And a morning. The ec and a warning. The ecb says they must be wary of introducing fresh stimulus, but are they moving closer to draghis position . We will hear from bundesbank throughout the show. And weve got the imf pushing for bold fiscal action, goldman pushing back on that. Where did they see Monetary Policy in the next . In the mix . Hans he says it will be data dependent. Normally, the german voice tends to be, well, quantitive easing can be counterproductive. Theyre specific, saying they wont be for it. I heard a central banker in frankfurt yesterday who was open to the idea of doing something more, but he clearly wants to tweak it. He may be closer to that theater constantia position. He didnt explicitly say it, but he seems to walk up to it. Guy we will talk about that later. S an i have plenty to h hans and i have plenty to kick around. Lets look at what bloomberg is telling us. A fairly positive open looks like the risk is creeping back into the Service Sector data, clearly speaking people. Clearly spooking people. The euros stocks up around 1 . European stocks look like they are going to open on the front foot. Hans yeah. They seem to be shaking off what is happening with shanghai. Take a look at these assets the shanghai composite was down almost 6 , and you look at that risk on sentiment, we are seeing a little bit of strengthening, and look at that pound. Pounddollar we need that to get to 1. 2 around june or july when wimbledon is playing. You will get a lot of americans up there feeling very rich. Then we have brent, down a little bit around 34, not a huge story. Lets head over to Caroline Hyde and get the latest for the first word. Caroline emergingmarket assets are so cheap that they may be the trade of the decade. That is according to a Research Affiliate by pimco, one of the worlds biggest Money Managers. They are joining a growing number of Money Managers who are turning bullish on em after three years of underperformance. Meanwhile, the manager of 85 billion at blackrock says the loss of power over markets means oil stock investors can get back into what they do best. Afteruying again having 25 of holdings in cash. He says that the turmoil is natural as trade learn how to price riskrs. The South AfricanPrime Minister says he is confident the country has done enough to preserve its investmentgrade credit rating. He spoke to bloomberg after delivering his latest budget. To demonstrate ourselves as South Africans that we can put a package together. Our plans and financing are terrible, but sustainable, and viable. I think we have managed to do that. Caroline global news, 24 hours a day, powered by 150 news bureaus around the world. Ecb needs to be very careful to avoid a counterproductive effects when it decides on what action to take at its march meeting, according to the again governing Council Member and the president of bundesbank. I spoke to him yesterday, and heres what he said. What matters for us is that we dont produce counterproductive. Effects we want to have a transmission of our monetary impulses on prices at the end, and if through the effect on the stability of banks our measures produce the opposite of what we want, it what and be smart to break in the first place. Hans lets bring in our guest this morning, the ceo and cio of capon investment, managing more than 2. 5 billion pounds in assets. No one to better parse a central bankers words. Policy getting ouat at there . The issue was because their economy is doing well, they dont really need the very easy Monetary Policy that we have at the moment. Hes presenting germany for the germans. Es not so much more needed and therefore you can argue about inflation not being the Biggest Issue for the germans at the moment. Hans weve seen the market backing off, expectations lost. What does draghi need to do to counter way that market move . How far can he go . I think it is mainly about instilling confidence back into the markets. Central banks are still there. The u. S. May have to back off a little bit from the support but the ecb is still there. Hans when we look at this idea of a tiered structure for bank deposits, if you bring that rate lower, more than 10 basis points, do you think the transmission functions available can wall off parts of banks assets so the banks arent seeing their earnings evaporate as the ecb try system like the economy . I think theres a bit too much focus on the banks earnings. What this next move by the ecb building,s confidence but also making sure that the euro doesnt strengthen any further than it has. That is the big point. We are focusing a lot on the banks, i said for a long time that i am not big banks at this stage, because their earnings are under pressure in a you low yield and in a low yield environment, but i think we have seen over the last weeks that there is enough support behind the banks that they will not be one of the major problems. Guy you dont worry that the main credit channel in europe is the Banking Sector . That the banks are unwilling to lend more money . Maybe it is a liquidity drought, maybe we are caught in where are we . The banks have got to function. We have got to get this story going. We have to generate growth. Im absolutely with you. Its all about confidence. What we currently have is this chronic confidence deficit, and that is also true in europe. That is why lending isnt going. Guy so is rocky the right person is draghi the right person to hit that . Should he be out spending money rather we are pushing on a string. The Central Banks and Monetary Policy can only do so much. Now we need to get the confidence back into consumers and industry to spend all that money, and yes, there is more to be done on the political side and centralbank side. Guy youll stay with us. Lothar will stay with us. Oil reverses yesterdays game as u. S. Stockpiles increased by the most since 1930. That story, next. Guy 7 41 in london. Ftse is waking up. A positive start around 1 . Lets get the details. Heres the Bloomberg Business flash. Caroline thank you. Ab inbev has reported fourthquarter earnings that missed estimates. Adjusted operating income rose on an organic basis. The miss underlines their need to expand in emerging markets. Bt must open up its Broadband Network to rivals and may need to spin off the division. That is the proposal from the u. K. Telecom watchdog ofcom. They say they must allow competitors to physically access their underground tunnels, which will allow them to take jerked control of the connection. Deutsche telekom has recorded fourthquarter earnings that beat estimates. It climbed to 5. 1 billion euros. Won for broadband offerings in germany. Shares in sharp have plunged after the announcement of the deal for foxconn taking a majority stake. They will control 65. 9 of shares. Thats 32 less than yesterdays closing price. Thats your Bloomberg Business flash. Hans caroline, lets get more on that sharp story with our managing editor for asia. Peter, thanks for joining us. What is the significance of the sharp deal, and how will foxconns acquisition work . Well, this is a big deal for sharp, and is a big deal for japan. It wasnt that long ago that it would be unthinkable for a foreign acquirer to buy one of the icons of japanese business. As this deal is coming together, it looks like there was no chance of foreign bidder would idder,ainst a domestic better but they pulled it out. The chairman was very determined in terms of focusing on this deal. He raised his bed and came to japan several times to press his case. He and it up offering more money. It is interesting to see the share reaction when news of the deal first broke, they went up a fair bit. Then when the details came out, looking at what the deal involved, shares plunged quite a bit, closing down 14 . The key thing is that existing shareholders will be diluted. Foxconn will put in for a ¥4 billion for new shares and get 2 3 of the company, significantly less than the values yesterday. Guy peter, why is the Company Worth more together than it would be broken apart . Back to the center of it. I think the key thing for foxconn is that they are a major supplier to apple. They make iphones and ipads, and they assemble a lot of their factories in china. Theyre a major supplier of panels for sharp those in tablets. They will be able to get more control over the supply chain as they supply apple and other makers around the world. The ideas that they will be able to use that integration to their advantage and boost profit over the longterm. We will see if it works. Guy thank you. Peter olson. Lets turned to another corporate story a proposed dividend in a move to show up a spanish Oil Producers price. Ryan chilcote is here with more. Walks us through this number. This is critical for all Oil Producers. Everyone is watching it carefully to see how the strategy works. Some people are boosting their balance sheets, but this is a different story. Ryan at the end of the day, with these earnings, they need to explain to investors have it will protect their credit rating. They have two choices. Plan was to cut the dividend. Massive. Been a lot of pressure to do that. Or sell part of their stake in the spanish distribution and retail business. That is something they would only do to protect their Investment Grade rating. They really didnt want to do that. And as you can see, they have done the first of the two options, cutting some of the proposed dividends. They have the problems that are inherent with all the Oil Companies, in to sense a very low oil prices. But they also have another issue, which is that they did the second biggest deal in the oil industry after oil prices started tanking. Theirthe bg shell deal, acquisition for 13 billion of Talisman Energy in canada, that really raised their debt levels, to the highest level in 27 years. They had the same pressure that all the other Oil Companies had, but because they decided to expand and they really did expand, they became a pretty Significant International oil theyin the north sea got this debt problem. Guy great stuff. Ryan, thanks very much. If im looking to try and work out what my dv cover is, how nervous should i be of some of these Oil Companies . They are clearly taking action. Dividends very much on the edge . I think they are on the edge. Only noticed now there was a problem in the oil industry guy people have been holding onto these stocks theyre big portions of an income portfolio. Its becoming a shrinking pool of assets that payouts at these dividends. Its true. But in these environments, in the mediumterm outlook, i think it is pretty quick and easy to conclude that this is not going to be sustainable. What i am more concerned about is not just rub salt cutting dividends just repsol cutting dividends, but a broader trend of cutting dividends. Thats not great for markets. Hans i want to stick with that scene. Asset managersd arent getting dividends from Oil Companies, not from Deutsche Bank certainly, what does this do to the Insurance Companies . Are the ones that are under pressure, or is a broader than that . I think it is broader. We are in the slow growth, low return environment, and that is the new normal that everybody has to get used to. And yes, Insurance Companies are one of the sectors that suffer. Hans so it is more than just the Insurance Companies. Do you see anything in terms of regional breakdowns . Butany is staying strong, we dont necessarily see that reflected in the dax. Is there a regional component to this as well . Yes, there is, but i suppose the dax at the moment is very much the barometer for the Global Industrial output, where the dax is telling us that a different story. Weird things this in the market on stocks, it looks like you will lose yields, treasuries at im getting a small pickup in terms of yields. If you look at the money made in the treasury market, why would you go anywhere else . Why would you even worry about stocks . If you look at the 30 year historical development, you have been waiting in government bonds all along, and that is exactly the point. We have run out of roads. If the economy picks up just a little bit, the arts desperately overvalued. Ive than happy to be overweight with government bonds recently, but that was a little bit cynical to my own mind, because it is the one asset class i am most worried about over the longer term. But it does help us as a shock it absorber in rough patches. Guy but why should i believe equity markets will outperform, even continuing from here . You hear what is coming out of the imf, a low growth environment, that is not a great environment for stocks. Its a much better environment for bonds. If you think about what you pick up versus the overall story, why would you not do that . The story is the relative. Are equities going to be great or are they going to better than government bonds that is where i am government bonds . That is whaere i am coming from. With inflation being around zero, that is still a good real en interest is not picking up any yields. As the yields fall further, there is not much more room for capital appreciation. Guy the duration story is where you are going. You fall further and further. The japanese yielding less than 1 . There is some flattening economy isut the telling me that it is still doing much better than what the stock markets have suggested. Guy thanks very much. Lets get to Caroline Hyde with stocks to watch. We need to talk about lloyds. Caroline indeed, guy. Keep an eye on lloyds bank group. Were expecting the stock to pick up 2 , 3 , 4 . Lloyds is in the white, visavis the stoxx 600. Their shares have slightly over performed versus the stoxx 600 banking index, which is down more than it has been your today. Lloyds coming out with the goods in terms of dividends, a 2. 25 dividend, even though they are setting aside another 2. 1 billion pounds when it comes to ppi. Claims this sold payment production, but nevertheless, capital guidance has impressed when it comes to lloyds pretax profit. We are seeing a pickup expect them to pop. We are also expecting bp to drive higher, releasing not as bad as it could have been. Remember, this is the first real analysis the watchdog has done on the digital market in a decade, and they awant bt to opn up their network, to be easier for rivals to get broadband into homes, but they are not saying to sell off openreach, and that is crucial. Lastly, zodiac another profit warning for this company. Watch this stock tumble 15 . Guy i think we would have known that would have happened. If you listen to airbus, problems on the rampup of that aircraft. Emerging markets may be the trade of a decade, according to pimco advisor. Lets bring back in the the trade of the decade . Is that what emerging markets look like . Right now, probably not. But over the long and mediumterm, yes. They are cheap undeniably, they are cheap but we have to stop looking at emerging markets guy fine. If youre a little more clear on which ones you want to own, why not by some, put them in your in 10 yearsin say time, the payout will be exceptional . They are trading at extreme valuations. Thats right. That is what we have done in our cour portfolio. In balance portfolios or equity heavy portfolios, it is around 10 , which is more than the industry has. That is because investors are taking a more longterm outlook and we can afford to be in that position. Guyhans so those geographical differences are you bearish on emerging markets in southern america, asia . Break it down for us. More bearish on those that are commodity heavy, and who just got government problems. Nigeria, south africa. Those are areas i wouldnt be on. Keen then the indian, Southeast Asian markets are far more interesting to us. We e still quite cautious about china until it matures. Id much rather play the Chinese Market through the proxies. Guy thank you very much. Coming up, the market open. Futures are pointing to a fairly positive picture. London looks like it will open to the upside. Futures, fair value up 1. 2 . That is the open we are expecting here in europe. Plenty more to talk about. Thats coming up. Welcome to on the move. Hans nichols is over in berlin. The imf says false start are required for Global Growth. How much the government actually have . We will have the head of sovereign asking the exact same question. The index tumbled the most in a month. Vicki pimco advisor says emerging markets of the trade of the decade. The ecb, Council Members tell us the Central Bank Must be wary of introducing similar for some busy moving closer to mario draghi . We will year bundesbank president about the show. Morning . Watching this what are we watching this morning . Lets get to the open now with Caroline Hyde. Caroline reverend yesterday, the last hour of trading the u. S. We saw those original raise. We saw the stocks close in the green. I catch of effort is been a mendous tall to us time tumultuous time of trading. Leading the charge is the likes miners getting a bit of a pickup today. Happen with a bit of risk into the market. Up postingthe numbers better than expected. Lets move away and get into what is happening. Interestingly, the bigger this disruption with oil down but stocks in europe opening higher. Were seeing the correlation down. 8 . That is even if as we see, once again building in the united states. Is there risk aversion when it comes to gold . The correlation is kind of breaking down. We have money moving into equities but into gold as well. Bake the daily check on what will happen to the pound. Trading basica