Headquarters. I am Francine Lacqua straight to the markets because they have been hoping for an hour. Stocks overall dropping. U. S. Stock indices are on the downside. Oil and copper falling. We have report showing that it is slowing slower than expected. U. S. Treasuries are rallying. Lets get to first word news with nejra cehic. Nejra german Industrial Production jumped more than forecast in germany. From december it climbed 3. 3 from december. European Union Leaders have its toward an agreement with turkey to halt to the inflow of migrants. Is jeanclaude called plans a real game changer. The separation without turkeys willingness to take back all irregular migrants who had been apprehended. Beay we were assured it will possible. All of the abovementioned ofisions that the days irregular migration to europe are over. Francine nejra chinas. Xports slumped more than 25 imports continued their streak of decline, falling more than 14 . It included the Chinese New Year holiday. A challenging environment faced by policymakers. The yen has strengthened for a second day after the chinese , evidence that the worlds secondbiggest economy is slowing. Revised data for japans Fourth Quarter gdp shows the economy contracted but at a slower pace than initially estimated. Global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. Francine . Francine think you so much. Lets turn to Central Banks. The Federal Reserve governor has laid out one of the most detailed arguments i fed it official on Downside Risks to the outlook. That is despite positive reports. Celebrated foreign demand to the policy path. Critics have argued that qe together with the Interest Rates is no longer effective in either japan or possibly in the eurozone. That case has not been empirically estimated. I believe that Central Banks have the capacity to qe and other measures to run expense three expansionary monetary policies. Francine that was Stanley Fischer striking an optimistic tone on inflation in the u. S. Comments from fed officials coming as the ecb president mario draghi is expected to unveil further stimulus measures on thursday. Lets bring in carsten brzeski. At the j. P. Hughes morgan asset. He is here from the u. S. Thank you so much. Does it feel different being here in europe . We are still talking about normalizing the fed. We are still talking about one possible hike this year. In europe, where talking negative rates. Carsten it feels very different. It doesnt everyone is talking about policy focused on stimulating. The ecb opened the door to fiscal stimulus coming from those countries that have Balance Sheet capacities to do so here to germany, for example. Francine you may look at the mystic policy look at domestic policy. Carsten i think there is a growing feeling in the u. S. That the world is in a growth slowdown. Whether that leads to recession, we will see. It looks like the Federal Reserve is out to sync with the rest of the world Central Banks. Francine does that mean we may look at a cut . Robert it is the First Time Ever we have had these two major Central Banks going in opposite directions. The ecb will not change its course. Draghi will do more easing. Up to the fed to see whether they can get back into sink. Francine carsten, what the you worry about the most. What do you worry about the most . Carsten i am worried the most about what the central bank can do it even if draghi there is an increasing atmosphere of despair. Not knowing what to do on top of that. A future with very low growth rates. Robert it feels like the Central Banks have done what they could but where is final demand . Where is demand for loans. The liquidity backed up as their at what is missing is that credit extension. We look at gold. If you look at gold, it does well on risk on days. We were talking about one of the greatest drawbacks to gold has been historically there have been no you it had no yield to it. Francine does that mean we were mispricing risk . Robert what is going on with the Central Banks is starting to distort the way you look at financial assets. Maybe for the last year or so. Things like gold become a very valid currency and the lack of yield is not a drawback. Francine carsten, you look at today and merkels future, she is having a great day. Production much better than expected, at a nineyear high. And yet we have a refugee crisis. Carsten i disagree. I dont see that we will get it yet. T is a preliminary agreement the german industry, yes, we had a big month. If you look back since last ammer, we went through stagnation period. In german politics, there is an increase of parties. We will be the first test case for Angela Merkels stamp in the refugee crisis. Francine robert, we often talk about what investors are mispricing in china. You feel there is something that Institutional Investors in the u. S. Misunderstand about europe . Carsten i dont think so. By and large, u. S. Investors have looked at europe. They have looked at the healing that has occurred. It has caught the attention of the fed, because the decline in the euro versus the dollar has created a pretty nice tailwind to european corporate process. To me, that is another reason the fed is talking more openly about backing away, because financial conditions indicators have been tightening since the middle of 2014. Francine all right, robert and Carsten Peggy so much. Robert michelle from jpmorgan asset management. Mark carney breaks his silence on brexit. How political will he get . That is coming up next. Francine welcome back. This is the pulse. Mark carney is testifying on the brexit. Lets get straight to the bloomberg is a splash with nejra cehic. Nejra Michael Bloomberg, the billionaire former three term mayor of new york has the sided against entering the 2016 u. S. President ial race. The announcement memos one of the remaining uncertainties and what has been an unusual and unpredictable Election Year it Michael Bloomberg is the finder and majority owner of bloomberg lp, the parent of bloomberg news. The very shares are trading higher that is from speculation that the uks biggest luxury producer against a takeover offer. After a mystery investor built a the about 5 in growth will shrink the. 5 this year compared to an estimate of the. 45 a year earlier. Shrink 3. 5 this year compared to investment of 3. 45 a year earlier. Bank of England Governor Mark carney has managed to avoid on the eu leaving so far. That is poised to change. Still with us to discuss this, Carsten Bresky and Robert Michele. Thank you for sticking around. Robert, how do you view a exit how do you view brexit . It is impossible to predict. How do you make a choice . I think it would be very unfortunate if it goes through. I think the dislocation that it could create through the markets could be relatively significant. I also think if there is disagreement and you are part of the club, then forward your solutions and work through that. Francine how do you view it, carsten . Germany and france would be much worse off. Rhetoric, there is the analysis that in the end, europe might benefit after a long while. In the long run, i think it is hard to say whether there might be more positive impact. In the short run, it is going to be disaster. The market will going to turmoil. In the longterm, moving away rom the u. K. Francine carsten, politically, you are france and you have marine le pen, do you not have a frexit . It would create a turmoil but youre not sure what the in game would be. Carsten that is across the board. By agreeing to a deal with British Government, the rest of europe already opened itself to be blackmailed by other countries in the future. There will be followups. Francine what you make from what we heard from the bank of england yesterday to make sure the banks have enough funding you go are we looking at a potential shock . The transmission mechanism because people are scared of what comes next. Robert you can ignore it and hope for the best that there is no brexit. I think that is what is going on with the bank of england. Francine what of the u. K. . What does the u. K. Look like june 24, if the u. K. Decides to leave the eu . Do thels clash guilds clash . Carsten Financial Markets will look different on the 24th of june. Goes will look the same this would only be the start of a lot of negotiation between the u. K. And eu. On,rt the world will move there will be bilateral trade agreements put in place. Europe worked well when it was fragmented before the eu pulled editing together. There could be some shortterm dislocation. If we get to the point where there is a brexit, they will price into the market before the 24th before the 23rd. Francine i wonder if it is the shock or whether it is the polls that let people down. Do you even think the london as a Financial Center can exist . Actually as an investor you would not be buying into the they have to draw every single contract again. At one point, it seems as though frankfurt would be the Financial Center of europe, going back to 2000 and 2001. For whatever reason, london attracted all of the investment and became the primary Financial Center. That puts it at risk. Obviously, if europe remains together and there is no frexit, weve got to move back some of the Financial Services to the continent again. Enda the reason that francine reason that london is not doing too badly carsten france will be looking for to the First National charge as an alternative to london. Francine what this is me for policy from the boe . We will be listening to mark carney and he will be at pains to not give a view, but at the same time discussing the potential for a brexit. Carsten it is impossible to come up with an objective. You have to take a position. Mr. Carney cannot. I am curious on how he is going to manage this balancing act. Francine me to it is a lesson on political management. Robert i think he will go through a laundry list of things. Francine if we do have a brexit, is a cut and policy in Interest Rates, because the economy will collapse shortterm . Carsten not only the boe, but ecb, the less we had was 9 11. Robert y tick the risk of not doing it . Why take the risk of not doing it . Francine it is another risk that is difficult to produce to predict. It feels like the fed is the onlycondguessing Interest Rate increase. When we see a rate cut or turn on qe again toward the end of the year, that is a more interesting question. Francine is there something that Angela Merkel that others can do to convince britain to stay in . Or is anything they say will be counter . Up to thehis is about British Government to convince the british people there is more for britain to gain staying within the eu than leaving it the u. K. Would be the big loser. Francine do you agree with that . Would also lose, right . They lose a key ally. Confusei think we cant the nearterm with the longer term. In the near term, there will be some disruption. Francine nearterm would be three years . Think they will move in very quickly here at whatever the operating model and europe is, that would take hold very quickly. Francine carsten and robert thank you very much. This is a quick pound check ahead of that carney testimony did this the first time we would hear from the boe governor talking about the risks of the risk of a brexit. We are back in just a couple of minutes here it couple of minutes. Francine welcome back. This is the pulse. This is your market check. Dropping with u. S. Stock futures. Lets get that board up to have a look at what the pound is doing. We have movement on gold and Everything Else spirit Asset Classes including yeah, gold and u. S. Rallying. There are haven assets. We have reports showing Japan Economy in chinese exports are shrinking. Concerns it about japan and china. This is the market. We are watching out for mark carney he is due to speak any moment now. He will answer tough questions on brexit and what that means. Guest,et back to our Robert Michele and carsten brzeski. We spoke of the risk about china and negative rates and the side effects that they could entail. The trouble this would entail for banks. Give me a sense of yen in japan. Carsten, if you look at japan, this was meant to be the great financial experiment. It is not working. Extra news Monetary Policy is not working. The they need structural reform. They need deleveraging. So much debt in the economy, i think it shows more Monetary Policy unfortunately. We dont have any other option. Carsten we do have more fiscal spending. The other thing would be facing a long period of weak growth. Robert or you loosen immigration policy and you cut taxes or do things that are more stimulative. The problem with going to negative rates is they are starting to in trench some bad behaviors. Francine from the banks . Robert from everything. From banks seeing the interest margin shrink. When you talk about the consumer, the interesting story to us is there are no more six for sale in japan. They were all sold no more safes for sale in japan. They were all sold. He is going to be damped it is moneys went to burn up. You are against helicopter money . There is so much written about helicopter money. This would be a way to spurn inflation right away. Robert it hasnt yet. You need something on the demand side. The supplyside is there. How about some fiscal spending and reform. How about something on the tech side . On the tax side . Carsten you could sell it as a consumption voucher which expires. Francine fiscal expansion is not coming anywhere in the world. Why . Are we interest in europe . Carsten we are forgetting the done nominator. The denominator is growth. People are throwing money. 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. Bloombergs European Headquarters here in london. Lets get to the let news. German Industrial Production jumped in. That is the first increase in three months. European Union Leaders of edge toward a agreement with turkey. It they are doubling financially to the country. Plans for turkey to take back migrants are a real game changer. They welcome progress made in the talks. Operation without turkey being ready to take back migrants who have been apprehended. Today, we were sure this will be possible. Above is a message that the days of irregular migration and to europe are over. Chinas export plunged in february. An extended their streak of declines to 16 months. It fell almost 14 months. Yearcludes the chinese new holiday. There is a challenging environment. The chinese data added to evidence the worlds secondbiggest economy is slowing. Revised data for japans Fourth Quarter gdp shows the economy did contract, but at a slower pace. It was revised up from the initial estimate. News 24 hours a day powered by our 2400 journalists and 150 years news bureaus around the world. To the house of parliament where mark carney is about to testify. He will be talking about the financial impact. Mark comments around these issues and i will summarize them in terms of the United Kingdoms relationship to the European Union, the status quo and changes to the status quo are limited to how that relationship those responsibilities, those agreements. Financial stability is the principle with which is suspect to the agreement. You asked a second question around limits. Stability isncial important. This is not the sole determinant of economic outcomes. Our comments and our analysis do not provide a comprehensive assessment of the economic case furthergainst any status quo or a change to the status quo. With respect to the European Union and to state the obvious are importantse in terms of the broader decisions that people have to make. They are not the totality of the upon which people will reflect and make the decision on a vote. And thisot be making should not interpreted as making any recommendation with respect to that decision. We have that on the record. To look at your approach in considering the risks of staying in the union. Have you any thoughts on the risks from the transaction tax . Hierarchyerms of the of remaining in the European Union, i would not put that new the top. We did think there are risks for remaining in the European Union and risks related to the development of the euro area. Im sure we will come to these questions. The institutions and the rules and supervision around the euro area develops harmonization that would be necessary, how that can impact our ability to achieve our core agreements. With respect to the financial the institutional view of the bank of england is a