manus: down with dollars, the greenback heads for its worst week since 2009, as traders vote against a rate hike for 2016. this, as we wait for the all-important u.s. job figures later today. as oil slides towards its first weekly drop since january, saudi arabia's foreign minister tells bloomberg the price plunge not derail his agenda. >> we cannot and we will not let our policy be determined. manus: reports that europe's second-biggest bank will give any target for the path ahead. and king of the road --

retaining the crown of the world's leading carmaker. we get third quarter results in a second on the terminal. ♪ welcome to countdown friday morning. let us get straight to the breaking numbers. coming in for the fourth quarter, 665 million euros. of market had an estimate 864 million euros. this is a miss. in terms of the cost reductions, let us get into some of the details. net income, excluding one off items, came down from 1.88 a year earlier. they are are saying is targeting a gross reduction of risk-related assets by some 20

billion euros. this is a bank in transition, net income of 665 -- the estimate was for 865.2. that headline very much missing the target for them. jean is planning to cut as much as 20 billion euros off the underlying assets, in terms of 1.6 billion additional tax income by 2019. told bloomberg that while the business is doing well, there are headwinds they have to navigate. >> we are doing well. we have adapted in the past, but there are pet wins -- particularly around regulation. they are not clear when they will fall, but we cannot wait. just like in 2012, we want to be in front. while we embark on the day of profitability of pretax, what we

embark on is a plan with three measures to improve by eight points. basically, we coined them focus, improve, and growth. manus: ok, that was the cfo of bnp. 10.9% atal buffers, the end of december for core equity tier one. currency revenues up, breaking news. ford-quarter revenues toyota came in at 72 billion, the number was expected to be 79. it is a mess on the operational side. this is a critical point, other people's pain is their opportunity. ¥7 trillionasted at from an original target of lower.

a slight miss for them, they are raising their guidance for the o ¥2.27ar of this year t trillion. in terms of net income, 628. the estimate was for 609. there is a raising of the guard at toyota, they are talking about rightsizing the businesses there. let us go you one business that has a bit of a challenge on its hands. it is linked in. i'm trying to decide what the correct term is -- slapped, trashed, it depends on how you want to be on the projection. they missed a third of the value of the stock, why? because the guidance was lower, they said they will make about 3.6 5 billion in 2016. they have 40 million users, but

jeff, the ceo, has guided it lower. this is typically what he does. but 30% knocked off the value. if you miss you miss at your peril this reporting season. that is one thing that has come through a look at what happened with credit suisse yesterday. look on the banking side. let us have a look at the other markets, just to give you an appetite on friday. jobs on the u.s., they are strong. 11675, reversing all of the losses when we went to negative rates. this is the biggest for yen. the mother of all rallies is coming to an and, so says oppenheimer. we'll get our guest host's view. we lost over 2.2% on the dollar. crude is down, oil inventories

-- well if there was not enough in the world, there is plenty more in the u.s. the highest inventory since the 1930's. nejra is in the house. nejra: the u.s. dollar is heading for its worst week since 2009, after traders strengthened that's that the federal reserve will hold unchanged because of the weaker global economy. the government debt has sent japan's 10 year bond yield to a record low, and oil has slumped to its weekly decline. president obama is proposing a $10 per barrel tax on oil in his 2017 budget come earmarked for green initiatives. it could be phased in over five years, but it has drawn swift rejection from the oil industry. fromuld require control the republican-controlled congress, which is unlikely. post a second record

monthly drop them after policymakers intervened. according to a bloomberg survey of economists, they central-bank to 3.2y that they fell trillion in january. accepting investments, after a $14.1 billion industry grapples with the negative interest rate from the bank of japan. the brokerage said it would suspend money-management next tuesday. and today is the last trading day of the year of the goat. decorations are out in force across asia, supposed to be somewhat dos i'll. but itcile. the year of the monkey will be even more unsettling. global news 24 hours a day, powered by our journalists. manus: give us your take. nejra: of course, the asian

pacific index -- the regional headed for adown, weekly loss. if we take a look at individual indices, a bit of a mixed trade. yet china first, the hang seng and you have seen the shanghai composite trading pretty much flat at the moment. the hang seng posted a gain of about 4/10 of 1%, -- as you can see at the moment. both trading lower. the weakness we see in the japanese shares are down largely to a stronger yen. that currency is headed for the biggest gain on the dollar in more than seven years, manus. this is all about the market not pricing in a fed rate increase this year. that led to a weaker dollar, really offset the bank of japan moving rates into negative last week. manus: thank you. up to speed now in terms of the trades. we heard that the dollar is

heading for its worst week since 2009. traders are shifting bets in terms of the dovish federal reserve. the number of fed speakers reiterated the word patience. the bank of england governor sent out a very clear warning. financial conditions have deteriorated notably, including widespread falls in equity rises, corporate bond spreads, and increase in market volatility. all of these developments pose downside risks to the united kingdom by trade financial, and confidence channels. how should they incorporate these media-run outlooks? at this point, i see them posing some risk, but i believe it is premature to change my modal outlook. >> i would just like to say one word about the u.s.

it has a major and special responsibility, as it normalizes its monetary policy. because that normalization of policy can be a source of significant spillovers. so it is critically important that the federal reserve continues to do this in a prudent, well communicated manner. and really them as indicated by chairman janet yellen, to do it on an evidence-based method. voices, theies of most poignant is the special responsibility that the federal reserve has from christine lagarde. we receive another piece of evidence from the u.s., a jobs day. bob parker senior adviser at credit suisse. sit back, it could be a bumpy ride. how relevant is the estimate of 190,000 jobs?

bob: very relevant, indeed. you said that we have seen this week expectations of what the fed will do. those expectations have changed. we had this conversation two weeks ago, we had guidance from the fed saying they would reprise the fed rate four times this year. the market two weeks ago discounting only one, possibly two increases on the fund rate. we had a weak fourth-quarter gdp number. and we had a weak export numbers. energylook at the u.s. and mining sectors, investment in production is down very sharply, indeed. and i think growth expectations are being pulled in to now discount probably only about 2% growth this year. so yes, that is better than the fourth quarter. but i think expectations of 2.5% growth this year have been brought back.

what happened this week is that the market is now saying the fed will not do anything. and that is why we are seeing this move in dollar-yen and the dollar-euro. manus: are central banks paralyzed? i get that. negative japan, negative europe. stymied mark carney. none of them really have the capacity to accelerate in an upward trajectory. are central bankers paralyzed of the moment? bob: i think it to that is no. but to quantify your comment, we now have 14 european government bond markets where two-year yields are negative. which is obviously unprecedented. i think if you look at mark carney, it is like the italian market. for the first time, an entirely italian history, they are negative. come back to your question, what are we going to see over the coming months?

we have seen the move by the bank of japan towards negative interest rates. their quantitative easing program is very much intact, they will not be reversing that. i think there is a high probability in march that the ecb will ease monetary policy further. that may be like the bank of japan like a move to more negative interest rates, it could be an increase in monthly qe. and it could be broadening the asset classes that they purchase. clear.sage is pretty coming back to the fed, i think possibly the market is a little bit too optimistic that the fed will do nothing for the rest of this year. but i have said consistently whenever i come on bloomberg that i think that the fed will move exceptionally slowly. my forecast is still that the fed funds rate will be 1% at the end of 2016. i think if i am wrong, it will not be 1%. it will be 75 basis points. manus: we will not haggle over 25 points.

bob: the much more important point is what happens to the size of the balance sheet? , today, thek to balance sheet is $4.5 trillion. if they keep the balance sheets stable, that is no trading of liquidity. what worries us a lot is what happens if the balance sheet hrink, which would send a very negative signal to global markets. expanding the balance sheets, same with the bank of japan, and at the moment, the fed balance sheet is stable. i hope it will stay stable. manus: we need to understand more about the reinvestment program. we have an article this morning that wall street is cutting the cut for terminal rate. where will he get in the end? the market is pairing that back. the markets in a terminal rate will be 2.75%. policymakers say 3.5%.

does that time with you? where is your view in terms of the new normal, the less? 2-3-yearus take the projection. i think it is reasonable to 2.5%ast u.s. growth or annualized. where we going to be on inflation? headline inflation at the most is going to be possibly, you know, 1%. at the moment, we have close to 0%. we have core inflation close to 2%. if anything, core inflation will not go up any further. wage growth, i think, is worryingly low. under that scenario, i think probably certainly sub-3%. if anything, closer to 2%. manus: bob, we have a lot more to get through. now, of course, we will bring you the jobs data live across , and onmberg and on tv

radio and online. 190,000 jobs is the estimate to be added in the u.s. up next, persuading poland. how david cameron is set to change tactics when he talks reform in eastern europe. ♪

it is 6:19 in london. 7:19 in brussels. it is get the bloomberg business flash. nejra: posting a 52% decline in urth quarter earnings, while announcing a reinvestment in investment banking to free up capital. sales fell to 665 million euros. toyota has raised profit forecast after surging sales of

the sport-utility vehicles and lexus luxury models. putting it on track to become the first japanese company to top ¥3 trillion in annual operating costs. and extending trade, that is after the company forecasted revenue of about $3.6 billion, missing estimates. the professional social network is facing a slowdown in sales in display advertising and marketing tools. strategy in 2016, we are increasingly focused on a narrow set of high impact initiatives, with the goal of strengthening and driving leverage across our entire portfolio of businesses. our roadmap will be simplicity, prioritization, and investment. toshiba hit a 35-year low after the company widens its 29%, farloss about

worse than anything analysts were expecting. they were struggling to recover from an accounting scandal where management had profits for seven years. that is your business flash. to:s: david cameron heads to see if he can overcome hostility from eastern europeans here in the u k u.k. it may benefit the countries by stemming the economies of poland and bulgaria. bob parker from credit suisse is still with me. this is a campaign. the government has been on fire, really setting out the agenda. at credit suisse, how do you look at brexit? before you give me a response, i want to show you the times whole.

this is quite startling. leaving, 56% support. support remain. we included the do not knows. even then, there is this move at the moment in the polls, 45% to leave, 36% to remain. 19% do not know. point toink the first make is that the opinion polls, you have to question the validity because people do not know what they are going to vote on. the cut the final terms of the relationship with the european union as not been finally negotiated. i think another point to make obviously is the very major component of the newspaper media is actually carrying very much the exit camp. to be veryve skeptical about opinion polls at the moment. i think once we get clarity on

the package, clarity on the data of the referendum, that i think we can find opinion polls more valid. a little bit of cynicism about opinion, message number one. message number two, and i think actually mark carney gave a very good presentation to the treasury select committee recently when he highlighted the fact that the u.k. still has a current account deficit of close to 4% of gdp. when you are running a long-term deficit, you are reliant on capital inflows to offset the account deficit. if the u.k. leaves the european union, you actually have to question whether or not capital inflows will decelerate. i think it is actually a very high probability that we could see increased sterling volatility with a bias towards the downside. i think we could see an underperformance of u.k. capital markets. and i think we will probably see some reversal in capital flows.

and that would not just be short-term capital flows. i think it would be longer-term reinvestment into the u.k. clearly, if there is an exit from the european union, in my industry the asset management industry, i have a passport to work throughout behold of the european union. if i actually stay living in london, that passport goes away. as a result, my ability to actually work without restrictions in the european union is going to be severely constrained. i think there would be a serious hit to the asset management industry here in london. manus: getting that message across to the broader british public is a challenge. i think that is the understatement of 2016. questioned you, briefly, the great volatility in the u.s. is also compounded by brexit.

bob: i would actually argue that we have already started to see investor fears about brexit, given the sterling against the euro. but yes, we have stabilized in the last few weeks. but the trend over the last two months has actually been significant growth in the downward move, against the euro. and i think that is actually people positioning themselves on the expectation of this referendum going to be difficult. manus: the dollar and sterling call, before i let you off the set, bob parker. toymakers biggest have been talking about a possible merger, according to people familiar with the matter. they had discussions. nejra has the details. nejra: as you say, this is according to people familiar. no details on how the deal might be structured, if it actually happened. as you said, it would bring together the world's two biggest

toymakers. andro owns my little pony barbie andich owns hot wheels. mattel actually withdrew the offer for hasbro, some not the first time have talked. it would bring together the strength and the girls category, i'll.sbro for the boys it would be a stronger competitor to lego. there could be antitrust hurdles because of late, in particular, antitrust authorities have been strengthened. they only have about a fifth of the u.s. market. battered andt, another set of disappointing

earnings. this time, we hear from the bank's cfo. that is next. ♪

it is 6:30 friday morning in london. let us give the bloomberg first were news. nejra: the u.s. dollar is heading for its worst week in 2009, after traders strengthen the bets that the federal reserve will hold interest rates unchanged because weaker global economy. meanwhile, demand for government debt has sent japan to a record low. and oil has slumped to his first weekly decline since january. president obama is planning to propose a $10 a barrel tax in his 2017 budget, marked for green initiatives. they could be phased in over five years, has joined swift

rejection from the oil industry. it will require approval from the republican-controlled congress, which is unlikely. china is at a three-year low, poised to post a second record drop. that is as policymakers intervene. according to a bloomberg survey, it fell to $3.2 trillion in january. numbeamura has stopped accepting money market funds, as it grapples with negative interest rates from the bank of japan last week. the brokerage will suspend orders for money management from next tuesday. and today is the last trading day of the year of the goat. decorations are out in force across asia, supposed to be somewhat docile. but it has proved anything but when it comes to markets, and the year of the monkey will be more uncertain. global news 24 hours a day, and

more than 150 news bureau around cehic.ld, i am nejra manus: not there yet. viewers can only take so much. after reporting a plunge in np, thes at bmp parents-based company held off for about three years from really deep cuts. as many of the european competitors undertook the scalpel, so to speak. we spoke about the plans to improve operational efficiency. >> we are doing well. we have adapted in the past, but there are some headwinds, particularly around regulation. it is not yet clear how and when they will fall, we cannot wait. dislike in 2012, we want to be in front. today basically in bark that we have good profitability,

18.6% pretax. ant we embark on is improvement for eight points, we are calling them focus, improve, and grow. so our cost effort is $1 billion. that is to be put into inspective of 8 billion cost. our objective is to really improve operational efficiency. we keep on serving our clients, even serving them more. and serving those who are no longer serve by their banks. we want to contribute to other activity. the thing is, we embark on this now. it is a plan in 2019, so we have to now iron these things out and go through all of the ramifications going forward. so today, it is too soon to say. >> how much of a boost will this restructuring plan bring to your capital wage? at the said, if you look

overall objectives, which are the pre-tax return on equity, we want to improve by eight points. are comingse points from this improvement. and the there are two, focus is basically getting out of activities and redeploying part of those savings to fuel growth. manus: a major selloff in european banking stocks can we bnp isked the cfo how measuring headwinds from global market t. and how it is trading at a discount from some of its peers? there was august, some turmoil. later in the year, as well. in suchlts are of environments because our clients need the products to take opportunity of investment possibilities. if you look at the reason for our growth, part of it extends from market share. because some of our other banks have retracted out of activity.

and we have decline. an example, which brought out some of their activity basically around cash management, we were the referral bank. and we onboard boarded 900 clients, stemming from the situation. >> still, according to the bloomberg data we have, the trade discounts to some peers in europe? is that justified? >> if you look at the return on tangible equity, extending at 10%. it would basically suggest that it would be training at tangible book value which is 60 euros per share. i think it is a good opportunity to invest in bnp. >> does that mean the market is not necessarily understanding your operation? >> if you look at the total european market to date, there is an overhang between what has been happening to the overall banking sector. there have been ramifications

over the last month which are the overallh banking sector, not necessarily specifically for one or another bank. manus: the banks are among the worst performing sector, down almost 20%. want some wallpaper for your portfolio, take a look at this. down 20%. european 600 down 10%. if you are looking for an underperforming industry, there you go. banks are battered. look, if you cannot grow the business, you cut cost and run out the clock in that trade pretty quickly. bob: just to quantify the underperformance, if you look at worldnks versus msci going back to 2007, the banking sector has underperformed the world by 50%. it has been a very tough place to invest. what would have been one

positive, is actually that the fines -- this period of very heavy fines on the banking industry -- if you add up the total amount of the fines since 2009, is about 250 billion . i think we are now through the process of very heavy fines and you interviewed the financial chief. let us not forget they had one of the biggest fines of 10 billion. over: they settled for half $1 billion. bob: the point i want to make is i think we are in the endgame of that period of these very heavy fines. if you then ask the question of who gets those costs, it is very simple. it is the shareholder. what has been the trend and what will be the trend in the next many years, the number one balance sheet. if you look at the balance sheet pre-lehman brothers, the average

leverage ratio was closer to 30. now, it is sub 15. we have had deleveraging, increase in capital, increase in the quality of capital. what i call core, real capital. we have had de-risking of assets, and i think very interesting, what has happened at hsbc is a good example. whereby we have had a reversal 2008, allnd in the banks going completely gullible. they are now retreating from a number of markets, notably hsbc cutting positions in brazil, turkey. manus: barclays, as well. bob: barclays exiting their visit in asia. and i think this reversal back to home markets is a durable trend. manus: very briefly, of course, cost-cutting --your own institution was quite

aggressively given a boost for not cutting fast enough. the other consideration is commodity exposure, paying enough for hsbc, standard chartered, deutsche bank. people are not worried. bob: i think you are right to worry about rising default rates in the energy sector and the commodity sector, more generally. actually, if you look at the which thencreen, goes into u.s. high-yield, look at the breakdown of the spreads in the u.s. high-yield market. it is very interesting. u.s. high-yield spreads are around 650. you have it there. u.s. dollars. manus: live on air. bob: go into high yield you have a spread of 529 basis points. that is obviously at a high over the last 3-6 months.

the point i want to make is look at the energy, 14%. extreme, you are seeing pressure in the high-yield market, in the energy sector. 920in materials, which is basis points. so the market is discounting, quite rightly, a sharp rise in default rates in energy and material high-yield. and that is quite right, in my view. manus: let's take the brunt of that, everybody seemed to tell us you can make the case both ways. it is a mix of, and that is what we will talk about. ryan is going to join us on set to talk about the earnings of the week. ryan chilcote our man on the oil mission. we will talk numbers. ryan sits down with bob myself to chew over the oil market's barons. ♪

manus: 6:43 in london. let us get the bloomberg business flash. np has posted a 52% decline in fourth-quarter earnings, missing estimates. that is writing down goodwill in the italian unit, while getting a revamp to boost profit and free up capital. france's biggest bank fell to six hundred 65 million euros, from 1.38 billion a year earlier. toyota has raised profit forecasts after surging sales of the sport-utility vehicle and the lexus luxury model. that puts it on track to become the first japanese company to reached ¥3 billion. taking a hit in extended trades, that is after the company forecasted revenue of about 3.6

oh you and dollars for this year, missing estimates. a slowdown incing display advertising and display marketing tools. >> our strategy in 2016 will increasingly focus on an hour set of high value, with the goal of strengthening leverage across our entire or folio businesses. our roadmap will be supported by greater emphasis on simplicity, prioritization, and investment impact. raising another 3 billion euros for capital, becoming he said the move is part of the plan to cut net debt by 4 billion euros. that comes as the steelmaker is facing 34 billion euros over bond reclaim it over the last six years. manus: thank you very much. oil is headed for his third weekly drop since the middle of january. expanding u.s. crude stockpiles sinking the global glut. counterintuitive

to a sustained price rally. this comes as many of the major supporters, is give you of flavor of what they said. >> we have watched the supply and demand figures carefully. our economics group, which will do an outlook shortly, they gave us some insight late 2013 that this was coming. we have been saying that for some time. lower for longer, but not forever. >> i think we continue to see volatility in the market. until really the oil supply side, in the second half, we will probably see improvement. and is mainly due to probably the impact we see on the underinvestment in our industry. >> there is a lot of the commodity environment being shortened. so we have for stability in our program, as well. that supports our capacity to come you know, meet the potential situation. but this could be even longer,

for longer than we might expect it. but we will rebound and be prepared for it. , low i don'tthe we go back there less recession. ok? i think below is an, don't get in a rush year. going to be play opportunities. the market will be volatile. manus: volatility -- the understatement of 2016. pickens tycoon t. boone calling the bottom. ryan chilcote joneses. bob parker still here. ryan: got to love the texas twang. nots: pickens was investing. ryan: the highest they have been since the oil boom in east texas come as a matter of fact, the

1930's. which is probably when he made his first trade. interestingly, his forecast for -- 50-60 dollars by the end of the year, he says he can wait or the inventory to come down. i think another interesting thing he said was that he expects companies, mid tier companies like pioneer natural resources, we heard a lot about barclays. expect tohey will spend twice what they actually take in, and terms of cash flow. and they expect a dividend cut. apache them all of those companies are great targets for a company like exxon. he likes them. but he is not getting in just yet. manus: pickens calling for ma. and the other interesting point is shale. it is a profitable. u.s. shale is losing approximately $20 a barrel. canada is losing $35 a barrel. are we anywhere near the point where shale has switched to hit

the numbers? bob: absolutely, yes. one critical question, this war between the saudi arabians and shale, will saudi arabia cut production? the answer is absolutely no. we still have saudi arabia on being 10 million, russia pumping 10 million. that puts a cap on the upside for oil price. to answer your question, with breaking evenstry at $50? so the productivity is improving. but i think we are now in the crunch point, and we will see a sharp decline in production. we have already seen a sharp decline in production. and what pickens was talking

about, in six months time, we are looking at a very different picture. i agree with him. we are at the bottom of the oil price because the production numbers will be cut. i disagree that we will go back to $60. but we could easily be between 40-50. manus: you touched on something there, let us talk about the foreign minister. he told bloomberg that low oil prices and constrained budgets will not derail the country's ambitions nationally. elliott gotkine has more. but it is certainly proving costly. that is a fair statement, isn't it? saudi arabia is waging a war in neighboring yemen, where it has troops on the ground. it is financing rebel groups against bashar al-assad in. and it is supporting the petition government to the tune of millions of dollars, to try and stave off instability in the

most populous country. all that has a cause. but where the oil is $30 a barrel or $130, the saudi foreign minister says the foreign policy will remain pretty much the same. lete cannot and we will not our foreign policy determine the price of oil. you have to do what you have to do, and order to protect your interests. and to promote your interests. is not price of oil going to be a factor in this. policy is notgn going to be impacted. federated finances certainly are, painting a budget deficit of around 60% for 2016. this year is not much better, cutting energy subsidies, building projects even mulling ipo.prospects of saudi's manus: the foreign minister their downplaying the risk of

war with the u.s.. and talking about iran, if they were to move now in terms of production, they would be handing shale everything they need, and handing iran everything they need. alec: very much so. now is the time to do this because is the point where the saudi policy is paying the dividend. there was talk of a risk, certainly over the iranian nuclear deal. which the saudi's were very much opposed to, second only to the israelis but the tactic rather than a strategy in foreign policy, where there are some differences of opinion. there is no risk, everything is great, between the u.s. and saudi arabia. when it comes to iran, he talked about about the impact on oil prices of iran coming back into the market. look, the oil market is big enough for everyone to have a decent slice of it. >> we believe that there is sufficient room in the market for countries to produce oil. the demand is growing.

pricesbelieve that the will be offset by the equilibrium between supply and demand. elliott: hovering just below $35, still not quite where the saudis would like them. manus: absolutely. great interview, elliott. elliott gotkine. bob parker, senior adviser a credit suisse, when you your that say to you? bob: very clear, they are not going to cut reduction from the very level of over 10 million barrels a day. obviously, if they did cut production, and pushed up the price to let's say $50 a barrel, they are basically helping iran. they're helping the u.s. shale industry. and if they are acting out of self-interest, which they are, those are two areas they do not

want to help. i think you have to assume no change in saudi oil production policy for at least the rest of 2016. i think likewise, one point to make is you have to make a clear distinction between the pressure on the saudi budget with the deficit, as elliott mentioned in excess of 50% of gdp. but you have to make a distinction between that problem and the fact that they are still one of the lowest cost producers in the world. the cost of production in saudi arabia is probably close to five dollars a barrel, same for the way. probably eight dollars a barrel. $15.probably 1ly saudi arabia is not unprofitable at $30 a barrel. manus: no, it is not. and they are going to be the drivers of sentiment. let us get your big thoughts as

we release you back into the wild. you don't speak to real customers and real clients. battered,- tortured, bruised. bob, how does the rest of 2060 look for you? in januarythe view that we would have a major equity market correction. i think we have now had that direction. we are in the endgame. i however do not think we will see a major rally for the rest of 2016. i think 2016 is would be a very frustrating year, whereby the correction is over. we are now forming a base. but i think we will be very choppy trading. within that, you have to focus on the extreme divergence between different sectors. you know, the sectors are going to be winners with companies that are consumers of commodities, because the input costs are significantly decreased. secondly, companies and sectors which benefit from weak currencies.

if i am in the eurozone, with which theround 110, ecb is not terribly relaxed about, they would ideally like it down to 105. so i think we have to watch this rally in the euro. but companies with cheap cost basis in devalue currencies, their probability is going to be very good. i like comedies with very significant levels of liquidity. they can increase dividend and their share of buybacks. i also think the ma cycle is very strong, indeed. by the way, that struck relatively positive in the investment banking market. all this negative sentiment on the banks, actually, we're at the endgame of this downdraft in the investment banking cycle. ardently, further consolidation in the sectors like health care, like the i.t. sector, like the energy sector, it is great for the market.

in turn, it is good for investment banking revenues. manus: i found the old and the city of london. bob, great to have you with me. we will talk about earnings. stay tuned. ♪ . . .

downward dollars. the greenback has for its worst week since 2009. this as we wait for jobs day in the usa. oil slides towards its first weekly drop since mid-january. the saudi foreign minister says the price plunge will not derail his agenda. and we will not let our foreign policy be determined by the price of oil. manus: europe's second-biggest bank records a 52% decline in profit. we hear from the cfo. and king of the roads. toyota raises its profit

forecast, putting it on track for a japanese earnings record. you are welcome. it is "countdown." shareents earnings per for bg group. market wast income, looking for $347 million. bg is now out of a much bigger family. net income beat analyst estimates. $423 million. $347 million was the estimate. that is the adjusted net income. that is the benchmark used on an earnings per share basis. we also have a beat.

total earnings for the full year in bg, $328 million. 400 $23 million for the fourth quarter. too many numbers. the point is, you have a beat on the headline for bg. let's talk about factory orders in germany, how it is impacted by the overall concern by global slowdown in china. factory orders, month on month, declined .7%. the market was looking for a decline of .5%. so we have a declining situation in terms of factory orders in germany. that is a drop in germany. the export slowdown cooling confidence. what you have here is losses driven by the decline in big-ticket orders. that is german factory orders. bg is a beat. how are we looking on futures? here we go. opening down a pip.

futures are virtually flat. london, paris, and frankfurt. the ibex has yet to go. the dax trading down 21 points at the moment on the futures. u.s. equity futures indicate a little bit lower. is the dollar rally over? it is the biggest gold trade we have seen for many years. themarkets heavy crude decline we have had from negative interest rates in the biggest weekly advance in yen versus the dollar in six years. index, 96. the mother of all trades is breaking down if you believe oppenheime. in a gain. scrapes let's get your first news with caroline hyde. caroline: the u.s. dollar is

headed for its worst week since 2009. the federal reserve will hold interest rates unchanged in the end because of a weaker global economy. demands for debt have sent the 10-year bond yield to a record slow. -- a record low. is planning to propose a $10 per barrel tax on oil in his 2017 budget. the money would be used for green energy initiatives. drawn swift objections in the oil industry and would require approval on the republican-controlled congress, which is unlikely. bnp paribas posted a decline, missing estimates. that is after writing down goodwill and announcing a revamp of its investment bank. net income at france's biggest bank fell from a year earlier. toyota has raised its profit

.orecast after surging sales it is on track to become the first japanese company to top ¥3 trillion. china's foreign exchange reserves, already at a three-year low, are poised to post a second consecutive record .onth the drop -- monthly drop according to a bloomberg survey bankonomists, the central will say that the currency hold fell by $118 billion. trading ofs the last the year of the goat. it was supposed to be somewhat docile, but proved to be anything but. astrologist say the year of the monkey will be even more uncertain. back to you. manus: thank you very much.

i was blinding you with numbers at the top. let me give it to you more sustainably. profitrth quarter declines. ryan chilcote, take us through the story. ryan: there are two main points. it looks like bg did a good job managing the decline in oil and gas prices. we see that in the beat on the bottom line on the adjusted at 420number coming in $3 million on the expectation of $327 million. it is good that they made a profit. not everybody made a profit in the fourth quarter. they are doing pretty well when it comes to production. if you look at 2015, production was up by 60% from the year before. the fourth quarter was even better than the average for the year. it was all better than guidance. this is exactly why shall is bg.ng -- shell is buying

when we look at these numbers, that is the context we want to look at them in. bg will cease to exist as a company soon. the shares will stop trading. it will all be shell. when you look under the hood, you do not see anything disappointing in these numbers. manus: let's bring in the head of macro strategy at state street global. it has been a big week for oil. the earnings analysis so far in the european sector. inill switch it to the u.s. the moment. what have you made it this weekend in terms of oil? >> we have been arguing for a while that it looked very oversold. the interesting thing now is it is beginning to turn. investors are very underweight this sector, as you would expect. manus: even at an institutional

level, do you think institutions ran from the -- ran for the hills? >> so far, this year, money is flowing back in. manus: that is interesting. the deal is done now. you have spoken to a lot of ceos along with myself. what is your take? if you go to the fourth quarter of this year, the analysts are predicting $48. that is up from the fourth quarter of this year. if the analysts are correct, that would mean that, in the fourth quarter of this year, if the analysts are correct, you should start to see actual year on year earnings growth at the big oil companies. that would be a good opportunity to get in, just ahead of that if the analysts are correct. manus: and you are right. ryan: three caveats in there. >> of course they are.

manus: don't get too tricky. let's talk about some other subjects. the dollar is heading for its worst week since 2009. that is not a caveat, that is a fact. a number of them reiterated the magic word, patients. >> global financial conditions have deteriorated notably, including widespread falls in advanced economy equities, rises in corporate bond spreads, and increases in market volatility. all of these developments pose downside risks to growth in the united kingdom by a trade, financial, and confidence channels. data-dependent policymaker incorporate these recent developments? at this point, i view them as posing some risk. i believe it is premature to materially change my mode of outlook.

>> i would like to say one word about the united states, because it has a major and special responsibility as it normalizes its monetary policy. that normalization of monetary policy can be a source of significant spillovers. it is critically important that the federal reserve continues to do this in a prudent, well-communicated manner and really, as indicated by janet yellen, to do it on an evidence-based method. manus: later today, we will receive another piece of evidence. it is the u.s. jobs report. of macrohe head strategy at state street markets. he is still with me. saying you have a special position. make sure you are data dependent.

the market simply does not believe that the fed can achieve what it originally guided. how do you look at the fed in terms of their ability to raise rates this year? >> it is amazing how quickly the rhetoric has changed. can they actually raise rates other than how far can they raise rates. just to take a step back from what has been a difficult week, the labor market -- today's report might be a little softer, but there is no doubt that the unemployment gap has closed. we know that core inflation is relatively high and remains so. ishink the real question what has actually changed. the financial condition. are there other financial stresses from commodity declines feeding through into the u.s. financial system sufficiently

for them to want to back away? that is the only thing that has changed. fundamentally, growth-wise, not a lot has changed the -- has changed. paraphrase,going to but what he was saying today, i get it, we are worried. it has been rocky. but everybody calm down. it is not crushing, what is happening in the real economy. that is the risk and that, in theory, we should get an answer to. there was a big focus on the dudley comments. boiling them down, they are not that different. they are the same comments you made in the month of january. they always talk about potentially impacting the economy. i think it is because we got off to such a bad start. we begun to see a policy response of the boj. we began to see talk of policy

response in the ecb. people want to hear the fed say we are going to cave as well. the worrying thing about this, and we are getting concerned about the dollar because it has but here is the difficult thing. there is still this massive gap between u.s. interest rate -- they priced in no chance of the fed going at all. manus: and then you look at the terminal rate. we had an article this morning and the economists are saying to 5 when we get there. i and not supposed to be subjective, but it seems like the fed handcuffed at a .25% hike. carney tethered to the batteries of the brexit. japan went negative. i cannot see any of them getting off zero.

michael: you said there was a warning shot from carney. i thought the clip you were going to use was the bit where he said that the rate expectations had gone too far. that was a clear warning shot. manus: he keeps saying that, you have all gone so far. michael: it is true. obviously, as always, they forecast and get the target in two years time. but he belabored the point that that was with market rate assumptions which were 20 basis points higher. and then in the q&a, he more or less said that you can market should not be discussing rate cuts, and yet they are. that was a pretty clear warning shot. he was supposed to be raising rates, by the way. told us last summer he was going to be raising them in january. inant to get one thing before we go to the break and this frightens me.

it is time to look at the pension. respondents believe that stocks go down and bonds go up. let's have a look. this was february 3. mr. risk of the week. are you worried? both stocks and bonds are to go down. stocks go up and bonds go down, 24%. it does not feel like amazing confidence. poll the readers of our research. we were concerned about a repeat of 2015. that was unusual and very bad. at least we got a majority thinking we are going back to normal just about. but you are right. a good quarter of respondents think it is very gloomy. manus: except for energy stocks.

stay with me. we have a lot more to get through. we are going to talk germany and brexit. a lot to talk about. what do the numbers tell us about europe's economic powerhouse? that is a discussion coming next on "countdown." ♪

manus: it is 7:19 here in london. it is eight on the 19th -- it is 8:19 frankfurt time. caroline connan missing -- caroline: announcing a revamp of its investment bank to boost profit and free up capital. net income fell. that was down point -- from 1.30 $1.38ion euros --

billion eurs. toyota is on track to become the first-ever japanese money to top ¥3 trillion in annual operating profit. bg group said fourth-quarter profit dropped 50% following oils decline. they beat analyst estimates, though. earnings come as a company is being bought by larger rival shell. german factory orders fell. from theped .7% previous month. the latest sign that a global slowdown may be restraining part of europe's largest economy. that is your bloomberg business flash. manus: let's get a little bit more now on the numbers from the top of the show. hans nichols is in berlin. what do these numbers tell us? were thet items

impact. hans: in europe, it is down .25%. that is factory orders within germany. within europe, it is down 6.9%. that gives you an indication that within the eurozone, there is not a lot of the ticket spending. you break it down again in terms of consumer goods. an increase. saw on investment vehicles and investment items, down .5%. hopefully we have a chart that shows you what factory orders does. three-month average because this is a very volatile reading. the actual number was down .7% last month. the month before, it was up 7.5%. in general, here is my big caveat. when we look at the unemployment rate in germany, the economy is doing fine. it dropped to 6.2%. a couple of days ago, we got

data on real wages. 2.5%.ages are up factory orders, a negative reading. it is a volatile figure. you look at the fundamentals and it seems like the german economy is plodding along. yesterday, we got provisions out of the european commission. they are predicting 1.7% growth across the eurozone as opposed to 1.8% from before. they are revising that slightly downwards. and i amop spending unemployed, then you can be concerned. otherwise, the german economy looks like it is just ok. i have no doubt of the accelerator impact that you deliver and it has residual impact in terms of the german economy. staying with europe, david cameron goes to poland today. he is seeking to overcome hostility to his proposal to cut well for eastern europeans in the u.k.

he also argued that a potential four-year curve of aid for eu foreigners living in britain may benefit those countries by stemming the exodus of highly-qualified workers from the likes of poland and bulgaria. so he has a moderately difficult job today. let's bring michael metcalfe back into this discussion. i am going to drag across a new piece which has been launched bloomberg. there we go. it is online. "brexit: whatt is should we do?" that is on the bloomberg brief. i am good with this. i am so on the ball with my bloomberg terminal. what is the risk here? how do you look at it? what do you talk about? when it comes to the brexit. one of the first things

to think about is where the market impact would be and to try to find that out. sign is theclearest sterling is weak because of low rate expectations. there is a little bit more to it than just the right expectations. the trial we have had run in the scottish referendum where the market was too sleepy about the risks. manus: strange that you mentioned that. i have a graph here that shows he is ahead -- if we went to the polls on the 23rd of june, where he is now in the markets, he is ahead of where he was in the scottish referendum debate. it is one of those in terms of he is actually doing a little bit better than he was in the referendum on scotland

and scotland going independent. the one thing i would say on sterling -- i will say two things. the first, it has fallen a long way against the dollar already. we have this interesting way of getting real-time online data. right now, that suggest that fair value is a 1.43. the sterling is not that undervalued against the dollar right here. is that so far, thate little evidence international investors are pulling portfolio capital out of the u.k. it may be that that outflow may not occur until afterward. manus: where would i see that flow of capital? is it going to be the sterling traded and then the equity trade and then other asset classes? michael: it may be that people will try to hedge the currency risk first.

the curve is very steep and so people are selling volatility. manus: let's talk about another currency. the greenback. i love this. the mother of all trades. the dollar has had a tough week. does that continue? we circle back on what you said about the fed. the mother of all trades breaking down? a great it has been trade. we talk about equities and bonds going down. that made a massive difference. the one thing i would say on the dollar is that if the fed does not go at all -- if we have see then -- if we have seen the tightening cycle, then i agree. if it is being driven by the expectation of policy divergence , and so far, most of the fed speakers are suggesting that they will continue to tighten -- over until the

very petite woman from brooklyn sings and that is janet yellen.

guy: welcome to "on the move." london.0 in 8:30 in frankfurt. i am guy johnson alongside jonathan arrow. -- jonathan ferro. the employment components of manufacturing and service, we are looking for an edge down from the blowout figure. the dollar this week. that has had a massive impact a look at the rallies we have seen for some of these mining stocks. it is absolutely down to the dollar. you can see that from some of the oil