This thursday morning. Somebody flicked the switch at the fed, from the most dovish centralbank meeting of the 21st century, according to Goldman Sachs. The tone has changed. The rollcall of hawkish voices rolls on. Bullard questions the very validity of the dot. A cacophony of voices. Bullard, evans from chicago, lacquered from richard and lockhart. Market is beginning to be blindsided. They are necessarily underweight. Says, is a pimco currency risk. Goldman sachs, good old Goldman Sachs, will keep the dollar bulls happy. Goldman says, stop worrying. Value the dollar is already in the price. Lets see how the strength of the dollar is pervading across markets. You are seeing a dropout of some of the commodity plays. You have oil coming back off of its recent highs. Timesories are three what were projected. Volume study percent below the overall average. You are back below 40. The psychology of breaking markets. It into perspective for you, gold is at a onemonth low. Emerging markets are also lower. The glory is fading in this Global Equity market rally. Before easter, will we be bull or bear. Yvonne . Yvonne really good morning to you. We are seeing optimism after the premiers speech. That resurgent dollar really weighing on asian markets. We are seeing energy and financial shares tracking down the market. Chinas stocks dropping the most in two weeks. We did get some earnings that were pretty weak. The theme seems to be low commodity prices. We did see that the small cap stocks entered into the bull market yesterday. We also heard from the premier reiterating its commitment of growth in the next five years. Shares down 6. 5 in shanghai 0. 6 in shanghai. Fluctuating between gains and losses but down 6 in tokyo. Comments from the bank of japan governor, kuroda, the impact he had was shortlived. He talked about negative rates and said he believed that the impact will eventually be felt in the real economy and does not see it happening in the next meeting when it comes to keeping this type of policy. It looks like we are back on the way down. Japans secondlargest trading house. First profit losses in modern history. Mining and mitsui os k lines all falling and dragging down the index. Earningsith the other as well. Petro china falling 4. 3 . 2015 profit, 5 gain. Lower than estimated. The loss in resources overshadowed the revenue from financial services. Debt they said that bad charges will be at least 75 million higher than previously forecast. Manus a great round of their from yvonne man in hong kong. Reporter two days after the Islamic State attacks on interior,uropean ministers meet in the belgian capital to assess counterterrorism and Airport Security measures. The continue their search for perpetrators at the subway station of the 230 people 33 people dead and 200 others injured. Face questions about last weeks budgets. His testimony followed yesterday by boris johnson, a leading proponent. Youviewers, we will bring George Osbornes appearance before the Treasury Committee. merge and a deal that will create the Third Largest bank in italy. Banko populair will on shares in both banks. The ceo of after the firms investment and troubled drugmaker, valiant, damaged the reputation. Global news 24 hours a day, powered by our 24 hundred journalists and more than 150 news bureaus around the world. Can find more stories around the world. Manus there has been is the weeks as awn in two drag on profits. The premier says he will not weaken the currency to reduce exports. He was upbeat about the future and described asia as the Growth Engine of the world. Economyrowth of asian was faster than the global average and the total share in the World Economy continues to grow. For one third of the global asia has become the most dynamic region in the world. Manus joining us now is Stephen Engle who is live. Obviously a really reassuring message there from one of the most interesting words, we will not devalue the yuan to reduce exports. Fib,able, or playing fable, or playing to the gallery . I have been asking this a lot around china. The currency markets in the stock markets have been seeing a lot of volatility and i would have to say the chinese leadership is learning a lesson that they do need to convey their message more clearly and more readily to the Investment Community around the world because of that volatility. Had all of those bets against the yuan thinking that the chinese had to devalue. Message even though some say, the chief strategist at Goldman Sachs told me earlier this morning that china would be served well by devaluing the currency. Least rest of it they will keep that relatively stable. There were two other risks on the table today highlighted by Goldman Sachs and the Property Market rebound. Goodman addressed boast both of those as well. He said the fiscal deficit is not too high at this moment and he would like to see Steady Development and avoid major fluctuations in the Property Market. So far, so good. Wass looking better than it a few months ago. Lee said that he is improving and that is the message they are sticking by right now. Manus great job, great coverage. Enjoy the rest of the day. Thank you for taking the time. Joining me now on set, it is the global head of microstrategy at state street Global Markets. As stephen was speaking and you were listening, there is a great debate. Devalue toe wont reduce our exports. The markets are saying seven different. Do you join that . How are you positioned in the yuan . Take the lid off. The thing that we are interested in is the comment about what is fair for the world. We have collected a lot of Retail Prices from online, in china and the u. S. , and created a very large pdp basket. The interesting thing it is suggesting now is that the chinese currency is more than 15 overvalued. Idea, that ithe would be beneficial to china to allow it to weaken further is true. For the rest of the world, for market sentiment, i think the comment from chinese policymakers are very important. They are as important as the measures we have seen from the bank of japan, or the ecb. They are as important as whatever it was that the fed has done. In terms of removing tail risk, that is what we have had in the last six weeks to two months. Policymakers responded to the panic and they have taken the tail risk away or diminished it significantly. Manus 15 overvalued is a fairly significant call. If you look, the fed raised rates, and they nudged it by an enth, but they did raise the rates. There was the lid taken off this repressed volatility. This says that these are so inefficient, distorted, and dirty that they will not be able momentum ofmong the the fed. The next couple of weeks will be interesting if the fed commentary continues in the current vein. The reality is that most people, werees included, we so so surprised at how dovish the dots were. Seeing the commentary from the fed that maybe the market over read the dots, that they did not intend to be that dovish if you take a side the kind of financial dislocations, the u. S. Economy is sending a clear signal. Core inflation is above 2 , the labor market has tightened, the fed does need to tighten. The uncertainty is how much weight should the fed be putting off . Manus part of the shifting in if you have a pboc which has determined not to let the currency drop out of the sky, how are you positioned in terms of chinese Currency Exposure . According to the nice chart here, we are running out of steam. Fibonaccis is the resistance line. Those are the things i want to try to get a grip on. On the first point, i think ,t is sensible that ultimately china will have a weaker currency. However, they are going to control it. There was a period at the start where, perhaps they were concerned about it weakening too quickly. Manus a higher deficit in a different currency in the region. I think that is right. The market has been there and tried it. The central bank has reasserted itself. There have been a lot of comments about the efficacy of policy, and policymakers losing their grip. The answer is, no they are not. China should be able to manage its Exchange Rate. If they cannot manage it, no one can. Manus what about a tobin tax . How disconcerting would that be . I think that in general, anything that hinders markets in that way would be concerning. I think that is true. I would argue that the central bank has enough reserve firepower to maintain Exchange Rate stability, without resorting to other kinds of measures. Manus i want to bring you a few headlines before we get you up to speed. This is from credit suisse. They are confident that they will deliver on its target by afterd of 2018 yesterdays huge groundbreaking news about the Bank Restructuring and our exclusive interview where he said, we were surprised by some of the positions. People were building positions for revenue rather than profitability. Shares are worth 14. 3 million swiss francs. The chairman will stand for reelection. Less than his counterpart across the road at ubs. Here is your day ahead. Starting with germany, we have the Consumer Confidence numbers at 7 00 a. M. Including the u. K. , we have u. K. And retail sales. Later, the performance of the week. It depends how you spar against boris johnson. George osborne will be quizzed on britains eu membership and the cost of an impact on brexit. Decision fromate turkey and this afternoon, our attention turns stateside. Set your clocks. Pmis willome visit be the dictator of the help. We will dive deeper into the fed reserves. What will happen in april . The cacophony of voices. The hawks are rising. Manus you are looking at a shot there of hong kong. The hang seng is down over 1. 25 . What happens next has an impact for everybody. Thats get an update on the business flash. A company has agreed to pay 12 5 million to settle a claim that the drugmaker paid bribes to china from 20092013. 2pany payments include million in penalties and 1. 7 million in interest. Is said to seek the removal of the yahoo board and will nominate nine directors to the board, according to a report in the wall street journal. There said to include star board s ceo. Cites a street journal starboard letter as its source. Kenneth coke is said to have left Goldman Sachs this month. According to people familiar, he will join the Hong Kong Exchange as head of the cash trading unit. It includes the China Connect Program which will link it to the shanghai stock stock exchange. Descendents of John D Rockefeller sold their exxon mobil stock and plan to dump all shares. Ssil fuel stayingd there is no rationale for copies to explore for oil as companies contemplate cracking down on carbon emissions. Goldman sachs remained the largest bank by commodities. Company madebased the most money from rom at your reals for the second Consecutive Year. That is the most money from commodities for the second Consecutive Year. Kumutha, thank you very much. Unchangedd that the Economic Outlook among Goldman Sachs and his colleagues should lead able to consider a rate hike. You could argue mobile risk lower, outlook is maybe but another strong jobs report, labor markets are improving. You could make the case. Metcalf is the global head of macro strategy and state street Global Markets. He rejoins us for this. There is a shift. Goldman sachs has maintained that last week, we had one of the most dovish fed moments in the 21st century. They say that your only trumped by Forward Guidance since 2011, september 2013, when they missed the taper. This has been a dramatic fed meeting, a dramatically dovish moment. There is a cacophony of voices shifting out of the shadows to change our mind. The one thing that i would say about the dots. Way of veryone numerical part of Forward Guidance. History of to the Central Banks that have tried to forecast their own rate, the riksbank have done this the longest, they are not that good at forecasting where they will move the policy rate that they set. Just like Central Banks can missed forecast growth and inflation, they can missed forecast their own policies. There is perhaps a precision in the dots that is not really warranted in Forward Guidance. I think that the dovish nature of the fed was all about the deterioration of financial conditions. If you look at some of the measures of Financial Stress the the kansas fed measures or the cleveland fed measures, if you look at the level of those indices, they spiked a lot in february and have come back, but not all the way back. It is sensible in that regard for the fed to take the foot off the pedal a little bit. To say, lets wait and see what happens. But the economy is clear, core inflation is above 2 , the labor market is strong, they should be tightening. Manus that is your base case. Lets get very bloomberg about it. How many hikes about it . This is what i really fascinated about. The market position, long dollar positions down by 80 , the markets are the least long since june 2014. Is that a golden opportunity to add to your fingernail long positions . You say fingernail. I hung onto that dollar long. Manus we are not liquidating we will stay for the dollar long. Part of it was about the ecb. I did not think the fed would turnaround so quickly, but the market powers undereimated how europe. Ltr is in sticking with the dollar, because the economy is strong, and we believe that financial conditions will normalize, it is clear that the fed goes at least twice, perhaps three times. You could get some upsize surpses and even more than that. The interestinthing about the market is that thefed has come to the market. Manus the fed is trying to correct this dovishness. Here is the interesting part. The market has been ahead of the dot all this time. Bequestion is, can the data Strong Enough for the market to get ahead of the fed, or at least ahead of the dots. Manus that would involve a complete capitulation, wouldnt it . I think it would be the Market Pricing in where the economy is. Manus we should probably cheer that, rather than necessarily see it as something negative. We have a lot more to go, Global Equities to get into. Metcalfe,chael global static strategist at state street Global Markets. Find out what happened when the mayor of london faced lawmakers to make his case for bringing the u. K. Out of the eu. Hey hows it going, hotcakes . Hotcakes. This place has hotcakes. So why arent they selling like hotcakes . With comcast Business Internet and wifi pro, they could be. Just add a customized message to your wifi pro splash page and youll reach your customers where their eyes are already on their devices. Order up. Its more than just wifi, it can help grow your business. You dont see that every day. Introducing wifi pro, wifi that helps grow your business. Comcast business. Built for business. When it comes to the fithings you love,. You want more. Love romance . Get lost in every embrace. Into sports . Follow every pitch, every play and every win. Change the way you experience tv with x1 from xfinity. Manus 6 30 in london and 7 30 and brussels. Nejra is here. We have been talking about the value of the dollar and its relationship. It is pervasive. Putting a cap on these risk markets. Nejra it seems the dollar is driving everything today. I have tracked it against the msci, all country world energy syntax. Bloomberg commodity tracks returns. You can see as the dollar heads higher, commodity stocks head lower. The dollar is on five days of gains. The longest winning streak in almost two months. Gaining ground versus all of its g10 peers. Oilourse, we have also seen holding its biggest loss in six weeks. That is that relationship. Look at the dollar versus gold. Re you can see the inverse relationshipd. Gold falling to its lowest in almost a month. This week it dropped 3 heading for its worst weekly drop since november. They are dropping for a second day, but currencies are falling as well. Theyre heading for the biggest a client in almost two weeks. I will show you what is happening in the jgb and u. S. Treasury market. Theyre proving no deterrent for investors. Manus lets get you up to speed here with kumutha. Kumutha europes interior ministers meet to talk about counterterrorism and Airport Security measures. They consider their hunt for the perpetrators of the explosions at the airport in a subway dead andhat left 270 injured. Osborne testified before law measures on britains measures and that you. His testimony follows yesterdays by boris johnson, a leading proponent to leave the eu. They will bring you George Osbornes appearance before the Treasury Committee. Goldman sachs says the effect of the strong dollar on inflation is limited. He suggests that it poses little threats to inflation goals, challenging comments by policymakers. The report argues that a strong dollar is not translating into significantly cheaper import prices. Goldman also says that the central bank faces fewer headwinds than markets are pricing in. The ceo of one, could offend goldfarb are comanager the sequoia and goldfarb. Goldfarb will take over as lead manager and the company ceo. The offshore yuan dropped to a oneweek low after chinas centralbank weakened its daily fixing. Pimco