Transcripts For BLOOMBERG Countdown 20160302 : vimarsana.com

Manus welcome to countdown. Anna a very warm welcome to the program, just past 6 00 here in london. Manus, let us talk about the last 24 hours that was equity markets. Rocking, bouncing off a very positive month for equity markets. The nasdaq having the best day in six months, just to put that in context, the yeartodate losses trend down to just 3 . Some real equities coming through. Manus that is what we have here. This is the s p 500, as you say, the loss trimmed back to 3 . Volatility trimmed back by 14 . Sinceggest oneday drop january. Deutsche bank saying get on with it. 11 since the middle of february. The u. K. Market has rallied 11 . As in the rallied 8 since the middle of february. It is a real shift, having passed through the needle. , there counting the msci asian market lagging. You have that downgraded by moodys on that view of china. The yuan is stabilizing. The manufacturing data really caught the zeitgeist. Anna anything positive around that, to put it in context with that comment from the bank calling from a rate hike from the u. S. In march. Still only a 22 chance. A nice line, manus. Let us check in on some of the ofk assets, get a gauge where people are putting their money in the overnight session into australia. 0. 72 on the aussie dollar, on the back of that gdp number, the dollar rising for a third day. Gdp at 0. 6 , better than the estimate. And the q3 number, also up. That helps. Man is going up to 1. 1 . The reserve bank of australia on pause. But dollaryen, lets be fair. We dropped to 1. 2 yesterday. The reason why i put euros sterling on there, there is a new feature on the risk radar. Sign. S the sterling has rallied for five days against the euro. of last year. The question is, have we priced in or are we taking a breather on the brexit risk . There is more to come with blackrock. Anna we will revisit that story. On the pound against the dollar. Let us get the bloomberg first world news. Nejra donald trump has a firmer grip on the nomination, taking seven states as part of a commanding super tuesday showing. Ted cruz won his home state of texas, as well as oklahoma. Meanwhile, Hillary Clinton liver a decisive performance, defeating Bernie Sanders to give her and all the insurmountable lead. Moodys has cut china to negative from stable, because of rising Government Debt and declining reserves. The state debt increases to 43 of gdp by next year, they are affirming the longterm rating, wouldeijings policies slow the reform of stateowned identities. Loretta lynch has challenged apples refusal. Interview with bloomberg, she said the company has been doing similar things for years. Seen how wee have do in fact balance privacy and security every day. In fact, until recently, apple was able to comply with our request. They have the toughest security out there. And we have not seen that parade, in those cases either. Nejra earlier, lawmakers in washington heard arguments from both sides on the phone encryption issues, that pitted the tech against the government. There were no demons in this debate. The company is not evil. The government is not evil. You have a lot of people who see the world to lenses, who care about things. All the same thing, in my view. Companies care about public safety, the fbi cares about innovation and privacy. We devote our lives to stop people from stealing our innovation, secrets, hacking into our devices. We care about the same things. It should make this, and away, and easier compensation. What happens here is that apple is forced to write a new operating system to degrade the safety and security in phones belonging to tens or hundreds of millions of innocent people. It will weaken our safety and security, but it will not affect the terrorists. U. K. Will generate less Economic Growth and have a drop in investment, if Voters Decide to leave the european union. That is according to blackrock, the Worlds Largest money manager. Vice chairman says that the brexit offers a lot of risk with little obvious reward. Stay with bloomberg. We will be speaking with one of the authors later this morning. Australias economy grew faster than forecasted in the final three months of last year. And a plunge in Household Savings since the lowest in 2008, underpinned by record low interest rate. The Australian Dollar jumped on the news. Global news 24 hours a day, powered by 2400 journalists and more than 150 news bureaus around the world. Manus thank you very much. Let us get up to speed on asia. Backandforth from the u. S. Last night. Suliette saly i standing by. Juliet good morning. We are continuing that relief rally we saw across wall street. Asian stocks actually now at their highest level since january 2008. You see this very solid line coming through across the region. The shanghai composite in late trade up by 3. 6 . Investors shrugging off that downgrade in ratings by movies. Australia saying that the cut should have a muted response from investors. That is certainly what we are seeing in this region. The hang seng in hong kong of 3 . Closing higher i over 4 today, we are seeing the yen little changed there. Closing at a high of the day. The 200 in australia up 2 , now back above that psychological 5000 point level, helped out by the betterthanexpected gdp reading. Every sector is moving higher in the region, oil materials, and gas stocks leading the charge. Industrials very strong. Here is what we have been watching in the region today. There have been big news. By 21 in hong kong after agreeing to take full control of sab millers 49 stake. Almost 5 in australia, reporting to cut 500700 jobs. Certainly, investors moving out of those safe haven assets back into equities. Taking a hit in australia today. Saly withette the latest on the strong session in hong kong coming through. Let us talk about u. S. Policy. Donald trump and Henry Clinton were the big winners on super tuesday. They turned their attention to each other, offering voters insights into what might happen ahead. Secretary clinton it is there tonight at the states in the selection have never been higher. And the rhetoric we are hearing on the other side has never been lower. Trying to divide america between us and them is wrong. And we are not going to let it work. Manus donald trump hit back, taunting clinton as whether she would emerge as the partys choice. Mr. Trump i am unifier. Believe me, i am a unifier. Once we get all of this finished, i will go after one person that is Hillary Clinton. On the assumption that she is allowed to run, which is a big assumption. I dont know if she will be allowed. Anna joining us for a closer look is our washington, d. C. Bureau chief and government executive chief megan murphy. Great to have you. Clinton and trump going after each other there. Does this mean that the primary races are effectively over, or might these do still lose their ground . Megan much over at this point. We saw a strong showing by Bernie Sanders in some states, or delegate lead is very big. As big as obamas was in 2008. And she has really had these huge gaps, she focused on her base of africanamerican voters, women. She had huge margins tonight. On the republican side, little bit of a different story. Yes, we saw a big win for donald trump again. He has won seven states already. He will probably win alaska, from the early projections. What has happened now is what everyone had feared, that the establishment wing of the party is left in israel and the central crisis about how they can move forward. Their chosen candidate, marco rubio, had a very bad night. The only 11 state, minnesota. He lost nearly in virginia. It is increasingly difficult for him to convince establishment donors that he is the man making coalesced behind emily keeps coming in second and third in these early contest. , if it was a general election, many are saying this last night, super tuesday was indeed that moment. That potential sort of insight. For Hillary Clinton and donald trump, the train to finally come unstuck . Megan it is hard because you basically have a politician in donald trump who is unbound by any of the traditional boundaries that we traditionally see candidates bound by. He will say anything. He has no limit for what he will do, what he will provoke others. How he would treat others, sort of changes from day to day. Since herinton, stunning loss in New Hampshire to Bernie Sanders, has really gone down to what she is best at. Discipline, organization, really trying to refine her message. Breaking down barriers them as you freak really says on the campaign trail. Head to head, this is a trickier matchup. He has shown a willingness to go to places in the cycle that no one else will go to. And he is surly not going to leave anything on the table with Hillary Clinton. Anna megan murphy joining us there in new york. Let us get to our guest for the hour, bob parker, Senior Adviser at credit suiise. Let us put this politics into wider context, if you like, look at it through the lens that you use. Look at it through, well, asking the question, what are the markets prepare for . Bob wait to be have certainty. I think we have a very high possibility that the democratic candidate will be clinton. I think she now has the momentum in her campaign. So i think the probability of a clinton upset is a very low probability. If we did have Hillary Clinton as president , i think probably economic and general geopolitical policy would be similar to what we have had under the obama administration. Anna the stability of voters. Bob exactly. What could concern voters is the deficit. She will be very relaxed about the debt ceiling. It is no longer a problem. The budget deficit has come down very significantly indeed. We had the budget deficit as a 2009,tage of gdp back in that is now less than 3 of gdp. I think clinton would represent a continuation of Economic Policy over the last 34 years. I think investors would be relaxed about that. Now, where we have uncertainty, trump lately has momentum. But we do not know whether the republican establishment, who clearly very sort of upset about the probability of trump being the republican candidate, it will be an attack on trump from the republican establishment. Will that attack be successful . We do not have certainty as to whether he will be the republican candidate. If he is, and if we get a trump presidency, we will actually have a number of very serious concerns. Particularly, protectionism. Manus you talk about protectionism, the u. S. Had tariffs on chinese imports, country. H another protectionism is already alive and well. Bob which is negative for the global economy. Manus ok, but if i look at the double risk with this man, if he gets the nomination, if he does not get it for some reason, what is the alternative . And that has legs . Think one has to recognize that whenever there has been an independent candidate in the past, have always failed. Manus i challenge that in that this man has defied every convention. It is does not seem to apply. Bob it comes back to my point. What investors are looking at, what is uncertain is the proper that the democrats will choose clinton. What is uncertain is that will the republicans end up with trump . If they do not, what is the alternative . If they managed to remove the establishment manages to remove trunk, does he run as an independent . Manus where would you prepare fx . 20 , would be equity, which are completely underprice them is that something we should think about . Ob if you get a trump presidency, the impact on the u. S. Dollar would be fairly neutral. The impact on u. S. Equity markets, particularly i think sectors which are vulnerable to protectionist measures, i think then you would have serious problems. Us not forget there would be severe restrictions on the flow of labor, as well. His antimigrant policy is actually very negative for the flow of labor into the u. S. Economy. So again, laborintensive industries would be hit. Anna quick word on the economy element of some data yesterday that suggested things were not quite as bad as things believed the beleaguered manufacturer sector was. Bob i think you actually have clarity for the first half of this year, possibly going into the second half of this year. After that, very mediocre growth number for the fourth quarter. Yes, it was revised up to 1 . That is still a very mediocre number. But i do think that led by consumption, some moderate recovery in manufacturing, focusing on the domestic factors of the economy, we will see growth just over 2 in the first half of the year annualized. Is that enough to trigger a fed move in march . My view is probably not. I agree with the markets, that we will not see much movement. I will stick to the idea that we will see movement, and a fed rate between 75 basis points at 1 at the end of the year. Rates are going up. But as janet yellen says, the pace will be very slow. Anna here is a look at your day ahead. Manus executive Board Members speak in frankfurt. Closely scrutinizing the address for clues ahead of the policy address. That is next thursday. Anna they only have a short window. Communicate anything material to the market, that explains the focus there. At midday u. K. Time, we get Mortgage Application data in the United States. And an hour later, adp employment change figures, head of fridays payroll report. Moodysoming up next, and china. And this latest piece of bad news for the worlds secondlargest economy. All that and more, right here, on countdown. Anna welcome back. 6 20 in london. Let us get the Bloomberg Business flash. Shares have soared in hong kong after agreeing to buy sab miller stake. It would give china full control of the worlds best selling brew, and smooth the way for the miller takeover by in bad. It still needs approval. Iconic capital, which helps manage the fortunes of look on valley billionaires, has hired stanford university. Kim will focus on private markets, including making coinvestment alongside private equity firms, according to her linkedin profile. The code finder of Chesapeake Energy is facing allegations he worked with an unidentified competitor to keep the price of land artificially low. Aubrey mcclendon, a pioneer of fracking, is accused by the Justice Department of orchestrating a scheme between two large oil and gas companies. He has not responded to phone and email messages seeking comment. That is your Bloomberg Business last. Manus thank you very much. Moodys cut the outlook for china from negative to stable because of rising Government Debt and declining reserves. Sees ahe agency says it debt increasing to 43 of gdp next year. Moodys of farmed affirmed, saying that it may slow the reform. Bob parker of Credit Suisse is still with us. What worries you most about chinese debt, what the government is on the hook for . What the population owes . Or are the two sides of the same story . Bob breaking it down by components, the first point to make, chinese debt is very low indeed. And yes, there is cause for concern that the reserves since 2014, which he at 4 trillion u. S. Dollars, are now down to just 3 trillion u. S. Dollars. But it is still the largest pool of reserves globally. Calls fort think this concern there. But if you look however at the chinese corporate debt levels, they are high. And they are obviously concentrated in certain areas. You know, those areas are number one, i think one still needs to be concerned about the Real Estate Market. Though over the last six months, look at the Real Estate Market price movements, early in beijing and shanghai, it is still performing. But you still have problems in the northeast with ago cities, frankly, the debt is not would be repaid on the speculative real estate developments. I think the second area to worry about is obviously the stateowned enterprise. It is deliberate Chinese Government policy now, actually to grasp that problem. So, to next year or reboot the stateowned enterprises. There will be some debt right off there. I think just the other areas you mentioned consumer sectors, i want to emphasize that the chinese personal savings ratios are still very high. By global standards. So i not worried about consumer debt. There has been a lot of concern about the shadow taking market. I think that concern was justified tothree years ago. But i think the ministry of finance, they have managed to restructure the shadow banking problem. Manus when you see the reserve requirement comes through, g20, a great deal of handwringing that g20 did nothing, where do mp . Fall into the ca versus other methods that may be out there. The markets i love this. A bit of wallpaper, but it is more intensive to ensure yourself in china and the philippines. Idiosyncratic, or a bigger trend . What do think of the Stimulus Program that comes next . One observation on that graph, that is actually a very positive statement on the philippines. And i would actually argue that in the last five, probably 10 years, we have seen a quantum improvement in philippine economic management. Well the philippine equity market became very expensive. Now it has had the correction. It is still reasonably expensive, but much less. All good news in the philippines. I think it is reflected in that cbs graph you have there. That is not necessarily a negative statement on china. It is a positive statement on the philippines. That experience in size. Coming back to china, if you look at Chinese Government bond deal, they actually have been quite high. Relative to come at know, other developed economies. Of furtherthe scope easing and Monetary Policy, as the economy has slowed it down. And this year, i stick to my view that growth will be between 6 and 6. 5 . We have is continued slowdown, but no hard landing. It is absolutely right to ease Monetary Policy further. Now in addition, i think we will see fiscal measures over the coming months. Anna might we get some of those at the weekend, bob . We have the Peoples Congress coming up. Bob absolutely. It needs to be eased further. I think that will happen, and that will underwrite growth close to six and a half percent. Anna bob parker from Credit Suisse stays with us longer. Manus coming up, we will talk spain. The Government Presses on to end the deadlock at a critical phase. We are live from a drip. What happens next . And the markets . Bob parker stays with us. Manus 6 30 in london. Let us get the bloomberg first word news. Jra Hillary Clinton has delivered a decisive performance, defeating Bernie Sanders by wide margins in the democratic primary to give her and all but insurmountable lead. Meanwhile, donald trump had a rmer grip, taking seven states. Ted cruz what his home state of texas, as well as oklahoma. Moodys has cut its outlook for chinas reddit rating to negative from stable because of rising Government Debt and inclining reserves. N. C. State debt state that increasing to 43 of gdp by next year. Movies confirmed its longterm debt, saying that the policy to support growth may slow the reform of stateowned enterprise. Deutsche bank, one of the federal banks that trade directly with the federal reserve, says they should raise this month if the latest Economic Data is any guide. The chief economist for the company in new york says manufacturing, factory jobs, consumer spending, and inflation are all improving. The u. K. Would generate less Economic Growth and a drop in investment if Voters Decide to leave the european union, that is according to black rock, the Worlds Largest money manager. Ite chairman hildebrand says offers no obvious reward. London is the stock power capital of the world, generating more jobs and proving more diverse the other cities. That is according to thde loitte. Creating 200 35,000 new skilled jobs in 2013. London now employs 95 nationalities. And the rapidly warming tides between cuba and the u. S. Will see the Rolling Stones play in havana. They will be the most famous western act to perform their since the 1959 revolution. Concert planning a free in the cuban capital, and a country that once persecuted people to listening to rock music. The latin america tour, the band says it will be a landmark in their sixdecade career. Global news 24 hours a day, powered by 2400 journalists and 150 euros around the world. Anna dont know if you will be there, manus. Three days after president obamas visit. And it is free. Manus it was very tricky. Anna let us move on. Talking about leaving the markets through the trading day, guy johnson is on the set with us. Bob parker still with us, from Credit Suisse. The big question this morning, guy, we saw such a big rally. March not bad so far, one day. Is it stable . Guy do you want to be checked in this rally . Look at tokyo. A lot of catchup that needs to be happening. A lot have outpaced the last month, year to date actually. What has been happening in japan and in europe, here is the thing. Look at dollaryen. That is a useful indicator. Three major houses in japan are calling dollaryen significantly higher. So, what where do i take that . You would have thought this was a story, if that is something to be aware of what i think about my equity market positions as well. What is the median level . 3 now. At 11 manus you just see them forecasting on bloomberg, median expectation for dollaryen. Guy look at the second one down. 108. Manus 109 for the first quarter, 108 for the fourth. Bob . Is on our models, the yen undervalued. That is the obvious thing. Look at where he came from the last 34 years. 72, we thenround had all of the reversal back to almost 125. Recently, we have stabilized the range of 110120. The argument for strengthening have a theirf we market in Global Equities, because that would drive Japanese Investment cash back home. Or aenever there is a risk bear market in Global Equities, that results in a strengthening of the yen. The other argument is, obviously, we have quite significant current account service in japan. But the bank of japan, i think that would protest 108. They were very uncomfortable a few weeks ago when dollaryen have to 111. ,deally, the bank of japan while they would not say that exquisitely, implicitly they would prefer stability in the range of 150120. I would be surprised if we get to 108. The negative rate conversation. We will pick up on that in the next part. Guy, thank you. Bob parker stays with us. Manus in spain, the party leader has taken the first crack at winning the confidence vote in a country entering a critical phase. Anna asking lawmakers in madrid to oust mario, the peoples party, after they produced an unprecedented deadlock in parliament. Make areoposals that i three. One, let us get spain out of the stalemate it finds it in. Two, put into action the change that millions are accessing four. This question of whether to vote for sanchez, the answer is a simple yes or no. And in that moment, we will know where everyone stands. Manus let us get more now with our spanish reporter maria taddeo. A very good day to you. What can we expect from todays vote . Maria good morning, manus. Today, finally we are getting real action in parliament, like you said, the political deadlock. It is a big day for pedro sanchez. He faces a confidence vote. If he wants to become Prime Minister today, he will have to when an overall girardi. By the looks of it, it looks like he will need a miracle for that to happen. Just to recap for viewers, back in december, the socialist had a pretty bad election result. The numbers really do not add up for him to win that majority that he needs. He will have to have the support, and of this state, that looks very unlikely. However yesterday, as you showed in that clip, he made it very clear that his strategy is to put them aside and focus on them. He knows he has moderates in the bag. So is about targeting, making attractive deal. He talked about renegotiating spains deficit. He talked about first aid, more rights for workers. He is trying to pile on the when they voteat no today, which is very likely, and makes them look bad. But also loves the pressure into friday, which will be the final and decisive vote. Anna you said you might need a miracle, assuming no miracle is forthcoming and he loses, what would a second vote look like . Maria definitely, that would take us to friday. Which is the final vote. Really his very final crack at it. At that stage, he is only going to need a simple majority. By that, we mean more votes in favor them against. Crucial, it becomes trying to force them into abstaining, that is a good deal for everyone. Those are words for everyone. If you do not vote yes, if you do not abstain or make it happen, it will really put the country back into deadlock. Most importantly, it gives him power. Manus maria, thank you very much. Maria taddeo in madrid. We will keep you updated on everything that develops on the story. We have a live blog at 7 50. What you have to do on bloomberg, top live. Anna expectations are high that the ecb will step in for more stimulus next week. Leaving the argument for more action, and fell to 0. 2 . Manus and festers will be watching the speech investors will be watching the speech this morning for clues on the ecb thinking. The address in frankfurt comes ahead of the quiet period on march 5. Lets bring bob parker back into the conversation. I love what you said in the break. Why should we be so focused on Benoit Coeure . Bob he always give speeches when the ecbs concerned about the strength of the euro. This is actually unusable. Betweena euro that is 108, 109. It is very clear. Again, they would never say it in public, i think it is obvious that the ecb does not want a stronger euro. They do not want that. It means they do not want a euro between 112115. Ideally, they would prefer a dollareuro rate over the next few months closer to 105. I think there is a very high probability that that will happen. And given the dovish statement from mario draghi and others, i think there is a high policy we will see monetary easing when they make the announcement on the 10th of march. Anna expectation has been high in the past. And we have not quite lived up to it. Bob that is absolutely right. And the markets and the markets a shot back in december, when i think it is fair to say that markets were led to believe the Monetary Policy would be eased. And action taken was much less than Market Expectations. I hope and think that Market Expectations are right this time. I do think we probably get an extension of negative Interest Rates. I think there is a high possibility that qe will be increased. I also think there is a chance he may expand number of asset places. Manus that might actually be the sort of shift them of going beyond government bonds. Guy did an interview yesterday with the ceo who was very effervescent, the understatement of 2016. Negative rates are a real issue. They are useless for his clients. It is absurd. He talks about a whole raft of issues. But he is really both severus in erous inicism vocif his criticism. One of the conversations, what is it doing to client money . The first, to make is that obviously this is negative for the banking sector. Balance sheet with negative rates is a huge challenge. Particularly, when you cannot pass those negative rates on to your domestic deposit base. Now, in terms of clients, whether it is pension funds, sovereign wealth, insurance companies, clearly running income portfolios in a negative or very low yield environment is a huge challenge. It is unprecedented. And i always come back to the comment when my life is very easy and 1980s, when we had 10year bond yields up 10 , and 10 year u. S. Treasury yields, one stage we were close to 17 . Life is very easy them. And as negative field environment, friendly you think of all ideas. Anna as years gone by, we know what that means. Bob parker, Senior Adviser at Credit Suisse, stays with us. Manus u. S. Attorney Loretta Lynch has challenged apples refusal to unlock an iphone. In an interview with bloomberg television, she said the company has been doing similar things for years. Ms. Lynch in the present, we have seen how we do in fact balance privacy and security every day. In fact, until recently, apple was able to comply with our request. And they have some of the strongest security out there. And we have not seen that parade of horrible come true in those cases either. And on Caroline Hyde joins us with some analysis. A forceful argument coming from the u. S. Attorney general in an interview in california. What do you make of this . Caroline it is fascinating, on apples home turf. Coming out and saying apple has been doing this for years. It is only now because the operating system has become that much more encrypted that we need their help. Her argument was that they have been doing it for years. She also forcefully said that it is one company dictating the way this issue goes through from here on out. She really does not feel it should be left to apple to decide the future of this investigation. But she is facing adversity. Just yesterday, a new york magistrate ruling in favor of apple. On actual deal of a particular argument, this is very similar to the San Bernardino shooting. This one, they wanted an iphone unlocked a drug dealer. This is what was being asked for by overall by the institution from the government. Apple won that case, but it does not mean they will win once again on march rate second. At the moment, apple is using that court order obtained by the fbi remove some of the security features so they can get in and hack one of those iphones used by the San Bernardino shooter in december. Clearly, we have someone speaking out in rejecting apples contention that it is against the constitutional right. Manus caroline, and terms of the battle, there is a battle between the state and the tech companies. It is being waged on the other side of the u. S. , you have a congressional hearing in washington to debate the Law Enforcement authority to access encrypted medications. Caroline such a busy day. Greta lynch in carolina, and in washington, you had apple squaring off with the fbi in terms of a congressional hearing there. You are right. And we heard from the fbi there, that particular speech from james comey really trying to iron out that this really should not be that contentious of an issue. At the end of the day, everybody wants what is right. Have a listen. James there are no demons in this debate. The company or the government is not evil. You have people who see the world are different lenses, who care about things all the same thing in my view. Companies care about public safety. Innovation and safety. We devote our lives to try to stop people from stealing our secrets and hacking into our devices. We care about the same thing, which make this an easier conversation. Caroline clearly, the fbi rather flabbergasted this has gone to the extent. This is against the fact that apple should not have to go to the court to argue this out. They feel it should be a congressional matter. Rather than something going to the court. But apple just sticking to their guns at the moment, really trying to say this is not just about one particular iphone, one particular scenario. T a shooting or elsewhere. Tim what happens here is that apple is forced to write a new operating system to degrade the safety and security in phones belonging to tens or hundreds of millions of innocent people. It will weaken our safety and security, but it will not affect the terrorists. In the least. Representing apple, bruce sewell. March 22 is when the hearing is scheduled. Apple so far as using that particular phone that was used by one of the shooters in the San Bernardino terrible atrocity that happened in december with the killing of 14. They feel this is a question of civil liberties. Meanwhile, of course we have a government still desperately trying to gain that access. Both fighting tooth and nail, which ever side of america they happen to be speaking on. Anna thank you. Fascinating story. The swiss economy, breaking news, expanding by 4 . Ander than the investment, the estimate was 0. 1 . All of that in the face of a stronger swiss bank. Manus i am just pulling this up. Bob, we have him from Credit Suisse. I am pulling up the euroswiss competency. We have traveled all the way back. I was trying to work out the percentage. Those are pretty good numbers in the face of, still, quite a big move in the currency. Economyhink the swiss having had that shop over a year ago, i think it is fair to say that that drove the swiss economy into quite a significant downturn in the first half of last year. Now, the swiss economy actually has adapted. We have seen some movement back in the swiss franc against the euro. Right. Consumption has improved. I think the export sector, which took a huge hit them has now adapted somewhat. The numbers, let us analyze it. Around 1. 6 annualized. I would not actually say it is a rapidly growing economy, but i think it is over the shock that this was economy got this time last year. Anna bob parker, Senior Adviser at Credit Suisse. Joke. Ng up with my weak manus were going to talk blackrock and brexit. Why the worlds biggest Money Management does not see the rest. Thewhat if the u. K. Quits eu . Anna welcome back. 6 52 in london. Now, the u. K. Would generate less Economic Growth and have a drop in investment if they decide to leave the european union. That is according to blackrock, the Worlds Largest money manager. Vice chairman hildebrand said that brexit offers little risk with little obvious reward. Manus meanwhile, norway has losing ahey risk key ally. If they choose to exit. The u. K. Is a strong i live for norway ally for norway. There is strong emphasis on competitiveness, on simple vacation. And is brought to the table firmly by the u. K. And of course, the standpoints are often shared by norway and of course the u. K. Has influence in the european union. Anna bob parker is still with us. Bob, how are you waiting your concern around brexit, and the market general . Found a report that was somewhere to what blackrock came out with just the last day. I think i will break it down. The fiscal impact, i would highlight two points on the politics. I think it will trigger another scottish referendum. I think this time, there is a high probability that scotland would go independent. That is the First Political fallout. The second political fallout, it would encourage independent movements. Particularly, in spain. Movement, ande n i think it would have a negative political impact on the european union. You then have to look at the economics, the economics inevitably would be a significant downward move in Foreign Investment in the u. K. Let us not forget, mark carney highlighted this recently in a talk, which is that the u. K. Account deficit close to 4 of gdp. They need capital inflow. Outside of the eu, we would not get that. Manus the early 80s . Bob one final point. The city of london employs, defining it different ways, about 300,000 people. It is not an unrealistic forecast to say that the job losses with a brexit could be perhaps 50 of that number. That is 45,000 people losing their jobs in the city of london. The city of london would be challenged on a brexit. A couple ofi read functions on the bloomberg, just looking at what is going on with eurosterling. That has been declining for five days. The longest stretch of losses since july of last year. There seems to be a moment of reprieve. Tolarsterling inching back 1. 40. These are some of the estimates in terms of the median going across 2016, 76, 74, 73 is where would be on eurosterling. Just this reprieve in the market but you think it is temporary . Bob triggered by two things. A week ago, sterling was technically very oversold. There he large short positions in the market, we have seen short covering. Factor number two, let us not forget as we discussed earlier, what is going to happen next thursday. The ecb meeting going into it, if we do get further easing of Monetary Policy, which i act, that is obviously euronegative. Over the next few weeks, we could see eurodollar moved down to 1. 05. The ecb would be very relaxed about that. Again, that is a reprieve for sterlingeuro. But we still have a good three months for this referendum. I think you will see, after this reprieve, a further leg down probably in april, and further selling pressure. Anna i guess everybody has to numbers right now. For in andu. K. Data out. Thank you, bob parker joining us. Senior adviser at Credit Suisse. Itv the factor . We will bring you the earnings. Anna not the x factor 6 56. See you in a minute. Donald and hillary win big on super tuesday, each strengthening their grip on their partys nomination. We have the latest. Anna a Global Equities rally Gains Momentum in asia as Economic Data from the u. S. And australia surges. Manus moodys cuts its outlook for china, blaming rising debt and falling reserves. Anna and lack rocks like blackrocks brexit morning. Brexit warning. Manus welcome to countdown. Anna a warm welcome to the program. Just past 7 00 in the morning wednesday. Us its super tuesday anna its wednesday in this part of the world. Lets talk about the markets. S pave a strong rally, the up by 2. 4 . Strong louvers in the United States last night. It moves into the overnight session, asia really strong, up by more than 4 . Here it looks manus europe looks like it will get a good opening. Up 9 10 ofotation 1 . Im trying to look at glass halffull. Expected. Better than aussie gdp up and better. Fromchina has had a knock the ratings agencies, but u. S. Manufacturers are not bad. They have stormed ahead, up. London up 11 . S p up 8. 35 . This silent rally. Anna march has been a decent year for equities so far. Not much of a statement with only one day gone. Have it number we looks stronger than estimates. Fouryour revenue from this 2. 94 billion with the estimate. One of saying about where they will be for the rest of the year . They say expect itv to be flat, marginally behind the market, if that is anything some kind of guidance. Of course, this is a Company Exposed to what happens in the advertising market. There was some talk about a significant cash return possible from this business. 4. 1p. Anus dividend is and Goldman Sachs is guessing higher. Its interesting to see whether that meets up with analyst expectations are shareholder expectations. They do talk about the overall advertising industry, saying they see themselves outperforming an estimate in the tv ad market. They expects theyre proposing a final dividend of 4. 1p. Manus a sticky headline on the bloomberg terminal, delivering 125p pershare. Share. Eviewing 125p per dotty is a retailer of anna electrical, furniture, that kind of thing. Leslie the breaking news there and get to first word news. Caroline good morning. Donald trump as a firmer grip on the republican president ial nomination. He took seven states as part of a commanding super tuesday showing. Ted cruz won his home state of texas and oklahoma. Meanwhile, Hillary Clinton delivered a decisive performance, beating Bernie Sanders by wide margins. Moodys cut its outlook for china from negative to stable. Sees statesays it debt increasing to 42 gdp by next year. Says beijing policies to support growth may slow the reform. The u. S. Attorney general, Loretta Lynch, has challenged apples refuser to unlock a dead terrorists iphone. In an interview, lynch says the company has been doing similar things for years. In the present, we have seen how we have balance between privacy and security every day. Until recently, apple was able to reply with our requests, and they have some of the strongest security out there, and we havent seen that in those cases. U. K. Will generate less Economic Growth and have a drop in investments, if they decide to leave the european union, according to black rock. In a report to clients, the vice chairman says brexit offers a lot of wrecks with little a lot of risk with little obvious rewards. The return to growth at the end of last year as it falls off the impact of a currency shot. Aftercreased. 4 , contracting the previous quarter. That growth beat analyst estimates. And australias economy grew faster than forecast in the final three months of the last year. Driven by a plunge in Household Savings. Of a. 4 estimates gain. The aussie dollar jumped on the news. Global news, 24 hours a day, powered by 2400 journalists. Manus thank you very much. Lets look at these asian markets Juliette Saly is standing by. Its a push pull in terms of what the market wants today. Juliette absolutely. We certainly have to investors in this part of the region, particularly in china, which is closing a 4. 3 , really ignore that ratings cut from moodys. Amz saying it should have had immediate response, and that is what we have seen across the board. If i take you into the hang seng, you can see that there are absolutely no stocks in the red today, showing how much risk on appetite there is. China resources up by 12 in late trade. It had been up by as much as 30 after agreedit to take after it agreed to take its stake in sab miller. The nikkei closed higher, up by over 4 . We didnt see the yen move too much during the day, so some really good buying coming through from the automakers after we saw february car sales better than expected. The asx 200 led higher by the commodity producers, particularly pimco. The asx 200 closing higher, above that 5000 point level as gdp impressed the market. It has been a very positive session in the region. Having a look at the yen, it is wilting a little at the start of the european session, but during most of the days trade it was pretty flat. The yen now down one third of 1 against the greenback. A very positive day once again in the asian region, stocks now at their highest levels since january 8 on the regional benchmark index. Anna thank you. Juliette saly from hong kong. Lets talk u. S. Politics. Donald trump and Hillary Clinton were the big winners. The two turned their attention to each other, offering what is perhaps an insight as to what might lie ahead. Clinton took aim at trumps divisive rhetoric. It is clear tonight that the stakes in this election have never been higher. And the rhetoric we are hearing on the other side has never been lower, trying to divide america between us and them is wrong. Were not going to let it work. Back, referring to himself as a unifier, and taunting clinton as to whether she would emerge as the partys choice for president. Im a unifier. I know people will find that hard to believe, but believe me, i am a unifier. Once again all of this finished, i am going to go after one person Hillary Clinton. On the assumption she is allowed to run, which is a big assumption. I dont know that she will be allowed to run. Anna lets get to our Portfolio Manager at hermes, joining us on set to put the politics into a market context. When you look at the results we had overnight, as expected, we got a strong showing from trump and clinton, still the front runners. How do you look at this through market lens . Does surprises there, i guess. Is expected, trump and clinton. From a market lens, it is too early to judge. I would expect if trump does seriously emerge as the front runner, if he has a chance of being the u. S. President , there is a good chance the markets may find that as uncertain. Markets right now arent really in the mood for more uncertainty. As we get closer to the election, well see how it will affect markets. It will probably be more of a question of going back to the story of Central Banks. Thing from ther United States yesterday after you put the euphoria of super tuesday aside, the data are getting moderately better, and it has certainly excited the market. We saw a big shift in treasury, a move in terms of the breakeven in the u. S. Manufacturing is reading like a summer of last year. Is a time for me to move off my grinch . I hate to be a wet blanket, but i think it is a bit early to get excited. We have had appeared aware markets have been negative, an until recently, when they were in negative mode, it doesnt take much once you reach a very negative stage, it doesnt much to turn momentum around. I would sit and wait for now, and i think there are still big risks manus at 6 00 a. M. , we ran through some markets. Up,s p 500 lost, the dax london up. Is that put it in context. A 10 rout in equity markets is that something more . It is hard to say. The only certain thing there is is that volatility will cling. I know that isnt saying much, but i think that is the case. Markets are in no mood for more uncertainty. Any companies or markets that are showing any signs of weakness, you are seeing markets punish them. Anna negative Interest Rates were one big theme around investments. We were talking to bob parker about how clients are scratching their heads and trying to work out how youre supposed to make money in the negative rates environment. It is something you talked to clients about as well. Yes. You have definitely seen this hunt for yield, and it is becoming harder to find something. Longterm, there will always be growth. There will always be opportunity. Its just that you need to be more selective in where you look. Manus in terms of the fed, there is this other piece from Deutsche Bank get on with it, if you are data dependent. You should be moving in march. Again, there seems to be this window, is shift slightly. Youve got anna only a 12 chance of a hike from the fed. Weve now got to the 14th of december, Market Pricing and 64 chance of a hike. Manus if anna talks long enough, i managed to get the word. [laughter] i wouldnt be surprised if we are back here in a month or three months time, talking about the expectation having shifted. Wrong, weont get me still expect another rate hike. We did even before this little surge of positive data, even though they are just trying to grab onto anything good. The action come through, and we see the vision not just by the fed but by the ecb, its going to be volatile, and we are going to see expectations move all over the place. Anna too early to talk about how u. S. Politics might rub up against the fed decision, i suppose. Historically, it tends to be Monetary Policy and centralbank actions tend to be free. Election yearn an i wouldnt expect any massive tightening. Even before today, the feds cycle will be a short one, even if they have hikes to come. Manus how unsettled as you talk in the office, how unsettling is the prospect of a trump republican candidate, a trump independent candidate . Would you even consider outcomes . The honest answer is we dont know, because we havent heard much from him other than on manus on policy. Exactly. Just bashing the competition. A lot of things he said that i found offensive, especially because he did so well from capitalism and he seems to be antifree market. I dont know if that is a fair thing for someone like him to say. That we will see. That will become more clear. In his defense, there are things he said about what you can expect from his Economic Policy which might not be as bad as everyone bills. It is a case of lets see what happens once whoever is confirmed, and lets hear what they have to say in terms of real policies. Anna thank you. Tim crockford stays with us. Ecb board0 u. K. Time, members speak at frankfurt. Well be scrutinizing the address ahead of the policy announcement. That comes next thursday. Anna at midday, Mortgage Application data in the United States. Hour and a quarter after that, a gauge of the u. S. Jobs market, adp employment change figures. Stock as next, taking asian equities extent the global rally. What to expect from the european trading day. Anna welcome back. It is 7 19, 8 19 in frankfurt. Lets get to your Bloomberg Business flash. Caroline thank you. Revenue,osted annual up 15 from the previous year. They announcede, a small your operating profits at 666 million pounds. Beer shares have soared in hong kong after it agreed to buy sab millers stake in their chinese joint venture. It would give china for control of the worlds bestselling brew and smooth the way for sab miller to buy ab inbev. The transaction still needs regulatory approval. Iconic capital, which helps manage the fortunes of silicone vally billionaires, have hired stanford kim. Thats according to a person with with knowledge of the matter. Hell focus on private markets. Of Chesapeake Energy is facing allegations he worked with an unidentified competitor to keep the price of leasing land artificially low. U. S. Justiceby the department of orchestrating us a scheme. The charge is wrong it unprecedented, according to a statement. That your Bloomberg Business flash. Manus thank you very much. Asian stocks have extended their global rally. Strengthened, aussie growing more than expected, manufacturing slowing down. Anna a little bit of data around their, if you are looking to go risk on. Thats what has happened over the last 24 hours but concerns remain in asia, underlined by moodys cutting is outlook on chinas credit rating. Lets talk about what futures are suggesting, because the u. S. Rally yesterday was sustained. The end of that rally could price into the european session, so we are expected to be 26 points higher. Manus yeah. Up over 2 , flashing back up again. The s p 500 rallying by 2. 4 . Were seeing a little bit of a liftoff. The great debate what are the ones we use every day . We talk about dollar yen. Its fascinating we are at a precipitous moment where the biggest banks are calling for yen to strengthen down to much stronger levels and we have seen. What could that potentially be telling us . Its all about safety, at the end of the day. With yen, like with gold, it is about a flight to safety. Your view of where the end ends is about where you expect markets in general to end. Manus this is euroyen, for example, the whole way down, a little bit of reprieve just coming in to the trade. But its the end of the year. In terms of euroyen, this is a tricky one. Question is now where and how do Central Banks move. With regards to the u. S. , its probably a lot harder to talk about policy divergence, because even though there is still a good chance of hikes, we dont know it is becoming increasingly clear that the cycle will be shorter than expected. Now for Central Banks like the ecb and boj to rely on the fed to do them favors, and that will have a big where on their currency, they end the year and where they go. But with youryen, it is harder to call. All eyes will be on the ecb. Anna lets talk about that. We have that 0. 2 headline until monday. That seems to be causing a market rally. Bad news is good news. s suggesting that this was bad news on inflation, therefore the ecb will step up and do more. Will the markets the wrong . Really are wrongly . Expectations are clearly very high now, and i think the ecb pacify. O a lot to that is a good question and we will see what happens. I think it is going to be hard for the ecb to knock it out of the park, because they want to keep some tools and reserve. They dont want to throw the big guns out yet. They probably dont need to keep it anna they have to keep the germans on site. Definitely. Manus they have to bring the big guns out. Lets get the producer to pull up the challenge the specter of deflation that is haunting the eurozone. Its a classic graph, which just shows the momentum, the deflationary momentum. There you go. That is a shift and a half. There are two questions here. First of all, the question is does the ecb, like other Central Banks, have more policy tools . The easy answer is yes, because they are running on competitive policy. They can make it more unconventional. The other question which is hard to answer is are these tools going to be effective . Are they going to be effective ecb, the issuee is that those Deflationary Forces are outside their control. Oil, commodities, but also imported deflation. Anna so you say therefore negative rates are what is needed, more negative . Or are you in the camp that says it is all about oil, not about whether the banks are lending. If you take rates negative, it doesnt make the banks more likely say itin the camp that is a great tool for generating liquidity, but not for getting people to borrow. The ecb, like other Central Banks, will have to remain loose, but they wont be able to force consumers to borrow. The european economy is definitely improving, but the pace will be very slow. If we take cpi and inflation out of the picture, we are still seeing positive prints in terms of employment, pmis. They are still in positive territory, but it is going to be a slow recovery. Manus in 40 seconds, through the prism of more action through the ecb, do you want to be longer on equity, shorter on euro, or longer in spreads . Good question. I think i want to be longer of developed market. I will always find opportunities to grow within that. Whether you are looking at equities, at commodities, any asset class, you have to be selective. Thats what i would say. Anna thank you very much. Manus 30 minutes to go before the start of the european trading day. European futures set for rising equity markets. Its a bright and sunny london open for you. Ftse futures indicate a 6175. V guy welcome to on the move. 7 30 in london, 8 30 in frankfurt. We are counting you open to the european open. Im guy johnson, alongside hans nichols in the german capital. Here is what we are watching. Risk on. Equity rally gaining momentum in asia. The u. S. Stocks have their best day in seven weeks. Europe called higher, but it has a lot of catching up to do. Trump and clinton win big. Hillary and donald dominated super tuesday, strengthening their grip on their partys nomination