Michigan is the biggest prize. Donald trump has a doubledigit lead, but there are signs that john kasich has been gaining ground. Bernie sanders is still doing better with younger voters. The European Union is getting a deal with turkey to stop the flow of migrants. Turkey made its most serious offer yet to stop the tide of refugees into europe. The Un Security Council sanctions were not enough for south korea. It is imposing its own penalties on north korea. South korea will present entry of any ship that has visited north korea in the past six months and his blacklisting people linked to north koreas weapons of mass destructions. Take a look at futures. Down across the board. The same concern about chinese exports. Take a look at europe. Also going to see red arrows overseas. As far as what we saw in asia overnight, we did see red arrows, except for in china. Take a look at this chart. Japanese 40year yields coming below the u. S. 2 year. You can make more money loaning to the u. S. Government for two thrs then you can loaning to e japanese government for 40 years. Stephanie it is europe that is responding by taking a leg down. That is because the Chinese Government has purchased equities in the last minutes of the discussion. It looks like they are doing it again today. Im not sure everyone would argue that china is a free market. Take a look at oil. Oil had been driving equities. Yesterday, it he coupled de coupled. Still a relatively high price for wti this year. I want to look at a riskoff trade. You see people piling into gold, piling into bonds. Gold is still up. Samantha are here with powers, the u. S. Ambassador to the united nations. We talk about china just about program. On this we typically talk about it with regard to economics. Are they a rival or a partner as you try to deal with things like north korea . Korea, we have just come off a remarkably successful negotiation with china. ,he broader Un Security Council as well. They back to the toughest sanctions panel that the Security Council has laid down against anybody in two decades. Sanctions are much more likely now to tighten the grip on north korea and the limit its ability. It is also a signal of chinas willingness to step up. If i were the leader of north korea, that would give me cause. Pause. This is something new for china. In the past, north korea has been dependent on china, but china has been reluctant to use muscle. This seems to be a change, correct . Samantha yes. They have gone along with sanctions in the past. But i cant overstate the extent to which this resolution has done. It goes so much further beyond anything that china has been going along with previously. It is a sign of irritation, of recognizing the threat they pose to regional security. David north korea stephanie north korea is reliant on china for basic needs, correct . Samantha this is the balancing act they seek to strike. They want to put enough tipped theut not balancing act. We have urged to them to be more forward leaning. Urged all of us to try to be selective to protect livelihoods. We want to make sure we go after the elites, who have put this program about the welfare of their own people. Stephanie can you go after the elites . You actually make Progress Given how protected their structure is . Think we can. I think china has good information about who is doing what. I distinguish two functions of what we have done together with china. We have blocked stuff from coming into the country that has been used to advance this nefarious program. Over time, we want to change the calculus of the regime. The extent to which multilateral , the kind of difference that can make overtime in shifting someones calculus. When you talk about the progress you are making and the changes you are seeing happen, does it worry you that this kind of progress will be held up or held into question as you look at this political cycle when you have candidates who are so negative toward Foreign Policy . Does that concern you in terms of the progress you have made . Samantha i wont weigh in on politics. Ive become diplomatic enough to stay clear of that. I would say that certain aspects of Foreign Policy have to have continuity. There is no way to deal with the threats of our time, to deal building, without multilateral coalitions. To build multilateral coalitions, you have to listen o what other countries interests are. I think president obama has done a forceful job. We have invested in u. N. Peacekeeping, we have a coalition to deal with climate change, to deal with isil. We knit things in the bud it willgs in the bud, help down the road. You cannot just show up and get what you want when you want it. David we talk about europe every day on the program. There are a lot of headwinds. Even overnight, there was talk about a possible deal with turkey and the eu. Where are we right now in terms of refugees coming out of syria and the middle east more generally . What is the path forward . Samantha this is a global phenomenon and a global tragedy. There are 60 million displaced people. Refugees. Of them are the world has never been more generous and yet the need is outpacing the demand. The world food program, because of the size of the appeal and the inability to fill it despite the u. S. Giving 5 billion over the life of the war, by virtue of the fact that rations were being cut, schools were not being set up, there were barely enough resources to feed people, never mind take on the schooling, that is when people began to vote with their feet. If you are a parent, you are looking at your kids and thinking, it is make or break if my rations are going to be cut in half. It is either barrel bombs from the assad regime, isis, or a smuggler. Talk about sophies choices. As the phenomenon is a global phenomenon, so to the responsibility has to be spread more equitably around the world. President obama had the state come back together he will be chairing a head of state summit to spread the burden across more countries. Many countries across the world do not take refugees at all. They may be geographically far afield from syria, but there is a way to spread the burden. When you are talking about is the symptom, to some extent. Can we really solve this without radical regime change in syria it self . Samantha what we cant solve it in order to solve it, we have to have Political Solutions. That is why secretary kerry is investing so much in collaboration with the russian federation, which has been on a very different side of this for the past five years. One of the reasons the refugee flow is what it is is because the conflicts are not ending. Reduction in see a the violence by virtue of cessation of hostilities. A longterm solution is going to require a majority of syrians to put their guns down and convince syrians abroad to come home. Stephanie realistically, how close are we to any sort of real resolution to stop this . There are meetings going on in turkey right now. Will there be a resolution . Is that even a possibility . To see moregoing refugees cross into countries like greece and italy in warmer months. Samantha weve got to get a political solution, not just ,rom syria, out in myanmar there is the same issue. The rights within a country did take whether or not people are willing to entrust the lives of their families to horrible people who are putting innocent on boats that dont float. It all depends on what we can achieve on the political track in terms of whether the flow will continue. It is also important to note that turkey, jordan, lebanon there are Financial Investments we can make in these areas. Host communities have really born this burden without it being spread around the world. Part of what has to happen is we, the world bank, others need to invest more in what has shouldered a disproportionate gordon burden. David it strikes me that we have the situation in libya, where the western world took a different approach. It was a fairly militarily active approach. You have been a student of this for some years. What have we learned from syria versus libya about with the best responses . Samantha we cannot be satisfied with either outcome. The situation in libya is aryans table, although they are moving haltingly toward a government of national accord. In libya, there was great reluctance on the part of the libyans who had earned themselves life without gaddafi to want an International Presence on the ground. Very proud and attendant to their sovereignty and said, thank you for the help, weve got it from here. Then divisions tour the society apart. Argue it is hard to no one can be proud of the results. There is heartbreak every day because of the rise of terrorism. But it is hard to see this magic tool that had we just done x or y, then the demons would have gone back into the box or the bottle. These are very complex societies. We open the toolbox we have and try to deploy the tools to mitigate suffering to get the kinds of Political Solutions that will bring conflicts to sooner. Oner an end we only have a short time left as the obama administration. Stephanie as you watch all of this unfold, Foreign Policy is going to be extraordinarily important and difficult for the next president. May be more difficult than any president in our lifetime. What is the most important thing that needs to be employed those first 100 days . What do you think we need the most . Samantha i think an investment in diplomacy. There is a lot of talk in certain circles about military force, where would we use it, what would we do but truly building these coalitions is what is required to bring about Political Solutions and there is not one conflict on the global stage that can be settled simply by the barrel of the gun. ,ven the terrorism challenge youve got to cut off financing, youve got to maintain border security, youve got to share yourmation to protect people and make sure the wrong people dont come into your country. Stephanie are you surprised that diplomacy is what we have heard the least of and all of these debates and meetings . Samantha i dont know. Im a diplomatic nerd. Much of a sound bite or a bumper sticker. [laughter] it is not necessarily going to work in a campaign, but one hopes that cooler heads will prevail. There are a lot of career foreignpolicy professionals who fuel our foreignpolicy across administrations regardless of who is in place. We hope that investing in the kind of coalitions that you need, understanding that military force can be a component of dealing with , especially, but it has to be part of a fulsome strategy. Because you cannot succeed otherwise, people are going to come to that conclusion. Stephanie selfdescribed diplomatic nerd. No soundbites are around diplomacy. That is a bumper sticker. This woman is some extraordinary guest. Ambassador samantha power, thank you so much for joining us today. In honor of International Womens day, we have got a big line of continuing today. Melinda gates, Mary Jo White, and we are going to let samantha a big day withs Michelle Obama ahead, no big day. David mark carney is testifying today in england over a possible brexit. His comments are next on bloomberg. This is the bloombergs nest Bloomberg Business flash. It is the 11th quarter in a row that the regions economy has grown. Business owners are less confident in the economy. Small Business Optimism fell last month to its lowest rating in two years. Contractsuspended its with Maria Sharapova after she failed a drug test. She said she had been tricking for years forug Health Reasons and said she did not notice when it had been placed on the banned list on january 1. Global go. Now on to mark carney is testifying before u. K. Lawmakers today on the economic and financial costs of a potential brexit. He said the boe will avoid telling people how to vote in the upcoming june referendum. Economic questions are important questions in terms of the broader decisions the People United kingdom have to make, but they are not the totality of the which peoples upon will reflect and make their decisions how to vote. Nothing we say should be interpreted as making any recommendation with respect to that decision. It is International Womens day. Francine lacqua joins us from london. Can the bank of england really avoid swaying votes. . Francine mark carney has been testifying for 2. 5 hours, lets give him a round of applause. He is trying to avoid getting into the political upheaval. However, he still needs to give an Economic Assessment of what a brexit would entail. What he doesnt want to be seen as doing is saying that it would be a disaster. He is trying to elegantly footsteps the situation. He almost lost his patience a couple of minutes ago in answering to one of the more conservative members. There is a risk to do domestic stability. David what is the point . They knew when he came in that he was not going to take a position and he spent 2. 5 hours not taking a position. Is this just political theater . Francine it is a little bit of political theater, but i think people are really trying to understand what the implications of brexit would be. Ruben king testified that the bank of england did not have the tools to do with financial instability nine years ago. This is a very Different Bank of england we are dealing with. Havecarney says they do the tools. Maybe it is political mustering to make sure the be a we knows boe knows their place and that they do not swear the voters. Sway the voters. Stephanie break down where it would actually affect us. Francine this is the question that we are in a difficult place in getting an answer. Some are probrexit saying that this will not make a difference. Contracts are written, then it goes back to business, they say. You could look at the housing market. There are so many foreigners from the eu coming here. Is that nohe truth one really knows because we have not had a situation like this. How do you know it happens to the pound six months after the vote . It is so emotional that the emotions get away in the facts. David thanks very much for joining us, francine. U. S. Equity futures are in the red. More on that coming up later on bloomberg. Stephanie we are watching u. K. Miners. They are all down. We will have more. You are watching bloomberg. We are just a little over two hours from the opening of the markets in new york. U. S. Equity futures are down a little bit. We are joined by tracy war sen. Joining us hot off of Bloomberg Radio hot is tom keene. First, lets get to first word. Malaysia is honoring the second anniversary of the 7 37pearance of the boeing 737. Over in california, the front car of a commuter train plunged into a creek after derailing. 9 people were injured and it is a miracle no one was killed. That train was traveling from san jose to stockton. Canadas Prime Minister says donald trump may tone down his rhetoric if he wins the nomination. He meets with president obama in washington this week. Deau says the things he may need to say to win the nomination may not be the things he says to win the presidency. David, over to you. David tom, it is time for your morning mustread. One of the leading experts on the dynamics of our economy. Stephanie Deutsche Bank hires the best. [laughter] he is absolutely phenomenal. Lets go right to the morning mustread. Increasing inflation appears to be late cycle. It does not justify monetary tightening until it is accompanied by acceleration in productivity. David, this is an incredibly Important Note about capital and labor. He is saying we are being ,looded with a lot of labor even our capital investments. Productivity is not therefore this nation. Stephanie we are focused david we are focused on getting employment up. We are not getting the output we should be getting, so maybe we are not asking ourselves the right questions. Citigroups wonderful Research Shows that it is about a lack of demand and we are waiting around for that spirit to go. We have been waiting a while. It is a singledigit world while we wait. I think there is a lot of uncertainty broadly. China, oil prices, the election. Our clients are very cautious right now. What i have observed since the beginning of the year is that clients are calm in the u. S. Is getly, the mood through this period, stay diversified, and we will get through it. Generally, people are pretty calm. Stephanie is inflation on the list of things people are worried about . To some degree, certainly. Right now, it is under control. Now, we are more neutral and it is going to take some time before rates go up. Reason they go back to productivity is the overarching measure of all the ever other stuff we worry about during the day. Service sector inflation, lawyers countants, stephanie lawyers always win. Tom the goods producing inflation is like this. Checked, theime i graph is widening. Indicating increasing concern. Tom there is a little bit of that out there. Do you see it . No. Stephanie how about Interest Rates . High net worth clients given where they are this low, maybe we should be concerned about the fact they have been a zero for so long, that unintended consequence. The one benefit is that our clients are ultra High Net Worth clients and they can borrow money very cheap and invest in higher yield opportunities. Overall, i think that is one opportunity. On the downside, everybody is searching for higher yields. Overall, we think that rates are going to stay flat for some time. A lot of people are looking at hedging future interestrate exposure for now. If you are hedging, you are going to get even less returns. If you are now in a lower return environment and you can add on hedging, get ready for less. Again, overall uncertainty is across the market. People are very cautious and they have to remain so. Tom the muni game continues to go forward. There is only so much they can pay for that is out there to buy. We think there is great opportunity in high assets, inc