Spider. Longestghai comp said streak since october. How much is it the slowdown deepening . Are we going to have to see a depreciation . I want to talk about what is going on in europe. The number story that comes together quite nicely. Carney on the brexit. Weve got this migration story which has a brexit angle. Heavy german industrial numbers. We have the german industrial story. Hans go week hans we have the turks upping their numbers overnight youd that is an easy number that is an easy check for Angela Merkel to write good to write. Guy you think about how you price this one into the market. This is brussels, germany showing we can deal with the prices. What would be negative for the brexit, in theory is positive for the pound. T has a Ripple Effect maybe they tighten up a little bit as well. The german story is fascinating and how we do with that with draghi. Maybe this economy is not having as many problems as thought youd as thought. We are going to avoid recession. Pimco as well. Hans in some way they are all right. Theyre looking at different data sets. The challenge is everyone getting the same data check and make a decision on where to go. One final thought on the brexit. I would not say it is negative. It seems what is happening in europe is neutral. They do have a solution. This spring and summer, we wont have a lot of headlines and images of refugees making that trip from turkey to greece, if they figure out how to seal that border. Guy it is more cameron then johnson. Open. Look at the we need to show people what we think will happen in 28 minutes time. Ti, if wti. Ons, it looks like down around 8 10 of 1 . Hans we see that coming through one we to the story out of china. We see the shanghai composite down here it have that negative trade data. We have the japanese yen. We have the stronger yen that is going to make the nikkei really difficult. Brent around 40. We have the sterling trading. Take a look, it is 1. 42. It doesnt mean the pound is falling that low. That means i cannot see the monitor. Someone who can see monitors all the time, first word is his news with Caroline Hyde. European Union Leaders have edged toward an agreement with turkey to help with the inflow of migrants. To double its Financial Aid to the country to 6 billion euros. Jeanclaude juncker coffer plants for called for plants for turkey to take back migrants. To take back all the regular migrants have been apprehended. Today we were assured that it would be possible. All of the above mentioned decisions sent a message that the days of the regular migration to europe are over. Caroline german industrial client reported percent from the december number. That is the first increase in three months compared to the immediate estimates. Michael bloomberg he billionaire former three term mayor of new york said he decided against entering the 2016 president ial race at the remaining uncertainties in what has been an unpredictable election year. Michael bloomberg is founder of bloomberg lp, parent of bloomberg news. Wall streets average bonus surged in 2015. That is the biggest drop since 2011 going to estimates by new york state comptroller. Down 6 from a year earlier. The industry added 4500 jobs in new york. Global news global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. Guy caroline, thank you very much indeed. The bank of england is about to get political. Stakes are high. Mark carney and deputy are due forestify on the brexit u. K. Lawmakers this morning. We are going to bring you coverage of that event. Bloomberg television from 9 15 a. M. Gmt. Ou can follow along really worth paying attention to it here is a look ahead to that event. ,pmorgan european strategists gianluca salford, joins us now. Its got, i have to start with you. Can carney avoid taking sides scott i have to start with you. Can carney avoid taking sides . Scott i cant see how anything he says will not be used by one side of the other. Says ask another politician is good to take us on and that is where the story gets legs. Scott go very dry, factual examples of what might happen if scotland was to become independent and it was used by both sides. Guy how far do we price this story into the bond market . Give me a sense of where the market is . Gianluca in rates, it is a bit more of a mixed back. You might look at the brexit story is something that could push the euro higher. You have to defend it. Our overall view is if the worst happens and we get a vote for brexit, the bank of england will have no choice but to cut Interest Rates. When you look at the shape of the money market, it is been pricing easing price easing for the last few weeks. Hans if i could jump in here, when we take a look at how this is all going to filter through, what it is all going to mean when we take a look at some of these Asset Classes, how do you see it shaping out . Gianluca can you repeat . Hans how do you see it shaping out into the Asset Classes echo how does it affect peripheral spreads . Trade flipside on how you germany versus italy . Talk me through the trades. Gianluca if you look at the issue of how brexit can influence euro area markets, there are three channels of contagion. Crisis. Stencil we have had a few. Go back to the first vote to reject the european constitution. You had a fear of a euro breakup in 2012. Turning the wheels into reverse on the european project, would be another one. You have something that is a bit milder contagion, a direct macro implication. Are estimating that you could lower u. K. Growth by roughly 1 here it 1 . That may be sufficient to treat another round of easing from the ecb. Finally, when you look at these applications on the domestic a la ticks, we are seeing the mastic politics, we are seeing that no major part is try to capitalize on these storms coming from the negative vote. It is fair to say you could see bond deals going down towards zero or lower. White they are spreads. If you take a look at the example of other situations where you had an exit stencil crisis, the response from such a banks was crucial. We expect the ecb to do something to what they did last year when he had the problems in greece. Guy we are done with the Asset Classes. Do you think hes going to be asked about negative rates today . Bank, any other central very little room to go below zero. Scott the top of the come session today is on cost and benefits of eu membership for the u. K. He may be get asked about what policy might do if the u. K. What to leave the european union. I dont believe he is going to go into the details. Either cutting Interest Rates are doing more qe, but i dont believe he will go into the technical details. Guy scott, think you very much. Hans as long as we stay out of the technical details, i think well get back into those with bloombergs scott hamilton. You are going to stay with us boe. Heck out ble go go on your bloomberg terminal for all things bank of england. The fed would rather not go there. Its sells a inappropriate jokes that you and i would tell, guy. Up next. Guy welcome back. For four minutes past the hour. London looking lovely. The markets looking softer as you can see on the futures. Lets get you caught up. Heres Caroline Hyde. Power hasroline and confirmed it is cutting jobs of meanwhile, profit at rwe has a slipped 45 . We will be speaking to the companys cfo at 10 15 london time. The german drugmaker merck has beat analyst estimates. Costs two 933 Million Euros to that is on the seat of i would be speaking at a formers Goldman Sachs banker has been caught up in an investigation into malaysian state investment funds. That is according to people with knowledge of the matter. He was issued a subpoena by the u. S. Justice department. Pimco says investors should move out of government securities and into Corporate Credit. The u. S. Wants to avoid a recession. An and germany avoiding offering negative yields. The bonds and bank loans offer a better alternative. That is your bloomberg is as flash. He has laid out one of the most detailed arguments by a fed official on the downside risks, despite several reports. She warned of the discriminating meanwhile,ting the vice chair Stanley Fischer struck an optimistic tone on the inflation in the u. S. And weighed in on a negative rate policy across the world. Critics have argued that qe with negative Interest Rates is no longer effective in either japan or parts or possibly in the eurozone. That case has not been empirically estimated, established. I think Central Banks still have the capacity to qe two run expense or he monetary policies even at the zero. Usedthe rate that is been by five Central Banks have worked somewhat better than many expected. Guest,ts bring in our Jpmorgan European rate strategist, john lucas salford. John lucas alford. It the most hawkish you have heard the fed chair . Gianluca it is reflecting the data. We have concerns about the u. S. Going into recession. Most recent activity data is not confirming that. When you look at the inflation numbers, they are telling you that something is working. At the same time, you have that areent rates stable at low levels. The fed has to continue the message of being cautiously optimistic about the economy and not letting that inflation go higher. Guy it was instinct to see what pimco said as well. They advised you want to get into credit as a result of that. Is that the right trade . Gianluca it is something that we are recommending. We are recommending exposure to for corporate, basically the reasons. Spreads are quite attractive. In an environment where you are not expecting a u. S. Recession anytime soon, there is potential. In, on thecan jump german side of the story, you get other german boones and you moving to german corporate debts, because it doesnt look like a recession on the rising in germany. , you make a economy similar play in germany. Gianluca we are more cautious again, a few weeks ago, you had the perfect storm of mobile pressure coupled with hedge risks coming from ireland and spain. Coming from the flareup of a brexit story. It looks to be quieter now. We are expecting to get something positive from draghi in the next few days. Guy do you think he keeps those spreads cap . Jill that is a difference gianluca that is a difference from places like japan. Eurozone, you still have a central bank that has the ability to keep spreads compressed. Of course there will be a big boost to the prospect of the region. Guy plenty of more stuff to discuss with you. He is going to stay with us. Minutes away from the open. Up next, we are going to look at potential corporate movers. What might be happening at burberry. Plenty of speculation. It is one of our stocks to watch. Guy 7 53 london. We are counting you down to the market opened it Caroline Hyde is here with stocks to watch. Checking out burberry. Caroline we are checking out burberry. Maker of the famished check print. Of the famous check print. We see a sudden spike yesterday in new york, white . Some speculation. Someone seems to have been building up a stake in burberry. This is what profit concerns that they could be having to defend themselves, looking at Financial Advisors to up support them to fight off any potential bids. The market capitalization is about 6 billion pounds. Go to htf on the bloomberg, it shows you the holders, the big institutional holders. A couple have more than 5 stake. 1. 68 . 1. 68 did this is not unheard of. It seems as though hsbc is the custodian for the current position. Many travel many try to rattle who is behind this increase. Burberry called up 7 . Profit beating expectations. Ook at the sluggish nature we are trading at 79. 71. We are seeing a 6 uptick in profits and sales. Theurged 6 amid restructuring of merck. This is a great function. This is analysts recommendations. This is trailing at the price but also the target price in yellow good but also the amount of analyst recommendation. To sell . To hold . Buy . Seeing profit down in germany and the u. K. This thing has bottomed out, not convinced yet. Gianluca salford is the with us. Deeper cuta 20 basis coming through. Why . Gianluca they have a problem here to inflation is lower than they have been forecasting for quite some time. Earlier, it was a story about oil prices. They dont have much ability to fight that. The last set of numbers is showing core inflation is the problem. Guy good to see this morning. Gianluca salford joining us from jpmorgan. We are going to take a break. See you in a moment. Find fantasy shows. When it comes to the things you love, you want more. Love romance . Get lost in every embrace. Into sports . Follow every pitch, every play and every win. Change the way you experience tv with x1 from xfinity. Hey hows it going, hotcakes . Hotcakes. This place has hotcakes. So why arent they selling like hotcakes . With comcast Business Internet and wifi pro, they could be. Just add a customized message to your wifi pro splash page and youll reach your customers where their eyes are already on their devices. Order up. Its more than just wifi, it can help grow your business. You dont see that every day. Introducing wifi pro, wifi that helps grow your business. Comcast business. Built for business. Guy good morning. You are watching on the move. I am alongside hans nichols. He is in berlin. Here is your brief. The bank of england governor is dragged into the brexit debate. He testifies before parliament this morning. Can he avoid taking sides . Germany gets into gear. Industrial production surges, leaving draghi dealing with a two speed euro. Is the slowdown deepening . That is the big question this morning for china. Hans we are going to talk about european equities just opening now. Acrossnegative futures the board. Lets get the latest from Caroline Hyde. Caroline we have a second day of declines in europe. Futures seem to be selling. We are digging into those numbers coming out of china. We have a 25 collapse in export data in the month of february. Sure, there was the lunar newyear, but hsbc says this is a sign of a deeper malaise. Clearly, youe sell off what you buy into. Gold in the gold is the haven. We will be talking much more about burberry in a moment. Of 1 x is opening 9 10 lower. Risk aversion is creeping into the market. Equities are going lower. The euro is moving higher. As i say, money is coming into the haven of gold. We are up 5 10 of 1 . Meanwhile, we are coming out of metals. We have seen a real ramp up in metals. Goldman sachs says now it is time to go short of copper. Copper is down 8 10 of 1 . Goldman sachs that can go all the way down to 4000. It is time to sort the issues of china. Oil is on the downside, off by one percentage point. Lets take a look at the pound. That went down by 1 10 of 1 on the british pound. Lets have a very quick look at some stocks on the move. February is up 4 10 of 1 . 0 of 1 . Rry is up 4 1 merck kgaa is up by 1. 5 . The drugmaker beat forecasts. Back to you, guy. Guy we will talk about burberry in a moment. Lets talk about the European Equity scene this morning. Lets take you to the imap function only terminal. Consumer staples are actually doing ok. We are selling in the materials sector. Financials are under pressure as well. Materials have seen a huge rally. These mining stocks are beginning to become a little bit unwound. This is what we see this morning once again, post that chinese data. Could burberry be a takeover target . Lets get to francine lacqua. You talked to the company . Sources i spoke to inside burberry. I was asking them about the ft article. Yesterday night, they reported there was interest in burberry. A secret person or group of people built a 5 stake. Own 5 of law, if you a company, you have to say it. Burberrytand that already has a relationship with hsbc. They have asked people to look into it to see who this group, for this person, is. It could be an activist investor. They could be somebody looking to take over burberry. This is a rumor we have heard over and over again. Why is there such a rumor . Guy, we both know burberry quite well. This is one of the only companies independent in the luxury sector. It is one of the only companies that has more than 19 free flow. Guy it is one of the few properties out there somebody could buy. The sector has been hit pretty hard, hasnt it . The china story has knocked down the entire sector. If you are looking for a target, one of the you fear once to access is burberry. Otherne a lot of the ones. Are held by families. And so, gaining control would be much more difficult. You are right. They have been hit. The share price is under a little bit of pressure. They are currently valued around 6 billion pounds. The evaluation could be around to 2illion pounds billion pounds more. They went after all of the big ones. It has to be one of the freestanding luxury groups out there. Hans francine, i love this story. Burberry isn about what i could afford in a burberry jacket. Guy, could probably up his s take to about 7 . Are they ready to start doing deals again, or is this the last hurrah . Onncine guy is very keen his burberry jacket. I dont know about the alpha males, hans. But what you can see is there certainly is investor appetite for that kind of deal. I dont know if it will become a takeover target. I dont know if it will actually be acquired by someone else or if it is a private equity that is looking at it, or if it is simply an investor saying, look this is a good deal. Given the price reaction, investors are hoping that someone management has been fairly quiet in the past. This was one of the big tests for the luxury sector. This is the first time we have a ceo that is creative director as well. Christopher bailey is in a difficult position because he was the first one to do it. Investors could be trying to test his resolve. Guy up next, the president and the ceo of Hilton Worldwide. We are joined exclusively from berlin. Guy welcome. You are watching on the move. 8 10arket is trading down, of 1 . Let me tell you why. Anglo american is down 5 . Glencore is down 4 . The miners are really doing the damage to the london market this morning. Lets get you caught up with the bloomberg first world news. Nejra mark carney will give andence on the economic financial cost and benefit of eu membership. He is expected to be pushed hard over his assessment of brexit risk w