We will talk about that. New ceoill speak to the about raising sales, earnings, outlooks, why he is putting hockey in the penalty box. Lets turn to the markets. A number of factors that you need to be thinking about today. One of which is we have a decent bid on the yen. Around. 2 point. 2 of 1 . Policy is beginning to work in japan. You can see the yen up by. 2 of 1 . The dollar is fairly flat this morning ahead of payrolls friday. Yesterday briefly week session for equities. A leg lower this morning. Lets move on and talk about what else is going on out there this morning. Lets the bunds open so talk about what is happening. We see yields beginning to push a little bit higher. Backing off their earlier session high. There is the open, bunds initially on offer but beginning to firm now. Of where cashator equities are likely to go. We will talk throughout the program about this incredible spread that is emerging between what is happening with the german on market and the treasury bond market in the u. S. And we will dwell on that a great deal during this program. The final thing is whether equities are going, we have seen where the bunds are opening, a mildly negative start. Down by around. 2 of 1 . A fair value calculation, you can click the box right here on the futures. A mildly softer open. We will see how it progresses the rest of the day. Lets get the bloomberg first word update. Here is juliette saly. Juliette in the u. S. It is emerging that President Trump met with the Russian Ambassador. Ast april over controversies despite claims by a spokeswoman that he had zero involvement with russian officials and during the campaign. Attention to trumps encounter with the russian official service. Five members of his Campaign Team had contact with him before trump took office. Meanwhile, President Trump has thrown his weight kind of a House Republican plan to replace obamacare. Even as conservatives mounted their own savage attack on the with one republican senator declaring it dead on arrival in the senate. With thed a meeting team to rally behind the bill setting up an unexpectedly close alliance between the president and House Speaker paul ryan. We will be speaking to u. S. Commerce secretary wilbur ross at 12 30 p. M. U. K. Time. Chinas imports surged last month from a year earlier posting the biggest gain in two years of yuan dominated data. Rose 4. 2 in february and you on terms. That left the trade deficit of 8. 8 billion for you the first negative rating in three years. Economist said the results were skewed by the timing of the week long Lunar New Year holiday. Japan is poised for its longest run of Economic Growth in a decade. An upward revision of fourthquarter gdp to 1. 2 on an basis. Zed aces that would be the strongest streak of expansion since 2006. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Bloomberg. Guy. Guy thank you very much indeed, juliette. Lets talk about what is happening in the u. K. Slipped to sterling a sevenyear low versus the dollar yesterday driven by weaker Economic Data and growing uncertainty over the course of brexit. 115 on the pound. You can find this out by going to fxfc. Q2 17, markets, this is q3 17, 116. Around 125. Global strategy joining us. This 122irting with line. What is it going to take to get it out of that 115 line . Guest there are a number of risks Going Forward. Politics which we think reignites as a risk. Our section is by the end of the month. Economics similarly we think having seen the Consensus Forecast move up in a Straight Line for six months for growth this year. Markets are becoming perhaps complacent on the economy. Surprises seem to be slipping over from positive to negative. I think at some point expectations for the economy overshoot the upside. Therefore the downside. We are closer to that Inflection Point now. Both politics and economics are risks Going Forward. Twohaving had postreferendum legs lower, very risky for third. Guy in theory, that should act of said act as some sort of insurance policy, it should provide some sort of forward momentum. Is that going to happen, have bigger positive is this . The consumers are beginning to feel the effect of imports in the inflation story. Is there something that will balance that out . Guest in terms of volumes, we think probably not. From exporters margins it is a positive story but what we see consistently the world over is the economy economies respond less negatively to shocks. We have seen that currently and in japan and we think the u. K. Will be the same. We are at the point now six months after the move that we ought to be seeing export volumes picking up if history is repeating itself and we are not. In the k traded or, isis are up 50 year on year. I think it is another area where there is disappointment. It would be the dividend for the falling sterling which we think will be smaller than expected. Guy presuming the governor of the bank of england will not be seen pleased if we see the forecast coming through. Guest i think we would question curdpside that the forward curve has at the moment. We think the risks are a lot more balanced. Ofwill go through a debate whether it will be up or down coming forward from here. Guy how do i factor in what is going on with the political story surrounding the exit vote . We have seen the house of lords kicking back to the Prime Minister a bill that includes some sort of realistic prospect of a decent, meaningful vote for parliament on the deal that is ultimately done . This game there is theory idea built around that deal is onet of bad that the europeans will progress because they want to see parliament kicking it back, they will want to see ultimately that happening. As a result of which may be brexit not taking place. How do i factor the politics back into my fx story . Guest this should prove to be a relatively short term distraction and not much more than that. In all likelihood the commons will still vote the bill through without the amendment. That will be the end of that. If the lords amendment does survive even then in all likelihood the meaningful vote, socalled vote the it is likely to be so close to the twoyear deadline itself that are listed play the only choice they have is to accept the deal there being shown or except there will be no deal at all. Realistically, this is a short term distraction. Alternately we will prove more than that. The timescale will remain article 50 by the end of this month and exit within two years. I do not think it is likely to prove a major driver. There are bigger issues. Guy one quick question on the politics. How would sterling react if theresa may were to call for another election . Guest it would probably react positively. If we had a snap election which is not an easy process, if we were to have a snap election we would see the government turn and stronger government Going Forward. That would generally be apostate thing but the process of going to a early election is not easy. The u. K. Has a fixed term parliaments are it is not something i am figuring into my thinking Going Forward as a likely scenario. Ilt analystsr of g giltve that the [inaudible] real yields, nominal yields, the whole thing seems to be out of kilter. And some thing is going to change. If we were to see a meaningful change in the gilt market factor that back to where sterling is. Guest so much what you see in the u. K. In the gilt market is not u. K. Specific. That is the story internationally. If we were to see a material selloff in isolation and guilt, that would raise a much bigger Downside Risk for sterling. What we are not seeing is there is any kind of finding crisis in the u. K. For the u. K. Which is running two large deficits. E moment i am seeing that remains orderly. Sterling does not have to worry about a Funding Crisis externally. If that were to prove to be incorrect, i would have a forecast sterling that would the below parity against the dollar and u. S. Sterling above well above parity. Your casts arere based on a relatively orderly adjustment process. There are some people that are beginning to get nervous. I have a question on my screen, the spread between the u. K. 10 year, the gilt, and the u. S. Treasury. It is pointed out continuing to blowout. How much wider cannot go . Can that go . U. S. the front end of the is probably recently fairly priced now. Nextarket prices are hiked week with certainty. What we have seen previously having priced in the most immediate rate hike, markets struggle to discount the gilt more than that. In the shortterm term we are likely to go through some more stability and fixed income markets. Having got that march rate hike into the price will struggle to price it more in the nearterm. Trading 121, 22, adam cole, at rbc europe. Listeners and viewers, we will be taking the budget in at 12 30 p. M. London time. Coming up on the show, chinese imports surged in february as exports missed estimates. This has not happened for a while. We will talk about why. We will talk about what is happening with the u. S. Treasury market and the fed. Growth will hike rate until something breaks . We will talk about that. And it is but a day in the u. K. Legit day in the u. K. All of that coming up. This is bloomberg. The open is 16 minutes away. Guy 7 46 a. M. In london. Lets get a Bloomberg Business flash. Here is juliette saly. Juliette thank you. O de monte paschi wants to start the sale as soon as european authorities approve it proposal. The bank plans to offer all the loans in a single block and may sell at less than 25 . A representative declined to comment. Snap shares have fallen for a second day in new york trading. The owner of the snapchat social media platform closed a most 10 lower as concerns over its growth trajectory way on investors minds. The losses brought the declines a sense the high watermark to almost 30 and whittled the market value to below 25 billion. Ferrari has launched the speediest production car in its history and it is sold out. Than three to thousand dollars and comes with a 6. 5 liter 800 horsepower engine which gets it from zero to 100 Kilometers Per Hour in as little as nine seconds. That is your Bloomberg Business flash. Guy lets talk about what is motoring and what is not. Thank you. Imports jumped into very well exports slipped 1. 2 , missing estimates by more than 10 percentage points. That left a 9. 2 billion trade deficit, the first negative reading in three years. We can show you the numbers here. That is the chart that you want. This chart from the m lib blog. Like a bad set of data for the regime looking to rebalance. Is that the correct rate correct interpretation . Guest there was a Chinese New Year holiday that gets a bit distorted. They would prefer that the export numbers are somewhat higher than they actually were. It is a bizarre bunch of data. I do not think we have ever seen a sudden change from month to month. You have to try and smooth it out over the quarter and it does not look quite so bad. Things are changing in china, that is for sure. Guy lets talk about what the implications are both for asia and chinas relationship with the trump administration. Guest as far as asia is concerned, other countries should be reasonably happy about this. When china is importing and large quantities that is usually pretty good for other countries. Australia is usually pretty happy about that. Most ofthe as are the other south asian nations as well. On that side, it is a good thing. We heard some encouraging signs in beijing. It looks as though china is starting to prepare the groundwork for a president ial meeting between the chinese and american leaders. This hopefully means that the risk of a trade war between china and the u. S. Is really moving into the background now. It will be interesting to see if this data feeds into that narrative. I want to ask you a more broad question and we have a chart. Ere, the s p future contract it has the longterm trendline and we are beginning to which through it. You guys are beginning to get cautious on whether or not we are getting close to a correction. We are getting into correction territory or early signs of it. What are you seeing in the market . The last few days have been quiet. What are we getting today . Guest much the same although obviously, people are getting a bit nervous because some of the rhetoric coming out of north korea, that sort of thing is pretty horrible. People are a bit edgy about that. Volumes are relatively light. Essentially, people are making small adjustments ahead of some big meetings coming up. We have the fed next week, bank of japan, the ecb ahead of that. People are holding on to what they have got. Overall, nothing really serious is taking place right now. Guy so wait and watch but the momentum stories interesting. V blog,omberg mli talking you around some of the analysis of what is happening in the markets. You can go to top live. It pops up with smart comments that are on things that are happening with the data, the macro story on politics and the corporate stories as well. We are minutes way from the european cash open. We will look at some of the movers in todays trading. The sportswear companies sees profit raising. We will talk about that stock, it is outperforming nike. That story next area the open eight minutes way. This is bloomberg. Guy cash open five minutes time. Lets talk about some of the stocks we need to be watching. Shares have had a fantastic run. We will be speaking to the new 1135 a. M. U. K. Time. Take a look at this chart, take a look at what has been going on. It has been a blowout performance. Here is nike. As you can see, after underperforming, it is outperforming nike quite strongly. The business will focus on the u. S. And focus on his core brand and what is happening with reebok. It will be selling its unit. Its hockey unit. Its hockey unit. Credit agricole, this is a story staketheir weighing a sell. The other one of want to mention foxconn. It is about what is happening at the highend Housing Market which has been softening. Pretax profit missing estimate, down by 33 . Is the sense that we are seeing some softness there. We are continuing to see the bund yields rising. The open is next. This is bloomberg. Guy welcome. We are very close now to the open in europe. Interesting stock stories to watch out for. More generally, a softening picture of european equities as we start trade in a minute or so. One,. 2 . Y it is fascinating to see a strong story coming through. Watch out for Credit Agricole, fosters, angie forex and g4x. Yields pickingnd up a little bit this morning. Not a great deal. We have seen a little bit of a push higher. We will talk a lot about the fixed income story throughout the morning. Let us talk about the market open and what is going on. We are expecting it to be mildly negative. Here we go, right. Let us see how the Market Makers are getting things going this morning. Ftse 100, mildly negative. We are just softening up a touch at the moment. Opening more negative. A little bit of a negative five vibeg from the negative coming from the Market Makers. We are coming up with some very big events, boj, said, ecb, etc. Lots and lots for the market to think about. Momentum really for equities. Let us deal with the details and what is moving these markets. Manus cranny, over to you. , politics, and trade pulling the market back. This is the fifth day in a row on the stoxx 600 you are seeing declines. We lost 1 of our value in the past five trading sessions. Marine le pen on the news this morning saying the new french franc will be sold at a oneforone value. A message for italy, you would be better off if you left the eurozone as well. The german data Industrial Production rose. The data is volatile. The chinese data undeniably loads up again in of rhetoric for donald trump in regards to deficits, trade deficits, and those kind of issues as to go towards detail any towards g20. It is budget day in the united kingdom. Theresa may and the Prime Minister have been thwarted by the unelected chamber, the house of lords. They are passing a bill back to the house of commons with an amendment. Who dares defy the will of the british people in terms of the houses of parliament . That is the question. What international are International Perspectives . This caught my either a caught my eye. This is going to be as good as it gets for the u. K. In terms of data. We expect growth. Net sales by foreigners have. A big expiration in january that might account for it, but will the world come back to the gilt market as a Tour De Force . Down by nearly 8 . Let us talk about sterling because this is the other big issue for the market. We take a look at the net short positions. You can see the record low round dot. The cable and gilts floating at the bottom. We are breaking lower by 1 8. The question is, for the market, the politics and the possibility of this addendum or amendment to article 50 ring true . What does it mean for sterling . Guy we are going to find out. The politics story getting more and more fascinating by the day. Mr. Miller is bad. Map, good morning. What have you got on your mov . Matt good morning. Im looking at the mov, got the dax up. Let me pull up the stoxx 600 for you. We are seeing losses. Deutsche, siemens. German equities are taking the big brunt of it today. On the other hand, another German Company raising its forecast and getting a big boost. Im looking at the index point affect on the s p, on the stoxx 600, so that is where you see the big drag here in germany and coming froms over, the German Company as well. Guy let us talk about what is happening more broadly. Let us talk about what is happening in the bond market right now. This is a chart we have to Pay Attention to. What we continue to see is a widening out of the spreads at the front end of the curve across the atl