Apple warning that coronavirus will hit revenues. The drop in apple surprisingly small. Flat as investors see little new in this reboot. We are going to get 35,000 job cuts, though. And franklin buying legg mason. L scale project s of protect active Asset Managers from the storm ripping through this industry . From london, im guy johnson, with vonnie quinn in new york. We are counting you down to the european close on bloomberg markets. Vonnie grinding lower, but slowly. We are down zero. 4 on the s p 500 as more and more companies talked about the impact of the coronavirus shortterm and more intermediateterm on their businesses, including the apple, and of course which is what spooked the markets after a possible turnaround day yesterday. Apple said it would tried to china said it would try to shore up its economy. We are also getting some good earnings reports helping shore up some of the market. Gold futures above 1600 an ounce, and that is all just in the last few minutes. It does show that theres a little bit of risk aversion out there. As you can see in the treasury market as well, it is very apparent. The 10 year has been flirting with 1. 55 all day, above and below it. The dollar index got up to 99. 50 at one point in the session. Guy in europe, we are midrange when it comes to equities. In terms of what is doing the damage, hsbc from a stoxx 600 point of view is absolutely massive. From the ftse 100, it is 30 points. The ftse 100 is down by about 54 points, so more than half of the loss on the ftse 100 coming from hsbc. Ae euro was trading with 1. 07 level, now at 1. 0822. Investore a weak Sentiment Survey coming out of germany. Coronavirus probably not even fully factored in yet. Ing krpata joining us now, x strategist. What do you make of the 1. 07 handle . Do we get further downside . The on one side, all of effects, but on the other hand, it is the Second Lowest yield in the g10 space. The funding currency of choice. [indiscernible] cut,e market is pricing a and terms of potential for the , itrsal in the eurodollar is just ongoing downward trend. Guy we are at 1. 08 now. Where do we . What is the floor in this move where do we go . What is the floor in this move . Petr in terms of the floor, we would argue that the floor at this point is vastly different. It is not around 1. 03. I believe it is way lower. Guy how much lower . Petr the valuation could be on parity, but i am not saying it will go to parity. In terms of eurodollar reaching a fundamental limit, it is now way lower because, very importantly, of the last two years. Eurodollar fair value has declined by 7 . That means at this point, the eurodollar being just below 1. 10, it is fairly valued. Three years ago it wasnt fairly valued. It was cheap. But what has changed is the decline in the fair value, meaning valuation at this point is not providing a fundamentally justified floor for eurodollar downside. ,f things continue like this eurodollar can go gradually lower and lower. Vonnie does that presume continued u. S. Dollar strength . Where will we get to on Something Like dxy . Petr i would say general dollar partgth in the dxy, a big of the upside is also the fact that the Commodity Currencies are doing pretty badly due to the coronavirus. But we think theyve already put the price in, and when you look at 10 year u. S. Treasury yields, they are already pretty low. Importantly, if you look back at the valuations of many em currencies, they are now very cheap. So while the valuation is not providing the floor under the currency, for many Commodity Currencies, valuation is now getting the lower upside. They are ultra stretched. Unless things get really bad in china and the coronavirus has big market implications, we think there is way less downside to these Commodity Currencies then to the eurodollar, at least from a valuation perspective. Vonnie we didnt get a move from the Australian Central Bank today, which might have surprised some in the market. Do those Commodity Currencies snap back as soon as coronavirus begins to fade . Petr if the coronavirus effect begins to fade, theres plenty of value in these. After go to what happened a phase i deal agreement has been reached in early december. We have seen a huge rally in the time, and massively undervalued Commodity Currencies. On a valuation basis, we are beent there, where we had two months ago. Provided the coronavirus concerns ease, theres huge upside for this currency. But it is not necessarily a huge upside for eurodollar because the euro will most likely be a funding currency in these emergingmarket currencies which are now ultracheap. Guy stay with us. Emea fxata, ing chief strategist. Want to talk about hsbc. It appears it is having to deal with a strategy reboot that has fallen flat with investors. Joining us from Bloomberg Opinion is our economist who covers finance, and the senior at fitchof banks ratings. What you make of this . It addresses the key challenges that hsbc has. Also tackles some more longstanding issues such as an unwieldy organizational structure and quite a high cost base. We downgraded hsbc last december when the bank first announced they were going to review their strategy because this inability to generate really strong profitability showed some challenges to the business model. They are still rated a plus, so we expect a fairly solid operating performance going forward. Guy what doesnt the market like here . Reporter one, perhaps they would have liked a little bit more clarity in terms of where the bank is going to grow. Obviously theres a greater pivot to asia, but also they are downplaying the coronavirus and the business in hong kong remains uncertain. The market think reflection we are seeing today is have not had confirmation of who is going to be the ceo. Theres been a lot of investors slightlysts expressing surprise that we are going into this big revamp without really being certain that the interim ceo is going to be the person in charge. That cant boost confidence in the execution. Vonnie if investors have enough patience to wait for a couple of years, and ultimately there are going to be 200,000 job losses, according to leadership, will investors be rewarded . Christian when we look at it from a credit perspective at the rating agency, the decision to really maintain Strong Capital during that period is certainly positive given that any operation of that sort bears quite a lot of execution risk, and that is something the bank will have to manage carefully. At the same time, the pivot to asia or a greater proportion of business being undertaken in asia also means that the bank will have to generate adequate effort ability in a region that is potentially more volatile than elsewhere in the world. Vonnie at the same time, at least its plan is very different from some of the other banks. It is not clear that that has played out for some of those banks either. Would you suggest that perhaps hsbcs different approach is the only one for it right now . Christian it is important to bear in mind that hsbc has very distinct features. It is one of the banks with a very strong global footprint and a presence in key markets. That is really something that this plan is focusing on. The idea of moves to refocus the business in the u. S. And Continental Europe speak to that. If the bank manages to integrate those businesses more closely with its International Framework , helping or offering products to their clients, that is a distinct advantage for hsbc. Guy do you think share price reaction makes it less likely that noel quinn gets the job on a permanent basis . Reporter those who argue the longer he stays, the more likely he will be confirmed, i wouldnt read that too much. Today is more of a reflection of the uncertainty with regards to that position, and the lack of more detail in terms of growth. Of course, as your other guest pointed out, asia is volatile and it is going to be a bumpy road. Guy there are some who ares adjusting that hsbc needs a transformational deal, that it needs that bulk up in china, bulk up in asia. How do you see the prospects of that . Where would you see the risks in such a deal . Strategy is clearly an organic play. I think with any transformation, nation, mergers and acquisitions transformation, combination, mergers and acquisitions, it is import to find a partner with whom you can operate. I am not sure it is that easy or straightforward to find someone like that for hsbc at that point. Guy thank you very much, indeed. Elisayou to bloombergs martinuzzi, and Christian Scarafia joining us from fitch ratings. Kailey a revenue warning from lower. Ending us. You have the ftse 100 lower by about 0. 7 , the stoxx 600 by about 0. 4 . The s p 500 is off by about zero point 5 . I want to know to the underperformance of the socks, down about 1. 5 the sox down sox, down about 1. 5 . It is lighter volume than usual. If you run the avat function on the bloomberg terminal, we see that volume is nearly 10 below average for the past 20 days. Of course, we are coming off a long weekend in the u. S. Maybe some took an extra long weekend, but we have been seeing longer volume see and lighter volume on selloffs. Finally, risk aversion is refunded across other assets as well. You are seeing a bid into safe haven treasuries. The yield down about four basis points to 1. 55 . Gold futures above. 1600 announce you are seeing money gold futures above 6,000 announce above 1600 an ounce. We have seen a pretty steep decline throughout the course of 2020. Th concerns surrounding the coronavirus. Copper and crude up about 4 since that time. Vonnie thank you for that update. Viewers, do room empathy function gtv on your bloomberg arouse you do remember the function gtv on your bloomberg allows you to browse the charts featured here. This is bloomberg. Guy from london, im guy johnson. Vonnie from new york, im vonnie quinn. This is the european close on bloomberg markets. Lets check in on the first word news now. Ritika gupta has that. Ritika President Trump keeps trying to derail the sentencing of his friend and onetime advisor roger stone. The president threatened to sue people connected to special counsel Robert Muellers investigation and called for stone to have a new trial. For the first time, Michael Bloomberg has qualified to take part in a democratic president ial debate. In the latest npr pbs newshour poll, bloomberg reached his fourth pole with more than 10 . That means the democratic that meets the Democratic National committee threshold. Founder and the majority owner of bloomberg lp, the Parent Company of bloomberg news. Says effects from the coronavirus will cause it to miss sales for this quarter. The are ramping up factories in china are ramping up production slower than expected, and demand in china was hurt because of stores closed. The coronavirus has affected has infected more than 70,000 people. One fatality was a senior doctor at a hospital in wuhan, the epicenter of the outbreak. The u. K. And south korea are preparing to evacuate their citizens from the cruise ship that has been quarantined in yokohama. Two planes filled with americans have already flown back to the u. S. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. Guy thank you very much, indeed. ,e are back with petr krpata strategist. Emea fx in the g10 space, what do i buy . Petr we think it looks pretty good. In the em space, most of the highyield ors the highyielders. We think of things like russian ruble or even mexican peso. Mexican peso is already outperforming most of the em currencies so far this month, and in fact, today we are talking about the negative impact of the coronavirus on the market. Up against the dollar since the sorry . Vonnie is that on usmca trade . Petr i would say not necessarily because then you can also have a look at the entire latam, and the other currencies are underperforming heavily. If you look at the structure of the currency now at an ultrahigh real rate, the highest out there. Only ukraine has a higher real rate. The external situation, like a ande balance in mexico, sentiment very importantly. Unlike other central banks, mexico is cutting Interest Rates and a very cautious way, which means the real rate is a high real rate, and that is why the currency over the coming month looks pretty well, but in case , we think big rebound ruble will do well, and all these undervalued Commodity Currencies. The ruble and someguy we just g central to buy the u. S. Being sanctioned by the u. S. Does that not worry you when it comes to the russian ruble . Petr you can argue another downside, but we have been in the situation where there have been plenty of sanction risks for russia many times in the past. Think it is more meaningful, and i remember fears from years back, looking at the Downside Risk of sanctions on the oil and government bunds, but over the past years, ruble can go past this sanction risk unless something heavy materializes and we see price action. But again, comparing ruble to other em currencies, say, comparing to mex, ruble looks pretty good to us compared to other currencies in the high real rate. Guy thank you for stopping by. We greatly appreciate it. This is bloomberg. Guy from london, im guy johnson. Vonnie from new york, im vonnie quinn. This is the european close on bloomberg markets. It is time for your latest Bloomberg Business flash. Walmarts outlook is making up for lackluster holiday sales. The forecast for the current your met expectations. The Worlds Largest retailer isnt a spitting ecommerce losses in the u. S. Will fall. Meanwhile, Comp Store Sales rose less than expected in the holiday period. A shakeup at dupont. They have removed their ceo and finance chief. Executive chairman ed greene will take over, for the summit will take over, further cementing his role as the architect at dupont. Two pond is in the midst of an efficiency drive. California utility pg e has taken a pretax charge for claims from deadly wildfires. The company says it is now on track to get a bankruptcy reorganization plan approved in june. If it gets the ok, pg e can take advantage of funds that would protected from future wildfire liabilities. That is your latest Bloomberg Business flash. Lets look at where u. S. Markets stand. Weve been losing ground as we progress through the morning, and that has increased in steam. The Dow Jones Industrial average down 0. 8 , the s p down 0. 6 , the nasdaq down 0. 4 . Dow chemical is the worst performer, down 2. 6 . Guy over here in europe, hsbc taking a big chunk of change out of the ftse 100, also the stoxx 600. More broadly, what we are seeing is a risk off story feeding into the car sector, the mining sector, the banks as well. The car sector is lower, as is the oil and gas sector. Estate, utilities, safe havens doing better. Ftse, 0. 8 . Similar story for the dax. The cac 40 only down by 0. 5 . The european close is next. We will have all the details. This is bloomberg. Guy 30 seconds until the end of regular trading in europe. Down across the board. Blood and down hard, paris down hard, parisdon down down hard, germany down hard. Italy is not down. Quite a tight range. We faded from session highs, which were hit midafternoon into the close. We are now down half of 1 . Banks have been a big issue, miners have been a big issue. Been the numbers that have coming out of some of the institutions causing problem. Hsbc has taken a huge chunk out of the ftse 100. What is happening with a single currency, early on we had a 1. 07 handle. I guessed was saying we could get down toward parity. Today we did get below 1. 08. We have rebounded a little bit. We have still not fully factored in the coronavirus into the european numbers. That could be a fairly substantial blow. Lets move onto to the individual markets around europe. The ftse 100 affected by the miners and hsbc. The dax affected by the car stocks. The cac 40 only down. 5 . Lets show you the grr. This tells you the risk off story. Definitely risk off today in terms of sector breakdown. At the top you have the safe havens. The bond proxy story has done well. People have been rotating back into them. Rotating out of tech. Not a lot of tech in europe, but tech has been hit a little bit as well. Let me show you the bottom end of the market. Basic resources, glencore, we will talk about those stocks in a minute. Well. Rs vector trading the car sector trading well. We have a story out of hsbc. Banks down 1. 8 . Oil and gas down, industrials down, chemicals down. Technology, you wouldve thought you would see a big Ripple Effect in technology. Semiconductor stocks are under pressure. Lets show you some of the individual names and talk about what is happening with hsbc. A huge number of points. This is such a heavyweight. This is europes biggest bank. It goes down by that amount, 2017 los, you really feel it. Italy, why is that bank up by so much . The question is will its bark a wave will it sparked a wave of mergers in terms of big banks consolidating smaller banks. Apple dialogue one of the effects being affected one of the stocks being affected by the apple warning. Vonnie the extent of the coronavirus fears in companys earnings outlook impacting the market today. We are seeing a speed up and a slow down for stocks after hitting another record for friday. We are down. 6 for the s p 500. The dow down more than that. We are also seeing the 10 year yield go to 1. 55 repeatedly. We are not breaking through much further than that. Nevertheless it is a sign that risk off is firmly on the books for the day. If you do not see it already, you see it in gold futures, up ounce and 1600 an the dollar holding firm. Idiosyncratic stories off the holiday yesterday. S p 500 down. Great performances. Kroger is interesting, Berkshire Hathaway taking a 2. 77 stake. There are analysts warning you should sell on the strength because Berkshire Hathaway has a mixed history with consumables and its partnership with 3g is don. Kroger right now up 5. 5 . Downside, conagra brands, one of those issuing warnings about earnings, not so much to do with the coronavirus. More to do with general weakness and consumer weakness. Retail weakness. That is interesting because we have seen the retail sales economic figures hold up but we are seeing chinks in the armor when it comes to some of the companies. Guy lets get back to the miners and talk about that sector today. Higher iron9 on ore prices, this allowing the companys new ceo to extend a run of returns to investors. Miner. He worlds top the Ceo Mike Henry spoke to bloomberg earlier. Mike demand is holding up, prices have held up because of other supplyside disruptions and we have not seen any issues with receiving payment. As long as things are contained within this quarter we think they will hold up through the financial year. If not, then we have to revised our forecast. So far we remain reasonably confident about the outlook for the remainder of the calendar year. To mike henry speaking bloomberg earlier. Speaking to us now, the leader of the team covering mining, metals, and stocks. Good to see you. The numbers look pretty good. Well talk about glencore in just a moment. If you are mike henry and youre running any of these big companies, how much visibility do you have in terms of the impact the coronavirus is going to have . It seems like not a lot. Everyone is waiting for when we will get the details of how bad the coronavirus is. We are starting to see that, apple with the big announcement today. Bhp saying it will be waiting for it. Glencore mentioned they are still looking to find out. If you look at the market, especially the Copper Market that moves to things like the coronavirus, there was a big selloff earlier in the month. So far things have been Holding Steady which to me says people are waiting for what will be the next big data point and the next information to send things in one direction or the other. We had Martin Gilbert on the board of glencore on earlier and he was not that confident about miners with the australian wildfires and Everything Else in the market at the moment. What is the worst Case Scenario for some of these miners . Lynn worst Case Scenario for coronavirus would be a big hit in demand that could have a s,vere impact for the miner but the Global Economy overall. If you look at copper, china is close to half of the worlds copper demand. Any kind of slow down or logistics issue will be a big impact. Guy the market was talking about mark was talking about the wildfires and this being a Pivotal Moment in our thinking about the climate. Glencore is taking a big charge and a big write down related to its coal business. What is the future of that business . Lynn it seems like there is starting to be a split between europe and asia. Europe is on the decline and that is why when core is taking the right down. Glencore is why taking the write down. You are seeing a shift in power between asia and europe. Vonnie what is the best in class for the minors . Is there anyone excited about any particular miner navigating this landscape well . Lynn i bet glencore wished it had some iron ore this past year. It seems like iron ore has been the big driver of earnings. You look at glencore results and they suffered from the lack of iron ore and got hit from weaker metal prices like copper and things like that. Guy we will leave it there. Thanks to see you. Joining us on the mining sector. Lets get checkin with bloomberg first word news. Ritika china trying to keep it share of the trade deal with the Trump Administration. U. S. Companies will be allowed to apply for tariff waivers. Beijing listed 690 six American Products eligible for relief, among them soybeans, crude oil, and liquefied natural gas. The department of Homeland Security is waving 10 federal contracting laws to speed construction of a war at the u. S. mexico border. They include climate for open competition and justifying selection. The move is expected to spark criticism that Trump Administration is overstepping its authority. Similar legal challenges in the past have failed. The jury in the Harvey Weinstein rate trial is set to begin deliberating today. The trial involves accusations from two women. Weinstein says Sexual Conduct was consensual. He could face life in prison if convicted. The boy scouts of america filed for bankruptcy. The organization is trying to protect itself from a rising tide of claims tied to sexual abuse of children. It is setting up a trust fund to coopt to compensate victims. The boy scouts of the latest groups to go bankrupt over claims they turned a blind eye to sexual assault. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am ritika gupta. This is bloomberg. Uy thank you very much these are the final numbers in europe. This is the settlement. I want to give you an idea of the damage hsbc did the ftse 100. Hsbc took off and we had 51 points off. That was the net change. 31 points of that was hsbc. The next biggest point loser was glencore, which took off 4. 5 points of the ftse 100. Hsbc taking over 31 points. We will continue the coverage at the top of the hour on bloomberg radio. Jonathan ferro new york, i will be joining him in london for the cable show on dab Digital Radio and the london area. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. Close onhe european bloomberg markets. Vonnie time for the stock of the hour. Here is viviana hurtado. Viviana our stock of the hour is legg mason. Shares are surging. They are up almost 24 after they agreed to a buyout from rival Franklin Resources at a big premium. The deal valued at 4. 5 billion. Lets take a closer look at the stock price. 50 per share is the buyout price. That represents a 23 premium to friday share price. It also gets the stock back to 2008 levels. In 2008, the financial industry taking a hit, this included legg then which cratered after Portfolio Manager lost big on financial stocks. Lets take a look at the industry contact of the merger. Franklin and legg mason. It represents a move do combat trend toward indexing. B. I. Writing that in the last decade passive style funds have taken in 1. 6 trillion. 1. 4have also lost trillion. If you were to look at the sp y, 300 20 billion in assets under management. The combined firm will manage 100 trillion in assets. It unites funds across asset classes. You can see the fixed income and equity making up the bulk of assets. If we were to go back to the broader into see trends of money it will continue from active to passive and that will send fees lower and job cuts and forced consolidation. That is your stock of the hour. Guy thank you very much. Time for a bloomberg exclusive. Shares of hsbc closing sharply lower today. The bank announcing overhaul plans that include cutting 35,000 jobs and taking a 7. 3 billion charge. We spoke to the cfo about the restructuring as well as about the impact of the coronavirus on the business. On the coronavirus, it is evolving. There is a big call on how long it takes for the virus to be contained. At the moment, our fourthquarter results, we had a resilient performance in hong kong. Profits were up 3 . Overall, we are continuing to actively monitor the impact of the coronavirus. I think we will have to take additional provisions this quarter as a result of that. Y much a call you give us any indication of the slow down and lending, the reaction in china or hong kong and the first month of 2020 . Make coronavirus, live in terms of the actual reality may coronavirus come aline in terms of the actual reality . Ewen we have had to put in a lot of Contingency Planning around our Operational Centers a lot of my colleagues are able to work at home rather than go into some of our Office Centers where for our customers, when you look at the actual january numbers, they continue to be robust. I think we are seeing some customers obviously struggling at the moment, particularly those in the returning sector, some of the real estate sectors, anything that wasnt tourism in hong kong. The credit matrix continue to be robust. Cfo speaking exclusively to bloomberg early on. Lets get some analysis on hsbc. Joining us is the head of Global Bank Research joining us from citi. The market did not take this restructuring well. Was it not enough . Was it wrong in the way it was portrayed . What was the problem . Two things to flag. First of all, the general banktor fatigue about big restructuring, particularly u. K. European banks. These restructurings have been going on forever, it feels like. There is a shorterterm phenomenon which is that the shares are trading up in the last few weeks into these results. In a shortterm perspective, outperformed. There is some element of travel today. The longerterm fundamental point is we have had restructuring upon restructuring and the u. K. And the european banks for over 10 years and people are now like show me i will not believe it until you deliver. Ceo why is an interim allowed to put forward a plan like this that is so big and so fundamental for the banks future . The ceo or heot is the ceo. Keeping him as interim ceo seems like a mistake. That is a good question and i am sure it is a question you asked hsbc. There was when this was first leaked in the media a couple of weeks ago, there were definitely eyebrows raised. To beected this plan presented by a permanent ceo. The board are still discussing who to appoint as permanent ceo. It is curious. Vonnie will this plan work . What they have set out makes sense. The questions investors in the market will have is where is this restructuring taking us . By make sense, they are talking about refocusing on asia and emerging markets, on retail and wealth and corporate banking. All of that makes sense. It has been discussed for a dozen years. The questions today, they are talking about 100 billion dollars of riskweighted asset investment. That is like 15 billion of capital. That is a lot of money. It is not clear where that will be invested, specifically. Retail, id about think the markets will have questions about where exactly. In the shortterm, a lot of investors own the stock for capital return and there are suspending the buyback for 2020 and 21. Relative to big u. S. Banks, the capital return outlook in the next two years is not great. What the management is telling us is 2023 will be a clean year and that is where you will see almost three is years down the pipe. A long way away. Vonnie in the meantime you have a target price of 510 pence. Would you wait to get involved to see if somebody else is chomping at the bit or might it be a Good Opportunity given that as you say, on a two to three year time horizon, things might look different . We have been sellers of the stock since early 2019. In the past we have buyers of the shares. , wee 2019 and true now remain stellar with the shares. Obviously the economic disruption happening in hong haveand Greater China, you the management of hsbc discussing that. There is uncertainty around the delivery of the plan, and we would rather wait. At some point itll be an interesting entry opportunity, but we do not think right now is the time to buy into the shares. We would look elsewhere. Guy what are the chances of hsbc deciding it needs to get bigger in china, that a transformational deal is required . That is where futures life. Talking sinceeen under two and a half and three ceos about pivoting back to asia. When they talk about pivoting back to asia, they mean Greater China and specifically the bay area and the pearl river delta. Acquisitions are possible in difficult. They are talking about significant organic investment into asia. That is an interesting point to watch about where they find all of these opportunities. 100 billion dollars is a lot of capital to deploy in asia. That is interesting. Their plan works. There is a lot more money hsbc will be putting into asia. Vonnie thank you for joining us , a price target of 500 pence. Coming up, it is our global battle of the charts. This is bloomberg. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. You can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. All with millions of secure wifi hotspots and the best lte everywhere else. Its a different kind of wireless network, designed to save you money. Switch and save up to 400 a year on your wireless bill. And save even more when you say bring my own phone into your voice remote. Thats simple, easy, awesome. Click, call or visit a store today. Can you help keep these iguys protected online . . Easy, connect to the xfi gateway. What about internet speeds that keep up with my gaming . Lets hook you up with the Fastest Internet from xfinity. What about wireless data options for the family . Of course, you can customize and save. Can you save me from this conversation . That we cant do, but come in and see what we can do. Were here to make life simple. Easy. Awesome. Ask. Shop. Discover. At your local xfinity store today. Vonnie it is time for our global battle of the charts. You can see the charts on the bloomberg. Run the function gtv. Kicking things off is ritika gupta. Ritika im looking at the traditional inverse correlation between gold and the dollar which is now at its weakest in more than eight years as you can see in the bottom panel. On the top panel you can see gold, which is this white line, and the dollar, which is the blue line. Theou can see, historically assets have tended to move in opposite directions. As it changes makes the metal more expensive to holders of other currencies. Now a safe haven demand is driving both of these assets with fears oft is coronavirus derailing Economic Growth in china. If you look in golden particular , it had quite the stellar run even before the coronavirus. Trading at its highest in seven years. It is over 1600 an ounce. That comes even as the dollar rises. It is having its best start of the year since 2015, is up 2 yeartodate. With that in mind and with these attempts to contain the coronavirus, it will be interesting to monitor the relationship between these two assets in the month ahead. Vonnie excellent presentation. Guy . Guy lets talk about the coronavirus when it comes to iron ore. Good one. S a if you are a minor, you want to be in the iron ore space. China and the coronavirus could have a meaningful impact. We are seeing data, we have seen iron ore shipments plunging. It is understandable. Look what is happening in the car sector, people are not going back to work, as a result, keep an eye on this, the prices come down, but keep an eye on china in terms of the important spirit vonnie both excellent charts. Guy, you are the winner today. Well done, ritika. Coming up in the u. S. , balance of power with david westin. Hell be speaking to the former u. S. Ambassador to germany. David from bloomberg World Headquarters in new york to our tv and radio audiences worldwide, i am david westin. Welcome to balance of power, where the world of politics meets the world of business. On the brief today, from hong kong, Sophie Kamaruddin on the state of the coronavirus. Alex webb from london on apple taking down Sales Estimates as the virus hit supply chain and demand, and from washington, Kevin Cirilli on the nevada debate that will include Michael Bloomberg. Lets start in hong kong. Thank you for your great reporting. I understand a lot of monitoring going on in the province. On tuesday china reported the lowest number of newcases since the methodology to detect infections and the government has increased its restrictions on movement of people across the nations. 160 Million People remain on lockdown. The government plans to sweep s byunidentified patient