Equities could return to last year, it would be a big statement. Anna we have the exclusive ,nterview with hugh hendry and why he is big on japan. Manus welcome to countdown. Anna welcome to the program everybody. It is just that 6 00 here in london. Manus, big on japan . The most moves we have seen, 2. 5 this morning. But really, that is just tying in with the global picture we have seen in equities. Hitting the highest level since december. Absoluted there is an sense of relief in the markets. 16 from the low, all predicated on whether you think that china has settled, and whether george soros is right china is looking like the u. S. In 2008. Let us break it down. We will kick off with the s p futures. We have a nice rally on the way, the s p Late Afternoon was not so bad. To 61 ternoon, back probability of a hike in rates in december. Anna yes, exactly. Oil price very much a price, Energy Stocks rising. Asian stocks rising, as the price little more stable after a decent rise. Barrel, nymex at 44. 21. Up by just a fraction, but substantially higher than it has been over recent days. That is a story over oil, u. S. Production falling, and how freeze talks to be revisited as early as next month. A lot of talks about bond markets, as the ecb day the spread of the u. S. Over german bunds, very much in focus as we look towards the ecb is going to stay. That is the data coming out of europe. We will discuss that later, and expectations for a fed hike on the rise. Manus absolutely. That will play into the markets. One of the big corporate stories , let us bring you the breaking news from one of the largest pharmaceutical companies. Firstquarter sales coming in from a net sales, at 11. 6 billion. That is just ever so slightly below the estimate of 11. 8 billion. They delivered a solid firstquarter, novartis telling the loss. They confirmed the 2016 outlook. That is critically important. There are two sides to this business, drugs coming off patent. And one of course is happening which gave ins the latter part of 2015. They say that the growth plan is on track for earningspershare. And they maintain the first indication for this year, keeping the 2016 forecast. Earnings up 1. 17, that be the core operating income of 3. 2 billion. Anna that is the early earnings report. Let us talk about what is happening in the auto sector. Day, shares in Mitsubishi Motors have not yet traded in japan. As the number of sell orders far outnumber the deads. Bids. The company admitted to exaggerating fuel efficiency results. Manus let us get a little bit more on the story and the asian market, even on man is standing by. By 50 today,ne people are speculating that when he gets going, we could see a price check of 20 . The overall official move . Yvonne that is right. Were just waiting for that match right now. But as you mentioned, with the sell orders far outnumbering the seeing 7733, the aee market is that ¥583 share. We could be seeing limit down at 19 , a plunge at the close. Because in japan from the regulators do force these companies to start trading. Maybe at the last minute, we could see another tank their at the 7 00 a. M. Our u. K. Time. The is after we heard about vehicles impacted by the cheating scandal. The bigger issue now is a testing method of the carmaker has gone through has not been fitting with japan standards, since 2002. And this cheating scandal now could make it harder for mitsubishi to stay afloat. It is one of the most cashstrapped carmakers among the japanese peers, and they could now be forced to be bailed out again, something they are quite familiar with over a decade ago, when they had that cover in terms of the recalls around the 2000 era. Series what we are looking at and the broader picture here in asian markets, we are seeing that crude climbed a that is certainly boosting sentiment. The yen holding onto that threeday retreat, really boosting Japanese Equities, up 2. 4 . They are leading the regional benchmark as well. And there are bets piling up now that next week with the boj meets, we could be seeing some type of monetary stiglitz. Goldman sachs is one of them. They have a new timing for monetary stimulus, for next week since june. Back to you guys. Anna thank you very much. Lots to think about in the asian sector, plenty on autos later in the show. On that story and indeed on volkswagen as well. For the moment get back to hong kong. Haidi lun as that for us. Haidi good morning. With the theme of automakers embroiled in scandal, volkswagen agreed to pay at least 10 billion for several claims. And losses by american car vehicles. R diesel that is according to person with direct knowledge of the matter. This comes ahead of the deadline, set by the federal judge, saying how the carmaker will fix the vehicle to get them off the road. In a court filing on tuesday, volkswagen said they expect to reach a settlement. There will be no need for a trial this summer. Billionaire investor george soros says that china resembles the u. S. In 2007 and 2008, before credit markets freeze out the global recession. Markersid that credit far exceeded the forecast, should be a warning sign. Hendry says he is now speculate on a recovery for japanese stocks. Asian policymakers maintain the policy of negative Interest Rate. He spoke exclusively to bloombergs francine lacqua. This, the deficits of buying, the currency is going to collapse and we would lose buyers of the bond market. About that itng hasnt happened for a week. Internet have in the year before, you the year before. People have to stop repeating the same error. I the earthquake that shook southern japan last week is estimated to have cost 3 billion u. S. Dollars. The initial production comes worldwide, more than 50 people died into powerful tremors and aftershocks. The april 16 earthquake was the most powerful to hit japan since the fukushima disaster five years ago. President obama will tomorrow urge britain to keep the country in the european union. In between lunch with the kwame and the duchess of cambridge, obama is excited to weigh in on the Brexit Debate with David Cameron. Drizzle evidence of that americans are broadly aware of the debate in the u. K. , or care about the outcome. Ii, then elizabeth oldest reigning monarch, and the longest reigning in british history. Gun salutes take place around noon in the u. K. David cameron will lead tributes in the comments. News 24 hours a day, powered by 2400 journalists in around the50 bureaus world. Find out more about the stories on the bloomberg at top. Sending it back to you guys. Manus thank you very much for getting is up to speed. There is speculation that the signalario draghi may further easing. The 10year u. S. Note and the bund and germany, the most in three weeks. Anna western European Central banks, live from frankfurt, great to have you on the program. What is the angle going to be today . Will he be emphasizing the stimulus, or pointing to things improving in the euro zone economy . The unemployment picture and the output gap narrowing. Well, you would bet that he has two messages. One is that ecb stimulus is working so far. And the other is at the risks remain on the downside, therefore the ecb should need to act in the future. And it would do so. What he would emphasize at the moment there is no need, otherwise it begs the question why hasnt he done so . And you are right. Some of the data, you can be selective, some of the data is relatively strong. The Unemployment Rate in the euro area is 10. 3 , way that o hybrid down from 21 1 around three years ago. If you take a look at the output gap, it is closing slowly. But it is starting to close. When he gets there, that is when the inflation picks up. Inflation is nowhere to be seen. That is the real black mark for the ecb. Great there is a statistic in terms of the trust factor in mario draghi. In germany, likely to address that . The trust level from germans on the ecb, the distrust is rising exponentially . Yet, this is the key. As long as the ecb does not have any inflation, it is very easy to argue that the policies are working. And in fact, they are detrimental to certain sectors of the economy. Notably savers for people planning for retirement. That is where the attacks are coming from. Theyre gaining traction when i just there but in the netherlands and other places. People are angry. The german attacks are also seen on the ecb independence. And if mario draghi is asked about the subject, you expect some kind of response. He has backing from the bund ba backing within the governing council i would imagine. And therefore, he can say the ecb will do what it has to do. We will get inflation back on track. Probably quite diplomatic, and he is Mario Draghis friend. Paul gordon joining us from frankfurt. Joining us now in the studio, alan higgins. Great to see you this morning. Weigh in on the ecb this morning. Do you think he will be playing up the need to do more because inflation is still well below target . He is focusing on doing this already, and looking at the data that is improving your the eurozone . I think you are spot on. It will be quite balance. I think he realized that when he kind of said that is it, that might be a bit of a verbal mistake. But i think he will be balance. In particularly, pointing to the this idea that you get paid 40 basis points for new lending. And we havent seen the impact of that yet. And he will say, look, we are going to do more. I do not think he will get drawn. Asking about helicopter money, i dont know if that is going to be someone had asked that. The bloomberg journalists, but i dont think it will be drawn particularly. Corporate bonds have not really started yet. But really, you have to say, since the last meeting, and i was on just before talking about Corporate Bonds being included, and they were, the risk market has done very well. We dont know what the market circumstances would have been like. So, the only issue is the euro. Manus lets talk about this. Since march 10, we have had a rally. It stayed a little bit in the sinceouple days, up 2. 75 march. We have given a little bit back here. But theyre not as preoccupied on currency as they are on transmission. The transmission mechanism connecting to be the balance. Alan i think youre spot on. Going back to the euro when it was all about getting it down, that is despicable things. We realize that that term, general Dollar Strength has been risk taking. So were kind of easing back on that. And yes, it is yes about the euro now. And maybe they consider it a fair value. The euro has a big asset. We are neutral, we do not really want to get involved either way. And it is pretty fell value. And is focusing on Interest Rate differentials would be a weak argument. Anna you say there are certain questions that have to be asked at a press conference. It can be difficult to watch. Another question is around the relationship with the german political scene, as we were talking there with paul gordon. Wolfgang, the finance minister mariomany, saying that draghi shares the blame for the rightwing populists parties in europe. We were reminded by paul there, they are friends. There is a risk to that conversation a little bit. Is that something that he might not want to way into, but is that somebody needs to ask questions about . Alan he probably will. Politicians are politicians. And we listen, summit along that line. More encouragingly, though bund bank has become supportive of the ecb. That is far more important actually, whereas politicians they need to get reelected. So i am sure it will be very polite. Support,e has the bank and to a certain extent, it is a good place. Manus chief Investment Officer stays with us. Anna and of course we will bring you the ecb Rate Decision, followed by Mario DraghisNews Conference at 1 30. Manus more centralbank action earlier in the day, a Rate Decision from swedens bank at a 30 u. K. Time. On the data from, u. S. Jobless claims at 1 30 this afternoon. Anna we get earnings from tech giant microsoft, and late in the day, president obama leaves saudi arabia, no doubt talking about oil. And he comes to the u. K. More on that next 24 hours. Seeking outlk about growth in a slow commodity environment. Anna welcome back. 6 19 in london. Looking over Victoria Harbour there, up by 1. 7 on the hang seng. Asian session pretty firmly in the green. Let us get the Bloomberg Business flash. Here is haidi lun. Thanks, anna. American express rising in afterhours trade come after posting betterthanexpected firstquarter earnings, coming in at one dollar 35, more than was expected. Customers are increasing spending. While come falling in extended trading, while some orders are coming from apple. The iphone maker will start using intel or some of the modems. Also forecasting profits that were in line with estimates, after results in china. Of kfc and taco sales climbing in the chinese market. The chinese unit about his plans to spin out, could grow around 60 . Shares rising in the afterhours session. That is your Bloomberg Business flash. Manus thank you very much. Let us talk mining now. Do not expect commodity margins to be as high as they were in the last decade, that is according to the present of operations at the minerals and australia. His name is mike henry, and he joins us now to discuss growth and opportunity in the commodity great to have you with us. I was looking at some of the 27 on basicp resources. The stock is up 31 . The big question on everybodys mind, is the worst behind us, in terms of metals and minors . Or is this just a brief reprieve . You ello, i think if good morning. I think if you look at the increase we have seen recently in some commodities, we are not expecting the that will hold for an extended period of time. Short to mediumterm, we think we will see things like iron ore, the result potential to come back down again. But the longterm outlook remains quite positive. Global growth, we expect over the longterm, going to be quite strong. And given where we are positioned, both in terms of a recent on the cost curve as well as geographically dont we think there is still a fantastic opportunity, both for the industry and the opportunity. Anna anna here, iron ore prices dhave done quite well in recent weeks. Talkw mckenzie, your ceo, a little bit variously about oil prices. What is going to bring those prices down then, do you think . Mike i think we need to look, anna, and the fundamentals that have driven the price runup. It is not just sentiment. We have seen an uptick in activity in china. That has led to more steel. They were running very low inventories for steel and the input. As we see activity pushoff, they needed to purchase more fairly quickly. And that brought prices back up. What we are continue to see the lowcost and new production come to market, either through productivity or new investments. And as that happens, once the mills are through the restocking cycle of we do expect to see rises come back down again. George soros this morning has written a piece, saying he sees china as being similar to the u. S. Back in 20072008. This is rather in auspicious. He says that was a debtfueled economy, before the credit crunch. How concerned are you about the rebalancing in china . Would you agree with george soros, in terms of what were really staring at in china . Look, let me separate my response into two parts. One is the longterm Economic Growth of china. And we believe the fundamentals are strong. We are big believers that china will continue to develop, and as they do so theyre going to require more by way of commodities. Demand will increase, and that bodes well. In terms of debt, i think there are key differences between historically. U. S. A lot of the debt of course in china is domestically controlled. And china has the reserves that would allow them to deal with any shortterm issues, and any case in terms of debt. It is not something that changes our view around the longterm fundamentals for china and the attractiveness of china as a commodity market. Anna let us talk little bit about your m a and tensions, mike. In recent past, you have copper, gas,l, given the opportunities that are out there, some assets relative to history, are you going to widen the Shopping List . Reason that we have talked about copper and oil as being the areas we would like to grow is because we see the fundamentals for those commodities as being the strongest. Good longrun demand, you have to decline rate in existing oil production, meaning you will need to bring new investment to market. So we see prices recovering more quickly. Copper, by the end of the decade, we will see the deficit. That will mean higher prices. On the m a front that we have a longheld strategy that we are sticking to. Lowcost expandable assets, that has been a Winning Strategy today. It will be winning in the future. Those sorts of assets do not come up for equally, when they do, they need to compete against internal opportunities to deploy capital. One of the great things about the company is that we have a portfolio of high returning growth projects, that we can bring forward in due course. Orould not categorize m a acquisitions as being highly likely. We will never say never. Manus never say never. Talking about margins, do not expect we be saw the last decade, you need to tighten that us. Is a decent margin for you going forward, giving everything that you just said . I dont wantook, to go into the specifics of numbers. What i can say is that for many of the commodities, we expect to see higher prices. On an environment where on the cost side can we continue to drive things hard. And across all the businesses, we think there is further to go. What is that going to look like . Volume through productivity, taking what we currently have, getting more volume. At the same time, driving down units. Anna mike, thank you for joining us. Thank you so much for joining us. When we come back and we will talk about cars. Manus welcome back. This is countdown. 6 30 in london. We have breaking numbers from erickson. Anna the Telecom Equipment maker given the best quarter numbers connect sales coming in at 52. 2 billion. That is a little bit below the estimate of 54. 4 billion. Net sales number alone that below the margin, excluding restructuring. 33. 9 percent, just below the estimate, 66 . And the net sales number, just