Threatened by u. S. Tax rules. Is the inversion era over . What does the head of the imf have to say about greece and Global Growth . Bloomberg will speak first two Christine Lagarde later this morning. By what was happening in the european banking center. We still do not know what the Panama Papers mean. Zeb we have not heard from the regulators. We are starting to hear from the banks. They have said they have done their due diligence. We have not heard from investigators. This mysterious thing with the banks could be the tip of the iceberg. It is not like panama is the biggest tax haven. It is one of many. And they are very clear confident in their compliance practices. Given the history of all of these stories. We are going to find out how investors feel about their banks very shortly. It looks like we are heading to a negative start to the day in europe. European stocks are pulled down. The cac is going to open up lower. London is down. 4 . We are going to see a negative start here. The particularly dollaryen, it does all the way down to a stronger yen. It broke through the 110 mark. Crude is well below 31 a barrel. Pricing action this morning. It is all the way down there at 175. You see how treasury and the yen bonds have traded in tandem. Lets get the bloomberg first news. Kumutha thousands of lenders have taken to the streets to express their anger about the government. That was after the panama paper scandal. They allegedly benefited from offshore accounts and tax havens. Protesters were at the parliament in reykjavik. Motion oforward a noconfidence and called on the Prime Minister to resign. German factory orders unexpectedly fell. Slowed down is weighing on europes largest economy. 1. 2 from theped previous month. That compares with a median estimate for an increase in a bloomberg survey. Pimco says that bill was warned. He wouldwledge that lose the fund if he quit before the Third Quarter of 2014. They are challenging grosss allegations that he was forced out. He is suing for around 200 million. He said that any settlement that he receives will be donated to charity. Speaking exclusively to bloomberg, President Trump says that he is openminded for additional rate hikes this year. I would not be surprised if that was one in the middle of the year and one at the end of the year or one in the fall and one at the end of the year. I think it will depend on the data. I will be openminded about it, for sure. News 24 hours a day powered by our 2400 journalists in over 150 news bureaus around the world. Thank you. The chief executive of Credit Suisse says that he is compliant in his ranks compliance with tax issues. Panama papers, it dragged some banks into the mud for setting up shell companies. He spoke exclusively to rishaad salamat. Rishaad is then in buy in hong kong now. What are you taking away from this . Is this a bank ceo they give you full confidence that his bank is in the clear . Rishaad it is hard to say. I asked if the regulator had been in touch with him. He said that he was not prepared what then the regulators had been demanding of Credit Suisse. He said a few months ago that he wanted to change the culture at Credit Suisse. He called the culture completely unacceptable. We are talking about 11 million pages of documents that came out. Been pointingave at various world leaders. Is, were they legally compliant . That is something that he says rent. Hey we we only accepted it for legitimate purposes. We do not engage in that. They have to leave the bank. When there are structures beneficial to a thirdparty, we insist to know who is the beneficial owner. We are very conservative in our practices. Lets not forget that Credit Suisse is one of 500 Financial Institutions that on embroiled in these socalled Panama Papers. There is no doubt there will be further revelations. He was keen to emphasize why he was here in this part of the world. Doubling profits in the asiapacific over the next three years. China was doing very well when it comes to Wealth Management projects. Well. Surprising him as they are exceeding his expectations in actually getting clients on board. While the rest of the world sees it as a chance to cut jobs, they are adding headcounts. There seeing this as pivotal or key to their future. Guy, that is it in a nutshell. Guy thanks very much indeed. Lets carry on the conversation. Its bring in our yes. Guest. The problem with this story is that investors just do not know. Situationling with a where investors are questioning whether management has a line of sight. Knowact that we do not casts a shadow on a sector that has had such a terrible time. It is unwelcome news. Shouting fire in a crowded room. The history of recent practices and the Financial System is quite good. The last 10 years is pretty appalling. Banksct is that these have changed already. The regulators have got them where they want them. You think the regulators will have an easier time managing this process . John undoubtedly. The banks are better structured to know what their liabilities are. It is part of a process. The first part of the process is that you had an overleveraged Financial System with no transparency. By the way, changing all of the management. He was one of the guys that helped. Newty much, we have got a bunch of captains on the ship. We have a new structure of the Financial System. For the move on Financial System to play the role it used to play. One of the roles is to liquefy money and lend money to legitimate businesses. That is what you have got here. Thehave got a large part of puzzle in terms of the regulators getting their hands around a bad system, for everybody to make sure they understand who the boss is. It is government. That is part of taxation and the whole thing. I am not intimidated by what we are seeing. , we are closer to the as rather than the beginning the Financial Services showing up as the evildoers in the room. Zeb are we going to hear that from the bosses on the Panama Papers . Do you expect to hear that the u. S. Department of justice is opening up new investigations as a result of these papers . Course. There is always a line of american litigators looking to help themselves to free money going around. What we have now is a very different scale and nature of offense. Even mr. Thiam was happy to hegest that in his opinion was saying in code that all that they had done is put together legitimate tax structures. People that if the have these tax structures were criminals, it was not his job. Customers, banks have and some of them are not entirely pristine. As long as their source of funds and the business they have done with the bank and the bank has a per reported to the authorities, then they are like you and me, they should not be held liable. Guy if these guys were criminals, they would be quite concerned about that. John absolutely right. Zeb we acknowledge that some banks have some unsavory customers. We do not have any unsavory guests. You are sticking around for the next couple of minutes. We do have the australian rate decision. This puts pressure on the companys economy. We are live in sydney for an update. Australias Central Bank Says a resurgent currency could hamper the economy. It held its Interest Rate at a record low of 2 . We will speak to daniel petrie. The currency is having a profound impact on the adjustments in the economy. Walk us through it. A very good morning to you. The us trillion bank did leave rates at 2 . That is above were the fed is an even further above what the japanese authorities have been doing. The transition in the australian economy, the country has been a inefficient very of a once in 100 years mineral boom. , australiaoming off can transition into new industries. They are selling a lot more services into southeast asia. Seen ints have been more recent times, that currency has taken off again. Mosts risen by 7 10 , the raising . 80. New, it is anything really a wait and see game for the central bank authorities. Is guy, the data is not exactly great. Should we sit back and wait for the data to soften up . Is whatperhaps that they are starting to look at. There was one fly in the ointment today. The big thing about australia, this is not a place of great culture. What we do very well is export lots of minerals. That is what australias stock in trade was. We had the trade report. We have a deficit of 3. 5 billion. That is staggering money and you think about that adding up over a quarter. Effectively, the only thing going for them is that they have a pretty good unemployment rate. You need to get the engine going. Before that trade report and before the Central Bank Decision today, it was proverbial murder on the dance floor. They certainly killed the groove. Iny do need something chinese manufacturing. It would go a long way to improving the prospects for the land down under. Guy we are going to leave it there. We will leave the culture aside as well. The rugby is not bad. Right. John is still with us. Needs chinafinitely to get back into its groove and get going. Is it going to happen . John our view is that it is a long way through the course that it needed. If you analyze the growth rate in china, the government said 6. 5 . That seems to be backed up by the blend of manufacturing data and Service Sector data in china. I do not think the leadership is telling a story that is wrong. Clearly what has happened is we have a massive oversupply of products that we thought china would need in the future. That needs to gap by still growing chinese demands before the prices stabilize and go back to what was very pleasant conditions at the turn of the decade. China is going to be a help to Global Growth. Is it going to do and a change the commodity price environment . No, i do not think so. Clearhe fed has been very that it has been quite honest with the global story. He was talking about two fed rate hikes this year. He is on the dovish end of the spectrum. Take a look at pricing. Post the election, it was only 57. 9 . You look at this and the market is barely pricing in any hikes. Do we have a mismatch and how does it get resolved . John i think there is a mismatch. The Federal Reserve is responsible for it. Clearly, they are adjusting their commentary to global conditions. Erian if you have a central bank that is not setting Monetary Policy based on u. S. Conditions, but rather global conditions, you cannot say that this will work very well. They just do not know. The Global Environment and Global People watching the world say that if you realize you are setting the global price of money and you take that role seriously, then probably two rate hikes is too much. If they go back to looking internally and setting prices for the fed, then two is too f ew. Hans looking outward for the u. S. Fed, that brings us to our chart battle. Betweene regulation japanese and u. S. You get to choose which one is the winner. It is at this point where i compliment you on your tie. The white line is the japanese curve. We see the first bazooka. This is when things are rolled out in 2013. The blue line is u. S. Debt. Then they start moving in tandem. Isn you get that bazooka where you see it working exactly in tandem. You see the 10year yield going all the way down. Now we have negative rates. Japanese Interest Rates going down and the u. S. Interest rates also falling. You have to follow the former path, which is looking at this outside. Internally, she may look a different direction. These are the sort of forces she is up against. I will have guy throw you his chart. I will be generous this morning. John can i point out that on the thai, there are owls. Empty, but there are rain clouds on that tie. We will put the two things together. This is looking at the s p 500 profit estimates. This is what we are seeing in profits forecasts since 2010. A massive drop. You could take this is glass glass half empty. The reason i say this, maybe with a loan estimate, the market could clear this. We could say that we are going to cheer and the stock market is going up. We will be blown away. John i think that a lot of that will be resource oriented. Last year when we started with the s p, people started with 116 and ended up around six dollars. In of that was essentially the Energy Sector and material sector deciding that they were not going to grow. That has been pushed out. In the First Quarter we start with a bizarrely negative oil price. A large part of that is going to be to do with that. If you look under the bonnet, you look at the core rate of Earnings Growth in the u. S. It is in the range of 4 or 5 . That is what it is going to be for the year Going Forward. Those sectors of the market that do not have a very high bar to hurdle anyway. The dollar has been a bit more benign this quarter. There is a tiny bit in the tank to surprise on the upside. Talk aat i have done is little bit and then he talks a little bit. To pick aing to have winner. I cannot remember what it was. John i think it is right that yellen is paying attention to global Monetary Policy. Ultimately, the u. S. Wins. Engine brings other people up. It is quite clear that negative rates, which is where japan and europe have put themselves, is an experiment that is yet to prove itself convincingly. Guy 20. This is not going well. Sfacese smile on nichol is unnerving to me. Stay with us. Coming up a little bit later, Francine Lacqua speaks to Christine Lagarde. That is at 9 30 u. K. Time. The open is next. Guy good morning. Welcome. I am guy johnson. Hans nichols is over in berlin. We are moments away from the start of european trading. What is top billing . Hans dragging european banks into the spotlight. Tidjane thiam says he is confident in his clients will agree. We will find out shortly. Could beas it threatened the air of inversion over. The first tol be speak with Christine Lagarde later this morning. Well take a quick look at futures. Being mostly on the negative side. It is all negative with the exception of the ftse, guy. What do you have for me . Guy here we go. The new price on the fair value is showing a negative number. Lets see exactly what numbers we are posting. At the moment, not as negative as maybe the fair value suggested. The market may settle the story out starting more negative now. The ftse down. 5 . Open todo not have it properly on the dax yet. Names thatg banking could or could not have an issue with this penama papers story. Panama papers story. 3 . E down. 1 the cac down 1. 4 . The market a little bit better. Lets see if i can do you out of the imf and get you updated. What we are seeing is a sector rotation that we have not seen thus far. The wheel is all green. We will show you what is going on. It is the Energy Sector, that is the big loser. Materials are down. Financials in the mix here to banks are down by 1. 54 . The Banking Sector really under a lot of pressure. Hsbc is down by 1. 67 . Youve got some of the Spanish Banks trading softer. It is interesting to see the Banking Sector is really coming under pressure once again. Lets get back to our guest, the head of research at investec, john haynes. Haynes he gave hans the chart battle. The banks are trading off again. John it is hard to say what is the Panama Papers are affecting a large number of banks. Now,ed to concentrate on it is one of those sectors. One of the sectors reveals how the broader world is going to go. The Financial System is reacting anyway that suggests that negative Interest Rates are having a more negative effect on the prospects. Guy do we understand this . John that is why we have to look at the aggregate indicators that are trying to tell us. There are two affects, one is your margin. Low interest margin. You would hope it would be offset by the relief. The money is going to boost Economic Growth and the credit upload to the equation. Particularly if you also back this up with he gave the banks to offset that interest margin pressure. Investors are not believing it. That is a bit concerning. There is something about this experiment that may be they run out of bullets. Maybe they shot maybe shoot themselves in the foot. Hans im going to pick up on that metaphor. I want to remind viewers, Credit Suisse is down 3 . Anglo american down 4 . When you look at the ammunition argument with the fed, is it going to shoot itself in the foot, do we face a massive credibility problem . Central bankers are the wizard of oz, they do not have the hours they pretend to have. Best they do not have the powers they pretend to have. They do not have the powers they pretend to have. Jonathan john i am a bit of an optimist. The coronation they have to yed has allowed us we have had a depression no question. We would have had a depression no question. They have displayed a ability to deliver. Thathave been saying increasingly loudly. The next stage has to be fiscal policy. The world cannot print money itself into a better situation. Giving the coded green light to america. A number of european nations are increasingly strident about their desire to loosen the shackles of austerity in the european union. Even in the far east, weve got china looking to do more proactive stimulus. Think the next stage is clear. The banks have to do what they have done before. They cannot do more. Hans i will concede your point, john, the firefighter did an extraordinary job. What do you say the argument now, the Monetary Policy and highoctane fuel that is out there is enabling on the physical side not to make the Structural Reforms that seem obvious to be done. In some ways they do not pull the pressures from the markets to make those changes. John that is an argument. That is a strong set of views that they are doing more harm than good. Suspect that we would rather that we stay in the same environment as we are now. Less to take care of of the process, we start injecting real demand into the economy again. Clearly there are some strange things going on because of the environment we are in. The banks are telling you this something is happening with the negative Interest Rates. That is not comfortable that is not a comfortable process to watch. The truth . What happens people get comfortable with it. The issue of Interest Rates is because we have default, the banks themselves are looking at how to deal with it in terms of their business model. It is natural if you like there Risk Appetite to be temporarily tempered by that process. Decidect overtime they what business they are going to do and not do. The regulatory environment, with levers to play. We have spent a long time shouting at banks telling them what not to do. Banks, they can go off and stop allowing them to do more aggressive things. Tocan tell them to do thanks to do things. Guy up next, the play americas, the currency traders. The playmakers, the currency traders here it the currency traders. Guy welcome back. We are 10 minutes into the market session. Markettell you how the morning is progressing. We are seeing a negative story. The dow down by 1 on the average. Mining stocks are down, Energy Stocks are down and the financials are also trading softer. Stocks like Credit Suisse. That stock is under pressure. 13. 124. At down by 2. 3 . Hsbc down by 2 . Thats a little more than it was down in asia. The financials very much are a part of the stuff we are seeing. 10 minutes and 10 minutes in. Heres a bloombergs first word news with kumutha ramanathan. Kumutha their anger against the government, that is after documents link desolate in the Panama Papers leaked in the Panama Papers scandal. Police erected barricades around the parliament to protect lawmakers from protesters. If you hours earlier after the performed a motion of noconfidence and called on the Prime Minister to resign. In february fell and a sign that a global trade the slowdown is weighing on europes largest economy. Seasonal swings and inflation dropped 1. 2 from the prior month. The rating which is typically volatile compares the estimated warning in a bloomberg survey. Saudi arabia plans to double the size of its stock market which is among the most closed in the world by adding dozens of companies and making it easier for quarters to invest. Invest uarters to that is according to the Capital Market authorities. The countrys regulator. Pimco says he was warmed and he moved hisdge that he bonus if equipped the funds. The companys response came in a court filing challenging his allegations that he was forced out. The pimco cofounder is suing for his cut of the bonus pool around 200 million. Any settlement or ward he receives will be donated to charity. Or award he receives will be donated to charity. Looking forward to this year. I would not be surprised if there was one in the middle of the year and end of the year. One at the end of the year, so i think it depends on the day let the data. Im going to be openminded about it. Kumutha global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. Now you can find more stories on bloomberg at top. Hans. Hans i want to give you an update on the german debt, 10 year yield. Yielding at it has become the below that level for the First Time Since april. Just how cheap money is here. It gives you a sense why there is concern among german bankers for their stress on the banks and also a potential asset double. Deutsche bank asset bubble. Deutsche bank is down 2 since last i checked here i last checked. The Panama Papers and how the banks are going to react. Guy you can enjoy a line to what you just talked about in the terms of the bond market. The curve we continue to see. That extrapolates out to japan. You can see the extreme flattening we have seen their. We have seen there. Prices going up, yields coming down. Enjoy line back to the bank and say we deal with this difficult shape of a curve. Is this the right call back to john haynes point . How we work our way through understanding how this is going to fit together. You can draw some very clear lines in some these stories. Lets talk about one of the main risks down there. That is the political risk. Airbus says it is strongly supporting the u. K. Remaining within the european union. A letter sent to employees that represent around 11 of the workforce. The company warned that a brexit would not be helpful to its operations. Lets bring back in john haynes. Helpful. Not be clients you have talked to, do they understand . It seems to be one of the difficult issues to understand as an investor. John they understand there are real issues that will have impacts on their portfolio whether or not they can price them that is a different question. We have problems with that regard to delete when we have binary issues which is an emotional one. I fully understand both cases. If youre emotionally attached to a 70 issue, maybe there is another way. We dont know which way it will go until the time. It will become more difficult to call the odds. The bookmakers say one thirds in favor of us staying. Historically he has been pretty good at predicting, you can be relaxed about the event. We will learn more as the event approaches. It is only rational reaction to a negative event for porations in the u. K. There will be a period of reflection as they which in itself would be enormously negative for growth here and we are facing an event which has the potential for relief or a nice the ridges a nasty readjustment of expectations. That is something hard to price in to the markets. Hans go what is the main think thats hans what do you look what is the main thing you look at . The reason that is reasonably reassuring. I expect be less reassured as the time approaches and we take a little bit of risk off the table for our standard mandate portfolios. This is the reason. We expect to become more nervous as that time approaches. It is one of the few events we worry about. The fundamentals of the World Economy are reasonable. Is clearlyal risk rising, not just in europe but america too. And america becoming isolationists. Manages to spark a certain kind of debate, very different mindset than the one we are used to in the biggest economy in the world. Guy can i took on the other side of the trade . Lets talk about what is happening in euro sterling. It is come under pressure. The best forecaster on the bloomberg says it is the Biggest Issue is to see what happens with the brexit. John we think it will get through it. Exposure global generally. Generally we think it will be bad for Global Growth. Overall, Global Equities will produce a little bit because of our concerns that it will become a larger issue. We have not specifically targeted europe on that basis. Guy ok. Hans how much of a drag on the eurodollar is a brexit related . Is the pound pulling down . If we do have the vote on june 23, the u. K. Stays in the eu, do you expect to see the euro pop up just a little bit . Euro bump up just a little bit . John yeah, european financials will be helped. It will be a positive for european exposure and u. K. Financial assets. We just spoke of, there is the wrong result would be more negative than the right result would be positive. Guy thank you very much indeed, john. John haynes, the head of research at investec. The Panama Papers on the wealthy who remain in the shadows. Suisses ceo comments and an interview on the subject in an interview on the subject. Guy 22 minutes into the equity section lets show you what is happening in the european story. Risk off dominating. Youve seen it in japan and what is happening with the yen at an 18 month high versus the dollar. Look at what is happening in europe. A riskoff kind of sentiment being built in. The miners were down this morning, that is what that is what is dragging funding down. Dragging london down. There are the miners, 4 for bhp billiton. To look the bank sector. Down 3. 03 . Hsbc down 2 rate budget in frankfurt down 3 . Rippling through the bond market as well. Hans limited to my chart. Nothing shows you what is happening better than what is happening with the german bund. It is down. This is the last 30 days. We are all the way down below. We are at 0. 9 . That gives you a sense of how far it has fallen. That is zero, guide. That is zero, guy. What is driving the sentiment is the Panama Papers. Draggedlations have sentiments. They have dropped the share price lower. Referrals to other firms for help setting up shell companies. Jimmberg spoke to tidjane Tidjane Thiam on the subject. Tidjane i continue what our pencils are which will only allow legitimate legal purpose. We see tax compliance. Otherwise we are asked to leave. With thoseperate standards. Hans lets get to one of the reporters that is been covering this. Greg, you are on the story. The big question seems to be is this a storm in a teacup . Or is this a tip of an iceberg . Greg probably a bit of both. It is not like we just we just discovered so companies. Companies. Ed shell as far as the two but the iceberg, and a certain sense, yes, this is only one law company. I am sure there are plenty of other Law Companies in panama and British Virgin islands. Lets not be hypocrites. U. S. , itaware in the is in europe. Probably a little bit of overreacting. This is probably only a small part of the picture. Guy how do you think regulators are going to react . Greg theres already been a lot of work about opening up offshore centers. Theres the blacklist of offshore centers. That is a process that is been going on for 10 years and that is going to continue to do with the tax codes. The Way International tax treaties are set up. That is where the work is going to have to be done now. Guy it is fascinating to see how this works his way through the political channel. Us out of paris. Up next, a riskoff kind of morning. Backfired . J bazookas we will discuss that next. Guy 30 minutes into the trading day. Welcome back. Riskoff the dominant theme coming through it weve seen in asia. Coming through. Weve seen it in asia. The Energy Stocks are down. The mineral stocks are down. The bank stocks are trading lower as well and whether that is riskoff were related to panama, those are the numbers we have been posting around europe. One of those stories we need to be repented to we need to Pay Attention to. Ubs getting soft numbers. That is the oil story. The today chart, where down the. 2 . Where making lows at the moment we are making loads at the. Oment it at the moment the equity markets have been falling a little bit. We will talk about yen and a little bit. Tests in a little bit. Lets get to and a little bit. Lets get to some of the stock stories. Caroline we need to keep a close eye today. They are going to be tripling their profit target. Of a commercial vehicles and one pickup truck. The market doesnt really like it. Down some 4 . Persia is coming off its lows here at the most down the most since january. Saying. What ubs is the chief executive of peugeot saying a conservative approach they feel. Earningstargeting before interest and tax margins of war percent. Of 4 . This is their strategy until 2018. The new plan has Little School or any upgrade and consensus. They bailed out a couple of years ago. Siemens on the downside. Down 2. 4 . The reason you go there seems to be the reason . Urgencyare expressing to slash the cash to the cash. Players. Ate equity there could be some 4. 4 billion revenue company. Employees could be added. The amount of money is pushing the stock lower as they look at m a targets. On the upside, this is one of the best performers. 1. 4 higher. 1. 4 . Ey group up by this is a developer in the united kingdom. They look like they are winning in terms of Development Plans in west london. Homes could be built. 30 story tower is included in that. We will see if they get the goahead. Guy we have to talk about how the supply is in london. We will that conversation over the next few months here at a riskoff few months. Christine lagarde reflecting that. She is delivering a speech over in frankfurt. We are going to be talking to her in an hours time. She is saying the risk off Global Economy is increasing. She is talking about the need for greater noble corporation. Greater global cooperation. It would be tragic to close borders. I have not heard anything about greece yet, but i guess we will find out what she says about that. I am sort of i am sure Francine Lacqua will be asking. That is coming up a little bit later. Japan. Ets turn to their index fell for the first time just for the fifth time in six days. For the fifth time in six days. Trading down. We just heard from there he does your sugar from hirohito. He is saying they are wanting to keep making appropriate responses when necessary. Watching that fx moment this movement. With the sense of urgency. We will see whether or not they can talk down the euro. We are joined by adam cole. He is the head of strategy. We appreciate you coming in. When you take a look at what you see, we have a couple of Central Banks moving years now we have comments from the government of japan. What are you looking at moving. Now we have comments from the government of sudan thats government of japan. What are you looking at . Risk appetite is the climbing. Is declining. We see the Commodity Currencies weaker. The yen remains the beneficiary of the market say paving thats safe haven safe haven. Hans mr. Crow to not much success talking down the yen mr. Kuroda has not had much success talking down the yen. At what point does the market lose confidence . Do they have any control over the strength of the yen . One of the problems of the boj is one of the last policies it made back in january when you started introducing negative policy so i think what the boj probably will do Going Forward is open up policy debate to include a faction of the Balance Sheet is an option. That will be much more effective and putting some downward pressure on the yen. Yenmarket is along with the materially for the First Time Since the change of government. Think there are policy options for the bank of japan. It needs to swing that debate back toward monetary expansion. Aware of the fact that maybe we could get intervention from the boj . Yet. I dont think the problem with the boj in justifying intervention would be the yen is still undervalued at current levels. There may concern will be the pace at which it is moving rather than the outright level. If we wait for days just wait four days, the risk rises materially. Wait four days, the risk rises materially. Thatt think we are at point yet. The cloud i am looking at now for euro yen, the potential for a downside move is it there. Is there. You look at the actions of the boj versus the ecb, is it draghi versus kuroda guy kuroda . Not been a major factor in the declining dr. Declining dollar. It is been a commendation of thats aeing riskoff combination of markets being riskoff. A combination of markets being risk off. The Central Bank Policy outside of the u. S. Has played a miner roland that. Some forward you get if Risk Appetite stabilizes, dollar yen can build up more momentum. It needs those conditions to be met. Probably the most important factor will be the ecb. Guy your since would be more broader than that, risk on, risk off is the defining factor. Data continue to see week like we did out of japan, the market resisting the feds talking to us about to rate hikes being appropriate. Gives the extent of where this move can take us. Adam if we get down to 105 quickly, then you would see a real step up and the rhetoric. In the rhetoric. A material threat of physical intervention. Threat of physical intervention. If we carry on falling at this kind of pace, i think 105 would be a step up an intervention. Guy adam conner adam, good to see you. Up next, Indias Central Bank cut its interests rates to its lows late lowest rate since 2010. We are in mumbai next. Guy 42 minutes into the equity market session. I want to take you to frankfurt. The bundesbank introducing Christine Lagarde ahead of her speech. They keep piling the pressure on. He really is. He is saying the imf is indispensable part of the bailout program. He is talking about greece. He is saying Christine Lagarde, we need you you need to be a part of this process here at need you. You need to be a part of this process. Greece. Happening with we have some comments from Christine Lagarde already. Boj. Ive rates, we have not seen anything yet from her, hans on what is happening with greece. He is making the german position very clear. Hans he is making it easier for merkel to go ahead and go back to the bonus talk the bone this talk. The ims position is you need to have debt relief, they gives you a lot that gets you a lot closer to debt relief. It seems to me the yens environment is going to give some cover to Angela Merkel and cdu members that would be reluctant to vote for an overall debt writedown. It has to go back to the bundesbank. Lets go back to kumutha ramanathan. Kumutha thank you so much. Allergan shares plummeted in late trading as the u. S. Treasury department announced rules that would limit the ability of American Companies to avoid paying taxes by issuing debt to their foreign parents. Allergan is from new jersey but has a domicile in dublin. It would give pfizer a foreign address and lower tax rate. Its salespany missed asset. Lastipped 15,000 vehicles quarter below the forecast of 16,000. Tesla says that was mainly because of hearts shortages because of hearts shortages. The Company Reaffirms lance to deliver 80,000 to 90,000 vehicles this year. This is chief operating officer is stepping down. The move model succession plans at the Worlds Largest entertainment company. He was widely seen as the air to current ceo. That is your Bloomberg Business flash. Hans. Hans a move widely anticipated it was cut to 6. 5 , a fiveyear low to see where theceo any surprises in the statement. The fact remains that this was unexpected. The governor has stuck to the script by cutting. He is clearly making the statement that he will be maintaining his accommodative stance. That is the reason why he has done this. The inflation rate has been steadily declining for the month of february. That was lower than expected. Portly, the government in the recent budget. We traded commitments to reduce budget budget deficit. That is the finance up finance minister of india [indiscernible] aspect ofinteresting the Statement Today is the bank of india has moved to inject liquidity. The Banking System was fighting liquidity. The markets have responded. Guy great analysis. Thank you very much indeed good the view in india posted that rate cut. Allegan and pfizers merger could be in depth in jeopardy. The tax cutting power of inflation. Extended trading on that news. Nejra cehic is here. This hinges on the number of technical issues. Nejra exactly. The u. S. Company merges with a foreign firm, the u. S. Shareholders have to own 80 of the firm. The treasury plans to change that threshold to 60 . If shareholders have 50 or more, the could be subject to enter and version penalties subject to antiinversion penalties. The shareholders would end up with 56 . The Treasury Department said on monday the rules would limit companies to put his faith in inversion if they have already done them in the past six months. Allegan has been involved in several merges. Up to not turned be allowable, the ownership ratio would swing more toward pfizer and the treasurer analysis. It is still unclear whether these rules are going to impact the merger. This is why allegan and pfizer have to go way and assess it before coming out and saying whether there is going to be potential impact. They said they are going to conduct a review. Some say this is going to affect pfizers proposed acquisition. Others disagree. The companies appear to have anticipated something because the terms in the regulatory filing layout a foreign to Million Dollar in the event a 400 million in the event. Guy thank you very much indeed. Nejra cehic on the story overnight. Having a massive impact on both of those stocks. Have some more impact from Christine Lagarde p she is speaking live in frankfurt. The bundesbank president introducing her earlier. She is warning of global risk saying do not close down those borders good those borders. Have not gotten specific yet on the greece question. Francine lagarde will just Francine Kwok will Francine Lacqua will pressure her i am sure. Guy welcome back. Christine lagarde talking about the risk to the Global Economy are growing. I will take you to homeland to france. The pmi data. The flash number on the services , 51. 2 the actual number we now and sub 50 is actually contraction. French Service Sector that will be something for the bank of france to think about carefully. France has the ecb meeting talking as the ecb gets ready to buy company bonds. Heres caroline hyde. The fight is on to find the right securities. The derivative of fact but nevertheless, a trade. Caroline mario draghi came out and said we want to stimulate the economy that much more could we want to more. Want to buy sovereign bonds as well. We want to buy sovereign bonds as well. Nevertheless, you can see the borrowing costs is coming down. Bond pours in to these funds. 379 million was ordered into the euro Investment Grade bond market. We have had we have had inflows into the bond market. Corporate debt dollar debt selling off. How the debt selling off. Pound debt selling off. Coming down to the lowest we have seen in a year. We have 1. 09 of your average premium above government that. Money going into above government debt. There was such a scramble to get a hold of individual corporate bonds. A way to lower that market, sell insurance. The way of a betting on the market is not to be buying insurance, but just to sell that insurance. There is far more liquidity out there. There is a bigger premium. You got three times on your credit default in terms of return. There seems to be that cbs is where it is but also yields. Maybe tempting many to sell euros. Guy thank you very much. What islk about happening in the fx story. Richard jones joins me. Risk off this morning. We are seeing yields touching. You got dollar yen looking fascinating. What is the trigger . Richard the dollar yen is a tail wagging the dog. I think that as risk sentiment and japan is starting in japan is starting to falter. One of the more important things were going to have is the boj will look at this and will not be thrilled about it. Do they start intervening . They definitely will not be happy with the dollar yen falling to levels where it is now. Hans we had german pmi data coming in at 55. 1. The flash rating was 55. 4. It is still north of 50. Ncis saying it should be richard i think there is. The germany factory numbers were not brilliant either. Germany is probably doing better than everywhere else. These numbers are a little bit of a concern good injured concern. If germany is starting to lag, what does that mean for the rest of the euro area . Guy Richard Jones joining us. Would you more coming up on bloomberg television. The miss our conversation with his team lagarde. Just with Christine Lagarde. With Christine Lagarde. Then she is going to talk to Francine Lacqua. Today, john kerry at 4 30 p. M. It is a busy day on bloomberg. I am here london. Going to be a great show. Guy in the red here to europe stock markets fell and oil extends its decline onemonth low as investors reset last months rally in the riskier assets. Such a banks beverage as india cuts rates to a fiveyear low. Toreiterates his commitment just two more u. S. Hikes this year. Lagarde speaks as the path to a new imf loan for greece gross rockier. We talk bailout, brexit and Global Growth in a bloomberg first interview with Christine Lagarde