Lacqua. European markets little changed after drops. Lets check in with mark barton. Mark lets start with the stock xx 600. Lower, higher, coming down once again. We fell by 4. 8 last week, easily way to get the gains of the prior two weeks, amounting to 3. 8 . Still, the index is down by 11 this year, one trillion euros, on track for its worst year since 2011. The macro highlight of this week is janet yellen, appeared before congress. She is going to have to strike, francine, some sort of balance andetween caution confidence, but the domestic economy is in good shape after those jobs numbers on friday. This is the Interest Rate projection, fed fund futures now saying we will see a 53 chanc e of a said rate hike in december chance of a fed rate hike in december. This is thursdays figure, below 50 . There is now more than a 50 chance that the fed will raise rates in 2016. We have the economy adding 151,000 jobs last month, average earnings rising the most in a year, which has got people rethinking their Interest Rate projections. I want to stick with the u. S. , because this was the big decline or last week. The nasdaq 100 plunged by 6 last week, falling by 12 to 2016. We had disappointing results from the likes of linkedin to tableau, feeding fears that momentum shares, francine, are hitting a wall at the same time that the Economic Data are showing growth slowing in services and manufacturing industries. Linkedin was the big decline are on friday, sinking over 40 . Francine. Francine mark barton there with your asset check. Now lets get straight to the first word with nejra cehic. Nejra thanks. Chinas foreign currency reserves have fallen to a fouryear low, dropping 99. 5 billion in january, continuing a slump from 2015. Pressure ons policymakers to strengthen the economy through fiscal easing and structural reform. Minister arabian oil says he held successful talks with the venezuelan a cachet to stabilize the current market, however he did not reveal what steps users should take to shore up prices. The u. S. Has opened the door to a Ballistic MissileDefense System that could reshape the defense landscape. It comes after north korea launched a longrange rocket over the weekend. From the bloomberg first work desk, im nejra cehic. Francine seven strategists have lowered their projections for the smp amid a route that has whacked more than 2 trillion. We have the founding and managing director thanks so much for having us. It is going to be a brutal week. Markets are concerned about something, but we arent sure what. Possible negative Interest Rates in the u. S. , we dont know what the reserves in china are looking at when will markets start feeling confident . I think the markets need to see some signal from Central Banks and geopolitics that things are calming down a little bit. Withyou saw last week japan going to negative rates, although it is on tha tier basis, its not like all of the reserves another centralbank joining the camp of negative rates. You could look at that as a way to say that the Current System is not working. Were really in uncharted territory. Havenot only qe, you also geopolitics continuing to play a big role, with north korea, a lot of implications with china, and also the middle east. Francine im not sure what needs to happen. Central banks are doing their best, but they are struggling because growth is so little. Unless they have a repeat of the financial crisis, will be stay this way . Absolutely. The scenario of this new paradigm is going to be there for a while, so its really above that market really about the market adapting to that reality, finding pockets of growth in a much more flexible way than they have been used to in the past 10 or 20 years. I think that is really what is happening. Francine thank you so much. She stays with us for the next 40 minutes. Lets go straight to one of our top corporate stories, europes bestperforming stock up 28 since january 1. Profits for the last quarter put the 10 hit at the dollar took its toll one gold. Lets bring in mark bristol, who joins us by phone. Great to have you on the show. Whats your take on gold prices from here . We see a nice job will it continue . I think that many factors will drive the gold price, the right now, listening to your program, the Global Economy is a little bit confused, and the messaging coming out of all the different sectors is also confusing, and that is good for gold. People arent sure about currencies. Lowve got low growth and Interest Rates, and one of the overheatedsks is the state of the chinese economy, and generally in asia, that big surprise in japan, and all that helps. On the flipside, the supplyside of gold is still probably too high, and still not profitable, and i think that is something we need to reduce, as far as new gold supply goes, and i think we are slowly seeing the industry and the company starting to have a very stressed market. Everything looks positive. Francine francine it looks positive, but we also have comments from the Anglo American ceo, a frank and brutal assessment of the industry. It may benefit goal because it is a haven, but how tough is 2016 going to be for the World Economy . I think the world in 2016 will be tough for everyone. I think the gold industry is probably getting a better gasario than the oil and industry, and i think generally, when companies are so standard groceries around the world are having to cut jobs and struggle to survive, i think the whole world is in a situation where 2016 will be a year of welath preservation Wealth Preservation rather than creation. Francine are you expecting a lot more volatility in the price of gold, and do you think there has been enough pain to flush out the weaker rivals . A i think were going to see trading range of around weve always said, for the next two years, i think we will be middle of the range for the next while. A pain is coming. Everyone is celebrating this 50 increase in gold, but at the end of the day, i remind you, when we spoke last year, it was slightly above, and we were all struggling. I think ultimately the big driver is that the inherent lack of capital with a consumptive industry, we havent been finding the gold we have been mining. Theres a real squeeze in the gold industry, more so than we see in the other resource sectors. Francine what are the chances of a recession this year . A global recession . I think the chances are certainly i would put them as even at the moment, but one of the things i have always said is politicalk at the everyone tried8, realization of some of the massive losses that we saw across the world in that time. They tried to package it and traded out. And trade it out. Those stresses are still there. At the end of the day, the world needs to balance its balance sheet, and that is what people woke up to after christmas. We cant keep bluffing the pain and the realities of our past behaviors. We have to manage them up in the global industry. Francine mark, what is your take on dollar . You mentioned there is a strong correlation between dollar and gold. That has an impact on your bottom line. Ben bernanke just a couple weeks ago said we are seeing the end of the dollar rally. Is that right . Isi think that the dollar overbought. There isely definitely more logic or it to declined and to drop. It immediately starts becoming a orden for a growing recovering economy in the u. S. At the same time, francine, when you look at the gold price relative to the gdp growth, the s p or dow indices, the u. S. Equities indices, there has been in the last short while a massive disconnection a mass of disconnection. It doesnt make sense, where the dollar sits today. Then, weve got to see only other thing is that everyone is trying to devalue their currency against the dollar, so this race to the bottom is still there, and for some reason, the u. S. Federal reserve feels its not necessary economynd keep the u. S. Competitive. Its allowed the dollar to grow in strength. Francine mark, whats your outlook for m a . You abandoned a joint venture with anglo gold, and a lot of investors say that means your growth potential, what you have in the pipeline, is limited. Are you looking for Something Else . Do you want to buy something straight out . Usfundamentally, whats got to where we are today very clearly is separate, the fact that we have the discipline and is to create value. The easiest way to do that is through exploration, discovery, and development. At the same time, our biggest deal was in m a transaction in the form of the mutter acquisition, but it fettered our criteria. Industry,k at the oil, gas, base metals, and gold, the situation they find themselves in today is because of the lack of discipline in the way they run their business in vain acquisitions, assuming everything was going to continue to grow, including the commodity prices. Weve been a lot more sanguine and disciplined in what we do, and i always say that the biggest driver of our success is the things we didnt do. We have a clear set of forces in which we run our opportunities, and it didnt meet that. We posted very strong results this quarter in whichever way you cut it. No debt, no payments, profitable, still advertising all are capital. Its a real deal company. We have no intention to change that formula. Francine mark, thank you so much. Mark bristow. We were just saying in the introduction to your share price. Stay with the pulse, plenty more coming up, including a China Council cop of the yuan defense. Then, the Worlds Largest oil trader says the days of 100 oil for over for good. Thats as oil hits a record low, although investors cant agree on whether to go long or short. Threatensn. New sanctions against north korea as they launch a longrange rocket. Francine welcome back to the pulse. Lets get to the Bloomberg Business flash with nejra cehic. Nejra thanks. Kathy know has agreed to sell its stake in a supercenter for 3. 1 billion euros, which will reduce borrowing after they attacked the french retailer for allegedly understating its debt. Volkswagen says it will publish its results as soon as april. It may hold a Shareholder Meeting four to six weeks later. Wine is on course to clearance to open its first Retail Stores in india, according to a person with knowledge been. With with knowledge of the matter. That was your Bloomberg Business flash. Francine thank you. Chinas Foreign Exchange reserves fell to the smallest since 2012 in january, the biggest currency record decreased by 9. 9 billion. The pboc also indicated that they sold dollars to protect the yuan. Lets welcome in bloombergs asia emerging markets fx energy oneditor. What does this tell us about the health of the chinese economy . Hi, francine. What this tells us is it raises thed flag, and that depreciation on the yuan continues. One has to be really wary of reading too much into the fact that the figures turn out to be less than expected, because in december we had a record drop of 108 billion, and january it was 99. 5 billion. Its not very far from the record. If mexico had depleted its reserves by 100 billion, it would have wiped out more than half its stockpile. Indonesia would have wiped out all, as well as malaysia. Clearly tells us there a lot of depreciation pressure on the yuan, and it complicates the pbocs efforts to boost the currency at the same time as boosting the economy. Francine what does it mean that they will have to focus on . If you are the pboc, how are you doing this . What is your next step . The next step is really difficult to say. What they cant afford to do is allow a huge depreciation in the yuan, because lots of foreign money in china, lots of turmoil, if you let the currency decline systemic, financial risks. At the same time, the pboc will probably try to resort to some sort of gradual fiscal easing to try and boost the economy while not allowing a sharp devaluation in its currency. Francine all right. Thinking so much, robin. Lets get straight to the global a look atnk take this chart. Options on december 2017 eurodollar futures imply that the u. S. Will join five other Central Banks in cutting rates. This goes back to the fact that you are nervous. You have been nervous for a while. In seeing how Central Banks do next. Are they now the only game in town, and one of the chance of u. S. Negative rate . I think the chances of u. S. Negative rates are quite good, that we have to be cognizant of the fact that in europe and japan, if a negative rate comes, the balance of Central Banks are using even more unconventional measures. The u. S. Economy, relative to the rest of the world, is in a good spot, but clearly my view is that there would be four rate for normalization. Francine is that it, then, for Interest Rates . I think it 2016 we possibly have one or two, but it is going to be very slow. It will depend on the Global Economy. A very strong u. S. Dollar is not good for the Global Economy, because it is very deflationary. The fact that the wages in the u. S. Went up is a very good p oint, but i think it is premature to say we won the battle. I think this disruption from technology, alot of capacity, supply and demand in many different sectors, will continue to bring lowinflation. Francine and this goes to we heard from the randgold ce sayingo he is nervous, and anglo ceo saying it will be the worst year yet. A tougher 2016 and no rest bpite are we sure it is not a recession looming, markets being beacons of what will happen . I think there is a difference between supply and demand in oil or commodities and the rest of the world, but i think Technology Progress has made it such that there is a capacity in a lot of other sectors. In banking, for example. A lot of capacity in clothing. A lot of different areas. I think it is more about this adjustment, and therefore assessing this trend of demand. The strength of the demand in some emerging economies has bee n there mostly because of other issues. If youre i call it turning table. The new oil divided geopolitics, because a lot of emerging markets me their wealth on commodity export are hurt. That consumer demand, in turn, is being effected while you have demographic trends in a lot of developed markets that are naturally abating demand as we know it. That doesnt mean we wont have growth in certain areas like new luxury, health care, gadgets, experiences. We will find pockets of growth, but this theme of supply and demand and thinking about demand and growth in the ways is absolutely going to stay with us. Francine but the problem with what you are saying is that it means that deflation could stick. Were not talking about europe becoming japan. Struggled deflationary francine the Central Banks cant fight it. Goal, and they are not used to that. If you want to put it in terms of capitalism versus other systems, capitalism is moving toward administrative measures, unconventional measures, well china, which was the king of administrative measures, is trying to move closer to the more Natural Forces in the market. Its finding it a bit difficult, at place with the reserve numbers. Francine do you think they will devalue the yuan . I think it is not in chinas interest. What is happening in china is is transition to a more sophisticated, advanced economy, and we should expect the reserves to come down. Remember, those reserves were built on the fact that china grew to be the trader of the world, the manufacturing place of the world, the fact that goods were exported around the world. This is being altered, and china is hoping to rebalance the economy. We should expect reserves to be gone. How we cushion the perception from the market with regards to currency that its not becoming freer, as we know with the imf, is going to be seen my senses have pockets of worry that china will try to hold on. Francine thank you so much. She stays with us. Up next, lower for longer. An exclusive interview with the ceo of the Worlds LargestEnergy Trader, saying that we might never get back 100 oil. Hes painting a pretty picture. That is after we heard from the ceo of Anglo American, the worst performer on the u. K. No respite in 2016. This is open th the pulse. Francine welcome to the pulse, live from london. Lets get straight to the bloomberg first were news with nejra cehic. Nejra thanks. Chinas foreign currency reserves have all into a near or your loan, dropping to 99. 4 billion in january, continuing islam from 2015 at the peoples bank of china to shore up the yuan. Foradds pressure to fiscal reforms. E Saudi Oil Minister says he has talked with the ezuelan counterpart the u. S. Has opened the door to a parking a Ballistic MissileDefense System on north koreas doorstep, a move that could reshape the region security landscape. It comes after north korea launched a longrange rocket over the weekend. The Denver Broncos won super bowl 50. The linebacker was named the most valuable player, as the mostwatched sporting event global news, 24 hours a day, powered by 2400 journalists and more than 150 news bureaus around the world. Im nejra cehic. Francine thank you. I just a rubric i look at the super bowl. On the oil market with mark barton. Up, but we are touch lower, coming off a massive weekly drop, 8 for the wti price. This is a 12 month chart. You know the trend it is very much your friend. That 8 decline followed gains of percent in the prior two weeks. The saudi arabias oil minister met with his venezuelan nonterpart on sunday, elaboration on steps required to shore up the market. Would eatec members up to attending an extraordinary meeting. Money managers may not agree on where oil prices are headed, but they are increasingly eager to wager their bets. Totals a great chart wagers of the price of wti, climbing to the highest since u. S. Commodity