Transcripts For BLOOMBERG Bloomberg Surveillance 20200207

i am francine lacqua here in london. a lot going on in the markets. of course we will continue to follow credit suisse after the resignation of tidjane thiam. downside,it to the but starting less than they were at half an hour ago. u.s. jobscus on report today for any indication earlye could have seen signs of the virus impacting u.s. economy. we are not expecting anything on that. it is actually quite backward looking, but we do follow any corporate news to see whether they lower their forecast because of what is happening in china. we had burberry do that earlier. renminbi.e let's get straight to first word news with viviana hurtado in new york city. viviana: we begin with the coronavirus. the chinese doctor who warned about it back in early january has died. . weeks ago, he was visited by police and sanction for rumormongering. his death is now one of the 630 plus now reported. the number of coronavirus infections climbing to more than 31,000. beijing is lashing out at countries imposing travel bands, saying they are "sowing panic." opec expects russia to respond in days to cut output, confirming age price row triggered by demand in china. the opec alliances facing one of its biggest ever tests from coronavirus. the price drop could hit the budgets of nations from saudi arabia to cause expands -- to cause expand -- kazakhstan. pete buttigieg has a razor thin lead over bernie sanders in the iowa caucus. in thelaring a winner race due to the tight margin and irregularities in the caucus process. alls are usually considered official. not a germany, the fallout of a controversial path with the far-right. the politician at the center of the crisis has resigned. for the first time, a state premier, appointed with the help of the far-right. it involves a ruler with the chapter of the local cdu. it breaks convention, as established parties have vowed not to ever work with the right wing. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. francine? francine: viviana, thank you so much. our top stories today, a shock shakeup that credit suisse, tidjane thiam resigns. damaging spy scandal. thiam will step down after fourth-quarter results next thursday. he will be replaced by thomas gottstein, and he is a 20-year veteran of the bank. it follows a power struggle between thiam and chairman urs rohner. we have patrick winners, who has been following the story, joining us from zurich, and also anothernkford, joh guest. patrick, we have heard there was a fight between the chairman and the chief executive, but a lot of shareholders have come out and supported the chief executive. patrick: good morning. i think it is still a massive surprise, a huge shock that tidjane thiam is leaving just a couple of months after his chief operating officer. i do not think many people saw this coming. there was an eerie kind of quiet indirect, and that we know why, because tidjane thiam was ousted. i do not think this is a big shop today. this tiedpatrick, is 100% to this by scandal? to say. it is difficult supporters are not saying it is tied to the spy scandal, but what you see in the press release today is that tidjane has apologized for everything that has happened, the first time he has done that. previously, the chairman has apologized, and today is the first day that you have seen tidjane doing so. credit suisse will hope that all of these negative stories are over. the other thing that might come out of the woodwork's in the future are ther shareholders, who have been threatening to replace rhoner if thiam, which is exactly what he has done. francine: let's get to jan patrick. has he done a good job at actually restructuring the bank? did.atrick: yeah, well, he that is why it is also a little bit surprising, as patrick mentioned, because he did an excellent job and restructuring the bank, realigning it with a more, let's say, conservative approach, focusing on real tail banking and wealth management and moving away from more voluntarily -- volatility. that is something investors and analysts are wondering about, if the bank will now change its strategy. gotss not, given that ttstein is a long-term employee. francine: the share price is down 5%. it is falling by a little bit less today. we have any idea what top shareholders are thinking today? patrick: yes, that is the main thing to watch now. we had a couple of major shareholders publicly backing thiam and urging the chairman to either do the same or resign. the big question now is -- what will those shareholders do? powerhey start another struggle in the board? that is probably why people are really concerned right now and selling shares this morning. gottstein, amas 20-year veteran of the bank, who leads the swiss unit, how differently will he lead this bank? jan-patrick: i think he will be pretty different. thomas gottstein is as swift as they come. he did spend a lot of time in london. he used to work for ubs. he is an ecm banker by trade. that is how he progressed in his career. he is in his mid-50's, i think, so he is definitely the safe candidate. i am not sure right now you would say he has got the same star quality that tidjane has. barnhart,jan patrick i do not know if this would happen in germany or elsewhere. can you talk us through differences of how swiss banks are run, whether the chairman has more power than in. . other parts of the world. jan-patrick: i think it is a little similar to what is happening or what could happen in germany, in all of the german-speaking countries, the supervisory board has a strong position, and when things turn sour, of course they have to take action. and with all that thiam has done in the past, being a good manager for the bank, at the end, the buck stops with him, and no matter whether he was fully aware with what is happening with the spying scandal or not, it is is responsibility that those things should not happen, and that is why i can understand that the board at some point woul was now forced to make a decision here. francine: patrick winters, we know that the chairman, or thrown or, has -- urs rohner, has complete backing to complete his term until 2021. or emboldened by this? he is in bone then, if you can make it the next year without shareholders trying to topple him again. eventually when it came down to is -- who is in control? is it the board or is it to jam p.m. -- tidjane thiam ? the board decided that they were control, so it appears that this strengthens rohner, at least for now. francine: if you look at the way that this is portrayed in the media, it looks like it is the old guard against international investors. how much truth is there in that? patrick: there is definitely come in the way the story has been pursued, i would agree with ,hat, i would agree with that the swiss process turned against tidjane thiam. francine: thank you so much to both of you, patrick winters in zürich and in frankfurt, again patrick bernhardt -- jan-patrick barnert. iq new show, "etf at 9:30 is coming up a.m. you can also contact us on your terminal. up next, we will talk about the growing impact of the coronavirus on the global economy. this is bloomberg. ♪ . ♪ francine: economics, finance, politics, this is "bloomberg surveillance." i am francine lacqua here in london. let's get to the latest on the coronavirus. japan has 41 cases. number for china's mainland has climbed to more than 31,000 over the last 24 hours. burberry has scratched guidance for the year. it has wiped out at least three-quarters of sales in china. and l'oreal has warned of a temporary and slow down its china business. joining us is fiona frick from you just and. welcome to the program -- from you just and -- unigestion. welcome to the program and thank you for joining us. now markets are trading sideways, but we have more companies coming out, say and watch out for guidance in china. how do you view this, from the finance perspective? fiona: it is interesting, because it was quite good lately. we have seen that the u.s. thath has been good, european growth is not stellar. at least we are not in a recession we are growing around 0%. the central banks have shown that they are there. the u.s. central bank, the european central bank, even the china central bank, and inflation is nowhere, so on the macroeconomic front, it is quite good. then you have this coronavirus, which has demand on china, which could have an impact on global demand and therefore on global growth. and there is also output. francine: to the point that we could see the seeds of a possible recession, or not so much? is it slowing growth? fiona: it is slowing growth. to the coronavirus and with the response that china has done, which is incredibly powerful, with the currency and all of these people, the impact that could have on consumption and on out for some global companies could be quite important. the question is -- how long will it last? it is more of a wide shot today for us, but we are looking at, we keep our positioning, which is still positive on the macro side, because growth is still there in the u.s. no inflation. central banks, which will be ready to step in if there is a problem. francine: ok, will that be enough? if central banks step in, even the pboc, do they have better tools than they did in the downturn back in 2003? fiona: i would say that we are in a different position than we were with stocks. i would say the economy is stronger, wages increasing in the u.s., on employment is going down. so i would say that the economic situation is better than what it was in the past, so i would say that generally when i central bank does something, it has an impact on markets, and it has an impact on wages and unemployment. francine: how do you monitor the coronavirus in terms of markets? it is also like everyone thinks they are a virologist, right? trying to figure out how it spreads. do you look at data points, or do you try to preempt them? fiona: i think you have to look at earnings from companies, because moving forward, the results we get now are backward looking. l'oreal is a good example. the information burberry gave today is an interesting example. so it will be trying to understand the forward-looking outlook that companies give directly into our models. francine: if burberry comes out, do you assume that the whole luxury and sector is hit, that you would pause or be more cautious about? fiona: luxury sector is very dependable in china. obviously l'oreal, all of these companies will be suffering from the coronavirus if it expends much longer. francine: where do you see value elsewhere? fiona: [laughs] francine: if they're part of a market that is immune to the coronavirus, or do you look for positive growth in europe? we don't even talk that much about details that president that could -- tariffs president trump could impose on europe anymore. fiona: with the china and u.s. trade in general, which gave instability to the market, the problem is the markets are quite expansive, so whatever the news, and it can be the coronavirus, it could be bad news on the trade deal, it could have an impact on the sentimental investors and turn things upside down. what i found very interesting is in that performance in january, it looks, on the surface, okish, but there are some strong distortions. you see u.s. equity, which was up, european equity, which was down, and emerging markets, which were even more down than that. you see the credit u.s. down, you see defensive assets performing quite well. obviously taking a hit, and the dollar going up. your opinion on investors and the market is much less than it used to be a month ago. francine: thank you so much, fiona frick looking at some of the opportunities but also thanks winnie to watch out for in the market. she joins us from unigestion. after a record 2019, european now has assets under management as well as a trillion euros. etf iq europe," is coming up. we speak to the chief investor next. this is bloomberg. ♪ t. this is bloomberg. ♪ francine: this is "bloomberg surveillance." i am francine lacqua here in london. let's get straight to the bloomberg business flash in new york city. viviana hurtado. viviana: credit suisse accepting the resignation of ceo tidjane thiam. he will be replaced by thomas gottstein after fourth-quarter results. thisfollowing turmoil at was lender. the board says it unanimously back to chairman urs rohner, this until his term ends in april of 2021. now to burberry, the company scrapping financial guidance for the year as it warns the coronavirus wiped out three quarters or more of its store sales in china. 24 of its 64 stores on the mainland are closed, despite uncertainty over how long the outbreak will last and how far it will spread. by the end of the year, uber forecasting its first-ever quarterly profit. it signaled cost-cutting measures are exceeding the company's own expectations. the previous go for profitability wasn't 2021. the push is likely to take its toll in growth. bookings will decline slightly. that is your bloomberg business flash, francine. francine: thank you so much, viviana. lowered itshas quarter, disappointing numbers. we are joined now by phone, the chief executive officer of norsk hydro, hilde merete aasheim. thank you so much for joining us. first, you have more than 600 employees or around 600 employees and several plants in china. how are you dealing with the coronavirus? hilde: well, the plants that we falling china have been , following revelations from authorities. we are following the situation obviously closely. francine: give us a sense of how will impacte virus the demand, first of all in china, but could we see a bigger spillover worldwide? hilde: well, i think it is too early to have an overview. it depends very much on how long the situation will take. we are following the situation closely. the long-term effects are too early to estimate. francine: i understand it is too early, and we have numbers companies, including burberry, already giving us an idea of how much of an impact it will have. but if we were to say, as we are now, quarantines, lockdowns in certain cases, if it potentially does not get worse, is it impossible to estimate how much demand that would take away from the market? hilde: i think i would not give an estimate on that. francine: is it worse news than the trade war? the market -- obviously affects the market. that is exactly why we have announced the financial results today, which are weak, which is foruenced by lower demand aluminum due to the macroeconomics. see a surplusou of aluminum this year? hilde: for 2020, we do. francine: all right, thank you so much, hilde merete aasheim, i hope to speak to you soon. she is the chief executive of norsk hydro. european trusts now have assets under management up to one trillion euros. our new show, "etf iq europe," is coming up in just a few minutes from now. this is what your markets are doing in the meantime. there is quite a lot of news out there. we are also seeing a headline just crossing the bloomberg terminal on the virus coming from singapore, saying it is on par with how they were dealing with sars. this is bloomberg. ♪ is bloomberg. ♪ francine: welcome. i'm francine lacqua. everything you need to know about the funds and the flows. . francine: european exchange traded funds have stormed. 107 euros. we'll look at what's hot and what's not. and authorities around the world grapple with the coronavirus. how should you hedge? and the largest money manager planning to invest more sustainably. we'll tell you how to profit from green etf's. what are exchange traded funds and why are they growing so quickly in europe? we'll bring in danny berger. why have they grown so much? dani: it has to be costs. they are simple indexes that need to be followed and are much less expensive than their actively traded counterparts and because the others are actively managed there can be inconsistencies what you're getting with exposure but e.t.f.'s you get that transparency and a lot of banks and institutions and wealth managers like to use them as a buy and hold strategy. the interdaily quidity, if you want to trade anything strategic and want to buy a sector, you want to do it that day or sell it that day you can trade in that way with e.t.f. i said it was the cost and also just the breadth of offerings, we're seeing providers get really creative what they're giving clients. for example, you can go out and buy a three times inverse levered oil e.t.f. we're seeing managers use these in lieu of futures. every day we get more and more e.t.f.'s out there especially in europe and gives investors a wide breadth of strategies to use them for. francine: why are we so far behind the u.s.? dani: when you look at europe, the u.s. has four times as much assets as europe. really the genesis of the e.t.f. market was very different in the u.s. it really started as a mom and pop product, a very retail heavy product but in europe it was the opposite. this was something that institutions bought and now is just slowly making its way to retail. according to morningstar we are seeing more penetration and because of that the e.t.f. market could reach $2 trillion in 2024. to get there we need to see the continuation of what we had the past few years, that's regulation promoting e.t.f.'s in europe and more stock brokers offering cheap ways to buy e.t.f.'s and then we have roboadvisors like nutmeg using e.t.f. the retail portion is growing but definitely a institutional part in europe. francine: let's welcome our guest the next 30 minutes, peter thompson head of goldman sachs e.t.f.'s. when will the european e.t.f. market try to match up with the u.s.? why is it so much smaller and what needs to change? dan: dani made good points. it's a market in the developmental stages and even though we're a quarter of the size of the u.s. market we're growing at double-digit rates and seeing organic growth across countries and i think when we look at europe, it's developed differently with the institutions starting it but then we just had a natural fragmentation that is the french market, the german market, the u.k. market coming at different times and coming in different ways. francine: do we need and will we get the tax incentives the u.s. e.t.f. investors have? peter: i think that will be difficult. there's a inherent structure in the u.s. tax code, in species transfer that has enabled that. unlikely it turns up here but still the principles dani mentioned of transparency and ease of use, at the end of the day you can't underestimate convenience. it's easy to use these products. francine: if i'm an investor do you need to choose france over germany, how confusing is that? and the french investors largely. peter: the one thing that's taken a while for investors to understand that's simpler in the u.s. market where there's one listing, one currency, one regulator, is we've had a bit of fragmentation of liquidity here. there's a listing in paris, a listing in milan, etc. that's changing, also. one of the big developments in the last year or so has been r.f.u. platforms. bloomberg has one and trade web has one that aggregate liquidity and has been excellent for clients. francine: we'll see how that changes in the coming years. peter thompson from asset management stays with us but what's hot in e.t.f.'s this week. which secretariesors have been attractive? dani: i'm looking at f.l.o. go. a look at what bond and stock indexes had the most flows year to date. the top one for this year so far is the u.k., the bottom one is germany. this is a trend we've really seen over the past year continue. u.k., $320 million worth of in flows so far this year. a lot of that is guilt products. you have to imagine the u.k.'s negotiations with the e.u. and whether that trade is going to get done. certainly a big player here, germany, we continue to see economic weakness and why we see these big red outflows as well. one of the interesting ones, we've seen some outflows from norway as well. you have to imagine some of the coronavirus impact is being effected here and north cairo disappoint and a lot of the stock indexes will have raw material producers in them and might make the norway e.t.f.'s look unattractive as those risks persist. francine: coming up how you hedge and how do you use e.t.f.'s we'll discuss that and which e.t.f.'s are attracting the money in europe this week. that's coming up next and this is bloomberg. ♪ ♪ francine: this is bloomberg e tfiq. what you need to know about the europe funds and flows. let's talk about hedging against risks. how do you trade the black swan risk? investors say the answer is to go big. despite the market turbulence, more than 600 million europeos in net new investments have flowed into e.t.f.'s and 150 million have gone into fixing. peter thompson from goldman sachs assets managements. if you look into flows what makes you worry the way the market is changing and the way it's functioning? peter: fixed income is a big part of that. last year was the first year ever in europe we had more flows in fixed income than equity and it was a very similar dynamic in the u.s. market and one of the highlights of that segment has been the short end, the short duration. so we're getting a sense more and more investors are using fixed income e.t.f.'s in cashlike instruments when the market has some stress or when they're parking money for a little while before they make a decision but very effective way to do it. francine: does it track and is it parallel to the havens we're seeing across the world? if there's something like the coronavirus scare and you see a bit on yen and a bit on the u.s. swiss frank and cold and treasuries do you track that with e.t.f. peter: gold is a great example. the gold e.t.f. market has been a game changer in allowing very simple access to gold. you've seen a lot of inflows into gold last year, also. francine: the instruments, gold, i want to buy a gold e.t.f., how many instruments do i have to choose from? peter: you have a lot of choice. there's probably 10 out there and you look at something commoditytized like gold, it's about price and size of the fund and how big you want to be in percentage of the fund but you have a lot of choice. francine: is there a french frank or does it not make sense? peter: they've been slower to take off but in europe we have multiple listings and multiple currencies. investors that want european equity exposure in euros and sterlings, in dollars depending on their home currency can take all those choices. tom: dani has the leader board we'll look at when you see the flows, is there anything unusual when there was that freakout from the coronavirus? peter: again, you're seeing in some places in the e.t.f. market is the price discovery and particularly true in the u.s. market. the first views investors are expressing are hitting e.t.f. francine: peter thompson from goldman sachs asset management stays with us and we look at he e.t.f.'s attracting people. dani: this is what he was talking about and at the top is a u.b.f.e.t.f. when we see them on the top it's usually the e.t.f.'s they use internally and this is a lot of wealth management. they cut their call on u.s. stocks and upgraded e.m. and we're seeing that effect. the i shares e.u. inflation linked bonds getting over $200 million worth of inflows the past week. christine le guard said she was optimistic about the inflation picture in europe. in the meanwhile we have is e.t.f. and a e.s.g. also. it's bigger in europe and we u.s. ord enflows into e.s.g. e.t.f. pps. can you see two three e.t.f.'s being the biggest loser and perhaps the coronavirus concerns are making investors draw mare money with the amundi offering. here's the other side of the u.b.s. trade. they upgraded e.m. and withdrew money from their u.s.a. e.t.f. francine? francine: thank you very much. et's talk about investing in e.s.g. when black rock said they are becoming a key factor. investors sat up and listened. how can you use e.t.f.'s to prove us from going green. back with peter thompson. if you go back to what you said e.t.f. can be a price discovery point when the market turns. did you see more violent moves? i don't know how you look at it, do you track what e.t.f.'s do in gold and compare them to what the actual price of gold to see which is more violent or is that useless? peter: i would say a slightly different angle. most of what we look for there is daily trading volume. where is liquidity and how narrow the spread is getting and the turnover you see in the market. that's a leading indicator of where people are taking those views. in things like gold, short end treasuries sectors we see that quite frequently. francine: talking about e.s.g., what are you seeing in e.s.g. e.t.f.'s? peter: it's a huge growth area. for a long time a lot of us thought there was a lot of talk on the topic, is the money moving and is there action? i think there's been a paradigm shift. e.s.g., you'll have to prove what you're doing and investors are asking for it and they want to know. there's various ways to do it and i think the e.t.f. market will be at the forefront of that. we've seen some bold statements from black rock, from goldman that this is really changing the way people invest. francine: what do you look at for an e.t.f. e.s.g.? is it like a part ruble and part something else? peter: there's a basic way you exclude things people don't like for whatever reason. but i think that's pretty rudimentary. it's about the data now. francine: there has to be an active one, right? peter: not necessarily. you can put e.s.g. in a transparent index and there's a fair amount of it out there. esmci has done that with their families. right now where the active and passive worlds are meeting on this topic is the data. what can you draw from the data? is the data good enough for us to take views on which factors are influencing e.s.g. and how that relates very importantly to performance. francine: and european investors have real appetites for these kind of e.t.f.'s? peter: it's still a small segment. you look the a e.s.g. of the $6 trillion out there, it's 1%. it's still small but investors are demanding this. they want to know and it is shifting. i think you'll see more and more issuance there. you already have had some big scandinavian pension funds taking views publicly on e.t.f.'s so it's coming. francine: can you tell where the demand is coming from, which kind of investors or where these investors live? peter: i would say scandinavia is one of the lead points in that, very advanced in their thinking. and i think that's again, there's diversity in terms of where is the view on e.s.g. in sweden versus italy versus the u.k. we have different paces in terms of how people are adopting this, the principles they're using. but it's moving. francine: how much do you expect it to grow, now 1% of all e.t.f.'s peter: it's $60 billion out of $6 trillion. it's one of the areas from a small base has the most rapid growth and i think you're going to see some bigger bets. usually see kind of incremental movement. i think you'll see bigger bets. francine: give me a number, 5% next year in europe? peter: i would be surprised that number doesn't double at least. francine: peter thompson stays with us. from green investing to investing in green. we'll tell you about one of the more surprising things you can look at it. that's coming up next. you guessed it, it's cannabis. this is bloomberg. ♪ ♪ francine: good morning, good afternoon, good evening. this is bloomberg e.t.f.i.q. europe. everything you need to know about the funds and flows. i'm francine lacqua here in london. the days of e.t.f. just tracking indices are long gone. there are now e.t.f.'s for just about everything. every week we'll dig down into the exchange traded funds you might not have heard of. here's dani burger with this week there is an e.t.f. for that. dani: cannabis e.t.f.'s have crossed the atlantic after the success of the product in north america, hand e.t.f. and purpose investments have launched the medical cannabis and wellness e.t.f. it's cross listed in london and frankfurt and this new fund is linked to a basket of u.s. and canadian marijuana stocks. half of those stocks touch the plant. in other words, directly invest in companies that grow can luss. i should say all the companies it is invested in are medical marijuana stocks and you'll get no recreational marijuana stocks in this. perhaps appealing to those more conservative mind investors. so far this week it's gained about 5% and is better than the s&p which gained about 4% but over its launch, it launched january 14, it's basically up 1.5%. so not stellar performance but e.t.f.'s in hese america, despite a little disappointment they continue to get assets and this one has nearly $7 million worth of a.u.m. francine: thank you so much. now let's get passive aggressive. after years of brexit uncertainty, demand for u.k. stock is picking up and they've added $6 billion in fund tracking assets. they face a quandary, should they rely on a active manager or throw their lot in with the passive regulation? we're looking at the numbers and with us is peter thompson from assets management. how much of a pickup have we seen in e.t.f. fs [ >> the opt miss imhave been seeking toe breaks and boris johnson wanted the parliament to like his brexit deal and we thought they'd go in mutual funds but we've seen the opposite trends a the money is going to e.t.f.'s with $6 billion of flows and black rock is one of the record inflows and mutual fund are continuing to see outflows and the reason is costs and also in general, the battle of passive mutual funds and passive is winning in that game. francine: do we know what kind of e.t.f.'s, is it normal e.t.f.'s? >> the most pop or block rack and ftse e.t.f.'s, the biggest bench farc and the more domestic mid cap e.t.f.'s, those stocks are doing really well because of bets the economy will recover once brexit is over. francine: talk about this passive aggressive. before i get to that, cannabis, is it a concern this could be a fashion? do people make e.t.f.'s and if it doesn't pick up it's lost? peter: i would say the message i have on that is the adaptibility of this wrapper. it's just started on the equity side, fixed income, commodities, it's going into kind of every area of the market. cannabis is an example of that and here in europe, a signal also there's a very healthy ecosystem in terms of not just the big bench marks but the scheme attic plays and the things around the periphery and satellite space are coming to the e.t.f. market and working. francine: would you do a cannabis e.t.f. tracker? peter: we have no plans for that but it's out there in the market. francine: let's talk about active versus passive. active is what, also 1% of the market, is that true, active e.t.f.'s? peter: a small segment but there's big news and talk in america on this nontransparent active topic which the s.e.c. approved last year. the great and the good of asset management are lined up to launch nontransparent active e.t.f.'s and if that catches on in the u.s. market i'm sure we'll see it here in the not too distant future. francine: if the catch is on, is there a catalyst for something and something we're seeing that could happen in the u.k. for this kind to get bigger? >> i've been looking into the topic and the feedback i'm getting is once it launches in the u.s., it usually takes 1-2 years to come to the european market. so maybe once it launches in the u.s. after a some time finally europe will see the active and semitransparencies. francine: is it more work doing an active e.t.f.? pete ir: it's a bit more work but the fundamental question is, does the market want this, do investors demand this? they like the e.t.f. wrapper clearly but do they want active content with a little less transparency in that wrapper? they'll vote with their money as they normally do. francine: what needs to happen for the appetite to grow, does it need to be a complete downturn in the markets? this isn't the million dollar question. peter: i wouldn't think it's driven by market dynamics. i think it's more once again, is the convenience of the wrapper, the ability to trade it all day long like a stock, does that appeal to the u.s. investors when it comes to active products? that's the big question. tip how does brexit change the u.k. e.t.f. market? >> it does introduce some more certainty, right? but at the same time, there might be more volatility ahead because boris johnson faces quite a battle with the e.u. over the free trade agreement. we'll be watching e.t.f.'s on a daily basis to see how exactly investors are playing this game. francine: that was fun. that was our first show. are you coming back? we have a yes and a maybe. peter thompson is head of european e.t.f.'s at goldman sachs asset management. i will be back next week on friday, the first of many shows. that's it for bloomberg e.t.f. i.q. europe. we'll be back every friday at 9:30 a.m. london time. this is bloomberg. ♪ . beyond the routine checkups. beyond the not-so-routine cases. comcast business is helping doctors provide care in whole new ways. all working with a new generation of technologies powered by our gig-speed network. because beyond technology... there is human ingenuity. every day, comcast business is helping businesses go beyond the expected. to do the extraordinary. take your business beyond. ♪ francine: shoppers nation e.t.m. steps down and the board supports ernest. european shares trade lower after fresh records on wall street. markets take their cue from the u.s. jobs number and the coronavirus continues to spread. but barry said it has erased sales in china and warn growth will slow to 5% this year. good morning, good afternoon, good evening everyone this is bloomberg surveillance, i'm francine lacqua and tom keene in new york. a lot of the togetherous is on the coronavirus and but berry and l'oreal coming up with forecasts and the shock news of the resignation. and we knew there was a power struggle and looks like the chairman won. tom: let's cut to the chase. there's news on friday. francine lacroix earned a relationship in countless interviews with the chief of credit swiss. what did mr. thiam do wrong? francine: this is what people are trying to find out. it's allegations on the spying scandal. there was a sense on the government and chairman that they needed to hold on to the reputation of leading sweet private bank and the source will be on that and shareholders. david owns 8% and coming in with a strong sense and that was monday and said he's 100% behind him and attributed to some of the speculation because he was different to other sweet chief swecktives and we'll have more on that throughout the day but now let's get to the bloomberg first word news in new york city with viviana. viviana: we begin with the coronavirus outbreak and in china the death toll has risen to 636. one of those victims, the chinese doctor who was initially sanctioned for warning about the deadly disease. his death leading to online anger against the communist government. beijing said the number of the virus have climbed to over 31 thousand and a heated phone call from boris johnson and president trump. bloomberg has learned the president berated mr. johnson, this in a dispute over china's huawei technologies. president trump spending months to try to persuade the u.k. to persuade them not to rebuild it in is mad. in iowa, pete buttigieg holds a razor thin lead over bernie sanders. buttigieg had a 26.2% of what are called state delegate equivalents, that's .1% more than sanders. the news agency that calls the race, the associated press won't call this one because of the tight margin and irregulatories in the app that fielded results. global news powered by more than 2,200 journalists and analysts. tom: i believe i did two data screens. futures with an ebb to it. today europeo weaker. this is a strong dollar day, 10955. oil somewhat of a bid as well. i did oil twice. it's frith. what do you want? i did euro twice there. save me. my data check is lousy. francine: i'm here to save you, it's what i do day in and day out. the markets are trading sideways. and they are waiting for the u.s. data but a lot of the focus will be on individual stocks. if you look at burberry it's fallen after financial guidance and credit swiss down 3% after the chief executive was ousted, tom. tom: let's go to 2007 and the collapse and failure of germanic and swiss banking. credit suisse is in the light blue and they're miserable by 2012 and by 2015 literally when mr. thiam comes in u.b.s. and credit suisse are at the same point and then you see the ineptitude of deutsche bank and the relative underperformance of credit suisse versus u.b.f. and i can't tell you but this is a huge deal on one street in zurich, switzerland. francine: more on that story. thiam resigned and some saw he was ousted and a stunning reversal by the executive that was backed by shareholders following a spying scandal and he'll step down after presenting the fourth quarter results and will be replaced by thomas gutstein who is a veteran of the bank. it follows a power struggle between thiam and the chairman. joining us is our finance reporter patrick winters. was thiam ousted or did he resign? >> i've got to say looking at all this evidence circumstancely today, you've got to say he was ousted. and this escalated really, really quickly. last couple months the bank was saying thiam did nothing wrong and didn't know about the spying and one week ago the chairman denied the story we wrote in which he was looking for candidates to replace thiam and it escalated quickly and has all the markings of an ousting. francine: what do we know about the new man in charge? patrick: the new man in charge is a swiss guy with a long banking career behind him and he has a background in equity capital markets, banking but he's no pushover. this guy is an aggressive investment banker and spent more than a decade in london and someone who has a lot of respect of people in switzerland. tom: the stock is down 53% and mr. thiam took over in june of 2015 is it a lot of blah, blah, blah outright share underperformance? patrick: there were two capital raises during that time so if you're doing a direct comparison between u.b.s. and credit swiss, u.b.f. was bailed out and credit swiss had a different story and had to go back to shareholders and ask more cash and you see the relative underperformance. anecdotally speaking to lots of shareholders, most people seem to have been broadly supportive of thiam and what he'd done and restructuring and what we see are the cultural things, news flow and spying scandal that won't end and the bank and the board. couldn't continue with things in this way. tom: thank you very much. this is a huge deal for global wall street not only on swiss banking but mergers and talk about where you'll find scale and whether it's in the united states, in the united kingdom asia where hiam's he had an expertise. we're joined by an expert who has been watching the story for years particularly with a banking analysis side. where was credit sweet when he was shown the door, it was a restructuring but what was his plan derailed in 2020 and 2021? >> exactly. good morning. the big problem is we need to understand what will be the next chapter for credit suisse. a lot of people got involved as investors and we gave him the irish traction of the bank and it will be different and going to be a growth story geared towards asia and then you find yourself with a professional r. gottstein leading the local suisse bank operations. are we buying a local story in switzerland with negative rates or buying a growth story in asia? that's the question mark we have as investors today. tom: what is the urgency of investors including mr. harold harris who picked up a storm, what's the urgency to see share appreciation here? >> obviously i think when you look as indeed a few months ago, when you look at share prices, you have also to look at what the rest of the sector did and the rest of the sector underperformed for a decade basically. and we're far from 2009 prices n european equities. now we are probably at the inflection point of european banks and finally starting to lever and defied as the leadership today. as a potential shareholder, i'm a bit baffled to be honest but i understand there was a lot of pressure and probably decision goals beyond what the natural decisions on business plans. but obviously you have the rest of the sector which is finally moving higher and finally delivering convincing results. and then with credit suisse, you're stuck with a story where you really don't see this strategic direction. francine: i want to come back to something you said moments ago saying as a shareholder and now you need to ask yourself whether you are buying the suisse local banks rates or agent wealth management play. when do you find out? was this kind of play between a lot of the big top shareholders and international vision for the bank? and the older guard swiss players? >> that's part of it. on the one hand the company decided to move swiftly to new leadership instead of embarking in a long selection process as you see maybe. think of s -- hsbsc, they embark on a longer leadership process and you have a c.e.o. we don't know will be the same or not. and on day one they may switch to another leader. either guy has been with us for 20 years. on the other side you have the chairman leader leaving in one year and you know there's a lot f pressure on this chairman. do we have the guy from the future or will it be someone else? tom: thank so you much. francesco on short notice. it's jobs day. jim glassman with us later. he'll join with us a real feeling for the fabric of the american labor economy. after that with the white house discussion, john farrell speaking with lauren. last time he spoke in davos it was a spirited discussion. larry kudlow in the 9:00 hour. this is bloomberg. stay with us with more on credit suisse. dd dd tom: good morning, everyone. jobs day we haven't touched the seriousness of the coronavirus. a cruise ship has some presumed infections out of hong kong. a lot going on today. right now with jobs day and all the news, we'll get to the virus in a bit. on the markets. jeremy stretch of cibc, head of the foreign exchange shop and peter dixon who is always interesting and very twisted because he's an economist that actually looks at the markets. peter dixon, how rare an economist that looks at markets. are the markets now linked to economics? are they acting in tandem or noncorrelated? peter: we've been saying many months if not years what's happening in the equity markets doesn't seem to stack up with what we're seeing in the economy. and we all know while that is, there's a lot of central bank money pumped in the markets keeping them afloat and looks to be the story for 2020 but obviously as we're going to discuss i'm sure in the next few minutes random shocks such as the coronavirus could derail it. we're talking about politics and random shocks and the economy really and takes their place. francine: let's talk about the black swan. what does it mean, do you have to lower your earnings per share, we heard burberry and l'oreal. china sales will be affected. peter: it's too early to really say what's going to happen. there's some amount of caution that is warranted. if you look at what's been happening in the markets over the course of this last week really, you're not seeing that caution. and rather suggests to me we're setting ourselves up for some kind of correction once people take action and maybe the earnings figures won't turn out as we had hoped. francine: you had a busy week because if the markets freak out they all buy havens and all those havens are currencies. >> that's right. we are continuing to be braced for this safe haven flow and safe haven impact. of course only a week ago we saw the dollar getting a little bit sold off in terms of month end rebalancing and subsequently we've seen investors moving back to the safety and liquidity of the u.s. dollar but of course we're seeing some of the yang crosses being a barometer of risk dynamics and did see a reasonable bounce of the yen during the course of the week with back to the 200 moving average but maybe starts to come back in and people taking risk off the table towards the end of the week and we're seeing those risk barometers and yen crosses moving back again. tom: when you get someone as eclectic as jeremy stretch, we'll bring up the raw chart before we go to tv. jeremy stretch over a six-year period, i have strong yen, weaker aussie. i guess that's a commodity game as well. does that trend continue or do you look at it almost as an extended example of we've gone a bridge too far? jeremy: in the short term it doesn't feel like the markets are using rallies to sink in to. talking for china for example and you look at the number of chinese tourist accounts, it's 15% of the tourist revenue. if we see a long production in terms of tour us imflows we'll see an impact in terms of the australian economy and one of the key metrics that will dwind whether the r.b.a. will consider lower rates will be in terms of the employment backdrop and if there is fragility, that's manifesting itself in terms of the weaker employment profile that aussie yen trend is likely to continue and we'll see selling into strength. tom: have you changed the last 90 days with the hugely shock, have you changed your u.s. domestic versus international view in the equity market? jeremy: i wouldn't say change it but we're more aware of the risks now. clearly those companies which are exposed to the chinese market indeed, the global markets we just heard are perhaps under more scrutiny than they once were but if you look at what's happening to the u.s. market, i think to a large extent that's been driven by safe haven flows in the u.s. market because the domestic economy at least looks pretty robust and looks at the moment to be well insulated from the worst of the international concerns. i haven't changed my view but certainly would say there is more cause for looling at the u.s. domestic side in saying yeah, actually it's doing ok. tom: we'll continue this friday with jeremy stretch and peter dixon this morning. much more to talk about including the labor economy in america is front and center. bangup jobs claims yesterday and bangup a.d.p. report as well. the american labor economy on a friday and on a tuesday evening the results of the new hampshire primary. hopefully it will go a little better than iowa and looking at the new hampshire primary, 8:00 p.m. will whb that occurs. 7:00 p.m. look for that coverage in new york. this is bloomberg. bloomberg. ♪ ♪ francine: this is bloomberg surveillance, tom and francine from london and new york. tom, to an important update on the coronavirus, singapore raising its alert level over the new coronavirus outbreak, the same degree as the sars epidemic. cases in china climbed to more than 31,000. joining us now is bloomberg's tom mckenzie, host of bloomberg markets, the china open. tom mckenzie, when you look at the speeds at which this has happened, it seems to have been slowed down. we know there was an outrage in china because one of the first whips who is a medic now has passed away. does that change the dynamic and conversation in china? >> what it does is underscore the fact that the government under ping is tremendous economic pressure as well as the health challenges they face. there really was an igniting of anger over the night on the juice that there was a whistle blower in tes and was flagged a sars like virus and shut down by police and reprimanded by local officials and called a rumor mongerer and went on to get ineffected with the disease and very sadly passed away last night. his treatment, the way he was treated by local officials igniting that anger which we haven't seen in years online being expressed by mill ones of -- millions of people and is something the leadership has to deal with. and they want to see why the doctor was treated the way he was and adds to the grim set of scenarios as the caseload increases, more than 31,000 infections now and more than 630 deaths. don't forget nile ferguson at imperial college in london, an expert at tracking viruses we could see 50,000 cases per day and doesn't think it will peak until at least march in wuhan. it's a friday and i understand you, steve engel and the rest of our team are under immense duress. jeff curry of goldman sachs stopped us yesterday with a 4.0% stick for the first quarter growth in year china. do you observe that on the streets? can you quantify that dearth of economic growth when you look out the mckenzie windows? >> it doesn't seem unreasonable that call given when you walk out on to the streets here and you see shop after shop closed, cinemas closed, shopping malls closed, restaurants shuttered, no traffic on the streets of a bustling city of 22 million people and of course this is just beijing and happening across china just an hour south of where i am in beijing, the city enforced a lockdown on residential compounds so one member of the family can go out surprise, once every two days to purchase goods and come back. that's the level of restrictions. so deepen that impact on a broad swath of the economy it would not be too surprising to see the s&p saying they revised when it was 5%. francine: thank so you much, tom mackenzie. ♪ hi! we're glad you came in, what's on your mind? can you help keep these guys protected online? easy, connect to the xfi gateway. what about internet speeds that keep up with my gaming? 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[ fast-paced drumming ] ♪ francine: this is bloomberg surveillance. tom and francine from london and new york. tom, we're expecting maybe the chairman of credit suisse to talk to bloomberg shortly to have his side of the story, what was very clears ousting as we're talking of thiam took many investors by surprise and sounds like it was a battle such as big shareholders like vid harro and what the chief depecktive has done five years he's been in charge and some of he suisse chairman who disagreed about the reputation of credit suisse after what we saw in the spying scandal. tom: most interesting and for global wall street will continue to drive our coverage forward. our swiss and london teams working on this full time. new york city on a friday with first word news. viviana with us. viviana: toyota extending the shutdown of their plans until another week. japan finding another 41 cases f 9 virus on the cruise ship quarantined. 20 cases have been disclosed. the death toll in china has risen to 636. there are more than 31,000 confirmed cases of the illness. and the u.s. and china reaffirming their commitment to the trade 1 deal. the president trump and the leader continuing to pursue cooperation and coming a day after china cut tariffs in half on $75 billion of american imports. and the white house may strike officer who my shared. and alex could be dismissed from the national security council. the move would be portrayed as a downsizing at the n.f.c., not retaliation and we land in germany where the slump isn't over. industrial production fell 3.5% and is the most since the global financial crisis. trade tensions and brexit battling germany plus the auto jury has been involved by the climate of social news. powered by more than 2,700 journalists and analysts in more than 120 companies. i'm viviana hurtado, now back to you. francine: u.s. president donald to and ping agreed implement the trade deal last month. the two leaders agreed to continue extensive communication and cooperation between both side. let's get back joining a bcsd.h of there was something like the coronavirus would force and make them come in with their contract negotiations. does it make it the americans are softer on the chinese? >> it's interesting to see how the relationships between the u.s. and china will go here. if we are going to see a substantial downgrade of economic activity of china in the first quarter and perhaps longer than that, then perhaps those purchasing commitments will be start to put under a question or doubt and the question is will there be flexibility an is there a hard stock by beijing. in public the u.s. will play a relative game of hardball and will be very clear they want to see their ambitions met in terms of the face 1 deal and if we do see it, there could be a breaking down of those trade relations again. >> you could argue president trump was acquitted and after the trade tariffs work he'll get his way and continue to use them throughout the world and it puts global negotiations at a halt. >> is it doesn't change the underlying view of the administration. trade sanctions do appear to work and i'm pretty sure that we'll see over the course of this year and fobal next if the president is re-elected and that europe will come into its sights which is something the european fair. tom: the president of the united states suggesting mr. xi will be successful in fighting the virus. hunhui cting on it at is associated with apple and fox con of course tell staff not to return to shem citizen, the headquarters, to curb virus and there is worldwide 800,000 people. there is not a small shop to say the least. francine? francine: it is huge and don't know how the market perceives if this is -- there are quarantines and isolation and staffers stay home. if we say in this status go, how difficult is it for what it does off the world economy? >> it is kind of smock and we can only model the moment in retrospect and do it in real time. the view taken by many economists now lifted is this will be a relatively short pay rate of attraction in the economy followed by rebounds. if the larger economy suffers, it doesn't suffer a kind of horrendous collapse but of course as you said, the risk is that the virus doesn't peak until march or later. as a consequence we get a weak first and second gaar. we let reedy know the effects of that by the summit. francine: the bank of land on and e.c.b. and the feds came out and was an early day, the remedied.can be and in what they put out say the coronavirus is of course additional uncertainty factor. does central bank have the tools -- not to deal with it, do they have what it takes to entertain it? >> that's what the markets are hoping for and has been a subtext is the presums the central banks will be there to help in the downturn whether it be in the real economy but in terms of the financial sector. in many instances we have central banks at or below historical numbers and it's prudent to say they're monitoring the risks and will continue to understand and try to assimilate that in their forecast profiles and act recordingly and it's a combination of stocks right now and many people are trying to utilize them, and that's rebounds and v shaped rebound and hope it with be reply dated the next time around. tom: let me union peter dixon's morning with a question i've never asked. does the fed do a 5 basis rate cut as a result of flat on their back and come out now and say look, this is central bank's forced majeul and we're getting 25 we cans. >> not now the situation across the global economy is uncertain. why would you want to spend that ammunition now when things potentially could get worse later on. if you talk to central bankers what they'll say is we're monitoring this and it's on the very edge of our radar screens but there's no need to react now. if the fed wants to provide nelt and support they'll do it when they know how bad it is and b, i think they'll only react if and when the u.s. economy starts to suffer the consequences. tom: very interesting. this is jp morgan now tactically lowering their euro call to 111. we are seeing friday adjustments. paul, take a seat on jp morgan and go down on europeo dollar. we'll have more on that later. good conversation, moving, of course, to the jobs report. after that report john farrell in conversation with mohammed. stay with us. this is bloomberg. ♪ ♪ >> viviana: you're watching bloomberg surveillance. burberry is scrapping the forecast. the coronavirus outbreak wiped out at least 3/4 of sales in china. on the mainland, burberry closed 24 of the 64 stores of those shops that stayed open, sales plummeted. paul singer has a new target. they've learned they built a stake of almost $3 billion in softbank group. the hedge fund believes softbank is undervalued and tokyo shares were up as much as 8%. by the end of the year uber is forecasting its first ever quarterly profit months earlier than planned and cost cutting is helping. uber reported fourth quarter losses. and the richest person in the world is under a selling spree. jeff bezos sold almost $3.5 billion of stock and the transactions are part of prearranged trading plans and haven't hurt amazon's price since the day before bezos started selling shares were up almost 10%. and that's the bloomberg business flash. francine and tom? tom: one of the most extraordinary things out there. i was with john farrow out there when we saw the claims ome out and amazing to see a 202 statistic, a low number of people in america looking for work. a very countable and measureable statistic. jeremy stretch with us and peter dixon. what do your toronto patriots say about a fully employed america, does the c.b.c. buy that idea? jeremy: yes, it is a notion we can buy in to and we're seeing labor markets look remarkably tight and seeing the underemployment rate remaining near cyclical lows and we have a very tight labor force and earnings which are probably still running north of 3% and a ow underemployment rate. that is reminiscent of a tight labor market and we may see a number slightly disported because we see the impact of census hiring and we should see a number slightly above the 12 month share that comes in at 176,000. tom: peter dixon, i want to look at the chart i can say is like no other chart in the world. his is a trend over 30 years of claims to employed and screamed to a new low level. peter dixon, what does the chart out for three and four standard deviations, what does peter: what ou we've been discussing. it's the labor market and does it reflect the fact people are finding jobs or people discouraged from claiming. it seems to be the former, people are finding jobs. slightly ironic at a time we're talking about automation destroying jobs and labor will e replaced we find ourselves enjoying the biggest boom in history and we should celebrate because the doomsdayers have been wrong the past decade and i'm not saying it will continue that way but a fantastically good place to be and you can look across certain other economies, the u.k. for example are seeing very low rates of time oyment this is the for labor and aren't getting the terms of reward in higher pay necessarily. francine: how do you describe the strength of the u.s. economy? it's something the last couple days we've been looking at the coronavirus impact and a couple big investors maybe we're underestimating inflation. inflation could pick up all of sudden. >> that is one of the underlying concerns and has been on the radar. going back to what peter was mentioning about the labor market and we're not seeing it reflected in terms of earnings growth and that phillips curve have at some point broken down and adjusted to others and that's a variable we do need to be mindful of. if we are going to continue to see the u.s. economy in the short term running at a relatively higher and healthy rate that could potentially start to stimulate the inflation refreshers because we've become rather complacent about the outcome of that because we're seeing things like oil prices coming under pressure because of the coronavirus. we've become complacent about the concept of a inflationary environment over the medium to longer run. francine: what does it do to dollar? jeremy: the dollar is an interesting one because we started the year suggesting the growth exceptionalism that's driven the u.s. dollar would perhaps start to moderate and the events of the past couple weeks have really brought that sort of thesis back into the markets' perspective and going back, one references jp morgan changing the euro forecast. europeans uniquely rely on exports and the longer the risk the head wind of exports and the longer the growth of the tendency to be diminished and in consequence relative to the u.s. providing support for the dollar. at the moment the jury is still out and we still would favor a lower dollar across the year but in the shorter term it seems difficult to stand in the way after strong dollar when we are getting this consistently better than expected u.s. economic data. tom: are other nations having the same wage growth mystery the united states is having? peter: yes, inflation is conspicuous across the board. the phillips relationship has changed. if we look at the euro zone the past four or five years, the curve is actually flat. there's no real pickup in wedge growth and we're struggling to figure out why. i discussed before the idea that in automation hasn't sub planted labor yet but it may be one of the factors helping to force wage growth to remain low. there were structural changes in the lane market of course and workers have been shifted down to the high earning areas to the lower productivity areas as well. there are a number of shifts going on below the surface we don't understand yet but clearly it's a problem across the whole of the world. tom: bring up the bar charts. i don't like them full disclosure. this is a beneficial bar chart with the glory of summer and 3.2% year over year hourly wage growth and it's evaporated away the last four months with the ugly december statistic. we'll see at 8:30 this morning. mr. stretch, cibc and mr. dixon with commerce bank as well and we'll continue here. much more coming up. a lot to talk about. centered upon after the jobs report. lawrence kudlow, national economic counsel director the 9:00 hour. this is bloomberg. good morning. orning. ♪ ♪ francine: this is bloomberg surveillance, tom and francine from london and new york. germany is facing a possible recession again, industrial production plunged the most since the global financial crisis and comes a day after report showed factory orders fell at the fastest pace in more than a decade. jeremy stretch of cbic and peter dixon of commerce banks are with us. when you look at german manufacturing, the car sector is not doing great and talking about possible extra tariffs the trump administration would impose on german car manufacturers. is there any value, blexity is happening of course weakening across europe. is there any value in owning german stocks? jeremy: i think there's value but the headwinds for those values is looking quite significant. once we get the indices out of the way, the q-4 earnings season, once we've had a chance for analysts so see the outlook for the 2020 economy and what companies expect, that's the time perhaps to step back in and it's all dependent upon what companies think is going to happen -- what the coronavirus will do for earnings. at the moment i'm reasonably positive. but i certainly see there are reasons to stay cautious and stay out until you have more certainty. francine: what's euro now? is it a parallel to what it's doing to the german economy? jeremy: as i mentioned, the headwinds to the german export sector persist the greater the head wins to the euro. in a sense we've seen brief notations trying to move to the upside and opt miss imkick in and saw it late last year and the daya now is suggesting the rebound we've seen in the p.m.i. indices is not quite perhaps as durable as we'd hoped and taking the wind out of the sails of the euro and caught in a 109-112 range and it's still playing that range ultimately, and if we can see a degree of stabilization if we do see that low 109 print it probably gives you a short term tax opportunity to start to load up on euros again at slightly lower levels. it is very much reliant on that global backdrop but it's interesting investor sentiment ended at a two-year high and is what we're seeing in the euro stock 650 and the real disconnect in germany and perhaps some of the metrics of investor sentiment. tom: we had an extraordinary conversation with mr. landow good the commerce of germany. what has been reported on the former elections in east germany? peter: i think it's interesting because we've had a situation now where the c.d.u. and a.f.d. have a potential to retire and that's potentially a game changer. i think the question then is does the s.p.d. look at this and say this might be a good break clause, if you like, in terms of supporting the grand coalition. and obviously that's going to play out over the course of the next week or two. you get the sense very much that the electoral landscape is changing. the east and the west are clearly going in different irections politically. they're clearly becoming a national player and there are indicators that landscape is changing and it clearly poses problems i think for the c.d.u. ahead of angela merkel's eventual departure from the political scene. francine: tom: part of this is the call on euro. what is your call on euro? jeremy: the longer the headwinds persist the greater the difficulty we are going to see in terms of the euro going higher. we still expect a higher valuation of the euro through the course of the year. i think the top side targets are going to be further compromised the longer the crisis goes on but i think we can and should see a move back north of 115 and maybe even as high as 117. if we do get a resumption on a relatively v shaped outcome in terms of the global backdrop we're not expecting any additional stimulus or action from the e.c.b. in the current environment and if we can see some of these headwinds in terms of german political dynamics having an impact in the terms of the fiscal outlook that might provide the sort of perception of slightly better optimistic of the euro head. francine: jeremy stretch of cibc and jeremy dixon of commerce bank as well. a deterioration, dow futures at negative 131. on the american economy one of the themes as we visit hong kong, andrew hollandhorse will join us, citigroup's chief economist, it's john's day in america. stay with us. this is blerpg. lerpg. ♪ ♪ tom: this morning in this first quarter, 2020, goldman sachs considers 4.0% economic growth for china. that's increased 13%. yesterday there is a third cruise ship adrift at sea. a doctor at wuhan central hospital dies. there's continued dollar strength. this morning the euro weaker and oil struggles to find a bid at $51, the west texas barrel. and a clash of banking civilizations. enough say data swiss, out with the gentleman from the ivory coast in france. this is bloomberg surveillance. it's jobs day in london from new york. francine lacroix in london. francine, the president of the united states and the prime minister of the united kingdom reports really going at it over huawei. our tech team alex web and the rest in london, what's the huawei distinction between the two blond

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