Threatened by u. S. Tax rules. Is the inversion era over . What does the head of the imf have to say about greece and Global Growth . Bloomberg will speak first two Christine Lagarde later this morning. By what was happening in the european banking center. We still do not know what the Panama Papers mean. Zeb we have not heard from the regulators. We are starting to hear from the banks. They have said they have done their due diligence. We have not heard from investigators. This mysterious thing with the banks could be the tip of the iceberg. It is not like panama is the biggest tax haven. It is one of many. And they are very clear confident in their compliance practices. Given the history of all of these stories. We are going to find out how investors feel about their banks very shortly. It looks like we are heading to a negative start to the day in europe. European stocks are pulled down. The cac is going to open up lower. London is down. 4 . We are going to see a negative start here. The particularly dollaryen, it does all the way down to a stronger yen. It broke through the 110 mark. Crude is well below 31 a barrel. Pricing action this morning. It is all the way down there at 175. You see how treasury and the yen bonds have traded in tandem. Lets get the bloomberg first news. Kumutha thousands of lenders have taken to the streets to express their anger about the government. That was after the panama paper scandal. They allegedly benefited from offshore accounts and tax havens. Protesters were at the parliament in reykjavik. Motion oforward a noconfidence and called on the Prime Minister to resign. German factory orders unexpectedly fell. Slowed down is weighing on europes largest economy. 1. 2 from theped previous month. That compares with a median estimate for an increase in a bloomberg survey. Pimco says that bill was warned. He wouldwledge that lose the fund if he quit before the Third Quarter of 2014. They are challenging grosss allegations that he was forced out. He is suing for around 200 million. He said that any settlement that he receives will be donated to charity. Speaking exclusively to bloomberg, President Trump says that he is openminded for additional rate hikes this year. I would not be surprised if that was one in the middle of the year and one at the end of the year or one in the fall and one at the end of the year. I think it will depend on the data. I will be openminded about it, for sure. News 24 hours a day powered by our 2400 journalists in over 150 news bureaus around the world. Thank you. The chief executive of Credit Suisse says that he is compliant in his ranks compliance with tax issues. Panama papers, it dragged some banks into the mud for setting up shell companies. He spoke exclusively to rishaad salamat. Rishaad is then in buy in hong kong now. What are you taking away from this . Is this a bank ceo they give you full confidence that his bank is in the clear . Rishaad it is hard to say. I asked if the regulator had been in touch with him. He said that he was not prepared what then the regulators had been demanding of Credit Suisse. He said a few months ago that he wanted to change the culture at Credit Suisse. He called the culture completely unacceptable. We are talking about 11 million pages of documents that came out. Been pointingave at various world leaders. Is, were they legally compliant . That is something that he says rent. Hey we we only accepted it for legitimate purposes. We do not engage in that. They have to leave the bank. When there are structures beneficial to a thirdparty, we insist to know who is the beneficial owner. We are very conservative in our practices. Lets not forget that Credit Suisse is one of 500 Financial Institutions that on embroiled in these socalled Panama Papers. There is no doubt there will be further revelations. He was keen to emphasize why he was here in this part of the world. Doubling profits in the asiapacific over the next three years. China was doing very well when it comes to Wealth Management projects. Well. Surprising him as they are exceeding his expectations in actually getting clients on board. While the rest of the world sees it as a chance to cut jobs, they are adding headcounts. There seeing this as pivotal or key to their future. Guy, that is it in a nutshell. Guy thanks very much indeed. Lets carry on the conversation. Its bring in our yes. Guest. The problem with this story is that investors just do not know. Situationling with a where investors are questioning whether management has a line of sight. Knowact that we do not casts a shadow on a sector that has had such a terrible time. It is unwelcome news. Shouting fire in a crowded room. The history of recent practices and the Financial System is quite good. The last 10 years is pretty appalling. Banksct is that these have changed already. The regulators have got them where they want them. You think the regulators will have an easier time managing this process . John undoubtedly. The banks are better structured to know what their liabilities are. It is part of a process. The first part of the process is that you had an overleveraged Financial System with no transparency. By the way, changing all of the management. He was one of the guys that helped. Newty much, we have got a bunch of captains on the ship. We have a new structure of the Financial System. For the move on Financial System to play the role it used to play. One of the roles is to liquefy money and lend money to legitimate businesses. That is what you have got here. Thehave got a large part of puzzle in terms of the regulators getting their hands around a bad system, for everybody to make sure they understand who the boss is. It is government. That is part of taxation and the whole thing. I am not intimidated by what we are seeing. , we are closer to the as rather than the beginning the Financial Services showing up as the evildoers in the room. Zeb are we going to hear that from the bosses on the Panama Papers . Do you expect to hear that the u. S. Department of justice is opening up new investigations as a result of these papers . Course. There is always a line of american litigators looking to help themselves to free money going around. What we have now is a very different scale and nature of offense. Even mr. Thiam was happy to hegest that in his opinion was saying in code that all that they had done is put together legitimate tax structures. People that if the have these tax structures were criminals, it was not his job. Customers, banks have and some of them are not entirely pristine. As long as their source of funds and the business they have done with the bank and the bank has a per reported to the authorities, then they are like you and me, they should not be held liable. Guy if these guys were criminals, they would be quite concerned about that. John absolutely right. Zeb we acknowledge that some banks have some unsavory customers. We do not have any unsavory guests. You are sticking around for the next couple of minutes. We do have the australian rate decision. This puts pressure on the companys economy. We are live in sydney for an update. Australias Central Bank Says a resurgent currency could hamper the economy. It held its Interest Rate at a record low of 2 . We will speak to daniel petrie. The currency is having a profound impact on the adjustments in the economy. Walk us through it. A very good morning to you. The us trillion bank did leave rates at 2 . That is above were the fed is an even further above what the japanese authorities have been doing. The transition in the australian economy, the country has been a inefficient very of a once in 100 years mineral boom. , australiaoming off can transition into new industries. They are selling a lot more services into southeast asia. Seen ints have been more recent times, that currency has taken off again. Mosts risen by 7 10 , the raising . 80. New, it is anything really a wait and see game for the central bank authorities. Is guy, the data is not exactly great. Should we sit back and wait for the data to soften up . Is whatperhaps that they are starting to look at. There was one fly in the ointment today. The big thing about australia, this is not a place of great culture. What we do very well is export lots of minerals. That is what australias stock in trade was. We had the trade report. We have a deficit of 3. 5 billion. That is staggering money and you think about that adding up over a quarter. Effectively, the only thing going for them is that they have a pretty good unemployment rate. You need to get the engine going. Before that trade report and before the Central Bank Decision today, it was proverbial murder on the dance floor. They certainly killed the groove. Iny do need something chinese manufacturing. It would go a long way to improving the prospects for the land down under. Guy we are going to leave it there. We will leave the culture aside as well. The rugby is not bad. Right. John is still with us. Needs chinafinitely to get back into its groove and get going. Is it going to happen . John our view is that it is a long way through the course that it needed. If you analyze the growth rate in china, the government said 6. 5 . That seems to be backed up by the blend of manufacturing data and Service Sector data in china. I do not think the leadership is telling a story that is wrong. Clearly what has happened is we have a massive oversupply of products that we thought china would need in the future. That needs to gap by still growing chinese demands before the prices stabilize and go back to what was very pleasant conditions at the turn of the decade. China is going to be a help to Global Growth. Is it going to do and a change the commodity price environment . No, i do not think so. Clearhe fed has been very that it has been quite honest with the global story. He was talking about two fed rate hikes this year. He is on the dovish end of the spectrum. Take a look at pricing. Post the election, it was only 57. 9 . You look at this and the market is barely pricing in any hikes. Do we have a mismatch and how does it get resolved . John i think there is a mismatch. The Federal Reserve is responsible for it. Clearly, they are adjusting their commentary to global conditions. Erian if you have a central bank that is not setting Monetary Policy based on u. S. Conditions, but rather global conditions, you cannot say that this will work very well. They just do not know. The Global Environment and Global People watching the world say that if you realize you are setting the global price of money and you take that role seriously, then probably two rate hikes is too much. If they go back to looking internally and setting prices for the fed, then two is too f ew. Hans looking outward for the u. S. Fed, that brings us to our chart battle. Betweene regulation japanese and u. S. You get to choose which one is the winner. It is at this point where i compliment you on your tie. The white line is the japanese curve. We see the first bazooka. This is when things are rolled out in 2013. The blue line is u. S. Debt. Then they start moving in tandem. Isn you get that bazooka where you see it working exactly in tandem. You see the 10year yield going all the way down. Now we have negative rates. Japanese Interest Rates going down and the u. S. Interest rates also falling. You have to follow the former path, which is looking at this outside. Internally, she may look a different direction. These are the sort of forces she is up against. I will have guy throw you his chart. I will be generous this morning. John can i point out that on the thai, there are owls. Empty, but there are rain clouds on that tie. We will put the two things together. This is looking at the s p 500 profit estimates. This is what we are seeing in profits forecasts since 2010. A massive drop. You could take this is glass glass half empty. The reason i say this, maybe with a loan estimate, the market could clear this. We could say that we are going to cheer and the stock market is going up. We will be blown away. John i think that a lot of that will be resource oriented. Last year when we started with the s p, people started with 116 and ended up around six dollars. In of that was essentially the Energy Sector and material sector deciding that they were not going to grow. That has been pushed out. In the First Quarter we start with a bizarrely negative oil price. A large part of that is going to be to do with that. If you look under the bonnet, you look at the core rate of Earnings Growth in the u. S. It is in the range of 4 or 5 . That is what it is going to be for the year Going Forward. Those sectors of the market that do not have a very high bar to hurdle anyway. The dollar has been a bit more benign this quarter. There is a tiny bit in the tank to surprise on the upside. Talk aat i have done is little bit and then he talks a little bit. To pick aing to have winner. I cannot remember what it was. John i think it is right that yellen is paying attention to global Monetary Policy. Ultimately, the u. S. Wins. Engine brings other people up. It is quite clear that negative rates, which is where japan and europe have put themselves, is an experiment that is yet to prove itself convincingly. Guy 20. This is not going well. Sfacese smile on nichol is unnerving to me. Stay with us. Coming up a little bit later, Francine Lacqua speaks to Christine Lagarde. That is at 9 30 u. K. Time. The open is next. Guy good morning. Welcome. I am guy johnson. Hans nichols is over in berlin. We are moments away from the start of european trading. What is top billing . Hans dragging european banks into the spotlight. Tidjane thiam says he is confident in his clients will agree. We will find out shortly. Could beas it threatened the air of inversion over. The first tol be speak with Christine Lagarde later this morning. Well take a quick look at futures. Being mostly on the negative side. It is all negative with the exception of the ftse, guy. What do you have for me . Guy here we go. The new price on the fair value is showing a negative number. Lets see exactly what numbers we are posting. At the moment, not as negative as maybe the fair value suggested. The market may settle the story out starting more negative now. The ftse down. 5 . Open todo not have it properly on the dax yet. Names thatg banking could or could not have an issue with this penama papers story. Panama papers story. 3 . E down. 1 the cac down 1. 4 . The market a little bit better. Lets see if i can do you out of the imf and get you updated. What we are seeing is a sector rotation that we have not seen thus far. The wheel is all green. We will show you what is going on. It is the Energy Sector, that is the big loser. Materials are down. Financials in the mix here to banks are down by 1. 54 . The Banking Sector really under a lot of pressure. Hsbc is down by 1. 67 . Youve got some of the Spanish Banks trading softer. It is interesting to see the Banking Sector is really coming under pressure once again. Lets get back to our guest, the head of research at investec, john haynes. Haynes he gave hans the chart battle. The banks are trading off again. John it is hard to say what is the Panama Papers are affecting a large number of banks. Now,ed to concentrate on it is one of those sectors. One of the sectors reveals how the broader world is going to go. The Financial System is reacting anyway that suggests that negative Interest Rates are having a more negative effect on the prospects. Guy do we understand this . John that is why we have to look at the aggregate indicators that are trying to tell us. There are two affects, one is your margin. Low interest margin. You would hope it would be offset by the relief. The money is going to boost Economic Growth and the credit upload to the equation. Particularly if you also back this up with he gave the banks to offset that interest margin pressure. Investors are not believing it. That is a bit concerning. There is something about this experiment that may be they run out of bullets. Maybe they shot maybe shoot themselves in the foot. Hans im going to pick up on that metaphor. I want to remind viewers, Credit Suisse is down 3 . Anglo american down 4 . When you look at the ammunition argument with the fed, is it going to shoot itself in the foot, do we face a massive credibility problem . Central bankers are the wizard of oz, they do not have the hours they pretend to have. Best they do not have the powers they pretend to have. They do not have the powers they pretend to have. Jonathan john i am a bit of an optimist. The coronation they have to yed has allowed us we have had a depression no question. We would have had a depression no question. They have displayed a ability to deliver. Thathave been saying increasingly loudly. The next stage has to be fiscal policy. The world cannot print money itself into a better situation. Giving the coded green light to america. A number of european nations are increasingly strident about their desire to loosen the shackles of austerity in the european union. Even in the far east, weve got china looking to do more proactive stimulus. Think the next stage is clear. The banks have to do what they have done before. They c