Anna welcome to the program. Asian markets getting a boost, betterthanexpected export data out of china. Let us talk about the oil. The big story the last 24 hours, briefly dipping below 30 a barrel. We have a great story on the terminal, talking about how 11 months ago, we were talking about 20. The not look as crazy. Beus i thought we would cheeky and sneaky today. Jeffrey gundlach says oil below 40 is causing frightening political paper. We might make it to 45. Anna let us talk about the Foreign Exchange markets. Tradeng to the chinese data, that is reflected in the market. The aussie dollar and the rand getting a boost, because of the stable fixture on the yuan, reflected in the japanese currency. Knus we have the japanese urodas former deputy, theyre more comfortable with u. S. Futures trading higher. We will have more throughout the program. This goes back to yesterday grade goldman said it might be time to buy. Gundlach, and jeffrey says they will likely struggle before a buying opportunity later in the year. Anna he is a lot to be gloomy about. Let us get the bloomberg first word news. Nejra good morning. Widened,rade service as the worlds secondlargest economy trade balance increased to 60 billion, taking the fouryear tally to 4. 5 billion. The weakening yuan has rocked global markets. Up for the first time in 12 years, as the supply of crude means that they have not staved off a further decline. A gauge on the return of Raw Materials has dropped to the lowest level since 1991. Barack obama has used his final state of the Union Address to call for a more noble politics. He also hit back at claims that the u. S. Economy is in decline. President obama the United States of america, right now, has the strongest, most durable economy in the world. Anyone claiming that americas economy is in decline is peddling fiction. Bears one of the biggest says there is more bad news ahead. Ndlanch said that ack hiu really ugly situation would be more likely if the fed keeps hiking Interest Rates. Downside, high yields are very unlikely to rally. The redemption cycle we could be looking at a real ugly situation during the First Quarter of 2016. And it is particularly more likely to happen if the fed keeps banging this drum of raising Interest Rates. Nejra and that is your bloomberg first word news. Anna . Manus thank you very much. The Chinese Government has yet to stabilize the yuan. The trade data this morning shows a rebound in december, and the surplus had widened. Anna we will break down the numbers in a moment. Lets head over to hong kong, where david is standing by with the market reaction. David, this has been taken quite well by equity markets in general im even if that does not necessarily apply to china. David absolutely. It is very important when you look at the economy, and you guys will talk about the numbers in a moment. What happens in the stock market in china is very rarely reflected what is actually happening on the ground. That being said, though, very encouraging numbers out of china trade helping the sentiment, which was already quite good. We started out today, the overall since right now in asia up 2 in the trading, is that these of vicious moves over the last seven days were a bit overdone. Whether that was dollaryen levels, a oversold. 5 or 9 on the regional benchmark. There was a bit more of a trickle of good news today. Getting more riskaverse, i guess you in todays trade. Back to the yuan fixing, relatively unchanged to the dollar. Arguably, you look at the spread between the onshore and the offshore. Checked, the offshore was lower than the onshore rate. The spread is quite narrow. Ratehe yuan interbank spiked last night raid last i checked, just over eight percent. Like it or not, the bank did manage to impart some discipline in the markets. Which is contributing to the Risk Appetite today. The developing story, as we all gains in taking these any shape or form they,. Anna david, thank you very much. Manus let us get to shanghai. Balance rade recovery on the way . Or is this a oneoff, will we see the trend continue . Greg good morning. Well, it looks like the depreciation that started back in august, when the central bank 2. 6 he value of the yen by and again in November December when we had a steady depreciation, and looks like that is now kicking in, reflecting in the trade data. So it looks like probably favorable trade data Going Forward, at least in terms of exports. On the import side, we also saw improvement today. Where the decline was not as severe as that 11 from last month. It only declined by 7. 6 this month. That also points to possible improvement in the economy. Anna and what are the areas that shows the biggest gains among the biggest improvement in the data . Well, if you look on the commodity side, there were some of thets for Raw Materials, like iron ore. On the export side, steel and Refined Oil Products were huge. This was more or less expected, possibly more than expected on the steel side. But one of the interesting things to note is exports to hong kong surged for the month, which brings us back kind of a reminder of some of the fake data incident that played the reliability trade data early last year. Us thank you very much, our bureau chief in shanghai making ense of the data. Anna he expects chinese volatility to continue. During is now is the head of global fx strategy. Let us talk a bit about the chinese currency. I am amazed to see the yuan offshore is set for a record fiveday increase. Intervention of some kind or another in the offshore chinese currency, it seems. Weakeningture u c in both measures is likely . The fundamental picture is one where we will see a continued structural slowdown in china. I do not expect it will be a hard landing. Having said that, with the fed hiking rates on the one hand, and the continuing slowdown in china, you will see pressures for outflows continue. I think that the chinese or authorities are moving towards a place where they would like, ideally, to start seeing some more market trading forces. Which means, when you get capital outflows, the system depreciates on the exchange rate. Manus one thing we touched on with other guests, the offshore and the on shore. That gap widened to a record last week. It came back together again, with a call for a bigger depreciation in the yuan. What will happen in terms of the differential, onshore versus offshore . I think it is very difficult to know on a daily basis. Thematically, i think what we will be heading towards is an environment where we will see a contraction in the spread. Anna the imf doesnt like it to be one. Definitely one of the more decisive factors. If you look at how the chinese have actually played the last year, it seems to me that they warned the increases of the yuan being included grade they managed to get back, playing somewhere along the lines of the imf. Manus if we talk about the contagion, anna and i talked yuan off on aean fiveyear low. If we look at your positioning, youre talking about buy the yen versus the yuan. Is this a direct consequence of the move i think to a certain extent, it is. First of all, the issue itself is south korea. The trade that we have is going along with the yen, versus the south korean currency. South koreas won needs to come under some weaker pressure because of the Competitive Pressure it is getting from the other currency. I have been bearish on japan for a lot of time. I do not think that the elements are therefore sustained recovery. But having said all that, when i read all of the statements coming out from the japanese authorities, both from the board as well as the government, it seems to me that these guys have convinced themselves that they have managed to get rid of deflation. Which tells me that i do not think they will keep on stepping on the pedal. Anna does that mean the end . Yes, that is what i am leaning towards. If you look back at 2015, the dollaryen trade was the most boring trade out there. I think it is virtually nothing. Volatility. Ally low in that respect, people are really getting bored about this notion of a portion of the yen see at least over the next 34 months, i do not see the coast for dollaryen. Manus our story this da, it isuotes kuro the strongest since october 2014. This is wipeout, kurodatime. First off, let me say one thing. As far as dollaryen, let us not lose sight of the big picture. It has come off massively over the last two years. A depreciation of approximately 30 . I think, or at least i hope, that these people have started to realize that Monetary Policy probably has reached its limit. And, ideally, they would like to get coordination from the fiscal, where this will get japan out of trouble. Anna thank you. He stayed with is longer on the program. Manus we will hear from several voices within the fed. First up, boston president gives his economic outlook. Anna then we hear from chicago fed present charles evans, and we get the Central Bank Fed b eige book. Manus and you do not want to miss the interview with robert, coming up at 1 p. M. London time. Bounces, and, oil crude recovers after a brief fly below 30 in late trade yesterday. That was the first time weve seen that, of course, since 2000 03. How many times will be asked that question this year will we ask that question this year . We will talk about that in a moment. Anna welcome back. 17 minutes past 6 00 in london. Let us get the Bloomberg Business flash. Nejra volkswagen has been dealt a blow, and it attempts to overcome the emissions cheating scandal. California rejected the proposed engine fixed, putting more pressure on the ceo, who will discuss ways of the crisis later today. Affiliated with the group anonymous, hackers have claimed responsible of the for taking down this website overnight. It is the latest japanese coming to be hit over protests over japanese whale hunting. They said they have no connection. Computer shipments dropped 13 . That means 2015 saw fewer than 300 Million Units shipped for the First Time Since 2000 and eight. 8. There were more than 360 million in 2011. That is your Bloomberg Business flash. Manus thank you very much. Oil prices dipped below 30, as we were telling you. Nextis rebounded, the milestone be 20 . That is the question. Elliott is standing by. There is a moment of reprieve in the overnight session for oil, isnt there . Elliott there was, manus. But who knows how long that will go on. Belowst time they dipped 20, you were in your 30s. They didnt rebound, as you say. But it is hard to find reasons to be optimistic in the oil market. You still have this oversupply. In the absence of any major change in that supply or any pickup in growth from china, it is hard to see how much support there is for those oil prices. And of course, the pain that has been experienced by producers, investors, countries it may just be a taste of things to come. If they do go that much lower, manus. Anna now that we have touched below 30, it even fleetingly, how likely is it to drop below 20 . There is really been interesting commentary overnight on that subject. Elliott it has. Im glad i have to answer it myself. But that is more from citigroup, from a year ago, who said that prices could be heading below 20. We are now confronting 20 oil. He says that number is some and you have to talk about. The likelihood is fairly great. Clearly, oil markets cannot maintain a price at or below the 30 level for very long. The question is, for how much longer . He is joined now by goldman sachs, who reckons there is a 50 chance it could hit 20 per barrel. This is causing immense pain in the gulf economies, and other producers as well. Malaysia is using 68 million in the decline in the barrel of oil. You have Conoco Phillips losing almost 2 billion. And we saw yesterday petr obras lopping off 5 million, somewhere around the region of a quarter. There is some kind of optimistic note to leave you on, guys, it is this. China imported a record amount of crude, taking advantage of the low prices simply. Up, win prizes start to go china will start using its stockpile and stockpiling the oil. That would therefore reduce demand on the other side of the equation, allowing prices to fall back again. I kind of semioptimistic note to leave you on. For how much longer, wait and see. Anna elliott, thank you. This is proving difficult for many governments. We will talk to munich later on about that subject. Manus let us keep the subject on oil trade for todays undlach, jeffrey g said it may have found a bottom. Jeffrey it could be easily consistent with the pattern from recent weeks and months, the oil might go up. I am not saying it is going to some huge number. From theght go up 50 shortterm bottom, if i am right. It might go up to 45. Even that number is not enough to save the Energy Market from some of the trouble it is having. Isa Vasileios Gkionakis still with us. Amazing to think that a 50 price, that is how far we have come down. Maybe we are seeing a bottom in the oil price . Vasileios gkionakis it has become a futile exercise to find the bottom. I think what really makes it , on thet is because whole, you have supplyside problems. At the same extent, you have some demandside problems. It all depends on whether you think the market is at equilibrium at every time. Personally, i do not think that 30 is equilibrium. From a fundamental perspective, we should see higher levels in oil. Having said all of that, when bad, theylly get could escalate even further. Manus it is the contagion effect, as well. It is not just that break down in the oil complex, it is the bloomberg Commodity Index the lowest since 1991. We touched on it yesterday, whether we can even contemplate capitulation or the markets moving that you see, it is an uncomfortable base to sort of coin the countdown phrase at all. What do they say . Vasileios gkionakis our view is that basically we will see a gradual cap in 2015 and commodity prices. It will be very gradual, because the market will remain very conscious. Let us not forget that we had a big bounce last year, between the first and the second order, only to see a further slimp going into year end. At the same time, we are seeing the demand perspective, the world is not as bad as people actually think. And in that respect, i would say that, first of all, we have the u. S. You do get the occasional fluctuation in the data. Yes, you may have solved the slowdown. But at the same time, the euro a lot of people have said that it is in really bad shape. Last year, i do not think it was a bad year for euro growth. On that perspective, i am cautiously optimistic. Weak oil price is not game over, far from it. That is talk about how this currency. Mmodity you recently published Research Suggesting the aussie against the Canadian Dollar, because of trade deterioration is not fully reflected in the trade. Vasileios gkionakis absolutely. Let me first say this is a Canadian Dollar trade, as opposed to what we tried to do which is get some of the dollar out of the equation. A lot of people have started having doubts about the Dollar Strength from going from pso, there seems to be a lot of uncertainty. We look at the relative terms of trade with canada, we are seeing a massive deterioration probably about 21 . Canada, over 34 years. We have seen that being reflected in the exchange rate. Aussie is moving lower. Year, the end of last where he saw a sharp rallying. We do not think it is justified by the fundamentals. Inus one the top four canada is causing dollarcanada next week, and another round of rate hikes for canada. Any others . Vasileios gkionakis i do not think the picture is that clearcut Going Forward for Interest Rates cut. As a matter of fact, i think that in canada, we have got a pretty robust canadian employment report last week. Thats also not forget canada is very much linked into what the u. S. Is doing. In that respect, it is doing well. Nna Vasileios Gkionakis manus the outgoing president leaves and optimistic message for the worlds biggest economy. When youre on hold, your business is on hold. Thats why comcast business doesnt 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 rides ready. Dont get stuck on hold. Reach an expert fast. Comcast business. Built for business. Manus 6 30 in london. Let us get the bloomberg first word news. Nejra chinas trade service widened, and exports recurred last month. It increased to 60 billion, taking the tally the 594. 5 billion. That supports the weakening yuan that has rocked the market. Oil is back, after tumbling below 30 for the first time in 12 years. The oversupply of crude means prices have not staved off the threat of further decline. The gauge of return on Raw Materials, that tumbled to the lowest level since 1991. One of the markets biggest bears says more bad news is ahead in the first three months of the year he Jeffrey Gundlach warns that a potentially ugly situation would be more likely if the fed keeps to the path of hiking Interest Rates. If it does start to show a downside, then high yields are very unlikely to rally. The redemption cycle could be looking at a real ugly situation during the First Quarter of 2016. And it is particularly more likely to happen if the fed keeps banging this drum of raising Interest Rates. Nejra democratic president ial hopeful Hillary Clinton has called for increasing the estate tax and closing loopholes used by hedge funds and the wealthy. She also wants to reduce the threshold to 3. 5 million for individuals, 7 million for