Delegates needed to win. Ted cruz 13 states and marco rubio has 87 delegates. A verymp i know it was tough night for marco rubio. He works hard. He spent a lot of money. He is a lightweight. Herline meanwhile in victory speech, clinton took what sounded like a shot at rumptrump. Mrs. Clinton it is clear the havesin this election 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 were not going to let it work. Caroline clinton has 1001 of the 2283 delegates needed to win. U. N. Security council vote on new sanctions for north korea has been delayed until today. The sages are aimed at punishing north korea for its recent missile launch. The sanctions are aimed. North korea would be banned from selling minerals. The Worlds Largest money manager says leaving the European Union would mean it risk for the u. K. With few rewards. The countryarns would have a drop in investment if voters decided to leave the e. U. Predicts volatility and u. K. And European Assets will increase before the vote. Im caroline hyde. Down we see futures here across the board. S p futures off about five points. Dowd joins off about 40 points. This is, even though there are a lot of green shoes, green shoots, a term that is coming back with bond yields rising, and copper rising i want to show you oil. That is one of the reasons we are down. Oil is off here in new york. 2 . 33. 73 a barrel. The correlation between oil and stocks is strengthening again. If you take a look at my bloomberg. Screengot the hs appeared you can click the correlation box. I have enlarged the box. Back in january, we were strongly correlated with. 96. We started to come down to. 7 but we are rising back up. Even with all the positive sentiment around the world, we have the correlation of oil strengthening. Lower oil means that we see lower stocks. If we take a look at copper, you can see that we are at the highest level that we have b een since november. This is the one of things that is helping to boost minors overseas. Although, does not seem to be helping the ftse. The ftse is negative. You take a look at the picture in europe, the other indices are gaining. The stoxx 600 up only. 2 . A fifth day in a row for stocks in europe to gain . Lanhee you have to go back to jonathan you have to go back to october. Only the s p and u. S. Is 66 points off the level we started. Things are looking good, although the ftse is turning down. Interesting because u. K. Miners are gaining the european banks are gaining. It is mostly banks in Southern Europe that are showing big gains produce the credit ubs rising. And antander doing quite well this morning. Asian banks overnight big green arrows. The hang seng more than 3 and the nikkei in tokyo, big gains, 4 and chance. It has been a strong day for equities. The question is, will the u. S. Followthrough . I think we need oil to turn around for that to happen. David it was a big night last night, super tuesday. 11 different states. It was a big day, good or bad. One of the stories we want to talk about is donald trump. Republican contest. If you have gone back the year, most people would not have predicted it. Yet, as you look at the markets, it is hard to see a discernible reaction. Josh, you know wall street and washington. Is this because the markets has only prices in or are people waiting to sort things out with the convention . Josh anyone who thought they knew washington dont know anything about politics. There is a disconnect going on between the insiders who spent their careers in washington and thought they could predict what is happening and those results we are seeing in the states. It is very difficult of predict. The second thing i would say, it was a difficult night for the republican party. You have to look at it and say they were looking for some sort of clarity even if they did not like it. You now have all these candidates and have an incentive to keep going. Is waiting, kasich for ohio. We did not see any clarity coming out of it. As a result, the markets are saying, wait a minute. If the apologists cannot if the politicians cannot figure it out, we cannot figure it out yet. David its fair to see, correct me if you think i am wrong, there is nothing that last night that deterred trump from his march towards the nomination. Ash he has got to view it as good night. Chris christie is back on stage after a rough couple of days. Making him look pretty good in comparison to the few days he suffered. Of movemente lack in markets off the back of this, too many variables . My mind goes to the u. K. And i think about the brexit risk. The vote is june 23. We know who is behind it and intensive. The u. S. Election, we do not even know who the nominees are. If you put donald trump against Hillary Clinton, most polls suggest hillary comes out on top. Are there too many variables . Josh you are exactly compared to most local candidates, trump does not have a clearly defined economic plan to read you ask them, he says i am a great deal maker. I have done incredibly well. Point, that is not an economic plan. The market goes in and says, ok, what do these candidates stand for . It is easy to decipher for Bernie Sanders. Easier for Hillary Clinton. Almost impossible to know other than his comments on trade what he would actually do if he became president , trump. Political risk is a big story not just in the u. S. But in the European Union with brexit looming. Financial institutions are concerned. The ubs ceo joined surveillance. In general, in switzerland, a lowersed to lead with rates or negative rates environment. We have been taking action over the last couple of years to physically reprice our services, to reprice, the credit side of the equation because whats going on with negative rates is the you are right side of Balance Sheet is getting a subsidy from, youre subsidizing the left side, the credit. We are being clearly asking for higher rates for our clients. Francine do you think that eurozone institutions are less ready . You have the swiss example. What does it mean for rivals, the side effects of negative rates are extremely difficult to judge. This isnk that something that also european banks have been started to get used to. A few months and quarters i would say. You can start to see also the effects of it. In order to avoid negative rates, some banks are conditionsd trade, that may also create future potential risks in the system, like in real estate and mortgage is. Is veryi think there little way out of this, other than we price, as i mentioned before, the credit side of the Balance Sheet. And also starting to ask for fees on services that used to be subsidized by deposits. Deposit today is affecting the lower rates or negative rates environment and also making the proposition. Also talked about overcapacity. Are we going to see consolidation in the Banking Sector in europe because there has been so much pressure on your rivals . In general, the european Banking System is clearly, has a huge overcapacity. The problem is to create the environment in which we learn from the mistakes of the past, that not every bank should try to copy the other, but rather, every bank has to find its own nextto lead through the phase. Means focusing on what you stand for, what you are good at, by geography or client segment. Tom you mentioned what you are good at. It is his pleasure to speak to you. Your history of working in the trenches. As you look at a strategic path for for your bank, your competitors are slashing costs for the knowledge segment and Investment Banking. Deutsche bank has some very strong language. What everybody wants to know on global wall street is how are you going to retain your intellectual and your trading and your banking firepower . What are you going to do in the next six months to keep that with . Look, everybody, has to find his own way but if you look at our Investment Banking business, we focus much on what we believe in our clients believe we are good at. So, the Investment Banking business is the idea of onestop shop is dead. I dont buy the story that when you hear people commenting on competitors exiting you are going to pick up market share. I think there is very little to fullif you dont have the capacities and in certain businesses, the reality that no matter the Capital Requirements makes certain businesses unprofitable. Therefore, i think you can retain Investment Banking expertise, but you need to pick up which segments you want to be good at. Tephanie that was the ubs ceo josh, this is amazing. For a bank ceo to say you do not need to be onestop shopping. That is the exact opposite message we heard out of banks a few years ago. I think an environment where regulators are requiring them to shrink their Balance Sheets. There are doing what businesses had to do which is allocate capital efficiently. They have got to decide where can they drive the highest return. When youre in that environment, you stop during doing certain things. The cost is too high. Whatever the reason is, we allocate some capital someplace different. Stephanie because of all that middle management, this never happens because people want to save their vertical. Jonathan the other difficulty for them is operating in a Interest Rate environment. This is key going into next week, the ecb talking about how to commit to mitigate risk, negative consequences from negative rates. Look to switzerland, a multiti ered rate. There will be a lot of talk about that as we build up to the ecb meeting. This conflict where they have two responsibility. They are trying to regulate banks and reduce risk, and at the same time, they have an imperative to improve the economy. And push them to take risk. Those two objectives are coming into direct conflict. No place more than switzerland. Stephanie there you have it. Next, we will look at chinas latest reality check. Moodys cut the countrys Credit Rating. That is coming up right here on bloomberg. Jonathan we are talking about moodys as the Credit Rating agency looks to downgrade and cut the outlook for chinas Credit Rating. Joining us is Bloomberg Intelligence and josh. Ti m, look at what moodys has done. It points out two important things in china. One is the debt orton and two the debt burden and the two is the potential to reform. Days ahead of potentially leaders meeting to discuss that fiveyear plan. What did you make of the moodys move . It practically speaking, probably does not mean an awful lot. I think that is what the market told you over the course of the last day or so. The debt burden of almost 250 . You have to think about it is made up of corporate, made up of fovernment, made up o individuals. The lions share is corporate. Its all domestic. International flows dnot matter. Dont matter. So, rudys kind of does not matter. Josh the chinese are not paying close attention to it. Then the major holders of the chinese debt are either chinese institutions which are statecontrolled. Tim it is a domestic market. Domesticarket its to from the standpoint of what is going on with domestic flows versus international concerns, it is insulated. Josh , shall quiddity is there . How much liquidity is there . You have the same kind of thing on the debt side. Tim it is almost nil. Individuals are much more oriented towards property, bank trust products. And bank deposits. They are not into bonds. Thosean debt and reform, two go handinhand. We talk about the capacity that china has. When your reserve requirement stands at 17 , you have got space to breathe. You carry on cutting rates, youre feeding overcapacity in the system. It is not push it up. It pushes it lower. It is a problem. Tim it carries into what you had said. This weekend starts the National Peoples congress. They do it every year. So what . It is critical this time because this is when you got the ratification of the 13th fiveyear plan. Blueprint, their roadmap for where they want to take reform in their administration. I think that is part and parcel of maybe the speculative fervor in the market today in china where the stocks rallied, is expectation you will see alngible substantive, fisc stimulus and reform measures coming. Josh the National Debt is only the piece of the story. There is a problem of the municipalities where National Control is much lower in a lot of the debt resides. Tim its very true. That is part of the problem from the standpoint of having government directives coming out of beijing, and the localities do other things. That haveare steps been taken from the standpoint of debt swaps and other things on the minutes of calories on the municipalities front. On the corporate front, the zombie front, the excess capacity you see in a lot of commodities and materials basis that they do have to resolve. And there is a big question, can they do that effectively . Josh offtopic. This report that chinas consumption was down over 2014. A good sign for Climate Change. How much of that reflects a new regulatory approach to Climate Change and how much reflects the slowing economy . Tim an interesting question. Part of this is the Energy Intensity of the chinese economy. Like lowering, just economies always do when they hit a certain threshold. Part of it is a shift in where their Energy Sources coming from thermal is still the lion share. But one of the things you will see emphasize is the shift to nonthermal. Its solar, wind, gas. Thank you very much for joining us. Coming up on bloomberg , the u. S. Government attacks apple on two fronts. Did they puncture a hole in apples argument . David the apple versus the fbi debate is heating up. At a security conference yesterday, Loretta Lynch tried to shoot down apples arguments. In the present we have seen how we do in fact balance privacy and security every day. Until recently, apple was able to comply with our request. And they have some of the Stronger Security out there. We have not seen that parade of horrible consequences in those cases. David joining us now is tim higgins from washington. He has watched part of the hearing. Tim, this was billed at the shootout at the ok corral. Was it that dramatic . Tim there were some elements of great drama. Tow wo giants going at it. The government is arguing that apple is creating forantless faces, havens terrorists and criminals and that we as a society shouldnt let one company decided that is where we want to have going forward. Youd josh, i want to bring in here. Is this as big a deal as people are making it out to be . Josh i think it is a big deal. What you see for the first time is a clear example where the u. S. Technological lead and the u. S. National security lead are coming into direct conflict. The hearing is about which one is going to be more important. David what im confused about as it appears that apple in the past has complied with request similar to those from the at the. Why are they making a big deal about it this time . 2014, apple came out with new encrypted software that made these felons, they would not be able to get into them for the government. The fbi started making noise they were unhappy. This fight has been boiling under the until yesterday when it was out in the open in front of congress. s interesting is in front of congress and the courts at the same time. Whos going to win. Josh congress will defer. They will make a lot of noise in the interim. In the past, weve seen some fights were Silicon Valley went against other parts of the mainstream media. We saw this on privacy and piracy. This time, how long do you think the Silicon Valley lobby is going to be . Are they going to be effective from keeping congress from imposing limitations on them they do not want . Tim that is concerned of folks on the help. There is concerns about what kind of grassroots support will rise for apple. There is uncertainty from the last fight they had. Yesterday was inducing to see the mood of what was going on. The mood was mixed. There was definitely pockets of support. Some tough questions to them. David thank you. Later on bloomberg , apples at 9 30 right us here on bloomberg television. David you are watching bloomberg. Futures in the United States down across the board. Josh steiner is with us and we are joined by megan murphy, the Washington Bureau chief. We are going to start with first word with caroline. Caroline thank you. In the. Supreme court is case today that has the potential [indiscernible] hear arguments in the first major Abortion Case in almost one decade. It involves texas law that proposes stricter [indiscernible] about halfady cost of the 41 abortion clinics in the state to close. U. S. Special Operation Forces have captured an islamic operative in iraq according to the new york times. They say u. S. Forces are expected to capture more of the Islamic State but that raises questions about what to do with them. A new study says that london has been out new york and five other biggesto be the worlds power capital. London generates more highfield jobs and is more internationally diverse than other cities. News power 24 hours a day by more than 150 news bureaus around the world. Jon im surrounded by new yorkers so i will not comment on that and go straight to the morning mustread by josh steiner. We have been looking at why the taxpayers have commented on the taxpayer have commented. They are seeking leverage in the markets for shortterm loans. A problem for governments and nonprofits that depend on the investment firms to manage their pension firms and endowments. What an industry under pressure. Break that down. Josh that goes to the convers