Transcripts For BLOOMBERG Countdown 20160407

Dip on concerns it cant maintain the momentum. Jpmorgans jamie dimon outlines his take on the brexit in his annual letter on the outcomes of an eu vote. Large and potentially unknown. Welcome, it is countdown. I am manus cranny. Lets get into the clear message the fed wants you to get. There will be a rate hike this year, a dovish janet yellen, the minutes confirm everything we heard, and mr. Bullard says there is a debate, but if you look at wrip, a rate hike in the usa, that is not on the cards anytime soon. By december, 53 . The dollar is down. That is the message from the fed. Get it and get it clearly. Global concerns will trump the domestic issue. The s p had biggest rally. , the biggest rally in almost four years. What you have here is volatility dropping. There is another story, 1 trillion worth of stocks being shorted. What happens at the u. S. Equity market really takes flight. As talked about dollar again this about dollaryen. The dollar lost 6 since the fed raised its rates in december against the the yen. What you have got here is a break below the 110 level. That is critically important in terms of the move. The weakest since 2014, and that continues. What it invokes the bank of japan to take action is when you break this important psychological barrier. What is happening in terms of risk. We have a benevolent fed, oil on the rally, lets talk about your risk this morning. , have a lookggit at this. It leads the asian market gains. You have the dollar at 3. 89. The fed being a little bit more generous, up 1. 12 at one juncture today. The asian currencies have been rallying but they are struggling. Nymex up 1. 09 . Inventories are dropping, inventory output is dropping. You see the lower dollar, the higher oil price. Can it stay intact . Lets get a look at what is going on in the rest of the world. Dutch voters have rejected a treaty between the European Union and ukraine by a margin of nearly two p1. Nearly two to one. It has exposed antieu sentiment and one of the founding members. If britain decides to leave the European Union, the outcomes are unknown, according to jamie dimon. He says that, even in the best case scenario, there would be years of uncertainty, which would hurt the economy of both the u. K. And the eu. A brazilian congressional report has decided that proceedings rousseffresident dilma should move forward. They found evidence toward the claims against her that she tried to hide the size of the budget deficit. Her supporters call the campaign against her and attempted coup. Record,ry has set a becoming the most traveled secretary of state in history. His trip to bahrain yesterday takes a total mileage to 1. 0 6 million, 1000 more than Condoleezza Rice managed under president bush. With 10 months of the Obama Administration left to go, kerry shows no signs of letting up and will be in japan later this week. Hillary clinton visited 112 countries, kerry has only managed 81. Global news 24 hours a day powered by our 2400 journalists around the world. You can find more stories on the bloomberg at top. Manus yvonne man is standing by. Were waiting for that real reading in terms of what was going on in china. Everything i see has gotten the key portion in asia has had a bit of a rally. They are losing a bit of steam, but we are still in positive territory when it comes to the regional benchmark year. China down 9 10 of 1 . That is ahead of the fx reserve data. Level should stay about the same as what we saw back in february. Adding to the idea that the pboc may hit may delay this cut. We are seeing a bit of pressure on the south. A lot of fluctuations in some of these major markets, particularly in japan. Now about 1 5 of 1 . It is a stronger yen. It is swing between gains and losses. We are seeing a little bit of an upside right now. There are a lot of talks from the likes of jpmorgan, saying that intervention into the japanese yen right now really wouldnt do much. It would just be futile. 109. 07 is where we stand right now. The Oil Prices Also giving producers around the region a bit of a boost. We saw healthcare stocks in the u. S. Overnight, over that pfizer and allergan deal. I want to end on some other big earnings. Samsung electronics falling 2 a firstquarter preliminary operating profit actually beating estimates thanks to the Early Release of the galaxy s7. Zte resume to trade today after the Commerce Department in the u. S. In march barred exports, after saying that it violated the sanctions in iran. I, fallingven 5. 3 , the board rejecting plans theve the president , president. Manus thank you very much. The minutes of the feds march meeting show policymakers were split. They debated in april Interest Rate rise. Several officials leaned against such a move because it would send the wrong signal. Others said it might be warranted. Following the release, st. Louis fed president James Bullard told bloomberg got a hike could come at any meeting. The committee certainly reserves the right to make a move at any time. A live meeting is just a meeting where you can debate, is that right . We debate at all meetings. All meetings are live meetings, there is no other way to think about it. Manus did the top fed watchers react . What did they think . I think, they want to raise rates but they want to do it at a very gradual pace. A couple of rate hikes this year is probably right. June and december. I think the fed is going to be a little overshooting again in terms of what they think they are going to do in 2017. They are trapped by their own mandate. Their mandate, strictly a domestic mandate. Primarily are are more global and more demanding. It is likely what they want insee is called is calm the markets, but i think april is not going to happen given what we heard today. Manus lets bring in the head of Market Strategy. Trapped by their own agenda. Peter what was your take . Peter i think we expected a broad set of views, but i think the dominant one was the concern about international risk. While yellen sort of encourages dialogue, there is still a section of the fed that remains significantly dovish. While we are not really seeing a reaction in the markets, whether it is a strong dollar or even increased expectations of fed fund rates. Manus if you didnt get once, get it three times, bullard said. Debate. E there is a there is Nothing Shocking in that. Yellen, as a chairperson, encourages that kind of dialogue. She really does that. I think it is often confusing in the marketplaces, it adds. Ignificant uncertainty i think overall, she is cautious, watching and develop internationally, and that is going to be the dominant force in her policysetting action. That is what they are focusing on and that is what will define their rate. Manus what will spin this . If we look at wrip, december is a 53 . What would it take to spin the odds, to change the dynamic . Saidt of the 17 on the fed the risk of inflation is tilted to the downside. The risk on the fiveyear, fiveyear is tilted to the downside. First of all, oil is a big piece of the story. The fact that it is not increasing significantly creates Downside Pressure on inflation. Number two, i think the data coming out of china is a huge, important mover and whether the feds expectation changes. If we start seeing stabilization and improvement, i think expectations will ramp up very quickly. We think that the International Backdrop of growth is going to be very low for most of 2016, and that is going to keep the fed from raising rates very aggressively. That could change very quickly. Manus should i buy some dollaryenptions options . Supply qe, far left. Who cares . Bank of japan, negative rates. Here we go, where back for a bit of shock and all shock and awe. I dont think that run is done. One thing we are getting from japan is that the expectation for inflation, if you look at the recent report, continues to decline. Tools, as you mentioned very clearly, they are having less and less of an effect in the marketplace. Boj ist move for the probably buying private assets, so there is not much more that you can do. Recently, we have gotten enormous amount of verbal intervention, the thing that the boj does the best. It really is the last stand of a central bank. It throws so much at the market. Some form of helicopter money from japan . Peter i think it has to be. Inflation is not going to pick up in japan and theyre going to have to do something pretty extreme. Is really it unless they give up the fight on fighting inflation. Strike rosen Peter Rosenstreich stays with me. 8 30 u. K. Time. Everyone is focused on the halifax prices. The ecb publishes the account of its march Monetary Policy later this afternoon. Last night spent minutes, we get more news. Who isanet yellen going to accuse to stoking the great u. S. Fire . They made the bubbles, they burst the bubbles, they cleaned up the bubbles. That is a conversation you simply dont ever want to miss. How much foreigncurrency did the pboc spend last month to prop up the you want . manuscranny , 1 18 is 6 18 in london in the afternoon in hong kong. A bright picture of Victoria Harbour in hong kong. You have the nang seng up 18 of 1 . Of 1 . 8 samsung shares of debt despite better than expected. Better than expected firstquarter profits. 5. 7 billion dollars estimated s7es of the 27 of the line. Overseas Chinese Banking Corporation has agreed to pay for barclaysllion wealth and Investment Management operations in asia. Theyre Private Banking unit, the bank of singapore, will use cash. They will is deep in the presence in its core markets of singapore, malaysia, indonesia and china. Three former knick more of traders have been accused in the u. S. Of increasing the spread on their traits and generating about 7 million in additional revenue by lying about how much they paid for dad. Pleaded not guilty and are scheduled to go to trial in october. Mcdonalds chairman entering canada is to retire Andrew Mckenna is to retire. It will end one of the longest 10 years in the fast food industry. Joined the board in 1991, mcdonalds had just opened its first store in moscow. It has since grown to more than 100 countries. That is your Bloomberg Business flash. Manus foreignexchange reserve data from china. Economists expect the figures to show that the pace of decline slowed last month. Pboc to stemthe the capital outflows. For bonds and fx, our editor joins us now. We are all waiting on these numbers. I think what the market probably wants to see is some kind of a flaw being created. I think the flaws that the market is looking at is not something that will come about anytime soon. , after thel see is wide swings of what happened in january, the pboc burns speculators out of the market, what that is actually resulted in is some sort of stability in the market. We have used expectations, east capital outflow pressures, and kind of positively improved sentiment. That is, i think, the big take reserves decline less. Maybe a 6 million decline compared to a record 108 million decline. Manus one of the Great Stories that i read was about how Chinese Companies are getting burned. This drop in the yuan. I know that is little compared to the fx story, but it is an issue. Robin earlier this year, we had exporters taking the rare step of speaking up. It seems like the pboc has heard. What we see is the central Bank Following this tool policy of depreciation against the dollar while allowing depreciation of currencies against its partners. How the central bank is achieving this is by limiting the amount of increases against the dollar. As you know, the dollar hasnt done very well for the past few months. To illustrate this point, if you look at the euro, so far this about it is up about 5 against the dollar whereas the yuan is up about 0. 4 . Exporters have little reason to complain for now. Manus thank you so much. Peter is still with us. Everyone is waiting for this number. The fxnese are taught trader a lesson, dont screw with our currency. The expectations for further evaluation was pretty strong. They reversed it, they continue to make it a bleeding trade, one that is punishing traders. They switch their focus from fx and Interest Rates to fiscal policy. I think that was a very smart move so that the focus is not going to be on the Exchange Rate and trying to arbitrage there. The fx reserves deceleration. Manus one of the areas that we know the money is flowing through, this is the reserve requirement relationship with the value of the yuan. I think these two run very much in lockstep and that we may see the parts in terms of moving with reserve requirements. Propensity for more money to flow out. Peter i think you cannot focus , because it encourages people to liquidate their cash and move out of the chinese yuan. Not looking at the rrr so aggressively is an easy way of stemming the tide. There are other back alleys which they need to focus on more specifically than using the rrr. Manus we have seen 104. Investors have been buying offshore stocks, 104 consecutive days, 6. 8 billion. It has flowed from on land into hong kong. The is, is that that where the next defensive play comes in . If they want to hold the tide, they will have to clamp down on these. Becaused to be stopped, the official routes are being closed. They are easy to close. The back ways of finding investments is what the pboc and be Chinese Dollar needs to look at. Manus where do you stand on the discussion . We heard robin talked about the euro value against the dollar. Numbereems to be the everyone is going for. , we dont see a fundamental reason why the dollar should continue to appreciate. We had a low expectation for the feds policy path. We think the International Market will keep the fed relatively dovish. From an Interest Rate standpoint, relative value, you get better value over the u. S. ,e dont see the reason why even in a safe haven trade, were seeing things like swiss franc and yen more optimal than the dollar. Manus we are still waiting for those fx reserves. We talk more fx. Manus it is 6 30 in london, 7 30 in brussels. Here is the bloomberg first word news. Federal reserve policymakers were split when they debated in april Interest Rate hikes debated and Interest Rate hike at their meeting last month. Several were against the removed because it would send the wrong signal, but others said it might be warranted. The odds not topping 50 until the fomcs meeting in december. Voters have rejected a treaty between the university between the European Union and ukraine at a rate of nearly two to one. It has exposed the extent of antieu sentiment in one of the founding members. If britain decides to leave the European Union, the outcomes are large and potentially unknown according to jpmorgan ceo jamie dimon. He says, even in a best case scenario, there would be years of uncertainty which would hurt the economy of the u. K. And the eu. A brazilian congressional report has recommended that impeachment proceedings against president Dilma Rousseff move forward. The court found suspicious evidence of the complaint against her that she is illegal financing to hide the size of the budget deficit. Charges she says the are baseless and her campaign called the charges against her and attempted coup. John kerry has set a record by becoming the most travel secretary of state in history. History to bahrain yesterday takes a total mileage to 1. 6 million 1. 0 6 million. More than Condoleezza Rice managed under george w. Bush. Kerry will be in japan later this week. One record still eludes him. Hillary clinton visited 112 countries. Kerry has only managed 81 so far. By 2400 a day, powered journalists in more than 150 news bureaus around the world. Find more stories on the. Berg at top manus lets see how the markets are faring after. I am starting with the dollaryen trade. At the moment. 8 we are seeing a dollar weaker against most of its major peers after those fed minutes showed caution on in april rate increase. The end, stronger against all of yen stronger against all of its peers. Saying they will check risks of stimulus if needed. May go further if there are no concrete actions at the finance ministry, it is said. Jpmorgan said action would be futile and the main driver of the rally is exporters brady cashel, not exporters bringing cash home, not speculators. Those fed minutes driving gains in asian stocks. These gains being led by health care. We saw the deal between pfizer and allergan fall through. We saw that really fueling merger speculation in the industry, and that is why we are seeing healthcare stocks leading the gains in asia. Could a final deal on Oil Output Freeze be near . Chart of the hour, anchor of on the move. Story that kuwait thought you could do a deal, get around, and today the mechanics of why this deal potentially could work. Is, this is showing effectively, the month on month production changes of various countries. Ist to wait is proposing that we use february data in terms of output rotted in january. What this chart is showing is how Different Countries have changed their outputs january to february. On the lefthand side of the park is a really big increase in its production. Percent increase in its output. They will struggle to get towards four. Iran cant, maybe get on board with some of a deal to freeze output. In the datee change of the kuwaitis have maybe allowed to be possible. Thee get a deal done on 17th, were pointing toward a firmer oil story. As we have seen, you get other assets reacting. Oil seems to be maybe the lead indicator at the moment. Manus it is almost a daily move. Ratio, the 120 day ratio was Something Like 0. 66. For you, peter, the propensity doha a deal in delhi in obviously, they are trying to build the narrative to bring iran in. Peter it is very powerful and has significant leverage in the region. Mathematically, it might not be too dramatic, but from a geopolitical standpoint, in the region, that is a big number. I think saudi will be quite worried about an increase, and the rest of the region as well. Ay what happens if you get hoga get a doha deal . Peter the decreased production story, i think, is gaining traction. That is already priced in. Now, we are seeing significant production cuts increasing globally. Startget a deal, if we seeing oil refiners coming down, oil rigs in the u. S. Decreasing rapidly, i think oil has a significant upside. Says wti atan sachs 35 is just right. Not too high, not too low, simply just right. It aligns the share the shale producers. We saw the difficulty. Job, and it sets up toward the doha meeting. Guy johnson will be back in just under an hour. Lets talk about samsung. The shares are dying despite the better than expected quarterly profits. Operating income rose 5. 7 billion. G7 smartphone, a head start over rivals. Lets go to our Bloomberg Asia tech editor in hong kong. Lets look at it right now. Boom . S driving this we have the stock down 1. 87 at the bottom of your screen. What it all in the price . I think expectations have been rising. They have been rising ahead of todays preliminary earnings. I think the problem now is that there is not a lot of visibility , but the market basically expected the s7, which was well received, to perform really strongly in the months since its debut. Manus is this a resurgent moment for samsung . It is only one quarter, and, in fact, it has only been one month. I think samsung faces fairly monumental challenges. For instance, in china, where it has been steadily ceding market share, i think in the Global Smartphone market, it may be facing its most challenging year since the inception of the smartphone. As far as samsung resurgence, i think it is too early to call. Manus too early to call. Much from our bloomberg tech editor in hong kong. When we talk about the oil story, it is fascinating. Ways, one ofany the single biggest drivers of this chart. We use this a couple of weeks ago. The emerging market Exchange Rates. March, the biggest rampup, 5. 5 . We have begun to give that back. This story this oil story is inextricably linked along with a benevolent fed, a less aggressive fed. Does that hold . Think it does. We saw the economic data, sort of bottom out in the beginning of the year. Things like terms of trade for commodity importers, or exporters adjusted. Onsaw a significant rally that back. Now, we are starting to see the uncertainty of growth. While we are not going to see downgrades in sort of regional outlook, we dont expect it to be spectacular. I think what were seeing now is an adjustment for lower growth rates for an extended period of time. The global macro conditions, as you said, the dovish fed, macro conditions in china, should allow highyield traders to continue to go after these currencies. It is interesting, that was one of our stories last week , the emerging market fx trading is driven by politics. Look at what is happening, for example, in the real. Even in terms of europe. In terms of the em space, you have the rail story the real story. You can see cut a bit of a shift in terms of the complexion. How do you differentiate at the top of the show, we were talking about one of them being barnstorming. Peter we are looking for things that can apply, and see what the differential is in terms of expectations in the market. That is a big piece. Generally, the political whetheres as well as they are exporters importers, commodities. All of that takes place. We do like the asian emerging markets more than, say, latin america and eastern europe. We think they are in a better position. Manus the whole thing is around china, really. There seems to be a split. Cbs says 78. S 73, would you concur . Peter i think they need to put a cap on it. Any type of economic recovery in australia, with a strong dollar, gets derailed relatively quickly. We have seen recently the decision, they have come out significantly more dovish than expected. They are already moving on that. If they start seeing the Australian Dollar moving up nificantly, we do expect, manus wears their break point . 78. R they will move forward with a manus peter, stay with me. We have more to get through. , dutch courage. Voters in eu referendum. The extent of negative sentiment towards brussels. Later today, dont miss an historic manus it isnt 6 46 in london. It is 1 46 in that beautiful coming off New York Post that minutes. Down 1 8 on equity future figures. Lets catch up with the Bloomberg Business flash. Sellha emc is seeking to its business as part of a plan to deduct more than 6 billion of assets. Ahead with the Largest Technology takeover ever. Traders havenomura been accused in the u. S. Of increasing the spread on their and creating additional revenue by lying about how much they paid for debt. They pleaded not guilty and are scheduled to go to trial in october. Manus lets get you some breaking news now. Chairman suzuki plans to step neikei. Ccording to down 27. Of german suzuki plans to step down. The activist investor has been perhaps one of the most precipitous protagonists of this. They have been champions of times of 7eleven. He really push for this as the directors actually voted down personnel changes. Momentsone of those where activists really do get exactly what it is they wanted. When we get a little more breakdown on that, we will bring that to you. Lets talk about politics back here in europe. The dutch, today, rejected a treaty between the European Union and ukraine by a margin of nearly two to one. That is a result of a referendum which exposed the extent of antieu sentiment in one of the blocs founding members. Would make the netherlands the only eu member not to ratify the treaty. This is an important political fact. It means that it cannot proceed as was expected before. We have to take it step by step. We have now to talk within the cabinet, with the parliament, with our european partners, although also with the ukraine come to see what the consequences of this decision might be. Manus for more on this story, were joined from amsterdam by our netherlands government reporter. What does the outcome mean for the netherlands . That wes a surprise turn down this treaty between the eu and ukraine. Tois mainly seen as a blow the dutch prime ministers government, and his cabinet, all promoting the yes vote for this treaty. Now, it is a no. It means they have to go back to brussels and they will renegotiate a treaty. That is quite a difficult task for them. Is going to be difficult for everybody involved. Ireland ly sent they didnt like the outcome, i think it was over the lisbon treaty, and they made us vote again. What does it mean for the brexit referendum . That wewhat it means is now have a first referendum about the eu topic, and the outcome was that 60 said no. So, what could be the outcome for a british referendum is that it is possible to reject a proposal, something maybe people cannot think could happen, but this could be a first time that people could say no. Manus there you go. Thank you so much for breaking that down for us. Lets talk about jpmorgan. The chief executive, jamie dimon , he has revealed his thoughts on a range of suspects. His rates, brexit, in annual shareholders letter. Nejra cehic is here. He has got to say about the fact. Nejra what he is saying is that he is less worried about negative Interest Rates, but he is more concerned the rates might rise faster than expected. He also said that the market wont be able to rely on the biggest buyers of u. S. Debt. Were talking about the fed, foreign countries, commercial banks. He says that, if this scenario were to happen with Interest Rates on tenyear treasuries on the rise, the result is unlikely to be as smooth as we all might hope for. Treasuries, of course, had their biggest quarterly gain in the First Quarter of this year. Jamie dimon is really worried that that rally could turn around. Manus he also talked about brexit. He talks about it in terms of real risk for europe. He certainly didnt hold back, did he . Nejra he said the outcomes of a brexit are large and potentially unknown. He said that in one bad scenario , and he stresses this is not the worstcase scenario, the exit would trigger trade retaliation by eu countries, hurting both sides. He said that it is hard to determine if the long run impact would strengthen the European Union or cause it to break apart. In the best case scenario, britain quickly renegotiates hundreds of free trade agreements with the eu and countries around the world. He said that even this scenario would result in years of uncertainty, and it would hurt the economies of both britain and the eu. Manus thank you very much, giving us the latest. Have the sage of omaha and we have the sage of jamie. He is barely on the money in terms of identifying some of the biggest risks. Peter we all know the brexit is one of them. Im not sure this is revolutionary. I think that speculating exactly how, if there is a u. K. Referendum, and if the u. K. Does decide to leave, how brussels will react. I think that is still very much up in the air. Manus i can assure you of this, his temperament and tone of voice peter he has to speak like that now. After the vote manus have you met many friends people recently . Peter i grew up five miles from the border. Manus lets talk about risk. Oft we have here is the cost protecting yourself. In real terms, real in real terms, year to date. People will write in and send me a bloomberg, this is misrepresented. I grant you, the cost to insure yourself is still 10 times higher than it is on the u. K. The other markets are not. Peter i think, first of all, it shows the uncertainty around the brexit. T is very hard to price in in brazil shows how critical global macro is. The political situation in brazil could not become any more unstable. Yet, we are seeing the real recover because the dovish fed, because of stabilization in international trade, which is taking a bigger stand on pricing than the underlying. Manus Dilma Rousseff has some staying power. Peter it is amazing. In iceland, what was that, 48 hours . Manus lets see if delma has anything to say. We have a great story on top fx this morning. It is really wrapping up with city about sterling, and the contagion risk for the rest of central europe. Is . Iggest portion of risk poland is set to get 140 billion euros. Off,e u. K. Goes, we are that is where we are going to see a major risk. 2 against the euro, 12 against sterling. If i said the worst contagion bresky trade contagion brexit trade . Peter the uncertainty is still very much there. One of the things about the brexit which will allow the u. K. To go to Eastern European countries and negotiate direct trade deals, is that 44 of u. K. Trade goes to the eu, and it needs another outlet. Why would it not become a more direct relationship . That might be hlthy for these emerging markets where they can negotiate good deals with the u. K. Instead of perhaps broken deals with the eu. Im still very uncertain. Manus thank you very much. Head of Market Strategy at swiss quote. What comes next . A little bit of a look at the fed minutes. The impact for markets. Quit the committee reserves the right the committee reserves the right to make a move it anytime. Manus president James Bullard talks to bloomberg exclusively saying all meetings are lying. It has revealed a split debate over april rate hikes. Tone out ofovish the u. S. Central bank sets the greenback lower with asian markets mixed. Galaxy gains. Samsung handset helps to beat expectations. On the concerns that it cannot maintain the momentum. Letter calling outcomes of an eu vote large and potentially unknown. Manus you are welcome. This is countdown. I am manus cranny. We have a little bit of a feast. 150 Million Pounds of a Share Buyback. There is a new ceo. This is his First Program completed. That is the top line. Continued tight management. Gross margin between 240 and 250 basis points. Fourth quarter, this is the food side unchanged. Versus an estimate of a gain of. 5 . Likeh quarter, like for sales and that is where they hold the market dominant in terms of position. It has come in unchanged. You store openings program ahead of views. 1. 9 on the quarter. Thatally want to see what nonfood number is. Lets bring you some of the fast retailing numbers. Is cutting their from60 ¥60 billion ¥110. Billion forsting 60 the rest of the year. The first half came in net 99. 3. ¥4 billion. Fast retailing is cutting its outlook for the current year in terms of operating profit. ¥120 billion from y180 billion. From faste top line retailing. In terms of lets get some of these headlines from seven i. A fullyear dividend of ¥90. Seven then i to pay a full dividend of ¥90 it net income, were looking at one of just 50 at 150 looking billion. The seven chairman at suzuki that was by nikkei. Now you have the full numbers and going back to Martin Spencers total sales. 1. 9 for the quarter. All of the trading guidance remains unchanged. The gross margin to a 50 basis points 250 basis points. 150 billion pound share back this Share Buyback Share Buyback. We have a Federal Reserve admitting real reaffirming that dovish message from janet yellen. ,. 4 . Dicating higher volatility drop my 9 in the united states. You are seeing volumes below the lower than normal in the equity session. Pfizer rallied the most in four years. It is betting by the market is it. June is off. 20 probability at coming of the w. A. R. P function after those fed minutes. It talked about the domestic issues in the u. S. Trumping test the International Issues the International Issues the real focus for the fed. Let it run a little bit higher. Yes all meetings are alive. The debate is in there. The question is the market sword 20 in june. The market is moving. Oil is up. We get back to the oil market in just a moment. You are seeing a nice rally as the kuwaitis are trying to make it work. Lets each up to speed. Work beyond markets, it is bloomberg first word news. Kumutha good morning. Dutch voters have rejected a treaty between the European Union and ukraine i margin of 221. The results have exposed the extent of antieu sentiment. If britain decides to leave, the outcomes are large and potentially unknown. That is according to jpmorgan ceo and his annual letter to shareholders, he says that even in the best case scenario, there would be years of uncertainty which would hurt the economy of both the u. K. And eu. A brazilian congressional report has recommended that procedures proceedings against the president go forward. The main complaint against her is she used illegal financing to hide the size of the financial deficit. The charges are baseless. John kerry has set a record become the most traveled secretary of state in history. His trip to bahrain takes his million,eage to 1. 0 6 1000 more than Condoleezza Rice managed under george w bush. Kerry shows no signs of letting up and will be in japan later this week. Clinton visit 112 countries, kerry has only managed 81 so far. Global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. You can find more stories on the bloomberg at top. Manus. Manus lets get up to speed. London, paris and frankfurt are running a little bit higher and lets talk asian markets. Yvonne, we are finding out how much money flew out of china. Over 104 days, hong kong. Yvonne that money pouring in because there is concerns of this yen and where it is going to go. A lot of money pouring more money into hong kong versus shanghai. Reversal that we have seen we have seen in shanghai stocks to expected to show inline at the same level we saw in february. The capital outflows may have floated just a bit. 5 . We are talking about a stronger yen today. Take a look at how it is it we are now back to 108. 86 levels. The red line here is easily the reverse that we saw since qe started back in october 2014 around this time. 108. 86 is where we stand. You talked about the earnings coming out. We are seeing profits did rise and did slightly miss estimates. We are seeing here the shares up 14. 8 in the last two years. Here is how it was the day. Suzuki an pushing the chairman of the suzuki was going to be stepping down. After the board rejected plans to remove the 7eleven president who was the leading candidate to take over the group as ceo. Shares now pairing a loss down 1. 6 ending the day. A little better for the stock today. Some of the other movies here moving the markets here in the region. We did see oil produces rising in china. We are seeing santos, the. 8 . Petro china up. Health care shares we want to watch today. That pfizer and allergan deal, 160 billion merger was dead in the water. That is fueling speculation on mergers and where allegan is going to go next. Manus follow the money, even on. I love it follow the money, even on. The biggest move in four years. Lets see if any of the cash ends up in hong kong. Aftertalk about minutes the feds march meeting. Split. Akers, they were lean againstials such a move because it can send the wrong signal. Others say it might be warranted. President told bloomberg that a hike could come at any meeting. Cooks the committee certainly reserves the right the committee certainly reserves the right to make a move at any time. We debate at all meetings. All meetings are live meetings. There is no other way to think about it. Did the how did the top fed watchers react . Eres what they told bloomberg i think what the fed was to do is rate of is raise rates. They want to do it at a gradual pace to . Rate hikes. June and december. At think the fed is going to be overshooting again in terms of what they think they are going to do in 2017. I dont think they are going to make four. I think theyre are going to make three in 2017. Their mandate. S a domestic the concerns are primarily for a wild. And more demand in. What they want to see is calm in the market. April is probably not going to happen given what we heard today. Manus lets ring in nandini ramakrishnan. She is the Global Market strategist at jpmorgan. Thet of calm amidst all of at the top of the hour. Where do we go . When i read through the story, global concerns, the possibility of Inflation Expectation settling into a no a new lower trend. The risk that feds are worried about. What did you make of it . Ani i think they are mandate are no longer the top issues. It is Global Growth, concern and a tightening of the u. S. Credit positions which we have been monitoring through senior loan officer survey and many metrics showing banks and u. S. Credit market is getting tighter. Back lets take our minds. Top. 2017, i know it is not exact. It does reflect all of the fed overambitious to used. Overambitious in terms of what might be done in 2017. Nandini they are still independent and there are still three fourths of the year in 2016 and maybe by then, and inflation is above 2 . You have a really strong labor market china is called the down. Down. Calm which if measures by the labor market is tight, if inflation is above 2 , then they need to be tightening. It is more data that we need. Manus i love a break even. Janet loves a breakeven. In terms ofveyear the sentiment. ,1 out of the 17 fed governors risk out of info risk of infection forecast is the highest number since the fed started posting data in 2012. I was quite shocked by that. We are off the highs. Look at that. I know we are taking off again. What does that tell you you can why are they so worried . What does that tell you . Why are they so worried . Nandini the First Quarter of this year upon Us Oil Prices fell further did a lot of that Energy Component of the cpi has been had to fog again. It brought down the fiveyear fiveyear. So correlated with the oil price when the fiveyear fiveyear is for five years time is starting five years. A lot of that is relying on the oil price and immediate current factors. Not getting into the longerterm forecast. Manus where next for the dollar yen . Everybodys paranoia. Lets save it for the rest of the day. We simply dont want to admit exists. Capitulates my entire career. It is a store gathering of the fed chairs. Janet yellen, ben bernanke, Alan Greenspan and paul volcker. In conversation for the first time. Unique ing to be a up next, diamonds. Jpmorgan ceo shares his views on rates. Manus it is 7 18 in london. What a great day. But the future indicators of a third of a half of a half percent. Lets get you up to speed with come with a. Kumutha good morning. Shares have dipped despite better than expected profit. The Early Release of the galaxy s seven gated a head start on apples rivals. 5. 7 billion come estimated sales of the s seven hits 9 million units. Chinese taking corporations have agreed to pay 320 million to Barclays Wealth and Investment Management operation in asia. Sectors Private Banking the company says the move will deepen the core market of singapore, malaysia, indonesia and china. Three former nomura traders have been accused in the u. S. Of increasing the spread on the trade and generating 7 million in additional revenue by lying about how much they paid for debt. Peters haveo, tyler pleaded not guilty and are eduled to go to trial in as it markedcer down to fewer items. Samestore sales of general merchandise, a division that most enterprises sell 2. 7 . A 3. 5 imates were for decline. That will give new ceo an early lift. That is your Bloomberg Business flash. Manus. The state, there is of omaha, the whole history of the ceos and great titans of industry. Jpmorgan, jamie dimon steps up to the plate and reveals his thoughts on a whole range of subjects. They include u. S. Rates, the Brexit Debate in his annual letter. Who is going to break down . Nobody better than caroline hyde. Give us the take. What did jamie have to say about the fed . Caroline 50 pages. What if i percent longer than the previous year. The call my eye was the Brexit Debate what caught my eye was the Brexit Debate. Overall he is saying in the best case scenario, there is still going to be really brought negative impacts. Years of uncertainty. Scenario, if we manus in britain to renegotiate hundreds of trade agreements with the eu and the countries around the world, even in this scenario, it will result in years of certainty of uncertainty. It will hurt the economies of britain and the European Union. If youre looking at the poor cases, they say the trigger could be trade retaliation. You can see britain and the eu really fallout. It could cause a European Union the European Union to break apart. That caught my eye that in the based case scenario, we are facing years of you years of uncertainty. Manus what are the top lines of the fed . Caroline this is fascinating because many feeling negative rates come to the four. He says no. We see yields going higher. He in fact is warning about the fact that you can see the typical buyers of u. S. Rate treasuries fall out of the market. Sumer confidence deals bills as we see a better economic picture for the states. He is warning that you are not going to the fed, Foreign Investors or commercial banks buying treasury so much. On tenyeart rates treasuries on the rise, the result is unlikely to be smooth best to be as smooth as we had hoped. He is worried that treasury yields could be this could rise faster than we could rise faster than we could anticipate. 2. 9 . L hit a yield of Second Quarter even at 2. 25 at end of the year. Brace yourself. Yields going up. Manus i am always ready for a bit of risk. A letter from jamie dimon. Timely for you. I hope you have read all 50 pages. Of course jamie is your boss. The warning is all about the brexit. The risk. It is one of those big unknown quantities. It plays in. The imf views growth could the bloomberg consensus were a lot more murky the bloomberg consensus, we are a lot more murky than that. Your boss picture. Negative quest you have models shaving off growth in the u. K. 1 in gdpon up to growth there. Then, Going Forward with the imf, a little bit of slowdown in some of the engines of Global Growth that we have been saying. The services sector, pmi that is come up recently. It has not been a strong. Moreave markets getting focused on these internal measures approach, forecasting down a bit. This, the other thing is Global Growth, china, we are waiting for that data to come through. This is the other thing, we have u. S. Equity markets. I want to get an interpretation of this , what i have here is the Short Interest. About 4. 4 u. S. Equity market is now being borrowed by investors. High in line. Ly that is the biggest aboutface turn in the s p and nine decades. In nine decades. We need a leg higher in terms of growth in the u. S. Story. To take the s p higher. The short end will get whipped. Whipped was rocked. Nandini were looking for a positive estimate earnings for the u. S. Next line the Short Interest increase that indicate that markets are preparing for a little bit more. Perhaps even a fall. A little bit more bearish than what we would hope. A bit of a recovery. Manus how much are you cutting in terms of earnings . Typically 9 drop in probability. Nandini we are around their. The big headwinds of the u. S. Dollar and the low oil price and earnings, they are really still there. The problem is the u. S. Dollar. We were not expecting to stay as strong this year. We still think theres a chance for it to stay at this level and allowing the u. S. Multinationals to get the earnings in shape. Enda your view on oil manus your view on oil. February looks better. We get iran into the family. What you expect . What do you expect . Whatni a deal would be everyone in the market is looking on. There has been this has been such a supply driven market. Manus thank you so much for joining me. Well done. You read all 50 pages from jamie dimon. Strategist at jpmorgan. Countdown is up next. Guy johnson is there here it they are going is there. Theyre going to take you through opening of these markets. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. Welcome to on the move. 7 30 in london. We are counting you down to the european open. Im guy johnson alongside hans nichols. He is in germany. To too many weird the fed might be getting more dovish. Jamie dimon is still worried it might to quickly. The land of the rising yen. Japanese currencies rallied to the highest level against the dollar in 17 months. Is the boj powerless before the yens dissent