manus: room to maneuver, china central bank tweaks its monetary stock. there are still tools available to spark growth. germany's finance minister opposes any stimulus plan from the g-20. we're live in shanghai for the latest. show, a rally to national finance chiefs to campaign to keep britain in the european union. game on, the world governing body prepares to choose its next president. the latest from zurich. ♪
manus: welcome to "countdown," breaking news live bloomberg terminal. the world's largest chemicals producer has delivered their 2016 earnings outlook. it will be below -- a slightly below. that is the line from 2015. definition of the considerable drop in sales meet anything below 6%. this is a warning in terms of their outlook. this is at the forefront of global industry. we're seeing trade under pressure. defined a considerable drop in sales anything below 6%. they are saying they will see a slight drop off in profits. chance -- 1% to 10% change that is what they're calling a potential slightest
change. if i drop in profit. now, the chairman of basf will move" with the guy johnson. the one thing that is driving markets today, the s&p 500 hit a seven-week high. managedenchmarks had all february losses. what will come from the g-20? it depends if you listen to. from china, they have room to tweak. that we the prism of fx are perhaps the most focused. the uk's taken a battering, sterling has had a bad week. demolition derby in the fx market. just under 3% loss, they go. this is the worst week for sterling sense 2009. we have brexit jitters knocking consumer confidence. it is lowest since 2013, we have philip hammond come the u.k. former secretary warning that
declines. -- i have a little bit of a demonstration. what you have here is a real -- preparedness. that is how the fx market is setting itself up. i want to put this in context. it is not all doom and gloom even though i'm on my own. oil is set for a weekly advance. the output needs to last release 12 months. oil trade is on the week. gold also rallying as well. rising, the question is do you sell laura we see a relief rally? -- sell or are we seeing a relief rally? to eke out a game
there. they don't want this war of depreciation -- mark carney warning about that. 2% declining. let's get the first word news. >> china central bank has tweaked its stock defining it is prudent with a slight bias. this reflects the ramp up to guide money markets level. talkinge at a the pboc about the health of the world's second-biggest economy. china cilantro to stimulate growth as needed. they made the remarks just as the two-day meeting gets underway. collects there is the money for politics.
china is also improving. nejra: germany's finance minister says he opposes any stimulus plan from the g-20. he wants to focus on structural reform to strengthen national growth rates. hasays the monetary policy been exhausted. he warned using debt for fund the growth just leads to zomba theng -- zombifying economy. meanwhile, jeff gives measure of consumer optimism has plunged to the lowest in over two years. against thefalling dollar and it is heading for its worst week since 2009. football's world governing body chooses its next president today. the five candidates are making the final pitches. all say they're committed to
restoring fifa's reputation. blatter's seven your presidency was cut short banks to scandals. the catch up on these markets. haidi, all of the world is focused in your region. haidi: that is right. the world, increasingly, is listening very carefully. he did speak to try to bring some sort of calm to these very volatile markets. the pboc regulators have been doing a very poor job of the communications front. it was a very lengthy speech that he gave you. you made a point but having
adequate monetary policy. he is also talking down again depreciation expectations for the yuan. onsays china remains focused supply-side reforms. interestingly, he spoke about leverage and perhaps developing the homeland market. that is to be watching out for. seeing annitely effect when it comes to the regional equity markets. the markets have closed, up for the week by .3%. we didn't get that flatter rating on inflation coming out of japan for january. still very much nowhere near the despiteflation target rates going to the negative. we are seeing japanese stocks hanging onto games today. with just about an hours left of the trade, taking a look at some of the biggest movers today. it was pretty interesting, we
had oil weakening. across the play out energy space in a variety of different ways. first profit loss in about 20 years. that is up but down about 10% over just two sessions. we saw property development in china doing quite well today. ofrgrande up, we had 38 out the 70 monitors in january seeing it pick up when it comes to home prices. it comes tohen china's market but at least hanging onto some gains. manus: thank you very much, wrapping up the week's action. let's bring in jeremy had of fx chatterjee in the canadian bank of commerce. --have a hoist of voices
chairman of the canadian bank of commerce. we have a host of voices. we talk of a due process, but is that what you hope for this g-20? if you, or as often with these international programs if you lower the bar that is probably the best way to go into the event. go in for too to high expectations you're only setting yourself up for disappointment. that is the context we need to consider this meeting. i think we are in a scenario where we are seeing a huge amount of monetary policy experiments being conducted by a number of central banks. one of the latest going to the unconventional toolbox. we can into the realization that we need to see fiscal and monetary policy operating more and tandem as opposed to just relying on the monetary talk that has been available.
there talking a different language to each other, to say. remy: the chinese have held steady on the yuan bidding him to this. they published a statement saying they have a prudent and slight easing. they go on to say that there was and theyple liquidity are relatively accomplish. there is no doubt about it you want to make a point that we board and willh not be frightened to use it. manus: if we scroll back to the beginning of the year, right of the first trading session we came in with some weaker pmi data out of china. that is negative. that was the defining factor between where we ended 2015 and will be start the 2016. extended,ocess has
with amplified the negativity in terms of the china story and the implications that has for global growth in general. it protective you the chinese tour is not the sort of -- some .f the doom that is suggested taken at face rally that their significant policy tool still available that i think you can make the case that markets have become far too pessimistic regarding the global outlook. we see some kind of financial market to nami coming down -- trusunammi coming down the trac. manus: it is not a basket case, or a sunol me of that -- ts unami, but what would it take for you to think your best case scenario is correct. where do you call it if the doj is masked? somey: we continue to see
degree of moderate weakening. the chinese fx regime change last summer. that brings a great deal of uncertainty. one in fact, we were talking about a regime change rather than a devaluation. that is the way we would look at this. or willwe need to see, see, a degree of depreciation in the currency. to see someeed degree of the celebration in that context. we have to remember that the currency had been remarkably stable going into the u.s. dollar at a time when it had been appreciating. now we are seeing a correction of that. i think that is the point that was forgotten. the currency was held with the dollar. the dollar has rallied. we're seeing just a correction about over a prolonged period. we are not seeing a step change with devaluation. manus: there is one voice in preparedness -- mark carney, let's take a listen.
>> it is critical that stimulus measures are structured to boost domestic demand. sectors ofy, those the economy that still have healthy balance sheets. there are limits to the extent to which negative rates can achieve this. warning that from mark carney, it is interesting. .e look at where rates might be he's warning clearly that it is a zero sum game. there is no free lunch. that is what is happening right now, isn't it? jeremy: we've seen almost the world over trying to benefit. ask,urse, that is a tough because not everybody can do that at the same time.
i think this will be the issue is far as europe is concerned and summerlike a germany. just by relying on experts, the german economy cannot continue to grow in a next financial way. it needs to see something on the domestic side. there is a case to be made that the domestic demand story has to be improved. that comes back to consumers and consumer sentiment. if they are seeing all the negativity in terms of the headlines, that is a classic case. the top story, that is generally a bad news story. of course, that risk impacting consumer sentiment over time. we're talking more about that, the confidence numbers here in the u k are already at a 13 month low. potentialt the negative feedback moving into the reality of foot is going on. this is more ahead on
friday. there is a rash of inflation data coming in today. 50 minutes later, and germany at 1:00 p.m. u.k. time. at 10:00 get the euro zone consumer confidence. quarter gdp out of the united states of america. all eyes on that. up next, kuroda's inflation problem. far from his distant target of 2%. ♪
based on the company's definition of slump, a earnings could be as much as 10% lower than last year. we will be speaking to the chairman and ceo of basf at 8:35 u.k. time. aares of tumbled after controlling stake in the troubled electronics maker. it came as after the taiwanese company won a protracted agreement. it involved contingent liabilities of up to $2.7 billion. microsoft will file a court injunction to support apple in its fight with the u.s. government over unlocking a terrorists iphone. meanwhile, google, alphabet, and facebook plan to file separate briefs according to people familiar with the matter. after expects to join the so-called friends of the court brief as well. facebook ceo mark zuckerberg has
issued a companywide memo chastising employees who, despite his warnings, have been cropping out the phrase black lives matter and adding the phrase all lives matter. he said he is never had to make rules about what can be written, but considers these acts malicious. manus: thank you very much. we had fresh figures out of japan. zero inn was at january. the bank of japan governor kuroda, that is far from his 2% target. a negativeadopting rate policy. some economists are forecasting further monetary easing next month just weeks after the negative rate announcement. let's bring back into the conversation the head of fx, and frederick newman. jeremy, thanks for staying with us.
zero, nada, nothing that the japanese have done is lifted this inflation. towards the back end of 2013, it is just getting more difficult. it is getting more difficult to affect anything. negative rates, the market in terms of its acceptance of taking the yen lower hasn't worked thus far. itself was surprised that it did not work. they do not anticipate the rally of the yen after they cut rates. as i mean it will back off? we don't think so. perhaps late in the year, they are arguing that in principle
this should work. we should just press ahead a little bit and ultimately it would make some difference. i think they haven't quite given up on the negative rate story just yet. manus: how much more do you expect them to do? what is the tolerance for the lower buy-in? 0.5, if you push more negative than that you put the over all deposit rates for banks into negative territory. remember that this negative right only applies to a fraction of reserves. the overall deposit still earns interest. the bank of japan probably doesn't want to punish a banks too much. even they realize that if you undermine the profitability of banks too much, ultimately it could backfire. 0.5 is truly the threshold it could go to without harming the banks. the ski for long-term stability. manus: i want to bring you in, it jeremy.
isy monetary policy inextricably linked to mobile sentiment. but the g-20 does to improve our paranoia some hold in the marketplace. it is about a perspective about the bank of japan works. jeremy: it is, the context of the boj and the ecb as well. both are reliant on some improvement in global risk alleviate somelp of these deflationary issues. in a sense, they both have very strong vested interest in terms of seeing some stability coming back up the marketplace. i think that is the problem that the boj have found in terms of the ontario policy. they assumed it would help to cheapen up the yen but that became contingent on the reaction. it was clear to see the equity markets come under pressure and really become demised as well. line onhere is another
your shorter document which talks about the flow of money. put that in context for our viewers in terms of the scale of flow. jeremy: we've seen massive flows over the last month or two. we have seen investors moving back which of course hasn't been a scenario we've seen since late 2012. we have seen some big weekly float in terms of japanese bond purchases. risk appetite is really seen into, we have the middle of this month some degree of improvement in risk sentiment. we saw a very large move back towards buying foreign bonds. they started to look at the opportunities available in terms of high-yield elsewhere. it is still this oscillation between market risk appetite and japanese investment flows that are really creating problems for the japanese authorities in terms of the currency remaining stronger than they would like. that is continuing to compromise
inflation targets. they are all -- virtually all missing. frederic, where you are sitting, what the pboc does next, which lever they decide to move with next, do you think there is a movement on the currency? is there an ability to use monetary policy? how will that currency play into kuroda's options? the bank of japan is probably very conscious about not being seen to play the currency war game. he don't want to raise the pressure on the chinese, for example. so that they then themselves start to depreciate. the result will is asian that if they were to move to aggressively and push it to 130
with monetary policy, then pe anps the pboc would have excuse. i think it was some minimization in japan that they don't want to push to aggressively on the currency. you want to avoid an appreciation but also a massive depreciation so that then the pboc says we're in the game as well. in all bets are off. you have to choose a currency for the rest of the year to do your trades in, where will the market look like? i would not suggest sterling. there are other issues begin come onto at the moment. i think it will be the case that it could be a combination of either the euro or the yen. having said that, in terms of the context of the euro the second half of the year made proved to be a more constructive backdrop. yen would still be my
when you're on hold, your business is on hold. that's why comcast business doesn't leave you there. when you call, a small business expert will answer you in about 30 seconds. no annoying hold music. just a real person, real fast. whenever you need them. so your business can get back to business. sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business.
it is 7:30 in brussels. let's get to the first word news. nejra: china central bank is tweaked it official stance of monetary policy. this reflects a recent ramp up in liquidity's action and a mood to guide money market rates lower. that came at of the pboc seeking to calm fears about the health of the world's second-largest economy. --na still has room to sit stimulate growth, he said.
>> there are some fears that monetary policy faces. a potential downside. it is improving. nejra: the want to focus on structural reforms for the growth rate. the city monetary policy has been exhausted and warmth that -- warms that using debt could threaten the economy. he threat of brexit is hitting sentiment in the u.k.. the referendum will curb housing activity. the optimism is plunged to the lowest level in three years. the pound has also fallen against the dollar and is headed for its worst week since 2009. football's world governing body chooses its next president
today. they're making their final pitches come off saying they are committed to restoring fe ifa's reputation. seven yourr's presidency was cut short by unprecedented scandal. thank you very much. let's get up to speed on these markets now with caroline hyde. it little bit of a relief rally, look at the s&p. it is undoing all of its losses this month. caroline: it is having a bit of a feel-good friday when it comes to asian trading. wheres the asia-pacific up .4% in terms of its ramp up. nevertheless, every single industry group largely in agreement. tracking higher at oil picks itself up. utilities in telecom, this is the imap function showing you
how each and every group tends to be in the green one looking at asia. we have had a relatively good week. there is talk about the potential more monetary stimulus in the back pocket with china helping fuel some demand for those riskier asset classes. digging into also what is happening in the metal market. we are seeing it pick up, so related to what happens in china in particular. of course, the big hunger there has been for commodities in china. nickel is tracking up, the metal rally being fueled by what is said in china. this is what has been happening over the course of the month. s&p 500 and debbie ti crude on track for -- wti crude. they could to the best week since august. we up 11%.
the s&p 500 as you mentioned picking itself up off its monthly lows. we managed to get back into the white number what we were almost two cents january. we are seeing some notable improvement over in equities. thank you very much come a bit of an upbeat view coming from caroline on the day ahead. let's get into one of the mainom operators, spain's telecom operator. fourth quarter over debt comes in at 401 million euros. they have a fourth quarter net euros. 1.83 million miss on a variety of telecom companies in a variety of metrics. ida, net income however
increases 30% in the overall numbers. those are the telefonica numbers. let's switch our attention now to iran and hte middle east. -- the middle east. the first parliamentary election since lifting the sanctions. can it block initiatives from the president office? the hard-line guardian has a few moderates and reformers onto the ballot leading some opposition groups to call the election a sham. an iran reporter joins us from tehran. what is at stake? the world is focused on iran in terms of re-engaging. >> he is looking at two things, making sure he can protect those policies he is talking so hard
and getting the nuclear deal and sanctions. for that, he needs to parliament. he needs a tough, hard-line ince that has been obstacles his path for a couple of years to be slightly quieter and more muted. he need stronger support from moderate conservatives and reformists. he is looking for to the presidential election. to bee doesn't want us seen as a lame-duck president. he really needs an elective body that will be supportive of his policies going forward. manus: and, give me a sense of the turnout. that will be interesting. how big it or not to expect? far, 8:00 this morning, so it seems that we don't know for
sure exactly how many people have voted yet. officials have predicted the turnout will be relatively high. they think that because the number of people that stood to parliamentidates for was record-breaking. about 12,000 people came forward to stand in the elections. they said that people actually are galvanized by the nuclear deal. the ending of sanctions has energized people politically to come to the polls. at least, officials think the turnout will be relatively high. manus: thank you very much. response comest through on the election there. now, the iranian election comes after the lifting of sanctions. resuming ofa exports this year. that increased supply has helped deepen the global energy rout.
u.s. crude is still down more than 15% on the year for 2016. that surpluson was would be prolonged with u.s. stockpiles reaching the highest in more than a decade. that is a weekly story that we bring to you. we bring in jeremy back into the fold, and frederic. gentlemen, huge changes coming to play in iran. they are not prepared to give up their reentry into oil sales. in a prepared to play along with the russians. when you look at the oil story, is it feast or famine? everyone has a different story when they say it will be into my pocket. you think that we have more pain to come? isthe iranian story
unequivocally a supply boost. that should be a positive for consumers and importing nations. one of the things we forget here is that we still have the large energy importers in the world sitting on significant gains. those aren't immediately showing up, but overtime should push growth. china is a good example. the decline in oil prices lifts income about 2% of gdp, that is it significant boost to grow. india is another example where oil prices are helping to stabilize demand. offering somey cushion fussed the iranian story is critical here. down,ctors demand coming i think the supply story is now starting to win out. just: has the crowd clambered to high? my: in a sense, it is easy
to focus on those that are the losers from the rout in the commodity sector. they're very visible. there clearly demonstrated in terms of revenue reduction. seeing budgetary positions domitian's -- and diminished a very substantially. think it is true that there are winners and losers in all instances. i think we focus rather too much of a negativity. having said that, even including this potential supply boost that ,e will see with iranian oil there is still a degree of over amplifying that supply overhang. as we go into the second half of this year and consider 2017 that supply overhang at think will not be quite as i may make as perhaps markets have been assuming. i think that will encourage a moderate improvement. you mentioned this a big improvement in terms of shares this week.
that underlines how low prices have come. we don't have to move that far to get a double-digit again. that is another interesting aspect. talk about 45%, immediately 25% gains. that means lower inflation numbers could at some point turnaround. we could be running at a 1% inflation. there is an inflation component here as well. manus: this is a chart i prepared yesterday. we will take a look at cpi. this chart is something that i preferred. i, talked about a hot cp let's not show my messages to the whole world showing? i'm not saying we could call this, but it could flicker around quite a bit. that is possibly --
>> you can see a degree of flaw in the prices. in termse look at cpi of the annual comparison. i think this is one of the b, we assumee ec that would much more positive basis compared to 2015. that hasn't proved to be the case. if we start to see some degree of improvement or rebound in the oil price from a very low base, than those inflation metrics do look slightly less worrisome. at least, as far as the headline basis is concerned. manus: thank you very much. it is frederick newman, and thanks to jeremy stretch. next, the u.k. chancellor is looking for help in shanghai. aren't they all?
6:45 in london. let's get the bloomberg flash. nejra: basf expects earnings to drum slightly this year. the company's definition of slight, earnings could fall interest and tax could be as much as 10% lower than last year. we will be speaking to the chairman and ceo of basf. shares have tumbled after foxconn will buy a troubling stake -- controlling stake in the troubled electronics maker.
the sticking point involves contingent liabilities. that is according to people familiar with the matter. microsoft will file a court document next week to support apple in its fight with the u.s. government. meanwhile, google and facebook plan to file a separate industry brief. twitter says it expects to join a so-called friend of the court brief as well. facebook ceo mark zuckerberg has issued a companywide memo chastising employees who, despite his earlier warnings come have been crossing out the phrase black lives matter and writing all lies matter. hethe memo, he noted that has never had to make rules of the what can be written on the lord. -- board. but he considered these acts malicious. today innew president
zurich, five men are in the race to take the reins. ahead of the key meeting, some the candidates -- let's get straight to zurich. we didn't manage to get the voices of the lobbying going on. thereof a frenzy going on . it is been rather cold and chilly in zurich. what is the order of play? one of the messages that they are lobbying? >> good morning from a chilly zurich indeed. kick off to my right and about a few management large procession of mercedes limousines will show up. we already have a bit of a circus going on. there's demonstrators in favor of one of the front runners. dressed withn
dollar bills stuck to his head. things will really get busy soon. the first vote will be on the reform. that is potentially more important than the election of the president. the main event obviously after the reforms will be the election of the new president to replace sepp blatter. manus: who are the front runners? it is great, it is a must like opec, except there is more at play. ofo: i was at the meeting african football federation and they squarely throw their weight who hails from bahrain. roles alleged to have some in the brutal torture and suppression of protesters during the arab spring.
he comes with baggage. the of the front runner is an italian. the criticism of him, although he doesn't come in with any wasroversy, is that he involved with those just handed a six-year ban. runners, five candidates in all. scrum.go join the a new head of fifa election. finance ministers looking to use the g 22 drum up. i music in beijing yesterday come meanwhile the threat of brexit dissident sentiment here
in the u.k. the upcoming referendum would curb activity. meanwhile, consumer economic --imism plans to be lower its lowest level in three years. perfect timing, he is the head of fx. the prism of sterling. let me see if my memory serves is full to we've had the worst week from sterling since january 2009. the option boys are usually smart. they are paying premium. they're getting ready for more pain in sterling. what do you talk about with brexit? jeremy: it was interesting, talking about people postponing investment decisions or consumer spending. that will be the real risk as we run into june the. it will be this time of instability. we will see investments plus
pound. the u.k. has large accounts which rely on foreign investment inflow. forthcoming,not then inevitably that does suggest that sterling will continue to remain under pressure. underlying wife -- why we will talk about these levels this millennia terms of cable which is just north of 135. that seems to be a level that will be seeing sooner rather later. 130?: could we break it didn't seem that extreme. jeremy: it doesn't now. those only in the middle of the week. in a sense, we have moved a long way. surely sterling is looking at its lowest but it is the weight of fast money still suggesting we want to stand aside until
there is some clarity. the risk if we delay -- that could cause further pain is for a sterling is concerned. manus: this is monumental. i've shown as a couple of times. i was looking at the year to date, jeremy: what if you take it out to three months? manus: let's do that. i can do live tv. 15% over the year to date. jeremy: that underlines the pain that we have seen. for those people considering that from a continuous me realize, you sent there is a personal ramification to this that we are seeing the
pound or much shorter distances in terms of being able to spend across europe. that is the legacy being stirred up by brexit. manus: talk to me about -- to what extent is sterling underpriced with brexit risk? i talk with someone the other ay who said that brings different conversation. i want to talk but for exchange the quiddity. liquidity. is sterling priced at 130 54 brexit? jeremy: no it isn't. if we wake up and have seen the u.k. voting for exit, the new were trading at 135 going into the exit polls. one would suspect we would fall fairly substantially below that. liquidity is an increasing issue
in terms of the fx space in times of stress. manus: if we can just pull the chart back up again, it is basically talking about in times of stress this is october 2014, you were looking at this shift in terms of the quiddity -- look tliquidity. you are seeing some big moves. you can see really radical shifts. are you seeing that? are seeing that even when trade is going to relatively small tickets. your find in the market is moving much smoother than you would've normally notice. i have been around traders for a prolonged time. liquidity is very thin.
it is more difficult to call as a consequence of that. --xit will just and a lot emphasize that. next price will not be 134, it could conceivably be five or 10 figure sewer. manus: the older relationships -- figures lower. manus: the older relationships are breaking down. it is just diverging, that was a breakdown in correlation, isn't there? jeremy: correlations are not working as well as they have. in a sense, we seeing investors trading on fear. as a consequence, that has been has donehat the yen comparatively well. that is not because all of the fundamentals of japan, or the
room to maneuver. china's central bank to the kids monetary stock. there are still tools available to spark growth. germany's finance minister opposes any stimulus plan from the g-20. we're live from shanghai with the latest. the campaign to keep bridge and in the european union -- britain in the european union. fifa will choose its next president. ♪
manus: welcome to "countdown." 2016ll be a safe takeoff, will deliver a profitable growth. similar to 2015. buckle up, the top operating profit comes in at 2.3 billion pounds. this is trying to give the market a little bit of guidance in terms of what we can expect. of course, everybody is saying that the opportunity for the airline in terms of the monumental shift in the energy pricing is going to be quite substantial. for the first quarter, revenue evolution looks as if it is in line with the fourth quarter of 2015. this is version much but a forward-looking statement coming from iag. they are saying it is a simplest
jewish and what they saw last year. let's take a quick check on the futures. we have london, paris, and frankfurt all around 1%. the s&p 500 of course has undone all of its losses in the past week. undo all the losses that started the year to the month of february. the u.s. equity futures also indicate higher at the moment. are getting breaking numbers across, let's get to caroline hyde. how does it look? caroline: pre-released they had a profit warning now have the numbers in full for their full-year. we are seeing a seek to approval to pave 1.2 billion pound diffident access share. this is important, this has to do with turnaround after the bailout. they had a 45 billion pound payout and they're looking to
start to return to normalization. they are saying it will seek approval to pay 1.2 billion pound dividend access share. we're seeing a full-year net .oss close to 2 billion pounds that is in line with expectations, even bigger losses of 3.5 billion pounds. some improvement so that the losses are reducing. they had to set aside significant money for u.s. litigation. as well as the pension they have to give more money into at the moment. they're saying overall they took two point 9 billion pounds worth of restructuring costs in the full-year. bankaxpayer held the dropped 11% in the year. this is a company with a loss, but with the annotation to hopeless a dividend in the future.
manus: you also will get us up to speed up believe in terms of what is going on the bloomberg's first word news. nejra: china central bank has tweaked its stand on monetary policy calling it prudent. this reflects a recent ramp up in projections to guide the money market slower. that came after the head of the pboc slot to calnm fears. the governor said china scylla's room to stimulate growth if needed. -- still has room to stimulate growth if needed. >> we have some money for policy space. there are downside risks. improving monetary policy. meanwhile, germany's
finance minister says he opposes any stimulus package from the g-20. instead, he wants to focus on structural reform. monetaryhe space for policy has been exhausted and warns that get in the fund fyingh leads to zombi economies. the threat of brexit is hitting sentiment in the u.k.. the upcoming referendum could curb housing activity. economic optimism has plunged to the lowest in almost three years. the pound has also fallen against the dollar and is headed towards its worst week since 2009. football's world governing body chooses its next president today. all saying they are committed to restoring fifa's reputation. latter, who's a 17 year presidency was cut short last
year by an unprecedented corruption scandal. manus: let's get you up to speed now with the asian market session. the president of the central bank of china saying our dashboard has lots of buttons on it. afraid ofnot be acting in terms of the asian session. they were really cheerleading for much of this morning ahead of the start of the g-20. no fundamentals expectation that you should have in terms of further depreciation for the yuan. he suggested the outside world was spending to much time focusing on china's foreign reserves. about theo talking government knows that supply-side reform is key.
to country will continue integrate medium to high levels of growth. all of these things are actually starting to instill a sense of calm across the asian markets. plunge, more than 7% down for singin yesterday. in particular, we saw some of these industrial names, the steelmakers and coal miners have done very badly beaten down. they ramped up 10%. further industry consolidation, of course, after the g-20 passes because next week already worried about the next congress which is a key parliamentary session getting underway in beijing as well. supply-side reform is expected to be a key part of that policymaking. in japan, we had a slightly weaker yen which was good for
exporters. core inflation coming in near zero, very far from the 2% target despite negative interest rates. quickly, these were some of the top movers. sharp plunging again. they said yesterday it shared 14%. this after news came out that foxconn said it will avoid any final agreement with sharp. in light of new material information that has emerged. no more data on that, but that deal seems to be on hold for now. it is certainly a better and to the market. haidi, enjoy the weekend. great job this week on the markets for us in hong kong. the pboc governor has a few
things to say about the central bank's ability to stimulate the chinese economy. -- what thee the markets really wanted to hear. let's get to david inglis in shanghai. tell us a bit more. you are saying that the dashboard is alive and well. there are options on the table. david: i mean, there certainly are. good morning, i was asked at that keynote address. also it begs the question, he in english. that points to one of the bigger issues that china is hosting the g-20. them tos pressure on come out and clarify their plans. that being said, nothing groundbreaking. real rates are still
a little bit higher. that is where this debate comes back to square one. timeo you ease at the same keep stability in the currency? in the current situation you have capital outflows, and a small portion of those are speculative. how do you cut rates, and cut a situationmple, in where he don't want to exacerbate those outflows. as far as those foreign reserves are concerned, he basically said don't focus too much on that. we know there has been some hichern on the pace at whci china is going down. he says it is a short change and they are able to handle that.
asked him what happens now, how long the china have if they continue to intervene at this current pace. he basically said one year. that gives the pboc time to establish credibility. sound words, he gave some piece of a device -- establish a range. for the trading range when it comes to the currency. some downwardsee depreciation or downward pressure. david, thank you very much. great job in shanghai. the global market shortages at j.p. morgan, always great to get them into the hot seat. a lot to discuss, have a look at this. the world is waiting for the g-20 to give succor and life to
the rally. the yen, andg into world bonds, what do you need to hear from the g-20? are you please with what the president said? monetary policy is still on the table. >> this is along the lines of many central banks. your hearing them still having tools, and are still ready to use them. speech, and it's a good message. it's what i would expect for someone working in the economy and the markets. manus: what would your best case -- but are saying what they need to the rebalancing story and provide a sufficient floor. how does that translate for j.p. morgan? what is the floor? is it cuts, or a steady low slow drift in the yuan. nandini: general monetary
policy, we're looking for continued monetary cutting of requirements. they want to let prices determined the actual price of the exchange. we still expect further devaluation of the yuan this year. we're thinking around 6% devaluation further this year. i think it is interesting, that is not a surprise. we should be expecting that. every time there is a devaluation markets have fallen drastically. at some point we need to get ready that they will do it. is that what the g-20 needs to deliver? there was a great line, man up and tell the member countries they should accompany expansion.
if we don't get a fiscal expansion out of the g-20, it is just a talking shop. monetary policy has been front and center for several years. at some point, the actual economy and policymakers needs to come through. that is what will stimulate the economy. me, there was a manner changed his mind if you times. it is governor mark carney in terms of his perception of what is going on in the world of fx. mark carney: it is critical that stimulus measures are structured to boost domestic demand. sectors ofy, those the economy that select healthy balance sheets. there are limits to the extent to which negative rates can achieve this. he is stating the obvious there, there are limits
to which it can help. in japan.ing that i think that is the very personification of kuroda. still buying the yen. that may change, you make it domestic japan investors flipping over into foreign assets. but carney is right. missions can simply export their problems. there is no free lunch. -- nations can't simply export their problems. there is no free lunch. there's the dollar have enough of their strength? the fed keeps mentioning this. it is tough because the dollar has increased so much over 2015. with all these other central depreciating their currency, the dollar sort of has no other place to go but raise. expecting aully further increase in the dollar as we saw in 2015. but that is the call that we're
pretty stable on the dollar. .5%s: i had put 5% -- lower. have an exactn't number on it. we don't expect for the cuts. the system is innovating where you can not hurt the profit of the bank while still to the money flowing. that: you would get into -- we will get into that. one person seeking support. the u.k. chancellor looking for help in shanghai. he battles the brexit debate. ♪
let's gige up to speed with what the price features are. we are up over 1% of the paris market. up, we're seeing quite a nice boost to the european equity markets. the s&p finished with a seven-week high yesterday. is rallying, and oil is trying to make a decision as to where it is going. -- theydicating that have scope. talk, the markets react. caroline hyde is here. the royal bank of scotland has reported a loss. the largest taxpayer and lender said its net loss towards 1.9 billion pounds first of the company also said pretax profit fell about 20%.
it missed estimates. annual profitts forecast -- cut its annual profit forecast. the videogame maker said $219ting income will be million. as reported a loss. the second-largest one company posted a net loss of 1.8 3 billion euros. it slightly beat analyst asked mets -- estimates. manus: thank you very much. u.k. chancellor is looking to use the g-20 meeting in shanghai to drum up international support for britain to stay in the european union. was yesterday come
meanwhile the threat of a brexit is hitting sentiment here in u.k.. the up-and-coming referendum activity. the measure of consumer economic optimism has plunged to the lowest level in three years. brecon -- back in the global market strategist for j.p. morgan. is gathering as many forces around him as he possibly can. with sterling taking a battering, how do you prepare for brexit at j.p. morgan asset management? way.ni: no, there isn't a in a more extensive view, you don't know what is going to happen. markets don't like uncertainty.
it isn't a surprise you are seeing the pound the fall. we think the pound will again if ify stay in the -- will gain they stay in the eu. value in therent pound. it will not fall too far below some of those -- event of notin the voting for brexit, let's look the conversation. what we have here is option traders paying extra premium for this. a hefty premium for an armageddon like scenario. on the flipside, i see people say the rally to 160 if we don't vote for brexit. nandini: the uncertainty is calling me unassertive fault not
necessarily related to its fall. inis all -- we will find out june. manus: welcome, this is your first time on bloomberg. you are welcome back. let's talk about stocks. 12%,s are up, we are up leave the yen out for the moment. are you glass half-full or half-empty? : i am a medium to long-term investor. we don't think it will be a massive bear market this year. this is par for the course. let's see with this takes us, the data is still mixed. i am not in panic mode at all. manus: i like that. one big thing coming across the bloomberg throughout the week is emerging markets.
is pullede done here up -- you have identified this as well. .3,rging markets priced sub 1 do you join the club that says great value? or is it a value trap? how discerning to a need to be? nandini: very discerning. we are still cautious on emerging markets. it is fair to consider if this is now time to buy. the interesting thing with this is that there are some countries that we are more constructive on with a macro story. their price is actually quite high while some are finding a bit more pessimism regarding markets. the story is not quite get resolved like in brazil. you have to be very picky
about that. where evidence is quite structurally sound. if you are very selective about it, you can get a good price. you should ask of the russian currency when you get back to the office. when you look at europe and bullish are you on those two? risk or reward? nandini: i am pretty bullish on europe. draghi is doing all that he can there. we will see what happens in march. manus: thank you so much for joining us this morning on bloomberg television. until the opening of the european trading day.
so your business can get back to business. sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. diving welcome to "on the move." we are counting down to the european open. i'm guy johnson alongside hans nichols who is in berlin. china says it is not done yet. the head of the pboc says there's more scope to act. the right tool for the job. wolfgangnance minister schaeuble says structural reform is the only way forward. mark carney warns on negative rates. who is right?