Europe Waiting for Answers on U.S. Tax Reform: Davos Update

Billionaires, world leaders and investors are gathered in Davos, Switzerland, for the World Economic Forum’s annual meeting to hobnob and discuss topics ranging from the global economy and sexual harassment, to the risks and opportunities of artificial intelligence. Not to mention hear a speech on Friday by President Donald Trump.

Here are the latest developments, updated throughout the day. (Time-stamps are local time in Davos.)

Natixis IM Sees Risks on the Rise (9:04 a.m.)

There’s “more chances that risk goes up than it goes down” in markets, Jean Raby, CEO of Natixis Investment Managers, said in a Bloomberg Television interview. The company will seek “bolt-on” acquisitions and potentially bigger deals.

Europe Wary of U.S. Tax Reform (8:51 a.m.)

Europe needs to carefully assess the consequences of the U.S. tax reform, Economic and Financial Affairs Commissioner Pierre Moscovici said. “We have sent letters, five ministers from the EU and the Commission to the Secretary of the Treasury and, well, they responded orally, but I think when you send a letter you need to have a response,” Moscovici said in an interview with Bloomberg Television.

ECB Doesn’t Target Exchange Rate (8:36 a.m.)

The European Central Bank doesn’t target exchange rates for competitive purposes, Bank of France Governor Francois Villeroy de Galhau said. “Our only mandate is about price stability,” Villeroy de Galhau, a member of the ECB’s governing council, said in an interview with Bloomberg Television. “What we look at is the effects on the inflation outlook.”

Davos Takes on Sexual Harassment (8:30 a.m.)

In its own way, the #MeToo moment has come to Davos. At least two panels tackled sexual harassment head on, the first time in recent history it’s been a topic of official discussion at the World Economic Forum. The forum’s seven co-chairs this year were women, and while the attendees are still overwhelmingly male, among the younger set, half are female.

Bankers Tout Dealmaking Boom (8:29 a.m.)

A global boom in dealmaking is set to continue this year as companies use cheap funds for acquisitions and sell more shares to the public, according to top bankers at JPMorgan Chase & Co. and Deutsche Bank AG.

OECD Says Countries Showing Reform Fatigue (8:16 a.m.)

Complacency is worst enemy for economy as structural reforms are slowing down at a time they should be accelerating to take advantage of the upturn, OECD General Secretary Angel Gurria says in Bloomberg Radio interview.

May Rebukes Hammond for ‘Modest’ Brexit (8:08 a.m.)

Prime Minister Theresa May’s office slapped down Philip Hammond for saying he hoped Brexit would bring only modest changes, after his comments enraged the euroskeptic lawmakers May needs to stay in her job.

UBS Staying in Post-Brexit Britain (8:04 a.m.)

Andrea Orcel, the head of UBS’s investment banking business, said the Swiss bank is seeking to keep as much business as it can in the U.K. as the nation exits the European Union. All investment banks need to take a view and start executing their plans for Brexit, Orcel said in an interview with Bloomberg Television.

Advertising Industry Set for Growth (7:59 a.m.)

The advertising market is set to expand as economic growth strengthens, Publicis Chairman Maurice Levy predicted. The U.S. tax reform has changed the state of mind of top company executives “quite dramatically” and they are “very optimistic,” Levy said in an interview with Bloomberg Television.

Trump Apologizes for Retweets (7:55 a.m.)

President Donald Trump made a rare public apology on Friday for retweeting anti-Muslim videos posted by a British political activist two months ago, a social media misstep that hurt U.S. relations with the U.K. Retweets can “cause problems,” Trump said in an interview taped in Davos, Switzerland, with Piers Morgan of the U.K.’s ITV channel.

Collaboration Message Finds Takers (7:55 a.m.)

Cooperate, collaborate. That’s the overarching message from Davos this year for Mitsubishi Heavy Industries Ltd. Chairman Hideaki Omiya, echoing comments by Carlos Ghosn head of the Renault-Nissan auto alliance. For any one company, “it is not possible to do every single thing,” Omiya said in an interview. “It is necessary to have some collaboration.”

Risks to Global Economy Include Asset Bubble (7:43 a.m.)

Global economy faces risks but is set for strong 2018, Charles-Edouard Bouee, CEO of Munich-based consultancy Roland Berger, says in interview with Bloomberg Radio. “It seems the world has become more agile, able to sustain systemic risk problems we have seen like Brexit and Trump,” he said.

Trump Time (7:25 a.m.)

It’s finally time for the U.S. president to speak with his keynote address at 2 p.m. He’s expected to tell the world’s elite gathered in the resort town that his “America First” agenda will be good for the world -- not just the U.S. Last night he began making that case at a reception and dinner with business leaders. “It was very interesting and casual,” said Patrick Pouyanne, the chief executive of French oil giant Total SA. Less positive was billionaire George Soros, who wasn’t invited to meet Trump. He told an audience elsewhere in town that the president is a “danger to the world.”

Meantime, Big Tech struck a conciliatory note, Artificial Intelligence approached the summit of hype and bankers are still dancing.

Friday’s Highlights:

• “The End of Easy Money” panel with ECB Board Member Benoit Coeure, UBS Chairman Axel Weber and Bridgewater founder Ray Dalio, moderated by Bloomberg’s Francine Lacqua
• “Global Economic Outlook” panel with IMF Managing Director Christine Lagarde, Bank of Japan Governor Haruhiko Kuroda and Bank of England Governor Mark Carney discusses the prospects for 2018
• U.S. President Trump makes keynote speech before the close of the gathering

Here’s What Happened Thursday:

• European Central Bank President Mario Draghi attacked U.S. Treasury Secretary Steve Mnuchin’s comments on the dollar, saying he isn’t playing by the rules.
• Mnuchin sought to clarify comments he made a day earlier when he said a weak dollar is beneficial to the U.S. economy.
• Trump and British Prime Minister Theresa May reaffirmed the special relationship between the two countries.
• President Trump threatened to cut off funding to Palestinians unless they agree to resume peace talks.
• Barclays CEO Jes Staley told May to be prepared to sacrifice access to the single European market after Brexit if it means gaining control of its own financial rules, people with knowledge of the discussions said.
• Dutch Prime Minister Mark Rutte said his country will leverage its close trading partnership with China, while taking a “step-by-step” approach to Trump’s efforts to reshape the international order.
• May combined criticism with praise for technology giants as she took center stage at Davos to weigh in on the controversial debate of how to regulate them.
• Chancellor of the Exchequer Philip Hammond gave the clearest indication yet that U.K. lawmakers won’t have the full facts before them when they vote on the deal taking Britain out of the European Union.
• The heads of the world’s biggest asset manager and largest hedge fund warned against sitting on cash.
• May condemned the attitudes of men at the top of British business after revelations of a London charity dinner where hostesses were harassed and groped.
• Mining cryptocurrencies is far too energy intensive and is consuming as much electricity as a G-20 economy, Lagarde said.
• The U.S. warned Turkey to tread carefully in northwest Syria, as officials from both countries cautioned that the situation had grown dangerously combustible.

— With assistance by Andrew J Barden, and Chad Thomas