Welcome to countdown. I am anna edwards. It is 6 00 a. M. In london. Through what has been happening in the markets. We want to start with the chart we have here. The u. S. Equity market, the s p 500 over the past three weeks. Highlighting the roller coaster timeframe we have seen. Yesterday, u. S. Stocks were little changed. A with salt session. Whipsawtouched a session. The s p touched. Apple was a big lagarde yesterday. The dollar may be listening to the dollar may may be listening to the commentary from the fed coming through this month. General strengthening in the currency. That is not seem to be applied to all of the asset classes. Hawkish commentary yesterday talking about the risk of asset bubbles. Oft was the fed story another. Asian stocks are down for their third weekly loss. Corporate earnings disappointing. The boj has been speaking in japan. Dollaryen is at 108. 8. Heading for its second weekly loss against the dollar contrasting centralbank helices in japan and the u. S. Says he still has room to ease further. The korean wan is on the move a little bit trading a bit weaker. No trade in rates from the korean centralbank. The majority of economists said they saw that outcome coming but we saw some reaction in currency markets nonetheless. Good to see you. Two Regional Reserve president s. Similar casesut for an Interest Rate increase. Argued thatity fed the central bank risked stoking an asset double by delaying action to long. We are in a world where policy anywhere in the world will influence us. China, or europe if they make a bad decision it will influence our Financial Markets and our economy. We dont expect them to make a bad decision any more than they would expect us to make decisions. We do have to be aware that as we raise rates, there may be more Financial Market turbulence. Moving rates to a more global normal level. Distortions in our economy that can build over a number of years when rates are held for so long. Acting brazil president has appointed a former centralbank chief as brazils new finance minister. He has said he would pull the nation out of the worst recession in that nations history. A defiant president rousseff spoke to her nation and supporters of yesterday after being suspended from her presidency. What is at stake in the impeachment process is not only my mandate. The is also at stake is respect of the sovereign will of the brazilian people and the constitution. The conquest of the last 13 years. The gains of the middle class. The childrens protection. Access to the Technical Schools by the youth. Raising of the minimum wage. May be coming to an end. The greenback is a rallying after its worst quarter since 2010 threatening to drive up costs for businesses. Or hedge exposure. Dialogue Capital Markets says as much as 3 trillion was borrowed. Including by individuals and foreign companies. Traders who used to bank money in agency bond markets. The team run by anna and known internally as the Strategic Trading desk was shut down as Market Opportunities began to dry up. Citigroup said their resources would be better deployed in businesses that serve clients. Potential bid for months and took that has a market value of about 43 alien dollars triggering speculation 43 billion triggering speculation that a German Company may be interested. May bec equities interested in the Animal Health the acquisition work. Representatives for a year and monsanto declined four bayer and monsanto declined to comment. Global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. You can find more stories on the bloomberg at top. Anna let us stick with hong kong. David is in there and he has the details on the asian trading session. Markets are looking a little weaker in asia today. David a little shaky. We are entering the last few hours of trade. Chances are we will clock in the Third Straight week of losses. Markets have been in limbo. Youre looking at a five month low on the regional benchmark. 70 of bluey be chips. Losses seem to be concentrated across the big markets in east asia with the exception of shanghai which dances to its own two. Postelection bliss. A ninemonth high following elections which took place last monday. It has been very risk averse here. Markets have not been able to shake this. We are not looking at sharp declines but it is consistent. Over the last three weeks, asian shares have only closed higher on 30 cases. It is worth mentioning a few things to note. Gdp came out of malaysia and our ago better than expected. We heard from a lot of central bankers today. We had a decision out of south korea. The currency is weakening against the dollar by half of 1 . A fairly unanimous decision. On point. Governor tookrea the conceptab at that help has to come from somewhere else. He said the current rate is not sufficient to support the economy. It is supportive but not enough. We also heard from the bank of japan governor. That they do have scope to ease at the moment. If it time he said. Dollaryen barely budging on that. There he quickly. It is a big weekend in china. A lot of data coming out. Credit data most importantly. Dollar yuan, 652. Weakening trend for the last three weeks. With that in mind, i will bring up the offshore rates. I am not sure how this is but you will see the spread widened. You may want to watch this. As it happens, the intervention risk from the pboc may step up. That is asia for you this friday. Talk about what is happening in europe on the negative rate story. Denmark has lived with negative rates were almost four years, longer than any other country in the world. The effectiveness of his teams Monetary Policy sing it is creating higher demand and slowly boosting inflation. Negative Interest Rates are in fact working almost like very low positive Interest Rates. We have not seen any large negative consequences of negative Interest Rates so far. TheMonetary Policy creates higher demand and thereby gradually creating more inflation. Once you remember that it is through what you would call the demand channel that you create inflation, it is not perceiving the very low Interest Rates. Anna bank of japan governor kuroda says it takes time for the effects of Monetary Policy to occur. The Central Bank Governor said overnight that when markets are volatile, it will take even more time for positive changes to appear. He added that there is still and for the boj to act negative rates would filter through to the economy. To discuss this world of negative Interest Rates, david watson at the London Business school joins us as well as richard jones. Thank you both for joining us. David, let us come to you first. We have had the comments overnight suggesting that it takes time for negative Interest Rate policy to deliver the benefits that its proponents suggest it will carry do you go a long with this . Are we into diminishing returns . As he was saying, the negative Interest Rates are like low Interest Rates that still lower. We have had low Interest Rates for quite a long time. Havent know what it would been like without them. It could have been worse. It all feels a little bit sluggish. There is a limit to how negative you can have your Interest Rates go. Otherwise, i will put the money in a stock. Anna there is a limit. Rates are really small that you can get away with. What david is saying is very true. It is interesting to hear what the governor was saying. He emphasizes that there is still more they can do. The point we make about diminishing returns, when you get through the zero bound, is valid. One of the things that is a concern to japanese policymakers is the strength of the yen. Negative rates were meant to combat that. The market is saying that you do not have a lot left in your armory to combat this problem. Negative rates is like a desperate move. Anna have centralbank taken us in the right have Central Banks taken us in the right direction . Central banks around the world working out how they will try on a domestic basis to try to stoke some inflation which has been driven down . You would have expected the Lower Oil Prices would created a loon to the economy. To the economy. It is not clear how much you can do with just Monetary Policy. We are trying to get people to spend and invest. You dont know what it wouldve been like without this. You need to be careful of the interpretation. Is anyone looking forward and are almostosh, we back to making up the ground that we lost post 2008. We all grew up with inflation that Central Banks were concerned about. They know how to deal with that. Disinflation is something new for Central Banks to deal with. Anna they need a new set of tools. Governor kuroda says he specs he expects companies to invest. One of the goals of this policy. You are skeptical, david. I think that is right. Clearly Interest Rates are one of the tools that are likely to make people invest more but i would have thought far more thattive is a confidence the economy is going to be growing and there will be jobs for the people. Creating more demand for products and services. While that is absent, you have a problem. You have an effect on all sorts of other assumptions that we have made about savings and investments. Is thehat is weird malfunctions in the market. In the u. K. , we used to have a system where you saved for your pension and then you want the pension annuity and then you bought a pension annuity. There is not a lot you can do about that when you are 55 because you cannot make up the savings you should have been doing for the last 30 years. You even have a situation where sayinge larry fink. He thinks low Interest Rates are dampening the economy because people in middle age are having tosave so much more in order have a nest egg along with their pension. The policy that was supposed to stimulate the economy is doing exactly the opposite of that. You have all of these funny things going on. Anna one funny thing going on. Corporate treasures you would think they would welcome what the ecb is doing. It may be great for them to have another buyer in the market. Even corporate treasures are worried that the bond buying will put off traditional liars. You have corporate issuing debt. This negative Interest Rate world has a lot to learn about this still. It is still a work in progress and it is still experimental. One problem is that with qb, the , it distorts the market and it becomes different to what everyone is used to carry it doesnt surprise me that corporate treasurers are saying this is a challenge. David will stay with us longer on the program. Here are some highlights. A whole host of gdp data coming out of europe. We have a snapshot of the german gdp and inflation data due to be released. Two hours later, italian gdp. And then Economic Growth data from the eurozone as a whole. We have u. S. Retail sales and ppi numbers. Up next, president rousseff is out and result acting president is in. He attempts to pull the country out of its worth its worst its worse recession. Anna welcome back. This is countdown. 1 19 a. M. In hong kong. We have a weaker session underway in the asiapacific region. Let us get the Bloomberg Business flash. Apple has invested 1 billion in chinas Ride Hailing Service, didi. Build its help didi data driven ridesharing platform. A completes 11 million rides day. Other investors in the business include alibaba. Deutsche bank is due to cut 30,000 investment clients. The paper says it is starting end ofo do this by the 2019. It has 65,000 clients in global markets. Most of them exist only on paper. Japans biggest banks may forecast the lowest profit in four years weighed down by negative Interest Rates and the commodities slump. Others areand expected to fault 6. 9 in the year ending in march according to the average estimate of nine analysts surveyed by bloomberg. Hiring 175 people for the Financial Crime appliance team. Compliance team. The people will be joined by 25 employees reassigned from other offices. He will focus on antimonitoring antimoney laundering. Getting ceo is personally involved in an investigation into allegations of bias in the way that the Company HighlightsImportant News on the social network. Mark zuckerberg will have discussions with how facebook can of avoid appearing biased. The Company Found no evidence that the reports were true but it will take steps. That is your Bloomberg Business flash. President ils acting has moved swiftly to form a cabin in his first day on the job. The senate yesterday act the motion to send president recep to president rousseff to an impeachment trial. After more than 20 hours of session, Brazils Senate voted to pursue the impeachment early thursday morning. Be president gave what could her last speech as president in the president ial palace. Met with her and mentor and predecessor and demonstrators outside supporting her. In the government. She said impeachment is that too the coup. She does not recognize the legitimacy of the government coming in behind her and she will continue to fight. There is an acting president. He signed the papers at the same time that president rousseff was still speaking in the president ial palace. He has already announced 22 members of his cabinet including a finance minister who is widely anticipated by the market and is seen as investor friendly i markets. Late scheduled to speak thursday with his plans on brazils economy. We will see how he manages to pull brazil out of its deepest recession in more than one century. Morning,h us this david is the executive fellow at the London Business school. Here is a country that seemed to promise so much. That story has turned sour. It really feels like it has turned sour and the economy in recession. Going to see the Glass Half Full side of it, there may be two things. When i was young, brazil would have had military takeover by now. The democracy seems Strong Enough to go through all of this which is quite interesting. There are still of course strong economies Strong Companies in brazil. This impeachment as i understand it is about someone opening up about cooking the books of the national accounts. It was not that president rousseff was taking money for herself. She was trying to present the economy in a better state than it was. It reminds one of greece. Not a million miles different than what some of the banks seemed to have been doing before 2008. It was not an honest account of what their financial decision was. This may be the end of a tunnel for brazil. It may be better. This very topical with corruption conference. More broadly, the emerging markets story it seems the emerging market stories are saving the global crisis. The Growth Engine that china thatnto producing seems to have crumbled. It would also be a worry if we are depending on it to keep the World Economy going. Now, it is the chinese turn. Can you keep your economy going by borrowing . We are now working on a coordinated global basis to think about how we get the flows of capital correct. If we were to do that, the opportunities we have seen in the last generation for development are very high. , ahave had the potential hiccup in the west and a potential for a hiccup globally. Anna thank you, david. Up next, his strongest morning get. The carney brings rings alarm on brexit. We will analyze what he said and see what it means in terms of investment when we returned to countdown. [ soft music ] e. T. Phone home. When you find something you love, you can never get enough of it. Change the way you experience tv with xfinity x1. Shoah, ha ha. Ew artist. Show me top male artist. My whole belieber fan group. Its not a competition, but if it was i won. Xfinity x1 lets you access the greatest library of Billboard Music awards moments, simply by using your voice. The Billboard Music awards, live sunday may 22nd, 8 5 pacific, only on abc. Anna welcome back. 6 30 a. M. In london. Getting some numbers from the french telecom. They have recently been in the news because of the telecom unit. Have reported a net loss. Q1, net loss coming in at 180 million euros. Against a loss. That loss increasing a bit. They have taken a charge in the First Quarter. Giving us an update on their 2016 net worth charges and how that will affect operating profit. They confirm their full gear outlook. Fullyear charges of 270 million for their Network Sharing a look at the revenue numbers seem to match estimates. Confirming their fullyear outlook. This company has been planning to sell its phone unit to orange. That deal fell apart. The French Market missing out on that chance to increase the Pricing Power to the french mobile space. Onis now pursuing expansion the broadband side. Last month,