♪ ♪ means brexit. >> brexit does mean brexit. >> brexit means brexit, and we are going to make a success of it. we are leaving the european union, but we are not leaving europe. but we want to ensure, the best possible deal. the best possible deal for britain. every vote for me is a vote for strong and stable leadership. strong and stable leadership. strong and stable leadership. no deal is better than a bad deal. what we are working for is the best deal for the united kingdom. the british people just want us to get on with it. get on with it and let's move on. there are some in westminster who would wish to delay or even

stop brexit. i can only get a deal through parliament if legal changes are made to the backstop. we must secure legally binding changes to the withdrawal agreement. to get the changes this house requires and deliver brexit on time. i have always said that no deal is better than a bad deal. i think we actually have a good deal from the european union. i do not to see article 50 extended. our absolute focus should be on working to get a deal, and leaving on the 29th of march. that was the prime minister theresa may's messages on brexit over the last two years. parliament votes on her deal today. nejra, you are on the green. 2016 the range, on sterling was 12%. today the calls are anywhere between an 8% demolition on the downside if the parliament goes through a hard brexit, to 2% on the upside of a deal goes through. nejra: that is why so many

people tell us on the show, there's barely any point trying to make a call on the price. if you want to trade sterling, do it by options, and one way might be by buying volatility. we have seen shorter-term numbers rising in the past few days, because there's so many possible outcomes. i don't know if i would call it a new deal, but some changes to the legal text around the backstop, but will it be enough for lawmakers devoted through? manus: that is the question we put to movies a little earlier today. they were with me onset in dubai. they think she doesn't have the votes, even if she brings the e.r.g., they doubt she has the votes to take her deal across the line. our guest will hobbs this morning says it could be the extension that the e.u. offers, could push a meaningful vote number three. let's check in on markets around the world. the team is standing by. we have our bloombergquint

partner in mumbai, and first dani burger. thanks leading the gains. niraj, let's start with you on india, first of all. dani waswondering how speaking on india if i am there good morning. doing well, manus. starting off well, staying put with those gains. if you asked me an hour and a half ago, the nifty looked exactly the same, 1% on the nifty and sensex, 1.2% on nifty bank, and the currency has been e currently atrupe 69.60, a two-month high. putting in money everything will day for the last 10. the currency has gained a strongly. for, overwatching out

the last few days, we spoke about how government owned companies are doing very well. for the last eight years, one space that has done nothing, but because of recent regulatory changes, the utility space and power index is doing extremely well. 18.5% the last few days, the gains for the index, which comprises the utility stocks. that's one remarkable mover in the month of march. outkly, watching for this one among all other government owned companies. back to you. nejra: thank you so much, niraj, giving us the update on india amid a kind of risk-on rally and markets today. let's turn to vw. sales fell for most of the brands inv 2018. porshe, all fell.

they are planning a rollout of almost 70 new electric models by 2028. bloomberg's matt miller us from wolfsburg with a guest. great to have you with us. matt: here with herbert diess, ceo of volkswagen. thank you so much for your time. butheld two-year forecast, profitability has fallen. do you expect to turn that around this year? is 2019 the year that profitability will rise again? herbert: we actually had our forecast, and we are quite happy meeting expectations from the markets. changeover, the currencies. i was not an easy year, and am happy with the performance we had. we had the same outlook for this year to keep profitability at this level. markets -- we are

optimistic there will be a settlement between china and the united states, and if brexit would be clearer, i think this could be another good year. also, we are investing a lot in new technology, so keeping profitability. matt: how important is it to you to get a good brexit deal, and how optimistic are you that can happen? herbert: brexit is important for us. the u.k. is an important market. a companyntley there, really depending on exports. many of our luxe year brands and sportier brands have a big market share in the u.k. ora controllable brexit, whatever decision is introduced, would be very important to stabilize.

matt: can you quantify that? tell us what you expect? herbert: we have different scenarios. if it is really an uncontrolled brexit, yes, we would probably see a decline in the market on both sides, exports. we are preparing for a few things, but you can only anticipate so much. it would not ruin the company, but we would not like it. matt: on a china-u.s. trade deal, do you have optimism? can you put that into a quantifiable dollar figure? herbert: you know, for us china is very important. we increased market share last year, under difficult conditions. china is really important for our worldwide presence, and also for our profitability. starting last year, january and february saw a decline of close to 10% in the markets, so that is hurting.

on the other hand, we have new products, and i am optimistic that they will be a resolution between both economies, because i think it is in the interest of see a lot of and i eagerness in china to find a compromise. it is so important for both countries. hope weimistic, and i have a better second half. matt: you have held your forecast at 5% sales growth this year. neutral orssume a positive outcome between the u.s. and china, between the u.s. and the e.u.? >> that would assume the second -- we hope wear can slightly grow, and 5% is the upper end. we think we have good product

momentum, new models to be launched. porsche isnching, launching. matt: and you hope to cut costs from the wltp changeover. over one billion euros in 2018. herbert: we are much better prepared this year for the change. not think we should s see a lot of negative impact. on the other hand, the market situation will be more complicated than last year, so you can't really account for i r. -- it. matt: thank you so much for your time. i know you have a busy day. ceo of diess, volkswagen. back to you. manus: great interview with the

latest from volkswagen, ceo herbert diess. let's get you up to speed with the bloomberg first word news. theresa may faces parliament later today, after striking a late-night deal to revise the terms of the u.k.'s divorce from the european union. after a chaotic day of changing plans, the u.k. prime minister may a last minute decision to fly to strasbourg for talks with jean-claude juncker. 20 minutes before midnight, they held a news conference announcing changes that they hope will be enough to win over lawmakers in this evening's vote. >> crucially, one of the requests parliament had, the parliament had a majority vote for, was that it should be possible to replace the backstop with alternative arrangements. we secured in this a very clear timetable which enables the backstop as defined currently to be replaced with alternative arrangements. >> the backstop is an insurance

policy. nothing more, nothing less. the intention is not for it to be used, like every insurance policy. and if it were ever to be used, it will never be a threat. singapore has become the latest nation to ground boeing's 737 max aircraft after two crashes involving the best-selling model. earlier, u.s. aviation regulators signaled confidence in the model, one day after 157 people died when an ethiopian airlines plane crashed. the faa says the 737 max remains airworthy. brazil, china, indonesia and others have grounded the plane. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts. this is bloomberg.

thank you so much. coming up, singapore joins china and indonesia to become the latest nation to ground 737 max planes. we look at what boeing may do to address growing safety concerns. manus? manus: indeed. if you are traveling to work, you know what to do. bloomberg radio. it is by your side, in your pocket, on your desktop when you get won. it -- when you get there. digital radio in the london area. this is bloomberg. ♪

nejra: this is "bloomberg daybreak: europe." nejra cechic in westminster for today's brexit quote. manus: i am manus cranny in dubai. another grounding of the boeing

max 737 after the crash in ethiopia that killed 157 people. the decision comes even as u.s. regulators deem it were the, and , and boeingrthy says it is safe. stephen engle is tracking the story. where do we stand right now? this was the pivotal moment on the faa ruling thus far. wideen: the faa ruling has implications to airlines and regulators around the world. if they did a blanking -- blanket grounding of this, it would have reverberations all around the world. some individual airlines and regulators, dominoes are falling, but not blanket grounding right now. the faa put out a global note, saying that the plane is air -worthy. there's no conclusive evidence linking the loss of the ethiopian flight with the lion air flight that crashed in

indonesia. the slight and data voice recorders have been found -- flight and data voice recorders have been found. we are also having headlines right now, keep in mind that in the middle east a number of airlines fly the 737 max, qatar, dubai, theyroc, fly and more37 max's, orders. have received faa 7otification on the 736 max air-worthiness. no further action needed at this time, according to fly dubai. nejra: as the headlines come through fast, thank you for bringing those to us. we are still waiting for the full facts of what happened. will airlines be forced to

respond to passenger concern and ground planes? ephen: that's obviously the possibility. individual airlines have to weigh the pr, reputational damage of continuing to fly, versus the cost of grounding those planes if they succumb to the public opinion. but we are also getting lots of comments, obviously social media is full of flyers commenting, saying they don't want to fly on the 737 max 7 until there is conclusive -- 8 until there is conclusive because. the flight attendants association says that they are expressing concern about flying. this is an issue that will be continuing, as the investigation continues, but right now boeing definitely has a headache on its hands. were slatedax 8's

to be delivered over the next 12 months. already, lion air said the six of the more than 190 they have ordered, six of them they will delay order for the orders. manus: certainly the plane was d out untilsol 2023, so a critical moment for the cancellations or delays. 250 of those planes were delivered last year. the latest on the boeing story, stephen engle in hong kong. one of the biggest drivers for market sentiment, the conversation around global growth. sincet the weakest pace the financial crisis. a new bloomberg gdp tracker shows an expansion in the first quarter, 2.1%, sharply down for 4% in the middle of 2018. oecd says momentum in the u.s.,

u.k., canada and the euro area is slowing, although there are signs of stabilizing in china. our guest, from barclays, is with nejra and i. will, with that level of reduction in global growth, bloomberg is asking the question. momentum to downward becoming self-sustaining, are they there yet, or are we still a distance away from a doom loop? will: manus, that's the key question at the moment, isn't it? is the economy going to stall, or are we bottoming out? lead indicators tell me we are bottoming out. one thing to look at this, a number of kind of unrelated factors. the overlyve successful policy measures to curtail risk in china, as low as

4% on some measures in china in december. and then you have this accident-prone european economy, constantly stumbling over all sorts of blocks in its path. and then the u.s., this kind of fiscal steroids ebbing a little bit. all those things have come together to create this slower path for growth. the risk of recession the next 12 months is still relatively low, but closer than you would want to be. nejra: is the bond market globally being too optimistic? bund yields, some say heading towards zero. but looking at the u.s. curve, the 10-30 curve has been steepening. what is the bond market telling us? will: i think what you are looking at, generally at this time of the economic cycle, people get quite ready for recession. 10 years in, looking at the chronological age of the economic cycle, positioning.

that may be how the bond market is looking at it a little bit. we do think the bond market has been a little too pessimistic on prospects for inflation. we think the prospects are little more robust than is generally realized. the wage figure from the otherwise appalling employment report last friday was one evidence. we think the bond market is too meek on growth and inflation prospects, and that is something that will correct. that in a sense is one reason we are leaning against the stockmarket rally. as bond yields rise, it takes some hot air out of the recent rise in developed world stocks. weus: certainly that is, have other people calling tenure paper down to 2.5% in the short-term. why do you continue to be overweight emerging-market equities? i understand your position on underway u.s. -- underweight

u.s. still skewed toward emerging markets. is that near-term, until the end of the year? what drives it? will: it feels like there's a little less hot air in the emerging-market story. one thing we saw last year, the trade story which is, let's face the 45thtory with president thumbing his nose at the international order gets a lot of viewers, but i think people were exaggerating the trade war effect on the underlying economy to a certain extent, which made itself felt primarily in emerging-market assets. it feels like, if you look at korea, taiwan stock markets for example, they are just slightly underperforming, and we want some skin in the game to take advantage. also, we don't think the cycle is over. we still want to take some risk, but just a little more clearly and carefully. our baseline of equity risk is

just a little lower than it would be earlier in the cycle. nejra: if bond yields rise as you expect, do you take the risk out of emerging markets, or stay invested because it is a sign the global growth could be stronger overall, and therefore that could be good for global markets? will: it should be welcomed by all of us, to some extent. where valuations can absorb it and where they cannot. aerging-market assets look little less overcooked in the short run. we think they can absorb that reassessment in inflation from the bond market, but we think the developed world will struggle a little more. nejra: will hobbs, great to have you with me this morning outside westminster. the wind has been holding off, so we are all right for now. he'll be continuing the conversation with us on bloomberg radio, 7:30 london time, indoors. [laughter] let's get the business flash headlines. >> volkswagen saw profitability

at its main brands fall last year as it looks to invest 44 billion euros on electric and connected cars. audi, the biggest profit generator, is under pressure to lift margins against mercedes-benz and bmw. vw confirmed overall revenue forecast to rise as much as 5% this year, despite sales in china, its biggest market, slumping 18% in february. bonus by 19% after the french bank posted a surprise decline in fourth-quarter trading revenue, and gave up key 2020 goals. the ceo's variable remuneration for 2018 was lowered to 1.0 6 million euros, meaning total pay fell 9%, the third straight year oudea's variable pay has been cut. elon musk told a new york judge that two tweets he sent last

month about has low were not improper. hisbillionaire ceo cited constitutional right to free speech and diligent attempts to comply with restrictions on his social media activity. facess say musk punishment for breaking sec restrictions, but probably not loss of control of tesla. that is your bloomberg business flash. manus: thank you very much for the roundup. day. brexit a midnight bargain, a long day of drama both in london and strasbourg. theresa may secured changes. sterling, cable is bid. juncker warns, maybe this deal or no brexit at all. nejra, the question to ask, does she have the votes to take her deal across the line today in parliament? the freshest line is from moody's, and they don't think

she has the numbers. nejra? ok. you can tune into nejra and i shortly, bringing you all the action from abingdon green. this is bloomberg. ♪

manus: good morning from dubai. i'm manus cranny. this is "bloomberg daybreak: europe." nejra: live from westminster, i'm nejra cehic. it is budget day. here are today's top story. manus: theresa may strikes a last-minute agreement with the eu to revise the backstop. will it be enough to win parliament's support today? jean-claude juncker says it is the only option. >> let us be crystal clear about the choice. it is this deal or exit might not happen at all. manus: boeing's woes continue.

singapore is the latest nation to ground the 737 max but the faa says that plane is airworthy. shares sink following sunday's fatal crash. a clear road ahead? volkswagen tells us he is optimistic there will be a solution in the trade dispute saysthe u.s. and china and he is aiming to keep profitability at 2018 levels. >> it is not an easy year. we have the same outlook for this year to keep profitability at this level.

nejra: we are back at westminster again and this time, theresa may comes back from strasburg with a new brexit deal. will it be enough for lawmakers to vote it through? . it has been all about the backstop. we've got three new legal texts, but she didn't get a timely that on that backstop and the ability to unilaterally exit. it will be all in the details and the attorney general will be coming through them, as well as lawmakers. manus: yesmanus:. tos it give enough comfort bring them onside? moody's says unlikely the deal will get through. the house is behind you. they may not bring the entire house. there are lines coming from a conservative lawmaker right now saying the brexit deal doesn't a new anything, but attitude for the pound. nejra: the site dropped 1% yesterday and again in today's session.

--rling is bid and above the vol rising. i they going to risk a no deal being voted down and a possible extension to brexit and perhaps no brexit at all. we heard from jean-claude juncker, this deal or no exit. manus: there is the presumption you go for an extension but what might the price be extracted for an extension from the eu? to the bond market because that is where the brave go. they don't fear inflation. have a look at u.s. bonds, barclays expecting higher bond yields in the near term. you are seeing treasuries drop in price. the retail sales were better than christmas but is that enough to give hope the u.s. will rally forward? jpmorgan, warning on the goldilocks scenario for the stock market. italian government bonds stronger this morning as you've got the new backstop in the form

tltro's. -- wilbur exit get a deal done -- will brexit get a deal done? apple numbers were better than expected. nejra: those are two of the things that pushed the risk on rally in the u.s. yesterday. we saw the s&p 500 go above its 200 day moving average. salesntioned retail stabilizing. u.s. futures on the front foot, gains in asia and not quite as much firmness in parts of european futures so you have dax the same butoing ftse futures doing -- struggling for direction. 1.3209, it jumped as much as 1% earlier. we are seeing risk on across asset classes today.

let's checkt asia, with juliette saly in singapore. a second session of gains in asia. we caught the tail wind coming through from wall street and you have seen tech stocks in. japan and taiwan rally today. . china's market, closing higher by .7% solid moves coming through from indian markets today has two opinion polls suggest prime minister modi's government is likely to win the elections. the dates were announced yesterday -- data was announced yesterday. pretty flat in australia and weakness coming from indonesia and other emerging markets but we had yen weakness on the risk on sentiment and that pushed the nikkei higher by 1.8%. speaking of yen weakness, it was a laggard in currency moves in asia today. down by .1% against the dollar. the front runner was the indian rupee, up .4% against the dollar

as we await indian inflation data coming through. february expected at 2.4% year on year, below the 4% target, pushing out the likelihood we could see a rate cut from the and the rupeel higher for a second session on inflows into stocks and bonds. the peso, the worst performing currency in asia today. that is as the new central bank governors there says he thinks the currency is trading to the upper end of the band between 52 to 55 pesos to the dollar. manus: thank you very much. juliette saly in singapore. .ow to brexit we are waiting to hear from the irish prime minister, expected to make a statement in the next hour. let's see what the irish say in regard to the concessions because theresa may has won changes to her brexit deal. it was a chaotic day in london. the prime minister had late-night talks with

jean-claude juncker. around midnight, the two leaders announce the new deal. >> what we have secured is clearly that the backstop cannot be indefinite, cannot become permanent. vote is anit insurance policy. the intention is not for it to be used like an insurance policy. if it were ever to be used, it would never -- >> a very clear timetable that enables the backstop as defined currently to be replaced with alternative arrangements. >> let us be crystal clear about the choice. mightthis deal or brexit not happen at all. on -- ralliedg is on the back of this midnight agreement. very european. it is also unclear whether theresa may has done enough to

win parliament's support. joining us for more, our executive editor in national government affairs. has theresa may done enough to get her deal through parliament? moody's says not. rosalind: it is all about the arithmetic tonight. alas last vote was a significant loss. more than 200 mps voted against it. that is a very big gulf to get over. that said, her deal is looking better. -- legal, the lingle language around the border between u.k. and ireland may be enough to bring over some brexit hardliners who fear being trapped in the eu and its mechanisms indefinitely. it is all about what we see during the day, those mps talking and what we see in the vote tonight. nejra: absolutely. we also have geoffrey cox, the attorney general's recommendations on these new

legal texts. walk us through the votes. what votes are going to happen and when? is there a prospect they could be rolled together and we see two votes today? rosalind: it is all very up in the air. one of the key things today is to hear the attorney general geoffrey cox's perspective, his legal opinion. he is expected to say this does mean the u.k. will not be wedded indefinitely to the eu. and his wordteer carries quite a bunch of weight with the other brexiteers. over voters but we are waiting to see what the plan is for the vote this evening, how many votes there will be. it won't start until 7:00 london time and could go for several hours. right now, the key question is on that particular vote on the deal, what is the margin by which theresa may is expected to still lose? nejra: thank you so much.

, ourind mathieson executive editor for international government, joining us from the london set. strategist, equity at ubs. great to have you with us this morning. talk to me about your base case. is it that we eventually do get theresa may's deal but with some sort of delay and if so, what time frame are you looking at? >> good morning. it is very good news. step where they strike a deal and this is already positive news. the market reacted, the pound is climbing. there is more to do. nothing is done yet. there is a vote tonight and we may not get this vote done by the end of the day, so our central scenario is an extension.

maybe an agreement but probably not tonight. in the meantime, this is good news on the market is enjoying this positive news this morning. manus: the question is this. whether you try to get ahead of resolution, some sort of resolution, which seems to be the trajectory for sterling and the markets. i am seeing buying into etf's and ftse 250. are your clients putting money freshly to work in the u k market? inudia: what we suggest navigating across these uncertainties because nothing is done yet, so what we say to our because is when the pound is close to 1.30 and two by the pound when it is below 1.25. short-term,in the we try to an aggregate -- navigate to be on the safe side.

when you look at a time behind four years, we tend to see u.k. stocks are less defensive than in the past because of the brexit deal, which is not clear what we bring to the economy. all in all for the time being, we have a tactical location on new case stocks -- u.k. stocks. we've tried to navigate with a strategy and longer term, we tend to be less positive on u.k. stocks, but longer-term being between two and four years. nejra: ok, so longer-term you are less positive on u.k. stocks. i am also aware that you think the interview came moves be more -- intra-u.k. moves might be more interesting between the ftse and 50 -- ftse 100. how much is it affecting your view on european equities? one element we like in

the past, brexit is an impact on european stocks and european have been very correlated with u.k. stocks. if you don't account for the currency moves, clearly the correlation has been very high. is the reason why we have not been overweight eurozone stocks so far. eurozone stocks and european and u.k. stocks are really linked to the currency. any increase to the currency is a negative impact on the ftse 100. any selloff on the currency is positive for the 100. seen this morning after theresa may struck a deal with the eu, the pound is already up. manus: it certainly is.

it is ripping around from an eight-day losing streak. this chart is in the gtb library. we are breaking entire ground. what i want to get a sense of, if there is a deal, theresa may's brexit deal, does that bring forward the capacity of the bank of england to act? at the moment, the market is knocking any action from the bank of england right into 2020. do you think we would have to rerate that action? 30% probability of a hike in september. would we rerate the bank of england's proclivity to act? claudia: yes, it could bring rates in the u.k. but this is about the economy. we don't know what the economy is doing. we have seen some slowdown in the eurozone. of centraln a number

banks go from hawkish to dovish. we see the fed making the brakes. to look into the economic data to see if the economy is slowing are not. for the time being, the data remains quite weak in europe overall. nejra: claudia panseri, equity strategist at ubs stays with us. on bloomberg, we speak exclusively to the former u.k. prime minister tony blair. don't miss that interview at 5:00 p.m. london time. let's get the first word news with annabel in hong kong. annabel: singapore has become the latest nation to ground aircraft afterx two crashes involving a variant of the best-selling model. aviation regulators signaled their confidence in the models a day after 157 people died when an ethiopian plane crashed.

737 max remains airworthy. brazil, china, indonesia, and others have grounded the plane. venezuela's power crisis which has put utilities out of commission is now risking water supplies for 5.5 million people. many of caracas's residents have been reduced to carrying buckets of filthy river water after pumping plants stopped operating due to ongoing power cuts. backed maintenance means up power plants at dams around caracas out of action. theexecutive director of international energy agency has told bloomberg the geopolitical situation is very challenging for the oil market. >> we are seeing the geopolitical tensions are -- on theprecedented oil markets. libya, iran, venezuela, trade tensions are very challenging.

annabel: global news 24 hours a day, on-air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus? manus: thank you very much. if you are driving to work, you've got your radio with you. it is on your mobile device, dab digital in the london area. this is bloomberg. ♪

nejra: 7:20 in london so we are 40 minutes from the equity market in europe. i am nejra cehic in westminster for today spread to vote. manus: i am manus cranny in dubai. dark clouds over the houses of

parliament. let's check on the markets, euro stoxx 50 following the u.s. equities, asian equities had a cracking session to the upside. pips,.ope, opening up 17 nasdaq bid. all far too negative on apple and crude is up. lege got this rolling higher even though the bloomberg global growth tracker says global growth is the worst since the financial crisis of 2009 at just over 2%. good morning. nejra: there might be dark over the global economy and over westminster, but risk on today. no dark clouds over cable, up .4%. we jumped as much as 1.1% yesterday and gained on the prospect of the deal theresa may is bringing back.

will it get through parliament and what happens next? the 10 year yield moves higher by two basis points, stabilizing in the retail sales data yesterday. we saw a rally in u.s. as well. you mentioned apple tech stocks gained. news, allh merger lifting risk sentiment and dollar-yen showing the proclivity for risk, as well. let's talk oil. alix steel spoke to a ceo and asked about the sovereign wealth fund plan to dump oil stocks. the fund is not allowed to invest in a share but it is a rational decision because if you look at the norwegian economy, this is a national view. we are extensively exposed to oil and gas prices, ownership in nor, so for the

government to look at this, this overall exposure and needing to reduce that exposure. rational and when we start talking about this, there are many ways to interpret but you need to go back to the starting point for the government and communiques about this. prices,iew oil and gas it is not to do with that but a portfolio view. alix: i felt like it what did -- what it did was highlight shareholders pushing back on "big oil." ahead but thatms must be pressure for companies like big oil to change their models, to be more climate change sensitive. aldar: definitely. of expectations out there. climate change is happening, it israel and our oil -- it is

rea and oill and gas is a part of the issue. we have to build that into our strategy, into our day-to-day business and that is what we do at the company and what i see from shareholders. they asked more and more questions that relate to that. and small large shareholders, how has the conversation changed in the last two years when it came to new energies? it is definitely higher on the agenda. we see it coming into the criteria and more and more portfolio positions from shareholders. aboutvery much information and i think people have reasonable requests in terms of how we perform and how we think about our strategies and shake our portfolios. eldar: -- alix: do you feel that if you don't ramp that enough, they

will drop you? eldar: what we see in our shareholders is that it is more focused on these criteria, getting into the portfolio and index portfolios and there are more questions going when you're back and meeting investors now, it is different. it is in every discussion with have with shareholders. they asked these questions. they want to know more about how we think about the oil and gas and the importance of that. real, it isge is affecting society and we shouldn't see this as an attack on our industry. it is a reasonable request from shareholders to know more about what -- how we relate to this. equinor ceowas the speaking to alix steel. it is brexit day.

does she have what it takes to get the eog behind her? the rest of the house of commons behind her? she didn't get the ability to unilaterally exit the backstop nor did she get a time limit but that is a self fulfilling conundrum about a time-limited backstop. how does it look on the green? sterling he's on a ripper. nejra: yes, up for a second day but when you think about the backstop, that is a sticking point to an extent even though there are new legal texts around it. lawmakers are going to see if that is enough to vote it through. you got headlines coming through from the dup saying we need to see how legally binding the changes are and we are yet to see the new brexit document. we talk about the er g being opposed, but we have to think about how the dup response. -- responds. manus: absolutely, and dup sammy wilson has made a few comments. i know anna will pick those up.

what will geoffrey cox have to say about the legality of the changes? i wish you well on the green. the european market open is next. brexit day continues. this is bloomberg. ♪ ♪

bloombergome to markets come the european open. i am anna edwards alongside matt miller. matt: today, the markets say all hail the u.s. consumer. stocks push hire around the globe as american retail sales rebound. europe looks set to continue this trend. the cash trade is less than 30 minutes away. anna: may's midnight deal.

she has won legally binding changes to her brexit agreement but will it be enough to win parliament's support today? jean-claude juncker says it is the only option. >> let us be crystal clear about the choice. mightthis deal or brexit not happen at all. setting the course, volkswagen's ceo tells us he's optimistic there will be an end to the u.s.-china trade dispute and says he is aiming to keep profits stable this year. year, andnot an easy we have the same outlook for this year to keep profitability at this level. and boeing's woes continue. the list of countries grounding the 737 max rises with singapore banning the plane from its airspace entirely.

the faa says the plane is airworthy but anticipates changes will need to be made. good morning. matt: good morning. less than half an hour from the european open. --m here because i just woke spoke with the ceo of volkswagen about their full year earnings, in line with estimates. their sales forecast, which they are holding as a gain of 5% for 2019. regardless of the global growth so down -- slowdown we have assumes told me that a better second half than the first half because the first couple of months have been difficult. coststhe view ltp testing cost more than a billion euros last year and possibly a deal, a trade deal between the u.s. and china. at least he he is optimistic.

we will play more of that interview through the program. we continue to track the auto story and how it links to the global growth story. in westminster, we are tracking u.k. politics because we have a meaningful vote taking place and we don't just have the initial withdrawal agreement and future relationship text, we have three new terms, pieces of writing to factor in, the result of theresa may's maddie -- or late today -- to strasburg. a withdrawal agreement, a political declaration and a unilateral declaration. lots for lawyers to pore over. we will have lawyer against lawyer today. geoffrey cox is a legal voice that matters and he will speak in the house of commons later. he has very been much -- been

very much part of drafting this documentation but will he say it is enough for the u.k. cannot get trapped in the backstop? that could be crucial for the erg and the dup. a former u-turn -- attorney general has said this is not enough but we will see what mps in the house and lawyers make of it. air, we have news on lion boeing, and airbus. yesterday, a huge story with boeing shares getting crushed in u.s. trading after the latest ethiopian air crash led to a 8 jetsng of the 737 max in china and through other asian countries. now, we hear the air carrier, the first -- that first had an air crash with the 737 max, lion air, is mulling a switch to airbus planes.

did may switch its fleet from boeing to airbus. that would be another blow for the u.s.-based playmaker. let's get to the first word news headlines with annabelle droulers in hong kong. we will stay on that boeing story. singapore has become the latest nation to ground boeing's 737 max aircraft after two crashes involving a variant of the best-selling model. earlier, u.s. aviation regulators signaled their confidence in the model a day after 157 people died when an ethiopian airlines plane crashed. the faa said the 737 max remains airworthy. brazil, china, indonesia, and others have grounded the plane. theresa may faces parliament later today after striking a late-night deal to revise the terms of you k's divorce from the european union. after chaotic day of changing thes, the u.k. p.m. made

decision to fly to strasburg for talks with commission president jean-claude juncker. 20 minutes before midnight comedy held a joint conference to announce the changes which they hope will be enough to win over lawmakers in this evening caution vote. >> crucially, the request of parliament had and came together and had a majority vote for, that it should be possible to replace the backstop with alternative arrangements. we have secured a very clear timetable that enables the backstop as defined currently to be replaced with alternative arrangements. annabelle: venezuela's power crisis which has put utilities out of commission is now risking water supplies for 5.5 million people. many of caracas's residents have been reduced to carrying buckets of filthy river water after pumping plants stopped operating due to ongoing power cuts. lack of maintenance means backed up power plants at dams around caracas out of action. meanwhile, the executive

director of the international energy agency has told bloomberg the geopolitical situation is very challenging for the oil market. >> we are seeing the geopolitical tensions are putting unprecedented shut off on the oil markets. libya, iran, venezuela, trade tensions are very challenging. annabelle: global news 24 hours a day, on-air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. anna, matt? anna: thank you very much. annabelle droulers, live for us in hong kong. we are talking about the car sector because matt is talking to vw but i want to bring you news on nissan renault. it will create a new operating board. the story yesterday suggested this could come about.

the ceos of nissan and renault are to join the board. we have live pictures from oppression conference in which these changes are being announced. the alliance says the decisions are to be taken by the board and it will be consensus-based and the new board will meet every month in paris or tokyo. they are trying to reform the board. big questions hangover carlos ghosn, his departure months ago from the businesses. this is the renault chairman speaking to us this morning -- that renault ceo speaking to us from tokyo. the pound is heading for a second day of gains on optimism about a revised brexit plan. theresa may and jean-claude they madeid "meaningful adjustments to the divorce deal." parliament is set to vote on the revised settlement later. let's get to our bloomberg live

strategist keeping the studio one for us. thank you for joining us. --are made to believe they're will he many fine points of legality, many opinions today, but how high or low will the pound go on brexit based on what we have seen overnight? mark: we have seen a wide range of forecasts. how shows no one has a clue to trade tonight's event. i think the reaction in either direction may be quickly faded. if you get the deal passed, that leads to longer term uncertain tea and the fact of what will be the new trade negotiations? relief in the short-term that we avoid the worst case, but we've get back to focusing on long-term fundamentals for the u.k., which aren't positive for the currency. if you get a rejection, which is the base case, there is an assumption we get a net -- an extension before the deadline, but we have uncertainty that lasts today's. -- two-days.

it is negative, but expected in the market. matt: why is there a higher --brexit,no deal u.k. mark? fair enough coming from "the telegraph" which backs that shows more british citizens support no deal rather than the delay. why wouldn't they follow constituents' wishes? mark: i'm not sure we've seen parliamentarians follow voters throughout the whole process. they're his been eight emergency about what is argued in parliament and what many in the street are arguing about but i would agree we will probably price in a greater deal -- risk of a no deal brexit as we get closer to wednesday and thursday, assuming tonight's vote fails. that is why sterling will probably be weighed on if it fails tonight.

we will get in your -- knee-jerk reaction and we will drift lower to the end of the week until we know we get an extension. that is the base case in the market, which is why there was no panic across currencies yet. matt: thanks very much, mark cudmore. bloomberg mliv strategist in the city of london today. join the debate on today's question of the day, which is how high or how low will the pound go on brexit? what is your guess on the range? bymit it to the mliv team going to your bloomberg terminal. next, profit drops at volkswagen , audi and porsche brands. we will bring you our interview with the company's ceo, also in english. straight after the break and bloomberg radio is live on your mobile device or dab digital radio in the london area. this is bloomberg. ♪

matt: welcome back to "bloomberg markets: the european open." we are about 15 minutes from the start of cash equities trading. atkswagen saw profitability its main vw, audi, and porsche brands fall last year as the

carmaker suffers costs related to the diesel scandal, a new regulatory procedure, and production delays. i spoke to the ceo herbert diess and started by asking if this year, profitability will rise again. herbert: it is not an easy year. outlookthe same probably for this year to keep profitability at this level. it will be even harder this year. difficults are really the first two months. also, we are optimistic because there will be a settlement between the united states and china. brexit, they will be clear what will happen. i think this could be a good year and we are investing a lot in new technology, so keeping profitability would be an achievement. matt: how important is it for you to get a good brexit deal

and how optimistic are you it can happen? herbert: brexit is important for us. the u.k. is an important market. bentley is depending on export from the island so this is a critical situation for us. many luxury brands, sporty brands have a big market share in the u.k. volkswagen is important in the u.k.. orontrollable brexit, introducedcision is would be very important to stabilize our brexit. matt: can you quantify that and tell us what you expect? herbert: we have different scenarios. it is really an uncontrolled we would see a declining markets on both sides, export would be difficult. we are preparing a few things, but it wouldn't ruin the company. but we would notice it. matt: on the china-u.s. trade

deal, do you have optimism there and can you put that into a quantifiable dollar figure? herbert: for us, china is very important. share, so china is really important for our worldwide presence, also for our profitability. markets are really down, already starting last year, january-february, define -- decline of 10%. on the other hand, we carry a lot of new products and i am optimistic there will be a solution between those economies because it is in the interest of both parties and i see a lot of eagerness in the u.s. and china to find a compromise, because it is so import for both countries. china will probably suffer more,

so i am optimistic and i hope we have a better second half of the year. matt: you have healthier forecast for 5% sales growth this year. does that assume a neutral or positive outcome between the u.s. and china, between the u.s. and the eu? herbert: that would assume the second half of the year is better than the first, and we hope we can slightly grow, whether 5% on the upper end -- ceo: that was volkswagen's herbert diess speaking to me here. where volkswagen has its headquarters. we are live in brussels for another interview with luxenberg's finance minister and that is one you don't want to miss. this is bloomberg. ♪

anna: welcome back to the open. nine minutes till the start of cash equities trading this tuesday morning. we are in westminster because of the brexit vote. months of political tremors over brexit have shaken westminster to the core. what about london's financial sector? will it remain as relevant after the u.k. leaves the eu?

the cityound those in are building up operations elsewhere in anticipation of brexit day. dani burger looks at some of the numbers. dani: the timing of this comes as lawmakers vote on the revised bill. this study by new financial says 275 firms will move some of their business out of the city to cope with brexit. the biggest beneficiary looks to , luxembourg,h 100 paris, amsterdam falling behind. 5000 is the number they identify of staff moves or local hires. this figure is expected to rise but maybe the best measure is how many assets will be moved out of london. move 10% -- banks will of banking assets out of the country. thanks very much. bloomberg's dani burger showing

us. the financewith minister of one of those countries to benefit from brexit relocations. maria tadeo is with the finance minister of luxembourg for the latest meeting. maria: it is interesting because this could be one of the big countries to benefit from the u.k. exit. i want to go straight to the point. thank you for being with us. yesterday, there were concessions given to the u.k. the eu said this is the final thing. what happens if u.k. lawmakers reject the new deal today? pierre: i wouldn't be that negative from the outset. let's face it, the european union side through the commission has made a last ,ffort, gone the extra mile giving the united kingdom the assurances it is asking for and i think on the european side, we

have done every thing we can. obviously, we can't -- came from a situation where two years ago, there was question about hard brexit and hard brexit and here, we are in a situation where we might face a situation of no deal, which is that for both sides. i hope this extra effort will be enough. maria: the reassurances have been given. jean-claude juncker call this a second chance. if thiset the sense deal doesn't get through, next week we are inevitably headed for an extension of brexit? even the extension needs 127 positive votes from the other member states and i fail to see how having a couple of weeks more time will make the situation different and help find a solution we couldn't find in two years. said, if that is the last thing we can do to find a

deal, luxenberg will not oppose it, but the time is coming. maria: focus on your country, we know you are well to attract financial business and industry. how many have already moved their assets? aboutny are we talking and what is your horizon for investment you think you can capture? pierre: we have been in the special position that we have always said we want to continue to work with london city in a cooperative mode and that has been appreciated by investors, and it is about 50 companies that have decided for luxenberg. what you can see is in the whole a multiple has been choice as other players have chosen other places but we are pleased with what has happened in terms of asset managers, insurance companies, fintech companies, quite if you have chosen us. maria:, anna, that was luxenberg's finance minister.

thank you, maria tadeo in brussels. pierre gramegna, the finance minister of luxembourg. we will get to the market open next. you.

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♪ >> welcome back. a minute to go into the start of the cash equities trading today. let's get to annmarie hordern at the london studio. she'll run us up to the market open. >> good morning. let's kick it off with the 1.1265, the trading highest since december, 2016. oil to the upside, extending gains we saw yesterday, saudi arabia planning to cut deeper on the output curbs, less than 10 million barrels per day. in venezuela, the electricity crisis making it difficult to access oil wells. csi 300 higher, asia stocks higher, who we'd by tech shares. sentiment in the u.s. sector,

consumer retail sales stabilized. and the pound is up about 5% this morning. optimism is building to reach a deal. let's talk about what's going on in european futures. higher, is opening optimismouch higher, building that potentially we could see a brexit deal in this key parliament vote, theresa may getting a new deal. the big question is whether she can get it through parliament. does it make enough concessions for the hardliners to get a deal through? i know you will be live in westminster. -- cac had some payroll data better than last quarter. let's take a look at the broader picture. one th