francine: european stocks open lower. zero.se seals dip below the yen strengthens. as the cost of protecting thesche bank debt soars, lender feels the need to reassure shareholders. bear sayst pound that sterling will lose regardless. we talk brexit. so, welcome to "the pulse." i'm francine lacqua.

now let's take a look at the markets. this is what we are seeing on the board. yen strengthening past 1.15 per dollar. stoxx europe 600 opening lower. 9.5%che bank losing yesterday and now gaining 3%. japanese yen at 115. i want to show you the 10-year jgb, negative territory. this fell below zero. if we look at some of the other banks overall this stoxx europe 600 bank, unchanged. the nikkei finishing the day 5% lower. man and dust unexpectedly fell for a second monday in december. -- unexpectedly fell. even as domestic demand remains

strong. the median estimate had been for a .5% gain. goldman sachs expects the reserve to increase rates to 1.3%. goldman says it sees above trend u.s. growth and predicts a gold rally will go into reverse. in germany say four people have been killed and 100 injured after two trains collided. the incident happened near a area.n the bavaria thank you. with some of the news you need to know about. the stocks 600 just erased this morning's losses. mark: i want to start with the msci all country world index.

this is a one-year chart. the rout in risky assets continues. a three-day decline is now 3.5%, leaving it just a whisker, almost 1% from a ber market. is almost 20%. money moving into fixed income assets today which i will come to. this is the stoxx 600 which fell yesterday. it has fallen every single day in february. bankood news is, deutsche rising as much as 5% today, reassuring employees and investors it does have enough cash to pay its debts. shares up by 5% today. the big decline in europe yesterday was the asc, it fell 7.8%. down 1% today. this is the stoxx 600 in the

last year, fallen to its lowest level since october 2014. have a look at the big equity decliner today. ofs is the nikkei 225, one the few asian markets that is not closed for the new year holiday. look at that decline, down by 5.4% today. 1 est level since 2013, june 2013. the rising yen hurting shares of exporters like toyota andn nissan. the yen today is the best-performing currency against the dollar. i'll show you how it is faring over the year. this is the dollar today. the yen -- year to date. the yen up by 4.2%. the euro up by 2.9%. let's change to today to give

you an idea of what the yen is doing. as you can see, the yen is the preferred safe haven out there, rising 1/3 of 2%. canadian and singapore dollars up-to-date. i'm going to leave you with the chart which shows predominantly red. these of a european -- today. small gain in london. in stockholm. we have got declines but nothing like yesterday. francine: mark barton there with the charts.i want to show you the price of oil. we had breaking news from the iae. up price of oil has gone after it raised its estimate of surplus. a lot of market participants that, the program say it is not a problem with demand, it is a problem with surplus. will besaying there

even more surplus because opec will continue pumping oil. because of the higher opec output, surplus will be even bigger than i thought. you can see that brent on that b gaininghose headlines 1.7 percent. deutsche bank shares slumped after it became the biggest rs tor in the last four yea try to reassure investors it has enough cash to pay its debts. in a moment we will speak to a gadfly columnist. but first let's go to hans nichols. what triggered deutsche bank's problems? and theywas an analyst were looking at whether or not deutsche bank could pay their coupons not just in 2016. but also 2017. in part, because no one knows how big their litigation costs, what that exposure is going to be? after the note came out, you saw shares dropped 10%. they climbed back.

they are back up. what deutsche bank is trying to say is we have plenty of capital. 4.3 billion.have that seems to have satisfied the market. you take a look at databank -- ofdeutsche bank in terms their liquidation value versus the share price fell. they're much lower than all of their peers. you look at lender's and the half an0, since 2012, absolutely hammered. they are back at their level for when draghi said you do whatever it takes to save the euro. that is the low point. we should look at credit default swaps. almost doubled since the beginning of this year, spiking up where you see deutsche bank in a different league. note, goldman sachs has a note out talking about liquidity in the ecb. they are 700 million euros less this period than they were in

2012 at the height of the crisis. factine: you mentioned the that deutsche bank did tell us they did not need to raise additional capital. let's have a listen to what the cfo told guy johnson. what have a clear view on amount of money is necessary on the restructuring side. clear view onve a what we think we need to invest into driving down our non core units. but we have some flexibility in doing some of that, in particular as it relates to our non core unit. in that sense we feel like we can manage the way over the next 12-18 months, which will be tight. see,rom all what we can we think it is absolutely doable. francine: that was the cfo of deutsche bank. the markets are testing his resolve. hans: yeah, how much flexibility to have in their non core markets. he is indicating they have quite

a bit of flexibility. it is going to be tight. the markets are wondering how tight it is going to be. when you look at what happened in 2012, big banks like bank of america, which took a $5 billion from warren buffett, we just saw credit squeeze have a -- credit suisse. the idea that banks need a lifeline would not be in a new event. deutsche bank is on record saying they are not going to need it. it seems like we have a theory match between the bank and the markets you want to test it. francine: thank you so much. you published a piece yesterday called bank shareholders are pricing in -- reservoir gold ending. it was a very clever piece. are trading where quentin terrance tina took the movie in the 1990's. quentin tarrantino took the

movie in the 1990's. >> the question is, is this going to be worse than the financial crisis? the world has changed a bit. the financial sector is less leveraged, more robust. that is a good thing. the problem is, investors still feel they just are not know what credit world of stressed markets, of china could do with the banks balance sheets. francine: this is why they're being hit so hard as we do not understand exactly what regulation or these banks will look like once they go through all the developments, big overhauls of their exposure to commodities. we do not understand what we are looking at. >> which is crazy to think that today we can't say, can we value a bank? banks were these crowd the trade. people loved banks, they thought they were going to be a safe haven. they thought they would be beneficiaries of q.e. these were recommended stocks and now they are just being

dropped. francine: is there anything that banks can do to calm investors? yesterday was the first time in four years that deutsche bank had to come out and say, don't panic, after a credit note came out. >> coming from the credit markets. we are about to find out if bank ceo's can say anything. some investors say they should disclose the reserves heard some say they need to disclose more about the commodities exposure. so that this is a market why sentiment issues. until we get an outside capital, central bank, somebody bigger, we are not going to get a decisive shift in the mood. francine: what you mean by catalyst, something has to go wrong? >> markets have been conditioned over the past two years to react to big central bank intervention. people want to hear something about the dollar, they want to use some guidance from central banks again. there is a sense this is kind of vigor than w-- bigger than what

the ceo's were hoping for. francine: the problem is this pressure could go on for quite some time for the banks? because their underlying issues. they have not brought down their cost levels. investors are wondering what the new model will look like in this new low growth environment. francine: thank you so much. our gadfly columnist. stay with "the pulse." the italian finance minister plans to overhaul its reputation in the debt market. he tells bloomberg in an exclusive interview. the threats to europe. greek stocks hit 1990 lows. the italian prime minister bets on cameron. then german industrial production unexpectedly drops. can the european union withstand the pressure? ♪

to "the: welcome back pulse." let's go to the bloomberg business flash. jose: panex has named gonzalez the ceo. gonzalez is a former deputy finance minister. resigned after he failed to address falling

output. 150 oil and gas companies tracked by ihs may go bust as pressures glut prices. a further shakeout would help stimulate deals that have been put on hold because i is sellers have disagreed on asset values. the world's largest producer of platinum says it will place all expansion projects on hold as it expects prices of the metal to remain low. and written down mines operations by $878 million. >> we have placed all our growth capital projects on hold until 2017. one of the thing that we had, the one project we had in a secure, we have taken a look at that, the cash outflow and then said, in this current environment, given the cash outflow and the combination, the

market does not need new answers coming to the market. we have said we are going to put that project on maintenance until 2017. nejra: global news powered by our 2400 journalists and 150 news bureaus around the world. francine: thank you. public debt the will change the financial markets perception of the country, that's the few of the italian finance minister. ecb's effortsd the c to boost inflation. >> inflation in the euro area has to go as quickly as possible towards -- the equally grim valley which is at 2%. they are very far from there. the ecb is doing a great job. my view is that should continue to do so. outside the country's, we should do our best to facilitate the transmission of q.e. tour's economy, which in the case of

italy, includes dealing with the banking system. francine: let's introduce our panel. the chief investment officer at stanhope capital. also joining us is joel stern. guys, they do so much for joining us. it seems when you look around the world and speak to investors, there is a malasise but no one can tell us what the markets are testing. >> i think at the moment it is a worry about fear itself. if you get a falling market, we know a falling market starts to dampen growth in terms of gdp. is nowl we have had making people say, perhaps we will not spend as much -- companies won't do the spending they might have done. at afore, we are looking concern about economic growth that was not really their six weeks ago. six weeks ago we had interest rates going up in the u.s. now we are beginning to worry

about growth. profitability. and when we are looking at banks, it is not just about liquidity. it is about can these banks grow properly? francine: the problem is actually the real economy is not doing that badly. so, investors are almost testing that. >> i think it is doing that badly. the united statest the growth rate is under 1%. the markets in the united states are concerned that maybe all these $15 trillion of promises being made by the democrats, what if they actually win? the real problem worldwide is is it is a quiz in and set the oil price has come way down but i believe most of these problems by a very substantial collapse in the real growth rate in china. china was growing at 11%. now by my estimate it is growing only around 3%. what happened? so quickly, growing

there was a tremendous expansion in commodities. look at the australian dollar. the australian dollar went from 70 cents to 1.10. francine: a lot of people fear saying, but people will not openly tell you. i have so many guest saying that they oil or copper problem is not a demand issue. how do you know you are right? >> if the equity markets are down 11%, which they are, it is halfway to an economic recession. inwe have another 10% drop financial markets, the recession is almost likely to take place globally. francine: is that right? everything ising correlated apart from the fact the real economy is not correlated to the markets anymore. a demand issue. people saw strong demand in china and thought this was going to continue. therefore, you had a huge increase in capacity across

commodities and energy. once that growth in demand tailed off, there was oversupply. i think at the moment you have an oversupply problem because demand has grown slower. francine: but you believe one joel tells us china is growing at 3% in the world where looking at would be different. which means we would be on the brink of recession. >> i don't know about the 3%. that is quite bearish to my mind. >> just because the chinese tell you they are going at six or eight, do you think that we should believe that? >> i do not believe that either. if you believe the three, you 11,dn't have believed the it probably was not 11. they have slowed from one level down to another. >> that's a good point. but you see the world saw 11%. what did the world do? we have got to build more capacity. they build capacity in the

prices start to come down as china starts to grow less quickly. francine: if you really believe, as an investor, you take your money out. you put it under the mattress because there is nothing left to buy. >> over the last three months, that would have been the right place to put it. the dow in america was at 17.8. an 11% drop.that's think about what happened to the steel industry. -- $3.70 a share. good god, what is taking place? there is a massive recession in commodities. the problem is the banks of loaned money. what are the banks going to do about their loan portfolios? francine: you are more optimistic than this. think citigroup came out with an estimate which came out to the energy industry at 3%. so, yes, they could have a hti

there, but it is not the sort of >> the markets to not believe you. speak to you. 70% of the people that say the markets are saying one thing's wishes fear. they are testing something because there were so much cheap cash. 20% to 30%, said this is something more sinister. >> i don't think it's as sinister is joel thinks. i think we are in a low growth environment and that is going to continue. in the low growth environment, volatility is far more significant than the returns you are getting. europeialsin in have a nonperforming loan problem. i do not think banks in the u.s.

have the same problem. i would be more optimistic in the u.s.. the united states growth rate in the fourth quarter is estimated to have 1%.n 7/10 of two months from now they will come up with the revision. i bet it is closer to zero. francine: does this mean a federal reserve reversal? >> in germany, industrial production down with a decline in the value of the euro? what is going on in germany? germany is the strength of the euro in my opinion and that is why the euro is going to weaken. francine: i've been told that employment in the u.s. is looking better, construction is not believe that you're shaking your head. >> no, i do. francine: the fed and janet yellen will have to go to a point where they go negative rates because the economy is doing so badly? >> i do not think the central bank can do much in this situation. when we have a world of excess capacity, commodity prices

falling, and economic growth rates in both the u.s. and germany very weak. look, the outlook is at best in europe and the united states together may be we will have a 1% growth rate. francine: that is better than recession. >> but you can't have more increases in rates in the u.s. people have been talking about three more rate hikes fisher. >> they say this about the gold price. because price is up real interest rates are down to her take a look at the 30-year government bond rate. it is now 2%. it was over three. that sends the gold price skyward hurt when goldman sachs, and i think they are terrific, say there will be three hikes this year, if the markets believe the record to be three hikes, the gold price would not be near $1200 an ounce. francine: you can say the same thing with rising yen or government bonds in japan below zero for the 10-year. there is also fear in the market. joel is traditionally end of the

world to read your not. what needs to happen in the markets so that we get over our fear and move on to more stable territory? >> i think what we are seeing in the u.s. is a healthy setback. it had a really strong rally. you look at the stocks that shot up, netflix and facebook. you had the strong rise across the market. actually the market has got too expensive. valuations are hybrid you should not have high valuations when profit margins are high. because, with the following profit margins, it leaves you exposed. i think the u.s. is coming back down to more reasonable valuations. world,re in the valuations are reasonable but there is this concern about the slowdown in chinese growth and what ramifications that has. francine: that was a spirited conversation we are just getting started. jonathan bell, joel stern. thank you so much for joining us for now. up next, the pound's biggest

bear expects the currency to lose 17% if britain remains part of the eu.u. we talk about the european referendum coming up next. ♪

welcome back. let's get straight to the first word news. german industrial production fell for a second month-end december. 1.2%. sank even estimates to demand remains strong. the median estimate had been for a .5% gain. goldman sachs expects the federal reserve to increase u.s. rates no fewer than three times this year to 1.3%. goldman says it sees above trend u.s. growth and predicts a gold rally will go into reverse.

germany say four people have been killed and around 100 injured after two trains collided. the incident happened near a town in bavaria around 37 miles southeast of munich. global news 24 hours a day powered by our 2400 journalists in more than 100 news bureaus around the world. european markets regaining some of their losses this morning after opening lower. u.s. strategists, where the u.s. 10-year yield would asked 2016 -- if you'd them on january 1, they what is said near a percent. the yield today falling to 1.68% . this is a chart going back to 2011. you can see the record low, 1.38% in june 2012. earlier we reached 1.68%, 30 basis points from that record

low. we are at the lowest since february -- this is the reason why interest rates expectations. fed fund features. this figure here, the december meeting, the chances were above 30%. this is the chart from today. let's just move it back to friday, just after the u.s. jobs report. look at what happened after that wage growth was stronger than expected. the probability of a rate hike in december moved up to 53%. let's move back to today once again. here we are on tuesday. 0% chance of a rate hike in march. a rate hike in december. that is what a day of market turbulence does to fed funds futures. this is what it does to the japanese mind market -- bond market. we have seen the yen rise, and japanese stocks decline

since corroded implemented -- implemented negative interest rates. government bond yields have fallen to below zero for the first time. daat was when kuro implemented negative interest rates. flight to quality. where else is money moving today? gold rising for an eighth consecutive day, the longest winning streak since july 2011. it's slightly spoiling my narrative. now it's falling >> again. but you get the just. -- gist. moen moving into gold -- money moving into gold. jonathan bell, the chief investment officer at stanhope capital and joel stern both still with us. jonathan, we have a pessimist in the studio. joel says it is almost the end of the world. you are a lot more sanguine, in saying the fundamentals are different to what market perception is.

where do i find value? jonathan: my view is a value view. we have got a slow growth environment. and i do not disagree with joel on that. but you're buying on yield of 4%. butted profit growth, true, you are getting a 4% yield. compare that with government bonds in your getting a good return, over inflation as well because we have near zero inflation. in europe, equities are not given you a reasonable return. i'm still a player of the financials, the cyclicals you have got to be careful of and go for defensive staples. francine: would you see any value -- one of the point to make is that the share buybacks are not a good thing for corporate governance? joel; that's right. for those companies where the shareholders are concerned that management is using surplus to invest in projects they know nothing about, those companies

are the ones that benefit from a share buyback, because they are not going to destroy value in those investments. eor the firm's, in general, th reason given by people in the financial community is that a share buyback reduces the number of shares outstanding which increases eps. so they say, higher eps, higher share price. what they're using as the money is not being investigated. francine: let's say you are an oil company and dividend is one of the things you are focusing on, then it is maybe worth getting some of that money out of investments and putting it to good shareholder value? joel: i do not believe that, either. forgive me. i have done studies of this, and believe it or not dividends are not healthy at all. the price of the shares falls on the ex dividend date by the dividend you paid out. the firm cannot be worth more when it has less. the study shows that dividends gained are equal to capital gains loss. what matters to shareholders is

the total return. cedi were expecting a total of 10%. werether -- say they expecting a total of 10% -- warren buffett america has never paid a cash dividend. if i ever paid a cash dividend, you know i have gone insane. why? he said i could earn higher returns inside the firm than outside. why would we want to pay a dividend? i served on the board of a company, a privately held family business and we were about to go public. one of the investment banks that came to visit us said you are to start planning to pay a cash dividend. we said, what is the reason? 75% of companies pay 25% of their earnings and dividends. francine: that's for someone who holds it longer-term ph shorter-term, people still want the dividend? there is a question of whether you should get a

dividend or share buy back. what you do not want his companies reinvesting capital, lower rates of return. if warren buffett is able to reinvest still high rates of return, that is fine. the problem we have got at the moment is you have got company in the cyclical industries, in the commodities and energy that have been reinvesting at rates which they should not have been reinvesting that in joel: i would say one more thing about warren buffett. he owns a large percentage of his company. if he makes a decision that is maximizing the value for himself, all his shareholders are coming along free for the ride. can you imagine? it costs almost nothing to have mr. buffett managing your money for you. even believe it myself. francine: what you're pointed to end this is a theme that i have heard when you look at economics, maybe we are pricing things run. maybe the way we look at share prices is wrong. that? we need to address

is it business school? >> i teach at five graduate schools around the world and i teach on eva. economic value added. if you take a look at a perfect score of 110. dividend and earnings-per-share changes, the cash flow, the 100.rs are 2, 56, 8 out of 79.is between 62 and that's how strong it is as a relation to the changes of value. we tell our clients, you should not only implement an eva program but also have bonuses tied to improvements in the eva. and companies that do that have outperformed their peers by a total of 51%. francine: is that right? again, do we need to look at different models because actually since 2008, the world has changed? jonathan: the rate of growth has

changed. that is a really big issue for investors is you're not getting the same earnings growth. had you not had share buybacks in the u.s. last year, you would have not had -- have had equities growth. i'm not going to talk about the eva with the person that is responsible for it sitting next to me, but it is -- joel: i don't mind. outathan: but it is ab management investing the money wisely or if not, giving it back to you. francine: what a great conversation. jonathan bell, the chief investment officer at stanhope capital and joel stern. now, up next, are concerns about deutsche bank overblown? we asked the european finance managing editor next. ♪

francine: welcome back to "the pulse live from london. it has been a busy morning pay let's get straight back to the bloomberg with mark barton. mark: this is the mcsi all country world index which measures developing markets. days including today, it has fallen by 3.5%. why i brought up this chart is because right now from last year's highs we are almost 20% below that level.

19%, which makes the msci all country index a 1% whisker from a bear market. that is the first chart i wanted to show you. between gains and losses on the stoxx 600. if we do game, it will be the first gain in february after falling for six consecutive days. this is the chart going back to 2014. earlier today, we fell to the lowest level since october, 2014. deutsche bank is a bright spot today. it wasn't yesterday. 9% yesterday. they're up by 5%. it reassured investors and employees it does have enough money to repay its debts. down 7% yesterday. lowest level since 1989. investors fleeing riskier assets such as greece as concerns about

the bailout as well. will that unravel? i tell you what has been unraveling today -- the japanese stock market. one of the few asian stock markets that is trading today. since june, 2013. 5.4%. the rising yen hurting shares of automakers, toyota and mazda. i want to show you the eyn. this is dollar against all its major peers. the yen is the best-performing currency today. very quickly let show you how it is faring over the year. the yen is the best-performing currency. by4.4%. it seems that mr. kuroda cannot get the eyyen lower. that's the message for central banking today. francine: he's certainly trying his best but it seems the tide is against governor kuroda when it comes to the yen.

for more on deutsche bank, let's bring in our european finance managing editor. shares have been punished but deutsche bank seems to stand out. are there many more concerns on deutsche bank than other banks? we'll get back there in a couple of minutes because i think we are having technical issues. now, let's talk about brexit. brexit is one of the main things we have been talking on the program. we had a poll over the last couple of days. showing the 56% of the people they pulled want to leave the e.u. the italian prime minister renzi says he expects an anti-berexit deal to be reached at next week's summit. sir, thank you so much for joining us. extremely emotional.

we have not really heard the campaign for or against yet. the battle lines have not come out. are you concerned we are going to the poll to quickly? if it is the summer and we have not heard the campaigns yet, that leaves very little months for people to understand how they want to vote. >> we have got a european council meeting coming up in siberia. -- in february. there is a very strong chance that will be a deal. if that is the case, we are looking at a referendum in june. if that is the case, yes, it is not a long time, but it is quite clear what we now need to do. currently, the debate is all about emotion. in those few weeks and months, we have got to lay the facts out in front of the british people an informedmake decision. francine: at the moment, we do not know if this country were to

leave the e.u., we do not know what comes next. >> in terms of the economy and industry and the financial services sector, the argument is compelling. not only that, part of this deal which we will have in the council meeting will be to actually put the non-euro countries like britain and the interests of the city of london paramount. we will protect the position of those nine nations who have not been inth the euro zone. that is an important message. so much today is about emotion. to understandave the facts and make an informed decision. the an idea.e you're working with the prime minister as a special task force to try to understand the consequences of a possible brexit. are we going to see less investments? are banks going to leave london?

i try to talk about this every day and i'm none the wiser. >> i can't make decisions for those people. that is the unknown. and that is the whole point. that nobody to date from the out campaigns have made a compelling argument why we would be better off out of the european union. the changesyou to we have made. i can point you towards the changes in the budget we've made. i can point to the changes which baskets dealour will be a substantial game changer. it is not just about changes in our next week. this is ongoing. it is not that european industry suddenly got bad, but they are getting left behind. we need a cultural change. i think written is driving that change -- britain is driving that change. francine: if we were to vote in a week from now, everything is emotional.

what will people go to the referendum thinking about? is it immigration? it is quite difficult to understand what as a voter your emotion leans towards. >> what worries me is that the people who want to vote out, they all fall into categories. it is about immigration, it's sovereigntyhey call of their nation. there is a lot of misunderstandings about human rights. they don't understand that the european court of human rights has nothing whatsoever to do with the european union. francine: do we need more big business to come out in favor of staying in the e.u.? yet to make up my mind whether that would be counterproductive or not. whole number of constituencies, big business needs to talk to big business making the case to the people who are listening to the business community. coming from an agricultural background, i need to talk to the agricultural communities. you can't have o ne umbrella message.

specificto focus messages with specific details and facts to individual sectors. francine: i read an interesting piece that caught me by surprise, making the point we are not speaking to women enough in the brexit debate. they hold a very large proportion of the votes in this country. does the narrative need to change? >> i suspect it does. we need to be talking to young people as well. one of the features i have seen is that older people tend to be more likely to be against and older people use their votes. younger people tend to be more in favor but they do not use their votes. today in london we are launching campaign, ands these are the kinds of messages we have to take on board. francine: very interesting. richard ashworth, conservative member of the european private. up next, concerns about deutsche bank. are they overblown? we ask our correspondent in

milan. ♪

francine: welcome back to "the pulse live on bloomberg tv and radio's jimmy on your tablet, your phone and bloomberg.com. last night, deutsche bank felt a need to reassure investors and employees it has enough funds to pay its debt. let's bring in our european finance managing editor in milan. beenank shares have

punished. why is deutsche bank being singled out? >> what investors are focusing on are some of the banks that have some of the weakest bug ffers. their ability to pay coupons on some of -- and equally some of those buffers in relation to capital wher eyou see shares amid concern as prophet does not strengthen as much as the bank might have benned for, it may not generating as much in terms of additional capital. the marketsto tap again. this is feeding the downward spiral in its debt. francine: who is the most vulnerable? french banks are doing better than other ones. am i right? >> yes, as i mentioned earlier,

what investors are focusing are the banks that have the weakest buffers. in terms of capital you would market,redit in that which is among the least capitalized banks and credit suisse which tapped investors for 6 billion last year. some concern that may not be sufficient. remember, all of these three firms are undergoing deep overhauls, deep restructuring which is going to com tougher the market, the deeper thate at a cost. re expensive that is going to be. and the lower the profit. francine: thank you so much. in milan. now, the first votes have been cast in new hampshire. the opening presidential primary in the 2016 u.s. election. hans nichols and former white house correspondent joins us live. it is a crowded republican field. could we see anyone drop off?

hans: that is a hope that this will have a winnowing process on the republican side. when you look at the polls, you see a lot of folks bunched up, especially the governors in that mid tween range. mr. cruz is posting 13%. and have got mr trump. the question is who comes in second and how many tickets there are coming out of new hampshire? looks like there are three or four tickets coming out of iowa. the question is, who comes out and what strength they have? on the democratic side we are looking to see the margin of bernie sanders' victory over hillary clinton. francine: we'll keep a close eye on it. hans nichols with the latest on the u.s. presidential election. stay with bloomberg. "surveillance" is up next. deutsche bank's.share price is little changed. it has seen a lot of fluctuation this morning. today, it opened higher and then

it went back lower. now it's flat. we will also go through a lot of the european banks and our big story on japanese banks. more on "surveillance" ♪

investors asord to deutsche bank says the lender feels the need to reassure shareholders that it can cover them. will it be a seventh day of losses? they are showing signs of stabilizing after the selloff that sent it to the strongest level since 2013. regardless lose 70% of what happens. this is "bloomberg surveillance." i am francineac