It very bruised apple. 45 billion in market cap is lost as a 50 onequarter growth streak is shattered. Has peaked iphone come and gone . We are going to talk about apple and the fed, but its all about the banks. Were going to talk to santander. My assessment of the banking reporting season is expectations were so low that actually trying to make a beat happened and isnt as hard as you would of thought. A good think thats point. Its a lot like the show. Expectations are low. People may watch it. Santander and barclays, even though we did have a difference onbarclays had a big loss the estimates, and santander Beat Estimates one thing they have in common, they are losing loans on commodity loans. That get us back to the oil and gas sector. We need to press them on how bad are their Energy Sector loans. Guy its going to be fascinating to hear what they say about the low Interest Rate environment. What was interesting about barclays, they cut the retail part of the business, which now makes more money than the investment part. Thats a factoid we will bring out later. We are half an hour away from the european open. Let me take you to the bloomberg and show you what is going on. To be honest, its all about the stocks rather than the stock market, and its going to be interesting how everything changes throughout the morning. We are a little bit higher on the euro stocks. Cac flat, and the dax, a little bit firmer. It does seem as if everybody is going to be staying in germany today because of the lufthansa strikes. Hans you may be staying in frankfurt to her that is where much of the strike is located. Onsaw a big move overnight u. S. Inventories. Brent is still up higher. Namely the big story for me is what is happening with the australian dollar. Its down there at the bottom, big loser, down almost 2 . We basically see a flat dollaryen. Lets get to bloomberg first word news with david inglis. David lets get started with donald trump, because he has declared himself the presumptive nominee for the Republican Party. Victorye as he swept to in all five northeastern States Holding primaries tuesday. On the other side, Democrat Hillary Clinton beating Bernie Sanders in four out of the five states. The winds had pressure on their challengers to show they remain viable. Spain is heading for new elections in june after parliament failed to select a Prime Minister for the first time in its democratic history. King philippe a halt to the efforts to forge a governing majority last month. He concluded that none of the candidates had enough support to win. Marks the date as the likely date for a new poll. As we just showed you, the aussie dollar has weekend after inflation unexpectedly dropped during the First Quarter. The Consumer Price index fell 0. 2 . Were expecting a 0. 2 gain according to a bloomberg survey. The shares of apple have slumped in after hours trading, that after Second Quarter sales fell 13, 13 from the year earlier. The tech china is also predicting a further sales slump as growth in china stumbles. Dayal news 24 hours a powered by our 2400 journalists and 150 news bureaus around the world. You can find more stories on the bloomberg top. Guy thank you very much indeed. Lets just talk about what weve got coming up. Earnings, butrate really, its all about the fed. We get the outcome of the fed local meeting at 7 00 p. M. U. K. Time. Economists see no chance of a hike today, but investors will be looking for clues as for the possibility of a rate rise as soon as june. That may be somewhat overeager. Expects as market hike in september. Joining us is first word strategist richard jones. His june 2 soon . To richard i think june is too soon. I expect the fed to play a steady hand, but a lot of change from the previous statement, and i also think i know we tend to be obsessed about brexit in the u. K. , but we have also had the fed saying, and i believe it was Dennis Lockhart saying, that brexit is on their radar, and they are concerned that any sort concerns may feed into the u. S. Economy. With the fed meeting in june a week before the brexit vote, it might be too soon. Guy compare and contrast the domestic story. You talked about the brexit story and what is happening with the boj and ecb. Domestically, things are taking along pretty nicely. Richard for a datadependent fed, and im a bit of the data that has come down considerably since two weeks ago. 2 was the estimate for gdp. Now its about 0. 4 . It has come down considerably. I think a lot of economists are saying, the fed can discount a soft patch in the First Quarter. For a datadependent fed, the most recent data they look at was quite a bit softer than what even as of sixed weeks ago. Im going to think you from berlin. Im also going to apologize i cant be with you in london. Up next, we are joined by the chief Financial Officer of bank go santander. Firstl discuss the banks Quarter Results and the outlook for European Banking. That is coming up next. Guy welcome back. It is 40 minutes past the hour. This is what london looks like. Absolutely freezing this morning, but beautiful. The sun is out. We dont often see that in london. Heres the Bloomberg Business flash. Heres david inglis. David thanks, guy. Lets get started with lufthansa and air berlin, canceling more than 900 flights this week alone, Public Workers demanding a 6 pay increase. Cancer sick cancel 60 of those flights today lufthansa will cancel 60 of those flights today. First quarter adjusted earnings for the energy producer, 1. 64 billion. Thats more than 1. 25 billion seen in a bloomberg survey. Profit was about 37 lower than a previous figure amid a slump in crude prices. Statoil has reported a First Quarter profit surprising analysts who expected a loss. The oil Company Announced adjusted profits of 122 million to the market predicted the Norwegian Energy producer would be 125 million the opposite way in the red. Adidas has raised its profit forecast. Income up 15 to 18 this year. Also raised its 2016 sales outlook. Now to check twitter, taking a tumble after missing estimates for revenue projections. It is expecting secondquarter sales to be lower than 610 million. Analysts were projecting 677 million. It is for going to add new which has affected advertising sales. Thats her Bloomberg Business flash. Back to you. Guy thank you very muchguy indeed. Quartert new first European Bank earnings, creating a mixed picture for the industry. Yesterdayhartered reported a beat of profits. Capital told bloomberg levels improved. Barclays reported a drop in pretax profit of 25 . Analysts predicted a figure of 846 million dollars. I think analysts are seeing numbers they like. Santander posted a drop but Beat Estimates. Net income came in at 1. 6 3 billion euros, more than the 1. 5 expected from bloomberg surveys. Joining us on the phone exclusively is jose garcia contera. Good morning to you, sir. Thank you for taking the time to join us. Clearly, the numbers have been affected by the Foreign Exchange story, so im going to move past that. Int im seeing is a 5 drop net q1 interest income. How much of that is you rolling 23 program across spain, and how much is due to mario draghi . For the thank you opportunity. The 5 drop in Net Interest Income is mostly explained by particularlyrate, the drop of the pound relative to the euro. Excluding that, Net Interest Income is up 6 in the quarter compared to the First Quarter last year. In spain, we had a slight negative Net Interest Income, but again come its mostly due to the competition on the asset side. Guy jeff bailey at barclays saidguy hes feeling cautious ahead of the referendum in the u. K. The u. K. Come as you indicated, somewhat of a driver of the profitability line. Are you feeling cautious ahead of that moment, as well . Mr. Cantera i think our business in the u. K. Is doing very well. On thegaining clients onetothree account. 123 account. One billion pounds of deposits per month in the First Quarter. Our business is doing very well in the quarter. Obviously, we felt market due to the Eu Referendum in the exchange rate. In the u. K. , our business is doing very well. S hans nichols in berlin im glad you mentioned eu politics. I wanted to ask you about the ecb program. Do you plan to participate in the . Mr. Cantera we are analyzing that. The Technical Paper is not out yet. Once we know the details, we will decide whether we will participate or not. I think its too premature to make any estimates at this point. Hans you have announced some job cuts in spain. Where else might we see job cuts for the bank . I mr. Cantera think searching for efficiency, operating efficiency, is a constant for santander. We have one of the best efficiency levels in the industry at 48 . Right now, our target is to get to 45 . Were looking to reach that target in our geographies. The search for more efficient business processes is a constant. Dont have any specific plans similar to the ones we announced in spain, but again, its a constant strategic goal we have in our day to day. Guy weve dealt with europe and the u. K. Can i take you to the other side of the atlantic . Were going to start south and work our way north. You have seen a significant decline in npl in latin america. Is that sustainables . Mr. Cantera the main problem there is brazil. The brazilian economy is challenging at the moment. Its estimated that the gdp might drop around 4 this year. 4 lastfter another year. We think we are going to see pressures coming from that in the next few quarters. Doing a greate management of the situation in brazil through the changes our business has made and cost controls and the spread increases. I think its a challenging environment, but i think over the next couple years, the cost of credit in latin america will go down. Guy let me take you further north. Lets talk about north america. You have a stress test coming up. You have failed it a couple times. Are we going to see a third fail , or is it a pass . Mr. Cantera we dont have any indication from the fed yet. We had an exercise a couple weeks ago. We havent heard anything from them. More important than passing or to see if weits are making significant progress toward setting up a Robust Foundation for our business longterm in the u. S. One year later, its not important. What is important given our commitment to the u. S. And our longterm goals in the u. S. , what is important is for us to build a strong foundation. We want to make sure we are making progress towards that. Hans we saw bad commodity loans really affect the results of barclays and Standard Chartered. Where are you positioned on that, and how much do you see the slowdown in commodities and loans affecting your business . We mr. Cantera have a relatively small portfolio in oil and gas. However, in the u. S. , we decided to make prudential provisions in the quarter that amounted to 100 million. Right now, we have 8 of our oil and gas portfolio in the u. S. Provisioned for. We feel comfortable with that. A lot of what we have in the u. S. Is reservebased lending, highquality names, very good quality names, and elsewhere, we mostly work with semistate Oil Companies in latin american countries. Oilintrinsic risk of our and gas portfolio is very low, on top of the fact that we have a relatively small portfolio. Guy i asked you a political question earlier on. Let me ask you another one. We have seen the news related to the fact that we are likely to see another election in spain. Can i ask you two questions first of all, how do you think the economy is being affected by the political instability, and is there any impact you are seeing into your business as a result . Mr. Cantera i think its the last elections, we had them in december. The economy in spain is doing very well. It grew at 3 last year. Its expected to grow at 2. 8 this year. So far, the impact is not significant. Inwill have elections again june. Hopefully, we will be able to form a government after that. The real impact in terms of the economy, i think, is going to be negligible or relatively small. In our business, we are not seeing that. Just to give you a few numbers, new mortgage production is up 25 . Business lending is up 13 year on year. That tells you that the spanish economy really is thriving at the moment. Guy excellent. We will leave it on that note. Thank you very much indeed for your time, the cfo of banco santander. Up next, we are going to look at potential corporate movers, including barclays. Yes, the bank may have missed estimates, but it looks as if there might be stability in the Investment Bank that the markets liking. Its a similar story may be with what we saw yesterday with Standard Chartered. There are no horror stories. Maybe thats enough to keep the market on board. We are eight minutes away from the market open. We will run you through the financials next. Hans it is 7 53 in london. That means it is 8 53 in berlin. What are you watching in london . The ring gynt is rising, the new central bank governors. We watching two things this morning. Were watching what is happening with the fed. Thats going to be the big story, but in advance of that, European Banks are in focus. We were speaking with the ceo of santander, interesting conversation talking about the spanish economy and with what is happening in the u. K. F and barclays is an interesting call. Caroline hyde has the details about the banks. Caroline we actually could see barclays pop on the open despite the fact we are seeing profit down 25 . It looks like a miss. This is barclays share price over the course of 12 months. Many expected it could fall. We could see 2 or 3 higher. Theyve got big credit impairments coming from the oil and gas area. Perhaps also some of the charges come into their corporate and Investment Banking unit that they are winding down if you strip away that charge, it looks like profit before tax beat according to certain analysts. Watch the barclays shares. Could it rise on the open despite a 25 slump in its firstquarter profit . This is total in the white. This is the oil and gas 600 stock index. Total beat firstquarter estimates, one, . 6 billion helped by costcutting. Lastly, i give you adidas. The open asw on adidas beats in terms of its forecast. That looks a little bit like a [indiscernible] coming up, it is the market open. How will barclays start the day . We will find out in four minutes and eight seconds. Councilmember mckeown good evening i am guy johnson. Hans nichols is in berlin. Where moments away at the start of european trading and you have the morning brief. Ans no fireworks expected but investors await a risk assessment. As barclays falls 25 of the First Quarter of the Investment Bank is relatively resilient. And a bruised apple. Lets head to caroline for the latest. Caroline we are starting to see 0. 2 . Day stoxx 600 up barclaystale and come out with earnings. You see a slump for the first time in 14 years. Here is the euro stoxx 50. Completely flat. Waiting for the cac 40 to open, for the dax to open. It is a Tech Industry feeling the pain. And the fact that apples earning missed forecast. No huge moves. We want to dig into the individual movers once again. Oil guiding energy higher. If you dig into the imap function, you can dig into what is happening on and industry basis. Those suppliers of apple saw a lets move on to what is happening in currency markets. This is your world currency. Down 1. 8 . That is what happens when your inflation falls through the floor. Weve got weighted median cpi, your Consumer Price index, gaining 0. 1 . It was the weakest on record for australias inflation. Does that mean more Interest Rate cuts are to come . Elsewhere, the u. S. Dollar weakening ahead of the federal reserve. Lets get on to those stocks. Lets get into barclays. In terms of its impact on share price, or was it indeed that we were seeing barclays post a 25 drop in their share price . Its up 3. 5 . Missed, but its in the bad bank area. The corporate Investment Banking unit saw a decrease in its pretax profit, but it was oil and gas. Underlying this, it looks good. Total, up more than 1 . The First Quarter beat even though profit fell 37 . Adidas, unchanged. German stocks are a bit slow to open. Adidas, forecast to jump 2 to 3 . Y lets talk barclays. We have michael morrow, our u. K. Finance editor. What are we up now . Days, 4. 72r three percent. The daily session chart, maybe not so amazing. Three point 65 . Walk me through this. Michael you saw yesterday with Standard Chartered a bit of a relief rally. 25 ,you have profit down but its not as bad as it could have been. The Investment Bank seemed to hold up better than some of the u. S. Peers. They had a week quarter a year ago, so its an easier held up. N, but trading creditrating did better than expected. There are some nuggets of good news, and a lot of the bad news came from the businesses they are exiting. Investors can say, if i believe they are connected out of these, i can look past that. Guy most of the bad news is in the rearview mirror. He mcfarlanes court that can deliver a share price doubling in three years, we are doubling we are all for that. Its got a long way to go, but this is certainly a star. Give jeff daly a little bit of want toity in saying, i stick with the Investment Bank. I think it can turn around. Hans from the goldman numbers, we saw Investment Banking income down 23 . It doesnt look like we are going to have that much activity in the m a sector. Read it forward a little bit. What does it mean if m a stays soft . They dont seem to be giving up on that space. Michael they are certainly not giving up on that space, but it does mean a rough year. You heard it from Deutsche Bank talking about this year is probably going to be down because there was so much turbulence at the beginning of the year, and barclays today saying that Investment Banking in april was not as strong as in march. You are seeing some slowness in that area, and m a drives a lot of followon activity. Certainly, that will be a headwind. Guy why are we so obsessed with the Investment Bank . The Investment Bank is old news. In some ways, are we looking at the share price popping . This is confirming a trend that the valuable the Retail Business looks pretty good. The Investment Bank is an issue but there are parts of this business and they are becoming clearer in these numbers. Theyre starting to really come through. The reason that the Investment Bank gets some much attention is because it dominates the capital, which drives the roe. That is why i get so much attention from investors. A lot of these other businesses are star performers. Areeley c barclay card what investors are excited about. If you can get the Investment Bank cannot only be a growth driver, but a drag, you can have a very profitable company. It is time for me to do my autopilot question which is to ask what does this mean for . Eutsche bank we will find out tomorrow. Certainly a bit of hope. That things were not as bad as the u. S. Banks made them seem. It went down but not as much in the trading business and you have this kind of surprised in the credit trading being up more than 40 . Bank reference this or are they clicking a share from Deutsche Bank . Are they both benefiting or is barclays kind of winning . Or are they taking away business from nomura . This shocking drop, they have come through a massive miss this morning. Unexpected losses and you saw them get out a lot of the trading businesses. Its because it has been a tough environment. As these players exit, that is the hope for the big guys. The smaller players exit, pick up more share, and it is easier to be profitable. Guess we need to take it back to germany. Adidas is out this morning and that share price looks like its continuing. Hans he says as he takes over and try to turn the company around and the increase guidance for next year. It means either i am buying more Running Shoes or you are buying more tailormade golf equipment. That has always been a drag on added us on adidas. I am spending more time on the track or you on the links. In crudehe collapse prices they have the estimates. How did they do it . Guy 3 11 a. M. In new york. Jon ferro just getting up and out of bed getting ready for his radio hour. He is probably out of bed, shaving, listening to us, wondering what is going on. But jon, we are trading a little bit higher this morning. Just a touch. The stoxx 600 up by run 0. 2 . The dax up by 3 10 of 1 by 0. 3 as well. This is a more interesting story. This is the stoxx 600. As itms of the big names, moves over to the business delighted with what he is seeing, barclays is up by nearly 4 as well. On the downside it is interesting to see whether they are trading down by around 3 . Lets deal with the details. Still with david inglis david ingles. Reporter donald trump has declared himself the presumptive nominee for the Republican Party as he swept to victory in all five northeastern states. Democrats Hillary Clinton beat Bernie Sanders from four out of the five states. They add pressure to the challengers to show that they remain viable in the race for the white house. Failed to select a new Prime Minister for the first time in democratic history. Concluded that none of the candidates had enough support to win. June 26 is the likely date for the new poll. The aussie dollar has weakened quite a bit after inflation unexpectedly dropped in the First Quarter. The Consumer Price index fell 2. 5 . Of Standard Chartered says, should britain vote to leave the eu it would create tensions in europe which he says destroying should the u. K. Choose to , on the day the eu after nothing will happen. But there will be a tremendous amount of conjecture about what might happen. That is destabilizing. Even if they vote to stay in, if it is a close call, it leaves uncertainty. Of , there is aleaves real risk that it creates tensions in europe that are just right. News 24 hours a day powered by our 2400 journalists and news bureaus around the world. Guy now, these two stocks have beaten estimates. Statoil unexpectedly posted a profit. The companys ceo spoke to bloomberg about the difficult climb up. We are obviously affecting the low commodity price. No Significant Impact from that. We could see a very strong performance. We are growing Production Capacity organically, and also very Good Progress on the Improvement Program that we have in working hard on for quite some time. Guy he is talking to us a little bit earlier. They both produce profit. This feels eerily similar. Is it similar reasons . It is. Refining is one of the reasons. Etalle is the biggest refiner in europe. Thats what we learn from them. The refineries are working at 94 capacity which means that demand is very healthy. That has been helping them. In all thehing is, Oil Companies we have heard from, we are seeing really restrained capital spending. I like the way you are mentioning from the demand side. What does that tell us geographically about where demand is coming . The growth is coming in europe and i think thats really encouraging for the crude oil picture. Bp, we heard yesterday from americans are driving more, gasoline is just over two dollars per gallon at the pump. What we are seeing is much better than expected margins. Winter was very tough because it was warmer and people bought less heating fuel than anticipated. We have stronger margins and very Strong Demand in europe and the united states. Having those two drivers in asia is very ehl helpful. Guy lets talk a little bit about the expectations versus reality. Expectations were pretty much on the floor. We knew that the oil price had been low and the upstream business would be tough. Is the market looking for reasons to be cheerful . To be fair, the Oil Companies to not always surprise on the upside. I dont think this is just a case of the Oil Companies guiding the analysts to pour of ver expectations. What i will say is that two takeaways from the total earning statements today, the spending cuts, the reserve capital spending. A couple months ago, they said their target is 19 billion. They will come in below that. But if you think about it, we had the head of the iea earlier saying in an interview, the oil price could be as high as 80 by 2020. Its like funding your kids education. If you keep cutting back on capital expenditure, you will make less money down the road. That is a big picture message for investors out there. Total is still depending on 60 per barrel oil price. To balance their books and have cash flow they need a 60 price. From 60 shifting announced rigorously to six to 50 or 55. If you are holding total shares, youre still 15 out of the money from being assured you will get the dividend in the future. Guy we know that you have to go beyond the radio. We will let you do that. Ryan chilcote, if you want to listen to him, go to the radio. But i urge you to stay here for the time being. One thing that you should also be doing if you are on the bloomberg and interested in what is happening with barclays, go to top line. You will get a list of things and you can select what is happening with barclays. The call is now on. We have Senior Management addressing the call no. This is a live blog. We can follow it. Great information and analysis. Tliv. Hans . Hans it is witty, it is fun, its a lot like this show. Up next, smartphone sales take a bite out of apple. We break with that means for the company. Iggest coming up next in newtonian physics. Hans welcome back to on the move. I am hans nichols here in berlin. Were looking at the dax. It is basically flat this morning. The streak is over. Apples run of 51 consecutive quarters of uninterrupted hans sales growth ended due to waiting smartphone sales. Tim cook addressed the iphone slowdown on the earnings call. Challenges, there were a number of encouraging signs during the quarter. Oneinstalled base of over billion active devices continue to grow strongly. We added a huge number of to mac switchers and new customers. We generated strong growth from services. We sold 51. 2 million iphones in the quarter, consistent with the range of our own expectations, but lower than the exceptional quarter when we saw an acceleration in iphone upgrades and 40 sales growth over the previous year. Is carolineith more hyde, someone who does on occasion set her iphone done. Break this down. Caroline he was trying to sound optimistic, but 51. 2 million apple iphones sold is a slump a 60 . Youre setting to hear him talk about the Services Unit which is really the Silver Lining amid a large dark cloud. Services did grow 20 which is the apple music platform, the app store, the icloud storage. Elsewhere it is down 19 . Iphone shipments down 16 . Profits slumping 9. 6 . Sales are still phenomenal if you compare them to any other large company. We are still pulling in more than 50 billion and one quarter. This is the first slump in sales you have seen in 13 years. Your down 13 . Is this a question of shortterm or longterm . That is what everyone is trying to work out. Is this a marked slowdown in china . Is it because of strengthen the dollar or is it more macroeconomic issues . What about the slower upgrade process . Are we seeing fewer apple clients wanting to get new phones that much faster or can we do with an iphone 6 for a few years . Do we not want the latest gadget in september . What about the iphone se . It is a cheaper device. With that start to cannibalize the more costly product . What they need is an amazing new product that will convince us we all need to buy a new one. The problem is, you look at the supply chain, you talk the technology guides, they are scratching their heads. The likes of paul come and taiwanese qualcom and taiwanese chip manufacturers saying we are not seeing any uptick because smartphone sales are starting to slow down. Slightlyelling it cheaper but very highlevel devices. What about the next great product . The watch hasnt done all that much in terms of sales. Eke into the will we see the cars eke into ne said quoi. I really think the Services Area is where they are trying to extol the virtue. They say we have one million products and peoples hands. Started to the margins at the music sales and the icloud sales. At the moment, we are not seeing it. Supplies are not seeing it and you are seeing arm holdings today, amf, and dialogue semiconductors all down. Guy top live is where you need to go. Hans nichols, were not done with the banks yet . Hans we have standard charter. They have surged him as 10 . Our exclusive interview with ceo bill winters next. [ soft music ] e. T. Phone home. When you find something you love, you can never get enough of it. Change the way you experience tv with xfinity x1. Shoshow me more like this. E. Show me previously watched. Whats recommended for me. X1 makes it easy to find what you love. Call or go online and switch to x1. Only with xfinity. Guy expectations are pretty low so a lot of the stock stories are a fairly decent beat. The markets are quite flat right now. The 600 is up by 0. 2 . Were running into the fed. That is part and parcel of the narrative. The banks are front and center. Barclays has been trending higher. The Bank Earnings are a big feature of the week. Barclays as well as morning. The barclays story. Meanwhile, Standard Chartered reported yesterday with profits plunging. Stocks surged on a surprise drop in impairment. Francine lacqua caught up exclusively with the ceo, bill winters. It may distress our shareholders to know i do not watch our share price. It does not influence what we are doing every day when we come to work. What we want to do today is tighten up the ship in every way that we can, serve our clients, develop products that are relevant, understand the competitive environment, respond to it and get ahead of it. We are investing for the medium to long term. We knew and we know there are things we have to do now. We have to very strong from a capital perspective. We have to demonstrate that we are making progress. We will lose the faith of the shareholders, even if we believe ourselves. We tried to do that in the eight months since we have been here. Will diagnose the problems, will tell you what we will do about it. And will let you track it. We cannot control the price of oil, we cannot control the rate of growth in china. We can be prepared for the downside, we can be ready to capitalize on the upside, but we tell you what we will do and we are doing it. Francine what has surprised you the most since you have been in charge . Management style . Your team . Shareholders . No matter how long you know an organization from the outside, you never know what youll find of the inside. I came in thinking this was a bank with a superstrong ethical culture. People come to Standard Chartered because they think they can help change the world. It sounds cliche, but it is true. Our brand promise is, here for good, and its true. The flipside of that is that there was a looseness to the way that we managed the place. I dont think im not blaming anybody. I think it came from years of Great Success when the bank outperformed. From time to time i get a hard time from shareholders who say how could we have seen such a great great drop. Things mustve been terrible . I say, youre the one who bought the stock at 14 pounds. You are encouraging management to grow more, book more loans, get bigger, you madam shareholder or mr. Shareholder are encouraging the bank to do the things that were the partial undoing. Shareholders to appreciate that but i say, what we are doing now is focusing on what is great about the bank, what we can invest in to make it better. And that is what we are doing. Guy kind of hard to ignore the horse. Lets talk to Francine Lacqua not making any connections. In some ways i am. Basically, the message that winter is delivering is get off my back. Francine kind of and maybe it he is like a trojan horse to heure that net income basically almost gave a warning to shareholders saying, we are trying our best. The errors of the past not be repeated, youre trying to fix the bank. If you cast yourself back extent eight years ago, Standard Chartered came away largely unscathed from the financial crisis but they had too much spent because they were lending money to risky as this is in emerging markets. With the downturn, they are not in a great place. Year to date they are the second best performing bank in europe which was a surprise to me. They have lost so much in the last five to six years. Guy yesterday was all about not really any nasty surprises. In some ways, were getting that story from barclays as well today. The markets got too used to, you wait and the line drops and everybodys eart st everybodys heart starts racing. Francine Standard Chartereds impairments were less big that people had thought. It was very sobering to listen to the ceo who says, i have a ship, and try to do it correctly. He was not crying victory, but he was very sober, very on message saying, we are trying our best and cutting down costs and rethinking our models. Guy we left the horse alone very quickly. I will do some are research. Fran will be back on the pulse very shortly. What is going on hans . Hans will not talk about horse powered mitsubishi. I will talk about their forecast. They are not getting one. They are declining to give a full year forecast. They dont know the full impact of the scandal. Remember, they are in a backandforth with the government and regulars in japan on how much they need to put forward, what they need to come forward with. They still have not given us an entire accounting of what has happened. That is the story of mitsubishi. Not a lot of visibility this morning. The aussie dollar falls. Inflationys core slows to the weakest on record. We are live in sydney next. Guy welcome back, youre watching on the move. One of the big stories here was barclays this morning. Some of that is starting to be unwound as we speak. The stock is still up quite nicely. The media call has just finished. We have given back some of the game. Similar stories at the other banks as well. Keep an eye on that sector. It has had a nice bounce but it would always be unlikely to last throughout the entire day. Thats your Bloomberg Business flash. Here is david ingles. Lets have a look at energy earnings. Total has posted past market estimates. Over 1. 6 billion. 1. 25 the one billion seen in a bloomberg survey. The of rising production and refining profits. Lower than a37 year ago amid the slump in crude prices. Adidas has raised its fullyear profit forecast. Net pany said it sees income rising this year. It had previously forecast a 10 to 12 increase 10 12 increase. Revenue productions expecting than sales to be lower the 610 million. Twitter also missed its First Quarter revenue estimates signaling that it struggled to add its struggle to add new users may have affected advertising sales. That is your Bloomberg Business flash. Back to you. Inflationralias core slowed to the weak us on record as headline prices unexpectedly fell in the fourth quarter. Dan petry is there. The aussie dollar was also sold off aggressively. Will the authorities have to act . Word, that is certainly looking to be the case. You saw that core inflation number. To give you an indication, eight 2 3 rgets inflation and. We are facing good oldfashioned deflation. The one thing that policymakers here would like to have is economy firing on all cylinders. At the moment, a shrill you has caught up with that global pessimism which we have been seeing on the markets. Reader,arge, for a q1 just use my own vernacular, it is a shocker. You are not seeing anything really heading toward an upward trend. The big banks have been coming in with revised forecasts. Rba saying there is a live decision next week. Keep your eyes posted on that one. Guy this 25 basis point cut. Is part much of this and parcel of confusion at the rba as they watch what is happening . As the commodity story rolls off and the Service Sector and the rest of the economy start to make a migration. It is hard to judge for the guys to figure out what rate policy should be doing and whether or to. This aaa will be hung on its very difficult, you are quite right. That will be an acute pressure for the government of the day. Also in election mode. There is one due in july. Australians for some reason love to have elections these days and chuck Prime Ministers. By and large, you are looking at a situation where there is a transition from a miningconstruction boom. That delivered rivers of revenue but without much to show for it. S are in deficit. Australia if anything needs to activate a fiscal all of the lover. That a fiscal policy lever. They spent 30 billion on shopperready projects. You have a situation where the central bank needs to step in and address the demand equation. We are seeing at the moment the aussie dollar which has also been very unhelpful. The rba extra cash rate is 2 . That sounds quite impressive when you compare it to its p eers, but by and large that is a huge gap. Bringthing, its really being dragged down by that as well. One factor that also played heavily today is good oldfashioned crude which is playing havoc with markets such as ours. It does appear that they will have to act on tuesday. That is the reserve bank meeting at 2 00 p. M. Australia time. Hans thank you for your verbiage, the shocker. I will keep that with me all morning. As lowflation advances in has adopted several unconventional monetary policies to that end but has not been able to vanquish stubbornly low inflation. The bundesbank resident president weighed in on the prospect of helicopter money. In my opinion, the concept belongs back in the academic drawers that it came from. The decision of money to the people will lead to a complete dissolving between monetary and fiscal policy. It creates expectation that money could keep raining from the sky, which in my opinion is not right. The for the time being, ecb has signaled that it is unlikely to do anything to the impact of stimulus can be assessed. Janet yellen now has the perfect opportunity to hike this summer. Joining me now to discuss centralbank interconnectedness is the chief economist at hell of a lot at helebat frankfurt. When you join the conversation across the atlantic come up what will the get from janet yellen and what is your message to mario draghi . Tonight we will hear from her that, for the time being, Interest Rates in the rightre right exactly where they are. Potential fort be inflation or risk. First quarter growth will be relatively weak. The growth would be better throughout the year. For the time being, growth in the u. S. Is not very strong. The labor market is very strong, the risk for inflation in the future is there. Rates are do is right for the time being, but in case growth will pick up and inflationary risk will increase,there might be an Interest Rate hike the first of this year. We expect the next hike in june. Hans when you look at what frankfurt, in particular at the ecb, mario draghi is the gentleman leaving the door open for janet yellen to hike, to make action. What is the one thing that frankfurt would like to hear from janet yellen . I think that what frankfurt wants to hear is that things are not as bad as some markets think. We have kind of a vicious circle. We had turbulence in january and february. This created uncertainty. This uncertainty was one of the reasons that mario draghi went even more expansionary. This policy created again uncertainty. To get out of this vicious circle, we need some kind of stability. That is a stein that janet yellen could give tonight that the situation in the u. S. Is not as bad. Case, the growth will be increasing in the coming months. There is even room for higher Interest Rates. Guy the best way she could say she is comfortable with the u. S. Economy and where it is is to raise rates. Would that be too much . No. I think it would not be too much. I think it would be really a good sign to say that everything seems to be fine the time being. Risksare risks, but also on both sides with growth and inflation. She is fine with the Current Situation and that is about it. Further data will show the future. Guy when you look at what is happening with the story relating to the Banking Sector in europe, we were talking to the cfo of santander early on. He is waiting for details from the ecb. Monetary policy at this point and time seems to be stuck in the middle. We are waiting for the fed to figure out what it will do. We are waiting for the ecb to provide us details. How long until we get a gauge on the real effect it is happening right now . The problem with Monetary Policy is that many people think the only instrument we have is Monetary Policy. But at the end of the day it is whomarket participants should be willing to invest. But at the same time, the ecb sends a signal that everything is so weak and the risks are bigger than the opportunities. Then there is the whole burden on the Monetary Policy but then it gets stuck and i think that the ecb realized that the negative Interest Rates were a mistake. In germany and the critics are so loud that he says, i dont want to hear that. Please let me go the way that i think i should. We have kind of a dilemma. He cant turn back negative Interest Rates right away but i think the ecb started to realize negative Interest Rates are a for the companies, savers, and the banks. Thats the kind the dilemma that we have there with the monetary penalty, especially in europe. Guy gertrude, chief economist at helabad. Draghi did not answer the argument, he just made another one on that charge about low Interest Rates. Up next, poll position. Trump and clinton extended their lead in the race for the white house. Do the challengers stand any chance of mounting a comeback . The latest coming up next. Mr. Trump i think the only card she has is the womans card. She has nothing else going. I Hillary Clinton were a man, dont than she would get 5 of the book. The only thing she has going is the womans card, and a beautiful thing is that women dont like her. Look how well i did with women tonight. Hans that was donald trump who called himself the presumptive nominee after winning all five states. Hillary clinton, who won four of the five hit back. Sec. Clinton mr. Trump accused me of playing the woman card. [booing] if fighting for Womens Health care and paid family leave, and equal pay is playing the woman card, then deal me in. [applause] hans lets go to our senior white house correspondent, Margaret Taub is up late in l. A. There has been talk of trump softening his image. When is that likely to happen . Reporter maybe never. He set himself tonight, its l ike a football game. If you are winning, why switch . He said maybe i will switch a little bit in the general election but not the stuff that is working. He is still trying to win a primary and a lot of what he was doing to Hillary Clinton a few hours ago was probably aimed at trying to lock down the republican primary vote in indiana. But video cameras are rolling and this is the stuff that ads are made of in the fall. I think his position is that he will cross that bridge when he gets to it. Guy the bridges keep getting crossed. Can he actually be stopped . Reporter yes and no. It all comes down, in large part, to what happens in the state of indiana. If it is not resolved then, then in california, all the way to june the difference between what is going on with donald trump and Hillary Clinton is, a lot of the republican establishment wants to stop him. On the democratic side, a lot of the democratic side is waiting to receiver at the convention. It becomes increasingly difficult to stop him when he has nights like he had last night. Guy we will leave it there. We will watch with interest. Margaret joining us out of new york, up early or late, depending on your point of view. You will not want to miss our allstar lineup this fed day. We will speak to a fed president , bill gross will be joining us. Blackrock as well. The fed is really front and center today. But we are not talking about today. Word that wes one need to look for in the statement we gave which is risk. How will they talk about it . Is it upside or downside . That is what im looking for. It is only 8 00 our time. Guy we will stay up late. We never stop. That is what london looks like this morning. Later on, youll be speaking to the boss of gfk as well. Thats coming up. Francine big oil beats. They top estimates as cost cuts upset trading higher revenue at the barclays. Stock rises. Trump and clinton score big. They extend their lead to the white house race. Decision day for the fed. It is hike still on the table jack oh is a hike still on the table . To the welcome pulse. Life from European Headquarters here in london. Lets check on the markets. We have a lot of