Commissioner. And brexit blues, worries about heads referendums Consumer Confidence to its lowest level since 2014. Dont miss bloombergs allstar byxit debate, who will join leaders from both political and the business world. The question should i stay or should i go . That is coming up a little later. Let it you caught up with everything you need first for the. David in china, the central bank has responded to a kumble at the u. S. Dollar by strengthening its currency the most since july 2005. That comes after greenback strength fell. Yen was also sent surging. Amazon sales and profit have topped estimates. Cloud services, and the catch it added to evidence of the ecommerce giant can make money even if it invests heavily in hardware, software, and entertainment. Deutsche banks Advisory Board member is stepping down two years earlier after criticism that he went too far in probing potential wrongdoing at the company. He was not isolated after he tried to examine links between Board Members and court cases. He has not responded to requests for comment. Bank of scotland posted a deeper than expected loss in the they putrter as it some Government Support to receive during the financial crisis. The net loss more than doubled. Rbs plans to resume dividend after warning said could miss a deadline. Guy lets talk about what we need to know about these markets and how they will open in 27 minutes. Let me show you the terminal and where we think we will go this morning. It looks like a fairly negative start. And you gettures, this fair value calculation. The cac down by about 1 , euro ,ocks around the down by. 8 the dax could outperform a little bit but we look to see a fairly negative day. Other assets to be aware of, brent is below this 48 line. Eye on whatclose happened in portugal today. The last main Rating Agency to have an Investment Grade rating on portugal announce its decision today if it will downgraded it would be significant for portugal and the ecb. Keep an eye on south africa, we have a court case which may reinstate corruption charges against president. He wants that closely at the moment. Not much moving at the moment there. Dollar yen the big story. A huge start for the yen already this year. What does the boj ultimately going to do about it . That is one of the main stories. That is the week that was when it comes to the japanese yen. Part of that is what the fed has done. Aat has shalen u shaken up number of Asset Classes around the world. Had such ant strong start to the year since 1995. Joining us now is the head of fixed income at invest tech. Good morning. Guy was it a mistake for the boj to do nothing . I think it is quite right. Hat they stayed back unfortunately for them, the yen is a risk of this currency when it goes up. Right thing tohe hold onto. But to see what happens with fixed Interest Rate. Guy they get in the no impact on lending at the moment. People described this as pushing on a string. It wille questions, have to come from other areas. Guy was negative Interest Rates a mistake . That would seem to be the impression we get from mario draghi that they are very different economies, but draghi has made up his mind that it is not a good idea. Extent of negative Interest Rate policy has come to an end. If you ask a bankers and will europe and japan they would say it was a mistake. Guy the fed actually did what it did is the real story this week. Not a lot, but we continue to see the dollar moving down. The impact that is having is a larger effect. Of the the dollar is one most important market levels. The fact that brent is higher, that signifies and quality prices that it is on the back of weaker dollar. Guy where do you see the fed going . Is this commodity run helping of the emerging markets and calming everybody down, let unwind towards the back end of the year . I think the world wants a weaker dollar and the fed wants to raise Interest Rates. Thisant to have one go year. They dont want to raise them too much because of the turmoil that might cause. There is a goldilocks scenario that could be one more Interest Rate rise. Guy u. S. Treasury, what are we, 192 . 182, is at the right price . Darren there is a shortterm threat to treasury yields. The movement in break evens we have had this year. Worry inflation is coming back into the system. Longerterm there is good structural reason. Back toare getting pre70s levels where the market didnt care about rates because they didnt move that much. That is great news. Of the direction of travel here . Darren it may be. One of the big worries and that Global Growth cant expand the current rates and if it fall to ake quite a lot of stimulus. There are worries about Economic Growth and structural falls in levels of inflation. Government bond prices are a value at these levels. To go further, the u. S. Treasury is a highyield and Government Bond market. Points, in the u. S. That is really good value. Guy well move on to europe in just a moment. Up, it is the Brexit Debate. Given exclusive conversation on the eu and the uks membership. Program, is the next eu crisis about to happen . Is portugal already front and center . Gety, portugals debt could cut to junk. 41 minutes past the hour we get to major indicators inflation and First Quarter gdp. This comes as portugal, the worstperforming bond market teeters on junk status. Bloomberg senior european correspondent has the details. Walk us through why this is important. Jeff if they do take the step and downgrades portugals debt, it is not a great sign, obviously. But there are safety mechanisms in place that should mean that this doesnt lead to a meltdown or a reemergence of the sovereign debt crisis. First of all, the banks have other types of collateral. They could use to pledge for funding should they needed. Ot completely reliant on the sovereign paper. Is badace of it for the government but it shouldnt cascade to a larger banking crisis. You wouldnt expect the markets desk give us a sense of what you could expect. Mentioned, there are safety mechanisms in place. We do have a lot of ecb stimulus and backstops in place. Even in the ela crisis last year, the market response elsewhere was relatively muted. There is no reason to think it will will be different this time around which is a smaller problem. Guy thank you for much, indeed. Youen is still with us, do agree with that . A bit more worried than that. The reason anything in the market for a downgrade in portugal today. If you look at where market reacted. E they havent in terms of the outcome, it could put more pressure on portugal politically and may lead to a breakup of the current alliance. I am a bit more concerned in the shortterm. With greece saw there was little contagion. This could be fenced in portugal, we wouldnt see this spreading . Is justno, because this a portuguese issue. At what isou look happening, it is important because the ecb wouldnt be able to buy under the current qe program. It would be in the same basket as greece. Greece is would, but a special case. It is become a political issue recently. Portugalsou look at debt, its underperforming this year. Darren most other sovereigns have had better performance. Portugal has an. Guy the market is worried about something. How do you price this properly . We have government risk, economic risk. People are looking at fundamentals much more. But you want to do is price in risk of based on fundamentals. If you go back a month there were challenges between the European Commission and the portuguese government. The portuguese government had to line at the end between the hardline and fiscal prudence. Guy over expecting another summer of problems in greece . Darren you cannot rule it out. That might come back to bite us, and brexit. Actually, brexit is a european issue. This is about the european project. If brexit occurs i would be worried for the levels that bonds could get it because people could argue the european project is dead. That point . Get to it is all been priced into the pound and none of into the euro. the market should be slightly concerned about that. Week, so thebeen a euro should also be week. Yields mayheral bond come under pressure as we get closer to the vote. sy this will make draghi job harder. Figure negative is slightly worse than anticipated. We talked earlier on about the boj struggling to get the effect that it once had from policy. Is can argue mario draghi having a similar problem here. Maybe this will make life even more difficult for him. Fundamentalist, the bounceback may be stalling. Given what is going on with the banks this hasnt been helpful. Inflation is a big problem in europe. We havent hit inflation for some time. That may continue. Guy do you think he is right on the credit channel . That gets through to the real economy. At some point, people start to talk about helicopter money. Guy they already are, but the bankers are saying we have to put it back in the drawer. If that is the case, if that is a language, it is getting pretty close to the edge of what is feasible year. That is why the talk about fiscal policy is getting more and more. Does this talk about fiscal policy and they push or you . Buten less than talk helicopter money. That is a bond investment and it really worries me. Fiscal in terms of addition, that is a sensible thing for countries around the world at this point. Im not sure it would welcome it, but it would admit that it is a necessary thing. Guy i give her much, youre going to stay with us. We speak to the eu commissioner to get his take on portugal, greece, what is happening in italy right now. All of that is coming up. We are joined very shortly by one of the stories were watching very carefully today. Guy 8 minutes into the market open. Hastquarter earnings beaten estimates with the danish manufacturer of Wind Turbines has the auto intake was at a record high. Speaking to bloomberg, the companys president and ceo joins us now on the phone from copenhagen. I am interest in this operating beat you generated. You talk about the auto story, talk about what the market missed coming into your figures. Im really pleased. Of course, as you said, it is was recordhe intake high. We had a very big order in the quarter. Part in oura big intake. Guy youre keeping the outlook fairly stable at the moment. Steady as she goes in terms of the overall performance. But the Competitive Landscape is starting to change. How is that going to change the world for you . Aders i mean, we are in good position. Largest global geographical reach. We are the leader in revenue. That isa good strategy built on organic growth. Course, we have to see what happens in the market. Platformave a Solid Program of those two and three megawatt turbines. Guy is this business becoming more Service Oriented . Be building big pieces of steel and sticking them up around the world or servicing that business . Both businesses are very important. We have put more focus on the Service Business during the last two years. A separate business within the company. We made two acquisitions. Im confident that we will see good growth in the Service Business. We have set up a strategy target and are we on track of achieving that growth. In this quarter, we see that from a delivery point of view it thanually a lower quarter the surface plays a bigger role in the mix. I am confident that the market has the potential to grow even faster than the turbine market. Where you talk about growing organically, youve made some acquisitions. Two businesses, is that when the focus is . Will the consolidation be more on the service side . Anders of course, that is where we are down to. Servicegthen our offering and be able to offer a wide Service Partnership for our customers. We had those two acquisitions recently. They may be focused to integrate those companies into the service organization. We will leave it there, congratulations on the numbers this morning thank you for taking the time to talk to us. Vestas ceo joining us on the phone. Well talk to the eu commissioner, that is next on bloomberg. We have a market that will open very shortly in around four minutes time. By the looks of things, were heading for a negative open. The cac will open down by over 1 . That is the story, the open is next. Guy good morning. We are right here in the city of london. Moments away from the start of european trading. Here is your morning brief. The yen spikes along with the Blood Pressure at the boj. The japanese currency is off to its best annual start since 1995. Lastportugal cling to its Investment Grade rating . And what on earth is next for greece . Brexit blues. Worries about the Eu Referendum send u. K. Consumer confidence to the lowest level since 2014. Dont miss the Bloomberg Brexit debate. We are joined by the leaders from lyrical and business worlds. Looking forward to that conversation coming up a little bit later. Let us talk about where we think those issues will take us this morning. We have a negatives heart penciled in a negative start penciled in. The market is starting. Seen losses in asia overnight. Japanese markets closed but the excludingian index japan heading for a weekly drop. Looks like europe is going the same way. These are the industry groups. The worst performers are telecoms come at down almost. 5 . No, that is changed now to industrials down. 8 with Information Technology down we percent also. Read across the board on industry groups. When we look at what is happening across the indices, the euro start is down the ftse 100 is down. 8 . Betterthanexpected gdp data out of france. The dax has not opened quite yet. The European Equity markets towards the end of the week following the losses in asia and the u. S. Yesterday. Let us take a look at currency markets. The big story is dollar weakness, yanis strength. The dollar dropping to an 11 month low. This is after u. S. Gdp came in weaker than forecast appeared the economy expanding at the slowest case in two years. Look at what that is doing to dollaryen. The yen on the back of the bank of japan decision. 107. 14. Finally, stocks to watch this morning starting with the royal bank of scotland. Taxs britains largest lender. The deepest loss in the First Quarter. It is pointing slightly higher now. Astrazeneca falling 12 , down almost. 3 and casino up after it agreed to sell a vietnamese grocery chain at one billion euro. European equity market is not off to the greatest art. Cacs down 1. 3 . U. K. Consumer confidence has fallen again. The measure has dropped to the lowest reading and almost three years. What are the implications of the Brexit Debate that is coming up. We have three politicians from each side of the argument. They will debate as to whether britain should stay or go on the referendum scheduled for june 23rd. Let us kick around what is happening in the market surrounding the brexit story. During is still with us. Darren is still with us. Spurt to thatin was open on this visit last week obamas visit last week. That is an indicator of that. Guy the market has not priced in the risk as the fx market has. Darren if you go back to 2011, u. S. Treasuries were nearly defaulted on in the summer, august. The best insurance against u. S. Treasuries defaulting where the u. S. Treasuries. It could well be that if it is a big risk off moment, that the yields will go down and not up. Guy how will the central bank responded that respond to that . How do you manage that as a central bank . Darren you care less about the market and are more concerned about the economy. Interest rates will likely be lower than they otherwise would be so we will have lower for longer. They will be looking at policies to stimulate the economy further. Loosening the Monetary Policy would be the result. Guy that is a negative scenario. What is the more likely scenario . Market pricing. Day, after the u. K. Stays. Walk me through darren i think it will be a risk on move is the u. K. Chases tuesday. If the u. K. Chooses to stay it will be risk on and yields will go up. I know that is perverse. It is very uncertain but i am more of the mind of risk on, risk off. Not until sometime in 2017 at the earliest. I think inflation is coming back on the scene. A shortterm thing. Guy the pound would presumably do some of the work for the central bank in that case. The pound would do some of the work. About 10 . I would expect to see at least half of that retraced. Guy how would continental markets respond . Darren in the peripheral bond space this could be a positive. As the u. K. Chooses to leave, that comes into question. Guy that is a positive spin. We will not break up the euro. However, the market can only think about one thing at a time. At the moment, it will be focused on the brexit. It would be waking up that friday, what is next . Darren there are so many Different Things that would concern the market between growth, inflation, china, and the effectiveness of negative Interest Rates. Guy would we be focusing on greece, italy . Does it refocus attention on the problems that the eu faces . Take the brexit story away, the apocalyptic scenario may have been removed and we are back to the monday. How on earth do we get this economy moving . Darren we have had those problems for the last few years. Those things have not been forgotten about and yet bond yields continue to be low, it is a low growth environment. Guy when you look at what is going to happen to greece this summer, the reason i have to ask is you get through a brexit vote and the remains. People are turning to the next thing in mind. Looking at the dates. There are some big payments from greece do in a few days afterwards. Darren i think greece will come back on the scene. There is a bit of brinkmanship going on, especially on the part of the greeks. I think it will be higher up on