I do not know what governor kuroda can do. Watch. re on the parity the much stronger yen goes over into everything else, including lower german you. Francine i had a call this morning by 103. Lets see if we have 100. In syria, fighters backed by the u. S. And russia have an on opposing sides. There are now zeroing in on the islamic state. Theyre trying to cut the supply routes between iraq and syria. British forces supported by the u. S. Are moving closer to the selfproclaimed capital of rock. Kurdish forces supported by the u. S. Are moving closer to the selfproclaimed capital of rocca. Is coming in two months before the u. K. Vote and germany, a turnaround from last year when mainstream politicians wanted to kick grease out of the euro. Now they expect to reach a deal to unlock more bailout money. The demands that they take part in the aid program. Were hearing from the founder of the Panamanian Law Firm at the center of the tax controversy. Did nothingfirm wrong and he will make a few changes in his business model. Mossack fonseca. Fallout. D, it was a thursday antigovernment demonstration. The demonstration started with the Prime Minister and his wife were shown to have investment in offshore companies. They now want the finance minister to quit. New protesting. Maybe that is an icelandic thing . I can see michael mayo at the jp Morgan Conference call holding banana at james dimon. T is all about the yen the 10year has not moved. Under 40. E, the next screen, this is jawdropping. Point 38, a lower number is a stronger yen, but the acceleration is really front and center. The german yield, three digits,. 106. Negative. 50. They are in tandem. Francine it is amazing when you look at negative bond yields, they are going smoothly. I want to show you the european stocks unchanged. 1234. Want to show you yen i have a great chart going backwards. Crude oil, 37. 8. We have stockpiles that declined in the u. S. Goldman saying it is 35 on the that is a sweet spot for u. S. Producers. Tom no question. To look atany ways currencies. If very importantly, they do not show the same emotion. Im having trouble with the dollar collapses. This is trade weighted dn. It goes back 20 years. The gradual toyotafriendly decline. This is the export policy in japan. Here is a stronger japanese yen against abenomics. Vonnie the currencies are there versus the dollar. She doesnt know if there is more that abe can do. Of they are going opposite what they wanted to meetings ago. Rancine i have yen we are now completely synced. We spoke to j. P. Morgan chase, and he was saying there is no late in intervening at the moment. He believes the currency will rise to 103 per dollar. He yen is the red line i chose options on volatility links to yen. Crossng the dollar yen searching to 84 above average volume yesterday. It looks like it might rise. People are getting more anxious about the risks and piling into yen. Lets get to the jp morgan chief asset strategist. Stephanie, it is great to have you on the program. How do we price risk . It seems like the havens cannot get a break. Janet yellen is not giving confidence. Stephanie theres interesting stuff to say about the yen. As an economist, i like to see fundamentals here at it might be bad news for japan. I think it is driving that back up in the yen. I dont think we learned anything we didnt know. People that are reassured the comments that we heard from janet yellen last week and her Economic Club speech were in line with the tone of the meeting. They are focused on the same asymmetry. When youre closer to the lower band you have more room to increase rates. If you take a mistake you have to cut rates. That is giving them a riskaverse approach to the world. They are now openly talking about the rest of the world as a factor more than in the past. This has traditionally been parochial in the mandate. Francine economists are talking about china, but theyre giving themselves time to make sure the economy is Strong Enough for the u. S. That seems perplexed. Question you had that in september, they are going to wait until china fixes its problems . It is more the broader dynamic around currencies and Financial Market confidence. There are nervous about how much the improvement in sentiment has been driven by them and not fundamental factors. You hear them saying some of the underlying reasons why we saw momentum in the Global Economy is still there. Just because we have injected a that is still there. Even the currency question around china has not gone away. They seem to have a handle on it. They are allowing the currencies to strengthen against regional current these. We have seen the reverbs go up, as you would expect. Tom the german twoyear yield went to. 502. The elephant in the room as you state is china has not moved. Our the markets telling the chinese to catch up with major traded assets . We startedi think the year worried about learning about the circuit breakers. Worried about crucial things that the idea it will let loose of the currency. Sent ofage they have the last few months is they are not willing to do that. If you look at the Foreign Exchange reserves, along with the reevaluation effects, the high reserves that come along with the weaker dollar. Reduce outflows as well. Sense ao not coordinated intervention. We know unilateral intervention doesnt work, but when do the japanese blink . This is the polar opposite move of a 120 yen. Stephanie they do have a problem. They are right, you have to do quarter needed intervention. That doesnt work if you are not catching a fundamental change as well. That is the issue the japanese have. The fundamentals are pointing in the direction of a stronger yen. The account surplus, for example. Youre looking at a country benefiting the lower Commodity Prices and structural flows. Back to Pension Funds paying out more than they are taking in. You can not, against that, even the bank of japan. Tom the idea it is not only about yield and price, but flows. The surplus in recent quarters and years in japan. We will look at oil in the next half hour. We are thrilled to bring to you the top, the greatest transaction in wall street history, steve case looks forward to the third wave. Francine i am Francine Lacqua in london. Tom keene is in new york. My girl economics and the mark their yen. Nomics and the Early Release of a galaxy s7 smartphone gave a head start on apple and chinese rivals. It sold three times as fast in its release as the s6 did. A boost to the new ceo steve wrote who is trying to turn around a fouryear decline in apparel. On luxurydiscount apartments in london if you buy in volume. Developers are offering institutional developers discounts of 220 . Buyers have to be willing to take 100 homes or more. That is your Bloomberg Business flash. Francine thank you. The chinese Foreign Exchange reserves expected to increase for march. Robin, reserves are rising for the first time in five months. By 10. 3 billion. Do we believe the figures . i see where you are going. The fx reserves, as with all economic data, look at it with a pinch of salt. It generally shows what is happening in china. The easing capital outflow, the depreciation pressures. I do not think the figures are hugely off from what people are expecting. Tom robin, what does a stronger yen signaled to chinese authorities . I dont think chinese authorities are looking very much outward to see what is happening with other currencies. The way they are following the appreciationowing against the dollar while allowing for depreciation against the currencies of its trade partners. How it is achieving this is by limiting the advances against a declining dollar. If you take the euro, it has risen 5 against the greenbacks. It was originally 0. 4 . That helped against its trading partners. It tells people it is appreciating against the dollar and achieving a twopronged strategy. Francine thank you for those comments. Stephanie flanders is with us. We talked about the fx reserves. They rose for the first time in five months. Is a weakening dollar, a better than expected economy thanks to the easing on the fiscal monetary side and curbing capital outflows. Surprise. It is a the trend had been for shrinking outflows, and we knew the valuation affect would kick in this month. They have foreign currencies, not only dollars in their reserves. Certainly want to watch on the outflow side, how much of this is driven by tighter capital controls, and how much by easing. We heard about one thing driving lets Chinese Companies not confident in chinese ability to pay foreign debt. There was an idea that that would be a temporary factor. Once they reassured themselves about the debt paid down. We might see that particular move coming out and no longer adding to outflows, but it might be too soon to say. It is not that reassuring, because we know they cannot do that. Tom is it too soon to say there is an interest in emerging markets . In my desire to acquire emergingmarket assets . Seen the we have flows into emerging markets over the last few weeks has been higher than it has been. Jp morgan we have Institutional Investors talking about wanting to get exposure to emerging markets. We have our own internal debates on the Asset Management side if this is the beginning of the end of this terrible performance for emerging markets. A economists say we have not seen the fundamental improvement to see the market going up, but we agreed it is a dangerous time in emergingeight markets. If you are underweight at the start of the year, you are looking at this rally if you are an active investor, you want to revise up your balance, even if youre not piling into the market. Andcine is chair yellen the fed trying to give a helping hand to china so it doesnt hurt too much with currency manipulation . , even if the bad loans the chinese authorities want to, keep controlling it. Stephanie it changes the dynamic on the dollar. It is a different dynamic on commodities and oil. The combination of the dollar ies is helpful for the dollar. In the minutes, they are aware of that here the market thinks you can have all of these things together. The more the oil price is going up, the more we will talk about interestrate hikes, and it goes into reverse. Tom Stephanie Flanders. The hour will continue this discussion. Yellen, ben janet bernanke, sherman greenspan, and paul volcker in the same room. That is at 5 30. Michael mckee will give wisdom in our next hour. Today, 4 fed chairmen will be in new york. I wonder if james dimon will be in the front row at 5 30 tonight. Lets go to our morning mustread. Francine this is the firstever joint panel. His letter writes in to shareholders, he was talking about the risk of fed policy mistakes and weighs in on the brexit. He said he is talking about the brexit and its uncertainty. It will hurt the economy of britain and the european union. That is jamie dimon, the jpmorgan ceo. Stephanie flanders, also with jpmorgan. Looking at the risks of exit, there is a clear realization that these are risks for the world economy. It is no longer confined to the u. K. Or europe. Stephanie what happens when you have a steady growth rate seems to be more in the 1 range rather than 2 or 3 . Will have more of an impact if it comes with a broader slowdown. That is why people are talking about the broader economic impact. Particularly in the eurozone. If youre seeing a slight weakening and momentum, then why youre, that is talking about it. In normal times, this could not get europe into a recession, but there is more going on. Liberates us to be open about opposition. We see risks with britain leaving the eu. I have been trying to campaign to make sure it doesnt happen. It is something, particular countries will be affected. Ireland i would worry about a lot. In the longterm it is something we can cope with. It is the short term uncertainties. Tom . Length leave the union is they go through with it . Stephanie we would have said that they year or two ago was a sure thing. The the low oil price fiscal dynamics are completely different than at the time of the referendum. I would not be so confident. That are other things could go if you have that lived. We are seeing uncertainty. Tom we have a wonderful section coming up on oil. Lets do a check. We are yencentric. Giving you the markets. The euro is expected to be 114 10. It is a stronger yen. 108. 30. Stephanie flanders of jpmorgan. Coming up, we will look at oil. A gorgeous new york, the Chrysler Building to the left. Bloomberg surveillance. Tom good morning. Bloomberg surveillance. The yen on the move. 108. 29. Right now, lets get to our first word news. Vonnie a report from brazil, lawmakers move forward with impeachment proceedings against. Resident rousseff there is evidence she used illegal financing to hide the size of the budget deficit. The house will have to decide if she will be impeached. Venezuelan workers will get an extra day off every week. The president wants to save everyicity by declaring friday and saturday in april and may as a working holiday. The u. S. Will search for evidence that people or companies of native taxes against russia. At least 2 billion in transactions involved individuals and businesses with ties to putin. Russia has dismissed the reports. The race heating up between Bernie Sanders and hillary clinton. Senders lists wall street donations to clintons super pac and support for the war in iraq to say that she is not qualified to be president. Has died. Ard he came out of the bakersfield, california music scene in the 1960s and had 38 number ones. Is known for okie from the skokie. Mistie from must okie ogki. Tom bakersfield wanted to be more like l. A. There was a revolt led by bakersfield. And thisga, anderson, was the guy. You went to the bakersfield airport and it was the Merle Haggard airport. It saves country music, no question. Real offense when people mention okie. There is so much more with Merle Haggard. He truly saved country music. Was that too much on bakersfield . Experte no, yoare an on country. I more of an electronic and blues brothers. Aboutg to oil, talking news, Goldman Sachs saying 35 per barrel is more of a goldilocks price. Not too high or too low, but just right. Stephanie, thank you for sticking around. Foris the perfect number u. S. Exporters. They want it higher . I dont think 35 is what the Global Oil Companies want. Articularly the country i think we will probably see, before a large scale bankruptcy, we will see one or two major export countries getting into trouble. Youre seeing downgrade for countries like brazil. I think at 35 we will see more. 10 days wehe last spoke to the saudi deputy crown prince who is saying they wont budge if iran does not freeze off oil production. We heard from kuwait saying that they will freeze, and they dont care what everyone else says. If you do not have saudi freezing productions, oil wont move . Iain they are the biggest player, but there is nonopec production as well. The the rebalancing of market argument depends on is the u. S. Going into reverse, which is happening. There are enormous capex cut by on theors having effects world. It will happen, how long it takes is hard to guess. Il declines if you dont invest, production goes down. That is what is happening. Tom you have an interesting opinion on Royal Dutch Shell. Explain why i should be interested in Royal Dutch Shell. Iain it is almost a nobrainer at the moment. They have a new ceo that is determined tom not to be Royal Dutch Shell. Iain exactly. Shell, i dontor think many people cared. About technology, progress, other things. The guide now really cares about profitability. That is the difference. Also, you have a restructuring acquisition,e bt which is second to none. The last time he saw move this big was when exxon merged with mobile over decade ago. Tom explain on the balance how supple their capex is. What can they do to manipulate investment spending over the next five years . Do they have flexibility . Iain i talks about bringing down. They have to get below 30 to ben if they are going competitive to what exxon has done over the last six months in terms of production. We will hear about that when they give us a strategy update. The third thing is the yield. You have a dividend yield in the company. They have promised they wont cut back. Shell will move heaven and earth to deliver. A fairly low oil price which will improve. Also, the dividend yield, it is a no brain or. Francine is there any value to be made in the industry . Volatility. So much geopolitics is complicated. Opec has lost control. This market has come such a long way. You see the supply reaction, which will take a while to see through, but that is the fundamental that has changed. You are seeing capacity down and investment in future capacity down. Over the mediumterm, that gives you a market where it is not the overall evaluation, it is particular stories around particular turn around prospects. You could look at high returns. Asset managers are starting to see this less as an asset class and more as an individual corporate story. Where is the terminal value of oil . Is it 50, 70, or 80 . Isn the way that we look where costs are going. Theyre coming down dramatically. In the Service Industry particularly having to make significant cuts to service costs. The longterm terminal cost, terminal price, used to be 100. It is closer to 70 now. That is what you need to get the engine going in terms of supply when we come through this time of oversupply. That is where we are heading. Stephanie what has changed is the dynamic. We know theres more of a cap to oil from the ease with which the back on stream. Some of the shale has been taken out of the market and we know that can come back on. It changes the dynamic for opec, and also the market more generally. Tom Michael Mckee in the 6 00. Our on a most historic meeting janet yellen, ben bernanke, Alan Greenspan, paul volcker will look at our monetary policy. That is a huge deal. Tom bloomberg surveillance. Francine lacqua in london, i am