franko the boris affect -- -- francine: the country decides its place in the world. post a fourth quarter -- in part due to ♪ francine: welcome to the pulse. live from london. i am francine lacqua good let's get to breaking news. we've got europe's pmi numbers. ecb is interesting as the

gets ready to ask more on march 10. we had a slightly higher forecast. manufacturing falling to the one, a little bit below what economists were expecting. they were expected forecast of the two. some of the european stocks. they are mainly in the green. let's see if they're sticking to that. you can stocks going from 1.1%. this is after their biggest weekly events. we are seeing a lot of the miners on the higher side did this is the big story of the day. the dollar pound is at 141.60. the pound falling the most in seven months. this is after boris johnson one of the most popular politicians in the u.k. says he will campaign for britain to leave the eu in the june referendum. this is a concern about volatility. the markets to really know how to model a brexit for now.

crude gaining. we're listing to a former opec president. it just be see one of our top stories, a loss -- hsbc one of our top corporate stories, a loss. let's get to bloombergs worth word news with nejra cehic. nejra: next francine. shares at hsbc are trading lower this morning after a reported surprised fourth quarter pretax loss of $858 million. estimates have been for profit. ceo of europe's largest bank has been excellent rating plans to scale back the lending vast desk to scale back the lenders stori- hsbc one of our top corporate stories, a loss. let's get to vast global footprint. the german economy took a hit this month from week global demand. it fell to a 15 month low. at the same time, a services game slightly improved.

france's economy showing signs of weakening. the pmi slinked to its lowest level come into a contraction. the company cut prices at the fastest pace in more than year with weak demand partly to blame. google news, 20 hours a day, powered by our journalists -- global news, 24 hours a day. francine: a u.k. deal was reached late on friday night, yesterday saw the exit debate, london,h the mayor of borst johnson, saying he will campaign to leave the eu. david cameron will address the u.k. parliament to make a case for remaining in the eu. it, great to have you on the program. onnick, great to have you the program. are you concerned with leave the eu. nick: investors typically like the status quo.

better the devil you know. during the debate over the next three months, they're going to be concerned about jobs. it is unlikely -- there is going to be doubt. francine: the problem is the doubt. the doubt means markets will be uncertain which means they don't know how to price anything at the moment which means we are going to see a lot more volatility. what is your biggest concern? how do you bet against that? nick: there is a balance between the pound and we have seen the ftse and the earnings are in foreign currencies. we typically would have a small allocation to the u.k. for a global investor. it is not a huge concern to us. francine: i say your job is more difficult. yours have to be a political analyst.

you say that boris johnson is one of the most popular alterations in the u.k.. do you think he will make a material difference to the referendum? nick: i don't believe so. i believe the people on one camp with the other already. there is already going to be small swing vote. think the heart will change people's minds. francine: that is the problem, it is four months. which is short. it seems so long in the markets mind. nicholas: it depends on how good a case the exit team can build. i don't think the deal was done -- i will think the deal done last week will have a huge amount of impact -- i don't think the deal done last week will have a huge amount of impact. francine: heys --

stays with us. we would talk about commodities next. we'll take you just will bring you the brexit news over the next few weeks. philip green, i asked him what happened -- next line cooks who knows? -- >> who knows? . am hopeful sort of, that is fine. fixed exposure or staff exposure in europe. let's wait and see. who knows how these things are going to go? runco will you take -- francine: will you take a position? >> i don't want to get into politics. retail is hard enough. not wanting to take a position yet. you can see more of that interview here and 45 minutes. stay with the pulse, plenty

coming up, including the world's third-largest gold producer returns to profits. demand -- the man who negotiated and one.e we bring you glenn lori from barcelona.

francine: welcome back to the

pulse. let's get to the bloomberg business flash with near change. nejra: efg international has agreed to buy swiss bank. valuedh and shares deal founder was arrested in november amid a corruption investigation and released from jail to remain under house arrest. he is denied any that she has denied any wrongdoing. -- he has denied any wrongdoing. -- he bank has appointed replaces ashok iran. subject to regulatory approval. the world's 12 biggest banks cut front office currency by 5% in 2015, that is according to reports by coalition development. the trend has seen banks reduce

headcount by more than a quarter since 2010. that is your bloomberg business flash. francine? --ncine: the various latest the very latest on our top stories. -- overturned a profit in the fourth quarter. joins us on the phone from johannesburg. thank you for joining us. congratulations on returning to profit. how much of this was due to falling currencies? >> the falling currencies and fuel prices came only of the end of november. largely, that is where the weakening happened. that is how the cost improved by 10% to 14% year on year. we slashed debt by 30%. our cost came in -- that is quite a result. francine: you sold some of your

assets to bolster the balance sheet. will you be selling more assets to share? net target was at 100 lean dollars. we did achieve that with us some of the mines in the u.s. there is no real need from a balance sheet point of view to sell more assets. francine: you're not changing your net debt target for this year? >> no we are not. you would've seen our margin improved by 14% year on year and that is despite a 10% drop in the gold price. there is no compulsion to look at the portfolio from a balance sheet point of view. francine: we talked a little bit about currencies and fuel. how many opportunities does the lower rent if you -- the lower brand if you -- lower grand give you. >> south africa accounts for

only 25% of our global production. from a currency point of view, we are exposed to around two thirds of our production portfolio is exposed to falling currencies. we get a very good tailwind from currencies and fuel. our job is to manage it. therefore we hold the operations accountable. that is where we are pushing the sales. francine: do you think there is a supply crunch coming in gold? i know you're working on the company, but the external factors in this case -- >> the macro market in gold is changing. gold was the first commodity to all back in 2012. you're going to see a supply crunch come. the question around u.s. interest rates, there is talk

about negative real interest rates coming through here it in addition to that, people were criticizing gold for having lost its safe haven status. again inhat crop up the last two months of the year. that is before you take into account global inflation creeping in which is what most of the central banks are targeting. francine: what is your target for the price of gold? you must have a price in which you model with? joinede: -- >> when i the market, someone told me i can tell you that goal will go up and down -- we do sensitivities both on the downside and upside. wencine: final question, attempt to split south africa and international operations again? >> you never say never?

our focus right now is getting the best of our that's out of our existing portfolio assets. a 10%generating improvement from our south africa operations which had a bad 2015. we want to turn them around in 2016. they did you could take out to the bottom line. francine: thank you so much, sir. the world's third-largest producer in south africa. russia's gold in 2016 is gathering pace as investors sit havens. -- nick,er is the seo when you look the risk environment and look at turmoil, what is interesting how the angela merkel anglo gold -- given the turmoil, they need to buy something. -- nick: one can

understand that. we never really considered gold and investment for clients. if you look the world's bond witht at the moment, negative returns. maybe we'll have to review that. francine: you're not expecting a recession. expectingre not recession this year in the u.s. but brazing. next year, probably a hard probability. if there is a recession, it will be a mild recession. francine: even if there isn't a recession, we're looking at a brexit, we're looking at an unpredictable u.s. election. there is nothing i can hang my head and say this will go well. nick: there's nothing particularly rosy. maybe this is the new normal. we have to get use to sluggish

growth. china as well, much growth. francine: if you are an investor, where do you park your money? nick: u.k. there's nothing like technology stocks. emerging market companies have realized their productivity is very low. they need to invest. -- if younies can don't believe there's one be recession this year, there are a lot of securities that are pressing that in. things like good quality investment debt. francine: what is the one thing that is being missed price in the market? is it an asset class? -- nick: is a credit would say credit. i think it is a reasonable value

at the moment, yes. francine: is there anything else? what happens with oil? will probably rise if it. there is a catch to where it will go. there should -- that should be a benefit to the world economy. look at what is happening in the u.s. next line you have this too is a billion dollar bonus dividend to the u.s. economy did some has gone into increasing taxes. rest has gone into savings. we've had pretty good consumer spending, plus 3%. the savings but, you could argue that is not going to the economies that benefit. that would help from any recession, because that is down. francine:, thank you very much for now. up next, credit and small cast. we talk nick lister's top picks.

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francine: welcome back to the pulse. live on bloomberg tv. no disasters, no fireworks. that is the assessment of his this is, arcadia group which is the parent company of top man, top shop. i spoke to the man. >> it is ok. some bits better than others. europe, we are doing well.

francine: we surprised? -- were you surprised? >> it developed. building. nordstrom, very good. generally, no disasters. online u.k. strolled. we killed softer. -- retail softer it in the mix, ok. we got a lot of things going on. we are launching a new athletic brand. -- a new athletic brand with jan beyonce.ith francine: how about asia? how is aged doing compared to the u.s.

-- how is aged doing compared to the u.s.? high-end, being a little bit overexposed, now they want to come out. now would be a good time to go in when they want to come out. francine: overall, you seem like a lot of world leaders saying it is not that bad, it is not that great. are you worried about a recession at all? think.n't i think we could spend an hour talking about all the things going on in the world. , whether it't know is an american election, the european debate. whether it is currency, the stock market. you have to take it all in. i think we've got to test we run a pretty tight ship. ship.run a pretty tight

our inventory, we know how to run it well. we run it very tight. new.mers today want to buy how can we be sharper? faster? quicker? francine: on the brexit, doesn't that impact your business model? >> most of our business in europe is online. hopeful, that is fine. we are not that big to fixed exposure in europe. let's wait and see it who knows -- let's wait and see. who knows. francine: nick lister helps to manage assets under management. philip was talking to yesterday.

he said if we had let line growth in u.k. that is not too bad. many seem to be in this wait and see situation. you also like real estate. nick: one of the most powerful mechanisms in asset management is reallocating those sectors which have fallen and selling those which have arisen too far. and be very disciplined about that. look at what is happened in the last several months. .e talked about credit real estate, yes, there are certain markets you could argue priced for perfection. the larger 20 for our cities. regional cities and smaller countries have lagged those markets. a reallocation to those sort of markets. small caps on amid cap's. if you really believe there's

going to be significant reception -- recession, that is understandable. your belief is that the world is not coming to an end. that maybe we are in this new normal. that's something he to happen for markets to either correct for markets to nick: central banks need to work out what exactly their time to do it they have been trying qe for so long to try and get a reaction, it is not really worked. we need the banks to become effective again. small interest margins. they are getting whacked in europe. non-conforming loans to sort out. the central banks and regulators can help supporting the banks, it would be a good idea.

and, thank you for joining us. coming up, a big miss for europe's asked bank. -- europe's biggest bank. ♪

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francine: welcome to the pulse, live from bloomberg's european headquarters. i'm francine lacqua. let's get to their change. and hsbc are trading lower this morning after a surprise fourth quarter we text loss of 858 the lien dollars -- $858 million. june go over, the ceo has been accelerating plans to scale back the lenders of vast global footprint. the euro area is showing signs of its drain from the global slowdown.

purchasing managers index for the eurozone fell to the lowest in more than year. it will raise concerns about the health of the region's economy and they also increased pressure on the european central bank policymakers to add stimulus at their next meeting in march. home retail group shares jumped after a takeover of the argos -- it plans argos to make 175 hence i share. that tops a bid from supermarket chain. global news, 20 for a, powered by our 2400 journalists. francine? francine: sterling is giving all the headlines this morning. this morning after london mayor boris johnson backed a brexit. let's it to mark barton. mark: boris has moved the currency market clearly. this is sterling against all 31 of its major peers.

the russian ruble, the best-performing out of the 31. the euro is the worst performer against the pound. still, the euro is up 1.3%. everything will currency out of the 31 is rising against the pound. after boris johnson said he will tap it in for your desk for britain to leave the -- for europe to leave -- the bloomberg correlation weighing the currency indices. and measures the pound against all of the big major developed trading peers. , thean see sterling today one-day performance is down 1.6% it that is the most since january 2015. the bloomberg pound correlation currency index is down to its lowest level since january 2015. this year, the gauge has fallen by over 4% at the biggest annual

drop in a number of years. brexit fears unsettling currency. this is a great gauge to gauge volatility and currency pairs. this is the euro pound currency pair. this is implied volatility. this is telling us how much volatility to -- do investors expect in the euro pound exchange rate in the next six months. it will cover the upcoming referendum on june the 23rd. we arisen to the highest level since 2011. great rate chart. we'll keep an eye on that. how about a look at what is happening on the stock market. the biggest weekly gain since january 2015. all 19 industry groups finished a week higher. -- finished the week higher. almost up by 10% since falling to its lowest since september 2013. the stock i want to focus on his

the biggest decline are today, hsbc. europe's biggest bank posting its unexpected fourth-quarter loss, income lending fell. fair value losses on its debt. the share falling by 19% in 2016. ignore that though. the stoxx 600 is up by 1.3% today. francine: achy so much, mark. -- thank you so much, mark. hsbc has posted a loss. income from lending fell. profits had expected a of $1.95 billion. let's see to our u.k. banking reporter. first of all, how much of a surprise was this? hsbc needs to do more cuts. >> as you can see, investors were not positioned for this.

we have shares down quite heavily today. lowest on the ftse. this is probably the first quarterly loss. banks have been notoriously hard to read since 2009. they have been some suggestions for analysts this morning that they need to cut deeper than the 5 billion in cost by the end of 2016 that they have already outlined. the things weof covered it credit suisse, barclays, a lot of these banks does that are a lot of questions about how you -- exposure to commodities. hsbc was one of the first to come up with that kind of figure. --stephen: amiss of the banks there will have to pull back.

chairman says he expected a popular road ahead. francine: what are we expecting from hsbc. further job losses. they're keeping the headquarters f u.k. what are investors hoping for? stephen: we're looking to see fewer employees. finance director said they will only invest in businesses which meet their own return targets. from all of leicester, the bank only made about seven -- from all of last year, the bank only made about seven. francine: great to have you on the program. we'll catch up with you later on.

peaked that's have we reached peak mobile? -- have we reached peak mobile? ♪

francine: let's get to the business flash. here is there a chance. brazil's -- the cash and shares deal values bfi at swiss franc. the founder was arrested in

november amid a corruption investigation and released from jail to remain under house arrest. he has denied any wrongdoing. appointedank has jamaal hockey she, -- he replaces i suck our raw -- i shock our raw. he will chair the middle east and africa's committee did the 12th -- the world's biggest -- francine? francine: are we reaching peak smartphone? that is one of the issues up for discussion at the industry gathering for mobile world congress in barcelona. caroline hyde is there with a

special guest. caroline? i am indeed, francine. , take you for joining us. you are the network provider in the u.s. you are connecting cars, phones, everything. in the smartphone area, are you worried about the saturation? >> not at all. the smartphone just begun seven or eight years ago. growth,ill seeing whether from an os side or hardware side. it is still growing. they're still a lot of gas in that tank. what is exciting is what is behind the glass. what the innovation is what is behind it, what drives it. how it -- how we resolve problems for our customers.

caroline: are using demand for the higher end phones? pace is a different discussion. we are still seeing demand. we are still growing. we are focusing on what the customer wants. on the high inside, they want a new phone every year. you saw bigger screens. we are seeing fabulous, which is a smartphone in a tablet combined. we are seeing it from all sides. about --nt to talk we're seeing it in the segment. everybody wants a smartphone. comes into our network is a smartphone still. it is still growing. we are optimistic it was -- it will keep going. caroline: they want to use it on their bridges, cooking utensils, car. how do you support that from and if the structure? how many billions he had to invest? >> we invest more than anyone else in the united states.

back to the first one of the question, the smartphone is a remote control of your life. .hat is what we talk about it drives imaging around you. most people would rather leave their wallet, their keys, they are not leaving the smartphone at home. it allows you to control your home. we have a product called digital life. it up to control your car, get to your office and drives imaging around you. that is not going to stop. people are expecting more and more. we have been in the middle of that for eight plus years. we have done very well. -- get our download speed even faster. you teamed up with the likes of until, erickson. getcalling for everyone to together, share the learning. do you agree? >> what everybody saying is we want rob been everywhere. -- we had want broadband

everywhere. 5g is exciting, but it is four years away. , let's maximize the four lt we had today. 5g will bring other advantages. more speed. it will also bring a process around the internet of things. the ability to connect everything to a network, low-power. there are advantages in that new generation. when we had today is pretty awesome. caroline: what about international growth of 5g at the moment? can you start to expand your showing investment in mexico? what about europe? looks personal, you get two things, 5g could be a way for us to deliver what you are thinking about witches a wired broadband to your home -- which is a wired

broadband to your home. we are still putting fiber in the u.s. come into homes and businesses. where adding millions of homes this year. we are excited about that. we started to think about expansion, we went to mexico because there is a wonderful opportunity for us as a company. we viewed that world, we have a bordick but why do we have that border? -- we had a border, but why do we have that border? our customers are asking for. our investment in mexico city is wonderful for the u.s.. it is wonderful mexico. utep but that when you have donald trump talking about he is going to build a wall -- you talk about that when you have donald trump talking about he is going to build a wall. >> all of us have to worry about the political situation. there are a lot of good things

going on. i am not good to make a comment on to trump. when i think that's what i think is it is important for us to take care of our customers. those people want a plan. -- they want to build go to their relatives and have that committee case in. caroline: and he plans to expand outside of the u.s. and mexico? >> one of the reasons we are here is we do business all of the world. we do business with every fortune 1000 company. we do business with them whether it is iot, a solutions organization. we are a global company doing business everywhere. our ability to expand will be based on things to make sense -- things that make sense to us in the future. caroline: the governor is ensuring you have the spectrum you need. >> the regulators are starting

to understand and working with us. it is going to be a journey. a lot of what you see behind me is all brand-new. the concept of wireless enabling everything is something we have been talking about for a long time, but now we are seeing it happen. people starting to say we're going to have to have more spectrum. first one mobility and do what they want to do when they want to do it. we have to work together. it is going to be a journey. caroline: i can't let you go without a comment about what is happening with apple. you as a company, are you backing what apple is doing? >> consumer protection is paramount to at&t. very important part of our business. our relationship with our customers. our chairman has come up with a couple of statements around that. if you read those, he gives you an idea of where we are around what tim cook has been doing.

caroline: it has been great to speak with you. always great time here. at&t mobility on bloomberg tv. painting his vision or where we go. what a great conversation. thank you, caroline hyde. there are plenty of great interviews coming out of -- coming this morning. apple, privacy and the brexit debate. here's what he had to say. >> we are watching this is wishing closely. we come back to taking back the security and privacy of our customers data very seriously. as we said, customers owning the data. we want to be a trusted stewart. >> you are so prevalent in being hit the oil situation. bring it back to the cave for me . london, used to live there. what do you think about the exit

situation -- the brexit situation? mark: it is an important issue for the british public. we employ over 14,000 people. it is really important for the u.k. to be part of a single market, because we think that is good for all you keep this is. having the u.k. as a part of a reform to eu is in the best interest of the u.k., but that will be decided by the british public. youre you cannot -- are optimistic about the sentiment? >> they're working at different clock speeds. in the u.s., we think the economy is very strong. in europe, we contingency growth there, moderate growth did they are making good progress.

see the chinese saysmy -- the government it is going to grow 7%. we would take the growth at any time of the year. we think the auto industry -- the government is putting subsidies to stimulate the auto market. in south america, we see their market is very tough to the auto industry will probably contract. francine: the plunging pound. we'll take a look at where the -- uncertainty. ♪

francine: the pound fell the most since 2010. ae mayor said he would back brexit from the eu. great to have-- you on the program. the business is at the pound will follow. will he have put a percent downfall or is that too much yet go >> goldman sachs -- too much? >> the consensus is not clear if we stay. volatility is not in favor of the pound at the moment. the bank of england [indiscernible] meets the pound will likely

follow -- will likely fall. hsbc is surging to 160. francine: it is amazing. a lot of fx traders are saying because we do not know, we have four months campaigning, it will remain volatile. the pound is expected to fall regardless of the outcome. is that fair? she: they are preparing themselves for the pound. protect yourself against the decline. when you were coming on, we get a great chart made up for you. of the expectations pound depreciation against the euro. have a look at that. beautiful. based on the expectations of the pounds depreciation against the euro, that is what the blue

circle is. again, it just implies that people are concerned because volatility is what people get the most freaked out about, especially fx traders. is lessct on guilt clear-cut. >> if the u.k. decides to leave the eu, -- which is good for guilt. an exit could put a lot of foreign investors -- it is not clear which way it goes. debts the paying pound is where you go to express that uncertainty. francine: there's not much movement. eshe: they're going along with what is happening in treasuries. the outlook for the guilt, until you get that vote. caroline: -- francine: thank you so much for joining us. we give you great charts.

our government bonds and fx reporter. manufacturingi and services data. much weaker than expected. europe's week economy starting to feel the strain of the global slowdown. growth and deeper price cuts by companies, that is what was captured and reports by markets. that was about 55 minutes ago. this raises concerns about the health of the economy. structure 500 -- stoxx 600 is gaining 1.6%. i want to show you crude oil, getting 2.6%. we have a great entry coming up. he has been the oil minister of algeria. he was opec resident back and that's opec president. he joins us live from washington, dc. we continue the conversation on the pound. goldman sachs pricing in a

decline of 20%. a lot of economists are saying no matter what happens, the pound will continue to tumble, whether the u.k. leaves are not. we are back in two. ♪

francine: sterling suffers its biggest fall since 2010. battle begins. cameron makes his case to stay in the eu. the largest bank posts a fourth quarter loss primarily due to bad loans to energy companies. , i would notlondon have predicted that. tom: