Spider. Longestghai comp said streak since october. How much is it the slowdown deepening . Are we going to have to see a depreciation . I want to talk about what is going on in europe. The number story that comes together quite nicely. Carney on the brexit. Weve got this migration story which has a brexit angle. Heavy german industrial numbers. We have the german industrial story. Hans go week hans we have the turks upping their numbers overnight youd that is an easy number that is an easy check for Angela Merkel to write good to write. Guy you think about how you price this one into the market. This is brussels, germany showing we can deal with the prices. What would be negative for the brexit, in theory is positive for the pound. T has a Ripple Effect maybe they tighten up a little bit as well. The german story is fascinating and how we do with that with draghi. Maybe this economy is not having as many problems as thought youd as thought. We are going to avoid recession. Pimco as well. Hans in some way they are all right. Theyre looking at different data sets. The challenge is everyone getting the same data check and make a decision on where to go. One final thought on the brexit. I would not say it is negative. It seems what is happening in europe is neutral. They do have a solution. This spring and summer, we wont have a lot of headlines and images of refugees making that trip from turkey to greece, if they figure out how to seal that border. Guy it is more cameron then johnson. Open. Look at the we need to show people what we think will happen in 28 minutes time. Ti, if wti. Ons, it looks like down around 8 10 of 1 . Hans we see that coming through one we to the story out of china. We see the shanghai composite down here it have that negative trade data. We have the japanese yen. We have the stronger yen that is going to make the nikkei really difficult. Brent around 40. We have the sterling trading. Take a look, it is 1. 42. It doesnt mean the pound is falling that low. That means i cannot see the monitor. Someone who can see monitors all the time, first word is his news with Caroline Hyde. European Union Leaders have edged toward an agreement with turkey to help with the inflow of migrants. To double its Financial Aid to the country to 6 billion euros. Jeanclaude juncker coffer plants for called for plants for turkey to take back migrants. To take back all the regular migrants have been apprehended. Today we were assured that it would be possible. All of the above mentioned decisions sent a message that the days of the regular migration to europe are over. Caroline german industrial client reported percent from the december number. That is the first increase in three months compared to the immediate estimates. Michael bloomberg he billionaire former three term mayor of new york said he decided against entering the 2016 president ial race at the remaining uncertainties in what has been an unpredictable election year. Michael bloomberg is founder of bloomberg lp, parent of bloomberg news. Wall streets average bonus surged in 2015. That is the biggest drop since 2011 going to estimates by new york state comptroller. Down 6 from a year earlier. The industry added 4500 jobs in new york. Global news global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. Guy caroline, thank you very much indeed. The bank of england is about to get political. Stakes are high. Mark carney and deputy are due forestify on the brexit u. K. Lawmakers this morning. We are going to bring you coverage of that event. Bloomberg television from 9 15 a. M. Gmt. Ou can follow along really worth paying attention to it here is a look ahead to that event. ,pmorgan european strategists gianluca salford, joins us now. Its got, i have to start with you. Can carney avoid taking sides scott i have to start with you. Can carney avoid taking sides . Scott i cant see how anything he says will not be used by one side of the other. Says ask another politician is good to take us on and that is where the story gets legs. Scott go very dry, factual examples of what might happen if scotland was to become independent and it was used by both sides. Guy how far do we price this story into the bond market . Give me a sense of where the market is . Gianluca in rates, it is a bit more of a mixed back. You might look at the brexit story is something that could push the euro higher. You have to defend it. Our overall view is if the worst happens and we get a vote for brexit, the bank of england will have no choice but to cut Interest Rates. When you look at the shape of the money market, it is been pricing easing price easing for the last few weeks. Hans if i could jump in here, when we take a look at how this is all going to filter through, what it is all going to mean when we take a look at some of these Asset Classes, how do you see it shaping out . Gianluca can you repeat . Hans how do you see it shaping out into the Asset Classes echo how does it affect peripheral spreads . Trade flipside on how you germany versus italy . Talk me through the trades. Gianluca if you look at the issue of how brexit can influence euro area markets, there are three channels of contagion. Crisis. Stencil we have had a few. Go back to the first vote to reject the european constitution. You had a fear of a euro breakup in 2012. Turning the wheels into reverse on the european project, would be another one. You have something that is a bit milder contagion, a direct macro implication. Are estimating that you could lower u. K. Growth by roughly 1 here it 1 . That may be sufficient to treat another round of easing from the ecb. Finally, when you look at these applications on the domestic a la ticks, we are seeing the mastic politics, we are seeing that no major part is try to capitalize on these storms coming from the negative vote. It is fair to say you could see bond deals going down towards zero or lower. White they are spreads. If you take a look at the example of other situations where you had an exit stencil crisis, the response from such a banks was crucial. We expect the ecb to do something to what they did last year when he had the problems in greece. Guy we are done with the Asset Classes. Do you think hes going to be asked about negative rates today . Bank, any other central very little room to go below zero. Scott the top of the come session today is on cost and benefits of eu membership for the u. K. He may be get asked about what policy might do if the u. K. What to leave the european union. I dont believe he is going to go into the details. Either cutting Interest Rates are doing more qe, but i dont believe he will go into the technical details. Guy scott, think you very much. Hans as long as we stay out of the technical details, i think well get back into those with bloombergs scott hamilton. You are going to stay with us boe. Heck out ble go go on your bloomberg terminal for all things bank of england. The fed would rather not go there. Its sells a inappropriate jokes that you and i would tell, guy. Up next. Guy welcome back. For four minutes past the hour. London looking lovely. The markets looking softer as you can see on the futures. Lets get you caught up. Heres Caroline Hyde. Power hasroline and confirmed it is cutting jobs of meanwhile, profit at rwe has a slipped 45 . We will be speaking to the companys cfo at 10 15 london time. The german drugmaker merck has beat analyst estimates. Costs two 933 Million Euros to that is on the seat of i would be speaking at a formers Goldman Sachs banker has been caught up in an investigation into malaysian state investment funds. That is according to people with knowledge of the matter. He was issued a subpoena by the u. S. Justice department. Pimco says investors should move out of government securities and into Corporate Credit. The u. S. Wants to avoid a recession. An and germany avoiding offering negative yields. The bonds and bank loans offer a better alternative. That is your bloomberg is as flash. He has laid out one of the most detailed arguments by a fed official on the downside risks, despite several reports. She warned of the discriminating meanwhile,ting the vice chair Stanley Fischer struck an optimistic tone on the inflation in the u. S. And weighed in on a negative rate policy across the world. Critics have argued that qe with negative Interest Rates is no longer effective in either japan or parts or possibly in the eurozone. That case has not been empirically estimated, established. I think Central Banks still have the capacity to qe two run expense or he monetary policies even at the zero. Usedthe rate that is been by five Central Banks have worked somewhat better than many expected. Guest,ts bring in our Jpmorgan European rate strategist, john lucas salford. John lucas alford. It the most hawkish you have heard the fed chair . Gianluca it is reflecting the data. We have concerns about the u. S. Going into recession. Most recent activity data is not confirming that. When you look at the inflation numbers, they are telling you that something is working. At the same time, you have that areent rates stable at low levels. The fed has to continue the message of being cautiously optimistic about the economy and not letting that inflation go higher. Guy it was instinct to see what pimco said as well. They advised you want to get into credit as a result of that. Is that the right trade . Gianluca it is something that we are recommending. We are recommending exposure to for corporate, basically the reasons. Spreads are quite attractive. In an environment where you are not expecting a u. S. Recession anytime soon, there is potential. In, on thecan jump german side of the story, you get other german boones and you moving to german corporate debts, because it doesnt look like a recession on the rising in germany. , you make a economy similar play in germany. Gianluca we are more cautious again, a few weeks ago, you had the perfect storm of mobile pressure coupled with hedge risks coming from ireland and spain. Coming from the flareup of a brexit story. It looks to be quieter now. We are expecting to get something positive from draghi in the next few days. Guy do you think he keeps those spreads cap . Jill that is a difference gianluca that is a difference from places like japan. Eurozone, you still have a central bank that has the ability to keep spreads compressed. Of course there will be a big boost to the prospect of the region. Guy plenty of more stuff to discuss with you. He is going to stay with us. Minutes away from the open. Up next, we are going to look at potential corporate movers. What might be happening at burberry. Plenty of speculation. It is one of our stocks to watch. Guy 7 53 london. We are counting you down to the market opened it Caroline Hyde is here with stocks to watch. Checking out burberry. Caroline we are checking out burberry. Maker of the famished check print. Of the famous check print. We see a sudden spike yesterday in new york, white . Some speculation. Someone seems to have been building up a stake in burberry. This is what profit concerns that they could be having to defend themselves, looking at Financial Advisors to up support them to fight off any potential bids. The market capitalization is about 6 billion pounds. Go to htf on the bloomberg, it shows you the holders, the big institutional holders. A couple have more than 5 stake. 1. 68 . 1. 68 did this is not unheard of. It seems as though hsbc is the custodian for the current position. Many travel many try to rattle who is behind this increase. Burberry called up 7 . Profit beating expectations. Ook at the sluggish nature we are trading at 79. 71. We are seeing a 6 uptick in profits and sales. Theurged 6 amid restructuring of merck. This is a great function. This is analysts recommendations. This is trailing at the price but also the target price in yellow good but also the amount of analyst recommendation. To sell . To hold . Buy . Seeing profit down in germany and the u. K. This thing has bottomed out, not convinced yet. Gianluca salford is the with us. Deeper cuta 20 basis coming through. Why . Gianluca they have a problem here to inflation is lower than they have been forecasting for quite some time. Earlier, it was a story about oil prices. They dont have much ability to fight that. The last set of numbers is showing core inflation is the problem. Guy good to see this morning. Gianluca salford joining us from jpmorgan. We are going to take a break. See you in a moment. Find fantasy shows. When it comes to the things you love, you want more. Love romance . Get lost in every embrace. Into sports . Follow every pitch, every play and every win. Change the way you experience tv with x1 from xfinity. Hey hows it going, hotcakes . Hotcakes. This place has hotcakes. So why arent they selling like hotcakes . With comcast Business Internet and wifi pro, they could be. Just add a customized message to your wifi pro splash page and youll reach your customers where their eyes are already on their devices. Order up. Its more than just wifi, it can help grow your business. You dont see that every day. Introducing wifi pro, wifi that helps grow your business. Comcast business. Built for business. Guy good morning. You are watching on the move. I am alongside hans nichols. He is in berlin. Here is your brief. The bank of england governor is dragged into the brexit debate. He testifies before parliament this morning. Can he avoid taking sides . Germany gets into gear. Industrial production surges, leaving draghi dealing with a two speed euro. Is the slowdown deepening . That is the big question this morning for china. Hans we are going to talk about european equities just opening now. Acrossnegative futures the board. Lets get the latest from Caroline Hyde. Caroline we have a second day of declines in europe. Futures seem to be selling. We are digging into those numbers coming out of china. We have a 25 collapse in export data in the month of february. Sure, there was the lunar newyear, but hsbc says this is a sign of a deeper malaise. Clearly, youe sell off what you buy into. Gold in the gold is the haven. We will be talking much more about burberry in a moment. Of 1 x is opening 9 10 lower. Risk aversion is creeping into the market. Equities are going lower. The euro is moving higher. As i say, money is coming into the haven of gold. We are up 5 10 of 1 . Meanwhile, we are coming out of metals. We have seen a real ramp up in metals. Goldman sachs says now it is time to go short of copper. Copper is down 8 10 of 1 . Goldman sachs that can go all the way down to 4000. It is time to sort the issues of china. Oil is on the downside, off by one percentage point. Lets take a look at the pound. That went down by 1 10 of 1 on the british pound. Lets have a very quick look at some stocks on the move. February is up 4 10 of 1 . 0 of 1 . Rry is up 4 1 merck kgaa is up by 1. 5 . The drugmaker beat forecasts. Back to you, guy. Guy we will talk about burberry in a moment. Lets talk about the European Equity scene this morning. Lets take you to the imap function only terminal. Consumer staples are actually doing ok. We are selling in the materials sector. Financials are under pressure as well. Materials have seen a huge rally. These mining stocks are beginning to become a little bit unwound. This is what we see this morning once again, post that chinese data. Could burberry be a takeover target . Lets get to francine lacqua. You talked to the company . Sources i spoke to inside burberry. I was asking them about the ft article. Yesterday night, they reported there was interest in burberry. A secret person or group of people built a 5 stake. Own 5 of law, if you a company, you have to say it. Burberrytand that already has a relationship with hsbc. They have asked people to look into it to see who this group, for this person, is. It could be an activist investor. They could be somebody looking to take over burberry. This is a rumor we have heard over and over again. Why is there such a rumor . Guy, we both know burberry quite well. This is one of the only companies independent in the luxury sector. It is one of the only companies that has more than 19 free flow. Guy it is one of the few properties out there somebody could buy. The sector has been hit pretty hard, hasnt it . The china story has knocked down the entire sector. If you are looking for a target, one of the you fear once to access is burberry. Otherne a lot of the ones. Are held by families. And so, gaining control would be much more difficult. You are right. They have been hit. The share price is under a little bit of pressure. They are currently valued around 6 billion pounds. The evaluation could be around to 2illion pounds billion pounds more. They went after all of the big ones. It has to be one of the freestanding luxury groups out there. Hans francine, i love this story. Burberry isn about what i could afford in a burberry jacket. Guy, could probably up his s take to about 7 . Are they ready to start doing deals again, or is this the last hurrah . Onncine guy is very keen his burberry jacket. I dont know about the alpha males, hans. But what you can see is there certainly is investor appetite for that kind of deal. I dont know if it will become a takeover target. I dont know if it will actually be acquired by someone else or if it is a private equity that is looking at it, or if it is simply an investor saying, look this is a good deal. Given the price reaction, investors are hoping that someone management has been fairly quiet in the past. This was one of the big tests for the luxury sector. This is the first time we have a ceo that is creative director as well. Christopher bailey is in a difficult position because he was the first one to do it. Investors could be trying to test his resolve. Guy up next, the president and the ceo of Hilton Worldwide. We are joined exclusively from berlin. Guy welcome. You are watching on the move. 8 10arket is trading down, of 1 . Let me tell you why. Anglo american is down 5 . Glencore is down 4 . The miners are really doing the damage to the london market this morning. Lets get you caught up with the bloomberg first world news. Nejra mark carney will give andence on the economic financial cost and benefit of eu membership. He is expected to be pushed hard over his assessment of brexit risk when he appears before the treasury select committee. Michael bloomberg, the alie billionaire, has decided against entering the 2016 president ial race. Bloomberg is the founder and majority owner of bloomberg lp, the parent of bloomberg news. Production jumped more than forecasted in january. Production climbed 3 from december. That is the third increase in three months. Global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. Hans . Lets talk more about the challenges facing the hotel industry. We have the president and ceo of Hilton Worldwide joining me now, christopher nassetta. I know you say you are loyal to hilton brands. Clean on what i am remaining loyal to. Be doinghilton points well . We have a strategy that is focused on organic growth. We have grown the Company Faster than anyone else in the business, by over 50 last year alone. Yearyear we had a record of openings and findings. We open 50,000 new rooms and realms into00 new our system and we did that without any acquisitions, without any mma activity. Our strategy is focusing on having. Bread on having pure brands. Given the market share they derive, which is the premium market share and the space our owners continue in best with us heavily, we can continue to grow without needing any mma activity. You should be an honors member. If you are not, i will take care of that before i leave. Your honors points are always going to be good. Airbnb is obviously challenging you guys. You grewnceive that organically and you are not thinking mma, but it will changed. We have this merger with starwood and airbnb is not going away. Does the airbnb threat make you rethink your mma outlook . No, lets be clear. I am sure the merger will work out fine. We chose not to pursue that. It was not as though we were not invited. We were. We made the decision for the reasons we just described that we like our growth strategy. We think with the momentum we have and the scale we have that we have everything we need to be successful. So, that was by choice, ok . It was a proactive choice not to enter that zone. We are comfortable with that choice. There is, look, nowhere i go. That calls,t people want to talk about airbnb. And i understand why. It is a real model and it is a real business. It is taking a business that has been around for thousands of years and bringing significant efficiency to it. I think it is a wonderful model, but at its core it is serving a different need than we are. What it is really serving is a more a longer duration stay, generally leisure, and generally a value proposition. We are doing something different. We are taking very high quality, consistent products and wrapping it in hospitality. I think of us as in the business of hospitality and i think others, including them are more in the business of lodging. I think there is an opportunity for us to coexist. That is not to say that we dont compete at any level. That would be naive. We do the edges, compete, but it is not a head to head competition. Guy a quick question from london. I am guy johnson. I am not going to let you off the hook completely on the mma story. I am wondering if you think the sector is done because i was running the numbers on your company yesterday. You trade on above average Earnings Growth and yet, you have got a below sector evaluation. U look great. Thank you for pointing that out. Guy if i can figure it out, some monebody else can. Here is the thing. I will sidestep it at all. I said this on stage last night. I do think there will be more mma in the industry. We are at that stage in the cycle where i do think companies are thinking about what they might do strategically to enhance value. I think we will have more mma, whether we have more mega mma whether it is a starwood deal or smaller players it is hard to say. But in the next 1224 months, you will see a lot more mma. I dont think you will see that from Hilton Worldwide because our strategy is pure and it is working. You are going to see other things and getting to the evaluation issue you just described, we announced last friday that we are going to split the company into three pieces. I guess that is mma in a sense, but it is taking what we have and breaking it into three pieces. Part of the reason we are doing that is because we believe that over the longterm, we will get a better valuation. Why . Three fundamental reasons. We will have a dedicated Management Team and allow for dedicated shareholder bases in a three very different businesses that are embedded in one business. Two, we will be able to activate all three businesses fully, which we do not do today. We do it in the case of one, the management franchise business. And importantly, we will be able to have those Capital Markets and tax franchises. I think there is huge value in what we announce next friday. If that means today or tomorrow, exactly. The market is responding quite well to bed. If you think about the next 510 years, there is a tremendous amount of value in that. If we do our job, it is continuing to drive alpha. It is delivering superior performance. We break the business of part to create a simpler business for investors to understand. I think you will see our valuation will reflect that. Guy two questions spring to mind. What do you think the discount currently is . And the second question is, is ae come back to the mma story bit defensive as well . No, no. I mean, on the first i will let the market judge that. The market suggests the value. On the second, this is something we have been working on for a number of years. It is not defensive. The timing is situated around when we were able to figure out how to take the pieces and make this work. As you might imagine, it is incredibly complex to take a 100yearold company and break it into three pieces. ; that complexity became even more dramatic last year with legislative changes through the irs and regulatory changes. As well as legislative changes at the end of last year. It has been a bit of a rubik skew to figure out all of the bit of a rubix cube to figure out all of the pieces. We are doing it now because we figured out all of the component pieces and we are ready. Inould say it is all offense the sense it is the right thing to do for longterm value. We have been working on it and we are ready to do it. We are going to unlock this longterm value. Hans behind you is the brandenburg gate. Yesterday you said Southern Europe grew almost as fast as asia. I think 2016 will be another good year in europe. Thended up going in midsingle digits. That was for last year. I think we will do the same for this year. The asiapacific was faster this year and i think it will be faster this year. But i think europe will go probably last year, tied for second excuse me, third place. The u. S. Was a little bit faster. I think europe will be tied for second this year. Europe are not created equal, but broadly we can see pretty good strength and pretty decent recovery. We are also seeing a very nice unit growth. We had a record year in assigning deals last year and i think we will do it again this year. We expect to open roughly one hotel a week in europe, which is pretty good. In the world, we will open more than one per day. There are other parts of the world moving faster, but europe has been picking up nicely. Hans we thank you for your time. We can show you the brandenburg bridge later. Up next, we will be speaking to marcus kuh, his company has performed record fourthquarter profits. Hans german drugmaker merck has posted fourthquarter results. Here to talk more about earnings and details we are joined on the phone by mercks cfo marcus kuhnert. Thank you for joining us on bloomberg television. Youug did not quite do not have anything in the pipeline to replace it. When you look at the approval process, what will get you through this bridge period . Good morning. Quiteof all, we are satisfied with the performance in 2015. As we are facing tough competition. On the other hand, we have defended the business quite well. Gaprder to bridge the before we will get the first sales from our pipeline project, we have a couple of initiatives in place. Performancethe good and the further development of our other franchises. First and foremost in it the emerging markets and the areas of fertility, general medicine, and and a chronology. Endocrinology. We are working to bring in initiatives back under our own roof, under our own responsibility. Generating additional topline growth to generate a good momentum until the first pipeline sales arrive, which we expect for 2018. Guy good morning, sir. I want to talk about Market Expectations. You have an awful lot of buyers for your stocks. I have a price currently on the stock of about 79. The market has a price of nearly 100. Do you think the market is getting ahead of itself . I mean, it is difficult to comment on Market Expectations and share prices. From doinge refrain that. However, if you look at our business prospects, we have quite attractive and interesting businesses with good growth h prospects. We acquired sigmaaldrich last year. We are fully in plan. We are also in plan to deliver of 260 Million Euros by the end of 2018 on the health care side. We have an attractive pipeline. We are active in the field of hans ok, mr. Kuhnert. I apologize but that is all we have time for. , we have britains biggest loss of 2016. That cut 2400 jobs. More on that, next. Guy we are watching on the move. European equities are sharply soft this morning. Down 1. 5 . The miners are weighing on the stoxx 600. I want to show you what is going on. It is turning out to be a fairly interesting morning. We can see quite a sharp move from yields this morning, this is before carney talks to the Selective Committee later on. Plus, check out the terminal. I also want to show you this spectacular move. This is on the 30 year japanese yield. Mid140sne from the and 150s. Half of 1 on the yield. Check out some of the stocks with Caroline Hyde. Caroline you were just talking about the beaten up stocks and the minors this morning. For thee been on a tear last seven days, up 25 . But today, they are lagging. They are down 5. 7 . Jumprday, the iron ore we saw we heard from bhp commenting on this. They said this does not change the outlook of the china shuift. It does not change the midto longterm outlook on china. Anglo american and bhp are on the downside. Og has been they company to watch. That is down 5. 7 . Lookningrs anre not too pretty. Clearly, this is a company that continues to field the slowdown owdown in a sl smartphones. We knew burberry would jump. We understand a mystery investor has been buying up 5 stake in this company. Hsbc is the key holder of that stock for them. We will see more speculation of a rise. Hans, back to you. Rwe npowern utility 2015. Ported a loss after comparedting loss was to a profit of 227 million earlier. The german Grocery Store turning us now is bloombergs managing editor for energy and commodities. William has never confused a Grocery Store with a utility. He is a smarter man than i am. What is happening with the u. K. Business. It is a very troubled business. Rwe npower always ranks lower on any survey with customer satisfaction. What we have seen today is that people are voting with their feet. They have lost more than 145,000 gas customers. You know how troubled the German Company is. This trouble in england is the last thing they need. Sectore u. K. Energy seems to be in a colossal mess right now. The fresh are having problems with the nuclear industry. The germans are having problems with pretty much everything. What is this down to . Is this the u. K. Government . Is this problems with the way the market is set up . What is going on . The bottom line is, we need a lot of investment to meet our carbon targets. It is tough to get people to pay. , whichcific issue of eds politically, they want for different reasons. Financially, it makes less and less sense. It is hard to make money in england, given all of the constant political pressure from these companies. It is a tough marketplace to be in. Hans what is the bigger headache for them . Is it the Regulatory Environment in the u. K. , or is it angela shift . S energy the energy shift is the big problem for them. They have been hit harder than any other company. They were a giant of the german industrial world. They are having to Close Nuclear power stations, which were a real cash cow. Powered plants dont make any money. They are way behind in the race to cash out on solar and wind. They have a lot of, but they are taking action. They will split themselves in two. They will have a good rwe and a bad rwe. It may be that they can grow the business. Guy thank you very much indeed. Stocks are up 1. 5 . We will be speaking to the cfo at 10 50 london time. We look at the challenge facing policymakers in the worlds secondlargest economy. That is next. Guy let me check out what is happening with the markets this morning. Let me show you the mining stocks, which have been on such an upward trajectory after hitting lows a few weeks bad. It was inevitable that this would not last. Watch out a little bit later on, ore prices should be one to watch out for. We will talk brexit in a few minutes time. Lets get you caught up with the Bloomberg Business flash nejra the german drugmaker merck has posted fourthquarter profits that have beat analysts estimates. Burberry shares are trading higher in london this morning after speculation that the u. K. s biggest luxury goods producer is setting up against a potential takeover. Burr asked advisors to help prepare for a bit after industry investor built up a stake of 5 in the trenchcoat maker. Pimco says investors should move into Corporate Credit because the u. S. Will avoid a recession. With sovereign bonds in japan and germany offering negative yields, a equity valuation stretch. It is a better alternative. Hans fresh data out of china doesnt show an export slump deepening last month. Teamm scott, bloombergs leader on the chinese economy, joins us live from hong kong. Break this down for us. What does this mean for the chances of more stimulus . Malcom first up is the need to take all of this with a pinch of salt. There was a big slump in exports, 25 . 20 or more of declines in most trading partners. It sounds terrible, but we must remember that the Chinese New Year fell in february. That plays a big part. Want to be worried, we have to see this sluggish ough thesustained thr next month. Be much not going to help at this stage of from the external sector. That puts all the stress on domestic demand. Guy given the politics taking place right now, malcolm, this data could not have come at a worse time. Regardless of the one off factors we need to include within in. How will this be viewed . Malcolm in some ways, it is an indication of a new strategy. Chinese policymakers have realized that they cannot rely on the good old days of cheap exports fueling growth. They need to get local growth coming along. Aat means consumption and services. That is where a lot of these policies have been engineered. If anything, that is a vindication. It perhaps underscores the need going. This that is why we have seen more efforts to keep wages elevated. Because domestic consumption has to take over as the growth driver, especially given the Residential Construction is also slowing as the same time manufacturing is coming off the boil. Hans through all of your answers, i have heard this answer that is both cyclical on the export data and structural regarding a consumer driven economy. When you break it down, leaving aside todays data, are the challenges cyclical right now . Or are we in something structural . Malcolm they are both and that is the policy response we are hearing. If policymakers can be taken for their word, they say we need to question the economy. They say they have the tools to do it. There needs to be room even for structural reform. They need to take out some capacity in these sectors like steel and coal, which have proven so much of the deflationary pressure that added another headache for policymakers. There is this balance between structural and a cyclical. The challenge is both structural and cyclical. Hans malcom scott, we thank you for your time. Guy lets talk about what is happening in japan. What to take you to this charge first. This is the japanese 30 year yields. This is the start of the year. You can see this rollover, this incredible cratering of the yields on the 30 year. They are moving down to 4. 75 . Lets talk about support that was lost. I look at what is going on and i can understand why the economists are saying what they are saying. What exactly are they saying . We asked them to raise the effectiveness of his plan to recharge the economy with things like fiscal stimulus and to do so on a scale of one to ten. We got an average on the issue of economic effectiveness of 4. 6 , which of course is low. They were looking at, how well has it worked in propelling growth and moving the economy forward, and having it be on a sustained fiscal path. It is a low score because it has fiveon an uneven path with quarters of contraction since abe came back to power in december 2012. 4. 6 is the market economists gave abe for stimulating growth. What if you graded him on a curve. How does he measure there . That is a good question and it was not asked that way. Economistsure, these are going to the scores are not going to be great because if you look at last quarter, the figures show a contraction. The stockfore we saw market route. It has not been sustained. It has really been a slow start economy, even with Massive Central Bank easing and a lot of government stimulus. They have not been able to get that growth on the same path. Even if you graded on a curve, you would not see great marks coming in. Guy i dont know. What rate will we give him . We will think about that one offline. Up next, we will have the latest on what is occurring in brussels. How best to deal with the migrant crisis. Hans eu leaders in brussels are close to an agreement with turkey. The deal will include turkey taking back some refugees. A reporter, Ryan Chilcote, is in brussels. Eu leaders are maintaining a positive message after that meeting, even though turkey doubled their demands. Help me understand this tension. Day, at the end of the they have to be positive, dont they . Most of the eu is staking its resolution of this crisis on turkey, both stemming the flow of refugees and on turkey take back some of these refugees. If you are Alexis Tsipras and you are the leader of the callry that is the port of for these refugees and you are regarding the final destination point for these refugees and you are facing elections, you have to go back to your constituencies and say it is looking hopeful. It is their only solution at this point. Guy we are looking at live pictures of the greece and macedonia border. What i want to know is, markel appears to have done this deal largely on her own. Is that the correct read of this story . Did she act to make sure she got something here . Ryan i think that is mostly correct, guy. If you think about it, it was an eu deal discussed between eu leaders, Angela Merkel, and evee minister on the of the summit. It is not the doubling of the money that will be the issue when they take up this whole question when they meet next week. It is not the idea of turks getting free travel earlier. The real issue that some of the countries dont like and will idea that the turkish proposal still involves allowing some refugees to come from turkey into the eu under a legal, if you will, framework. That is what you have to watch. I guess you you should say, that is for you have to watch when they get together at the end of next week to see if they will do a deal. The expectation is that they can, but a lot of people say he effectively vetoed the process last night. Guy Ryan Chilcote in brussels, thank you. We have a big week ahead, two big events. Mark carney will be quizzed by parliament on the subject of the brexit. And on thursday, the ecb has its Rate Decision and the press conference. Check out both of those events on the bloomberg terminal. It allows you to monitor these events minute by minute. Lets bring in bloombergs richard jones. Good morning. Ahead of carney, i am trying to nail this one down a little bit. This is a fairly impressive move. Or is this a more broad story . I am going to bring in the german 10 year as well. It is a slightly different format, but you can see it. That is what we can see on the back of the data. Cais not entirely down to rney, but we are expecting interesting things. Photo those charts points to risk aversion. Equities are on the back foot. I think you are right. I think this will be a fascinating testimony from the Deputy Governor today. I think both sides of the Brexit Campaign will hang on every single word to see if they can a spin anything from these bank of england officials in their favor. The bank has tried to be noncommittal up to now, but today under pretty intense grilling we could see some opinions being put forth. Hans i like that call, richard. You are basically saying members of parliament are smarter than central bankers. I dont think you will get many echoes from that, especially not in frankfurt. Will you be live blogging this throughout the morning . Richard i will be live blogging the ecb on thursday. I think my colleagues in the newsroom will be doing the carney event today hans that is good. When it comes down to it, the ecb is more important than the bank of england, with all respect to guy johnson. The main event is on thursday. Unless guy wants to get parochial and the disagree with me. Guy i am not going to disagree with you. Both events are fascinating. We will get into that a little bit later on. To the point about what is happening in germany, though, and to hans point, Industrial Production data is out this morning from germany and is quite strong. Germany is reengaging the gears and may be starting to look stronger. Richard we have got the issue on a bunch of different metrics. Unemploymentn which is at an alltime low. And then, frances unemployment high. An alltime this is the challenge that faces draghi and the governing council. Guy nevertheless, there is a function on bloomberg. If you look at the rates we expect from germany, they are significantly higher on the payr oll. Split hase know that been going into the ecb for quite some time. You are right to point to the data today. Mario draghi is the head of the ecb. He has to look at policy decisions based on the entire eurozone. Guy there is another piece of evidence he still has a problem with. End the point you mad yesterday, the number is still very low. The market continues to watch that carefully as well. Richard, thank you indeed. We look forward to his live blogging on thursday. And we willulse bring you live coverage of that brexit testimony. Mark carney and his deputy will be giving their views to u. K. s parliamentary select committee. That starts at 9 15, roughly. That is coming up next here on bloomberg television. Watch very carefully what is happening in the gilt market. Francine extra liquidity as the bank of england make sure there are enough funds for banks here it just banks. Banks. It jumps to the most since 2009 outweighs ac demand slowdown. Taking trade. Chinas first tumble chinas 6. 5 growth. Francine welcome to the pulse