Price but is still banking on 40 a barrel. We are going to ask the companys ceo at 8 30 london time. The g20 story front and center. Carnies point is an interesting one. And schaeuble still banging the drum about structural reform. He sees that as the only way forward. Hans there isnt a whole lot of structural reform heading in the direction schaeuble would want in germany. Toy have all these refugees build housing for, to feed. That is a lot of fiscal stimulus. At the bundesbank, they are talking about having 0. 25 increase on gdp. Schaeuble in some ways is making the opposite argument of what hes doing at home. Guy plenty to talk about. We need to talk about the cpi story as well. Inflation, lets run you through what the market looks like with 28 minutes ago until the equity market open. Is a risk on story. It has been a risk on kind of week. Stoxx 600. 1. 2 . Ftse looks like it is opening up 1 . A littlealk basf later. Ats lets take a quick look some assets. Brent up just a little bit this morning, north of that 35 a barrel. It just went down a little bit. Weve got a slightly weaker dollar. The new Zealand Dollar story showing some increasing strength. 2. 61 . G seng up lets get a bloomberg first word now with caroline hyde. Caroline hans, thank you. The threat of brexit is hitting sentiment in the u. K. The upcoming Eu Referendum will curb housing activity. The measure of Consumer Optimism has plunged to the lowest in almost three years. The pound has fall and against the dollar and is headed for its worst week since 2009. Footballs world governing body chooses its next president today. The candidates have been making their final pages, saying they are committed to restoring fifas reputation. They will vote for a successor to sepp blatter, whose presidency was cut short by unprecedented corruption scandal. Voters in ireland to the polls today to elect members of parliament. Pulling opened at 7 00 a. M. Local time and will close at 10 00 p. M. Tonight. Global news 24 hours a day powered by 2400 journalists around the world. Hans thank you, caroline. China stocks stabilize after the head of the pboc sought to calm fears. The governor said china still has room to stimulate growth if needed. He made the remarks just as the g20 summit meeting gets underway in shanghai. Moneyna still has some for policies to address potential downside risks. China is also improving its Monetary Policy framework towards more pricebased measures. Hans joining us now in london is running the case ramin nak isa. Versus look at this zhou sure view, what do you see coming out of the g20 . Are we going to have another communique where everyone is talking past each other . Ramin we will see how much policy can help from where we are now. Everybody is exploring the zero bound. Nobody knows what is going to happen with respect to the zero bound. What can policy do from here . We prefer to have Structural Reforms. We would like anything which is growthpositive and increases the transmission mechanism between what Central Banks are doing and what is happening in the real economy. What the bank of japan did would be a very good solution in europe too. If you are lending more to the real economy, you dont get so much of a hit with negative deposit rates. That would encourage banks to behave as the central bank wants them to. That would probably be a good policy outcome. For the g20, i guess as you say, more talk, but i think its really what the Central Banks do which is much more important. Mentioned the zero bound. When we go further negative, we might get that in march. Have we theoretically tested what is happening with negative rates . There is a line that even though you are taking them lower, you are strengthening the currency. Ramin economists dont really know what is going to happen. Building theory on the fly. It doesnt help us much at this point. I think what is clear now is that banks are seeing this as a tax. Several banks tell me that they are limited in terms of what risk they can take, and having a negative rate which they cant pass on to clients is a tax on their profit. That will decrease the amount of lending in the economy and it will be growth negative, which is not what the Central Banks want. We have to consider whether it is going to be worthwhile to pick up rates further or whether we should go down the japan route. Guy lets talk about china. The pboc say there are plenty of tools in the box. What is the problem in china . Theyve got a huge debt overhang. Weve got a growth issue that is part and parcel of that story. When you look at the tools being talked about elsewhere in the g20, how does that fit into the china narrative . Ramin they are very much living in their own sandbox. The have a closed capital account. They also have control over outflows to a certain extent, much more than certain other countries. What they have to do is manage the deceleration. If you look at the Housing Market, there are signs that that is starting to improve slightly. We see about one third of the cities in china having price rises. Look at what happened with policy and how it affects asset prices. That really started to lift asset prices. Are we in a similar situation in china, where the market just needs to hear from the chinese that they are going to deal with this . The Global Economy is starting to rally. We are starting to feel better about the world. Is that down to the chinese starting to talk . They are communicating. That is what the market wants to hear. Ramin we certainly need to know about what is going to happen to commodities. That was the biggest transition mechanism from china to the rest of the world. The price of houses, the Housing Market in china, is key. Growth is becoming less commodityintensive. A lot of the shock we saw was due to the Oil Price Fall and the cover price and Industrial Metals fall. If we start to see that stabilize, that will be positive for markets. Guy communication is what i want to focus on. We havent heard from the pboc in a long time. We are starting to hear from him in a more regular basis. The market was confused about policy formation. We cut comments now. Maybe it is a sign of them needing to get in front of the story. They are starting to communicate. How critical a juncture is that . This is another step toward having an open capital account. Theyre going to have a currency that can float. Maybe not in my career, but it will happen. This is a step in that direction. They will show you what tools they have in their box. They have this very large foreign reserve. They have very high rates. They have huge Structural Reforms which they can do very effectively given the centralized government. I think he has a lot of tools in the box. Worried about not the hard landing this year. Growthforecasting 6. 2 this year, 5. 8 next year. A managed deceleration is what were expecting. Guy all those tools in the box that kuroda maybe doesnt have. Ramin nakisa stays with us. Next, kurodas inflation problem. Japan cpi stays at zero, leaving him far away from his 2 target. That story next on on the move. To french cpi is about break. Lets get your bloomberg first word news. Heres caroline hyde. Caroline royal bank of scotland has reported its eighth loss. Tosaid its net loss narrowed 1. 9 8 billion pounds. The company also said pretax profit excluding charges and restructuring costs fell about 28 to 4. 41 billion pounds. Expects earnings to drop as lower crude prices hurt oil and gas units. It gets a lower contribution from the chemicals union. Based on the companys definition of slight, earnings could be as much as 10 lower than last years 6. 7 billion euros. We was speaking to chairman and ceo of basf kurt brock. Telefonica reported a fourthquarter loss as restructuring costs outweighed sales. The phone Company Posted a loss of 1. 83 billion euros. Slightly beating analyst estimates. That is your Bloomberg Business flash. Hans thank you, caroline. Peoples bank of china reassuring markets that they have room to ease. There is one man not so accommodative. German minister Wolfgang Schaeuble openly opposed any fiscal stimulus package, warning that debtfunded growth leads to fying the to zimbi economy. Mark carney raised concerns of his own. It is critical that measures boost domestic demand, particularly those sectors of the economy that still have healthy Balance Sheet. There are limits to the extent to which negative rates can achieve this. Hans guy carney warning on the zerosum game of negative rates. Inflation remains a problem. French cpi breaking, year on year 0. 1. We were expecting 0. 1 positive. The month on month figure, 0. 3. We were expecting 0. 4. We will get more out of the rest of the eurozone as we work our way through the morning. This ahead of the march 10 meeting of the ecb. Eurodollar, not much reaction. Cpi, not exactly looking great at the moment. In terms of the kind of way this is going to work with draghi, i think we have something to talk about later. No inflation, certainly an issue for japan. Inlation was at zero january. It puts bank of japan governor kuroda far away from his 2 goal even after adopting negative rate policy. Some economists are forecasting further easing after that negative rate announcement. How far away, ramin nakisa, are we from full monetization of japanese debt . Policy toolsk his seem to not be working. Whether hes going to step back from the brink is not clear. I think more purchases is the most likely option. But his history has actually been a very good one in terms of surprising markets. He does a very good shot and awe story to markets. Guy but it hasnt got inflation. Ramin it hasnt. Guy he said he would have 2 by now. We are not there. Ramin from our point of view, it is stimulating markets. If you look at what happened to risk assets in japan, it tends to rally. Shortterm, guy is he stealing demand . Ramin that is the risk. Now that everyone is adopting these negative rates in the u. S. , theyve started talking about negative rates. There was a question in the fomc meeting. In terms of his policy actions, it will be interesting to see whether peoples another rabbit out of the hat. Where could the next shock come from . Hes exhausted the ability to purchase assets. Hes buying etfs, which none of the other Central Banks do. I think policy is limited from where we are now. I dont see how he could push this string much further. Hans earlier, you were talking about how you dont expect to see currency normalization in japan in your career. Either you are retiring very soon or you have no confidence that we will get to normalized policy. At what point is china starting to steal demand from other asian and developed countries . Ramin i guess it is dependent on what kuroda does. The places where we would like to be at the moment, certainly kind of long em currencies. Dmexpect outperformance of versus e. M. This here. We are using that as a hedge in our portfolio. We like to belong risk in europe at the moment, but the hedge we have is to belong dm currencies versus e. M. In terms of yen, it depends on what kuroda does. Guy thank you very much indeed. Ramin nakisa still with us after the break. We have the open. We have 10 minutes to go. Somee going to look at potential corporate movers, including rbs, who reported their eighth annual loss this morning. It is 8 52 in berlin. Probably the same time in frankfurt. And i were back in london if my clock is right. Caroline hyde has our stocks to watch. Caroline we are keeping a close eye on rbs. This is a u. K. Lender and it is trying to start to move away from government ownership. Start to give money back to the shareholder base. We are seeing rbs underperforming where markets have been hoping. We had that overall announcement back in january, that warning we got than they were taking significant hits related to restructuring costs. Overall, strip away those oneoff items and you see that the overall profit was a miss in terms of estimates. They are the biggest taxpayerowned lender in england. Since thatal loss bailout in the height of the financial crisis. 1. 98 billion pounds in terms of a loss. Actually, it is a 20 fall in pretax profit. That fall is overall a miss. We are likely to see the stock fall slightly on the moment. This is telefonica. Spanish company. We are likely to see that fall on the open. Europes secondlargest phone Company Reported a fourthquarter loss. We know this is a company lead in with debt. Desperately trying to pay it off. Estimatesbeat analyst slightly, but many analysts telling me this is a messy set of numbers. We could see telefonica fall. Guy thanks very much indeed. Ramin nakisa is still with us. I want to show you the function on the bloomberg basic resources over the last month, Banking Sector all the way down at the bottom. The market has been rallying. We are in riskon mode at the moment. Is that sustainable . Ramin we are forecasting the oil price is going to 47, 49 by the end of the year. It has sold off massively. I can see where there has been a bounce. If you look at etfs, they are having massive inflows. People are thinking the price is going to rally in that market. Maybe this is the turnaround point. We have seen the oil prices stabilize, starting to bounce around this 25 to 30 range. It does look like we have reached a stabilization point. We still see a problem for markets in the u. S. Unless we go above 35 to 40. So a big bounce, but also a massive guy clearly there was a big drop. My question is, does riskon sentiment continue, yes or no . Ramin i would say yes. Guy we will leave it there. Ramin nakisa is going to stay with us. We have the open, up next. Guy welcome to on the move. Johnson in london. Hans nichols is in berlin. Heres your morning brief. China says it is not done yet. The head of the pboc says there is more scope to act. The market is cheering, but for how long . German finance minister Wolfgang Schaeuble says structural reform is the only way forward. Bank of England Governor Mark carney warns on negative rates. Ramin nakisa basf misses. We are going to ask the ceo at 8 30 london time. If you read a great story, we predicted that heavier relay would step down. We have that conversation. Hans . Hans remarkable story. That is what were watching. Futures are pointing up. Lets get the latest from the touchscreen from caroline hyde. Caroline thank you. Risk on, china fueling risk appetite. Theyve got more firepower left. They can stimulate from a Monetary Policy perspective. Lets dig into how the equity market is opening. Weve seen the s p 500 in the u. S. Close at a sevenweek high. Lets dig into what is making the moves. Glencore once again. We are seeing money moving to the minors. Weve got Metals Trading higher today. Iag coming up with numbers better than expected. The owner of British Airways and other countries trading higher. Only two stocks are actually trading lower. Still some concerns about gold selling off. Actually, gold is on the up today. Cac 40 up as well. Money moving into the equity market, moving into the riskier assets. Weve got copper trading up 0. 9 and oil on a bit of a tear. This is wti crude, u. S. Based oil. Up 0. 4 today. On the week, we have seen it spike some 11 . Weve seen overall hope that the supply issue might be coming down. We could be seeing that freeze coming from russia. Lets have a look on the weekend what has happened to the pound. This is the worst week for the Great British pound since 2009. All those concerns about brexit anyying into what m companies have been talking about. One company that is going to be affected by brexit, rbs. We are likely to see is perhaps fall a little today. Strip away those restructuring charges, litigation charge, and we are seeing profit not where analysts have been hoping. It is down 28 on a pretax profit bases. Watch rbs. They are desperate to start giving money back to the shareholder, do share buybacks, and pay back the government. Lets look at telefonica, off by 0. 8 . Spanish Telecoms Company missing forecast overall. 1. 82 billion euros. Ferroy, for rope real vial, up 1. 5 . Does particularly well on its numbers. They are saying their sales are picking up and they are paying down their debt. Guy thank you very much indeed. Where are we with the rotation . We are risk on today. You can see that clearly on the map. Sectors in the green. Energy once again is leading. I. T. Is doing reasonably well. Ret me take you to the gr function as well. This is the list of the sectors on the week, basic resources and oil and gas leading the story. Take that over the last week. You can see this in action as well. Youve got them beginning to come off down at the bottom. On the week, basic resources is negative. Banks popping on the week, but still very negative for the overall story. Banks have had a good week. Hans kind of remarkable. We will see whether that holds up and whether there is a blot rbs, britains largest taxpayerowned lender, reporting its eighth annual loss. Joining us on set, a man knows a few things about banks. Richard hardington. Lets start with you. How is rbs still reporting losses . Richard it is almost eight years since royal bank of scotland came close to crashing and required 45 billion pounds of u. K. Taxpayer funds. What is happening is they are going through a hefty restructuring program. They were one of the biggest banks in the world. They are shrinking to more than half their size. That comes with cost. It comes with restructuring costs as they take people out and invest in technology. Also, goodwill writedowns. They bought a lot of businesses that turned out to be worth a lot less than they paid for them. That is something we saw with citizens financial in the united states. They took a 4 billion pound charge on that. They are taking restructuring charges this year. Hans guy the cfo says theres still much to do this year. How much more is there to do . What is top of the list . Richard top of the list, real big item is a charge in the united states. An investigation from the department of justice into u. S. Mortgagebacked securities selling ahead of the financial crisis. All the banks have been looked over for that in the united states. Rbs is one of the last. It could be a large charge for th