yen rallies but black rock warns that the markets are underestimating the feds resolve to hike. the opposition labor party prepares to unveil its position on brexit. and standard chartered the latest casualty of the commodities crunch. loansts a lose as impairment double to the highest ever. good morning, everyone. ."lcome to stephanie "the pulse
german business confidence for the months of february is at 105.7, a touch below what economists had forecast. 00.6.d a figure of 1 it's below expectations. as we are seeing yesterday with those pmi numbers out of the eurozone. we are seeing a little bit of crunch as weakness in the global economy is starting to affect the european region and germany as well. 1.1028.see euro at we are getting breaking news out of christine lagarde. we will monitor the news we get from her purchase talking about the gcc countries. stocks falling overall globally. over renewed concern over the strength of the chinese
economy. stoxx 600 down 0.2%. the shanghai composite was led lower by a lot of the financial and industrial companies. after the central bank in china weakened the yuan. the pound declining. crude slumping. let's get on to the second board. rick off mo -- risk off moved. the pound had to do with brexit. i want to show you two stocks that reported earnings. cutting its dividend. standard chartered down 3.7%. better than just about 10 minutes ago. let's get straight to the bloomberg first word news. nejra: bhp billiton has made a larger than expected cut to its for the, lowering payout for the first time in 15 years. as the world biggest mining company seeks to protect its credit rating amid a price
collapse. share price has fallen 40% over 12 months. david cameron's campaign to keep britain in the european union has been given a boost. 36 leaders of the u.k.'s 100 figures companies have signed a letter -- biggest company have signed a letter that says staying in would be best for the economy. that came after the prime minister fought back against the mayor of london who said he would campaign to leave the bloc. mark zuckerberg has backed apple during a speech at the mobile -- in barcelona. other tech firms has said they support tim cook's refusal to unlock a terrorist iphone. the u.s. government says it is a one off request. >> we are sympathetic with apple on this one. we believe in encryption. that is an important tool that, honestly, people are going to
find a way to get anyway. i think that that, so, i just think it is not the right thing to block that from the main steam products people want to use. i think it is not going to be the right regulatory or economic policy to have in place. nejra: standard chartered shares have fallen sharply as it reported a surprise $1.5 billion full year pre-tax loss. the bank's shares have fallen by 50% over the last year. a day news 24 hours powered by our 2400 journalists in 150 news bureau around the world. francine: thank you so much. blackrock, the world's biggest money manager, is warning bond investors they are not prepared for the federal reserve to raise rates. go,ou look at our wirp
traders reckon there is a less than 50% chance that fed will raise rates before the end of the year. but blackrock says strengthening inflation may prompt the fed to act sooner. let's introduce the chief kevin,ment officer at -- great to have you on the program. give us a sense on whether blackrock is right. we are seeing a lot of termite. -- termurmoil. >> we think the markets are more likely to be right than the fed. francine: so blackrock is wrong. isin: we think blackrock probably wrong. having said that, there is no question that domestic sectors, the consumer, thare in reasonable shape. unemployment a record lows. the fed will be keen not to center negative a message out. however, the fact is the external environment is still weak and getting weaker.
francine: what is getting weaker exactly? trade, global manufacturing as a result of the slowdown we are seeing in emerging markets. china and emerging markets. be be morehould ib worried about china now that i was in december? china is about to have a hard landing and it has not got the necessary tools to prevent a hard landing. the concern is that what point does it have to devalue its currency and by how much? if it does that by a large amount, that sends another huge wave of disinflation globally, so we have another downturn and committees -- in commodities. francine: why are we so uncertain about what the fed does next? we're also talking about negative rights. that was a just a possible cut in interest rates. then you have blackrock saying, they will hike this year.
is it communication, or just that the world is so much more difficult to read? kevin: i think the world is so much more difficult to read. the fed are paying a price for keeping rates too low for too long. the difficult situation they find themselves in is they decided to tighten rates toward the end of the cycle where the economy was weakening anyway as a result of these external pressures and difficulties. toour view, it's be wrong compound that error by over tightening. what they need to take into account, and i'm sure they are, is the fact that the dollar has risen over the past two or three years which has a tightening effect on the economy anyway. credittion to, why spreads, weaker equity markets, a slowdown in the housing sector and even some of the consumer
numbers of late in the u.s. have not been that great. toave got to be careful not compound the problem by tightening policy further at a time when policy is already tightening and the external environment is very vulnerable. francine: thank you so much. he stays with us. its chip designs are found in most of the world smartphones. caroline hyde is at the mobile world congress in barcelona with that company's ceo. caroline: joined by the chief executive of -- bond holdings. about 15 billion. phenomenal growth in terms of where you cover. there is a bit of worry about mobile on the high-end. should we be as worried as we are? >> smartphone shipments are slowing down, as everybody has expected for a long time.
it has gone through a phase of hyper growth over the last few years. it seems like everyone has got a smart phone. naturally the industry is slowing down in terms of new units being shipped. ofare still seeing a lot innovation going on, still seeing companies looking for new ways in which mobile phones will be used to control other things. you only have to look around the show to see how many cases there are of the phone being the controller for something else. whether it is a car, your heating system, whatever. the mobile phone is driving everything else. it is connected vineyards on display. can iot make up for the mobile revenues -- when will we start to see them become a bigger part of your business? simon: the continued growth and smartphones is still going to be a driver for our revenues. mobile is key to everything else. oneot, we do not look at as
replacing the other. it is another avenue of growth for us. make computing absolutely tiny so they can be deployed into so many different things. caroline: what sort of size of marketing we think we will get to in terms of the internet of things? have you done much theorizing in terms of the scale of the opportunity? you have already got $15 billion. -- 15 billion. simon: 15 billion was the number last year. cumulatively the number is 75 billion. we think iot is a huge market. it could be the hundred billions. there are many forecast. i am sure they are all wrong. it i'm certain this will be a big market, one that brings new business models. caroline: talk to me about security elements. simon: i have been talking at the conference about security and iot. cyber security a big theme at the moment.
that is a conventional commuting -- computing. got to start have thinking about security and a different way. the good news is now is the time to do it. if we let iot be deployed and try to fix security later, that is going to be a real problem. we are working on the low-level building blocks to allow secure software to be build on top of hardware. designer/you are manufacturer agnostic. apple in the news an awful lot regarding not security but privacy. where do you stand on the ongoing debate. have you come out saying we support apple? n: fundamentally, we believe that uses should own their data. they should have a say and how that data is used. what's interesting about this case is i think it will serve as a landmark for what happens in
the future. iot being so new, the potential issues around security and privacy can potentially explode over the next two years. the coming months of this issue -- if this issue does get result, could set the time for the future. caroline: i would be remiss not to ask a u.k. chief executive what happens in terms of the united kingdom and the brexit fate. are you concerned about the sudden boorse johnson makes to the equation and the factory could see a tight race on it comes to a referendum? the issue about britain being part of the european union is about access to people. we've got about 300 people in our u.k. offices who are from non-u.k. european countries. we bring in a lot of talent into the u.k. if we had to get a visa for everyone that would slow us down. forre pro staying in europe
access to a bigger market, although a relatively small portion of our revenue comes from europe. the ease of attracting talent into our business. for those reasons, we are very positive about britain staying in the e.u. inoline: you have a hub cambridge. would you ever consider moving outside of the united kingdom? simon: we have got about 1400 people in the u.k. i can't see us moving anytime soon. caroline: paint picture of economic growth throughout. you're in china, you are a global company. see 2016 going in terms of optimism when it comes to economic growth backing your sort of business? ghte headwinds hitting -- are you seeing the headwinds hitting your business at the moment? oil, slowingice of growth in china, all these issues can ultimately affect consumer confidence.
arehe same time, people very concerned about how the economy is growing, so they are saving more. our product is getting into consumer devices. it does impact our business. what we're thinking about is the long term. we are investing now for the future. we have invested through downturns in the past. that has enabled us to grow quite significantly over the last two years. we are thinking about the long-term. caroline: should you be worried about the share price taking a knock? simon: share prices go up and down. we are thinking about how technology is going to be used 5, 10 years out. so, the share price today does not reflect a we are doing. the revenues that we recognize today are based on work we did a long time ago. pcick on if you can e bit of work that is most
exciting? simon: definitely one of our top priorities is thinking about the security issues. we see there's an opportunity for similar technology, whether it is a connected car, connected home or a smart phone. there are some fundamentals on how encryption keys are s tored, how top-secret information is kept away from information that is a last secret. we are trying to architect that so that solution can be deployed in many markets. caroline: thank you so much. it was great to catch up with you at the mobile world congress. thinking all things security when it comes to chip design. francine: thank you so much. great interview. talking to the arm ceo about a number of risks. coming up, bhp billiton sacrifices its dividend. will it be enough to protect the balance sheet of the world's
generating losses in 2012 has surface to say he is not responsible. e said he was instructed repeatedly by managers to execute the strategy that went awry. he says he objects to the whale nickname. the s&p 500's rally will give way to a full-blown retreat should the benchmark decline over the next few days, so says the chart analyst predicted in advance in oil earlier this month. according to a former, the s&p will drop shadow slip at today's open and fall below 1917. the gauge closed yesterday after climbing 2.8% last week. the new head of china's a regulator has indicated he will take the top -- oand support the stock market by driving more capital into it. in his first comments since taking a position on saturday, he told senior officials its
main tests include supervising the market and checking for manipulation. that is what the people said. that is your bloomberg business flash. francine: thank you so much. let's talk more about china. as you can see from this chart, china's total bet stands at $31 trillion pitcher pulling from 2009 levels. china's corporate sector has been piling on the debt. let's bring in kevin boscher. worry about debt. we worry this debt is going higher. a record in china earlier this your. the world in general seems to have a debt problem. how bad can this turned? and it isis bad warring. a lot of that debt in china and the private sector rather than the public sector -- it is worrying. there is the optimist in me suggests the public sector and the government can buy time and give it time to make sure the
bursting of this deb bubble does not cause a major implosion in the economy. lead to a hard landing and in particular lead to a big increase in unemployment. it's a difficult balancing act. on the one hand, there is the argument they should let un profitable zombie companies go under to help resolve some of this debt problem. but the potential damage that does to the economic environment, which is already fragile and to unemployment, prevents them from doing that. they are trying to do that on a gradual basis. the problem is it has change because the u.s. went through the same issues, but now the market is so much bigger. and also, because of our mobile devices and social media and the way we communicate, these mistakes, or learning curves, get amplified by so much. what does it mean for a foreign investor? difficult for
foreign investors. in fact, from an investment policy perspective, the fact is the world economy still -- has still got way too much debt. what it needs is either higher growth or high inflation or debt forgiveness to bring us back into situation where we can perhaps look forward to a new growth cycle. to beis is why you have fairly cautious about equities from that perspective, because we are in a low growth, low-inflation environment where the pressures are to the downside until we can get through this problem. and it obviously makes the investor very wary about those areas with high debt levels. again, one of the negatives of the fed in the u.s. keeping interest rates lower for long periods,'s we had increased leverage in many emerging markets, including china. had increased leverage and many emerging markets. francine: overall, we talk about brexit, the fact the banks are
downsizing and your. then it there is the u.s. political risk. there is china. is there any optimism out there? -- the fact the banks are downsizing in europe. is a concern for us. it is more uncertainty in a difficult time. u.k.mes at a time when the economy has already shown signs of weakness. , whether that be from the construction housing sector, the loss of momentum from some of the strength we have seen previously, the brexit itself, the weaker sterling environment and the increased fiscal austerity. which means for us, as investors, is is perhaps a good time for us to look for opportunities outside of the u.k. francine: the pound falling is good for manufacturing. it increases exports. is there an ideal level? kevin: it is good for exporters.
it is not good for some of the small, mid cap companies who are focused on the domestic economy and they were the key winners over the past year or two. the downside of that is if suddenly the u.k. were to import more inflation as a result of a weaker pound, then that takes money out of consumer's pockets at the time that at the consumer is one of the few engines of the economy that is working well. in that sense, it is a bit of a zero-sum game. the other thing about the pound is it is happening at a time where every other major economy wants their currencies to be order toy weak in stick night economic activity. in a way, the u.k. is joining in the currency wargames. francine: think so much for all your insights. chief investment officer at books macdonald international -- thank you so much for your insights. the company warned that weaker prices and volatility across commodity markets are likely to
persist for longer than expected. joining us with the latest is bloomberg's ryan chilcote. what are they doing to counter the downturn? ryan: we call it the shreare less, spend less strategy. they are cutting back their spending plans over the next 18 months, by 23%. the big thing is the dividend, cutting it for the first time ince bhp burst with billiton 2001. investors expected them to cut the dividend by half -- cutting it for the first time since bhp in 2000ith billiton wine. they have done away with the whole idea of ever greater dividend payments. in merged with billiton at 2009. francine: where does most of the income from? is bhp in a league of its own or does it have the same problem as some of their rivals? ryan: they have their own need
problems which is perhaps the most compelling part of the whole commodity story. netink if you look at the income statement, that is the most interesting. 5.5ly what happened was a billionbillion -- $5.5 loss. that was because of $8.4 billion in impairment. .2 billion charge on their u.s. shale assets. what distantw, wishes bhp billiton from the big producers is is exposure to oil. if you look at the oil price and share price, they have been tracking one another closely. some people say that could be a good thing, if you believe that we might see an uptick in oil prices this year. francine: ryan chilcote with the latest on bhp. we will be talking to the cfo of
francine: we are right on "the pulse." let's get straight to the bloomberg first word news. and russiau.s. have announced a partial cease-fire in syria will start on seven. that revised hopes to the solution to a five-year war that's created a refugee crisis. -- the cease-fire will start on saturday. they must confirm that they will abide by the "cessation of hostilities agreement." the renewed focus on the brazilian president's party
after police carried out another series of searches in relation to the theme of kickbacks at a state run oil company. mark zuckerberg has publicly backed apple in its privacy battle at u.s. authorities. a number of other tech firms have said they support tim cook's refusal to unlock a terrorist iphone. apple maintains the complying would have implications for the future by the u.s. government says it is a one-off requests. >> we are sympathetic with apple on this one. we believe in encryption. we think that is an important tool that, honestly, people are going to find a way to get anyone. expect that that, so i it is not the right thing to try to block that from the mainstream products that people want to use. behink it is not going to
the right rightly or economic policy to put in place. hours alobal news 24 day powered by our 2400 journalists and more than 150 news bureau around the world. basesne: we have all covered. european stocks threatening to go green after opening lower this morning. let's head to the bloomberg with mark barton. mark: the stoxx 600 was down 1%. yesterday, it rose for the fifth day and seven, rebounding 9% from the 2.5 year lows on february 11. the driving force has been basic resource, oil and bank stocks. sentiment has been down amid further concern about the chinese economy. yuan referencee rate by the most in six weeks. manufacturing and services cell to new lows -- feel to new -- fell to new lows.
corporate story. bhp shares falling after it cut its dividend. it made a larger than expected cut to its dividends. to do is protect its balance sheet and credit rating from the slump in commodity prices. first-half profit -- the dividend was cut to 16 cents f rom 62 cents. statementarning in a that weaker prices and higher volatility across commodity markets are likely to persist and longer than the company had expected, printed it -- prompting it to shake up top management. intercontinental hotels which owns the crowne plaza shrres ares up by 3.7%. billion to return $1.5
to shareholders in the form of a special dividend. the special dividend will be paid in the second quarter. it also announced a 10% increase in the final dividend to 85 ce nts a share. it set operating profit last year 4%. sterling was the big story yesterday. it fell against all 31 of its major peers. the standout move was that 1.8% drop against the u.s. dollar, the biggest since may, 6, 2010, when it was also hit by political turmoil. that occasion resulting from an inconclusive general election. the pound ending yesterday at its lowest level since 2009. this is the pound against all 31 of its major peers. these are the currencies that are falling against the pound today, but still a majority are rising against the pound today, theby the japanese yen, australian dollar as well.
keep an eye on the euro, because of potential exit by the u.k. in the e.u., could encourage others. to the june 23rd referendum. francine: no one can leave the country. everyone has to go and vote. reported aartered surprise loss. 834-tax profit came in at $ million. further into the news with michael moore. just moved over from new york. just in time for brexit. and we're also joined by atlantic equities banking analyst christopher wheeler. you're almost on every day because every day there is something new and something bad in the banking sector. we also heard from -- saying brexit would not have a big impact on the bank, because they
are skewed toward asia. how worried are you overall about brexit and the impact it can have on banks? i find it crazy that the mayor of london that has all the banks, this is the city that has the most to lose if this country leaves the u.k., he has come saying, guys, we should leave. >> the big problem is some of the really high profile banks who based or headquartered their headquarters in london. goldman sachs, credit suisee. se. and the problem of having a passport across the whole of europe. if you go out of thank -- out youhe e.u. or the u.k., headquarters somewhere else. there is no doubt there is a great risk of people in business moving away from the city. francine: on standard chartered, we knew it would be not pretty
but we did not think it would be this ugly. >> there were a lot of things thrown in. loan impairments were almost doubled. they threw in a restructuring charge of $1.8 billion which they said may be coming at some point but it came now. it's just, i think they are taking on a lot of their challenges trying to get a lot of things out of the way, so they have a clear path forward towards the 10% roe they want to get by 2020. francine: i want to show you the share price. it was interesting because it opened and it fell sharply, down 12%. now it's only losing 3.5%. do you think the worst is behind them, or are they turning a corner? >> it is pretty early day. what is interesting is you have a number of banks, deutsche bank, credit suisse, standard chartered, all going through some major restructuring, yet
more major restructurings in market conditions which are not helping them at all. you saw one of the things people had not focused on was the revenue weakness. there has been a lot of talk about higher provision at both of the two asian banks. it shows you the difficult backdrop and wish they are trying to get to these new targets. francine: are we expected more -- expecting more, job losses or restructuring from standard chartered? does it mean they will have to cut more? >> yeah, they have said the restructuring charges could go from the 1.8 all the way to $3 billion. it could even exceed that. this would be a tough job in a normal environment, but to have the exhaustion is shoc -- ex ogenous shock just doubles the pain. francine: are we worried they
cut too much? because of a panic mo because ito -- because of a panic mood, ceo's cut parts of the businesses that are just too painful to take. >> that could well be the case, but i think the difference with standard chartered -- it growth strategys, it found itself as a winner and expanded to businesses. inought three m&a boutiques canada, australia, and south africa. it made complete sense at the time. of hitsbill's got a lot and pieces that he can step back away from and try to get back to their real -- finance and retail banking. francine: but the emerging market is slowing. china again today down. where is growth really going to come from? >> it will be difficult. we have jpmorgan investor data today. can they come out with more cost
cuts, because they have come out with so many to deal with a low levels of revenues. we are going to see that with a lot of these banks. they have to say the one thing we absolutely can control is our costs. that has to be a focus. while we hope we can generate higher levels of revenues, and improving. francine: we had hsbc yesterday. how do the two banks compare? i know standard chartered has to go through a more of a huge restructuring -- >> they are facing similar challenges in terms of the slowdown in e.m. in terms of revenue challenges compounding the loan impairment increases. i think it is going to come down in people's medium-term view of what the world looks like. if you think this is a temporary slowdown for the emerging markets, that is going to lead you in a different path than if you think this is more permanent, because if you are
looking five years down the line, what is your business -- does your business mix looks like? francine: what do you make of the timing of jpmorgan's london whale. writing a letter, it is not my fault. a renew of brexit debate. can fuel concern that the banks, it's the system that creates this kind of first taking. >> it is interesting to read you may have noticed that the too big to fail thing has come back into the space of discussion after the chairman of the fed in minnesota came out and said that we should be -- breaking up the banks. have we done enough to make banks safe? the london whale reminds us of the kinds of things that can happen. at a bank seen as one of the best run banks in the world. francine: it is linked to emerging markets but the link to
commodities. there seems to be a feeling that even on that, the european banks are behind compared to wall street. is that fair? >> i'm not sure that is fair. i think a lot of the banks are trying to contain that exposure. there has been a lot of lending to russian, as obviously focused more on the european side. you saw standard charter's cut their exposure to commodities this quarter. i think all of the banks are stays at about if oil 30 for another year, what that means for defaults, because you have seen some of these provisions spike up in the last year and that could continue. francine: do we need more transparency? should there be a standardized, all banks need to divulge how much exposure they have to commodities? >> i think most of the banks have done that. we saw yesterday, hsbc gave really good disclosure. energy exposure.
about $19 billion of commodities exposure. most of the banks in the u.s. movegiven -- so there is a towards saying we have got to be as open as possible because the one thing we lost in 2008, is nobody had a clue what was happening on the bank's balance things liked commercial mortgage-backed securities and other exotic instruments. think that is what we are seeing more of in the coming weeks. francine: thank you so much. we will watch that jpmorgan investor day a little bit more later in. exactly four months until voters decide whether to remain in the european union, we will take a look at how the debate is shaping up. ♪
francine: let's get straight to the bloomberg business flash. nejra: standard chartered shares have fallen sharply in london trade this morning as it reported a surprise $1.5 billion full-year pretax loss as loan impairment stumble to the highest in the banks history. the bank's shares have fallen by 50%. intercontinental hotels has announced a 1.5 billion dollars special dividend as the company posted 2015 operating profit before exceptional items of $680 million ahead of analysts
expectations. the ceo told us he is not concerned about the threat of brexit. >> we think it is a decision for the british people, and they can make their own minds up. for us, as a company, we operate think ituntries, so i doesn't have a massive impact on us. profit-- fourth quarter beat estimates. million.e rose to $938 that is your bloomberg business flash. francine: thank you so much. u.k. prime minister david cameron took his new deal to this country's parliament yesterday. he told lawmakers he believes and securityonomic
interests were best served by remaining in a reformed european union. by mr. cameron: -- prime britain cameron: can have the best of both worlds. we will be in the driving seat of the world's biggest single market and with the ability to take action to keep our people safe. but we will be out of the parts of europe that do not work for us. francine: let's speak now to zena o'donnell,, the u.k. government reporter. if you look at the opponents from david cameron, you have forced johnson and still trying to figure how much -- you have ellis johnson. - boris johnson. he is not that well-liked outside london. >> it is hard to judge however boris johnson whom voters know by his first name. he's the biggest scalp for the leave campaigners.
he'sroblem is, of course, facing accusations he is going to the 20 leadership -- to the tory leadership. that's slightly damages his brand. the problem for david cameron is not just boris. seven members of his cabinet are now campaigning against brexit. francine: it means david cameron may be very confident about his position. within his cabin and he says, you can choose whether or not cabinet,- within his he says you can decide whether or not you are pro or against. >> you have got to remember there was a lot of debate as to whether or not to get people a free vote on europe or not. this referendum was initially called because david cameron was afraid of more defections. that soft the uk-- solved the ukip problem.
francine: what to make a big business? a lot of big business wrote a letter in "the times." i guess it is the u.s. banks that have most to lose because they need a passport to go to the rest of the e.u. criticisms has been that some of the big u.k. retailers haven't signed that letter. secrets is cameron's weapon. he is really counting on business getting involved, spelling out the economic arguments in favor of staying in. the big campaign position here for those campaigning for in is that it is going to be bad for britain. we save a lot of economic crisis and volatility and let's not rock the boat. francine: you don't know what lies on the other side. that is an excerpt from "the times" letter written by ftse
their latest fashion line yesterday at fashion week. from september, everything seen on the catwalk will be available to buy. i caught up with christopher bailey backstage to find out what kind of opportunity the new format brings for business. mr. bailey: i'm excited about the future. i love change. this has been an evolution for us. it has not been something that changed overnight. in 2009, we started to live stream our shows. started toate, we invite people to order immediately from the runway. and so, that kind of is just -- built until we made the decision that we need to think about the shows in a different way, because the show format was created for the industry, for the media, for press, buyers. today, i find it confusing. if you have that audience but
ng, also have people bloggi tweeting and all the different social platforms around the world. but we expect people to conform to the way we've done of for so many years. so, it felt very natural to me, rather than some kind of huge change. francine: we are going through a huge change. are you surprised at the speed at which we buy things or the speed at which this change happened on social media? mr. bailey: no. i think nothing actually changes in terms of the way we will have as much time to create and to craft those collections as we have always had. it's just that we're just moving things a different way to, instead of this one, this show being just for the press, we will invite press and buyers to an earlier preview that's embargoed. it's actually where the going back to how it used to be. francine: so the consumer has
not really changed. is bailey: the consumer changing bread it is only because we have all been given these things that have got so soh power, and they enable much creativity and opportunity, that actually i find it an exciting way of talking to people through that. because you can storytell, there is a motion, music. you get the atmosphere -- there is emotion. it means that something that is happening in these little places called london and kensington gardens, that somebody in india or china or tokyo or los angeles, they can all feel like they are part of it. francine: what is your main challenge, given the changes it is going to go through? is it making something that is not feasible? mr. bailey: i've always tried to look at the collection as not spring.tumn, winter or i have always found it confusing
inter,e it may be autumn/w it might be cold and drizzly and lines and but it is boiling hot in another part of the world. again, i find it confusing that we are global, grow a global business. we talked to a global audience, and all these platforms are very global, yet we are telling you it is winter now. i think it is about being relevant to people. a bit of common sense. no more, certainly not some kind of huge creative thought process. it's what makes sense. if i am showing it to somebody and it is boiling hot, then i kind of want to show something that makes them dream, but it is also relevant. francine: that was christopher bailey speaking to me yesterday. it is amazing the pace of change in the fashion and luxury world. let's take a look of the markets.
vonnie: the global equity rally styles. oil declines. blackrock warns the markets are underestimated. sterling extends its drop as labor prepares to unveil its position on brexit. will declines take the euro with it? the latest casualty over the commodity crunch. this is bloomberg's "surveillance" in london. i'm francine lacqua.