Europe. Manus we are back together again. How anxious are you, you have read about syria, you have read about china, you have read about north korea. You have tried to observe the risk, do not reach for this annex just yet. This is the bank of america mobile inch stress index. Were picking at to the highest levels, we have gone from the lowest levels to the highest levels. We put on a quarter of 1 muster but we are nowhere near we were at the brexit moment in the middle of last year. Somersaulted peak that you saw when china and the equity markets collapsed last year. Anxiety is rising but it is nowhere new the brexit deke, nowhere near this time when your ago when china was the core focus, we are more anxious, yes, but these markets did not fall over. Losing 1. 1 the s p last week and gaining zero point 9 in yesterdays session. Lets show investors were we have been. Mnuchin talking about the timetable around tax reform. We heard Something Different from the president of the united states. We saw some strengthening and turkish assets. Since then a little bit of change weakening now for the lira and the base case is that we get limited structural reform. Iron lets have a look at ore and the s p 500. There is the iron ore. Iron ore has been falling for four weeks in a row. The last time it was this oversold was in december 2014. If you read some of the reports they say that this is further to run. You will went out the 2016 gain and they are saying that the gains we saw our unsustainable. That is a big feature in the mliv chat. Anna breaking trend that first day and what falls, and that iron ore story is dividing the asian equity section because you have the markets that reopen like australia playing catchup and weakening on the back of this iron ore story. Elsewhere you have the and Holding Things and check a little bit. Lets get the bloomberg first word news. President mikee pence has arrived in japan as he completes his asian tours. Koreas amid north tension about north koreas weapons program. They will increase talk about increased access to the japanese market for american products. Donald trump will take aim at i. T. Outsourcing companies when he orders a review of h1b said programs to favor highly skilled applicants. He c some companies asited that will not get visas approved. Racee plus president ial enters the final stretch with no main winner insight as the contenders scrap for votes in a flurry of campaign rallies. With almost one third of the electorate still undecided and the front runners clustered around 20 in the polls, the race is the most unpredictable the country has seen in recent history. Hasurkey, president erdogan declared his victory and the excellent of seeing the election culminated in us the majority of voters approving the cost to shun that gave him more power. The countrys deputy Prime Minister has talked it down the prospect of an early election. President everyone made it clear that the next elections will be held in november 2019. And there will be some turbulence. Some it is clear that elections are not on the agenda. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. You can find more stories on the bloomberg at top. Manus thank you. Rounding up the stories of the day. We have a trifecta of issues to do with. We have the dollaryen, we have got iron or something, these asian markets have a little bit of this, you have your asian indices, the nikkei holding onto more of gain, that is the dollaryen story and the a quarter ofs down 1 but the dollaryen where we want to keep an eye on. A lets stick with the talk about geopolitics. U. S. President Vice President mike pence visited japan as hes congenital his trip to the asiapacific region. They are seeking to do with caps on economic issues, keeping commerce secretary wilbur ross out of the dialogue. Is valve reynolds joins us from tokyo. What is expected out of the meeting, some headlines cresting the bloomberg this morning. Twohere are basically themes, one is north korea, that tensions are worse than the have been for a while. And mike pence has come out and said he is deeply committed to this relationship with japan and called the alliance the cornerstone of security, sticking to the status quo and all about working together on the north korean issue. , talking about the u. S. Japan economic relationship. Japan wants to avoid being pushed into a corner on trade issues. At the same time, he wants to make offers in terms of investing in the u. S. To improve the u. S. Economy and more jobs. Manus what are the prospects of a free trade deal between the u. S. And japan question mark we know that trump is not a globalist and he seems to be much more a bilateral us, it is cut almostand divide and conquer, is that . He stays prefers to stay in a bilateral format whenever he can. Onhave had wilbur ross in 10 the same day. He is not being allowed into the economic dialogue. We have heard the report that he met with Prime Minister of a abe to talk about trade. He said it is not clear what kind of format this will take. He does want to progress japanu. S. Relations. We do not know exactly what the agreement is but it looks as though is moving in that direction. Anna thank you. Studio,us now in the good to see you. A lot of jill geopolitical threats to do with. Yesterday we saw Something Different. Geopolitics causing you to rethink your strategy . Not much. We believe economics and earnings beats the political fears and we have seen a lot of this before whether it is north korea with saber rattling but it is encouraging to see the u. S. Line up with china on north korea. So many concerns about north korea and south korea, either equities are bond selloff but it tends to go away. It is a concern when you see these missiles ruled out and these big parades. Is us, the main news notwithstanding the debate between hard and soft data, we go away from the u. S. , you see strong economic activity. The saberhave seen thising by north korea and is the chart that we looked at the start of the show. There is this is nothing in the scheme of things, there is exit and the china debacle. Mind, drawdowns and markets, do you see them as opportunities . General yes. We have had a 2. 5 . Anna ali overdue for one . You see a 10 correction in Global Equities nearly every year. Theres not much euphoria in the market. We have had the debate about the vix many times. It does notow but mean there is euphoria. There is a production buying out there, you see the skewed numbers on equities or you see it in the euro. Buyinga lot of people protection. You can see it in the data. You can look at the price of puts and another way of looking at the price of fear, the vix is the purest one. There is still an awful lot of fear in their. Excessive buying of put options. Anna russian assets is something you talked about before. You have some russian equity and some exposure. As in that wrongfooted given the way that the end of last year, people were talking about a rapprochement, things look different now. You can see a trump endorsement in late 2016. It should be great for russian assets. We have been in russian assets for quite some time, late 2014, early way 15 based on the contrary and value style of investing. We did not go there, we had been already. The soft money has chased in thinking that sanctions will come to an end. Things they to warm up between the u. S. And russia. Theeed to warm up between u. S. And russia. Manus the one market that has struggled with all of these issues is the treasury market. It was risk off last week. And it was way enjoying herself and on was away enjoying herself. Bond market, it did not roll over. This is the point that fascinates me the most. We growth scenario, do really test 2. 6, do we travel toward 2. 6 in the absence of a great political shock . There is two messages there. The first message is that the end result of the fed funds will be in the fed area. The market knows, big picture. Were looking at 4 , 5 rates. Message number two is the hard global the u. S. , the economy is in good shape. The data is incredibly weak in the u. S. Rushed back into the Office Yesterday to have a quick look. The hard data remains extremely weak and the effect of fred the letter fed is down. Atlanta fed is down. Many global boom. Anna hard data is not cooperating. Our i and or is down, we talked about the weakness in the session is this an incredibly volatile asset, the many booms aside from that . Is cracking after a great rally from last year. It could be our view that this Global Economic boomlet were seeing will continue. ,uestioning that right now commodities like iron ore, we will be openminded. We will stick with it, when you look at global pmi almost as you have been here, they beat expectations, theyre both 50 nearly everywhere in the world. I want to get a quick opinion on china. We had some china data to absorb but the shanghai composite is struggling. Any top lines on china . We do own china stocks, mainly in the age share markets. Hshare markets. Iron ore has a good run. But a correction. We do not see anything fundamentally wrong with china. For a long time, we have been saying what is hard to pretend is not going on is value in the market and people who are close to china, who work in asia seem to be a bit more bullish than people out here. So we side with them. We will talk about emerging markets as we go through the program. Manus it will bring you an exclusive interview with the ceo hitting the tapes at 9 15 a. M. London time. Anna the fight of france is less than a week away. The election remains up for grabs. What does it mean for markets . That is next. This is bloomberg. Manus it has gone 6 19 a. M. In london. Welcome back. Iron ore, we were talking about it. This is gmm, iron ore down another four point 36 . The question you need to ask yourself according to our guest this canary is, is in the proverbial coal mine question mark we are about to undo our gains for 2016. This is a really important story in terms of rio tinto. When they open in the london market. The leveluch is at that Goldman Sachs suggested. Anna taking the edge of some of the australian miners in the trading data. Its get the bloomberg is this flash. Lets get the Bloomberg Business flash. The ceo has assured wall street they will rebound from the current storm. The issue will be a watershed moment for the carrier and it is the practice to put customers first. There Financial Performance beat expectations with shares eating in afterhours trade. In alaskas north slope is no longer leaking oil or gas. Say the wellists is out of control and want the authorities to investigate. To 650,000 barrels in march, the highest in four years. That is below its 1980s peak of about 2 Million Barrels a day. Cereal maker posts holdings have closed to a deal. Weetabix atld value 4 million pounds. Representatives did not immediately respond to a request for comment. Netflix has reported gains that fell short of estimates due to a lack of hit shows to draw new viewers and routine others. The lack of bigbudget production posted income. They said next quarter with the return of house of cards and three major movies on the relief release schedule, profit will miss estimates while customer gains will improve. The ceo of china as it management which manages almost 150 billion in capital has said some investors hold her dangerous assumptions. He was speaking exclusively to bloomberg. That is one of the very dangerous assumptions and the Investment Community that the government will provide. [inaudible] especially in the couple of initiatives. Reducing the leverage at the same time could reduce the core capital concept for asset managers. They have to go back to the basics. Your Bloomberg Business flash. Anna thank you. One of the most highly anticipated clinical events is less than a week away. The first round of voting in the French Elections take place on sunday. Manus in the polls, macron is still ahead followed by le pen. The two front runners held events in paris yesterday. I will restore our national borders. No other candidate is proposing this, none of them. We opened the door of france to terrorists and quickly understood the advantages that they could get from our incredible powerlessness and send their soldiers of hate and among the flow of migrants to hit our country in the heart. Out of 11 candidates, 10 want to bring us back to the fantasy of the past. Them, combat their ideas. With one candidate it will be cuba without the sun. Venezuela without the oil. Alan figgins is still with us. I was impressed when i looked at the [inaudible] in seven cities. We are a week away, less than a week away from the first round. How riskaverse are you feeling with in regard to french related assets . You want to look at the widenut you have to they have the power to threaten to leave the euro . The greek people wanted to stay in the euro and it is similar in france. She has to get parliament behind it. Then she has to go referendum and get the french people to vote to come out of the euro, that would be catastrophic. The fact is that the euro is popular in france, for us it is more of an opportunity. The country where it is 5050 whether the euro is popular. The italian elections when they happen, that is the one that is the break up of the euro type scenario. We would not be surprised, we think macron is going to win. Isre is that line about he the next socialist himself, he said france will be like cuba without the sun, he is repeating that, it is a great line. Like brexit. L be a oneday wonder where potential buying opportunities. Manus the market does not want to be caught twice. That is what the euro is, i have been seen people write down the question, can we deal with a third black swan . Becoming very itchy about this risk. You think it is a little bit more laissezfaire for you. It shows gains like we were talking about on equities. How expensive it is to buy put options, you have to pay a premium to be bearish on the euro. The market is skewing that relationship. It would argue that would be hard. On the day le pen wins, shock. Be le the shock could pen. We will talk a lot more about risk very shortly. Stable a stays with us. Anna turkey is torn after a divisive defeat by president erdogan. Stay tuned 48 interview with the deputy Prime Minister why he is ruling out other elections. This is bloomberg. It too 30 it is 2 30. Japan alliance is a cornerstone of peace in the pence, according to mike and he said that strategic patients with north korea is over and all options are on the table. Markets on the move. Stocksre seeing asian lower and Australian Shares with producersnd commodity were weakerr market than expected and you are seeing and comingsing keeping a close eye on the dollar index, it shows the dollar stronger and we saw it close below the moving average. Market was closed Steve Mnuchin said the strong currency is good overtime. Yield thatcus of the weeks. En down for the sandwich between these resistance zones. The 10 year yield has to fall and that is according to the go all the wayld back. The turkish president told a crowd of supporters that they dont care about the european critics and took aim at the critics of the voting process after a slim majority concentrated more power into his hand. A deputy minister says the turkey will not call early they are looking. Turkey has gone to quite a few dramatic experiences. There is a Terror Threat and a geopolitical drag. T will proved and him hi create structural reforms. Agenda witha reform elections and referendums and the president promised a possible referendum on whether or not they should introduce the death penalty. They get it opportunistic and it has been in power for 40 years. There has been talk for early elections and we have never had early elections. The president made it very clear that the next elections will be held and there will be a time of adjustment and transition. It is very clear that elections are not on the agenda. Capital punishment is a separate issue and it would not be as timeconsuming as it has been in the past. Good morning to you. We are getting more reaction to the referendum results and there is the budget that the sit and unemployment with the is the economy and that longterm view of investors. A firm has been keeping a long view on turkey is joining us now. Thank you for joining us this morning. Lets start out with this Political Risk and you are saying that it does not. What does it mean for turkey . We are in the investment of the long terms and turkey has been important for us. I expect the referendum and stability and i expect improvements in the economy. Top in theone of the is betters and this than most European Countries and if you look at this, it is lower than the european average and i expect all of this to come into play Going Forward. It has been rough for turkey. And webers may be better have had this out late last night and the presidency can focus on economic reforms. What will this look like and what will it do to the economy . Beene account deficit has going down and i expect improvements to continue. We are investing in the areterm and there businesses and you are not exposed to economic volatility. 2008, we were investing in a hospital chain and it has grown from one we exited the business. Improvements. Ar does this mean you are willing to expand . If you are as excited as you tell me you are, you should be able to put that to work. Turkeyill continue in and i expect that to go forward. Reaction withxed referendumtes and results. Investors stay away from . There is china and energy driven markets with consumer driven markets. With thea country average age of 29 and it has grown 5 and we expect this to continue. There are industries we like and consumer driven businesses. We own one of the largest businesses in the country and people consume yogurt and cheese no matter what. Ecommercelargest business and would have grown. There is this at 65 and the european average is where the opportunity is. The government focuses on economic priorities. Is that a better opportunity to look at exit in that scenario . Improvepect things to Going Forward and we are lucky. This in theve investing time. A priority. Are we see it will be for their a to the dollar. An on credibility to the currency and i would for that it would stabilize towards the end of the year. Investors will be look