German Business Confidence for the months of february is at 105. 7, a touch below what economists had forecast. 00. 6. D a figure of 1 its below expectations. As we are seeing yesterday with those pmi numbers out of the eurozone. We are seeing a little bit of crunch as weakness in the Global Economy is starting to affect the european region and germany as well. 1. 1028. See euro at we are getting breaking news out of christine lagarde. We will monitor the news we get from her purchase talking about the gcc countries. Stocks falling overall globally. Over renewed concern over the strength of the chinese economy. Stoxx 600 down 0. 2 . The shanghai composite was led lower by a lot of the financial and industrial companies. After the central bank in china weakened the yuan. The pound declining. Crude slumping. Lets get on to the second board. Rick off mo risk off moved. The pound had to do with brexit. I want to show you two stocks that reported earnings. Cutting its dividend. Standard chartered down 3. 7 . Better than just about 10 minutes ago. Lets get straight to the bloomberg first word news. Nejra bhp billiton has made a larger than expected cut to its for the, lowering payout for the first time in 15 years. As the World BiggestMining Company seeks to protect its Credit Rating amid a price collapse. Share price has fallen 40 over 12 months. David camerons campaign to keep britain in the European Union has been given a boost. 36 leaders of the u. K. s 100 Figures Companies have signed a letter Biggest Company have signed a letter that says staying in would be best for the economy. That came after the Prime Minister fought back against the mayor of london who said he would campaign to leave the bloc. Mark zuckerberg has backed apple during a speech at the mobile in barcelona. Other tech firms has said they support tim cooks refusal to unlock a terrorist iphone. The u. S. Government says it is a one off request. We are sympathetic with apple on this one. We believe in encryption. That is an important tool that, honestly, people are going to find a way to get anyway. I think that that, so, i just think it is not the right thing to block that from the main Steam Products people want to use. I think it is not going to be the right regulatory or Economic Policy to have in place. Nejra Standard Chartered shares have fallen sharply as it reported a surprise 1. 5 billion full year pretax loss. The banks shares have fallen by 50 over the last year. A day news 24 hours powered by our 2400 journalists in 150 news bureau around the world. Francine thank you so much. Blackrock, the worlds biggest money manager, is warning Bond Investors they are not prepared for the Federal Reserve to raise rates. Go,ou look at our wirp traders reckon there is a less than 50 chance that fed will raise rates before the end of the year. But blackrock says strengthening inflation may prompt the fed to act sooner. Lets introduce the chief kevin,ment officer at great to have you on the program. Give us a sense on whether blackrock is right. We are seeing a lot of termite. Termurmoil. We think the markets are more likely to be right than the fed. Francine so blackrock is wrong. Isin we think blackrock probably wrong. Having said that, there is no question that domestic sectors, the consumer, thare in reasonable shape. Unemployment a record lows. The fed will be keen not to center negative a message out. However, the fact is the external environment is still weak and getting weaker. Francine what is getting weaker exactly . Trade, Global Manufacturing as a result of the slowdown we are seeing in emerging markets. China and emerging markets. Be be morehould ib worried about china now that i was in december . China is about to have a hard landing and it has not got the necessary tools to prevent a hard landing. The concern is that what point does it have to devalue its currency and by how much . If it does that by a large amount, that sends another huge wave of disinflation globally, so we have another downturn and committees in commodities. Francine why are we so uncertain about what the fed does next . Were also talking about negative rights. That was a just a possible cut in Interest Rates. Then you have blackrock saying, they will hike this year. Is it communication, or just that the world is so much more difficult to read . Kevin i think the world is so much more difficult to read. The fed are paying a price for keeping rates too low for too long. The difficult situation they find themselves in is they decided to tighten rates toward the end of the cycle where the economy was weakening anyway as a result of these external pressures and difficulties. Toour view, its be wrong compound that error by over tightening. What they need to take into account, and im sure they are, is the fact that the dollar has risen over the past two or three years which has a tightening effect on the economy anyway. Credittion to, why spreads, weaker equity markets, a slowdown in the housing sector and even some of the consumer numbers of late in the u. S. Have not been that great. Toave got to be careful not compound the problem by tightening policy further at a time when policy is already tightening and the external environment is very vulnerable. Francine thank you so much. He stays with us. Its chip designs are found in most of the world smartphones. Caroline hyde is at the mobile World Congress in barcelona with that companys ceo. Caroline joined by the chief executive of bond holdings. About 15 billion. Phenomenal growth in terms of where you cover. There is a bit of worry about mobile on the highend. Should we be as worried as we are . Smartphone shipments are slowing down, as everybody has expected for a long time. It has gone through a phase of hyper growth over the last few years. It seems like everyone has got a smart phone. Naturally the industry is slowing down in terms of new units being shipped. Ofare still seeing a lot innovation going on, still seeing Companies Looking for new ways in which mobile phones will be used to control other things. You only have to look around the show to see how many cases there are of the phone being the controller for something else. Whether it is a car, your heating system, whatever. The mobile phone is driving everything else. It is connected vineyards on display. Can iot make up for the mobile revenues when will we start to see them become a bigger part of your business . Simon the continued growth and smartphones is still going to be a driver for our revenues. Mobile is key to everything else. Oneot, we do not look at as replacing the other. It is another avenue of growth for us. Make computing absolutely tiny so they can be deployed into so many different things. Caroline what sort of size of marketing we think we will get to in terms of the internet of things . Have you done much theorizing in terms of the scale of the opportunity . You have already got 15 billion. 15 billion. Simon 15 billion was the number last year. Cumulatively the number is 75 billion. We think iot is a huge market. It could be the hundred billions. There are many forecast. I am sure they are all wrong. It im certain this will be a big market, one that brings new business models. Caroline talk to me about security elements. Simon i have been talking at the conference about security and iot. Cyber security a big theme at the moment. That is a conventional commuting computing. Got to start have thinking about security and a different way. The good news is now is the time to do it. If we let iot be deployed and try to fix security later, that is going to be a real problem. We are working on the lowlevel Building Blocks to allow secure software to be build on top of hardware. Designer you are manufacturer agnostic. Apple in the news an awful lot regarding not security but privacy. Where do you stand on the ongoing debate. Have you come out saying we support apple . N fundamentally, we believe that uses should own their data. They should have a say and how that data is used. Whats interesting about this case is i think it will serve as a landmark for what happens in the future. Iot being so new, the potential issues around security and privacy can potentially explode over the next two years. The coming months of this issue if this issue does get result, could set the time for the future. Caroline i would be remiss not to ask a u. K. Chief executive what happens in terms of the United Kingdom and the brexit fate. Are you concerned about the sudden boorse johnson makes to the equation and the factory could see a tight race on it comes to a referendum . The issue about britain being part of the European Union is about access to people. Weve got about 300 people in our u. K. Offices who are from nonu. K. European countries. We bring in a lot of talent into the u. K. If we had to get a visa for everyone that would slow us down. Forre pro staying in europe access to a bigger market, although a relatively small portion of our revenue comes from europe. The ease of attracting talent into our business. For those reasons, we are very positive about britain staying in the e. U. Inoline you have a hub cambridge. Would you ever consider moving outside of the United Kingdom . Simon we have got about 1400 people in the u. K. I cant see us moving anytime soon. Caroline paint picture of Economic Growth throughout. Youre in china, you are a global company. See 2016 going in terms of optimism when it comes to Economic Growth backing your sort of business . Ghte headwinds hitting are you seeing the headwinds hitting your business at the moment . Oil, slowingice of growth in china, all these issues can ultimately affect consumer confidence. Arehe same time, people very concerned about how the economy is growing, so they are saving more. Our product is getting into consumer devices. It does impact our business. What were thinking about is the long term. We are investing now for the future. We have invested through downturns in the past. That has enabled us to grow quite significantly over the last two years. We are thinking about the longterm. Caroline should you be worried about the share price taking a knock . Simon share prices go up and down. We are thinking about how technology is going to be used 5, 10 years out. So, the share price today does not reflect a we are doing. The revenues that we recognize today are based on work we did a long time ago. Pcick on if you can e bit of work that is most exciting . Simon definitely one of our Top Priorities is thinking about the security issues. We see theres an opportunity for similar technology, whether it is a connected car, connected home or a smart phone. There are some fundamentals on how Encryption Keys are s tored, how topsecret information is kept away from information that is a last secret. We are trying to architect that so that solution can be deployed in many markets. Caroline thank you so much. It was great to catch up with you at the mobile World Congress. Thinking all things security when it comes to chip design. Francine thank you so much. Great interview. Talking to the arm ceo about a number of risks. Coming up, bhp billiton sacrifices its dividend. Will it be enough to protect the Balance Sheet of the Worlds Largest miner . Standard chartered takes a hit on his exposure to energy loans. The town pays a price as labour prepares to outline its position the pound pays a price. We bring you the latest on brexit next. Francine lets get straight to the Bloomberg Business flash. Jpmorgane former trader who became known as the london whale as his unit began generating losses in 2012 has surface to say he is not responsible. E said he was instructed repeatedly by managers to execute the strategy that went awry. He says he objects to the whale nickname. The s p 500s rally will give way to a fullblown retreat should the benchmark decline over the next few days, so says the chart analyst predicted in advance in oil earlier this month. According to a former, the s p will drop shadow slip at todays open and fall below 1917. The gauge closed yesterday after climbing 2. 8 last week. The new head of chinas a regulator has indicated he will take the top oand support the stock market by driving more capital into it. In his first comments since taking a position on saturday, he told senior officials its main tests include supervising the market and checking for manipulation. That is what the people said. That is your Bloomberg Business flash. Francine thank you so much. Lets talk more about china. As you can see from this chart, chinas total bet stands at 31 trillion pitcher pulling from 2009 levels. Chinas corporate sector has been piling on the debt. Lets bring in kevin boscher. Worry about debt. We worry this debt is going higher. A record in china earlier this your. The world in general seems to have a debt problem. How bad can this turned . And it isis bad warring. A lot of that debt in china and the private sector rather than the Public Sector it is worrying. There is the optimist in me suggests the Public Sector and the government can buy time and give it time to make sure the bursting of this deb bubble does not cause a major implosion in the economy. Lead to a hard landing and in particular lead to a big increase in unemployment. Its a difficult balancing act. On the one hand, there is the argument they should let un profitable Zombie Companies go under to help resolve some of this debt problem. But the potential damage that does to the economic environment, which is already fragile and to unemployment, prevents them from doing that. They are trying to do that on a gradual basis. The problem is it has change because the u. S. Went through the same issues, but now the market is so much bigger. And also, because of our mobile devices and social media and the way we communicate, these mistakes, or learning curves, get amplified by so much. What does it mean for a foreign investor . Difficult for foreign investors. In fact, from an investment policy perspective, the fact is the World Economy still has still got way too much debt. What it needs is either higher growth or high inflation or Debt Forgiveness to bring us back into situation where we can perhaps look forward to a new growth cycle. To beis is why you have fairly cautious about equities from that perspective, because we are in a low growth, lowinflation environment where the pressures are to the downside until we can get through this problem. And it obviously makes the investor very wary about those areas with high debt levels. Again, one of the negatives of the fed in the u. S. Keeping Interest Rates lower for long periods,s we had increased leverage in many emerging markets, including china. Had increased leverage and many emerging markets. Francine overall, we talk about brexit, the fact the banks are downsizing and your. Then it there is the u. S. Political risk. There is china. Is there any optimism out there . The fact the banks are downsizing in europe. Is a concern for us. It is more uncertainty in a difficult time. U. K. Mes at a time when the economy has already shown signs of weakness. , whether that be from the construction housing sector, the loss of momentum from some of the strength we have seen previously, the brexit itself, the weaker sterling environment and the increased fiscal austerity. Which means for us, as investors, is is perhaps a good time for us to look for opportunities outside of the u. K. Francine the pound falling is good for manufacturing. It increases exports. Is there an ideal level . Kevin it is good for exporters. It is not good for some of the small, mid Cap Companies who are focused on the domestic economy and they were the key winners over the past year or two. The downside of that is if suddenly the u. K. Were to import more inflation as a result of a weaker pound, then that takes money out of consumers pockets at the time that at the consumer is one of the few engines of the economy that is working well. In that sense, it is a bit of a zerosum game. The other thing about the pound is it is happening at a time where every other major economy wants their currencies to be order toy weak in stick night economic activity. In a way, the u. K. Is joining in the currency wargames. Francine think so much for all your insights. Chief Investment Officer at books Macdonald International thank you so much for your insights. The company warned that weaker prices and volatility across Commodity Markets are likely to persist for longer than expected. Joining us with the latest is bloombergs Ryan Chilcote. What are they doing to counter the downturn . Ryan we call it the shreare less, spend less strategy. They are cutting back their Spending Plans over the next 18 months, by 23 . The big thing is the dividend, cutting it for the first time ince bhp burst with billiton 2001. Investors expected them to cut the dividend by half cutting it for the First Time Since bhp in 2000ith billiton wine. They have done away with the whole idea of ever greater dividend payments. In merged with billiton at 2009. Francine where does most of the income from . Is bhp in a league of its own or does it have the same problem as some of their rivals . Ryan they have their own need problems which is perhaps the most compelling part of the whole commodity story. Netink if you look at the income stat