What the fed may or may not do. Tom i have to admit america wakes up to the shock and awe of two candidates for president this morning. Address that you both hours of surveillance. There is the reality, you wonder how brexit will be the morning after. Maybe that is the same kind of feeling. Francine it is extremely difficult to make political productions. Why the markets are interested in it. Lets get to bloomberg first word news. The rules rewrote of how to run for president and now donald jim is the presumptive nominee. He won 52 of the vote in indiana and now donald trump is the presumptive nominee. Ted cruz has dropped out of the race. We are going after Hillary Clinton. She will not be a great president. She would not be a good president or she will be a poor president. Vonnie victory has almost certainly allowed trump to get the delegates he needs that would prevent a contested convention. Bernie sanders won 53 of the vote in indiana. Senator sanders i understand the secretary clinton thinks this campaign is over. Ive got some bad news for her. We won awe want great victory in indiana. An almostinton has insurmountable lead. Sanders is trying to persuade superdelegates to switch their votes to him. A panel of british lawmaker says the u. K. Should consider stopping defending weapon sales to saudi arabia. There have been accusations that the Saudi Led Coalition has bombed yemeni areas indiscriminate. For a 12th day, there was violence in the city of aleppo. The u. N. Envoy was in moscow trying to arrange a partial ceasefire. Rebels of hit civilian areas in the city. Of an oil residents town in western candidate had been ordered to evacuate from a raging wildfire. The fire had destroyed four neighborhoods. Are making the fire are predictable. There are no reports of serious injuries. Global news 24 hours a day powered by 2400 journalists in 150 news tour around the world. Tom an odd day yesterday, choir today but it is flighty. Equity, bonds and currencies. Equities were flat. You literally from the bloomberg, and you look back and they are 7 . Yields were better. The euro 1. 1490. Panic. Y from that 1. 16 nymex crude has been soggy. On to the next screen. Yen with a 105 handle. Yen does nothing, showing it is about the dollar. And renminbi is worth discussing, francine. Quite a move out of beijing. I dont want to make too much about it but nevertheless, renminbi is the story. Francine i agree. It gives us a glimpse of what their currency valuation, whether it be devaluation or not is going further. European stocks under pressure. I want to show you basic resources down 2. 8 . Bhp, after they brazilian prosecutor filed a 44 billion civil suit over the november dam rupture. I want to put the ruble in there for good measure. Weakening the most amongst currencies worldwide. Tom i want to go over to the terminal now and look at our political economics but our economic politics. We have shown this chart before. Productivity out today. This is the back story, is this decline in the efficiency of our nation. Productivity moving over 13 years fomr a p from a peak of 4 . President ial moving average, down to here, to where we are. This is what mrs. Clinton and mr. Trump have to focus on. Vonnie this is the conundrum for the fed. The monthtomonth data is so up and down. You can tell where the trend is going. Tom a shocking chart. I know you picked up on this. Francine this is shocking because we have the same chart. I was going to adjust you keep on saying in europe we take to our lunches and take too much holiday. It has not been this bad. It is less elegant then your chart but it shows the same. Productivity expected to decline. It has not been this bad since 1993. Lets get to ubs Wealth Management investment strategist. Great to have you on the program. Tom makes an interesting point. I was doing a cheap dig. What this productivity shows you is that because of this, because wagebor, because of growth, because of inequality we now have much more uncertainty in the political world. And inequality is not going to get better anytime soon. And that has been causing a lot of the political and certainty. Clients are starting to look ards the Second European but longterm Political Risk and how that impacts policy. Look at how germany criticize the ecb. These issues are not going to go away anytime soon. Francine how do you deal with them from a market perspective . Do you get back into cash . Rey that is something our clients are more inclined to do in the Wealth Management space. Again, having a balanced approach is right. Our cash allocation is always around 5 . There are opportunities. It depends on your approach. Going to private markets, for example. Or alternative markets that insulate you from the initial volatility spikes. But these are things we are looking up. Tom good morning. Yesterday was quite an exciting day. Lets bring up the yen chart. This is off the aussie rate cut yesterday. Bank of japan, down we go. We are almost down to standard deviations of yen strength. Who is the cart and who is the cart . Is it the currency Market Driving policy or the other way around . Started i think it with the currency Market Driving policy. I think you have to go back to february where they cut to thetive and two days later, markets went the other way to i think the boj in not acting we silly, they are making a big bet on the u. S. Dollar recovering. Dollaryen will go higher because of a stronger u. S. This goes back to research from years ago. When we look at the renminbi the management out of beijing within a floating rate regime. They are trying to move that line from the lower left to the upper right. A wekaker renminbi. Will they be successful . Ffrey we are looking at a slight shift higher towards, not toward seven but i think they will be successful in balancing the need for weakenrs currency. In a few days we will get the reserve numbers for april. It has been a better mother. The are going to be expecting a much Better Capital flow position it ihas been a much better month. Francine giving all these youets, and given that believe that markets to not believe in Monetary Policy anymore, what do you buy into . Frey i think theyre going to be really selected. In japan, there is a lot more skeptical, the ecb officials themselves him and saying, yes, we can do more. Well, i think that is the thing. What the Central Banks are trying to in part to politicians, stop criticizing us. Get Structural Reforms in place and that will make Monetary Policy much more effective. That will be the choke point. Who can deliver . Francine thank you so much. He stays with us. Coming up later this hour, adam posen. We have to have a conversation with him about negative rates but also banks worldwide. Inncine im Francine Lacqua london. Tom keene is in new york. A better then estimated quarter for royal dutch shell. Shell has also cut thousands of jobs and renegotiated contracts. Maerskianish shipping line reported a stronger than in profit. Drop adidas plans to sell its struggling golf business. The German Company will look for a buyer for its tailormade adams and ashworth brand. Adidas will keep its golf shoe and clothing business. Coming up next, we will speak with the ceo Herbert Hainer. Francine thank you. Here is a treatment for those of you globally, everyone adjusting in america. It is a big day in the United States of america this morning. Supportingrk post mr. Trump, takes the high road with a beautiful photo of mr. Trump. Vonnie very clever headline. Here starting to piece it together. Instead of mr. Trump in a victory lap . What the hell is Bernie Sanders doing . The key question this morning, we saw a win last night by Bernie Sanders. We want to be clear that Hillary Clintons people were saying that they may see a loss in indiana. We have a situation now where we of the republican nominee is set. We have a democratic race where he potentially inflict damage on her. Tom who is the adult and the democratic room . Is it secretary kerry . I doubt it. Who sits the senator from vermont down and says, this election could be closer if you dont grow up and get out of the race . I do not think the democratic toty, the warren wing, wants really inflict damage on what they see in this election which is these surge of voters coming into the party. Tom what are they going to do, vote for mr. Trump . Or stay on the sidelines. Bernie like to talk about 27 but that is a huge amount of enthusiasm and money that they do not want to jeopardize of sort of having this at all going on. Whether anyone sits down with Bernie Sanders and says, you need to withdraw for the good of the party, i do not think we are in that situation. I do not think we have gone to the namecalling level. I think the party would be wise to look at the lexus coming out of what they learned and push or even further left on wall street. Is this Bernie Sanders campaign and during or does it tell us that mrs. Clinton is mistrusted amongst voters . What you see from the campaign is that Hillary Clinton is just a weak candidate and exposed on several levels. Number one being her trustworthiness with voters and her appeal among certain coverts of the voting bloc. Very strong and minorities. She will win Going Forward but she needs to shore up her support among the white workingclass voters. In particular, she needs to shore up her support and continued to shore up her support among women which has been a mixed variable throughout the cycle. Francine how does donald trump amanda berry fractured Republican Party . Whether or not he can mend it is a key question Going Forward. You have elites who are puzzled, angry. I think everyone sits in th party elitee sits in true disbelief where he has the nomination locked up. But there are serious fractions to heal. Even as recently, we had ted cruz, a person who is a serial philanderer and putting in place the war of words we have not seen. Her want to when the video again. Tom come on. The president runs with the assistance of his first lady. You have the trumps with the iconic new york look. Are they benefit or so removed that they are not going to sell to america . America, hisell to children, are some of his strongest surrogates out here. Wife, has not played as much of a presence. Jr. ,hildren, ivanka, don, they have proved to be some of his strongest surrogates. Francine as late as yesterday morning highly is making these wild assertions about ted cruz. Vonnie then he gave a speech that was president ial. Now . He change completely what hes run on and these wild statements is what has led to his strength. I think we forget that at our peril. I think he is in this bifurcated campaign were certain advisers are telling them, be more president ial, stop saying the crazy things such as ted cruzs with leeing associated harvey oswald. We cannot forget that has been a huge part of what has driven people who are so frustrated with washington, so frustrated with the media and people like me to back him. Vonnie no one is frustrated with you. Francine i know it is quite difficult to look at the political fallout from any of this, except to look at from an isolationist point of view. If you had trump for president , what happens to america . Geoffrey the trade angle is very important right up. It is not just trump. On both sides. The rhetoric. Inequality, free trade. Hasnt benefited everyone. In asia, in particular where i would say it is more pro free trade compared to what we are seeing in your. Japan, in particular, they are concerned about this entrenchment towards isolationism which hurts globalization. Francine thank you so much for pulling it all night or once again. Our Washington Bureau chief. Stay with bloomberg for more coverage. Jim piland and Mark Halperin with all due respect. Jim halperin. We are looking and markets and currencies. Tom, it is time now for the morning must listen. Michael mckee has that for us. Have beenand tom talking about movements and currency. We want to show you why they are moving. Take a listen. Whats the likelihood because we are never supposed to talk about my colleagues are going to say, and we are going to get a lot of data between now and then. In my view, yes, it would be appropriate, given all the things we talk about to go in that next step. A lot can happen between now and the middle of june. Mike john wayne speaking on bloomberg and suggesting that maybe the markets have this wrong. Fed are not anticipating a move in june but of said move in june is a real possibility. We also had the same, yesterday from Dennis Lockhart of the it led to fed the atlanta fed. Should, obviously, they try to prepare the markets for at least a realistic range of possibilities. The problem is at the moment fed funds futures are pricing in only a 12 chance of a fed move. Andlockhart and williams other fed officials i have been speaking to say that is way too low. Have two fedou official saying markets, you are mispricing it. Although, John Williams then said a lot can happen in the next months and a half. Is the market mispricing . Should rethink think more about june as a possibility . Remember there is brexit. We are not over concerns on china. Isffrey i think 12 , adequate right now. They will never rule anything out. Draghi will say we will never precommit. Prepare for a range of possibilities and anything can happen. You cannot pinpoint. Sometimes you can just say right now i do not think it is a live meeting. Tom y2k. Michael mckee, you have got to be kidding me. They are going to raise rates 8 days before brexit. Mike the polls suggest the brits are about to vote to leave the european union, then they may put it off, and september becomes the live meeting. But at this point, if the polls are to be believed and the brits are voting to stay in and the economy develops we get the 200,000 jobs we are forecasting, they want to go in june. Tom i want to rip up the script. Productivity, how big of a thing is it . All of a sudden productivity matters. Mike it has mattered for quite a while. They do not know why it is not rising. Business is not investing. We have not come up with any new products. The question is when does it come back . Tom Michael Mckee, always wandering through surveillance. Oflistens to every second bloomberg surveillance. His wife says he needs to get a life. Us from theill join peterson institute. A perfect time to speak to dr. Posen, about currency wars but far more importantly the economic politics of mrs. Clinton and mr. Trump. This is bloomberg surveillance. Donalds town. I am Francine Lacqua in london. Tom keene in new york. We have talked about currencies and markets. Lets get to the bloomberg first word news. Vonnie the republican nominee for president is almost certain to be donald trump heard even ahead of the Republican National committee is calling trump the presumptive nominee after his big victory in in the indiana primary. Top challenger ted cruz dropped out of the race. The victory paves the way for trump to win the nomination outright. That would prevent a contested convention. For the democrats, Bernie Sanders surprised Hillary Clinton. Of the about an indiana but clinton has an almost insurmountable lead in delegates and superdelegates. Sanders is hoping to persuade the superdelegates to shift their votes to him. The european agreement on refugees is having a huge impact. The greeks took in just 3500 refugees last month. The e. U. Reach an agreement with turkey aimed at cutting off the refugees crossing the aegean sea. The most unpopular leader and french history and he sounds like he is running for reelection. With the year to go before elections, Francois Hollande said that things are getting better. He pointed to iran as good economic news. Multiple survey show that hollande has an 85 disapproval rating. Public School Teachers in detroit were returned to the classroom after a twoday sick out. Lawmakers approved a plan that ensures teachers would get paid even if the School District runs out of money. Detroit schools have been under state oversight since 2009. Global news 24 hours a day powered by our 2400 journalists in 150 news bureau around the world. It has been aow, lot of fun on International Economics and trying to make sense of our odd Macro Economics. We had a wonderful discussion a number of days ago with adam posen and kenneth rogoff. We are thrilled that dr. Posen joins us on set today to we continue with ubs Wealth Management geoffrey yu. Everything devolves down to this experiment of negative Interest Rates. You and professor rogoff had a lovely debate about negative Interest Rates. What is the key distinction viewers need to know about whether negative rates will work . Dr. Posen the key distinction is twofold. First, is it a big economy with a lot of tom japan, u. S. , not denmark . Dr. Posen not singapore, not switzerland, where the capital flows are not a big story. The second thing to think about negative rates is how credible is it that you can go a long way . We try to rationalize what governor kuroda did last week at the bank of japan, not doing anything. That people start worrying you can only go so far with things. Tom lets look at thing so far. Lets bring up the two year negative rate in germany, leading the way in open economy. Were not near record lows but we are lower