Of course the unlimited, extremely cheap liquid provisions. Going forward, the thing the ecb needs to focus on our working incentives for lenders to lend. If we have prolonged negative rates they start getting worried. If we are looking at negative rates at the moment, it looked like it will be prolonged. Theres no optimism out there. Japanification is happening. It has been anything but what was expected last year. We have slowing global growth. Have seen financial happen quickly even though we are in a quantitive easing environment. I think the worry here is that negative rates are a calculation of traditional centralbank methods to slow the economy rather than a means to a more predict event. If you buy things negative then effectively you are getting less money. Negative rates could stay for longer terms. Sweden, 4 but still a negative rate. Where will the next shot come from . The fed raising rates is the biggest shock. I dont think it will happen in march or june. From china, the news weve seen overnight with the chinese yuan, they have convinced the market as such they are not looking for a cheaper yuan. I think you do look at inflationary pressure. I dont think they will do that. Come fromnk it will the Federal Reserve hiking too quickly . To an extent, i agree. I do not think it is Strong Enough to survive a strong dollar environment. The deflationary with the emerging market dollar, that has been a driving effect towards Commodity Prices and weakening purchasing power. I think we have seen most of the chinese yuan devaluation. Midway through economic tolerancing, it cannot happen with an overbought exchange rate. Something has to give. The way forward will be to deflate and monetize thomistic debt and look at the foreignexchange reserves. Economic debt. That could create my stresses. We will have plenty more on china next. With us and the polls. Plenty coming up. Were live from brussels as european leaders gather in turkey to talk about the microcrisis. Ryan is there. What are the key issues . The main issues are what to do with the tens of thousands of refugees making the journey from turkey to greece and the rest of the eu and the rest of the refugees already here. How du restore the passportsfree travel that has been under threat . What will the eu do for greece and turkey to get them to play ball on these issues . This is not a small one, fran. Plenty to talk about it and we will be back with ryan through the show. Also on todays, trump as the republican frontrunner fails to win two states. As brent flirts with 40, we will interview a head of an oil and gas company next. Francine youre watching the pulse. Working with financers on the merit of making a counter bid according to people with knowledge of the matter. The german chemical producer has not made a decision yet to look at the company with a market capitalization of 55 billion. Basfs trading lower. Commerzbank has named the successor to the chief operating officer who will take up the role when his term ends april 30. They are known for overhauling its Consumer Banking unit. Eds confirm the chief Financial Officer has resigned. It came after he expressed concerns that the move might jeopardize the groups financial situation according to people familiar with the matter. Thats her Bloomberg Business flash. Francine china will give top priority to development, the words from the premiers report delivered at the start of the annual National Peoples congress in beijing. Heidi is in beijing. What have we learned about the economic priorities of china . Francine, we went into this weekend and the opening session hoping to get some clarity on exactly whether beijing will prioritize growth or sacrifice some of the shortterm growth in order to put through some of these longterm painful structural reforms. Growth one out in the end with the 6. 5 cents7 target. Some are sighing that is just too high and does not give them enough space to put through some addressingforms overcapacity. Inflation is set at 3 which is high given that its tracking at 1. 5 percent. The widening neighing of the ratesion of them2 at a higher than nominal gdp. It does appear that theyre looking at propping up shortterm growth and adding more leverage to the economy and may be putting off some of these hard reforms that were initially flagged, francine. Us about thek to planned crackdown on loans for home down payments. They are trying to get risk out of the financial system. At the same time weve also heard about outflows this morning. Yes, thats right. The risks are rising and it illustrates how hard it is for policymakers to be able to direct which way monetary easing goes. What weve seen since the easing cycle started in november 2014 our property rises property prices rising over the last 12 months alone and the recovery elsewhere in the country has patchy, at best. We have not had confirmation yet, but they will be clamping down on these loans that basically you can borrow money to pay the down payment adding to risk and potential asset double. Bubble. This is part of a systemic issue and how much bad debt there is at the moment and that something policymakers are starting to approach. You spoke about outflows. We had the february foreign reserve data coming through and it is slow down a little bit in terms of how much of the reserve has deflated down another 28. 6 billion. Its essentially baying on what we had estimated where we had record amounts of depletion in terms of japans foreign reserve reports to try to stem depreciation in the currency. That seems to stabilize somewhat in line with the relative stabilization we had seen in the last month or so, francine. Francine plenty more from china through the day. Yena. Bring inmanish and we were talking about china before the break. You believe they will put further pressure on deflation around the world. Even if they say they do not want to devalue, it will be very difficult. Here i have two concerns. Theres not enough depreciation in terms of the leveraging house on the rest of the world. The second problem, much of the rative the hated by dictated by the growth problem. They have a debt problem that has led to a growth problem. Getcine actually it could a lot worse. Over the of the possibility of seeing a financial crisis in china because of the debt burden . It has broken because of the financial model. You cannot have them diverge 200 percent and expected to be a tenable model going forward. It has to happen in conjunction with its more productive areas. To be able to do leverage and balance and economy while keeping and sustaining domestic demand is a tough issue. They had their problem doubled up the moment. Of that, when i will also say is if you look at the new growth members, credit expansion in china and the index , gdp is not growing at the rate they say. If you look at what the board has come up with, the new index where they take into account retail sales and tourism, those numbers indicate that it is growing at close to 6 . What i found interesting is that there is no mention of the internet was eight of the renminbi. They do not want to open the capital account as they thought. Hey would the imf has reiterated they would include the yuan in the basket overnight. I agree that there is challenges, no doubt about that. They need to readjust it. There is more positive to look at. Inncine what about outflows february . This is still a concern. Measuresecause of the that china put in place to not allow capital to leave. Yes, the outflows are ultimately driven by domestic depositors wanting to shift money abroad. Francine is it capital flight or not . It is leaving for low yield areas. It is a matter of wealth preservation. Leaving is reflecting, first, expectations that the yuan will have to begin further. They cannot hold onto this to reflect the economy wow, at the same time, deleverage and sustain. They came out with a report that said all lot of the cash was used down to pay the dollar debt. I ask myself, can china control capital outflow . Yes, they can. That is a more important argument. Julian they control everything francine they control everything. If they get it right, they can manage this transition very smoothly. They are managing it. Its a very difficult job. Look at the housing economy. It is not the same economy it used to be before. Its a service economy, which is how china is changing. Its a massive economy that needs time to adjust. Tread carefully. And lena,manish thank you. Up next it is like the jailer accidentally left the door open is people can see what beyond. Everyone is wrangling about the terrors of the world outside. Huge weight lifted from british business. Francine we talked boris johnson. We discuss what a british exit from the eu would mean for business. Cooks you are either in the Single Market or not. If youre not, you have trade agreements. There are countries within europe that are postured in the market. Theye to accept the have all of the disadvantages of the colin market and they are not involved in the decisionmaking process. Francine that is german finance minister. Lets get more on the brexit question. When i come how do you view brexit . It seems like is unnecessarily. Eighing on investor sentiments we dont know what the u. K. Would look like. Lena i completely agree. As far as concerns thats as far as im concerned, there are two stories. One is the macro market story. There is a windscreen for broader dangerous political pragmatism happening globally when you look at the polls across europe from greece to france to germany over the last year. The rise of the process antiestablishment vote. I am a little worried because Central Banks have the only are the only game in town. They are incapable of facing down the global shock that we are facing, similar to a decade ago. Francine mannish i know if it anish i know we have had questions before about the economic fallback. We dont know what the day after brexit would look like or london two years from now. Who do you go to when you look at research . Manish when you look in poll numbers, 70 of people are undecided. 17 of people are undecided. There is research that the poll numbers reflect younger generation. If you set them aside and we are talking about there is not been a next and exit from eu before. I think both sides will have things to lose and there will be more corporation that people are thinking about. Francine in the case of a brexit. Anish it comes down to politics. It will be come going forward. If you have a growth slowdown. We are not growing. There is a disappointment with the economy, you find a changeat taking it will thanks. Francine li na you were talking about segmenting the desk li na, you are talking about fragmenting people get afraid to what happens next in the eu and we get shock. Lena the remarkable thing is we not have another institutions that exposed to correlated asset volatility that in terms raises interbank markets. Ultimately the lessons we learned a decade ago from the last crisis is still with us. Banks are only as strong as the networks and markets. The markets are only as strong as the ability to price uncertainty. 40 . Possible to it is not enough. Francine li na, think is a much. Were back in two and we will be talking about refugees next. Francine welcome to the pulse lets getdon to to the news. The drop in chinese final reserves fell to 3. 2 trillion. Thats according to data from the peoples bank of china. The news comes as officials take to the podium at the Peoples Congress again today to outline priorities at a time of slowing growth for the country. The iranian billionaire has been sentenced to death after being found guilty in a fraud case involving an oil fund. The court convicted him and two other people who were also sentenced to death. They were also ordered to repay a quarter of the money they laundered. He can appeal the verdict. Donald trump and ted cruz got a split decision in four states on saturday. The nomination race has not changed dramatically. Scored aninton overwhelming when over Bernie Sanders in louisiana. She has a solid lead for the democratic nomination. German factory orders fell for a second month in january. There is a seasonal swing inflation. The latest sign that a global slowdown and weak domestic Pricing Power may be hurting europes largest economy. Global news 24 hours a day powered by our journalists in more than 150 news bureaus around the world. Tom lets head to mark barton. They opened on a high. The function. This is where all the main European Forces are faring today. Ofs is digesting news out china over the weekend began the 6. 527 targets were the growth rate. To reach the new target of course, the government will permit a record high deficit. That will grow even as growth slows. Investors fixated on that. We have seen three consecutive weeks of gains along the winning stretch of october. The ecb policy announcement will come on thursday. Since they loosened policy on december 3, many would argue the stoxx 600 has dropped by 11 . One index it has been rising in recent days is the msci emerging markets index. In therisen by almost 8 last seven days greater the stocks are rebounding by 15 . Lets have a look at wti. Crude level is rising to the highest level since january 4. Wti is trading above 36. U. S. Drillers are cutting the number of active rigs to 392. Thats the least in more than six years against the global glut. Hedge funds are on the fastest pace in 10 much. Week, theor the third longest winning stretch since may as u. S. Production slipped to the lowest level since 2014. Crude oil is the highest level januaryry 4 grade 4. Francine thank you so much. Few days in aod terrible year for oil. Is the worst over for producers . Lets talk to the largest producer of motor fuel from coal. A 63 ave just reported drop in a profit. Thank you so much for joining us. Oil, iu see the price of know you have taken some measures to counteract the falling price, did you expect to remain so low for so long . We did not know what it was going to happen. We knew factors could hit us and we have been proactively working our programs here starting back order, we get us in had that program in place. When it really dropped in late 2014, we put a Response Plan in place to protect ourselves. We Just Announced today that we will be conserving 75 million through 2018. We are making sure we can protect our dividend and our Credit Rating and our Balance Sheets. That is where were at right now. Its a very tough environment. How do you view it from now on . Are you taking it worstcase scenario for the next two years . How do you guide looking at the environment . You dont have any say. We take a fairly prudent and conservative view. Latewhat we saw early in december dropping into the 20s in january, weve looked at our assumptions again. We are very conservative. 16 40 four fy 16. Were making sure the company is healthy. We are protecting the Balance Sheet and their caring ratios and dividend. Francine how can you call bottom . What would it take for the price of oil to hit bottom and start owing up again . Where i think the bottom is . Francine what needs to happen . Where can you be sure that you have it the bottom price for oil . Promisingre some signs. There is trust being built over and nonopec companies. There is some encouraging news about the potential meeting in march between russia and saudi possiblyenezuela, nigeria. That is very positive. That would certainly help. You talked about the rigs being cut back dramatically even though growth is looking stronger. There are quite a few factors. Hedging of oil in the u. S. Is coming off as well. They will be looking for higher costs overroduction there to be supported by a higher price. There are some encouraging signs. At the same time, you have to look at the pollution curves. Pers 2. 5 Million Barrels day per year. Were goings time, to need another 15 Million Barrels per day. You cant get there when you have that out of the upstream markets and projects. Its coming. I just cant tell you when. Francine will prices for base chemicals continue to decline . We have two pieces of our company in chemicals. We have base chemicals and performance chemicals. Are being, alcohols very resilient in the market. Its slightly softer demand, but the margins are strong. , to chemicals right now give you an idea in our first fyf which started july 1 of 16, oil was down 47 . Were downhemicals 23 . They are holding up a little better than oil. They are under pressure certainly. Francine thank you so much david constable speaking to us from johannesburg. Leaders meet in brussels with the turkish Prime Minister. Said hek Prime Minister has high hopes for the summit. To havelooking forward substantial results in these and the between turkey u. N. It. U. N. Necessarye time, its to accelerate the relocation and to substantially have a credible relocation process. Francine leaders are in brussels for a meeting about the crisis. Turkey has been invited to the summit and what with the eu like from turkey . In a nutshell, what the eu would like to see from turkey is a cessation from the refugees coming from turkey to greece or at least a stemming of the flow of refugees. What a lot of the countries would like to see is turkey agreeing to accept accept back the refugees that have already made that careless theney, and particularly refugees that dont qualify for asylum in the European Union. All the refugees that havent come from syria is much. Turkey realizes that for its part, it can request things of the European Union. It would like to see the European Union fast track. That still hasnt happened. The eu would like to see some assistance foral turkey to help deal with the problems back at home so the European Union doesnt have to. Its very clear that the eu needs turkey. They need to find a strong ally. As their criticism of their closing of the opposition paper . Ryan we did see some people criticize the closing event opposition newspaper and the police handing handling of the protests that took place after. We are told by people who watch turkey on a regular basis, that they are banking on the fact that the eu needs turkey so much right now to deal with this crisis to hold on the refugees and accept many back, it doesnt want to rock the boat if you will by allowing this criticism to get too loud of t