Trading day. Julie hyman has the latest from the states. Julie there is the latest. We are looking at the stocks fall again in the u. S. , not by much. We have a drift, what one trader described as listless movement in the market right now. We have push and pull from the earnings as well as anticipation for the job report tomorrow. Onyou look at the s p 500 the bloomberg, looking at the intraday charts going back for six sessions. We are down for five of the past six days, but because the movements have not been large on a daily basis over the six days, even though we are down five of six, only a decline of 9 10 of 1 . We are sideways, slightly down. And take a look at what is going on with the yields this morning, this has something to do with what is going on in the u. K. Integrate expectations being brought down, we have buying going down in the bond market. That is pushing this down by three basis point in putting pressure on financial state of the things are not down individually on a percentage basis, but financials represent the biggest john overall on the u. S. Stocks. And Something Else moving, a little chance atlantic transatlantic deal this morning with a company from the u. K. Offering to buy a formula maker, mead johnson. 14. 6 million is the offer price and they are in advanced negotiations. This is as me Johnson Mead Johnson sees a 24 . Have been other suitors including nestle, so we will see if other suitors emerge. And finally in the currency market, i note you will talk about this in a moment, but today these are the major currency trading partners of the u. S. And all of them are higher versus the u. S. Dollar, with the exception of the pound. And leading as the aussie dollar after they came out with a big trade surplus and also remember there was apparently a not so successful call between donald trump and the leader of australia. We are also looking at strengthening in the South African rand and the south korean won. Mark you inspired me. Listless, what a wonderful word. Sco, il take a look at ch put in listless, abstractly, heedless, what a wonderful function. And a beautiful word some would say. And we are down for the fourth day in five days, listless, whatever you want to call it, technology gaining, health care down for days of decline. And looking at individual earnings, 15 Companies Reporting earnings. And super thursday, a rate hike sterling is lower. Initially, it rose, and the now concerned about accelerating inflation fed and now has fallen back. It is well within expectation. And there is more slack in the economy been indicated and no rush to raise rates. And looking at the boe raising 25 points by august. We will hear more about that in just a second. One dollars point five cents is where we are. And this is the 10 year yield coming down as the expectations diminish and the rate hike is an offering from the boe. And bringing this down some of the wonderful coincidence. This is where the 10 year yield was on the 23rd of june, 2016. We all know what happened on that day. It really quickly, Deutsche Bank today, shares as much as 7 down. And they are concerned about the company finances. Net loss was also bigger than estimated. Back to the bank of england, during the News Conference today, the governor mark carney discussing the down delicate balancing act they are facing right now. The objective remains inflation control. That means any overshoot of inflation above target can only be temporary in nature and a limited in scope. As such, they have been clear that the tolerance for above target inflation is limited. We go outside the boe. If you look at the Market Reaction, the take away seems to be investors thinking there will be no nearterm move in interestrate and the boe staying neutral. Absolutely. I am glad that you brought that up, how many ways can you say neutral without saying neutral . Mark carney said that the next move in rates could be up or down, and that is something in line with what the voa boe was saying in november. Remainshe key rate unchanged. The growth forecast for 2017 was upgraded as expected, but the surprise was the inflation forecast between 2017 remaining largely unchanged. That is why we are seeing a weaker sterling in the market, because anything going into the meeting, what investors were expecting, was a different tone, given the strong data we have had recently in terms of growth and inflation. If you are looking for signals on where the bank of england might go next, mark carney was very rested on that today. Mark nevertheless, some members see this are a bit more worried about inflation, potentially overshooting, so does that mean down the line we because thison it, is a body that is right now united . Unanimous,vote was nine all on that vote. And yes, you are right, there were some members that were increasingly concerned about accelerating inflation. In terms of the longerterm outlook on his comments in the conference was that expectation is well anchored. I was asking myself through the News Conference, why was it that the inflation outlook remains unchanged for 2017, the projection for 2. 7 or thereabouts . 2. 8 by 2018. Part of the explanation could be although the weaker sterling was driving inflation expectations, sterling has actually stabilized, if you look at cable, the pound against the dollar since november. And the other thing was the mention of flat in the economy slack in the economy, talking about the equilibrium with unemployment and basically said it has further to fall before it starts possibly having an upward pressure on inflation. Vonnie mark carney gave an answer to your question to a certain extent by saying that the real uncertainty is perhaps what has pushed the pound to be weaker today. Nerja he definitely did address brexit again, as of course he had to since they voted to leave the eu in june. He said, we are at the very beginning of this journey and there will be many twists and turns, so this has more uncertainty in the future and yes, potentially that could have more of an effect on the sterling rate. That is what is driving sterling down. And that was definitely something that would also address he would address. But the big surprise was on the outlook for inflation, most economists were expecting an update and that is not what they got. Vonnie ok. Thank you very much. We would like to bring in our guest, continuing the boe conversation, we have a chief economist from north america, many years working at the bank of england. What surprises you most out of this meeting . I think it was the extent of upgrade,h upgraded, and the shift of the goal post. Given the growth upgraded and inflation will be above target for a long time, they should really be thinking about moving rates. The way they avoided that was the sigma we think the sustainable level of unemployment is lower than we thought. What has changed in just three months . It is a puzzle. You can conclude that they do not want to vonnie mark carney said there is uncertainty over rates and it is a news around the bank of england at the moment. I think what they are worried about, clearly they have a growth impact of brexit wrong so far and the rate cut they had last august looks like it was not needed, so they should be think about with drawing it. What they are afraid of is if they hike now, growth may outperform all and it looks as though they got it wrong twice and they want to avoid that. Mark is there credibility here, is in germany you had inflation peaking at 2. 8 in 2018, which is what the boe suggested here, there would be an uproar, they are still below 2 in germany. Is there credibility if inflation is about 2 for longer than the doe says . There is a credibility issue. This is reminiscent of policy from a long time ago when Central Banks were willing to accommodate inflation rate shock, and it looks as though the bank of england is accommodating this with sterling and the assumptions on wages, that he will not respond very much, well may be wrong. And we will find that out in the next few months as the spring wage round gets underway. Mark you mentioned the unemployment rate, the equilibrium rate has been moved and they5, from 5 , also said there is more slack in the economy, do you think so . Where zero natural rate of unemployment, the level that does not stimulate inflation . I think we have seen wages start to reaccelerate. Wages thatinflate have grown by a bit less than expected and i think the right reasons for that. Productivity is lower, so the wage increase is located and low. And we have to remember is inflation has been located wages have not low. Wages have not gone up. And the bank is assuming that workers will not get any compensation for the pickup in inflation, and i think that is likely where they will be wrong. We see inflation going above 3 this year, they have the peak around 2. 8 . When they say there is a limit to how much inflation overshoot we can tolerate, my guess it is 3 . Why is it 3 . Because if you deviate from the inflation target by more than 1 , mr. Carney must get out the pen and paper and write a letter why he got it wrong. Vonnie he has not had to do that before in the other direction. Take a listen to something that was interesting that he said today, because many banks around the world are feeling this. We are coming to the last line, the warhol which is a good thing. Vonnie 15 seconds of fame coming to an end for the Central Banks. Some in the administrations have changed when it comes to trade. What do you foresee as taken the place of Central Banks . In the u. S. We have fiscal policy taking the place of Central Banks and i think that is important. In china, fiscal policy. I would love to see that in europe as well, but i do not think we will get that. We are much more likely to see fiscal activism in japan where one of the architects of is basically saying the central game is over and we need to have more active fiscal policy. Vonnie 70 was expressing a wish . It is an acknowledgment of the reality, i think. We are moving into a different phase of the cycle into Central Banks have done a great deal, but we are not as reliance on them anymore and we do not think they are incredible. Mark looking at probability, there is a 30 chance of a rate hike by the fed in march. Is that probability going to be higher after tomorrows u. S. Jobs report . F it is a blockbuster report, the probability will go up. I do not think it will be large, because the fed will not know that the with the fiscal plans are and a lot do not want to be clear on that, clarity will come during the second quarter. June in my view. However, we have to payrolls before the march meeting and if they are very strong and unemployment goes a long way below the levels, then march would come seriously on the table. Many people were expecting that the statement might hint that a rate hike was a possibility and the rally that we saw in the markets, because we did not really get that but as we go forth, the economy looks to be in good shape and the manufacturing numbers from yesterday look steady and but i would not rule march out by any means. We need some monster numbers to get march. Mark and if we get june, is there have to do three of them in the year . They are saying two or three. Im in the two camp at the moment. I do not think it is a lot of difference. If you look at janet yellen, her rules seem to say this does not much that do much at the moment. I do not see a rate hike before june. Happens after, depends on the fiscal shaping up and have the economy performs, and how trade disputes go. Vonnie the global head of Market Economics and chief economics economist from america. Thank you. Mark Rex Tillerson speaking to employees at the state department. He was confirmed yesterday and is sworn in last night. We will take a look at his address on bloomberg life. This is bloomberg. From london and new york, i am mark barton. Vonnie i am vonnie quinn. Mrs. Bloomberg markets. Mark shares of Deutsche Bank dropping, the worst since december. In earlier today in frankfurt, matt miller caught up with the cfo Marcus Schenck, who had more to say on the latest quarter. As i mentioned, the Fourth Quarter was difficult. Some of the reduction that we did see, the driver of the ratio improving, in the Fourth Quarter particular then reduction in Business Activity in the market. We didnt expect that to come back do expect that to come back. Nonetheless, we are still targeting to get to the top. 5 12. 5 . And we took measures in the fourth just to make sure that the core metrics that stand for the suitability stability in the bank, the capital ratio, that it is in the best shape we can coming out of the quarter and a think we did well on that. Matt the most important question as he appeared toward profitability for this year, you still need to hit 12. 5 , are you going to need capital increased by a share sale you did not announce today or maybe asset disposal . Isi guess my answer to that what you may have heard in the past, we never rollout in the instruments rule out any instruments. The primary tool we want to use is to organically generate profit and with that capital there are disposals available to us and we execute them quite well, in the last 18 months on those, which will free up capital. If need be or if we see value, we could incredible, deploy the toll of raising equity. Tool of raising equity. So far, we have made it clear where our focus is, and if there is any change, i will it you know. Mark that was Marcus Schenck speaking earlier with matt miller in frankfurt. Vonnie mark, new u. S. Secretary of state Rex Tillerson is speaking to employees at the state department for the first time. You are looking at pictures from the state department. He was confirmed by the senate yesterday just before 3 00 p. M. Eastern and he was sworn in last night. He is saying the safety of workers is a core value of the state department. Shaping our country or our department. Vonnie you can watch his iveress on the bloomberg, l go. Saying we cannot sustain ineffective traditions. This is bloomberg. Mark this is bloomberg markets. I am mark barton. Vonnie i am vonnie quinn. Almost one hour into the trading day. Julie hyman is looking at retail stocks, including ralph lauren. Julie the ceo is departing the company. On the one hand, ralph lauren is had only and larrson been at the company for less than two years, he joined in november 2015 and has been at old navy prior to that, and eight an end. There was talk that there was a culture clash between he and ralph lauren, that they did not have the same Creative Vision for the company. And one consultant told bloomberg that perhaps his background in lower price retail was not necessarily the best fit for ralph lauren. Whatever the case, the ceo is departing the company and sending down the shares. I wanted to take a step back, to take a look at how the shares have done going further back. Here is able to the bloomberg, stock price going back 10 years , peakingne, climb in 2014, before coming down. Larsson joined as the company was already looking at declines in sales, it had a rocky past few years. And declining around 2015. He did not manage to turn that around or turnaround the stock price. The other retail story has to do with macys. Lundgren getting ready to step down from the company to be replaced by the president. And as he prepares to depart, the New York Post reports he is considering selling all or parts of the company, scotus feeling the pressure from saying that he perhaps have to do so. Those shares are up 3. 5 . But they have been seeing a downturn in sales just as the ralph lauren shares have. It has been tough for a lot of retailers. Vonnie so it might get tougher yet. Julie hyman, the markets correspondent. The u. S. Secretary of state and confirmeded newly Rex Tillerson, speaking to employees of the state department. He is saying, i am the new guy. Then he asked employees to extend respect to others, even when they disagree. This is bloomberg. Vonnie live from World Headquarters in new york and worldwide, i vonnie quinn. Ammark and i mark barton. Amemma chandra has more from our newsroom in new york. Has tested milosevic ballistic missiles. The yuan Security Council resolution adopted a landmark deal. It was called absolutely on acceptable. According to the labor outputent, employee increased at an annual rate of 1. 3 , still below recession levels. Employers added more workers rather than investing in technology to increase efficiency. One dead and one alert and talking following a hostage situation at the state prison in delaware. Deal thatns of a could collapse. Said turkeydogan has no other option but to release its hold on refugees. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am emma chandra. This is bloomberg. Mark . Mark emma, thanks. Today, the central bank of grading its annual growth forecast. Consequences earlier, and of course the boj this week announced they were holding rates steady. Joining us to discuss the state isglobal Monetary Policy michael osullivan. Implications for the structuring of our portfolio . Michael i think there was a rend going on. N t last year, it was pointed out as far as the areas political results. What i found more odd was the Market Reaction or lack of reaction. I think all of us were on this journey from deflation to reflation. I think the election of trump proved the market is taking a slightly onesided view. The marquez been in this reflation trade. I think that will go on for the next 6, 7, 8 months until we see that inflation is growing properly in the u. S. Having said that, we do not have any clear indication yet of what fiscal policy is going to be like, and it will take time. Than hes a lot more can sign up by executive order. He will have to do it with congress and people like paul ryan, so it will take time, and it will take time to implement. To a degree, maybe the market is beginning to price that in. In europe, you have a certain degree case where recovery is underway. I find a lot of people go through the ritual today of saying they are worried about the eurozone, and we see the rise i