Things that goes to john cryer. We are less than 30 minutes away from the European Equity market open. Lets ticket look at the terminal and show you a bloomberg is telling us about what that open will look like in 29 minutes time. It looks like the market is going to be opening on the front foot. A positive open for europe this morning. Around. 6 for the london stocks. London and paris are slagging a little bit. European markets were fairly flat yesterday. As a result of which, if fairly decent start to the day. What else is going on, matt . Matt you are seeing the aussi job by the most in more than a month after we got the minutes back from the rba meeting, suggesting they will stay put for the next meeting to look and see what their moves have done so far. Crude oil jumping to basically a sixmonth high. Look at nymex crude. U. S. Eculations that stockpiles will continue to fall. And then gold down. We have more big names added to the gold pile. We have heard from druckenmiller, who thinks gold should be your biggest currency asset. S, his george soro company is buying into shares of gold. Central activity around the world is pushing the price of gold ever higher. Lets get now to the bloomberg first world news. Haidi thanks, matt. The rba says a broadbased weakening of inflation pressures are behind the surprise Interest Rate cut. The Australian Central Bank first cut in a year. Gross outlookhe remains steady. The decision was not seen as a therebyunk, reducing the likelihood of another cut in june. Purchased a 254 million stake in gold. Soros has warned of this chinese debt. He thinks a hard landing for china is practically unavoidable and this will worsen global deflationary pressures and drag down equities. There are plans to increase his holdings in gold, betting that the gold will increase in value. The chief Investment Officer expects godl to rebound by as much as 40 in the next two years, a level last thing in october 2012. It is finally been revealed how much the debt is in saudi arabia. The kingdom has a stockpile of 117 billion. That puts saudi arabia among the top dozen holders of the u. S. Debt. Chinasjust 1 10 of trillion dollar hold. Global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. You can find more stories on the bloomberg at top. Matt . Matt haidi, thanks. With us is the director of investment at london and capital. He is managing more than 4 billion in assets. Thanks so much for joining us. Lets talk first about what we are seeing going on in gold. His teams everybody is piling in here. Some here are calling it a currency, which central bankers will probably take issue with. What you think about the run up of 20 we have seen this year . Generally, we know the gold is really sensitive to low Interest Rate. But we have seen is, once we have been into a deflationary environment, the real Interest Rates are coming down with the negative Interest Rates. That means the cost of the gold continues to come down. Historically, it is a lost income. That is one of the big reasons people do not want to own gold. It is up at his income. Negative rate of structures, that concern is no longer there. One of the things that held the goldbach is no longer there. What is important is we are in a world of deepening negative Interest Rate structure and qe. That means all currencies are trying to devalue against one another and of course, gold is there protecting the status of the ultimate currency. It is much more driven by demand than what you can produce. And of course, the production takes a long time before you can change the supply side of the equation. Right that thes gold has come back into favor as an ultimate hard asset in a world where we are trying to fight deflationary pressures with all that is available with us, and plus new instruments that central bankers continue to think of. That is really all about the negative Interest Rate structure, supporting the gold. Manus it will be interesting to see how this fits in with the deleveraging story as well. The blackrock ceo talking about how he is bullish on china, longterm. But he is a bit worried shortterm. He spoke at the chinese symposium. Fink told bloomberg that despite the reforms, it is the debt that really remains the concern. Fink i would give the chinese leadership some of the best marks in trying to transform their society. The fourth year of the plan to reorient china away from manufacturing, away from an export dependent economy, to a much more resilient domestic economy, in a much Greater Service economy. That is a very hard thing to do. It takes many countries 50 years to do that and country is generally have recessions in the transition. China mostto reselling, informal policy most recently, in formal policy behaviors have overstepped the market. The market is saying that chinas dependency on debt and investing in some of the stateowned companies is not a good longterm solution. I would say indeed, it is not a good longterm solution. Hopefully, this is only a shortterm remedy and they get back to the basics of trying to build a better domestic economy. Manus ashok, do you agree with that . The short term debt story is what is hanging over the market right now. The volatility attached to this is the biggest concern, i would argue. Debt whenever you see building up, it inevitably means mistakes are going to be made in the way the capital is invested. And you are going to get a very poor return on the capital. But i would not worry too much in the sense that this is not going to spread globally. I dont think so. I think it is containable. A lot of investment has gone into metal mining, you know, manufacturing side as well. With the slowdown in the world and slow down in china, that means the production itself is not being utilized fully. The cash flow you need to generate to service the debt is still eroding very gently. Of course, the problem with china has always been that we have to throw more and more capital to generate the growth. You had a situation where only about two to three years ago you of debt to0 dollars create 1. 00 of growth. The capital efficiency is increasing quite rapidly now. In a way, we have a problem and it is a very large problem. Ultimately, if the things really do get very bad, that of course, we know we have seen i in the , it canng countries balance. We are talking about a really serious problem here, though. Storeooking at the saudi this morning, where they have more than 100 million in u. S. Debt. The chinese have a little more than 1 trillion, but the debt issued in the First Quarter almost equal that. We are talking about 7 billion in debt. This is a problem getting too big to deal with. Ashok absolutely. What we are saying as we had measures taken in the First Quarter to measure the growth rate, to make sure did not slow down too much too fast. Some of those policies are now slowing or reversing. Some of the let us data coming out of china some of the latest data coming out of china has shown these are slowing down. In a way, the First Quarter moves have already eased off. Iswill see that that precisely a response to the fact that the indebtedness was rising too fast and too quickly. Words, the compass we are borrowing into to have a Strong EnoughBalance Sheet to repay the debt and continue to make the payments on the loan itself. We will see is what kinds of measures will be taken by the chinese authorities to make sure the debt burden is easier to carry. That means Interest Rates are going to be cut. More soft loans are going to be offered to soes and so on. I think it is a more mediumterm problem, not an immediate problem. Manus thank you very much, indiid. Ashok is going to stay with us. Up next, speculation that the South African finance minister is going to tumble. We have the full story, next. London. 4 in in stunning morning. I did see some red clouds earlier on. It might rain later, but just be prepared. Here is the Bloomberg Business flash. Haidi thanks. Vodafone has reported Quarterly Sales growth that the estimates regarding organic service revenue. This rose 2. 5 . Analysts surveyed by bloomberg on average had expected 1. 5 growth. That was helped along by improved results in several key European Markets. Associates have become the hedge fund to win approval in china. The shanghaibased consultants say bridgwater won permission to operate in the free trade zone back in march. This raises expectations that china might just lift the moratorium. Twitter is planning to give users a little bit more freedom to express themselves. A person familiar with the matter tells us they wilson stop counting photos and links within the 140 character limit. Links currently take up 23 characters. The move is part of a larger plan by Ceo Jack Dorsey to give the clients greater flexibility. In 16p to the lowest years. The u. K. Will decide whether to remain in European Union. 59 billion pounds is down from the same period in 2015. In fact, the lowest since the year 2000. That is your Bloomberg Business flash. Guy . Guy thank you very much. South africas rand has fallen toa two month low. Pravin gordhan has been prying to stave off a junk Credit Rating. There are many agencies still waiting to report, but these efforts have been repeatedly undermined. The presidency is denying that Pravin Gordhan is at risk of being arrested. Gordhan clearly is a man with a great deal of respect around the world. He is struggling to do the job the people want him to do. Is adjust a believe now that he does not have the backing of senior figures within the amc. How is the impact and what is happening in terms of Market Pricing and the rand . Reporter good morning, guy. There is speculation on whe ther finance minister Pravin Gordhan can hold onto his doubt. He has been charged with espionage, possibly arrested, and possibly fired. This has weighed heavily on the markets. Also felt that speculation, that is definitely indicating that investors are not happy with that kind of uncertainty. Uncertainty has been ripe in south africa and weighed heavily on the markets since the former finance minister was fired in december. They are trying to rescue the situation and wave off a Credit Rating downgrade, but the effort seem to be undermined by possibly a Political Force that are trying to seek for him two possibly be charged and arrested. Matt matt miller in berlin. How much damage is increasing or how much is this damaging the political certainty in south africa . Investor sentiment must be heard when zuma a point somebody and five months later the guy is going to get arrested for espionage and is not love to do his job. Reporter but we are seeing is that it is definitely doing damage. Pravin gordhan is a trusted man. He has a lot of respect. He has been really trying hard to make sure investment communities know that the south African Economic situation is improving, and also to wave off the threats of a possible credit downgrade. About himon keeping his job is something that will undermine these efforts. We do know that president zuma will be addressing lawmakers in Parliament Later this afternoon. It is expected that he will be questioned about how some of the Political Forces are undermining efforts to possibly make sure that investors have improved sentiments in the economy. That is something that finance minister Pravin Gordhan has been trying to do over the last couple months. Guy thank you very much. Lets bring back in ashok shah. Political instability goes on and on. A much is keeping you from not investing in the m right now . Ashok more importantly, there is the fact that we have seen a corporate earnings down cycle that has not stabilize yet. We have a situation where, in a way, because of the cycle and a large number of the economies in the emerging economies, we are waiting for the stabilization before it becomes unstable. Then . Olitics comes third, yes, but it is important in the sense that where it is stable, it is easier to invest. To understand when considering the nymex of the russian market. The dynamics of the russian market. Is a question of how big a discount that one person can put on the political market because of the Political Uncertainty. Also, markets like of africa have Political Uncertainty rising. And something very similar is happening in brazil right now with the Political Uncertainty. You have a much bigger discount and those countries. Where you have political stability, then that premium tends to be, in a way, going down. The assets tend to be valued quite highly. Guy ashok, thank you very much indeed. We are nine minutes away from the market open. Keep an eye on vodafone. They could pop at the open. The market open is eight minutes away. That story, next. Matt it is a dark and cloudy morning here in berlin. Features are indicating that we will see green when the bell rings. I want to get to the stocks to watch with caroline hyde. She has been watching vodafone, beating estimates. Caroline because he the stock pop up 1 or 2 on the open. Watch for vodafone, organic revenue be estimates. We took out the mma story from this particular stock. There was much talk that it could team with liberty global. But at the moment, vodafone is looking like it could rise. Revenue fell within 3 they managed to pull in 41 billion pounds. And manages to grow its Dividend Per Share annually. Meanwhile, keep an eye on hugo barra. It is promoting its ceo. This cannot after the bell. O when i become the chief executive. We have seen the likes of the previous chief executive having to step down on the back of that. They left earlier this year on the back of the plunge in shares. An this new cfo bring boost to the shares in business . We could see a rise as much is 2 . Finally, premier foods raises its sales outlook. Without the u. S. Company could be eyeing up premier foods. Remember, it was the likes of mccormick, analyzing the maker of bisco. Shares could rise up to 5 today, guy. Guy that open is coming up very shortly. We are four minutes away from the European Market open. Futures are pointing to a positive start and a lovely day. Around 0. 5 . Is up guy good morning and welcome. You are in bloombergs European Headquarters, alongside matt miller in berlin. We are moments away from the start of european trading, and matt has the morning brief. Matt good morning. We should all worry about chinas debt. Why blackrock thinks the worlds secondbiggest economy needs to deliver. And is the rba done . The aussie dollar surges on news of further cuts. Plus, who has the toughest job in banking . Why aberdeen thinks it goes to joh john cryan. Guy looks like we will have a fairly positive open, around half of 1 higher. Wel talk about vodafone, about hugo boss, but the general tone in the market is a little bit more positive. Were up around 6 10 of 1 . Heres the market open with caroline hyde. Caroline we are waiting for them to get galvanized. Keep an eye on germany as it reopens. Ftse called higher. We could be seeing the rally after the United States is bucked by Oil Prices Going higher, and noticeably the Technology Stocks in rome. Stocks increased by market capitalization at a debt of 18 billion. We are higher on the stoxx 600, up 3 10 of 1 . Telecom services up, this is the imap function. You can see which industries are on the move in europe. The downside, consumer staples. Performins not performing quites well. John cryan is having a challenging time, but oil has been helping to drive asia higher, and lets check in on oil, because we havent seen the sorts of levels in the brent contract all the way back to six months ago. You have to go back to october or november before you saw these 49 per barrel coming out. The cause seems to be the supply demand balance reorientation itself. Goldman sachs was surprised by the resurging; were seeing oil driven by worries about nigeria and supply concerns. All of this is just starting to see that maybe u. S. Inventories data out later today could stop it dropping for a second straight week. Data in terms of inflation from and i want get cpi, to get on the stoxx to be watching across europe. One of them is vodafone. How is that performing on the open . Higher, 1. 9 . The calls were right, vodafone pulling in fourthquarter organic services revenue, a growth of 2. 5 that h beat estimates. Their revenue came in line. Hugo boss up a tenths of 1 . Its rising as a new chief executive comes to the ranks. Promoted,s been becoming ceo and chairman of the managing board. The event profit warnings, shares fall off, a nd is this a new era . And premier foods, up almost 5 . You love this particular company if you love custard birds. 2017. Sed its outlook for they still need to prove themselves after rebuffing those m a talks earlier. Guy thank you very much, caroline. Lets look at these European Markets. This is the picture at the moment. A generally positive start to the day; the stoxx 600 up by 6 10 of 1 . Just to say, a whole bunch of asio, lafarge. There are a number of stocks on the downside. Yeah, absolutely. Were going to continue to see stories like that. Let me talk about Deutsche Bank. The coceo john cryan is the most challenging job among all his european counterparts in turning around the germ