is it better to travel then arrive? what would impeachment really mean for brazil? welcome. where a half hour away from the open. let me take you to the bloomberg did let me show you where we think that open is going to be. it is a shortened week, as a result you may not see the volume you normally get. we will be opening softer did the euro stoxx down by .3%. the cac looks like it is going .6%.en softer, down by what else is on the move? king dollar. what is happening as the recent move down -- has the recent move down started to run out of steam. you -- it is up by .1% good crude, that fellow friday, it has extended into monday. we are trading on the brent contract, just north of 50. we are going to talk to a major out of nigeria. shanghai very strong. that rally continues. take a look at gold. check out the gold-silver ratio. let's talk about what we need to know good here is the bloomberg first word news with timothy loehmann often. -- above 50,000 level for the first time in two months. that is after policy makers loosened controls on margin lending good the imf managing director christine lagarde has said china is on track with its reform. expect to be more difficulties. >> the transition is going to be good for china, it is going to be good for the world. unlike any transition, it will not go without some bumps on the road. we should expect that it there is a delicate balance to be struck -- expect that. there is a delicate balance to be struck between reforms that need to be accelerated. kumutha: malcolm turnbull has set the scene for an earlier election which is seen both parties in parliament resolve. senate passes legislation to crack down on trade unions. >> instruction by the labor in the green in this administration must and. the senate will have an additional three weeks to deal with the abcc and registered organizations. plenty of time to pass these laws. if the senate fails to pass these laws, i will advise the governor general to dissolve both houses of parliament. kumutha: barack obama has arrived in a rainy havana for a three-day visit, becoming the first sitting president to travel to cuba since calvin coolidge in 1928. obama will meet cuban president later and urge the communist government to seize a historic opportunity. turkish authorities called off the match. two hours before kickoff, setting and assist best -- and unspecified threat. it came after a man linked to the islamic state carried out a suicide bombing on saturday they killed four people. the bank of france conference in paris is taking place in paris. both bank of france governor and richmond fed, jeffrey lacher will be speaking. the comments come as global central bankers wait further -- wait further into territory -- into unknown territory. guy: picking up on that point, bloomberg spoke to imf managing director christine lagarde who had this to say on negative rates. >> if we had not had those negative rates, we would be in a .uch worse place today with inflation, probably lower than where it is. with growth, probably lower than where we haven't. was a good thing to implement those negative rates. guy: she is a fan get but the ecb is discovering, it can't push banks to lend. european banks have boosted deposits at the ecb. not necessarily the kind of policy outcome that we were looking for. for more now on the effect, let's bring in daniel morris. bloomberg's first word strategist, simon ballard. good morning gentlemen. on one hand it is working, because we are about to hear from simon. the credit markets are alive and they are happy. on the other hand, the deposits are back in the central bank, not necessarily. is it too early to make a policy judgment? early and we too will never really know. we have seen that a growth recovering given where we are in the cycle and is expected to pick up. it is going to rise. draghi will say this is what we did. i think people are right to be concerned about the negative impact. is itimon, give us -- this is going to happen anyway? simon: with the corporate bond market has been introduction of the carbon bonds. the -- was the corporate bond broken? arguably no. as it fueled and sent the market through the roof in terms of interest, a level of activity that christine has been huge. bettingseen the abf -- 2.5 billion. the largest in the eurobond history did the label of activity -- history. the late -- the level of activity. investors chase yields down the quality sector has become a self-fulfilling. guy: this is good. this is money going to function parts of the economy. are seeing ise another distortion that we have added to the bond market. that is going to cause its own problems. you're giving advantage to certain currencies. money is not being allocated in the most efficient way but anyway that takes advantage of the policy. second nearly, if now these companies to borrow, it is asked -- it is worth asking to what end? pushing lending to places where it should not go. now we are trying to unwind it. there seem to be -- guy: what would it take to make you think it was going to work? simon: i think we're looking in the wrong place for where solutions to come here it -- come. it is having opportunities to invest it did that seems to be a challenge for a lot of companies across the eurozone. guy: simon, you're nodding your head. you got to start somewhere. every journey starts with a single step. we have had a lot of steps. nevertheless, we are starting to get -- you got to get money into the economy. .imon: let's take a step back it is not a question of credit issues. it is not a question of solvency the injection of negative rates more and more broadly suggest we have a problem with somebody did we don't. the french retailer has been downgraded from double be -2 -- plus. minus two double be plus. it is being held on the banks balance sheets. there isn't -- is ok for me to have cheap funding. are we going to end up in a situation where the market becomes -- that gap is going to become wider and wider? simon: i think we have gotten their. much more is idiosyncratic. analysis is much more important now than over the last 18 weeks which is been much more macro jib and. -- macro driven. challenging macro backdrop. ,hort-term, you probably could because whatever they are going to buy. longer-term, no, you want to make sure you're not holding the baby with the bond water. guy: daniel, the idea of the negative rate is that still the -- we still do not know where the banks can lower their cost for your four years out. isn'tta we have indicative of that formulation. the currency as opposed to lending. we've been talking about the dollar, just the fact that europe is supplying more money. that might be the better benefit the necessarily the lending spurt. guy: we will put this up on the screen for you did we have the governor of the bank of france speaking at the event in paris. we will bring you headlines on what he has to say on the very subject we are discussing. we will come back to that. we will be hearing from this gentleman as well now. we make sure we will have all of what we need to know. simon, thank you very much indeed. . -- indeed. party, david cameron with the key cabinet members says spending cuts were 2-d. we'll discuss that story next -- too deep. will discuss that story next. ♪ guy: 44 minutes past the hour. welcome back. let's get you caught up. here is the business flash with kumutha ramanathan. mettha: mark zuckerberg has china's property and achieve. that came while the ceo was in beijing to attend an economic forum. facebook and other foreign social media such as twitter are banned in china. casino has had its ratings slashed to junk by standard & poor's. s&p says the long-term debt rating was cut due to a weaker than expected earnings in 2015 and a loss of business as a result of disposal in asia. the retailer expounded -- responded. will executive officer retire on december 1. one of the largest international and sure will split his hold with thomas a bear, becoming dacosta did -- on ray maybe the front runner. that is bloomberg business flash. guy. britain'split in conservative party worsened over the weekend. the support of the brexit unexpectedly resigned. -- the supporter of the brexit unexpectedly designed -- resigned. quicktime resigning because i want my government to think again about this and get back to that position which is about being one nation. this is not some attempt to attack the prime minister. it has nothing to do with that at all here if i wanted to do that, i would have been clear. guy: a new study says leaving 100union my cost the u.k. billion pounds in lost economic outputs and 950,000 jobs by 2020. i want to take you back to the beginning of the competition we had and talk about what is happening with the dollar did everything seems to hang around it. let's look at what is happening with crude. the dollar story is front and center. everybody seems to be interested in what is happening with goldman sachs. they are sticking to the idea that it is going to see three hikes from the fed this year. this is the chart that we got up on the bloomberg. basically it is the dollar swap index. the speculative dollar -- this is the data, let's talk about with dan morris. everything seems to hang around the dollar. getting the dollar right is absolutely critical to your investment thesis. how do i make that happened back up daniel: i think we want to look -- happen? daniel: having want to look at them printing the money that will weaken the euro to some degree. how far defense that's back -- how far the fed steps back. how comfortable they are with iron inflation. i think that is likely to persist for a while and we can work through the consequences in our asset classes. we'll get back to the store dollar mode. guy: goldman sachs is wrong? daniel: it is a question of timing. highestdid give me the -- ok. give me the highest beads of trade on the dollar. oil is one where we are going to see a lot of correlation. that is speeding through -- that is beating through to equity. we have seen the trade of the last few days. long oil, short banks. who is going to benefit from this? who is not going to see any pickup and the benefits coming through? -- latter is impaired the weaker dollar, all of the concerns we had about the exporters, some of that should reverse. domestically, it is going to be less clear, the impact in terms of what you see in the price of petrol. less clear from the sector basis, probably more evident at the higher level. guy: moneys been taking out of the european etf. everybody and their dog was long european equities. not so much anymore. why? daniel: that explains the reversal that we saw in january was so severe that at the beginning it was such -- when you have so much positioning. i think one thing that is healthier but the market is you have more divergence in the views and we had the beginning of the year. you can have a story that is more positive for u.s. equities versus eurozone. i think what we are looking at is with a weaker dollar, better for u.s. equities. the longer-term story for eurozone is still there. better profit growth potential than you have in the u.s. ex line the question of when that is going -- u.s. the question of when that is going to be realized. talking and saying the market ecb action very substantial. the priority very much to look at a credit market. he is saying the ecb cannot create conditions for a sustainable recovery could coming back to this notion that we need to see fiscal authorities doing more. what is interesting is the policy formulation does show the ecb is not done yet. there are things still to do. it does underline the ecb's resolve to tackled the low inflation that is currently being experienced within the eurozone. we are nine minutes away from the european equity market open. we will look at the potential corporate moves which includes axa, the ceo and chairman will retire in september. where is he going next? ♪ guy: welcome back. six minutes until the market open it with stocks do we need to be paying attention to? caroline hyde. caroline: i want to keep an i on this morning, because the gains are in the tune to 3%. after the rough white -- the rough ride we have seen, the chief executive could be set to resign. he is marco catalano discussing his resignation. power ofll about the the vendee. -- of vivendi. they hold about 24%. the chief executive of vivendi, the billionaire could become in charge. reaffirming his group over telecom italian. he wants them to get out of brazil and focus on italy to if they do sell the brazilian unit, they could help stock -- help drive the stock price higher. given i on axa -- keep an eye on axa. did fromto their board here we can see that henrie de castries is going to be stepping down. almostepping 16 years he has been at the helm of the company. could he become the next chairman of hsbc? thomas bluebell will become the next ceo. he is currently deputy ceo. watch for that change. it could fall on the open -- it could fall: the open -- it could fall on the open. s&p has cut their rating to junk it all of this that from 10 billion euros worth which are in the green in terms of bonds which are in the blue. a lot more costly to raise more debt. borrowing costs could rise if s&p cut your rating to junk. guy: looks like the cac is going to be in an underperformer this morning -- going to be an underperformer this morning. next. ♪ guy: good monday morning. welcome to on the move your diane guy johnson. moments away -- welcome to on the move. i am guy johnson. goldman sachs holding fast to its bullish gains. investors agreed it -- a great. whatever it takes. concerns on deposits are boosting bank lending. the latest piece in the policy puzzle good plenty of ecb speakers right now. better to travel that arrive. is in need for the brazilian markets. we will talk about that in the next hour. the cac is going to be an underperformer. members trading on the ftse 100 today. less than about this open. let me hand you over to caroline hyde. caroline: could we see money coming off the table? risk-taking and the risk aversion within the equity market? we are seeing dollar to reassert some of that strength as it taking -- strength. is it taking money out of commodities? you said about this new entrants to the market. cac you said will be the underperformer good we haven't seen after all of that sway of central bank news coming out last week. now just tentative cost is trading. it is easter week and we are going to have a shorter week. only one stock is rising on the cac at the moment. on the downside, it is the miners did accept we are going to be digging into that story. but you 100 down by .4%. -- meanwhile, the miners, glencore on the downside when it comes to ftse 100. keep an eye on the miners. they are being hit by the slump in metals prices. the dollar slump. we've got the euro down. ecb members once again should not go lagging there talking. the dollar.250 on -- 1.1250 on the dollar. goodat that gold up by 1% keep an eye on oil. down by 2%. oil rigs increase by 1%. worry about the supply side of the equation. up .4%.e, risk [indiscernible] worries about what that will do two-week crops. weakhat that will do to crops. the chairmaner -- of vivendi would like to see focus on ecb and get out of brazil. by one andccept down a quarter percent. earlier --ll leave henrie de castries will leave earlier than expected. guy: thank you very much. let me take you to the map and show you what is happening. the wheel of fortune. a little bit of red care the best performer. -- a little bit of red. the best performer -- a little bit of red. health care, the best performer. and the oil stocks that are getting shut down this morning. financials are low. that is the axa trade we are seeing this morning. you can see where he goes. let me take you to china and the chinese policymakers. concern about a surgeon leverage. the conclusion that nationals people's conference meetings to show china's priorities showing growth for years to come. development said china would do whatever it must to adjust the situation. all ourll strengthen our regulations and tamper risks to the stocks, bonds and foreign exchange. and make sure there is no risk. this is our bottom line. in jeff kearnsg in beijing. another economic concern is what do they make of it? message is there is a lot of risk out there. they are still deeply committed to the 6.5% target. they have all emphasized they can do it and it is within reach for the next five years. that is the message from the president. they're all talking about this and this is something that has been emphasized over and over. they talk about the risk and one of the risks that we have heard about is the risk of debt building into the system. 250% of gdp is where the level is now. that is one of the key risks they are working on monitoring as well as risks in the most in banking sectors. guy: a thought about local government. how concerned are they about government debt? how much control do they have on the ability of local governments to raise more leverage? is the key question. we do not know all of the details. they have not been laid out for us. there is a lot of different debt levels and different government agencies. -- the risk he sees in the real estate sector. he says the divergence between big city will stay prices and places like shanghai and beijing. bankss directly to the this is something you need to be watching out for. this is something you need to monitor and make sure you know your customers. this is a pretty straightforward warning we heard during the national people's conference a few days ago. guy: great stuff. jeff, thank you very much indeed. jeff kearns, china's economy editor. joining us now, monaco asia. a.joining us now by new wage bhanu.rning bono -- bhanu: i think the pboc is worried about leverage. growth at any cost. sometimes chinese policymakers speak -- this is a bank is worried about leverage. this level of per capita income, china has more compared to japan and the u.s. good when you normalize it for the state of development, china has more leverage than any of these. if growth is a priority, i think is leverage is going to go high. how much growth will this be able to get? the incremental capital output ratio is rising. you require more credit to generate the same amount of growth here it leverage in china -- growth here it leverage its -- growth. china is leverage in going to grow. i'd think they want -- i think they want reform but not at -- leverage is likely to go up rather than down. guy: for how much longer? when does it become unsustainable? bhanu: it becomes a problem for the banking system. property markets may impact the government and the banks balance sheets. that is something we need to watch. china can run this for another three or four years before it reaches debt. your deficit goes toward 90% of gdp. when is a augmented, i am included the local government -- when i say augmented, i am including the local government. 60% and rising at the pace of 10% a year. that is one thing we need to watch. i imagine when china gets to 100%, you will push the limits. ,aybe the wrong way to play it but you will see a significant drop in growth. the property market is key. it is the collateral of all lending in china. while it is a different problem for the u.s., construction-- the companies are quite lowered. you still have very high ratios and rising. guy: daniel, that raised a few eyebrows. how do i invest around that? daniel: this is old china versus new china. you have overcapacity concerns. you're going to have layoffs and restructuring. it is notable that when people talk about whether emerging markets are cheap and you look at buying wishes, you see the index that is china that appears to be cheap it within china, it is the banks that seem to be cheap. you're in an environment where it is cheap for a reason. we need to focus on the growth opportunities which are there in china. there are sectors that we're not focused on in the past. travel and so on that we know is shrinking. guy: waiting for the housing sector of which everything seems to be predicated upon to actually start to have its foundation shaken a little bit? daniel: it seems nasa much inevitable very likely to happen -- it seems not so much inevitable but very likely to happen. the is going to be concerned at that it will become unstable but not for a wild. -- but not for a while. bhanu: china is a part of the global economy, so from that aspect it will be a bigger impact. crisis, you'vean got a credit problem in the u.s., it impacts the rest of the world, it will be smaller. guy: we will wrap that up right there. thank you very much indeed. bob.l morris from bmp bear -- from bnp paribas. we are good to speak to the chairman of the biggest nigerian owned independent oil exploration company. that is coming up next here on on the move. let's take a look at what is happening in paris. you recognize that guy. he is speaking in paris right now. we will monitor what he says and bring you those talks in a moments time. ♪ -- any moment lost time. time.a moment's ♪ guy: 13 minutes into the -- -- has said china is on track to its reforms and expect more difficulties along the way. >> the transition is going to be good for china. and good for the world. and like any transition, it will not go without some bumps on the road. we should expect that. there is a delicate balance to slowingk between a deliberately slowing -- the liberally slowing economy and reforms that need to be accelerated. obama hasarack arrived in havana becoming the first sitting hesitant to travel since calvin coolidge. he will urge the government to see the historic opportunity. turkish authorities called off istanbulall match in about two hours before kickoff, citing an unspecified threat did it came after a man linked to these islamic state desk to the islamic state carried out a suicide bombing that killed for the people. -- to the islamic state carried out a suicide bombing that people -- 40ple people. global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. guy: everything seems to hang on the dollar doesn't? -- dollar, doesn't it? one more rig coming online. doesn't that make a difference? this is a dollar trade, but as you can see, nymex trading down. the brent trading down by one in .5%. -- trading down by 1.5%. the data is interesting because people are paying attention to lyat happens next, particular with this meeting that is coming up next, with these numbers of opec. here is a composition that we can bring you now. let's talk about the chairman and cofounder on the nigerian stock exchange. good morning to you, sir. thank you for speaking to us. can i ask you a straightforward question. which level of oil price is -- is your firm comfortable with? cooks the level of comfort in terms of oil price depends on capex.el of what we have kept our eyes on is the collapse of the oil price and cost reduction, making sure capex andn the essential operations. one of our things would be to remain at the lowest level of production in nigeria. that is an idea that our company will remain profitable regardless. guy: clearly there is a lot of politics involved. where do you see the story going over the next few months? when you look around the world, what is your expectation? mostthe oil price like commodity markets is very cyclical. they we're seeing the lowest ebb of that volatility. whatever one is clear about is this cycle will continue good no one can say whether the oil price -- say where the oil price will be. a very close eye on the fundamentals. the equilibrium of supply and demand will be good there is spec -- will be. there is speculation that has been driving the price. demand thatreasing we are seeing, with the reduction that has built up around the years, with the arresting of the oversupply growth, we are expecting some bloods in the market into 2017 and beyond. guy: you don't see any reason for big suppliers, opec to get together and talk about production cuts. there is no reason for that right now? abc: i think the dialogue within opec is encouraging. opec has come to terms with freezing could -- freezing reduction. -- freezing production. our we are beginning to see companies -- you look at the very gross reduction -- gross production. there is going to be some constraint and supply in the medium-term. this will be a stabilizer for price, regardless of what you're beginning to see at the present. the price can go anywhere. i was expecting to see changes. prices are the way they are today, we are going to be seeing constraint and projects that will increase supply. we will believe the supply supply -- the supply demand fundamentals will see -- guy: d.c. supply picking -- do you see supply picking up? abc: africa demand is rising good -- is rising. we are seeing that improving. if you look at the global demographics, you will agree with me that even though there has been oversupply for the past number of years, demand will continue to grow. even when you the emerging markets, india is very aggressive with growth. though itrowing, even is been less than expected. what we have seen in the manufacturing sector in china has not increased demand -- increased demand as expected. abilityhese shows the -- shows stability. has your company effectively stepped into places within the delta of nigeria, shell for instance,, gasquet to the risks that that has generated and how your -- can you talk about the risks that that has generated and how you are managing the risks? pioneered the acquisition from shell. -- what thatthe speaks to is our ability to engage in a proactive manner the nigerian host community and situate that we develop a win-win strategy. another thing that we have done is to make a strong statement to -- once you have a corporate government, you're bound to make yourself a very important entity as a destination for investment. we pioneered the dual listing of our securities. this made us more visible. it encouraged and delivered on promises that we made. it is a major driver for economic growth and diversity in nigeria. guy: thank you very much indeed. the chairman of sepp blatter joining us. to look at our charts of the hour. find out why the dollar's movements are interesting. that is next. ♪ guy: welcome back. an american in paris, mr. lacher speaking in paris. jeffrey lacker talking about where he sees all types of things. what is interesting is what is happening surrounding the dollar index. the bloomberg dollar swap index. it is heading toward his worst month. is trackat i have done that bloomberg dollar spot index against the treasury two-year yield spread to its g7 peers. the spread has narrowed. the dollar has come down except in the past few days we can see the little rise and the white line at the end. -- rise in the white line at the end it -- at the end. the treasury lose its desperate treasury loses its advantage. -- the treasury loses its advantage here it a correlation -- the treasury loses its advantage. the dollar yuan has been falling. goldman sachs has been holding on to its alleged stance on the dollar. -- goldman sachs has been holding on to its bullish stance on the dollar. at the end of last week, it fell below $30 signaling it is time for the dollar to rise. guy: bono, eu rally? it is down to what is happening with china. up.as boosted commodities that is helping e.m. the fed has dumped emerging markets as well. the run has been externally strong already. in the e.m., you do not see this relationship, in fact it is the effects that is -- rather than the other way around. that is why i think emerging markets -- [indiscernible] coming up.rom bhanu we will talk more about brazil. we will see you in a moment. ♪ tom: welcome back. we are half an hour into the trading day this afternoon. here's a picture of the markets. we have a short week. you'll see some volume coming out of the markets. the are fading some recent rallies. friday was an interesting day. out. find am looking at italian lenders as well. they are doing some of the most outperforming. they are up 3.4%. this continues across some of these key banks and players. they might be studying and writing ship. -- writing the ship. this is one of the performers. the spanish company is up 3%. why? dividends. dividends will be improved. they will pay out 66.6% this year. payout willd, the be up to 70%. more bang for your buck, more bang for your euro. downside, most of the stocks are on the downside. we are down about a half a percentage point. there is nothing like these changes of the guard. they are rearranging the deck. look at the news coming out of many other companies. this is down to .6%. they made him the new financial officer. he has decided to leave. they had a wholesale change because the ceo was ousted last month. the cfo is not being liked. they are changing to another cfo. back to you. guy: thank you very much. let's get back to the emerging markets. brazil is set for another week of high drama. they're drafting a recommendation to impeach the president. 68% of the nation supports ousting the countries leader. that's up from 60% in february. let's talk about all of this. let's bring in our emerging markets manager. justin, how critical is this week? justin: very critical. we have this multi-party committee meeting today. longnot really clear how all this is going to take. they are going to be deciding effort this procedure an to the impeachment vote for the senate goes ahead. it's a split committee. slightght -- it's a advantage in terms of numbers. anything can happen. are building pressure on recep. there is a massive protest. we have seen not so many over the weekend. we saw a record numbers of people coming out in brazil last week. it was a spontaneous response to her effort to get on board the cabinet. it was sure her powerbase. some saw that as a cynical attempt to protect him from police investigation into this corruption investigation it's been going on. seems to me this assumption among international investors that an impeachment would be a good thing, it would positive,ely easy and you are extremely experienced in this part of the world. with that the your take of the situation? justin: it's very different now. as this came to the four, investors really thought this was a bad thing. any uncertainty around the a cause for worry for investors. now it's come to solidify and the prospect that she could get kicked out of government has brought some relief. thee are people saying impeachment is priced into the market. it's one of the best forming currencies in the world this year. the stock market is up 28% this year, more than any other around the world. we are seeing brazilian borrowing costs. this is often to what's going on at the moment. if she goes and there is a new government coming in, how do they address the very real structural problems that still faces? that's a good question. guy: one that investors will start to think about as we work our way through this week. it was great to hear your thoughts. he is our emerging markets managing -- manager. we have priced an awful lot in. this kind of shows that this yield on new brazilian notes, you can see the rise up as we worry about it. we start to talk about impeachment. out?e trade long in, short i'm not suggesting that's going to happen. from a debt market perspective i think that is correct. they can still come in a little bit more. the risk dream is so negative that doesn't make sense for locals. that still makes a lot of sense. if you want to take only dollar debt, you still get paid 7%. that is quite high. from this level, you have to wonder if priscilla's going to default in the near term. i think valuations in the equity market for high. they have become much too high too quickly. i think political changes priced in. if we do get political change, it's not clear that we do, the problems are so real that many of them are linked to the laws and not the ideology of one government. it will be difficult to change that. 2014, brazilober has come down a long way in economic terms. i think the equity valuations have run higher than they should. tom: there are other factors. china. we've been talking about the growth story coming out of that. the mining stocks are rallying. there are other factors in the mix. bhanu: mining and energy have performed everything in the markets. the key question in e.m., you've seen them warm very well. in emerging markets, you've not seen growth surprises like the u.s.. total social financing number in china. china credit is the only thing that is flashing greece. our prior is that it's unlikely to continue at the same price. it's been expanding for the better part of six months. you only see that now in commodities. i think this is a rally that we should be looking at. i think the -- guy: you think it's a gentle slope? , itu: it's penetrating depends on your vantage point. you can see this go back very quickly. there is the view that e.m. is cheap. say we're going to retrace on equity. where my going to get the biggest bang? i want to long the debt in short the equity. bhanu: materials have gone up far too much. guy: geographically? bhanu: brazil, i think you will see a big pullback. guy: everybody is very excited about cuba. the president is there. we still have an embargo on. is this for investments? these stories are very good stories on the tenure basis. it takes time. we are goingr that to open up tomorrow and that will lead to another infrastructure boom in the world. i think this will be more private equity investment instead of a market that opens up. i think that's several years away. given the volatility elsewhere, you've got to know which trajectory it's on. the price.'s in if you're looking at private equity investments, across emerging markets the passive index has not done a very good job of representing e.m.'s reality. that's a huge part of emerging market growth right now. that's not been represented. it's about commodities and financial. the emerging markets are a private equity opportunity as opposed to public equity. -- cuba will be similar to miramar. i think this is a matter of seven years. guy: thank you very much indeed. next, the supermarket moves in on home retail after a south african rival checks out of the race. that's next. ♪ guy: we're 43 minutes into the equity market session. alibaba has said it's growth merchandise volume has passed the $3 trillion mark for the first time. that's $463 billion. the record figure comes as china moves deeper into the untapped rural areas of the country. jack ma's goal of overtaking walmart. they made $482 billion in revenue last year. china'skerberg hazmat propaganda chief. that came while the first -- facebook ceo was in beijing. facebook and other social media are banned in china. willhief executive officer retire september 1. france's largest international insurer will split his role. over the weekend, the sunday times said he could be the front runner to succeed douglas went as chairman. that is your bloomberg business flash. thank you very much. apple will launch an array of new products, including the new ipad and the smaller iphone. caroline hyde is here to discuss. last time they wanted a bigger one. caroline: there are people still using the iphone 5. they don't want to upgrade. their current phones won't be able to separate -- to the operating system going forward. they want the smaller screen. the larger ones they feel aren't for them. there are a huge amount of people yet to upgrade. havepgrade cycles elongated for apple. it's now 27 months. how do you tempt them to get another phone. similarlyo offer a powerful phone, but the price point is going to be crucial. how much cheaper will this be? 5c didn't work very well. is it looked a little bit too cheap. the price point was still too high. will this one come in lower than that? will it keep it a more premium feel. there are android phones out there that look slick, but much cheaper. the average selling price is $249. the average apple prices far exceeding that. will they just drag down the average price? will they get them locked into the operating system? will they get them locked into the services apple provides? guy: you talk about growth. what does this say about growth? caroline: it's not going to be very exciting. we are not going to be overwhelmed. we are going to be underwhelmed for the rest of the year. the product launch is it going to be as exciting as the watch. we are likely going to see smaller, more functional uses. we're going to see operating systems improved. nothing wholesale is going to change. there is still life in the iphone yet. just changing the price point and locking people into the the last time we saw the earnings statement, and they talked about one billion users. they want to think of apple more --a services company in company. guy: thank you very much inde. let me show you what's happening with the financial markets around europe. i think this is quite interesting. what we are seeing is a reversal of the rotation we've seen is like. the last few weeks have been rotating into the oil companies and out of health care in particular and the some of the more stable areas of the market. that's beginning to come to an end. telecommunications is on the rise. energy and materials, we are seeing a reversal of the rotation. it back towards it. it's an interesting point to say the least in terms of portfolio managers and what they are going to do next. see thearkets, we will easter holidays. let's get some corporate news. we have a big announcement. the u.k. is proceeding with a bid. and here'sbeen cut what the stock is doing. it's down by 1.7. let's dig into those stories and find out what we need to know. charles allen joins us. charles: broadly speaking, it's a response to what i am calling the amazon of retail. they need a broader offer. they need more general merchandise. delivery options. they need some sort of general merchandise and more digital. guy: i was looking at it like john lewis. it worked incredibly well. they want to replicate that. charles: that's there is no. you could say john lewis is well ahead in competing with amazon. he got it almost before amazon. it. guy: it's a very similar offer. charles: it's got the delivery. that's the other point. they've got a same-day delivery option. realistically, it's not their first offer. they did not disclose that. they had to raise the indicative offer. they walked away. guy: will they be on the downgraded? charles: i believe that to a degree. we knew it was a complicated company. they have taken some action to reduce the debt and the french business. is the the key business ,orecast of 900 million euros are they going to make it this year? guy: thank you very much indeed. the questions are yet to be answered. next, long-lived king dollar. -- we will investigate the merits of that trade next. ♪ guy: let's talk about the week ahead. it's a short one. apple will have a product launch today. the race for the republican and democratic nominations heat up. we have an update on u.s. manufacturing. number the durable goods coming on thursday. it's a busy week for ada. -- data. thursday, it will be lightening up. let's welcome richard jones. the story again hanging around the dollar, everything seems to hang around the dollar at the moment. the dollar is still going to appreciate from here? why could they be right? couldd: i think goldman be right. they could be right for the wrong reasons. i think the fed will be more hawkish. they had the chance to be and they chose not to. this is the messaging we will get from the fed. hikes byays to rate the end of the year. one or two is what we are going to get. that point you toward a situation where you think the rates will start to go down. richard: what i think good drive the dollar higher is something we were talking about a minute ago. there is any sort of investor nervousness, everybody will migrate toward the dollar. guy: some people are rotating out of health care and the oil stocks. but what's halfing toil in the last couple of days. that is the story to my mind this morning. richard: if you're worried about brexit, you probably won't sell the pound against the euro. that's compensated. will probably buy the dollar against the pound. it gives you something slightly different from the specific concerned -- concerns. whye are a lot of reasons on a flight to safety the dollar does ok. you are seeing this from the bank of france. the governor is talking about having limits. maybe we haven't reached those limits yet. richard: we've seen the other seen it -- side of the argument. we know what those criticisms are. withouthas argued that negative interest rates, the economy would be a lot worse. lagarde made a similar argument about japan in the euro area. whether you agree or not with negative interest rates, the monetary authorities in japan and the euro area think they are worth doing. i don't see them being undone anytime soon. that may be more stimulus. if your german, do you like negative rates? chairman is speaking to manus cranny. surveillance is next. ♪ tom: francine: commodity stocks lose. the dollar eanes after a selloff . negative returns on the positives are not reaching bank lending. latest piece of the ecb puzzle. after 88 years, a united states president arrives in cuba. this is bloomberg "surveillance." i am prancing lacqua in london. tom, it's a 40 week.

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