tell about. let's look at the euro. breaking through the 200 day moving average today. it rose as much as 2% earlier. since november. the polls proved collect -- the polls proved correct. macron winning the first round. thus avoiding what was perceived to be the nightmare scenario for the markets. marine le pen versus melenchon. marine le pen has trailed macron in every single opinion poll by 20 percentage points. and there it is. the spread. the 10 year yield. down now to the narrowest since the january. back in february, 79 basis points and today we are at 50.

a relief rally. somee: somebody made money, that is for sure. and marine le pen -- they gear up for a runoff. that takes place may 7. joining us now from paris is caroline connan. how will they modify their messages? caroline: we actually learned a few minutes ago that there will be a debate between the two candidates, macron and le pen. that will happen next wednesday on may 3. so that will be four days before the runoff to the election. of course, in between, there will be some rallies. we heard from marine le pen that she will hold a rally on thursday.

and the challenge now for marine le pen is to maintain her base beyond the 30% of the vote that she is expecting to get in the runoff. and whether she will manage or not to break the glass ceiling that has prevented her from ever being elected. does she do that? how does she expand her base? to maybe broaden her voter base? so the interesting thing i would say is how she will manage the globalization of -- the globalization story. there is a strong momentum from melenchon with a story about globalization. that was at the heart of his campaign. and even though melenchon was eliminated, he managed to get more than 19% of the votes in the first round. so well marine le pen managed to of those votes back to

her base? even though they have very different approaches on immigration and security, they big similarities in economic programs and their approach to globalization. vonnie: the french president is just speaking and i want to give you some of his comments. , sayingdorsing macron he will vote for macron, and says the marine le pen win would hurt the purchasing power of the pen is a riskt le for france. nevertheless. she is in the second round. what does that say about the traditional parties? do they have a voice anymore? caroline: the french president is why this looks so different from the elections in the past because he didn't seek reelection.

even smaller than the polls, about 6% for the socialist. and that day to create some new tension in the center that was taken by macron. and we do have, for the first time, since world war ii, the elimination of both mainstream candidates. republican and socialist. whether wen is also will see what we saw in 2002 when you had the republican father inine le pen's the runoff. at the time, we did have a ofublican front, if you say, the french people who wanted anything but marine le pen. and in the end, jack chirac managed to win by more than 80%. we will see if this is the case for this runoff.

, greataroline connan job. it isn't as low as it was earlier. we were down but we did come down following at those french president comments backing macron. macron is getting backing from both sides of the political spectrum. vonnie: we look forward to the debate. all eyes are on capitol hill because it is shaping up to be a busy week as trump approaches his 100 stay in office and congress returns from a two-week recess. tenants are really joins us now from capitol hill. there is a big place, if you like, in front of congress and a lot of stress. trump is threatening on twitter about obamacare and about drugs coming across the border from mexico. do you anticipate that anything will be induced with the legislation? where lawmakers

are beginning to return home to congress after being home with their constituents for a two-week recess. tomorrow night, numbers of the house freedom caucus will meet to discuss health care policy. not ryan has said they are going to bring any type of legislation to the floor this week unless they are a short that they have the vote. they want to overt what happened last time with the policy kick up in reforming parts of the affordable care act. it'll 28th -- the deadline for which lawmakers have to pass a partial government funding the 100thder to dodge day in office. have any typet to of government shutdown heading into the second half of this week. vonnie: even if he decides he doesn't care about the 100 day, and the significance of that, would he be willing to shove the democrats down if

decide they would not fund the wall? kevin: this, of course, the key issue here with the government alluded to is bolstering u.s. security along the border. the wall, so to speak. democrats are united against this. but there is something interesting here. i want to pull up a tweet from trump -- he cut his own staff off guard when he tweeted that " big tax reform and tax reduction will be announced next wednesday." that came moments after steven mnuchin was actually unveiling a series of executive orders on deregulating the 2010 dodd-frank reform law. and caughted that his staff off guard. let's take a listen to the budget director with a midwestern on friday. bill cannot be as good as it otherwise would be. dramatic.be as it cannot be as powerful if you have not dealt with health care first. there are other things to take

into consideration. factor of political momentum. so for venture reasons, we think we get a much better tax bill, one that the president actually wants, as opposed to when he actually settles for, if we get health care first. kevin: so there you have it coming from director mullaney. they are not just chore as far as the tax bill being released this week. his very own budget director versus what came from president trump. that has caused uncertainty with the republican aides about whether or not there is an actual policy plan to execute strategy. thank you. kevin cirilli. mark: oil is struggling to rebound. goals heading for the biggest drop in seven weeks. we are live in chicago to assess the market moves. this is bloomberg. ♪

mark: i am mark barton. vonnie quinn and i am vonnie quinn. speaking at is the deputy governor of the people's bank of china. today's time. you know, first on the chinese economy, the chinese economy had recently been stabilized. of thisfirst quarter ,ear, the gdp growth rate, 6.9% a little bit higher than most people expected. 1.4%. is

i over we have a higher pp 7%. that was expected. partlso, the very strong imports andmy is exports. imports and exports had been very strong this quarter. the total export and import volume surged 21.8% in the first , in which exports increased 14.8% and imports increased to 31%. that is partially reflecting the of the trading market and also the strong import to china. reflecting relatively stronger domestic economies. across the commodity prices.

so with that kind of relatively robust economic growth, i say are the reason behind that several reasons. first, the domestic demand is stronger right now. economy, the external has recovered, reflecting the international trade margin. and thirdly, the energy and commodity price is part of it. china ppi,ht now, the producer price index, recently had been higher. lastly, china's supply-side, structural reform, taking effect. when we had done the supply-side with structural

reform in the past two years, i think now, in terms of the capacity in terms of working with leverage and in terms of the inventory and also in terms of the corporate governance reform -- that has been making steady progress. so that the structure of the economy is better in the sense that there are more job creations and there are more companies registered every day. and also, innovation and the new economy has been stronger. industry report reflecting the change of the structure. and also, our final consumption configured to more than 77% of gdp, reflecting that this

economy has become more consumption driven. that is also our goal. goal for thetant structural reform. we would like for china to innovative economy, a consumption-based economy, driven basically by domestic demand. that is the structural reform. it has been working. policy,erms of monetary they will continue to do a prudent monetary policy. and also will be proactive with physical policy later this year. and a prudent monetary policy will give a higher priority to working on the following respects -- first, they will try

to maintain economic growth, and also, trying to work on the deleveraging process. lending andthat our oney supply has been growing a consistent basis with the leverage reform aspect. and also, we try to control the asset bubble. and you know that in some cities, there are still quite high real estate prices. so how do we control the bubble is one of the important things that we have to consider. and when we consider monetary policy, prudent policy, we would like to manage the risk in preventing systemic risk.

that is the monetary policy. theink that is about chinese economy, i would like to report. although the overall picture of the chinese economy has been fairly good and improving, in right now what i'm looking for with the market, the -- making, we have to work on the shadow banking regulation and also, shadow banking transparency. the other one is the nonperformance loan. gettingrmance loans are pretty much stabilized. after a long time of climbing a little bit. it is about 1.75%

. that is a sign of stabilizing. but we continue to have to work on the nonperformance loans. the pressure has been alleviated we have tot still, watch for that kind of phenomenon to see what is the underlying reason. mentioned,o, as i there are divergent movements of the property prices in different cities. that is still a consideration. mind. have to keep in i think that the overall risk is under control. mpl has been basically

stabilizingsigns of with the financial market. thesecond topic is about financial opening up of france in this role that they are interested in. i would like to emphasize the pillars that will be used across the border and overseas markets. that the is internationalization is a driven process.

and so it is a firm price. and that is a basic need for oversee use of this. and that means that the people's respect the market price and we try to level the playing ground. so emerging-market currencies can compete equally in a fair business environment. that thed pillar is central bank, they have to work on removing the existing barriers for to make analization, freely usable currency. was aow that china

centrally planned economy for a long time. there has been a lot of red tape and regulation, restricting a lot of the transactions, so that trade and investment and they use of the currency was not convenient. thing in thethe past several years. say, that what i've done and what my colleagues have done is to remove those existing barriers and cut off the red the transaction so that all the currencies can compete equally. the third pillar is that i watch offshore market.

in hong kong and in europe, there are demands for offshore markets. and i think that is a group development and also, right now , we haveof generation cnh and cny. and how they work together. and also, in terms of the fixed income market overseas. the fixedlot of income products and also, in terms of equity markets and in terms of global wealth management, there are a lot of products in the offshore, oversee market. developmenthing the of the offshore market closely. and i think that by and large, there is a positive effect the offshore market and

the onshore market, that is our policy intention. the last pillar is that we have monitoring and the balance of payments and logistics and cross-border transaction statistics and also, we have to do a better service transactionnbi across the border. like the infrastructure payment system and so on and so forth. as far as a central bank is concerned, they tried to do well with this service. of the as the statistics data. if we have the data, we have say that willnd i help. with the healthy development of the offshore market. regard, i would like to

take this opportunity to thank the bloomberg working group of the u.s. renminbi trading event. they have done a lot of work. done workave promoting the use in the united states. it'll also be the closer china u.s. economic corporation. groupe bloomberg working proposed several very good ideas. -- the u.s.,on the on the room and the settlement , those proposals have been accepted. last year, china granted ¥250 to the u.s. and the bank

of china became a roman declarant's settlement bank in the united states. and also, i want to emphasize that they would welcome a u.s. another man be clearing bank -- another renminbi clearing bank. that is a very good work. i will continue to work with the bloomberg working group and to see in the future that we can work together to make this process more successful. the opening for china financial markets, colleagues are mostly interested in the fixed income market as well as the equity market. and i would say that we are basically that and we

in the onshore market, we opened the china bound market to overseas investors and we introduce the more investment products such as hedging and making it more convenient with the risk. we open the market more. so that has been making a study the fixed income market. year,, i the end of last there are already over 400 foreign institutional investors investing in china. with a total investment amount of more than 800 billion yuan. but as i said, because of the astory and they were still

lot of red tapes. a lot of the investors, when they are working in this market, problemsd a lot of like low efficiency and red tape lack of transparency. so that, we will continue to work on those problems. and secondly, we do try to introduce a different investment product. to hedgey to help risks. for example, in february of this fell on china to hedge foreign-exchange rates in the onshore derivative market. so that would provide -- to the hedging onshore. in the market.

and secondly, they tried to make tax policies related to foreign institutional investors, , simple and china to more clarified. so to increase the tax policy transparency, that is also important. of the indexes, i would like to thank a lot of people here for your help, on recent -- including the china bond market. it is a good phenomenon and it is good for the future and it is good for institutional investors who allocate their investment in investors.rding to so in terms of opening our

, but some people some people are still interested in financial institutions and in the with theg obtaining settlement license. i think that is on an equal basis and i will say here that we have already given to institutions -- given two institutions for the united states, and underwriting license and the other one for the settlement license. and in the future, on the qualified basis, i think there are more foreign banks that we will have with those licenses. also, we do try to have a

forual and steady opening the equity market. december,ow that last we officially launched in hong kong, a stock connect program. this was after the shanghai hong kong stock connect her program. which has been, so far, operating fairly successfully. and also, we tried to promote shanghai pilot loans for free as experiment in other places. and the most important thing for this pilot program of the free trade zone experiment is to try pre-plement the establishment national treatment. and the negative approach in an operational way.

favorite accepted that the preestablished national treatment and a nationalist approach and principle but how to make it from a principle into an operational procedure is a lot of work. and shanghai pilot free trade ofe experiment did a lot their he good work on that. so, at the beginning of this year, china's state council issued a new guidance for and to try tog up attract foreign investments. in china. concluding, i conclude today,e speech i made that is an indication of the determination of the chinese government to further open up

the financial sector. the financial cooperation between china and the united states is extremely important. and i believe that our two countries financial corporations have a bright future. and have a very large potential. financial opening up in the areoration, they definitely good for both china and the united states. it will definitely strengthen the u.s.-china relationship. and i think we want to make it and more balanced and more sustainable. and at the end, for sure, it is a mutual benefit for each other. vonnie: that is the deputy governor of the people's bank of gang.there speaking, yi you can catch the rest of the

event on the bloomberg at tv , including a foreign panel coming up on china's stocks and outlook for the bonds. the interesting comments on the comments of the trade zone in shanghai. now with his us thoughts on china and political risk in europe is komal sri-kumar. joins us now from los angeles. thank you for joining us. there hasn't in a china related flareup since the beginning of last year. and then going on beyond that the summer prior to that when china devalued the yuan, is that tell us that china risks are dormant? that china is making the transition necessary without underlying risk present? what did that tell us about the transitioning that is taking place within china's economy? komal: good morning.

i think that what we have on the china situation is that some of is problems that they have dormant, rather than gone away. the deputy governor in the last talking abouts the opening that they have had and how much the has been an internationalization. theissue now is that chinese also want stability. stability in the market and stability in the political system. and as you and i know, it does not always go together. for example, the renminbis stabilization in the last few months that he reference to, it is a result of intense capitalization control and it is so stringent that it is difficult to make dividend payments and capital repatriation over the last 4-6 months. secondly, the deputy governor

spoke about the acceleration in economic growth to 6.9% in the most recent quarter. and that was achieved even as shadow banking and other forms of unregulated lending has increased. so the debt to gdp ratio continues to climb. the issue here is yes, china has issues. china has been stable over the last three to four months. the question is, what happens when the controls come off? how much of this is related to the people's congress coming up in september? are they just trying to keep the markets stable for a few months? a great question, what happens when the controls come off? reason why we saw the shanghai composite fall the most since september was on speculation they will step up measures to clamp down on leverage trading. the want to reduce risk.

but is there real appetite to reduce risk? don't think so. at one point, they want to reduce risk. the dinner last few days, -- it has supervision been explaining the many days of the decline in the share prices. , credit issame time freely available and they don't want to stop off their credit. that would cause economic growth to slow and unemployment to rise. so it is almost like you turn the fossett on and the water is coming out and you are trying to plug the leak but more water comes out. that is the situation they find themselves in. vonnie: what i found interesting was when he talked about the remnant be and how he keeps and that she keeps a close eye on it. is the market driven? or is this a safe haven? good question.

if you look at the exchange rate in the hong kong market operates market inhange shanghai, the hong kong market is supposed to be very free. it is supposed to show you to of any capitalt outflow that is taking place. cnh isngs affecting the the hong kong exchange rate. it is difficult for the chinese to move their cash out and buy the hong kong dollars or by the u.s. dollars in hong kong. the second issue here is the chinese institutions and chinese commercial banks at the directive of the central bank intervened in the hong kong market. have increased substantially, in order to make it expensive for you to speculate against the run and be . so yes, the market is free that

is it free of intervention? no. vonnie: if we switch to the results of the france election, , 11.5.vix back below 12 the yen is close to 1.10 per u.s. dollar. is this a one-time shift in risk appetite? or does this continue if macron wins? komal: i think macron and the marine le pen victory in the first round is positive for france. the chances are very high that macron will turn out to be the victor on may 7. but that doesn't mean that everything is ok for france. macron, as president, with not -- president, will not have a big parliamentary government behind him. so france will have cohabitation. and john micklethwait said it best earlier this morning when he said it is like in the united

states where you have neither the republicans nor the democrats winning the presidential election, but somebody from a third party. and that third-party candidate would have to get the majority to work with them. and that will be macron's challenge. in italy today, in terms of the bond market and the equity market, italy is going to have elections in 2018 and just because marine le pen loses in the second round in france, it doesn't mean that it is driven away in italy. the main reason for that is that italy has a youth unemployment rate in the neighborhood of 40%. so if the use turns out to vote in a big way, it will be a big gain for the mainstream parties that have dominated in recent years.

komal sri-kumar, great to see you. vonnie: we move now to the u.s. and president trump alleging $1 trillion in new infrastructure spending during his campaign -- one company closely following his energy and infrastructure energy, a $13 billion plan to upgrade its power grid. joining us from the new energy finance summit is alix steel. alix: thank you. i'm here with the ceo of duke energy, lynn good. energy.mmed with we may get some kind of information on wednesday. what is your base case for tax reform? on taxuke is supportive reform. i understand what the administration is trying to accomplish with additional competitiveness for the u.s. but for duke, it is which ordinarily

important. we are a regulated company with a tax capital structure that has a lot of debt that is consistent with regulatory oversight. so it is important to our customers. alix: you take on the debt to find the object your products. we are making the case that as a regulated utility industry, it is different. pricing, a huge capital spender. the industry spends over $100 billion a year. and those unique characteristics should be considered in confidence of tax reform. alix: is there a tax rate that could offset the hit you would take? ability andsted act maintaining it is the right answer for our industry. for going immediate capital sensebe a trade that make for our industry. so we are really focused on those two positions. alix: you quantify the potential 5% by 2021.ings --

what was your model for the estimate? ofn: we looked at a variety areas. we looked at some grandfathering of interest. so it is a reasonable planning range on how this would impact us. and again, given the regulatory nature, we think it makes sense. five percent, it goes away? lynn: if it is grandfathered for existing debt that is higher than that and all interested act ability, it is 7%-8%. alix: and what about the consumers? ofn: it would become a part prices going forward. the financing costs could be significant. alix: if you had to pay your

dividend, would it be a risk? maintaining an appropriate dividend is always our objective. pass throughomer and then dividend? is that how you would rank? lynn: i think you are to look at the full landscape of tax reform. today, what else is in the plan? what is the transition? and we will have all of those elements. costs for customers. maintaining dividends and making life decisions with the capital. alix: moving onto to the wire and energy policies, you have the retiring a lot of -- do you change the rate at which you retire them? lynn: our objective is to we want to drive

carbon out of our business consistent with new technologies like natural gas and renewable feature. our aspiration is to reduce by 40% by 2030. so our modernizing generations is not going to change. we think that is the right answer. alix: let's talk about the growth plan. year growth plan. what area are you most excited about? only pick one. lynn: investment in our grid. the electric grid is a part of our system that has a lot of demands on it. customerse needs of that have expectations. so we will be investing over the next 10 years about $25 billion to modernize the risk for the future needs of our community. alix: you also launch the natural gas infrastructure

pipeline. do you hope that he will see expedited federal approval for pipelines? i know you are building the atlantic coast pipeline as well. what is your prognosis for that area? them forlding structure, as you know, whether it is pipelines or transition, it is time-consuming. so it is a process and the involvement can be defeating. we believe that a more coordinated approach, we can still achieve great outcomes for morenvironment and accelerated infrastructure bills. we are an advocate for that. we believe it might be possible. alex coast for the atlantic coast pipeline, are you pushing this out? lynn: we have two milestones at the federal level. an environmental permit and final approval. both for 2017. we also are looking at the state and permit approval process for

2017. so our expectation is that we are building the pipeline by the fourth quarter. talk about bottlenecks. where do you see the biggest bottleneck right now? the national gas? atlantic a pipeline, when of the reasons we are providing is to give more of a structure into that area and also connects to the integrated pipeline system. in north carolina, we don't have enough infrastructure. ,nd as we move to national gas we see that as an infrastructure project. alix:'s natural gas and him structure, let's go to renewables. small-scaleseeing solar projects.

that hurts you. it takes away your business. how do you compete with that? lynn: we see renewables as important. is to meetve customers where they are and meet them in the ways that they want to be served. we added an extraordinary amount of ground in the carolinas and we think it will continue. alix: are you worried that the small guy will usurp demand? customerslieve that -- if our customers want rooftop solar, we should figure out a way to make that work in our system. and our integration and investment in the grid is to enable more renewables whether they are large-utility scale. alix: what is the biggest risk in your inventory that you see? lynn: i think the transformation that is going on. new technology. the fact that we are not growing

technologies at the same pace means we have to be for thinking. smart with our investments. and we have to continue to focus on low cost to customers. alix: always great to see you, lynn good. with that, i send it back to you. mark: great chat. coming up here, we get the eurozone reaction to the french election result with the finance minister to italy. this is bloomberg. ♪

london and new york, i am mark barton. vonnie: i am vonnie quinn and this is "bloomberg markets." mark: we are following stocks 35 minutes away from the end of the monday session, check out the figures. stocks europe 600 and 1.9 5%, the biggest rise

since the june. the standout market today. 4% higher today. the biggest increase amongst the big four, the most since june and the highest since 2008 after we had a macron-le pen victory. when asked speculating that it will be a macron victory in two weeks time. that is what the polls are telling us. this is the currency moves today. the euro-dollar is the most interesting. 1.2% today.up by i believe you with the bond market, as you can see clearly from this final chart. core falling, periphery rising. ♪

mark: it is 11:00 a.m. in new york. from london, i mark barton. i ame: from new york, vonnie quinn. this is the european close on

bloomberg markets. ♪ mark: we will take you from new in the next hour. paris, amsterdam, and washington today. here are the stories we are following from the bloomberg and around the world. in politics, le pen wastes no time hitting the campaign trail as she faces an uphill climb against a favorite, macron. how her policies will affect the french economy. timerkets are rallying big french results. we will hear from italy's finance minister. in banking, why goldman sachs has such a big trading myths in