From london. Lets take a look at the markets. Some great guests coming on the program. First, this is a picture for european stocks, down 0. 4 . Tohave our inhouse expert go through what didnt happen in doha, currently down some 4 . Then i wanted to show you the fallout, you can see the yen rising at 108. 26. Lets get to the bloomberg first word with nejra cehic. Nejra thanks. Brazilian lawmakers have voted to impeach the president. There were wild scenes of the parliament as the opposition secured the two thirds majority needed to move to the senate. There, for civil majority would see her suspended while she faces a trial. The president and her supporters say the campaign to oust her amounts to a coup. George osborne will wrapup his campaign to keep britain in the European Union today. The you can chancellor will highlight a treasury report which says it would cause permanent rather than temporary damage to the economy. Would cutill say, impact at enormous costs the public spending. Meanwhile the French Economy minister says, bridget will begin its power within the world. Emmanuel macron spoke at an hergency steel summit, where tried to persuade china to scale back its production. Because, you are fine, when you discuss your history with china, you are credible. You will never be in a situation to meet facetoface with china because the market is not relevant for the chinese. Nejra the death toll in the ecuador earthquake has risen to 272, with more than two and a half thousand people injured. Stretchmagnitude quake 170 kilometers from the capital. The Prime Minister flew to the epicenter after cutting short a trip to rome. Global news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. You can find more stories on the bloomberg at top. Francine thank you. Talks between the Worlds Biggest Oil producers failed to meet a deal. 16 nations representing half the crude output gathered in a bid to stabilize the global market. News sent oil tumbling. Elliott gotkine is live. With us here is javier blas. And for the biggest part of the show, stephen major, also with us. Elliott, what went wrong in doha . Francine, there would only be one of two outcomes, and that was deal or no deal. But given irans no deal always seemed more likely but that didnt stop of the attendees feeling let down. Disappointed, yes. But at the same time, i kind of expected all the problems. There were a lot of talks about so yes, inining, hindsight, i was. The iranian oil that it also confirming was the main stumbling block to an agreement. We got word that there was a Draft Agreement and the change of positions before the meeting on sunday morning led the Russian Oil Minister to some hot this session that ultimately proved fruitless and the oil minister said that the channels of communication will remain willand the ministers discuss among themselves how best to reach some kind of agreement but probably the next time they will get together will be june 2 and in the meantime russia will continue to produce near record levels. Howeems very hard to the they can reach some kind of f iran remains entrenched. Francine javier, im confused. In hindsight, we knew yoiran would never join in, but i felt we would have a soft agreement. Vier there was the impression the leading Political Force in the kingdom made clear in the first interviews that unless iran and saudi arabia would not join the market kind of discount to that but it that it is really the leading source now in oil policy marking and that is what happened. They went in thinking they had a agreement wasft agreed among the key delegations as they could not have a deal. Francine we will probably never have a deal to freeze production. They will never give it up, right . Exactly. I think of freeze in production is Wishful Thinking. The russians it said that the door remains open, but they also said they will be more careful in the future on these negotiations. Led to go they were to doha for negotiations and expected to be a champion of what moore junior officials had agreed and were let down. That russiadoubt will leave saudi arabia to play that same game. Francine how much do you look it mustrice of oil impact your inflation forecast. This move in the oil price says it all, doesnt it . There must be some Wishful Thinking ahead in our meeting, because clearly, there is something more structural going on. The idea that there could be a a littlei think its bit rich. The oil price went from 100 to 30, then bounced to 40. Of those moves, im not sure what is most important. Everyone seems to be hanging onto the idea that the oil price has to meet a new low, but maybe not. Maybe it will just be stuck in a range of 30 or 40. Francine is that right, hobby javier . Balance between 38 and 42 . There was thursday, exxon mobil who said it was important they said saudi arabia in particular was a prime discovery exercise. Opec and saudi arabia are trying to find the new price of oil. Hink that we have france we have not a clue what is going to be there, because we dont know the reaction of oil producers. Francine is it not the new price for shale producers . You can take barrels off, but if the price of oil touches 42, than the shale producers javier the truth is we dont know; this is untested. We dont know how quickly Shale Oil Production can increase again, and we dont know because a lot of the industry has been demobilized, jobs have been lost, people have moved out of texas and oklahoma to find jobs. This is going to be tested the next few months as the oil market recovers. We will know when they start to pump again. We only knowt, that about 30 or 35 is the bottom. A classic supply shop, housing commodities of any kind of in that takes a long time for the market to start clearing properly and for the process to start. To start anyorced kind of Asset Allocation based on equities or bonds with the oil price itself is individual. Its a symptom, its not a cause of anything. To do with the imbalances in the global economy. Reporte we have this saying that the supply demand equation goes back to the second half of the year. Does this change anything . Javier doha delays it a bit. What we know now is that everything that has remained the at 10ill continue pumping day. 2 2 million per if the saudis want, they can put more into the market on short notice. And again, we dont know what the saudi reaction will be. Last year it went up to 10. 5 and that is one of the reasons saudi arabia increased production. Ran his cut iran is coming back. They will increase production. We can to delay the rebalancing and we cant have a longer period of lower prices. Francine thank you so much. Javier blas, stephen major. Wellll be looking at allocation ons next. Into negative territory if necessary. Then, dilma defeated. The congress voted to impeach the president. She will be announced to deliver on brazil. Osborne puts a cost on brexit. We bring you the headlines from a busy morning for the u. K. Chancellor. Francine welcome back. Lets get straight to the Bloomberg Business flash with nejra cehic. Nejra hsbc is said to be preparing for change at the top. As ceo stuart golovin plans to quit in two years and the bank will appoint a new chairman to help take the next ceo. He joined in 2011 and scaledback hsbc operations, exiting more than 80 businesses and cutting 90,000 jobs under pressure from unhappy shareholders. Stocks fell about 16 this year. The deal to grenades Telecom Operator may be vetoed by the eu. People familiar with the matter say its bid may be blocked within weeks. They remain unconvinced that they could create enough competition. They want the companies to sell part of their Network Infrastructure to a new rival. Verizon is the leading suitor for yahoo after a numbered decided not to make a bid. Meanwhile, horizon and its a low unit are working with three Financial Advisors on he did that would thinld include yahoo japan. Francine thank you. Is not thete pain only problem according to the Swiss National bank, speaking at the imf meeting in washington. He reiterated the Central Banks willingness to intervene, even as he outlined and acknowledged the pain it was causing to Pension Funds. For Pension Funds and Life Insurance, it is a difficult is not a, but it question because of the negative Interest Rate per say. It is a question of very low Interest Rates in the local this is not only switzerland it is everybody in the eurozone and u. S. So for Life Insurance and Pension Funds it poses many problems. Francine lets get more on this. Stephen major, hsbc, is still with us. The problem with negative rates is that it is split 5050. Yeah. It is quite split. I think negative race gets in a raw deal. We have had negative rates for about five years and bond markets have adjusted. I have said before that i think the central bank is only setting the policy rate in line with the mediumterm rates and the point about Insurance Companies them, butough for its not as if negative rates is the cause. If the institutions field to thats their liabilities property properly in the past than they would have had a problem. I think the real issue is that we have had falling yields for quite some time. The last two or three years there has been a clear downward trend. Those were waiting for them to go off would not have bought bonds and that is their problem. To the missile a negative rates i think isnt right. Francine and you argued before that the way they are structured in japan, it is a threetiered system. If you use a tearing system, it can be much more efficient. Is of the key points here that the real economy is what its about. The central bank is setting the policy rate for the real economy is and it is doing it for real people in the real world of thought it is important to protect the are ordinary person in their bank account will stop we are clearing it out lower and lower rates below zero and you are pricing at the margin. The ecb is an example of a relatively efficient system. Prolonged problem with negative rates i will probably do they become a few hindrance . Kuroda says they could go further, but psychologically the markets may take it the wrong way. Andhey can go a lot further just to be absolutely clear i am if youing im a fan were an exam, this would be a d . Francine are the markets misunderstanding something . I think they are, and in the fullness of time, we will see what this is about. In the meantime, i think it is a much longer term, slow process. There is too much debt in the sovereign sector. How are you going to get it down . There are several choices and none of them are particularly attractive. This is the calm way of doing it. Is a natural process in line with where inflation is. As market is now clearing long as ordinary people arent too affected, it can go on. Francine switzerland will go further into negative territory. And dont forget that mr. Draghi has said that there is a floor, and subsequently cut rates again. Japan is clearly in the early stages. The dmb is saying unlimited and recent moves would suggest further action. It isnt over yet. Francine thank you so much. Stephen major, hsbc. He stays with us. We talk treasuries, next. Also, what does the rest of 2016 hold for fixed income investors . We will get more of that analysis. Im sure there is correlation. Francine welcome back. This is the pulse. Lets get more with our guest, stephen major. Great to have you. You had some great calls on treasuries that were quite market moving. Onyou have a new is that easing from janet yellen . Yeah. If you had to pick one single factor that has driven the bond market this year, it was the feds capitulation. That explains why it is the consensus going down in a steady fashion francine to what . To the market pressure or something brewing in china . That is the bigger question. Capitulation to more dovish forces. You can start with china as being a trigger people are focused on g20 but it has happened before. Rates, look at g3 and g4 and obviously japan and the eurozone have had negative rights. Connections of swaps in the banking system, its inevitable that there is a cap imposed on u. S. Fields. It didnt take much for the fed to signal that they arent going to hike. My concern is that it has moved quite a long way, and are not going to say they will change their view, but if you hit your target, then that may be pause francine what does that mean for treasuries . I would say not to change if you look at twoyear notes, they are close to the target, almost price for perfection. And it is fair to say that there are others who were hiking rates. For twoyear yields to go lower from here, the fed has got to ease or certainly remove any expectations of one more hike. Francine will that happen if there is a brexit . You could say that there is enough risk to keep Central Banks on hold im not saying to go shorter, im just saying that you have come a long way and in terms of the risk we have to look at portugal. Has and be that spain election in a few days after the u. K. Vote and there is stuff going on in italy. It seems to me to there are so many different factors in europe that would make a central bank pause for and for the said, it may be too risky to hike under that kind of geopolitical backdrop. It does seem to be that there is not less chance of tightening, which on its own is really quite bullish for bonds. Francine great, great, great analysis. Its always crystalclear. Stephen major, global head of fixedincome. Wielded talking about asia credit next. Also up next, francine welcome to the pulse, live from london. Lets get straight to the bloomberg first word news of nejra cehic. Nejra crude has tumbled the most in two months; all exporting nations have flunked after talks ended in doha without any talks on limiting output. To do agree refused to any deal unless all opec members joined, including iran which wasnt present,. George osborne will ramp up his campaign to keep britain in the eu. He will highlight a treasury report that shows an exit would cause permanent rather than temporary damage to the economy due to lower trade and investment. That, he will say, would cut income at enormous cost of public spending. The debt to total in the ecuador is craig has rules ecuador earthquake has risen to 272. Was7. 8 magnitude quake centered 170 kilometers from the capital. The president has flown to the epicenter after cutting short a trip to rome. Global news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. You can find more stories on the bloomberg at top. Francine thank you. Markets are trading lower; lets head to the bloomberg with mark barton. Mark good morning. The biggest weekly gain for european stocks, and first weekly gain in five weeks, the biggest in two months. The winning run has come to an end; oil stocks very much leading the decline. Oil and gas index down by 2. 25 . Of todays session is overshadowed by that meeting in doha when the worlds biggest producers ended without any agreement on limiting supplies. This is the price of wti in the last six months; today, crude is falling as much as 6. 8 , the most since a temper first, 2015. Significant hurdles to any deal after saudi Arabias Deputy Crown prince said that the kingdom wouldnt restrain its production without commitments from any other major producers, including iran, which has ruled out freezing for now. Still, wti is regarded by 46 of the almost 12 year low reached on the 11th of february. Just to show you why the price of oil matters, this is the correlation between the msci all country world index, a measure of developed and developing countries, and wti in 2016. Look how closely they moved. The correlation is the closest since 2013, the closest. It matters that the Worlds Biggest Oilproducing nations didnt manage to freeze output. And there is very much a trend toward haven assets today, benefiting begin. The dollar is trading near its lowest since april, 2014. Large hedge flows boosting the currency, and also hedge funds and other large speculators are pushing wages on yen strength to a record as japanese authorities appear reluctant to intervene in the market. This is the yen against all its major peers today. All these major currencies are falling today; the swiss franc is the best performer, still down by 1 5 of 1 . The canadian dollar, an oilproducing nation, down by 1. 3 . We had a g20 meeting at the end of last week, in the nation finance minister said he confirmed with his counterparts, including the united states, the disorderly Currency Movement of desirable, but within 24 hours we had jack lew, bluntly saying that japan needs to focus on domestic demands and called foreignexchange markets orderly. That is a clear warning that the u. S. Doesnt view yen intervention is warranted. But money moving into begin because of that meeting. Francine mark, thank you so much. Ffs presidency is hanging by a thread after the lower house of congress voted in favor for impeachment. Portuguese] in the opposition broke into cheers as the impeachment passed by a convincing majority. Bad news for the president , but good news for investors who have bet heavily on her impeachment. This is a picture for the stocks. The magazine first reported the february that a senator cited the president in a corruption scandal, which was good for the stock, as people were thinking of impeachment and that it would come sooner. Four months after, nothing has happened. Theave seen up and downs, president say she will hang on to the very end. That last leg up from yesterday. For more, lets bring in paul mcnamara. Also still with us is stephen major of hsbcs global head of fixedincome research. Paul, great to have you. Let me know whats going on in brazil. Even if the president is impeached, im not sure what good news can come of it. We need someone who can manage an economy he was the person . Paul thats a good question. The upside would be is that it would be hard to find someone who could do a worse job on the fiscal accounts in the Current Administration has, both of the