>> in china trade tumbleles. old engines suffer as the nation's exports slide more than 25%. the bank of england governor is dragged into the brexit debate kerry negative rate to be. the nodvice chair gives to interest rates below zero abroad but says he would rather not go there at home. anna: a warm welcome to the program. this is "countdown". let us start with a focus on

what is going on in germany. we have breaking news. this is germany's largest power producer. we are ready have some of the topline numbers. they pre-released some of the numbers. they were suspending their dividends. we have details on how the performance is going. 2015are talking about the net loss going in at 170 million euros. a profit previously of 1.7 billion euros. the adjusted net income we were expecting -- this is the unadjusted number. the operating result has also fallen compared to the previous year. we are getting a breakdown of how they performed in all of the various parts of their business. ae bigger picture story is broader story about power prices at their lowest level since 2002 in germany. a shift to renewable is underway putting pressure on the

struggling coal and gas part of the business. they are putting aside money to fund an exit from nuclear power in germany. they are spinning off their renewables. they are moving into a new company that will be listed on the exchange. a lot going on. a retreat from the previous year in terms of profitability. we will be speaking to the cfo at 10:50 a.m. london time. join the bloomberg surveillance team for that. let us talk about what has been going on in the markets. the china story was in our headlines. let us show you the china trade story.

+++ we will look for a news flow there. let us look at our radar -- risk radar. a retrenchment in the asia equity section. brent is still holding above $40. it broke the level yesterday. both nymex and brent retreating from the recent highs. money going into the yen as you might expect. weakness in the equity market session. 19% spike in iron ore prices yesterday. a singapore futures price now is down by 4.6% retreating a little bit away from the 19% spike we saw in yesterday's trade. let us get the first word news. european union leaders have edged towards an agreement with turkey to halt the inflow of migrants. the turkish government has called on -- to double their

eight. plans for turkey to take back migrants was a real game changer. workis operation would not without turkey being willing to take back all irregular migrants. today, we will show that it will be possible. all of the above mentioned decisions sends a clear message that the days of regular migration to europe are over. nejra: the bank of england governor mark carney will give evidence on the economic and financial costs of the brexit. he has already warned of the head when space in the economy. he is expected to be pushed hard regarding his risks. michael bloomberg said he has

decided against entering the 20 16th u.s. presidential race. when ofuncement removes the remaining uncertainties in what has already been an unusual election year. he is the founder and majority owner of bloomberg, the parent of bloomberg news. wall street's average bonus felt to $146,000 in 2015, the biggest drop since 2011. billion. call was $25 down 6% from a year earlier even as the industry added jobs in new york city. nike has suspended ties with maria sharapova after she failed a drug test at the australian open. the world's highest-paid female athletes will -- may now lose her almost $300,000 that she won at the tournament and her place at the rio olympics. she said she had been taking the drug for a decade and did not notice that it had been banned

organization as of january 1. -- i had been legally taking the medicine for the last decade. on january worst -- first, the rules had changed and the drug became a prohibited substance. which i had not know. -- had not known. let us check in with the live market action in asia. a week picture coming in. weakness coming in from china. it really was. that came up midmorning. it was a blow to sentiment. to show you how bad the headline number looks. exports to europe were down 20%.

that was the best. looking at these major trading partners, -20% was on the better side of things. --a is looking like this down 7/10 of 1%. weakness across consumer goods. .ou have personal goods a broad-based selloff across the region. this is how it looks if you want to split it across the individual markets. even going into this morning, we were already seeing fairly obvious signs that the rally was reaching its limit. . mixed picture yesterday volumes were quite light. in a lot of ways, all we needed was that data from china to push us off a cliff. to mention as well that japan came out with final gdp numbers for the fourth quarter before the chinese data came out.

it was not as that is expected. -.1% but suffice it to say even with that number, it is hard to imagine they are exchanging high fives at the boj. fives athanging high the boj, i don't imagine that is taking place. let us stick with the china story. slump deepens highlighting the challenge for policy makers seeking to support growth as capital flows out of the country. give us the full gloom picture of the export and import picture. >> a lot of glue indeed. it is pretty negative reading. a big slump in china's exports. there is a bit of distortion from the annual chinese new year that does impact china's trade

numbers. even when you look through the holiday timeframe, it is hard to find any silver linings. this is as much about global demand as it is about china's relatively strong exchange rate. partners,g trading japan and the u.s. are buying less and less of china's goods. this has been a consistent pattern. it is hard to say what will turn this around in a hurry. this raises questions about the future for the yuan. a weaker currency may not solve what is happening. it is about the slow down in global growth. it shows you how much work the policymakers have to do to really keep growth on track for their 6.5% that they unveiled. anna: worth pointing out that

distortion. the deeper malaise is still evident despite that distortion. thank you very much. let us get more now from our first guest. allen higgins joins us on set this morning. good morning. i have this trade malaise. i will say it again. it sounds nice. give us your thoughts on what worries you about this number. -- doeswere you a desk it worry you because of what it tells you about the global growth story? it is a bit of a story about both. the me have some bloomberg tv. -- tea. numbers, theerve fear about capital outflows

dissipated a bit. china is trying to make a transition from a cheap manufacture and the oversupply that they have. to a consumption oriented economy. this is what we should expect albeit pretty dramatically add numbers in that context. we know the world -- the world economy is relatively weak. it is consistent with subdued global growth. especially with china moving from a cheap exporter come oversupplied to a new focus on consumer. it is a risk off day. anna: not dramatically. >> we have seen much worse risk off days. see the did not people's congress and china setting a target for trade this time around. i read that they missed that target in 2015 and decided not timet one this

underscoring how crucial the domestic economy is. we know the negatives around where china is slowing and what that will do to the global trade picture but at the same time we need to see the domestic story in china picking up. are there reasons to be cheerful around domestic china just yet? be a bit auto sales week. that was a sign that consumption is improving. you can go deeper. adidas innike and terms of classic middle level purchases. there, you aren't nike running at 25% growth and adidas at 15% growth. that is kind of concrete in an area where it is difficult to find chinese data. consumption is working. that is the way the chinese economy has to go. steel inhe oversupply,

particular. the supply side which means cutting down some of these steel mills. things tocannot find buy into in the china story. about the chinese currency? what are your expectations? some people are saying that even if the government says they do not want to weaken the currency specifically against the dollar, that might mean they have to weaken it against the dollar to maintain it against that basket. >> it is a basket approach. anna: it is very early. >> bloomberg tea is doing its trick. it is quite ironic, within those numbers, a big trade surplus.

normally, countries with a big trade surplus, you don't expect the currency to go down. --would be like calling expecting this was currency to go down. outflows,about o -- not trade. we have seen that with the reserves declining. that is the only reason for a week or china. anna: they said that was not capital flight. don't worry about that. it was chinese corporate paying down debt. that sounds like a sensible thing to be happening. >> that is sensible. -- theya weak spot definitively need to refinance that. there are fears about capital outflows. trade deficit, normally switzerland and

germany, currency would go up. anna: we have high expectations, don't toy -- don't tweak? we? spanishget german and outflows. will be testifying before lawmakers on britain's referendum on brexit. feds warns don't underestimate downsized risks. fisher says negative rates are working better than expected. more on those comments coming up next. ♪

anna: welcome back. let us get the bloomberg news. a loss for 2015 after

serious billing issues and customer switching away. a loss of 107 million euros. rwe's generation unit slid 45% to 543 million euros and we will be speaking to the cfo at 10:50 a.m. london time. a former goldman sachs banker has been caught up in an investigation into a malaysian investment funds. according to three people briefed on the matter. leister was issued a subpoena by the u.s. justice department in late february days after the bank conference yet left the company. should move out of government securities and into corporate credit because the u.s. will avoid a recession. pimco says high quality company debt, junk bonds and bank loans

offer a better alternative. the world's biggest iron ore producer has signed an accord that could see the brazilian company take a 15% stake in the australian company. after china's policymakers signaled their willingness to buttress economic growth boosting the outlook for steel consumption. governoreral reserve brainard has laid out one of the most detailed arguments by fed officials on downsized risks to the outlook despite several positive economic reports. decelerating foreign demand should encourage a prudent adjustment to the policy pass. fed vice chair stanley fischer struck an optimistic phone on inflation in the u.s. and weighed in on the negative rate policy across the world. >> critics have argued that qe along with negative interest rates is no longer effective in japan or in the eurozone.

that case has not yet been thatlished and i believe central banks still have the capacity through qe and other expansionaryun policies even at the zero bound. the negative rates that have countries --five or five central banks have worked somewhat better than many expected. toa: let us bring back in the conversation allen higgins. let us talk about this negative rates phenomena. i have a chart that shows this strange world in which we live where you can lend money to the japanese government over 40 years and get a lower return than if you lend money to the u.s. government over to go. -- over two years.

fischer says he can see areas where it is more effect of than people thought it would be. allen: he is probably talking about denmark. where it seems to be working quite well. we do not know the -- we don't know what would happen without these negative rates. that is an extraordinary charge. years.s versus two you just had the story about pimco and the attraction of corporate bonds. credit is definitely in the sweet spot. where it works, it makes credit relatively attractive. it means companies can refinance. we have seen this year some huge jumbo issues from exxon for example. they are able to issue debt cheaply to invest in their business. i think overall it is a positive. anna: how much appetite you have

your risk with those corporate bonds in mind? we have seen more risk appetite in march. investors are saying by emerging market junk status. disingenuousl is to some companies that have better credit credentials. how much appetite you have for risk in terms of those corporate debt? allen: we own a bit of both. we have a lot more in corporate bonds than e.m.. dem story is predicated on the fact that there tends to be less energy. the well-known story in the u.s. heisey -- high-yield is it is a big component of energy. we have appetite for both. in terms of high-yield, when a country is downgraded like russia, most of the russian corporate it downgraded as well. there is some solid companies there.

we have seen that in the subsequent performance of these assets. anna: ecb. the ecb having introduced them some time ago. five-year inflation. a measure of inflation expectations -- you can see it bouncing since the start of march. is that significant? does that put off the ecb of what they were planning to do? is the draghi indicator. he introduced this in jackson hole in 2014. comeid five-year forward up getting away from the commodity price influence. it has fallen below 2%. the inflation rate, five-year forward. look at where it is. the case of 1.5% from 1.4%. it has had a bit of a spiked. spike.

this indicator is why druggie will be aggressive -- draghi will be aggressive. there has been a bit of a jump, 10 basis points. trading at 1.5%. long-term expectations. anna: is it market expectations are around draghi? aren: market expectations -- the narrative is surely it won't be disappointing again. negative rates yes but some sort of tiering to help thanks. going back to pimco. a lower probability. we saw the bank of england do it in 2008-2009. there is a historical precedent for it. -- the swiss

national bank buys equities. it is a well-known equity investor as part of its reserves. i wouldn't be surprised if they bought berry little corporate bond related to this date. if they wanted to get darwin going and make it easier for corporations to borrow and get the corporate spread narrow, let us see. this is his ammunition. cut theu think you will deposit rates and increase font purchases? allen: that has all been discounted. the issue will be to keep dying government bonds. the negative yields. talking about low and negative yields. that is a big component. running out of bonds to buy in the government space. anna: maybe corporate. allen: if it happens, i will come in on friday. anna: up next, sticking to the

central banking being. mark carney weighs in on the brexit debate. what can we expect our head of his parliamentary testimony. ♪

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you don't see that every day. introducing wifi pro, wifi that helps grow your business. comcast business. built for business. anna: welcome back. 6:30 a.m. in london. china's exports slump deepens in february with shipments plunging 25% in dollar terms from the year earlier. experts extended its streak of tolines falling almost 14% leave a trade surplus. the timeframe included the chinese new year holiday but the slow down highlights the challenging environment for policymakers. the yen has strengthened for a second day. evidence that the second largest economy is slowing. japan's fourthr

quarter gdp shows the economy contracted at a slower pace than initially estimated. it was revised to -1.1% up from the initial estimate of 1.4%. european union leaders have edged towards and agreement with turkey. turkey has called on the block to double it's a. .u commissioner president call that a game changer. not workperation would without turkey's willingness to take back all irregular migrants who have been apprehended on turkish borders. today, we have show that it will be possible. all of the above mentioned decisions sends a clear message that the days of irregular migration to europe are over. nejra: wall street's average 146 --ell 9% to

$146,000. the biggest drop. poll was down 6% from the year-earlier even as the industry added jobs in new york city. anna: the bank of england governor mark carney will give evidence to mps later on the economic and financial costs and benefits of eu membership. two weeks ago, he evaded taking a stance on a brexit. our approach to forecasting events around the referendum is to take developments in markets and confidence indicator surveys as given and to feed those into the forecast. we are not making a judgment. the potential outcome about the referendum. regarding which side will win.

or an assessment about the concert quinces -- consequences. may run out ofy road to sidestep the issue. bring into the conversation allen higgins. and guy johnson joins us also. what kind of expectation to we have set out here. i was intrigued by one thing he said in the inflation report press release. there is a long list about the referendum that we don't want to say anything. guy: i think he will get very technical and dried. i think you will get pushed into a corner. let us see if he has been put into a corner. what assets do we look like and how do we figure out where they are moving? the pound has started bouncing back. people are focusing on the euro

side of the story. whereg at u.k. assets and the pound will move, but i would say look at peripheral spreads over germany for example. if you start to see mark carney getting pushed into a corner, then you could see those spreads surrounding the concern about further referendums and countries leaving, you can see those spreads leaving. put the turkey story on top and it could be an interesting day in the european bond market. anna: we had a great story on the terminal which talks about brexit. the report continued 220 mentions of openness. these are clearly the keywords that he wants to throw into the

conversation about brexit. allen: i would expect him to dodge. -- he kept talking about looking at the indicators and the confidence. if confidence is low, we will take some action. guide: he -- guy: he will be dry and technical. press will and the pounce on him moving one way or the other. look at the derivative effect. anna: he talked about the current account. mentioned that in difficulties with funding it. see he bears -- errs to caution.

that is was central bankers do. -- ling if you think about the currency account. you don't want to be going into negative rates. it is unlikely we will see cuts. looking at the rest of europe. what does it mean for the periphery or for investing in europe generally? the u.k. has more favorable demographics than a lot of the european countries and is likely to be the largest european economy in the years ahead. wheren see a scenario sterling goes up with the euro on a brexit.

sterling-dollar at 1.30. we are going to bring you full coverage of mark carney's testimony later today. asian stocks have dropped the most in about three weeks since data showed japan's economy and chinese exports are shrinking. on whatet more details has been happening in the overnight session. nejra: i had the chart here of the asia-pacific index. they are heading for the biggest drop in three weeks. this is coming after china's exports slump deepening. the exports dropping more than 25%. so much focus on china with the national people's congress on going. i want to show you brent crude. yesterday, this rallied above $40 a barrel.

it has halted, the rally there, -- 40.35.l above 40 yesterday, brent rose on the speculation that we might see producers agreed to an output freeze but we have seen that fall off today or cult its gain on forecast that the u.s. stockpiles will remain at the highest since 1930. china's crude imports rose to a record in february. the real commodity that was in focus yesterday and again today was iron ore because of its record search. 19% yesterday. the most ever. this came after chinese policymakers indicated their willingness to boost economic growth. that boosted the outlook for steel so we saw the price jump. this is the benchmark. it is priced once a day. futures in singapore are pointing to a decline in iron ore for today. theay see that drop when

price is updated. citigroup is still bearish on iron ore. you have axiom capital management saying the price to, rather than being a rally was probably just a blip. anna: what is the outlook on other metals? -- thethis is the met london metal exchange. this has surged 50% from a 2009 low that it hit in mid-january. we have seen this rally. it has largely been on optimism about china and the outlook for china. says look someow prices could tumble as much as 20% over the next year. a pretty good time for bearish bets. let us talk about commodities. the iron ore price.

that had a lot of people scratching their heads. i have the chart here as well. iron ore -- a 19% surge is unprecedented. all kinds of reasons have been suggested. we are retreating a little bit from singapore futures coming down. but not retreating all the way back to where we started. are things going on in metals markets? china the sale of narrative as part of their hedge fund trade. short covering there. with commodities, don't forget the subset of hedge funds. trend changes, the load judgments. as you have seen a slight

improvement, there has been a huge it short covering from these players. that combination -- that graph is quite extraordinary. anna: we have seen a quite strong rally in oil prices since the start of the year. up above $40 a barrel. that is quite a jump from where we were. mid-20's in the middle of january. component is a huge of a cta portfolio. as the trend changes, there will be a huge jump in that. area wherena, one demand is high is the chinese demand for oil. unlike other commodities. i can see reasons why it is bouncing. seeingtress that we were

in commodities coming even though that should be bullish for the world economy, although the focus were on the companies and countries that were suffering so much. aren't buying oil to pileup in your garage, what are you buying? allen: we are putting more money into corporate debt, from finances -- financials. a couplee focused on of negative areas in financials. well-known obviously, deutsche bank has been suffering and barclays to a certain extent. people have not focused on the good dividend news. looking at the french banks, dividends are up 60%. lloyds saw a big increase. there is good news in financials. anna: we have been preoccupied with the dividend.

the cyprus exit. we will be speaking to the country's finance minister. that is live from the eu summit in brussels. that is up next. ♪

anna: welcome back. the time in london is 6:46 a.m. the power unit in the u.k. reports a loss. its operating loss was 137 million euros compared to the profit of 227 million euros a year earlier. we will be speaking to the company's cfo at 10:50 a.m. london time. hasgerman drugmaker

fourth-quarter profits that have beaten analyst estimates. to 933.4 million euros. on sales of its pharmaceutical manufacturing equipment and we will be speaking to its cfo later. almost 9% in new york yesterday after he reported in the financial times that a -- ery investor a former goldman sachs banker has been caught up in an investigation into malaysian investment fund. according to three people briefed on the matter. am leistner was issued subpoena by the u.s. justice department in february days after the bank confirmed he had left the company. cyprus has been given the go-ahead to exit its bailout two

months early. christine lagarde has said the economy has been impressive. withs get more on this ryan chilcote who is in brussels. called it what you will. brave new world order new dawn it will be an interesting time inside perspective in that program of financial assistance. and from the imf. to discuss it, i am joined by the finance minister of}. thank you so much. let's talk about what could go on. looking at the bond yields on the 10 year, and they are right around 4% which in itself is not an issue. what is interesting is that they have been headed north. the question is, what if we get

a shock and we see bond yields rising again in peripheral countries. what will you do? said what could go wrong, everything that could have gone wrong did go wrong a few years back. since then, we have been hard at work. reforming and consolidating the economy. we have issued five and seven and 10 year bonds. we are confident that through the continuation of this hard work on the ground, we shall convince the markets that cyprus is now safe and that we can continue financing. you could ask the same question to any economy. we are no different anymore than

any other economy which has to finance its needs from the markets. the best answer is that we must remain focused and disciplined to continue working towards reform and consolidation so that the markets can feel the comfort that is necessary. point doone -- at what bond yields -- than what cyprus used to borrow. back in the good times. -- there has been some nervousness not related to cyprus as such but more broadly speaking. trend is basically

downwards. over the last three years. we are quite confident. ryan: when you see cyprus re-gating -- regaining investment grade? that would make you eligible for the ecb bond buying program. drive things down. what i can say is that we shall do whatever is necessary to convince the rating agencies that we will remain disciplined and continue promoting those reforms which are needed in order to make cyprus and even more competitive economy. as collateral for ecb financing once the country exits

its bailout. >> the point to make is that the need and no longer in they have actually been able in the last three years to repay more than 70% of the liquidity of assistance that they had received during the banking crisis. the trend is very positive. in that direction. stabilized, they are going up in the banks are no longer in need of this liquidity help. ryan: is there a figure of how much of the ecb financing would have to be converted? >> i would not consider that as a given or as necessary. have been happening fast and that more than 70%. ryan: we were talking about -- givenrket access

your existing cache buffers, how long can you go? >> a very long way. needs for the next three years are more or less coverage. swapse started through working on debt which expires in 4-5 years. hardve been working very as far as public debt management. we will not be in need of financing. not say we will be out and about in the market. ryan: is there a realistic chance for reunification this year? >> i hope so. it is a top priority. i'm afraid we are not there yet. ryan: how would it be funded? >> there is a huge economic benefit.

i don't see a cost but a benefit. the opening up of commercial and investment, not just local but in the eastern mediterranean. ryan: thank you very much. this is the finance minister of cyprus joining us with an optimistic and a list view of his country's future now that they have exited the program of financial assistance. let's switch gears. the end power unit in the u.k. reported a loss in 2015 after serious billing issues and customer switching. let us look more closely at the numbers. good to see you. a big headache for them in the u.k. around this billing problem. >> it has cost them a lot of money. they have had to pay large fines. we expect them to announce that

they will lose positions from their u.k. workforce. this is a company that has in at the bottom of customer satisfaction. anna: what about the rest of the business? unit ispowergenerating also struggling at a time when it is difficult to achieve the power prices they once did. rwe is under a lot of stress because of what is happening in the german power market. tot means they have no money invest in the german business or the u.k. business. in germany, they have had to scrap the dividends. a big net loss. a company that is under a lot of pressure. renewables, and retail into a new company. we have some details about its listing. >> the new company will be the

business is that have a bright future. the other company will have the power plants, the fossil fuel power plants struggling to make money and reportedly the nuclear power plants which have huge liabilities this commissioning those plants. the idea is that the good company can grow and take advantage of what is happening in the german sector. anna: what are your thoughts on the 19% spike we saw in the iron ore prices yesterday. what is your take on how we ended up here? seeing extraordinary moves across the commodity etc.. from oil people are now worried that they have seen the bottom and they are being caught short. all of this has the hallmarks of a short squeeze. up 88.7% from yesterday.

we will speak to rwe's management later in programming. we will take a short break. more china when we return. ♪

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you don't see that every day. introducing wifi pro, wifi that helps grow your business. comcast business. built for business. anna: china's trade tumbles. the nation's exports slide more than 25%. connie weighs in. the bank of england governor's stretch into the brexit debate as he gets ready to testify before parliament this morning negative rates debate. the fed gives a nod to interest rates below zero. he said he would rather not go there. ♪ welcome to count down. i'm anna edwards. it is 7:00 in the morning here in london. let's have a quick word about what we are seeing at rwe.

we brought you the news at the top of the last hour about how the losses in the u.k. business. we had confirmation about the job cuts that have been talked about. will kennedy was talking about how this was expected. rwe cut 2004 into jobs. -- 2400 less than half 11,500 worked for the company. stop justoing to start in limiting a two-year recovery program. less than half will come from their own staff. we've got some breaking news coming in from the german economy. production numbers being watched closely good it looks much stronger than anticipated. their production up 3.3%. that is much stronger than

expected. the euro yen number up by 2.2%. that is a contraction of 1.6% year on year here at we are looking -- year on year. we're looking at how they are balancing the negative coming in from the chinese economy. we have seen it in the import an expert story. let's put the data to one side and look at how we are expecting to open up. i mentioned the chinese data. that took the edge of some of the trading in the asian session overnight here it -- session overnight. we are down .6%. the ftse 100, the cac all expected to open up in negative territory. a quick look at the risk radar. how do we see ourselves performing on some of these key assets as we head into the trading day? oil is weaker. we are above $40 on brent. that happened yesterday.

40.34. money going into the japanese yen. a fairly risk off day. checking in on iron ore, and 90% spike coming from iron ore. the price down 5.2%. here's caroline p it caroline: european union leaders have edged toward in agreement -- edge toward an agreement with turkey. double its financial aid to the country. the eu commissioner jean-claude juncker called the plans for turkey to take back a real game changer here it >> -- changer. all migrants who have been apprehended. today we were assured it would be possible. all of the above mentioned decisions have sent a message

that the days of irregular migration are over. caroline: the bank of england governor mark carney will give evidence later on the economic and financial costs and benefits of eu membership. he has warned of potential headwinds facing the economy. he appears before the u.k. treasury select. michael bloomberg the three term mayor of new york says he has decided against entering the 2016 presidential race here it gets presidential race. in removes -- it removes one of the uncertainties. majority ownere of bloomberg lp, the parent of bloomberg news. -- the bigs drop since 2011 according to estimates by the of state comptroller.

$25 billion down from a year earlier, even as the industry added jobs. global news --global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. much,thank you so caroline. let's check in on the asian equity market. as we got toward the end of the session, china turned around. now positive by the close. toi wish i knew the answer why we saw this rally. typically, this market down since 2002. six straight days, the longest streak of daily gains on all the way back to the summer. we are still down 10.5% on the shanghai composite. take a one-year chart. a chart you can make out a downtrend that we are heading lower.

2900 is the level for the shanghai composite. back to what happened today, days of decline. yields are on the way up last i checked -- on the way down, my mistake. we are fairly elevated compared to yesterday's levels. wasonly bright spot i get before markets actually started. australia was one of the first markets opened up -- to open up. we saw a slight bump up from a commodity rally. brent was over $40. those were the magic numbers. i and or at 60 dollars. that lasted for about an hour. thanks started to go downhill. japan opened up. we got the gdp numbers. midmorning, china came out with its trade numbers. the sentiment is touchy at the moment. asian shares had a bit of a run-up.

anna: let's stick with the china scene. china's exports slumped deep more than -- deeper than expected in february. capital flows out in the country. for more let's bring in enda curran. and the, good morning. , good morning. point out the difficulties in determining data. andreas: because of the week long -- enda: because of the week long -- that applies to export numbers. part of the issue is not just the factory shut down for a week , the base of fact is skewed. lunararner halt -- the holiday was at the beginning of

february. this year it came at the start of the month. , i think theaid feeling that numbers are still pretty downbeat goes to show you the challenge ahead for the policymakers in china. art of the story is just about week global demand -- weak global demand as exchange rate. yet look at japan, europe, the u.s., they are buying less of chinese gold. this is been a trend for a number of months now. even after the yuan has weakened, that is not a good signal for the demand for chinese goods. when you have a weak number like this number on the goes to show you that it would take really significant exchange rates devaluations for china to broker the export side of things. in the near term, when you authorities, it is

about a stable yuan. look for more on the stimulus and physical side. look for more on these -- on the fiscal side. look for more from the central banks. anna: enda curran, chief correspondent from hong kong. joining us now, andrew parry. andrew, great to see you. let's talk about this latest eta out of china. it has some people scratching their heads. it has week numbers. there are difficulties in interpreting it because of the new year holiday. at the same time, it tells us pretty negative things about the effect of the global economy. how do you view it? andrew: the global context is important. if you look at the run of pmi u.s., the u.k., the eurozone, japan, china, korea, it is painting a picture of a

slowing economy. not always that dramatic or as the market fall suggested. six consecutive year where the global gdp growth rate would of diminished. this is after years of qe did we are in a very low growth environment. anna: china's exports and imports over a five-year period grinding lower. from when you are saying about the global growth story, often tied in with what happens with global trade it we have seen a slump. how do you invest around that? andrew: investing in this environment is about looking for a needle in a haystack. growth is becoming a diminishing modesty. we are seeing that in the u.s. -- diminishing commodity. we are seeing that in the u.s. you are seeing a growth recession at the corporate level. your margins are at a high,

national income data is saying profits are under pressure. you have a different picture from the economic stats what the companies are beginning to see. with -- when the john -- when -- itminal gdp rate becomes a competitive world. what we focus on is finding those companies that continue to grow, irrespective of the economic conditions. " what are you looking for the moment? are you looking to buy into consumer stories in china? that domestic demand story will take up the slack from the old engines of growth. where do you look for the growth? onrew: the jury is still out whether the huge amount of stimulus we have seen in china is going to work good to urge to huge competing forces. exports diminishing very rapidly. then there is desire to

stimulate domestic growth. spending government very sharply year on year. they have increased bank lending , driven by government policy, not by demand. interest rates have come down a long way. so far, the domestic economy hasn't responded very well. it is less about making a top-down called. trying to find the individual companies market position, structuring, can drive growth in this day microworld or want to find the ideas from the bottom up, rather than making top-down sector calls. data, i amthe german skeptical about the number there, month on month. anna: what can central banks do about all of this? it shouldn't be the central

banks they do anything, it should be the government. andrew: my mother says i hate that mark carney. her first sentence to me, because someone her age has seen the interest rate diminish by 89 -- 80% to 90% is of central bank action. i was thinking about negative interest rates. where do you go? challenging draghi later this week. it begins to send a negative message. it could drive up the savings ratio. six or seven years of unconventional monetary policy, the efficacy of that. what comes next? that is a big question. this is a banks have been doing all of the heavy lifting, particularly in europe are we have not had that will to think of another way to? sluggish growth. from here, the only lead is only fiscal.

governance desk governments around the world seem reluctant. anna: andrew, stay with us after a short break. andrew parry, head of equities, stays with us. we will talk about that negative rate empire that he is talking about. sally fisher nosing that negative rates have worked better than expected. in the u.s., they prefer not to go there. we will analyze that after the break. ♪

anna: welcome back. this is countdown. 8:17 in frankfurt let's get the bloomberg business flash with caroline. caroline: out of the cut 2004, empower has to jobs. it is been operating off of -- that compares with a profit of 220,000 destitute to 20 million

euros. -- that compares to 220 million euros. burberry shares fall by 9% in new york yesterday. that is after reporting that -- close to 5% and the company, tousing desk causing them seek help from financial advisors from any potential takeover. a former goldman sachs has been caught up in an investigation and immolation state. -- in a malaysian state. lates given a subpoena in february. [indiscernible] pimco says investors should move out of government securities and into the credit because the u.s. will avoid a recession. sovereign bonds and germany offering negative yields and

equity valuation stretched. risk.oans offer a better the world's biggest iron ore -- it could issued see the brazilian company taking stake in the australian miner. chinese policymakers -- buttressed economic growth. that is your bloomberg business flash did anna? anna: he has laid out one of the ont detailed arguments downside risks on the out like -- i to several economic reports. -- outlook to several economic reports. sally fisher struck an onimistic tone and weight in the negative rate policy that we are seeing implemented.

qecritics have argued that with negative interest rates is no longer fit in either japan or possibly in the eurozone. that case has not been estimated -- established. i believe that central banks have the capacity to qe two run expansionary monetary policies. on negative rates that have been becausefive countries have five central banks worked somewhat better than many expected. with andrewget more parry who is still with us. once moresher empirical evidence on negative rates. maybe they delivered better-than-expected. i have a great chart here that shows the world we live in. you can lend money and this is

the japanese 40 year yield. you can lend money from the japanese government for 40 years and make less money. this has to do with the negative rate. plenty of strange things going on in the market. andrew: interesting consequences that we have to look at. optimistic to say that they work with the ecb poised to go negative. why are they for -- why are they going further down the economic rabbit hole with negative rates? is this coercion to go into more volatile risky assets. it is distorting the world of risk. if you're a pension fund, you look with our forming long bond yields. deficits continue to be under pressure. every time interest rates at the long and lurch down, the

deficits rise. u.k. companies have cash of the balance sheet. losers indefinitely this. ecb: you mentioned the going further down this road. it talked about all but one talkmists that we surveyed about cutting the deposit rate. the quarters of economists say an increase is what we're going to see it -- going to see. a measure of inflation in the eurozone. this is why they are thinking of doing it. it is not about expectation -- inflation expectation. the fact we have seen such a move downward, we're still at 1.5%. it is below 2% and that is where they wanted to be, isn't it? setew: can central banks

inflation expectation? it willsignal that flick around the other way and send a cautionary message, not an optimistic message. when you get these just get to these extremes, the reaction is to save. i was traveling in the states last week, and there is no feeling of imminent recession did the talk is all about ticks. one of the aspects about politics was the feeling of exclusion. the lack of benefiting from the economic expansion over the last six years. anna: what is it that drives the -- a more robust economy joining the savings rate higher. in the case of ecb, we could see people sitting more if rates go more negative because of the message of caution. what is it?

in both economies, it is that degree of uncertainty here it policy change in the u.s. certainly on the quality of jobs being created. not on the actual wages earned because 80% of those jobs were actually in low-paid areas. actually the number of high paid jobs have diminished over the last year. it is that economic uncertainty about whether it is filtering down. whether inflation is still there in wages. still there and earnings. people are reflecting that and wanting to save more. and there is a message of uncertainty on direct central-bank policy. will --here does people people will err on the side of caution. -- anna: maybe the rabbit out of the hat that draghi will deliver will be

about driving things. buying corporate bonds. what is your expectation for the rabbit? of rabbitshas a lot in his magic hat. why is he pulling more out? yes, by more corporate bonds. they will ease credit conditions . they will look to extend the range of asset purchases. if you look at japan, the bank of japan owns 50% of the market and intervening in the equity market. been great for the equity prices. it comes to a point where central banks intervening in asset prices again is not a productive thing. they should be setting monetary policy that accommodates growth did they should not be trying to coerce investors into buying assets, taking more risk than based necessarily want. -- then they necessarily want.

that is the boring side of month -- that is the -- building up risks in certain parts of the economy. anna: d.c. governments stepping in -- do you see governments stepping in? andrew: i think the g-20 told you that. no, not at the moment. anna: thank you for joining us. andrew parry, hermes management. here is your day ahead. spanish industrial production. 9:15, bank of england mark carney testifies in front of lawmakers on the referendum. we asked questions on that subject. at 10:00, we get a reading on eurozone gdp. on the move is up next. they are going to be speaking to the president and ceo of filtered worldwide.

-- hiltonk for the worldwide. the outlook for the hotel. london. in see you tomorrow.

♪ >> welcome to on the move here and it is 7:30 in london. i am guy johnson. along with hans nichols. he is in berlin. here is what we are watching. carney wasted. the governor is dragged into the brexit debate as he testifies before parliament. can he avoid ticking sides? that is the question you'd germany gets into gear. industrial production surges leaving draghi dealing with a two speed europe. china's trade tumbles. all and