Bad loan charges mount. The biggest conference kicks off in barcelona and we will be speaking to the ceo of ford from the world congress. Dominating boris out in the story now making his mark last night. I guess that does make it harder for those who want to keep the u. K. In David Cameron. How is that in berlin . Hans they are waking up to the story now and in some of the papers they had british polling on what the likelihood of the brexit would be. Most of the conversation still dominate this refugee story but very much on the brexit in the financial press. Will chat all about this throughout the show. Let me take you to the bloomberg function and show me what you think and show you what we think is the fair value. This is the line to focus on here. It looks like we will get a positive open for european equities after a solid week last week, one of the best you see for european equities for quite some time but you have to remember that there were some negative views before that. Hans that negativity is coming into the hsbc story this morning. The stock is indented two different places. Then when you have the new the themselves are being investigated among the banks at the sbc. The dolly one strengthening a little bit. Certainly going against this argument that we will see massive weakening and quicker tick take a quick look at brent. Of course the euro pound story, we really saw the pound we can on the back of that news by easter johnson. When by mr. Johnson. It was already weakening and then it weakened even more. Lets get the bloomberg first word within a vucevic with nejra cehic. Nejra hsbc has reported a surprise prequarter Third Quarter pretax thirdquarter loss. Acceleratingeen plans to scale back the vast global footprint seeking to boost profitability and reverse a share slump. They also said they have been investigated by the sec over hiring practices in asia. Arabia is back in saudi backing saudi arabias and russias decision. Energy minister may meet his saudi counterpart later. Hillary clinton eked out a victory against Bernie Sanders in the nevada caucuses while donald trump won the Republican Caucus in South Carolina. ,eb bush was the front runner suspended his campaign after a disappointing finish in South Carolina. I am proud of the campaign we have run to unify our country and to advocate conservative solutions that would give more americans the opportunity to rise up and reach their godgiven potential. But the people of iowa have spoken and i respect their decision. So tonight i am suspending my campaign. Global news powered by our 2400 journalists around the world. Guy the pound fell the most in more than a month after the london mayor Boris Johnson said that he basically campaign for the u. K. To leave. This is what he said on his. Oorstep last night i decided after a huge amount of heartache that the last thing i wanted was to go against David Cameron or the government. But i dont think there is anything else i can do. I will be advocating that they leave. A better deal for the people of this country. To save them money and to take back control. Guy lets talk about whats happening in the pound. Goldman sachs said it may fall to 1. 15. What to take you to this chart which is the europe Sterling Group risk reversal volatility chart. Referendum scottish vote. This is a measure of how much the market thinks that the pound will fall and since the start of this year that chart has gone as youmuch vertical and can see its a pretty negative story for sterling. Richardson in stuart the cio who joins us now. A situation where we watching this story develop at a fairly elevated pace. We have a deal on the table and the boris decision made. Give us your thoughts and how you think you trade next few months. Youll have to be looking at sentiment and headlines. And what you should be doing is trying to fade some of the noise. You see these big gaps and if you try to chase them it will be hard to make money to sometimes need to fade some of these moves but the overall message is that this looks a comparison sterling story. It will be hard in the next four months to be getting a real story. Positive sterling trading from the bearish side but dont get sucked into chasing these big gaps. Guy is a great story about how this is fantastic for the u. K. Stocks. Is that not a trade to make. Does the sterling make you more positive for u. K. Equities . Is a great example of u. K. Equities benefiting from a big decline in sterling. Interest rates came crashing down which is great for the economy. This time its a bit different. With Interest Rates that are expected to be zero already. Weve seen somewhat weaker pounds for a bit of time over the last several years. I dont big it was a massively obvious story because of the different Interest Rate structure that we see today. Hans moving away from the europe shores to the oil story do see this as one of supply or do we have a fundamental demand problem . Looking back in the last 18 months its clearly been a supply story and i think its beginning to shift. Bute not apparent today there has also been a lot of talk about the production freeze and potential production cuts in the next year or two as the big producers try to Work Together seenat the moment we have continual downgrades to global gdp growth. This is not a great story for demand. If we escape recession and find some supply of ballots. Reason we go to a global and u. S. Recession. Getse balance story further into 2017. But when you look at oil windfall in 75 from the high we have to be looking for some kind of stabilization. Guy , you are feeling fairly defensive . Well get more of his defensive thoughts and we will speak to the ceo life from the World Mobile Congress in barcelona. Guy the boris effect continues to affect Global Markets. We assume the pounds dropping 1. 6 . Just give you a bit of context, the sense we now have of sterling. That is the biggest decline that we have seen in a year on the cable rates as a result of what is happening. That is the story right now. Lets get the take of what is happening for the mobile world congress. The delegates are swarming to see the latest in technology from Virtual Reality to 5g products. Not just smartphones but smartphone providers. Our leaders are speaking to one of the biggest. Caroline . Caroline i am indeed, i. Guy. None other than the chief executive of ford. Launching a car at a tech conference. You are plowing in the technology. Here we are really emphasizing the point that we are transitioning from an auto company to an auto and mobility company. One of the reasons we are here is because we are talking about our core business which is designing and developing great utilities. It is also packed with Great Technology that will help you with the as a driver. What better way been seeing a technologysavvy audience . Caroline paint a picture for me. When will i not be driving . You are already investing a lot and driver assist. When do i not need to do any of that . We will probably see by the end of the decade that somebody will introduce a fully of economists vehicle autonomous vehicle. Caroline will it be you . It may be. The level we are shooting to come out with like the Tech Companies is a vehicle or the driver does not need to take control in a defined area. When we do come out we want to make sure it is true to our brand and our brand has always been about accessibility. Caroline who wins out . Is it you, google . Apple . Do they become competition . Caroline our view is we want to make sure that we can continue to be a leader in this area. We are not a leader in our core business but we are a leader in semiautonomous features. Features that keep you in your lane or adapt your speed on the highway. One of the announcements we are making here is we are tripling our Engineering Investment in those semiautonomous features. At the same time we are investing in Autonomous Vehicles and as we do that we will work with a lot of different partners. Makes sense to work with others we will and where it makes sense to work on our own, we will. Caroline in silicon valley, you have r d area, is it google you have been mostly discussing with . Who would like to own the data . This is the wonderful thing about a big facility. We work with startups and incubators. We work with large Tech Companies and small Tech Companies. As we do that, were learning a lot and establishing harder ships. Partnerships. Caroline any key announcements . We talk with a lot of different Tech Companies about what we call our Smart Mobility plan. You can appreciate that for confidentiality reasons we do not talk about that publicly. Our it comes to the data approach is that the customer owns the data and we want to be a trusted steward of that data. If the customer opts in to share that with us we want to make sure were giving them a benefit of return that makes them more productive or safe and allows them to enjoy their vehicle better. Steward. O be a trusted caroline what about the apple negotiations happening so strongly in the United States . We are watching the situation closely but we come back from our standpoint, we take the security and the privacy of our Customer Data seriously. Stewardto be a trusted and we are committed to protect. Caroline you are so prevalent being hit by the Oil Situation as well. Bring it back to the u. K. What do you think about the brexit situation in london. We have Boris Johnson coming out. It is an important issue for the British Public and as a Large Employer in the u. K. What we have said is that it is really important for the u. K. To be part of a single market. Good for all is u. K. Businesses and at the same time we also feel that having the u. K. As part of a reformed eu is in the best interest of the u. K. But that will be decided on by the British Public. Caroline are you optimistic about the Economic Sentiment out there . It depends on what heart of the world you are looking at. In the u. S. , we think that the economy is fairly strong and supportive of auto sales. In europe we continue to see growth, moderate growth. We are back to profitability is a company. In china, we actually see the chinese economy the government said it would grow less than 7 . Growth at anyhat time of the year and we think. He Auto Industry will do well down in south america, we see that market is very tough and the Auto Industry will probably contract. Caroline such a global picture for us and such tech expertise. Chief executive of ford. Not just an automobile company, but eight mobility company. Throwing it back to you guys. Caroline hyde joining us out of barcelona with that ford interview. Back becausee you we have seen a fairly big move on the cable rates. We have been down to 141. 75 on cable. Leverage selling is causing this. To bounce offng of that. But nevertheless, the boris effect is certainly front and center for the fx market this morning. There are going to be people in certain instances who are reasonably happy. The bank of england is concerned about this elevated level of sterling. Plenty of ceos would like lower sterling. Maybe boris has done them a favor. Hans but probably not mr. Fields from ford. When you look at the strong dollar that is such a way on the u. S. Economy. What has the strong dollar done and has it been a rate hike for the u. S. Economy . In europe, when we look at the macro picture, we are getting back into currency wars and we will see how that plays out on the macro effect. Guy who would have thought that boris would be leading the charge, but you cannot exclude that. Few minutesack in a time. We are minutes away from the market open. We will look at the potential movers including hsbc which reported a break big pretax loss this morning. Guy we are counting you down to the market open. Which stocks to we need to be watching . Hsbc is certainly one. It has that opened in london. Europes biggest Bank Reported a surprise fourthquarter pretax loss of 850 million. Estimates of been for 1. 59 billion profit which comes as Stuart Gulliver has been accelerating plans to scale back the lenders vast global footprint. Headthe other does with this morning is that hsbc is among Financial Institutions being investigated by the u. S. Securities and Exchange Commission in relation to their hiring practices in asiapacific. Home depot is being calm down as as one 10 by Analysts Company has made a 200 billion counter bid. Guy european stocks cash open up 1 . Hsbc is certainly in focus. Sterling is on the move as well. Equities look like they will open stronger. Guy welcome to on the move. I am guy johnson. Right here in the city of london. Alongside hans nichols. Where moments away from the start of european trading. He is your morning brief. The brexit battle begins. The pound sinks the most. Moores johnson says he will campaign for a u. K. Exit from the European Union. A big mess at hsbc. Europes biggest bank posts a loss of 800 million in revenue slumps and bad loan charges mount. Barcelona. Cells ing smartphone sales seconds away from the european cash open it looks like european equities are going to open on and up on around 8 . Lets go to nara for the open. Nejra we saw gains in asia. If you look at the shanghai comp said rising the most this month. Lets take a look at how european stocks are opening. We are seeing ftse 100 going up. 3 . This after David Cameron got that deal in brussels on friday night. Deal to try and avert a brexit. Since then we have heard london mayor Boris Johnson saying he is going to support the lead camp. Cap 40 unchanged at the moment. Cac 40 unchanged at the moment. 9 10 up. 9 . Lets take a look at the pound because this is a trade we have been keeping an eye on. You can see the pound down against the dollar. Dropped the most in a month after Boris Johnson came out saying he would support the lead camp. We have seen the pound gain the most in two weeks after David Cameron got that deal in brussels. Having a look at euro versus the pound, the pound weakening versus the euro. The euro at sterling volatility highest if you look at sixmonth volatility at its highest since 2011. Britains position in the eu going for now. Looking at the stocks we are watching today. Hsbc is a big one. You can see there, down almost 2. 6 . Down in hong kong earlier as well. This is after the europes biggest Bank Reported a Fourth Quarter loss. Analysts had been expecting a profit. This report comes against a backdrop the ceo really trying to accelerate plans to scale footprint. Global also of course hsbc saying it is a multinational institution, inng investigated by the sec regard to hiring practices in asia. Uptish foods we are seeing. 9 . It only saw a marginal decline for the group fullyear. Home retail unchanged at the moment. And a moment of madness i said the stocks to watch, home retail was down 10 . Of course it was called up 10 . This is after steinhoff coming forward and putting in a counter bid, pitting itself against home retail group. Guy . Just crossed the bottom of the screen. Eurodollar is moving on the back of that. Just Pay Attention to that move. Your sing a decent move, extending losses on the back of that weaker than expected french data. Around. 4 . Own we will get you more details. I want to give you a sense of how the flows are moving this morning. Financials unsurprisingly down. It is in health care that are leaving the moves. Hugey, a huge rise, with a conference sticking place in houston. Energy is trading up at 1. 3 . 1. 65 percent. That is the rotation you are seeing. Lets get more on the hsbc story. Banksd chin is at the asian headquarters in hong kong. Rosalind a big surprise for investors, hsbc posted a Fourth Quarter loss, compared to estimates of a profit of 1. 95 billion. Operating cost came in at 11. 5 billion for the full year. The bank says profit came in at 18. 9 billion dollars. 18. 9 billion. Equity came in at 7. 2 . Infected byted the bad loans given to Oil Companies and gas companies. Quarter increased of 32 on bad loans and credit risk is it credit risk provision. Income. Fog in 124r, the ceo says million 124 billion last year which is almost half to this time 2017. For the Fourth Quarter though, . 10. Sayshairman, Douglas Flint the Group Financial performance was broadly satisfactory. Guy rosalind, thank you very much. Rosalind chin at hsbc hq in hong kong. Dubai stocks selling to a bull market. January 21 loans. European equities on their foreign for as well, hans. Hans i am joined by marcel fratzscher. Ill is have to remind that it is an acronym for the european german institute. All the German Companies looking at what is happening across the cake potential the u. K. Potential brexit. Have a price in the prospect of a exit . People realize what will happen if one of our most trading partners brics away. What will it mean for Financial Markets in particular