This morning. We will track that trade carefully. And the eve of the election. The dutch vote tomorrow. Eachany votes will party get and what does it mean for france . Lets talk about where these markets are. We kick off with the gmm function. I want to start over here, and with the director to roll it back and talk about whats happening with iron ore. There you go. Thats the picture there. 4. 33 to the upside. Thats a big move. Now we are going to reverse that talk about whats happening with the british pound. Remember, you are going to see a lot of volume later on. I suspect whats happening with the weather will have a factor. The british down by. 7 this morning. You have seen a delayed reaction for what happened last night, both in london and yesterday. Talk about whats happening where we expect equity futures to go. Useful indicators expecting a positive pop in euro, a negative story in the united states. Europe up by. 2 . Finally, heres whats happening market. Bund we are seeing yields rising once again in germany. Big meetings towards the end of the week, looking forward to the results of the conversation between Steve Mnuchin and mr. Chaeubler. Juliette thank you. Chinas economy start of the year on a firm footing as its own growth engines gathered pay. Climbedal production 6. 3 from a year earlier, just ahead of expectations. Retail sales for the same period missed economist estimates, with a 9. 5 rise. At the same time, fixed Asset Investment increased 8. 9 . In the u. S. , the new estimates show 14 million americans could Lose Health Coverage by next year under a new geopay obamacare proposal. President donald trump administrations has been quick to challenge the estimates from the cbo, however several Senate Republicans have said the new analysis suggests the party may need to rethink its plan. The northeast of the u. S. Is being hit by a late winter storm, grounding flights, putting up our prices, and closing schools. As much as 19 inches of snow is forecasted for new york, with boston also expecting heavy snowfall. The extreme weather has forced Angela Merkel to postpone her visit to the white house until friday. Global news, 24 hours a day, powered by over 2600 journalists and analysts in more than 120 countries. This is bloomberg. Guy juliette, thank you. The u. K. Prime minister theresa may is preparing to trigger theit, mounting probably in last week of march after securing the permission of lawmakers. The first minister of scotland ased the data call for second referendum on Scottish Independence. We will talk about that when we are joined by alex salmond later on. The pound has a tough morning. A decent leg lower on the cable rate. Our guest joins us out of singapore. Mark, walk us through the market thinking when it comes to sterling right now. Well, i think its important not to over interpret this move lower. I think it comes down to a lack of liquidity and nervousness in the market you get a little move in one direction and then the trading starts kick in and you are going to get cap he moves. That is going to continue. But i think its unlikely they continue in a Straight Line lower. We could see it higher in the next couple days now that we know that brexit is going to be triggered. But we should have known that months ago. Guy yes. The imponderable bit has been whether or not we see the scottish another independence referendum that seems to have been the bit that has caught the market a little bit by surprise. How do i price that risk in . I think your letter question is more relevant i dont think you do. I dont think its possible to price it in yet. They will not let this referendum go ahead until after brexit and i dont know how the s p are going to convince scotland that they can somehow leave the u. K. , and then go back to the European Union. Arounds a whole element it being different with oil prices lower, that was already a question mark about that but now its a bigger issue. I think the whole Scottish Referendum debate is a tough thing to worry about, and i dont think traders can precedent. I dont think they will try to. We have to work out what the brexit steps are. It will be interesting to see if it feeds back into the negotiations surrounding exit. Talking of things were trying to figure out, he thought from you do we get a hawkish hike or dovish hike tomorrow . Look, Everyone Wants to know. I dont know any better. My guess is with Commodity Prices falling lower and the lack of runaway inflation would suggest that its a dovish hike. Also the fed has a history of airing on the dovish side. Overall, the longterm history has been that way. My guess is that they are not overly hawkish it can probably be interpreted either way, but the yield could get lower tomorrow. I have no inside loop we will have to wait and see. Guy absolutely. Always nice to get your thoughts. Are macro strategist. You can follow him and the rest of the teams a smart analysis. Joining us now to carry on the conversation from berlin, the president of the German Institute for research, also e diw. As that th the as you look from germany and see what is happening in the United Kingdom, what is your sense of how germany is going to use this situation . Is economics the priority or politics the road priority the priority . Clearly politics is the priority. Our expectations are it wont have a huge impact on the u. K. Economy probably it will be a gradual process of lower growth hard to next decade, even detect for u. K. Citizens and with a smaller impact on the euro area economy. The biggest problem we have in particular is that other countries might follow suit and may call a referendum. We have seen right wing arguingt policies all that they want a referendum on eu membership, and if you have a call for that referendum, it is no longer just a referendum on eu membership but on the euro. Then back to where we were in 2012, where as you recall, the ecb president mario draghi promised to do whatever it takes to calm markets that is what i see it as the biggest concern,. Olitical contagion the euro area economy is still very weak and vulnerable and on a very gradual recovery path. Up an i just follow mario draghi talks in the last press conference about the need for structural reform and he says its not happening in the way he wants it to happen. The concern surrounding populism of hard economic reform process is not happening. Can the europeans blame the british in any part for this . To a small extent, but the populism that we see on the continent is not a result just of brexit. It is basically the result of growing inequalities, of big migrations of refugees coming to europe in recent years. In particular it is the issue of social inequality that i deal is the main culprit. Itrse that is true makes existing mainstream parties much more cautious in pushing for further reforms. Euro countries need further reforms. The we should at the Success Stories spain has done tough economic and structural reforms, much tougher than germany or other countries, and they see very strong growth rates. Structural reforms can succeed. Populist 60 in one of may ben countries, it the netherlands, france, italy . What impact will that have is it country specific . Does it matter which one it happens in, and what will be the economic applications of such a move . That biggest concern is you see the rise of a populist party in one of the bigger economies in the euro area, because they become very quickly systemic. What we see in greece it is painful to see for the euro area, but it doesnt derail the recovery process. But if you have it in countries like italy where theres a high level of government debt, a very volatile Banking System with high npls, it could really derail the recovery process. Orcould lead to recession difficult economic situations with high unemployment. That could have repercussions not just for the country itself but for the whole euro area. Contagion may be different from but ie saw in 20082012, worry about a political contagion effect. There are plenty of risks not netherlands, but in france and italy and possibly other countries germany is isy stabilizing here, it politically very stable and economically quite strong, but my biggest worry is the euro area. Guy we will talk about germany and economics. The president of the German Institute for research. That conversation carries on. We will talk about the transatlantic story. What else have we got coming up . Snow postponing the first meeting between Angela Merkel and donald trump, but when they do eventually meets, how frosty will be encounter be . Plus, referendum rerun. The plans for another Scottish Independence vote. He will speak to Nicola Sturgeons predecessor. And the fomc prepares to meet for its latest rate decision. Why the rare agreement on the outlook between central bank officials, economists and investors, is here. The open is just under 20 minutes away. Chancellorhe german Angela Merkel and u. S. President Donald Trumps first facetoface meeting was blown off course by the snow storm battering the east coast of america and has been moved it to friday. But will the tone remain as frosty as the weather . Merkel will warn trump that a proposed tax overhaul could mr. Schaeuble and mr. Mnuchin are scheduled to meet. Still with us, the president of the chair and institute for research. Lets pick up the conversation and talk about why the german currentaccount surplus is not a problem. . Is a problem is it not a problem . Should b it to be a problem . But itsad a surplus, for mos first and foremost a its notor germany, so a problem of exports being too strong. Its a problem of german imports being too low. Germany has substantial so public gaps, and private investments are unusually low over the past 20 years. Thats a result of overregulation, high bureaucracy, lack of competition in the tradable in the nontradable sector, the services sector. This is where germany needs to do more. The European Commission and the imf, they all repeatedly warned germany, you need to reform services, improve competition, to improve investment and imports. That is the issue. Guy so thats the situation we find ourselves in, and as you say, everybody has been warning germany about this you need to do more in these areas. Yet germany is not doing more. Therefore, why shouldnt the white house start to get involved . Why shouldnt the white house try to figure out a mechanism to try to persuade berlin that now is the moment to take action on some of these causes . Warrotectionism and a trade is not really the solution to any issue. You will have no winners at all, you only have losers. Donald trump at his a ministration will not bring back any jobs to the u. S. By raising Tariff Barriers are making it more difficult to trade. Even if you look at german contain more they than 50 as imports, much of it coming from the united states. The administration will shoot itself in the foot by raising Tariff Barriers, because it will hurt American Workers and american firms. Guy lets bring it closer to home. We have talked about the gaps that exist in italy and spain and portugal and france. If you were to see germany changing its economic model, do you think the gaps will close . If germany became the consumer engine of europe, what impact would that have . That is a criticism you often hear from those countries. We have done these simulations and tried to see if germany closed its current account surplus, what would it mean for growth and demand in spain, italy, france . It would have maybe. 2 higher growth in those countries. So yes, it would help support some other euro area countries, but it is not a game changer. It would not pull these countries on the crisis. It would not generate a strong recovery. Yes, germany has to address this issue its an imbalance in pin euro area but to 1 your hope on pulling europe out of the crisis this alone will not work. Guy if the fed it raises rates aggressively, say tomorrow we hear from the fed, from janet yellen, and she says we are on a fairly structured path, we are going to be raising rates and we will get back to normal, and what we are likely to see is a stronger dollar. On yourdollar, we go down to 1. That currentaccount surplus is only going to get bigger, isnt it . I think the Exchange Rate is far overrated for its role in the current account. In 2012,uro was at 1. 60 germanys currentaccount was almost as big as it is today. Exchange rate movements have a fairly have fairly little impact on trade balances. They also have a very smart impact on inflation. Think its really not an issue of price competitiveness we are talking about. Its really looking at the structure, at structural impediments, to exports and imports. Guy we are running out of time you bring up the issue of inflation. Is germany going to be prepared . Will germany except that it is going to run. 2 inflation because the rest of the eurozone isnt . Its absolutely right. For an adjustment in relative prices to take place, germany will have to have much higher inflation rates in the ecbs target of 2 for many years to come. We dont see that at the moment. Germanys headline inflation rate was around 2 . Consumers,is german the german public really fearful of inflation. Thats an historical artifact left over, so expect to see continued opposition in germany to ecb monetary policy. Thats unfortunate because i think the ecb is doing a good job. But german opposition will remain strong. Guy great to see you. Thank you for your time. The president of the german diw institute. Minutes away from the european cash open. Next, the movers in todays trading, including engei, which says it is potentially looking for almost a 20 billion bid. This is bloomberg. The open is seven minutes away. Guy four minutes to go until the market opens. This is what new york looks like , a shot of lexington avenue. Is looking pretty smelly this morning, and it is only going to get worse. Angela merkels meeting has been canceled, and i suspect a lot of schools will close. The german and, french Utility Companies will be ones to watch as we expect results to come out over the next hour. Looks likerket open it is going to be broadly positive, but only just. Uy good morning lets take a look at where these markets are expected to go. Lots to think about. We are watching the pound closely. Lets focus on equities. This is the fair value that Mike Bloomberg is spitting out this morning. The pound is down, ftse up. It is a mechanical process at the moment. U. S. Futures are more negative this morning. That is some thing to Pay Attention to. Youre going to get a lot of fx action today. U. S. Markets are likely to be quiet. More volume as we worked for the afternoon session. A, because we have the Federal Reserve tomorrow. The second factor is that the weather in new york looks horrendous. I suspect that many will not make it to their desks. You will take some of the liquidity out of the market. Lets look at the market open. This is the picture we find ourselves with at the moment. Action in thee auction. The ftse just pushing higher. The pound is a contributed factor because of the Revenue Streams that come through an international group. The cac opening up in positive territory. No big moves this morning. Unsurprising given the fact that we have the Federal Reserves around the corner. Mannus manus the data from china is the jumpoff point today. It could have been a lot worse. Capital investment numbers are on the line. Energy is difficult. It is the Federal Reserve which will trump everything over the next 48 hours. Talking about sterling, look at this. To the flasht back crash of late september, early october. This is the state of play on cable. How quickly could you make it to parity if the brexit negotiations go through . Many highs. Greater descriptor that i can do. Cable is under pressure. The substance of that move is the move. Markets about it, these can be fragile and can move on the dime. Look at this this morning. Global policy uncertainty. Socgen called this the most worrying chart that they know of. Global uncertainty in the white, and yet vix, almost phlegmatic. Quite calm and not a lot of movement. They cannot both be. That is what the market is saying. Keep an eye on the treasury. The debate as to whether you want treasury in your portfolio, or if you can roar on with equities. Look at one of the great pieces written this morning. He ishiller saying worried these markets are putting too much value on mr. Trump. Guy thank you. Lets talk about where the markets are now. Lets dig into the market on stocks. Money is rotating out of the miners this morning. Rio is down. I have a set up for an index point of view. You have some of the banks trading down. A fairly eclectic mix. Just want to change that to a percentage point change, showing you what the gators and losers look like. Gainers and losers look like. Let me rotated back to index points. You can see money flowing back into the farmer sector. That is why we are seeing the upside. The rotation is out of the commodity stocks and into the farmer stocks this morning. More safe haven play. The numbers can be dropping shortly. Lets get back to one of the big political stories. Scotland could be heading for another vote on independence. Says they plan to start the Legal Process for a referendum in the spring of 2019. Asadds to theresa mays woes she prepares for the brexit negotiation. Lets go to the man who led scotland through the first referendum. The former s p leader, alec summoned alex hammond. Sitting in the chair you are sitting in now a couple days back, he said, she wont call another independence referendum if he is not convinced she can win. The polling is tight. Really, it doesnt point either way at the moment. Is she rolling the dice . I know the first day of this festival has made independence a favorite. The bookies tend not to throw money away. There is a good sign that the arguments have changed fundamentally since 2014. Scotland is completely on the european dimension. Guy this is not the role of the dice. Mrs. Of thing that you and the first minister think can be won . Guest remember, it is just over 300 days since she was elected first minister of scotland with 47 of the vote, with a manifest of commitment that if scotland were to be dragged away from the will of the people, that this is what she would do. Theresa may, you said it adds to her woes, but it a time over the couldvee months, she made the concession and accepted the compromise that Nicola Sturgeon had offered. That if they were determined to go to the single arc it, let single market, let scotland state in. Theresa may swept that aside, and now shes being confronted with the reality that Nicola Sturgeon is not a woman to the underestimated. Guy in some ways, she didnt have a choice but to do this. Manus guest the tories are ripping up their manifesto on contributions today in the budget. Nicola sturgeon thinks that the manifesto when she was elected should count. I think, so to the scottish people. Guy do you think the Prime Minister will listen now . Manus Nicola Sturgeon has said the door is still open. The Prime Minister may say, she should have taken scotland a bit more seriously. Perhaps i should not have gone last week and deliver the lecture about how to run the public services, particularly with the disasters done in england. There are always people who can change. May has such an any flexibility or sensitivity to scotland. S havee administrations had a look in. She seems determined to go with a hard tory brexit. That is not the inclination of the scottish people. Guy do you think she will listen to the request . Back to adding to her woes, she has plenty on her plate. Guest David Cameron used to tommy me that there would not be a Scottish Referendum, but when confronted with the reality of the Scottish Parliament voting for one, he had to accept. Democracy. There has to be a referendum. If she tries to tone it down or delay it, it will be massive. Then you would have an English Parliament toning down turning down a democratic response from scotland as a nation to the manifesto commitment for which the first minister was elected. Guy talking about the tory hard brexit, if it were not to come to reality, would the referenda be canceled . Timingi thought that the that Nicola Sturgeon put forward was interesting, particularly up to the window of spring of 2019. By then the deal or no deal will be clear. It has to come to the westminster parliament. Guy what if it hasnt . Manus it will have, because it is it to triyour timescale on article 50. By definition it is a twoyear timescale on article 50. By definition, by the end of next year you will note. You will know. When you see what has emerged or not in terms of that, they can go and compare that against a vision of scotland in europe. L scotland within the sigel marketplace would have a scotland, within the single marketplace, would have a huge competitive advantage against those who were not in a single rocket place. That is a huge marketplace. That is a huge problem for theresa may. Someone like Martin Gilbert would be one of the first to recognize the advantage. Get this thing to move on and talk about where oil prices are. Lets talk about the reality of an independent scotland, and whether or not the economy functions. That was, that was you, there. This is where oil prices have gone. Shale is the enemy of scotland in certain ways. You could argue that it makes the place lower and lower. Invented guest they invented shale oil in the mid 19th century in scotland. [laughter] guy so many things were invented in scotland. Is scotland viable in terms of oil . Guest at 60 per barrel, scotland would be the Sixth Company in the world with wealth per head, gdp per capita. There are under 200 countries in the world. 185ould be better than behind us with oil at 60 per barrel. One place above the you can u. K. Gdp in scotland excludes oil. I would argue that, given that we have lost 100,000 jobs in the scottishtry, to have unemployment at 4. 7 , versus the demonstrates at degree of resilience in the scottish economy. Theployment at 4. 7 , as industry recovers, and im sure that it will. There is nothing more certain in oil than what was up goes down and what was down comes up. Shale perhaps means it will not come back of. Manus we have lost a significant come bck ack up. Guest the industry is living with new investment. There are new entrants into the sector. There are a lot of hydrocarbons left in the water round scotland. Guy i can show you the forward curve. It does not point to a much rosier price than where we are now. Guest the point i am making is, they have had to adjust to 60 dollar oil. Spike agian,sp that would be substantial. The overall point. What makes a country prosperous . 50 countries in the world have substantial quantities of oil and gas. Oil prices go up or down, you would still rather have oil and gas than not. Even at 60 per barrel, scotland comes in at number 15 in gdp per capita. Butd not just on resources, scotland has more universities in the worlds top 200 than any other country. Guy lets talk about the mistake in some peoples minds that David Cameron main mad. He did not have a plan b. Brexit did not go the way he expected, and there was a vacuum after it. Are you certain that scotland as an independent country could rejoin the European Union . Guest i am. Over the next few months, you will find a very distinct perspective that will open up for scotland and europe. You will be able to see exactly how scotland can secure its position, particularly in the economic area. Scotland has many friends in europe. The u. K. Has virtually none left. 2014, as the first minister of scotland, i could not get to see as the leading member of the Scottish National party, i had a long meeting with jeanclaude juncker. People across europe know that and are is proeuropean totally exasperated with the government in london pursuing such a reckless brexit cause. Guy what did he tell you about whether or not scotland could join the euro . Manusguest these are private discussions. Guy but you discussed it . Guest we didnt discuss it much because these are facts. You have to be in the Exchange Rate mechanism for two years before you can apply to join the euro. The Exchange Rate mechanism is a voluntary act. That is why sweden is not on the euro. That would apply to scotland and nine other countries. Guy you would not expect scotland to join single currency . Guest correct. Guy would it be full membership . Would it be transitional membership . Could there be a period where you are not a member of either . Thet the logic of having referendum on the timescale that Nicola Sturgeon has outlined, youll be able to compare the hard tory brexit plans, or whatever deal they have managed to get with what emerges for scotland in europe. The certain that, negotiations about scotland will be a good deal easier than negotiations with brexit. Guy the risks are in our miss if it doesnt work. Guest what i think is important is to understand the economics of this. Ensureu need to do is to continuous membership of the European Economic area. That includes the European Union, iceland, norway, liechtenstein. To ensure you need your continuous membership. That is the logic of Nicola Sturgeon and the timescale she is proposing. We will see how that argument compares with the uncertainty of hard tory brexit of theresa may. She is careening toward the cliff edge. Told there was uncertainty about scotland being independent. Most of that uncertainty lies now in london. Guy is that a new badge . Euest my wife dug up the badg yesterday morning and said, you might want to wear this. Guy that is a 2014 badge . Guest im sure there will be much nicer, much more modern badges in Nicola Sturgeons referendum. Guy lets get a Bloomberg Business flash. Said to be waiting a lot of energy. The French Company is speaking to advisers who have not made a final decision about whether to proceed. They have a market value of 18. 6 billion euros. Engie declined to comment. They expect profit arise with positive contributions in trading and energy. Considering as majority sale of its nuclear acquisitions. The crisis may delay the release of thirdquarter earnings until westinghouse, which could be written down by 6. 2 billion could be the center of toshibas most recent cost overruns. Conceded defeat. Hascontroversial drug maker sold its entire stake as a loss and says he will leave the board. Says valeant may have less 2. 4 billion just at the end of 2016. Citrix systems is said to be working with advisers to seek potential suitors for a company. They have hired Goldman Sachs to sound out buyers for a private equity firm. They value the company at about 13. 3 billion. The spokesman for Goldman Sachs declined to comment. Representatives at citrix did not immediately respond to requests for comment. Guy we have just been talking mr. Salamond about scotland, and where it might be if it leaves. Can scotland deal with 50 a barrel or 55 per barrel . Hear was interesting to him talking about 60 a barrel when it is currently 50. The forward curve is upward sloping. Guy is it viable . The last time that they did it, it was nearly 100. Now it is 90 or something. I would question his response. In the long run, this isnt about what is economically viable and what hits there are to income, it is where they want to be in the long run. I suspect there is a hit to scottish incomes by some sort of separation. It is whether they want to live with that. That is true of europe right now. The populist vote is more about politics than economics. Or is it . The populist vote probably has been about economics, but it serves as a political issue. That is always the question with immigration are these people taking my jobs . It comes to the head as a political issue. To our were talking macro strategist early on and he says it is almost impossible to price in what scotland is doing. It is a most impossible to know exactly where we are going to be in the u. K. Generally in three years time. To then think about where is scotland going to be . That makes it even harder. The British Business is finding it difficult to know where they are and the scottish is this must be finding it even harder to know. Guy the bulk of scottish exports go to the u. K. . Yes. Guy the similarities to the brexit vote are incredible. Pivot in the way that the u. K. Is talking about pivoting . Scotland will always have the rest of the u. K. As its biggest trading partner. To think that it can pivot away from that toward the eu being its major partner is not going to happen. That is why there are so many howications in terms of will the u. K. Separate. Even within brexit there is an issue with hard borders on the Northern Island in southern island. Would you have a hard border between england and scotland . There are some an unknown questions. Guy you can extrapolate that to the United Kingdom as well. The pound is down. Is that the right trade to look at, in aggregate, political confusion squared . What has happened in the last one he four hours is exactly what everyone expected to happen last 24 hours is exactly what everyone expected to happen. As soon as we had the brexit vote, it was ripe for sterling to fall to 1. 30. Then when it is a hard brexit it was right to fall to 1. 20 where we are now. The breakup of the union i dont think makes much difference to sterling. Guy lets talk about it different trust us underway at the moment. Haveomc members, we economists talking about this. Investors all expected to see a hike from the u. S. It is 100 probability that this will happen. A Bloomberg Survey of economists march and december, the twoday meeting gets underway today in the slightly included whether. The question inclement weather. The question is, when are they going to start raising rates . We think the economy is in such a place that we need to start seeing a series of rate hikes. Or, are they going to do this hike and say, we are going to posit for a bit pause it for a bit . The market is expecting three rate rises this year, and another two next year. I would be surprised if we hear janet yellen Say Something that is more hawkish than that this week. Guy there is only down side. I suspect that what you have at the moment is what has happened is up until now, the dot plot was always above expectations and the market has now moved up to where it is. Guy we have the dot plot right here. There is only down side . At the moment, there is not much half in the dot plot heft in the dot plot at the moment. Three rate rises is the maximum you would get. Personally, i think we will not get three. Economict softening in numbers in the u. S. May delay one of those rate rises. Everyone is expecting it to be this week, june, december. If you get a weakening in economic numbers, and you look at the forecast now on gdp, it has come from 2. 5 at the end of ow. Ary until 1. 2 that could mean two rate rises, not the three. Year,his is the u. S. 10 2. 6. We can talk about the curve and what is going on with the united states. Is the u. S. Curve currently pricing and three pricing in 3 . For this year. The probability is that there will be three with the last one coming in december. The curve is priced close to that. Guy you are suggesting that you want to be long treasuries at the moment . The issue is where you are on the curve. I think yields are still below where they should be in the long run. There is this, how to get rates back to normal levels. The tenure has scope to move up, but at the short end, there is the risk that rates dont rise as fast as the market is forecasting at the moment. Guy what does that mean for equities . The equities will be more focused on what happens at the 10 year than to short rates. Moment, they are expensive by historic standards. Volatility is so low. Guy that is a whole different conversation. Volatility is low, pricing is expensive. You could see the 10 year go to 3 yield and i think equities are at risk. Buy at theee the 10guy what di moment . What the markets have been buying is this switch from quality growth toward value. That is something i have participated in within portfolios is to build up value. To have a value by us, bias, you have to start thinking about what to avoid. Things that are interestrate sensitive you have to be careful of. Up, if the rates are going just talking about when the announcement comes out, are they going to slightly encourage people to push up rate forecasts . Or, we are going to wait and see and be data dependent . They are going to be data dependent. Guy we will carry on the with jonathan. We need to talk about what is happening. Next, the Freedom Party leader has locked horns with the dutch Prime Minister in a televised debate. With jonathan. We need to talkthat story is ne. This is bloomberg. Guy the fat the market seemed to be in a treatment of raising rates. The referendum rerun, there will be another scottish independent vote. Brexit. A cliff edge on we are going to crack that. The dutch vote tomorrow, how many seats will go to them . What will the result mean for france . Welcome. Youre watching this. Matt miller is off today. We are 30 minutes in. You can see its not a great performance. We had the fed just around the corner. More importantly, we did see the pound sharply lower this morning. Were working our way through the day. There is new business profit coming through. We will get some more numbers as they come. I am not set up for this at the moment are in a question for you, do you want nexit . Do you want the netherlands out of europe . This will cost 1. 5 million jobs. That will mean chaos for the netherlands. England, there is chaos too. Do you want chaos in the netherlands as well . Dont do it. I hope you will not be the biggest party, that you wont form a cabinet, it is the worst news that the netherland can have now. Thef you exclude the peavy no party is set to win more than a fifth of the seats. The popular he is being seen as a bellwether for Political Sentiment around europe. Most people dont expect him to be a multiform a government, what are the implications of him winning. What are the implications of his Freedom Party doing well . We have been getting the larger share . Still on the getting a fifth of the seats in and all the other parties who said they will not form a coalition. You can look at how that increase in populism affects france. This is not a party that is going to win. Isview on Marine Le Pen that she will still be lagging. Not as much as if she stood in the seventh of may election. The followthrough is populism is growing. U. S. Investors and investors are more concerned about the political risk. Convergence. That could be one trade. I think the equity market would. Recap on the prudential numbers. The operating line came through at 4. 26. At 1676. Trading higher tv is where you can watch this program, tune in to the radio, use the functions we are following. Up next, the British Chamber of commerce upgrades its brexit forecast. We will speak to adam marshall. Guy this is the open. Lets talk about where some of stockmarkets and top stories. Here is nejra cehic. Germanys largest Power Generator last month, this Company Posted its worst annual net loss since 1949. It said today it expects profits to rise through december with positive Country Visions through its trading unit and noble energy arm. It will also resume paying a dividend. We have seen shares rise today. They have risen the most since may of 2016, hitting their highest since november of last year. You remember rwe last year it sold a minority of its unit and listed separately in october. Is wingch Power Company in by 5. 6 billion euros. Rwe reiterated saturday it can, in, so energy shares. So energy has risen the most since october of 2016, when it listed separately. Energy has dropped the most in two months. This gets it bloomberg first word news now. Hinas economy started year earlier ahead of expectations. Retail sales for the same period missed economist estimates with a 9. 5 rise. In the u. S. , a new estimate shows for 40 million americans could Lose Health Coverage by next year. At measures and has been quick to challenge the estimate, however, Senate Republicans sit just of the party needed to Senate Republicans said the analysis suggested the party needs to we think its plan. As much as 19 inches of snow is forecast in new york, with boston also expect how you heavy snow. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Guy thank you. Theresa may is preparing to trigger brexit probably in the last week of march. It comes up as Parliament Passes legislation allowing her to trigger article 50. A busy day in the u. K. Lets get more from anna edwards. So lets talk about the brexit timetable. What does it look like . Anna looks like the last week of march. The commons decided to back the government. Very few rebels on the conservative side of things in last nights vote. The lord timothy bell that definitive vision deciding not to fight the government on this anymore. This allows theresa may to trigger article 50 as early as this week, but it is likely to happen in the last week of march and specifically between the 27th and the 30th. From our analysis, that looks most likely. Celebrations to commemorate the treaty of rome. That is when the countdown starts. That is where we create the graphic that says countdown to brexit, possibly. Guy how do scotland, kid that clock . Anna little more clarity between what theyre choosing for an independence referendum. Will be ae choices scotland who may or may not stay or be able to join the European Union, and the u. K. , which has an uncertain relationship at that point in time with it you the e. U. Faced in scotland will be with that choice in spring, 2019. Guy thank you. Anna edwards in westminster for us. Uncertainty probably the word of the morning. The British Chamber has become the greatest forecast come upgrading its projections. 2017 numbers here. Director general of the bcc, adam marshall. How easy or difficult is it to make economic reductions in the kind of environment and i was describing . Adam it is an uncertain environment. We are lucky that we have the biggest private server to put picture. With the we have a flat picture. It is on spectacular growth. Ensuing we are assuming inflation will continue to rise, going through the bank of englands target this year, rising to the peak of 2. 4 next year, then fall back but still be above target. We expect more clarity around the brexit deal by 2019. That is important. Asneed to make an assumption to whether businesses have that clarity, because they will take investment on that basis. Guy let me ask about the pound. So it is just improving a little bit. Maybe not such a great picture with the euro. Adam we do not make predictions directly. What we have is continued volatility. Is whether we have increased volatility over the coming months because of all of this political noise. Whether it is coming out of brussels, it is the jitters that is causing this in the pound. Guy do have any questions about the deal with colin about how expectuld anticipate and an independent scotland to function. Many people are saying another independence referendum is inevitable. Whether we talked to businesses in scotland or elsewhere, what they say is they want uncertainty minimize. They have a volatile Global Economy to deal with. This is conditions are always fast changing to deal with. And now they have the brexit negotiation to deal with. Ist we hear, to a business, they do not want any more uncertainty on top of that. Andhis notion of hollywood scotland being locked into a constitutional debate and not focusing around the basics of the economy is what is worrying businesses. Guy how big of a concern is that . D sense the government has its eye off the ball . Agenda, want a domestic economic and investment agenda, to play a bigger role. It can be the case that when you have a case like brexit or some other constitutional thing to navigate, you you take your are off the fundamentals. Guy do you think they have or they risk adam there is a real danger. The chancellor of the accenture exequech or helping businesses to invest more, more us must these are the sorts of things we have to get right. Whatever the ultimate settlement for the u. K. , whose fundamentals matter . That is what businesses will go on. Guy what feedback have you gotten . Adam pretty negative. Entrepreneurs are saying the changes on National Insurance for the selfemployed and the text dividends have hit them. They feel hard done by this logic. What they would like to see is more attention paid to how the selfemployed, how those who are starting up and growing businesses are conjugating to the economy, rather than how much they should be paying. Kuy final click quic question about expectations. When you look at the british of not, are we in danger doing enough to support the consumer . We aren the one hand, independent on the consumer to drive so much of the growth and optimism in the british economy. On the other hand, we have to balance more towards investment year story of failed imbalance. We have a big change ahead of us. We have to use the change of brexit to rebalance towards investment and exports. Politicians have been talking about it, but it is getting incentives right, which will end up being less dependent on the consumer. Guy adam marshall, thank you. Lets talk about the weather. Favorite subject for a brits, but i expect the u. S. Will a state of emergency has been declared. There is plenty more still to come. This is bloomberg. Guy you are watching the european open. Gots talk about what weve coming up for the rest of the day. Its a busy session. The lesser of the two surveys i would argue. Weve got the final debate tonight over in the netherlands. I think were going to watch that quite closely as well. Fedmain event is the today policy meeting. The weather in washington is not that inclement right now. We will so you some shots of new york and it is snowing and snowing hard. I what to bring up its going on in the markets. At the u. K. , it is front and center. By british pound is down. 6 . How do you price in the brexit story . How do you price in the Scottish Referendum . That is something the market is trying to figure out. The dollar is down throughout the morning. The other thing i want to mention is iron or in asia. That is something to talk about. European equity markets are trading higher today. London, others are looking a little less so. This is a mixed position coming out of the equity story. The pound is affecting what is happening with the equity markets. The story is what is going on in the states. The fed is the big question of the session. They will be looking out the window wondering if there is a sign by the weather gods. This today meeting kicks off and it is snowing hard in new york and that is a live shot of times square. Also, we are watching to figure out if the fed is going to offer a hawkish hike or a dovish hike. What will the message be about the three hikes priced in. That is something we are going to be looking at. Carryllance is going to on the conversation. Francine and tom keene in a. Theyve got some great guests for you. I suspect that tom keene is going to be focused on whats going outside his window. This shows you exactly what is going on. The snowstorm continues. Goodlett. Good luck. The pound tumbles, Parliament Gives the u. K. Prime minister permission to start brexit, but scotlands leader has her own independence plan. 10 year treasury yields raise higher as the fed is poised to raise rates. And steady as she goes. An update to chair for chinas economy with industrial data beating estimates. This is bloomberg surveillance. I am Francine Lacqua in london. Tom keene is in new york. First of all, you made it in. Thanks to the snowstorm, it opened so tom could make it. It reminds me of the winter and the United Kingdom, or Something Like that. Where i grew up, this is partly april. But seriously, it is a big storm. It is just starting. School is out. And we are all here, looking