This is the markets we are looking at in terms of global equities. This is a second straight day of rallying, s p 500, futures advancing, crude oils advancing to levels we saw back in october. Jumping,s dollar also and the nations bond following after the nationsbank released minutes of the latest meeting. Lets get straight to the bloomberg first word with nejra cehic. Nejra thanks. Broadbased a weakening of inflation pressures was behind this months surprise Interest Rate cut. The australian Central Banks first reduction in a year came after cpi fell on the First Quarter for the First Time Since 2008, even as the Growth Outlook remains steady. Still, the aussie dollar jumped, as they said the deal wasnt viewed as a slamdunk, reducing the likelihood of a followup move in june. George soros has cut his funds in u. S. Stocks by more than 1 3 in the First Quarter and bought a 264 million stake in the worlds biggest bully and producer. Hes warned of risk stemming from chinas debt fueled economy. He thinks a hard landing for the country is practically unavoidable, and that such a slump will worsen global deflationary pressures and drag down straps. Darren berg plans to increase , bettingngs in gold demands will be lifted by uncertainty surrounding the outcome of the u. S. Election and britains eu referendum. The chief Investment Officer expect gold, silver, and platinum markets to rebounded by as much as 40 of the next two years to a level last seen in october, 2012. The u. S. Has finally revealed how much of its debt is owned by saudi arabia, after getting the figures a secret for more than 40 years. The Treasury Department says the king has had a stockpile of about 117 billion, putting saudi arabia among the top dozen holders of u. S. Debt. Is only 1 10 of chinas. The u. S. Released the data after bloomberg submitted a request under the freedom of information act. 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 so much. We should all be worried about chinas debt. That is the message from larry fink, the ceo of blackrock. He spoke to bloomberg earlier. We all have to be worried about it. But keep in mind, if the economy continues to grow 6 , you cant grow at 6 and have your Balance Sheets grow faster. Muche future, i would prefer seeing the economy grow at 6 , without the same time some form of deleveraging. Francine larry finkcommentss malcom scott joins us. It seems the pboc is gearing up for a bigger world. It does. It seems the pboc is among those people who are worried about chinas that. Broadening, looking at areas of formerly didnt. Little nittygritty instances. Credential framework it has set up in december, it has already been brought and to bring in new areas of formerly didnt look at, areas that the Securities Regulator would typically look at, like bonds and equities. Its also looking into crossborder flows, something that the banking regulator might not normally look at. The peoples bank of china is taking on those things. It doesnt want these things to blow up. Francine malcolm, why are these reforms so important . If we assume regulations are up to scratch, what can improving the picture me for the economy . Well, chinas economy last year was the case in point. It has proved to be a little bit too bubble prone, whether it is ; months ago we were worried about declining Property Market and now we are worried about overheating. The stock market can go from these huge bull runs to bear runs. We saw that last year with 5 trillion wiped away. If you can get rid of some of these speed bumps and start to hit the economy eating their investor confidence, if you can smooth this out with better macro credentials, may the economy can grow more smoothly. Maybe that 6 he was talking about could be more sustainable, and with that debt overhang, sustainability is so important to chinas future. Francine thank you so much. Lets continue the conversation on china with peter dixon, the Global Financial regulator at commerzbank. Great to see you. There is nothing fundamental that has changed, apart from this extra stimulus, giving a little bit of impact on growth. And i think china has been a source of concern for policymakers for a long time. We are now talking about debt. Numbers,k at the chinas debt to gdp ratio is on par with that of japan. That if there is some form of correction deleveraging, it will have a far bigger impact on the economy. Obviously the authorities are trying to make sure that the degree of the collapse is far less brutal than perhaps it might otherwise be. I am not sure that i witnessed a silly think we could escape the isd landing and larry fink right to raise concerns. Francine when . 12 months, two years . Think always been led to if it was managed in the right way it wouldnt manage boom and bust. It may not, but it couldnt be the kind of correction we saw in 2008. By chinese standards, it could be quite nasty. Francine but a hard landing is a huge deal. That is something that could be systemic for the rest of the world. Indeed. Its up 3 . In china that is half of what we are getting now,. Lets keep it in relative terms. Nonetheless, you are quite right. Is asive chinese slowdown rip through the rest of the world. The Banking Sector and other parts of the world, which is exposed to china, the links are relatively limp, and it would get ian important transmission. Francine this is our chart of the hour. Properties become the bright spot, Real Estate Investment expanded at the fastest pace in 13 months. Meanwhile, fixed Asset Investments slowed growth of 10. 5 . When you look at that chart of the hour, and you believe that we could see hard landing, what does it tell us about construction . What does it tell us about commodity producers that are very linked to china . Lets look at the construction sector first. Obviously people have been putting their money into the sector because they believe the recent correction is over. Property is still probably overvalued in some cities. And i think there are lack of alternatives, which is why there has been a dash to property. But this will not necessarily be systemic. We need to keep an eye on it , but you are absolutely right. The impact of the rest of the world, commodities in particular, could be quite brutal. We have rd already seen that. Moment, growthe is so fragile around the world. Inflation is almost nowhere, maybe a little bit in the United States. Could this hard landing from china bring the world into recession . Well, potentially it could. Of a crisis that has washed throughout the years. In many respects, emerging markets that could easily turn around. As you have seen, the chinese search has been driven, at least in part, by rapidly rising debt. If we do get this third leg at a time when the rest of the world hasnt, it doesnt bode well. Francine peter, thank you so much. He stays with us. We will be talking about the fed and some of the other commodities. There is plenty coming up, including Aberdeen Asset management ceo brad gilbert, and the toughest job in european banking. I think john cryan at deutsche has a tough job. I think tijian has a very good wealth manager that he can fall back on. Barclays has a very good retail bank, with good return on equity. I think they have all got good bits, and they have all got investment banks that they are probably trying to downsize. Francine and after its best quarter since 1986, can gold continue to shine . George soros think so. Plus, it has been secret for more than 40 years. We reveal how much of the u. S. National debt is owned by saudi arabia. Francine welcome back. Lets get straight to the Bloomberg Business flash with nejra cehic. Nejra vodafone shares are higher this morning after reporting Quarterly Sales growth on its network that be estimates. The wireless carrier said organic service revenue, which includes customer fees that excludes handset sales, rose 2. 5 in the threemonth period through. March 31 analysts surveyed expect it will. 5 . That was helped by improve results in several key european markets. Shares in Taylor Wimpey have junta this morning after the u. K. Housebuilder set its plans to buy a special dividend of 300 Million Pounds of july next year. The company also said it will increase its regular payout as it generates excess cash. Bridgewater associates has become the first Foreign Hedge Fund to win approval to set up a wholly owned Investment Management business in china. The shanghaibased consultant says that bridgewater won permission to operate in the free trade zone back in march. It raises expectations that china may lift the moratorium on new Investment Management firms imposed over concern about activities such as peertopeer lending. Corporate loan issuance in town has slumped to the lowest in 16 years, as private equity firms slow mergers and acquisitions while the u. K. Decides whether to stay in the european union. Leverage sales this year totaled 2. 3 billion pounds; 59 down from the same. When 2015, and the lowest since 2015 and that is the Bloomberg Business flash. Francine gold is up for a third day, and george soros joined the slew of investors piling into it. The move comes after he cut investments by more than 1 3 in the First Quarter. Gold has climbed a lot this year. , the best quarter in three decades. Joining us now is the sector head of Global Mining research a bloomberg intelligence. Still with us is peter dixon from commerzbank. Lets kick it off with you. We can show you 45 charts if not more that show you that golda miners have become the stars. Sure. I think Investor Perception has changed. There is a truly concern, a small concern, that they will be able to get through this, that china will be having more and more issues the debt problem that has issued a lot of cash they are the largest importer of gold and they think it is important so a lot of hedge funds are saying we have almost no allocations and gold we will put a small allocation in gold and because the market is so much bigger, it has been a bid in gold. They have been positioning themselves for a fear of Central Banks. China is in a really tough spot. They have a lot of debt. China has doubled be m2 that the United States does, 13 . They have a debt problem that a lot of people are concerned about. How are they going to get out of that, and if they are, will it be issuing more cash . If that is true, what is the one currency that we have that no central bank can mess around with . Francine and the problem is if you look at gold, it is hedged against everything that is ugly,. That people are concerned about there is nothing to write home about in terms of good news. Yeah. Thats unfortunately the case. It has been a fairly lackluster recovery we have had a negative couple of years, running into concerns about brexit, the china story and the fed. Do . You go for Something Like gold. Francine this could be the ultimate asset bubble. It could. It is very early days. Most companies have no exposure to gold. Some people say have 5 , but most have zero. Most people in the west have never seen gold as a true currency. You are starting to see some people show some interest, mainly the big hedge funds who are looking at it on a longterm basis. If you do see more mainstream funds, that you could have a bubble, that at that point gold is a lot higher. Francine are you expecting more volatility in terms of currencies, that could drive a lot of investors to pile into gold . Volatility will be betrayed of the next quarter. What with all the risks that are out there. It could get an awful lot worse, in the event that the brexit referendum comes out with the wrong decision. That will throw the cat amongst the pigeons. Francine what is the biggest risk out there . A mistake by the fed, or a political event like brexit or the u. S. Election . Think its an exogenous risk. I think brexit is my primary concern at the moment, because i think that will change the nature of whats happening in europe. There is an outside chance that we could get a trump presidency, but i dont think anyone is really worried about that at the moment. Francine can you put up some research this is ahead of the london platinum the one thing people need to understand is that gold is important. Central bank sold 1. 5 trillion worth of gold, and they have been increasing that. At the current pace, they will have an alltime record amount. They still believe in gold, and investors are starting to as well. Francine the bank of england is still off. Yeah. Kenneth hoffman, thanks so much. Peter dixon from commerzbank stays with us. We will be talking boj and yen next. Also up next, oil heads to a sixmonth high. Are we seeing the beginning of the end of the oil glut . Francine so oil is that a sixmonth high ahead of u. S. Data tomorrow. Stockpiles forecast a drop for second week, in nigeria and canada have got worldwide output on venezuela. Are we starting to see the end of the global glut . Lets have that conversation with peter dixon from commerzbank. Peter, we were speaking to the analysts they were surprised that the supply and demand equation has come at the balance quicker than they thought. Yeah, i can see that. I certainly would have thought that the second half of the year, we would see a much greater balance. It has come a little more quickly. Back and turn around again. I think the problem is that so long as Oil Prices Continue to go up, you dont force shale producers out of the game and you have this idea that supply continues to grow. We may be approaching limits on the oil price it may not that go much above 50. Local crude rally stocks tend to move in sync with oil and the question we had in january and february weather this was going to do something a lot more sinister, which has to do with growth in china consumption. Is this just because of outflow coming . Thehat the chart shows is extent to which markets are using oil as a barometer for global growth. Stocks are setting off at the same time oil prices are going down. Presumably Lower Oil Prices would be good and therefore equities or not. Francine the drop was too severe . Possibly. See that theight correlations are a little bit more negative. Francine does this help with the Central Bank Inflation conundrum . They are throwing everything at inflation and nothing is working. It may be that they need some exogenous shock and maybe central bankers shock upwards. We are less than 1 in most developed economies and certainly they would like to see it higher. They would be happy to see this for the next 12 months. Francine are we starting to see the next crisis, cutting investments so much that we could see oil back at 110 in two or three years because we arent investing enough in a lot of these oil prices . That presupposes i dont think were at that stage yet. Over the next couple years, i would buy that, but at this stage francine talk about inflation, this is one of the concerns for the boj. Yen strength hurting the ability of a lot of companies to increase wage. Is that what abenomics has done . Is a mistake or just not working . He hasnt fired the third arrow, which is structural reform. Is thatlem with the boj it has been difficult to generate inflation in an economy where you have an aging population. Francine but also because they are a haven . Rising andkeeps on days where we dont understand whats going on, and it is a Natural Heritage that almost look like the guys are against kuroda. You are quite right, and people nowadays look at the yen as a hedge. They are going to flee towards safe havens and the yen is one of them a few weeks back the boj bottled the decision and that has hastened the trended toward the end. I think the boj will have to work very hard to out run them because it forces the market francine great to have you. Come back soon. Peter dixon, from commerzbank. Coming up, with fewer than six weeks until the u. K. s you getreferendum, we the latest numbers. We will go through the currency, that show you how gold miners have become the stars of the market. Are francine welcome to the pulse from london. We are just getting inflation figures for the month of a role for the u. K. The inflation rate has been lowered i airfares and clothing. Im going through the numbers in terms of what we see. Were inflation is falling to 1. 2 . Its below what some economists had addicted. Look at the pound. The pound had been rounding as we had more brexit polls showing its boosting its lead. U. K. Inflation unexpectedly slowed in april. 0. 3 fromfell to 0. 5 . Is 14488. E the pound markets are pretty much flat. Lets get straight to the bloomberg. Im looking at the stoxx 600 arid we are on the third day of gains. Its up 1 at the moment. Its on a course for the longest winning streak this month. If you look at the equity benchmark, its most Industry Groups gaining. Nearly all of them are heading higher. Commodity producers that are doing the best red metals have rally today and of course oil. You can see brent coming down a bit. It is still above 49 a barrel. Oil has risen to a sixmonth high. This ahead of the rest data tomorrow. Its expected to show that it actually fell. That would be the first two weeks hes since september. Goldman sachs talked about a deficit in oil markets. Stocks are up and oil is rising. I want to look at the australian dollar. We saw this jump today. This is after the decision this month. Board members considered leaving the cash rate unchanged, even though they did cut in the end. The fact that there was a question mark about that rate is why we see speculation of pullback about a rate cut in june. Its pushed bond rates up in australia. I want to finish on the pound. We did