Welcome to the program. This is countdown. Friday morning, live from london. I am anna edwards. 6 00 in the morning here in london. Let us start this morning with the data out of china, stabilization seems to be the watchword. , inave fourthquarter gdp line with estimates at 6. 7 . But we saw stocks and the chinese currency both dipping on the back of the data. Credit,a data dump, industrial output, investment, retail sales all moving in the right direction would argue. But the real sustainability is the story of the rebound in the Property Market. What does that mean for debt levels . A quick reminder here on the terminal of the bloomberg about the importance of the China Economy driving markets, particularly in the asiapacific region. In blue, the chinese composited in white, with other evaluation of the currency. And we saw that selloff in january in chinese stocks. All of that had an impact on chinese stocks. And a wider impact on the region, the Regional Equity markets. How is the data overnight playing in markets . Lets check in on the Foreign Exchange markets. On the risk radar, a couple of positive responses. Even though we have seen selling them as a result we saw a bit of a bounce coming through in the korean currency. A bounce on the new zealand dollar. Optimism, i guess that is the on the back of that chinese data. We have the japanese currency in for good measure. That is weakening after the earthquake struck just overnight. The strongest earthquake since 2011. So far, nine confirmed fatalities as a result. Checking in on the price of oil, we had a very important meeting on sunday. This is where we are, firmer but not by much. Let us to the bloomberg first word news. Yvonne man joins us. Good to see you. Sachs isoldman embarking on the biggest costcutting push in years, trying to whether a slump in trading and deal making. According to people with knowledge of the effort, the ceo is calling for a push on curbs for travel and entertainment expenses. Ony report Quarterly Results june 5. Highyield bonds in the midst of the worst selloffs in 2014. Investors say they have yet to fully price in the results as the economy slows. The governor said the corporate debt burden is having a leverage compared with high saving rates is not very high. Federal reserve bank of atlanta president says he will no longer put for a rate increase this month, in light of weakening growth and still low inflation. Speaking to bloomberg, the fed officials said there are still opportunities ahead to make a move. Simply, if you look at the calendar, there are enough meetings remaining this year, that if the data were to suggest it is the appropriate policy to have three moves i do not know, two or three, both are possible at this stage. It will depend a lot on how the economy balls. And at least nine people were killed when a magnitude 6. 5 earthquake in southern japan calls and the 2011 disaster. The earthquake yesterday also injured more than 750 people. There were no reports of damages to the only operating Nuclear Reactor in a neighboring town. Global news 24 hours a day bureaus, more use stories on the bloomberg on top. Anna let us stay in the agerelated and get to a look at how the markets are performing at this early hour. Juliette saly is standing by, not early where you are. 1 00 in the afternoon of course. Let us talk about where the markets are going. Equity markets to not get a boost from the chinese data. Tte good afternoon. It is certainly afternoon here, almost homecoming. We are seeing a bit of a switch out coming through an asian equities. We do have to remember that the chinese data that came through at 6. 7 firstquarter gdp number was bang on the estimate. Widely factored into the Market Sentiment and also we had the regional index up for the past seven sessions in a row. But the pullback was always on the cards eagerly as we round out the end of the week. We are seeing the regional index lost about 4 over the course of the week. In shanghai we are seeing the markets down by one third of 1 . Interestingly though, Credit Suisse says they still see a rally for another 12 months, really favoring cyclicals there. The earthquake there and the stronger yen weighing on the nikkei. Pretty flat at the moment. We have seen a good rebound coming through in the us trillion market, which is leading the gains in the region, up by 4 10 of 1 . In terms of individual movers we have an watching a lot of those industries that are in the vicinity of where the japanese earthquake was. Toyota and bridgestone in the Automotive Industry both falling today. And sydney under pressure as said after Ceo Sam Walsh the runup in the Iron Ore Price is overdone. It could in fact fizzle out. Looking at currency, the china data gives us a boost to the all aussie dollar. Levels we have not seen since june of last year. And we see Good Movements coming through an emerging market currencies as well. The korean currency is stronger by about half of 1 . But a little bit of pullback in terms of equities, after a pretty solid week so far. anna thank you very much. Have a good weekend when you finally get there. Of china shows the worlds secondlargest economy stabilized in the First Quarter. Gdpathered pace in march, is 6. 7 in the first three months of the year that is in line with expectations. Industrial outputs, investment in retail sales all picked up last month for beating the forecast. We are joined by our beijing bureau chief, nick wadhams. Good to see you. Have the concerns about growth from the past several months, are they really abated . What can we glean from the latest data . Nick well, i think theyre a couple of things going on here. One is that the last sort of several sets of data we have seen have consistently beaten estimates. That would suggest that the economy is doing well, certainly sort of outpacing sentiment. So there is a whole period over last year when the numbers would come in and they were consistently worse than the estimates. Now we are seeing the reverse happening, which does suggest indeed picking up speed and doing better than people forecasted. On the other hand, we do have very strong signs of the government is basically stepping on the gas, in terms of stimulus, encouraging new lending. Really pumping new money into the market. There is a question about whether that is sustainable over the long term because it gets back to some of the underlying issues, which are issues of course surrounding debt and government and Company Ability to pay that off in the longterm. And how do we expect the Chinese Government than to react in terms of the stimulus plan . They were much talked about the start of the year, what they plan to do to stimulate the chinese economy. Not expected to rest on their laurels, but we have seen equity markets little bit equally. What you make of it . Economists dog forecast to Interest Rate cuts this year. We are expecting more stability this year. What we have seen our behindthescenes roles, or the government is looking to ease that debt burden. That is expected to be where the focus will live. Helping companies swap out there bad debt, so the bank can perhaps take equity shares in them. That is a highly Controversial Program but one that is on the books. Another one is allowing local governments to sort of trade in debt at high Interest Rates that at lower Interest Rates. There is indication that the government is both looking at stimulus, but also looking to address the debt burden which may come at a greater focus as the year progresses. Anna certainly the strength in the Property Market and the most recent data raise the questions about that. Nick wadhams joining us from beijing. Christine lagarde said the economic transition of china is manageable and added that she was delighted by the countrys medication efforts. Christine when it comes particularly to the Exchange Rate regime, i just clarified the situation for the better. Nobody likes uncertainties, markets in particular. Speaking in washington, Christine Lagarde made clear that the Global Economy is not in crisis. But there is still downside risk. Said,ine but as i have and has been repeated several times, we are on alert. Not alarm. Because we believe the Global Economy can actually repair egacies, can regain the vigor, and become more inclusive. But the current responses we are seeing need to be faster and he to go deeper. Anna let us bring into the conversation Gabriel Stein, Asset Management director at oxford. Great to see you. This friday morning, let us talk about this big picture. That kristi was referring to their, plenty to worry about. They are on alert, not alarm grade with that sound appropriate . Gabriel i think that is fine. We have had a lot of clients at Oxford Economics think there is would be a world recession. And our view is that more or less this. Light, most early not going to be a recession. But some of alarming, some signs, but we need to follow them and see what is happening. Anna she was referring to the policy response, suggesting anything go further and be quicker. Aere need to be new actors, broader range of actors in the policy response that we hear so much from Central Banks, maybe not as much as someone hope from other players. Gabriel it is certainly true that when the consequences of easing centralbank policy in particular the negative Interest Rate policy is that governments, as usual, feel that they can set back and do very little or nothing. It is much easier to let Central Banks do things than governments. And there is always a need for governments to government structural reforms. Are they going to do so . Thank you so in a crisis, and if we are not in a crisis it is less likely to happen. And is there anything in particular that would be needed now . That is more difficult to say. You are saying about infrastructure spending, yes that is good. How do you know it is right and so on . All things considered, a little nudge might be considered good. But the World Economy should continue its slow, below par anna recovery nonetheless. What about china . The Global Economy, not a red one, how does that flash of on your radar . The numbers this morning for the First Quarter matching the estimates. But a lot of the growth drivers, Debt Recovery and the Property Market for example . Gabriel yes, that is true. Let me say we disagree with nick, who we just heard from. We believe there will be targeted easing. But on the Monetary Policy side they have been quite successful. If you were to go back two years ago, im sorry one year ago, chinese broad money was growing slower than america on a sixmonth annualized basis. The growth of credit is around. And as we heard, china does have a bad debt problem. Study was is the needed now. What they need to do is move further towards consumption, household spending. They are doing that. We saw very strong retail sales. We have seen the Service Sector in china actually quite strong. So all of this is good news. Is it enough . There is likely to be more fiscal stimulus. Anna Gabriel Stein stays with us for the rest of this hour. Up next, we will talk exquisitely to the International Trade minister of canada. Freeland will be talking to us about the current negotiations she is undertaking with the eu. She is joining us from berlin, that is next. Anna welcome back. 6 17 in london. Let us get the Bloomberg Business flash. Here is yvonne man. Sachs isoldman embarking on the biggest costcutting clash in years, a slump in trading and deal making. Theyre calling for the push, which includes firings and curbing interstate meant expenses. Pricing the ipl at the end of the market arranged with about you and the company is 1. 8 billion. Million, as50 shares were sold at 19 million each. They are looking to the bats deal for the ipo market, hammered by stock market volatility. Goneiles stock firms have this year, the slowest for the recession. Pharmaceuticals working with investment banks to review options after receiving interests in a number of the businesses. According to a reuters report, the drugmaker has grievously assets,t the noncore seeking to pay down more than 32 billion in debt. The company is working to return to a stable footing after a disastrous eightmonth run, dancing stocks lose almost none percent of the value. Says the rally from the record low is not sustainable. Speaking of the general Shareholder Meeting in london, he said that prices may fall in the second half, as new supply offsets demand in china. The secondbiggest exporter of iron ore is set to report firstquarter production results on tuesday. That is your Bloomberg Business flash. Anna thank you very much. Canada and t eu have stuck a freetrade agreement, yet to be ratified of course. The European Union wants all the members to be able to travel without restrictions. But that could prove a bit of a stumbling block. Joining us now exclusively to discuss this is chrystia freel and. Canadas international minister of trade. She is live from berlin. Great to have you. Help us out here. How far have you got with finalizing the details of this deal . Are there still sticking points . Or is everything done . Tted. Tia every i is do crossed. S trade agreements take a long time, this is no exception. This is an exceptionally deep and comprehensive trade deal that canada has entered into since nafta. We believe it is the biggest trade deal the European Union has ever done. It is a great deal. Onfinalize the legals february 29. Because we are canadian, we are undertaking part of the translation. We did our bit, the french translation, by march 31. We will meet next week in brussels and we have committed to getting this deal signed this year. And that it should come into force next year. Anna the translation going on in the eu as well chrystia chrystia they have a lot more languages than we do. Anna has the regional issue been dealt with . Visa arrangements for all European Countries . Chrystia the visa issue is quite separate from the trade deal. We are aware of the issue with romanian and bulgarian issues. This is an issue the u. S. Has as well. We are working very hard with romania and bulgaria, as well as with the eu. Anna what if some European Countries do not ratify the deal. L . Well, what still needs to be decided, and this is an eu decision, and mixed agreement or not. To be event, it needs ratified by the european parliament. That will be the first step. Then the decision has not been taken to determine whether it will need additional ratification at the national level. In any event, as with other trade deals, after ratification by the european parliament, the agreement can go into provisional force immediately. And that provisional force covers well over 95 of the deal. Anna lets talk about another trade deal that you have been working on. And your predecessor was working on of course as well, tpp. My understanding is that you signed it. You are not in any great hurry to ratify that. With that be true . Are you waiting on others to ratify it first . Chrystia situation in canada is very analogous to tpp, we signed the agreement. It is very important for us, particular reasons we were not the government that negotiated this particular agreement, it is very important for us to make sure that we have broad consultation. In particular, we have a new parliament. We had the system in canada much like the british one, a Cross Party Parliamentary subcommittee. And our committee has asked to undertake a National Consultation of tpp. That is what theyre doing now, very important process. Can i say one thing about trade overall that connects with some of the earlier interviews you have been doing today . Anna yes, go ahead. So, i was really interested in the discussion to having earlier about Global Growth. And the Global Economy, perhaps i think one of your interviewees said there is an amber light flashing. I think is very important when thinking about trade to understand that this is a level we have that cost the treasury absolutely nothing to get Global Growth going. It is really, really important. I think that the slowdown in Global Growth is one of the biggest problems the world is facing. And the is an essential part of the answer. Our own estimates, we did a study together with the eu, which we think is on the low side, is that this deal will increase european and canadian trade by 23 . The impact on the canadian oneomy will be nearly percentage point of gdp increase. That is really powerful. Is ahat message of trade driver of growth. I think it is sometimes lost in the current debate. Anna one of the Big Questions around trade, sitting here in london, surrounding the brexit debate. Your trade deal with europe has been drawn into this as an example of how countries outside of europe can do deals with the eu. If britain did vote to leave the eu in