>> we are going to take you from new york to berlin. falls one day after janet yellen. states hef england could hurt economic growth. executive in the .inor industry >> nike announces self lacing sneakers. we will hear about nike's strategy from chief executive mark parker. to the markets desk were julie hyman has the latest.

julie: i am still wrapping my head around self lacing sneakers. we are seeing little bit of a pullback in the united states. taking the dow down. trading lower on the nasdaq. financials are the two worst performing groups. specialtybulence in pharmaceuticals. energy helping to counterbalance some of the losses. we are seeing gains in some of the commodities. pretty much across the board. 1.4% increase. seeing in down by nearly 1%. the fed saying it did not want

to support further strengthen the dollar. i want to take a look at caterpillar, which is one of the stocks we are watching this morning. caterpillar shares have been bouncing around. they are not much changed. this is our new chart of the our. -- of the hour. this particular one looks at the fed being good for caterpillar. caterpillar shares have gone up. you have to extrapolate two reasons. seen dollarave weakness, that has been good for exporters. to, commodities have recovered. commodity producers are caterpillar's they customers. caterpillar coming out saying its fourth-quarter estimates are worse than estimated.

mark? take a look at european stocks. it is been sort of a reaction. there have been two rate hikes in 2016. -- there arekets concerns about the global economy. that is the message we should take away. that is why we are seeing declines across europe today. 600 -- most of the industry groups are falling having a bigeurope story within the mining industry.

caroline, i made a lovely chart. chiefsam wash has become executive, he has outperformed his big three peers. all these companies are trading lower since january 13, 2013. only down by 40%. anglo american down by 70%. he is underperformed his big peers. he is up 20%.

the other two are up 30%. ceos announced their , another way of putting it, are leaving. with davideck in cora. david: secretary of state john -- y >> they are responsible for genocide in areas under its control including christians and muslims. what it says, what it believes, and what it does. groups have push for the

declaration. obama's nominee for the supreme court seat. mcconnell says that he will not get a hearing. the governor of michigan has appeared on flint's contaminated water. regulators switched flint's water source said it polluted the water. washington post reports that the president and constituents trying to replicate the success of his campaign. is the most active sitting president in decades. emergency inspection came after the electrical fire.

global news 24 hours a day powered by our journalists. today of's start with the big bank decisions. is that the big take away? this is certainly the first time the bank as a whole expressed how this will affect the economy. this is the first time we have seen this in the official minutes. -- doeses the investec

the domestic economy look fine? they are highlighting the emergent -- emerging markets. domestically, they say inflation should pick up. mark: it is well below its target. where are we on rates? with the uncertainty surrounding the referendum, what are the projections of the first interest rate hike? >> that was very interesting. there was no mission of a cut. last month, we had carney thing the bank had room to reduce. we had another official saying it would not take much for him to vote for a cut. today, there is no debate about that. suggest someket

the bank doest, not want to go there yet. mark: amateur houston on the banks of england. beenntral banks have loosening policy. out.esults of paid in europe, we are seeing stimulus of action hitting a bit of a wall. thank you for joining us. what is going on? oil and gases doing well. health care is on the downside. european stocks are lower.

european stocks are trading flat. >> we are taking a step back months ago. i talked about my expectations that we would get a rally. at that point in time, sentiment was very bearish. because,arish friendly, people were concerned about the global economy. earnings -- companies have been down. a rally off of that low was not surprising to me because sentiment was so negative and people were positioned so bearish they. we have had this large and more aggressive rally that i predicted. i don't think be can make too much of that. the fundamentals have not

changed all that much. rallyew is to sell the kind of market. how long will miners outperform? we are starting to see it pick up. are you expecting that to continue strengthen that industry? >> some of that is dollar strength. that is related to central banks and to the fed. that it willing slowly moved to a path of raising rates. at the end of the day when you think about the miners, it is all about global capacity. undisciplinedt of capacity in china. that takes a lot of time to work through. you don't make a policy decision to remove that capacity. while we are going to see

of the day,the end it will take time for the capacity to come out. i am not all that bullish about it long-term. they are rising principally because of the fall. it's a long dollar a mistake after yesterday? the dollar, or call was for a much stronger dollar. action is going to bump around. currencies have been incredibly volatile this year. it has is quite concerned for equities. if you look at the rate differential between the dollar , it isar-based credit been persistently widened.

we think the dollar remains relatively strong. fronton the equities -- who the rest of 2016 would you expect to outperform? preference is for european equities to outperform on it basis. it is not a fundamental call as it is one based on central bank action. that certainly where you are fixated at the moment. will janet yellen make a move later this year? ♪

♪ i am mark barton. hine.m caroline some of the biggest news stories. volkswagen is in talks in the u.s. about picking up to funds. fund would be administered by the epa to promote clean transportation in the u.s. the other one would be required by california. arch madness is not just a challenge for the nation's college basketball team, it is a challenge for time warner. they will be crowned on a cable channel.

that sportingg events will pay off. that is your bloomberg business flash. insight onget more the latest central-bank decision and how the markets are reacting. thank you for joining us. andrew, let's kick off with the fed. changing outlook for inflation. to looking at global growth concerns? >> i would not have a problem of them looking outside of the u.s. but the market is beginning to sense is that they do not have a consistent story from meeting to meeting to meeting. meeting,e they have a they change what they are focusing on and change how they are reacting to data as it comes in. >> we were all its betting that

janet yellen will focus on a labor market economist. of the about inflation, or lack thereof? seem clearly focused on inflation. if you look at core inflation measures, they have been rising where theylook at are, they are already hitting their year end target. the unemployment rate seems to be on autopilot and we are already hitting the inflation target. if the fed was data-driven, they are correct. they would have followed through on their forecast from december and moved rate higher. i think that janet yellen's arguments to the contrary do not ring true. it leaves us wondering exactly how sensitive are they to changes in inflation, unemployment, or whatever else

he happened to be looking at at the time. need does the u.s. inflation to surge in other parts of the world? >> oh boy, i hope not. whatever you think you can control inflation, it ends up badly. of of the characteristics the central bank is that they take inflation seriously. if they were to argue that it should run hot to make up for weakness earlier on in order to boost overall global inflation, i would be quite worried about their ability to manage that piece as it gets larger. from four to move two. next oneou think the will take place? the next hike. >> our forecast is for two rate

hikes in september and december. janet yellen did us a favor yesterday. i don't think she did the u.s. much of a favor. that is what you will see that april will be an evaluation month. june is a meeting to watch. we can all take a vacation that day in april. >> what blew me away was the fiscal risk. you heard the bank of england starting to talk about how it will affect investments. this is an election year. the economist intelligence unit putting out the top 10 global trump becomesnald president of the u.s. how should janet yellen look at political risk when looking at the data? -- i find it hard

to believe that people worry so much about politics. the u.s. government is set up with checks and balances. i don't worry about those risks as much. i don't think central bankers should worry as much either. that is a change in the economic structure. in the u.s., they are not talking about changes in the economic structure, but changes in policy. we can argue with policies are better or worse. the idea that it will represent the fundamental risk to u.s. activity strikes me as a little much. thank you for joining us. still ahead on "bloomberg markets," oil inventing today following the fed decision. have we seen the bottom of prices this year? we will hear from the executive director. that is next. ♪

♪ mark: you are watching "bloomberg markets." i'm mark barton with caroline hyde. and gone?ttom, chilcotewith ryan earlier today. the forecast may actually be wrong. >> if you get bad news from the , if ouronomists expectation of u.s. oil production declines is on the wrong side, it could be much more resistant. the question is about iran.

they think maybe iran has a few more barrels. what is your view? >> 500,000 to 600,000 barrels a day does not take major effort. you need a substantial amount of investments and technology to flow in the country, which are not be taken for granted. >> using maybe the market is anticipating that that will come faster? >> you have to be very careful. it does not translate into an automatic increase in the country.

aboutcrease may be 500,000 to 600,000 barrels a day. at the moment, they are rallying after a very bullish fed. still ahead on bloomberg inocencio. ramy we will be looking at the rio tinto shares. ♪

♪ >> welcome back to the world headquarters in new york.

i am caroline hyde. mark, the british takeover. mark barton. you are watching bloomberg markets. the check in with the first word news. hello, david. david: vladimir putin has a warning for extremist groups in syria. he said he will build up his forces again, in a few hours if necessary. he will continue bombing the islamic state and other militant groups. they want to understand how the november attacks in paris unfolded. reenactors are reenacting the attack at the bataclan concert hall and at the national stadium. gunman pledging allegiance to the group attacked a rock show at the concert hall. makes -- claiming claiming responsibility in ankara. they targeted a similar attack using turkish army officers.

hillaryy of state clinton was denied by the national security agency according to newly released e-mails. saying that she used private e-mail accounts through her blackberry to exchange messages with top aides. we are following a 29 hour shutdown. the power cables will be expected. it came after an electrical fire, one that is similar to one that killed a passenger last year. 26 areas needed replacement or repair, including what is called "showstoppers." bloomberg news powered by our journalist in news bureaus around the world. carolyn: making its way to the boardroom. naming top copper executive john the mann to replace that has led the company since 2013. it coincided with a metal slump.

there has been a stock decline for the last three years. we are joined by jesse. what do we know about jack? what are his leadership skills? how would he take the company forward? jean-sebastion of js as he is more commonly known, was kind of a surprise. has been theceable project in mongolia. and a norm is mine that he has been involved in. there are delicate negotiations with the government and of the threat of a potential nationalization. he has gone ahead and is wrapping up financing. charge samhould we walsh? that is our job, judging ceos

that are leaving. i've made up of beautiful charges for you. 4 listed in the big london have fared since walsh took over. they are all dovish. decline,all sporting but rio has declined 40%, the best performer. he has outperformed his peers, no mean feat in the last three years. >> people will judge him fairly kindly. this is one of the most turbulent times in the commodity markets. he has outperformed his peers. he slashed costs. the balance sheet is looking better than most of their peers and investors. his peers have awarded him for that. mark: what is the outlook? a lot of hard work has been done already for js? >> the most interesting part of

the announcement is that it could be interpreted as the beginning of the next phase of corporate life. he is only 44. we will see the company through the next phase of growth, which will be heavily dependent on copper. some may interpret it as him calling in the bottom, bringing in a fresh face, to leave the company through the next phase of existence. caroline:ou think -- do you think it's right that they are calling a bottom? areou think that they starting the expansion again? comments seeing more from early companies talking about the potential for activation and growth, stemming from investors on where that will come from. in cost-cutting mode for four years. consensus is that we are still going to see prices come along the bottom for some time. it is a supply story.

markets could be washed out. caroline: where do you think js should be focusing? more growth opportunities? where is the demand going to be coming from? we are in a downward trajectory looking at china. >> they're quite clear that copper is the future. fundamentals in copper look more attractive than other commodities, like iron or which has been their traditional staple. they have a hugely prospective copper mined in the united states and arizona, the revolution project is $6 billion and will come on stream in the next decade should take get the right permits from the government. theill supply copper to united states. the organic growth him about his where it will come from in terms with organic growth and acquisitions. there are projects in africa,

indonesia. those could be there to number one targets. the copper king for the u.s., always great to have the lawn. you on. -- to have covering all things commodity in the u.k. new luxury?he sales of high-end vintage clothing and luxuries are soaring. what is driving this phenomenon? ♪

mark: this is bloomberg markets. i am mark barton in london. hyde in newroline york. i love talking about all things vintage. market, secondhand high-end is soaring off the shelves. what is driving this phenomenon? mark barton's desire for all things old and y.ntage- they are wholesaling to stores. there is a shortage rather than the u.k.. you cannot move for a vintage store. how do you ensure you are buying luxury? that you have the best quality? >> we are very careful to pick trend relevant products. vintage is a big pool

ultimately. we want to curate which we think high-fashion customers are looking at from a vintage perspective. we have traveled for the last funny three years throughout the world to find dealers, collectors, options, and look at and theelements longevity, the timelessness, of what we are buying. caroline: where's the demand coming from? are you seeing international growth? from asia? they previously fueled the drum up in luxury demand. is it true for vintage? seth: asia has been lagging behind the u.s. and europe with because the idea of a preowned item is against what they believe. .e have exposure in europe in america, the biggest growth is with the american market. mark: where are you sourcing all of your goods? what margins to you have? seth: it varies. we work with so many brands.

the markets are certainly more competitive because of the auction markets. whether it is in now, louis vuitton, or the like, it goes between a preowned interpretation of some thing that might be a few years old to a true vintage item. margins will be across the board depending on the era and piece. mark: what is your relationship like? you are putting a new store in beverly hills. company that we have been talking about, one thing lookinghave been at is reselling goods for thousands of dollars. seth: we don't have a direct relationship with them. it is hard to speculate their opinion. they have made such an incredible product that is has withstood the test of time and

created an internal secondary demand. it is resonating, and is a good reflection for the brand that it has shown consistent demand and passion. caroline: if i had to buy one thing and one thing only that will be building in value, what would it be? birkin and kelly bags seem to be the market. you have to be on a waiting list to get them, they are limited distribution. year by year they have increased from prices. they have continued demand in the second day markets for those who have coveted additions that they could not by. caroline: what about the stories in london and paris, designers are worried about fakes. people come to institutions like bloomingdale's and harrods to ensure they are getting something real. how to prove to your customer

base that what you have is legitimate and that you do not buy the wrong piece? seth: that is a great question. authenticity is the key to what goes around comes around the market leader. we have been in the industry for 24-years with our soho boutique. controls, weternal have four different inspections that we put every product meetgh two inch or they the criteria of authenticity. they go through details such as a stance, all in grand's, leather-types and stitch quality that a very specific. -- that are very specific. what goesfounder of around comes around. you can always read more about luxury in bloomberg pursuits. right now let's check on what is happening in the equity markets. we have roughly two hours to go

until the end of the thursday session. no change in rates from the bank of england. a cut in norway. no change in switzerland. it has been a 24 hours after the fed turned dovish and european markets are responding in a negative way. that is along the market, the stocks europe 600 is down. the bond market how are they faring? their aversion to risk appetite? it is up against the dollar, that is boosting commodities. the euro is lower against the pound. aregerman bund yields declining. that is a flight to safety. to be corporate stories, it is all about the man at the top of rio tinto. leaving the top corporate executive. shares are higher. andrew witty, the chief executive of glaxo. down next year after a decade at

the helm. go to the u.s.. abigail doolittle has the latest from the nasdaq. tell us more. one of the worst performers is see trip.com. a better than expected fourth-quarter, but the first quarter earnings are expected to 30% for 2016 and more than year-over-year. a negative drag. it looks like the partnership is going slower than expected. we do have capital cutting their price. the left of the stock long-term, something that might be supported by the stock hugging the support of its 200 day moving average, suggesting that downside is limited. mark: what else is weighing on the nasdaq, which is in the red? abigail: the worst is indo international. it is down again.

down 50% year to date on a myriad of concerns. today the first quarter guidance head of the barclay conference is coming down and in branded revenue. market is down 65% on his record peak from last year. it is unclear what might stem those losses. mark: thank you. muchine: thank you very indeed. coming up on bloomberg "markets." nike going back to the future. the new racing technology. we will hear from the company's chief executive about the self tying shoelaces. ♪

mark: now to the bloomberg business flash to look at the biggest business stories in the news.

the u.s. trade deficit declined slightly in the final three month of 2015. for the entire year, the deficit jumped to the highest level in seven years. the deficit was currently down 3.6%. the deficit for the year rose 24.3%. central bankers keeping interest rates at a record low. they also repeated a pledge to intervene in the currency markets if necessary. this was national break described the frank as significantly overvalued. the norway central-bank dropped , .5 ofe to a record low one percentage point. the latest business flash. caroline? world's: nike, the largest maker of athletic apparel, is showcasing new innovations. lacingng, a self

sneaker and anti-clog cleats. stephanie ruhle is at nike's innovation and design event. she is talking to the company's chief executive, mark parker. stephanie: we are at your innovation event. we are not on the field. destination for fashion week. who is nike today? unveiling new're innovation. app, which is personalized for athletes. it will make it easy to get fit. a very important step. a connected app that allows you to have your own personal store to get fit, in terms of what

your personal goals are. it is all about personal service that is adapted for you. we have a range of innovation and projects across the product spectrum, from new forms of nike of, breakthroughs, new forms nike claimant digital natives taken to the next level. in terms of digital, we are often confused. you are the first in terms of the fuel band. many have said, may be connected to miss is not for nike. you are leading in a big way. how, and is it your ties with apple? mr. parker: the ties with apple are one part. being more personal, giving athletes and experience that is easier, connected, simple, personal -- is really what is important. stephanie: what about the bands? mr. parker: the access to data is not enough. it is part of the process.

people will be collecting data with other devices. that is not what we are doing. we are not creating the devices. the devices can be input, and that is an important part of making it more personal. stephanie: you mentioned climate , last time it was the climate cleat that was your favorite. it is on the board. what is your favorite? mr. parker: it is like asking me my favorite child. hugedaptive lacing is a breakthrough. i was on the set of "back to the future" over 30 years ago. to see that idea now come to reality and be available for everyone is a dream. stephanie: it might be a dream, but why did you need to make it a reality? do we need that kind of technology? mr. parker: we always push the envelope. it is about adaptive performance.

you will see more shoes and products that adapt with you in real time to help you perform at a higher level. stephanie: you talk about that. what product do you think that we really need? right now we have seen retail be slaughtered and china slow down. your china orders are great. what do you know the rest of the retail climate doesn't? mr. parker: it is about connecting with athletes and consumers. when i say athletes i mean world-class athletes to everyday athletes like you and i. stephanie: do think i am world-class? mr. parker: world-class in a lot of ways. i'm talking about olympic level. the important part is to connect with the athletes and give them something they need and want. it could be from a performance standpoint to perform at the highest level, but also aesthetically puts them in the right frame of mind.

something they feel good about, it is empowering. stephanie: are you still on track? mr. parker: women's fitness is incredibly important. women are more active today than ever before. it is not a trend, it is a movement that we expects to continue, and we want to lead. stephanie: you do not feel like it is a catch up? and we think about women we think of things like lululemon and see you sever ties with sheriff over -- maria sharapova. the opportunity is huge, but what results do you have that prove you're getting there? mr. parker: the women's side is growing at a faster clip than the men's business. we expect that to continue. it is a smaller percentage of the business today, but we expects it to outpace men's for the foreseeable future. stephanie: what about the lebron

contract? you do not have steph curry? mr. parker: no, but we have amazing athletes. we should not forget the athletes that nike has. a range of across all sports. the athletes drive the inspiration, insights, and innovation. stephanie: do you feel the temptation to go off athletes. we have seen what adidas has done with kanye west. many people say kanye west is a marketing expense. will you stick with athletes? mr. parker: we are all about athletes. our core is athletes. it is not just the world-class athletes, it is all athletes. we might work with someone like kevin hart who was here yesterday. an amazing athlete and entertainer with amazing energy. having him here to be a part of the event to unveil the innovation was incredibly

appropriate. stephanie: if there is only one product we could see today, what should it be? mr. parker: the one that is capturing the most attention is the adaptive lacing, the power lacing. the gateway into the future of adaptive performance. stephanie: i'm excited to see it. mark parker, ceo and chairman of nike. back to you. caroline: a legendary athlete and her own right, it would seem. thank you, speaking with the ceo of nike. next, alan greenspan is coming back. ♪

bloomberg's world news headquarters i'm in for betty liu. mark: you're watching bloomberg

markets. on bloomberg television. will take you from new york to london and canada. the fed, the bank of england, the rate is steady. will talk about what this means for the market in the global economy carried -- economy. emma: goldman sachs could increase 32% from a year ago. and, a bloomberg exclusive. justin trudeau tells us his plans. we are in the trading day.

julie haman. julie: mostly, the nasdaq is in the red. looksw in the s&p 500 like there is a commodity led rally. take a look again at the imap on the bloomberg. we are followed closely by industrials and energies down. it is no the only group down. overallh the s&p contributing individually, the most in the games today after the logistics company brought in earnings for the full year. if you take a look at the shares that are rising, caterpillar shares have turned around. they had the first quarter forecast that was lower. unfortunately, they do not have that chart.

you will have to take my word for it. also, it is lower. this is the one from the lagging group now. it is a continuation. they are concerned about drug pricing. mark: lots of mixed inputs from earnings today. they have an electronic speaker. first, own a look at the apple year today. it was the green at 7/10 of 1%. that is because today, it is also higher even know it has been legally around a little bit. we have seen it did.

those shares are down. there makes tear. have a demand for the iphone. if you look at the supply change here in the middle, apple is the biggest customer. it accounts for 24% of the revenue. continue trying with a lagging delay indicator. made the stoxxt 600. it was down 1.8%. it has been trading back ever since. fact, the mines are rising. look at the german analyst.

it said the expansion of the discount in the euro brand was counted as a cost of this year with the average eating into gains from oil prices. world's largest cement maker. earlier today, the market was expected to grow. even though they had the slow to market down in brazil. they had much less profit -- profit growth. yes, there were no surprises. they had this first rate unchanged earlier. they have been unchanged for seven consecutive years. the point is that you mentioned a reference in -- a break in the referendum. as a group, the bank of england has yet to do so. what the fed said was the

uncertainty over the referendum many made the investment decision that has also caused a growth. any knowledge that uncertainty is kind of bringing a significant impact in the pounds drop. this is a lovely shot. this is a withstanding page of theony months brings in rate cut. in february, 15 months. that is back in january. now, down to about 32 months. it has been nearly three years until the next bank of england break. i will say that they did say today that they're more likely to raise rates for the next few years. nice analogy. ; it is down only 1.5%. but say they go through october 2015. they have that distraction on the bloomberg. thank you. now, let's check in on first word news this morning. we have more from the news desk.

>> investigators have said john kerry has been charging with other minorities and christians in syria. >> with have the effort to collect the documents was superb. analyze the evidence of atrocities. we will do all we can to see the perpetrators are held accountable. >> lawmakers have pushed the declaration. lawmakers have a better understanding of the terrorist attacks in paris today. first responders are reenacting the shooting in the bombing. federal peerless court judge merrick garland has been meeting on capitol hill today. for months, senator patrick engaging with republicans for refusing to meet with anybody appointed by president obama. rick snyder is waning the

government at all levels. they are also talking that the polluted fund river. i'm david couric. emma: thank you. now, let's get back to the fed. the decision to leave interest rates unchanged for now. good morning. bloomberg television. he has expressed concerns about inflation. months, it has not lasted more than 3%. we have the idea of it represents a core cpi. a weak statistic to use. i think we will watch and inflection to about. i'm a go to washington.

policyo our research investigator. are somebody who calls for the intensification of congress to talk about monetary policy. yellen seemingly starting to bring in an inflation far more. are they right to do that yet go -- that? josh cohen we have the unpleasant rates coming out from where they were before the great recession hit. naturally, the central bank will worry about inflation. the fed statement yesterday seemed like they were determined to engage with the inflation target. state,, coming from the what they think they're willing to do is tolerate in overshoot. we have what the inflation could never go. ; your liking the tones.

we're going from labor day, to labor day, to labor day. what should i be looking at? yes, i think the question is all of it. the number one source of inflationary pressure that you can get remains wage cost and labor cost. i think we got some surprising data on that. that is in february. if you squint really hard at the end of 2015, you can see growth coming off. it runs just over 2%. it is starting to creep up a little bit. data it the last months of have nominal wages that outright fell. there is a reason for concerns.

that is the most important. rates are rising. people think they will concern the central bank. it is mostly about a wage coming from the tight labor market. fed equally focused on what is happening outside of the united states? also with what is happening domestically? is the fed the world central-bank after considering that? josh: i would not say they are as concerned. outside of the u.s. versus what is happening domestically. to factor more into their decisions. the u.s. is the single largest economy.

what is happening in the rest of the world will matter. especially in regards to monetary policy. banks in the eu and japan. they will put upward pressure on the dollar. i think that they are carrying more about the global banks. mark: every meeting, they have the rate confusing. we have the central bank at every meeting. josh: i think i see more consistency. statementve a firm that their are price inflation

target of 2% -- that is what people say -- they look at the long run average. over is an extended time the last few years. it should be matched by an extended time. otherwise, we lock in a lot of the lower prices. agree that they have that guidance. that said, i do not see a lot of shifting goalposts. . see them responding to data that data has been pretty soft. once they declare the economy recovered, today, the stock is not responding. preset desire to raise rates. mark: thank you for joining us. director of the economic policy institute in washington. coming up, these are the most

watch leaders on the world stage. we will get highlights from bloomberg television exclusive interview with the canadian prime minister. ♪

mark: that is according to people familiar with the matter. they say one fund would be administered by the epa to promote clean transportation. the other would be run by california for a similar purchase. caterpillar says first-quarter earnings and sales will be less than estimates. mining equipment has been hurt by the quality slump. oil drillers cut billions from the investment budget. they tried dialing into labor costs in china adjusted for productivity. it is 4% cheaper than in the united states. productivity and china has doubled since 2003. the u.s. remains up to 90% more productive.

that is the latest for this hour. is the debate going on in canada as they try to revive the economy after the big calamities bust. justin trudeau about austerity versus more government spending. >> a lot of people arrived austerity side. toy are thinking we had control government spending. canada is positioning itself in the investment. this idea that confident optimistic countries will invest in their future is really carried over what we're focused on. we have the information around cleantech renewable energies. i have roads and bridges they wanted to lead to better they think this is a great opportunity to begin

with the coming efforts. a lot of people, look at canada's economy. the budget next week. they see an economy that is growing by 1.5% a year. seems unable to mention that. often times, and a following , the where the recession ended we're talking million as such in debt that we kicked off with. this is much more modest. -- not just an instant influx. i think the challenge is that when you're trying to shoveling , what we have is a massive

influx investment infrastructures. we will do the non-sexy thing. the maintenance upgrade, we have the ribbon and will announce a shiny ribbon on it. that on subways and things that are necessary to keep the pace up in terms of transitive people. they are desperately needed. that is what we're focusing on in the coming years. then come up get into the longer-term things. mark: how will you pay for that? yes, we are aware that

we are getting a tax revenue that we would like. that has been a case of the past 10 years. forward was i put thatned around recognizing we need to increase growth. deep cut the economy or invest in the economy? you create opportunities to grow. that means you grow through investment. we are in the approach that we will get better growth. it will create more government revenue. it will give us through the phase. justin trudeau speaking earlier on bloomberg television. we have an increase of 1.2%. still ahead, we have had a

dismal quarter so far. even goldman sachs cannot escape it. we have that story coming next. ♪

♪ caroline: leaders are probably warning that the first quarter sachs6 has goldman publicly quiet so far. let's bring in bloomberg news. you head up the corporate finance team. muche really depicting how you are on for goldman sachs. it'll be hardest hit in q1. even the mighty goldman is not

through with the quarter. we are inside goldman sachs with executives telling us they have risen 25% this quarter. credit is going 32%. some of the other banks are even worse. city -- city bank and jc poor good -- morgan coming in. carolyn: break it down for us. currencies going to be the hardest take? where are we seeing the slums." -- slumps? >> we have sony companies. we have the delay. the markets have been so volatile. with the ipo this year, activity is down 14%.

that is huge. this quarter, we have already seen a hand of several small guys in the united states, this is the worst i've seen since the recession. that is where banks are getting really hit. it is holding up. it will be much longer to close. you know, they have funding markets closed. certain asre not as if they will be cut. there talking about renegotiating the price. are probably not as badly hits as the other two areas. it is also down. mark: the first quarter is typically the strongest overseas quarter. thesee seen some of double percentages decline in revenue. what sort of year are we looking at? >> march has picked up a lot.

saying thate been march will come through right back. is early on in the year. markets have been so volatile. nobody has been able to predict them. had massive influx into the high-yield segment. particularly with the high-yield return at 7%. mark: thank you for joining us. given us the rundown. coming up, we have a busy day. we will continue to watch the fed. the initial optimism turned out to be short-lived. stick around. ♪

♪ live from london and new york. stephanie: i am sure that --caroline: i am caroline hyde. >> turkey is pressing for

concessions as the european union meets over the refugee crisis. they want turkey to stop the flow from the middle east. in return, turkey wants money, a quicker path to join the eu, and the right to travel to europe without visas. in brazil, a new twist in the story involving the current and former presidents. the present has been blocked from appointing the president to her cabinet. it was seen as an attempt to a corruption investigation. u.s. government climate research. was the hottest february in 37 years. ice melted to record low levels. to contest burial chamber. it revealed two and in rooms.

queen nefertiti maybe inside. 150 news bureaus around the world. mark: thank you very much. the fed division yesterday is what was largely expected, what investors were really paying attention to is the forecast. ratene each members forecasts in the u.s. treasury 10 year yield was weighed down after two more increases this year. joining us to go through everything going on out of the fed.h i how investors got it wrong because we saw a boost in two-year yields in the run-up to the fed meeting. these dollar investors got it

right as we saw the dollar decline in the month ahead of the fed meeting. is that correct? did bond markets think the fed would be more hawkish than it turned out to be? >> on the margin, yeah. i think it was the one comment in the statement that related to risks from foreign economic commissions. baloney point out something that seems to be in the reaction of markets to fmoc statements. market constituents take the and then subtract one to two] from that path. in reality, we need to look at something more closely, which is the range of the dots is narrowing. there is growing consensus within ththe fmoc that the rate house will emerge. over the next several weeks to a couple of months, we will see

more selling in the front end of the yield curve as result of greater confidence in the path estimated. mark: should the fed be raising rates with core inflation picking up, with unemployment at an almost decade low? is it now the time to be raising rates again? guy: to be honest, i see my role assigned to estimate among other things with the federal reserve will likely do rather than tell them what they should. if you look at the three pieces of evidence, job evidence really solid, inflation numbers are picking up, and friendly we don't know what causes inflation in the short-term in an society so we have to take those data at their face value and assume they will be reasonably similar for the next few months to come. jobs are saying yes. inflation is saying probably. the markets in february were saying no, and that is the piece of the puzzle that has shifted. caroline: you are the most accurate forecaster for u.s.

treasury's back in 2015. sosa bloomberg. quite a nightly. -- so said bloomberg. quite an accolade. will it be lower at the end? guy: we have been holding lower than consensus for the year. i think this week does not really change that outlook. what is more salient is 2017. about half of our economic model runs produce a recession at some point in 2017. presumably, that would be accompanied by potential fed easing next year as well as the very least lower long-term interest rates during the year. caroline: we have had a lot of central banks coming out. today it is be a wii and switzerland and south africa even. but where should we look out after england? there will be fewer rounds

of debt being self and flexible ways in which they will be selling gilt. where do you see it going in the united kingdom? guy: most of our investors here are domestic u.s. dollar-based investors, so and we are formulating opinions on foreign markets, we have to pay a lot of attention to the foreign exchange cross, not just the trend in yields. but i suspect the u.k. is not going to be subject or is rather going to be subject to the same degree of inflation gravity that is affecting a portion of the now.right the next move is likely to be a cut which will be positive for the media portion of the yield term. at the same time, looking at the perspective of the u.s. investor, a vast majority of that will be taken out by a weaker pound. we are not getting heavier investment in the u.k. right now. mark: to what extent does the search for yields negative interest rates in many of our major economies around the world

and to what extent will that push down on the u.s. treasury curve? guy: i think it already has, right? we have seen the themes of correlation between 10 year german yields and 10 year u.s. yields at about two or two and a half years at this point. that is fairly well played out. i think the long end of the european curve, which is the closest influences along with the japanese curve, which had been historically a closed curve but less so recently, that has been played out as far as it affects the u.s. treasury market. thanxchange seems rather long-term rate schemes. mark: do you think the negative interest rates could ever become a reality in the united states? i know no is the answer right now i'm sure if you ask people a decade or so ago they would say no as well. is it possible in the u.s.?

guy: it is certainly possible. one of the phase i trial on a regular basis is called in the -- one of therket things i do on a vaguely basis is calle the euro dollar market. the probability became a material inventory but has stayed significantly. the market tells us there is a one in 20 chance of negative interest rates at some point between today and the end of 2017. that is pretty material. couple that with my expectation that there is a good chance of a 2017, an interest rates might be the only way to federal reserve can address a recession at that point. caroline: talk to me about liquidity. we have a great story in a moment about how this may be the best quarter in history for

hedge funds betting on bonds or in the bond market. how much does liquidated pay on your clients's minds? are you starting to hear concern? point youis a great make in difference between liquidity in the different markets here. most of our individual investors have relatively low allocation sovereigns. in this world we exist in today you cannot meet your retirement or college payment goals by investing it at a 2% investment you'll. -- yield. still very tolerable for any investment willing to sell a reasonable amount of bonds. volumes have picked up over the course of the last four weeks in particular. prior to that, the price impact, what you have to pay in order to sell immaterial block of bond, was elevated well above historical standards. doespect liquidity issue

come back as credit conditions probably deteriorate a little further. mark: final question really quickly. best way to make money in the fixed income now is? my preferred way to make money is in the long end of the u.s. curve. i made the argument for two years now with some consistency. long-term yields have been more stable than treasury yields. mark: thanks for joining us. good to chat with you. guy: thank you. mark: still ahead, about 45 minutes away from the european close. do not miss an interview with who owns executive many food chains across the globe. we will get his take on consumer spending in the u.s. and europe. don't miss out. ♪

♪ you are watching bloomberg television. caroline: this is your global business report. here is what we are watching. the bank of england expresses worry about whether britain should leave the european union. volkswagen comes clean and is negotiating to set a fund to pay for those fake tests. there is a summit in april about oil. mark: three central banks making decisions on interest rates. first opportunity bank of england -- first off, the bank

of england. policymakers stressing uncertainty after a referendum on its eu membership made delay investments and curb growth. givingal bank also interest rates after low income cut its growth and inflation forecast. it pledged to intervene in the currency markets if necessary. the swiss national bank considered the bank as significantly overvalued. norway's central bank cut its benchmark rate to a record low of .5%. the bank also signaled it is willing to ease further to hold off on a recession. central banks around the world go through their arsenal. alan greenspan appeared on bloomberg television. he says there is only so much central banks can do to help the economy. lan: the fundamental problem that confronts central banks is to maintain a sound currency. andave gone far from that

required central banks to do much of what the fiscal system tends to do. the cause of the problem that we are dealing with in recent years is stagnation. it is a fiscal problem, not a monetary problem. talk to the u.s. about setting up two funds to pay for pollution linked to those fake emission tests with volkswagen. that is according to people familiar with the matter. one fund would be administered by the epa. the other would be run by california or a similar partner. saudi arabia will take part in a meeting next month aimed at doing something about the oil glut. the summit.ting oil prices have risen 30% since the middle of last month. caroline: time now for our bloomberg quick take. the right context and background on issues of contex --

to address the risk of air in a straight in an era of high sequencing trading -- secrecy trading. here is the situation. earlier this year in china, circuit breakers lasted four days. in trip in just 30 minutes. the move was blamed for feeding the panic as investors dumped their shares. chinese authorities is suspended the board indefinitely. in the u.s., limits individual securities were introduced as a direct response to the flash crash of 2010. european regulators were acquired circuit breakers behind secrecy. bailey brought circuit breakers to stop markets. it was triggered once in 1997 an

it now the 17 -- and takes a seven percent -- countries that employ circuit breakers for the overall market include japan, brazil, and south korea. single security limits are widely used in the u k and pain in singapore and india. here is the argument. proposers say they restore calm and can even build confidence in markets. the main concern is how they set the threshold. too wide, they may never be used. too narrow, and they can lead to chaos. academic studies offer little evidence that they cut panic. opponents say the interruptions interfere with pricing. that is your quick take and global business report. for more stories, visit bloomberg.com or

bloomberg.com/quicktake. mark:'s delectable we will hear what the chief executive of mexico's second just airline takes about a possible donald trump presidency. that is next.

♪ time now for bloomberg business flash. a look at the biggest stories in news right now. airbus is in talks with iran to build airplane parts. it might also include contracts for maintenance and overall work. in january, iran agreed to buy hundreds of jets from airbus after sanctions were lifted. down.l. plans to step -- a ceo plans to step down. that is the latest business flash.

is mexico's ultra low-cost airline celebrating its 10 year anniversary this month. a decade ago, it started out with four airplanes. it has not transformed itself into mexico second-biggest air carrier. vonnie quinn spoke with the chief executive and asked him about his government's growth plan. -- his company's growth plan. 17%e are planning to grow or 18% if it is available. we are planning to keep on expanding into the u.s.. most of the growth will be into the u.s. the rest will be domestic. it is probably not going to be that many. it will be about linking the dots and points that we are already operating to give more and more service point-to-point. vonnie: more routs? are you looking to build on

that? what kind of costs are there associated with an airline? locale: we are an ultra carrier. we strive from having the lowest prices in the market. our average year, price was around 57 or $58 or segment. there are some other costs associated to that, which is basically the airport tax and value added tax. last year, we transported 12 million passengers at the end of 2014. 2015, we have transported 60 million passengers. we started doing point-to-point, which is something that 10 years ago did not exist. the other part which was absolutely important was the apacity to switch passengers from buses.

vonnie quinn: can take 48 hours by bus. to do you convince consumers spend a little bit more on an airplane ride? enrique: when we are doing is like changing a patient from a medication he has been using. that as part of a program. even with the prices we have, they are afraid of taking aircrafts. the are afraid of approaching airports. what we did is a very simple way of purchasing, a very simple way of accessing our counters and processing them and letting them be very efficient and simple. 66%ie: your stock went up in the last 12 months and 18% year-to-date. years. only public 2.5 are you concerned your evaluation is getting too rich? where might you raise money at this point? upique: i think it is going and it is naturally going up in

a way that we have been dollar whichth the is far better than our competitors. we strongly think in the give ang months, we economy in mexico and how consumption is, we think we can perform and keep on performing the way we are doing it in the first quarter. vonnie: the mexican surgical bank governor -- central bank governor mentioned the difficulties. what about for exchange transactions and the weakness of the mexican peso compared to the u.s. dollar. is that a problem? enrique: not really because we are seeing a change in two ways. we are seeing more mexicans flying within mexico and more americans flying into mexico. up atm is really going rates which are double digits. vonnie: you are not concerned about the peso weakening

further? that might happen. enrique: something that is important in our industry is there is a correlation between oil and peso. what has happened to us is we had a reduction in oil costs and the peso compensated the loss. vonnie: i want to ask you about the u.s. presidential process. we are seeing donald trump's rise to the front of the pack for the nomination for the republican side of things. are you concerned that donald trump might become president? are you concerned about his comments regarding mexico? enrique: no, not in reality because first, we do transport legal people. there is more than 30 million hispanic people in the u.s. that are legalized. we are focused on that. our customers are people with documents and flying legally within the two countries. the second thing that i think is

really important is donald trump has not met my team. it would have met my team, he would have invested in volaris. i think that is very important for us to understand. we have a company which is world class in terms of -- vonnie: not concerned he would impose tariffs? enrique: i could be concerned about the being the lowest cost operator on both sides of the market in the u.s. and in mexico, i think i can compete better than anyone in the market. mark: volaris chief executive enrique speaking with vonnie quinn. a quick beat out what is happening to european equity markets.we are roughly 35 minutes away from the end of the thursday session. not as low as we were at the start of the day when the stoxx 600 fell by 1.8%. the dollar falls.

miners are rising and they are a big constituent of the ftse. have a look at what is going on in the bond markets. the euro is up against the dollar and down against the pound. we will discuss more on that with our bloomberg met scott hamilton shortly. 10 year yields are falling as our german yields as well. caroline: it is a very happy st. patrick's day. i know vonnie quinn will be celebrating it. the white house doing it also. the fountain goes green for today and just in time where s&p 500 sessions were up. health care on the downside. dow jones up. european close is up next. see you later, mark. ♪

>> it is noon here in new york and midnight in hong kong. i am scarlet fu. >> i am alix steel. >> i am mark barton. this is the european close. ♪

mark: we are going to take you from new york to london in the next hour. here is what we are watching today. the bank of england expressing worries about a vote on whether britain should leave the european union and the influences on its decision on interest rates. alix: german airliner lufthansa checks in with a record loss. we will hear from the ceo. scarlet: eight us company -- a best company once to open on the east coast in the u.s. we will speak to the ceo of royal ahold. we are midway through the day.