francine: life after oil. saudi arabia outlines plans for crude oil. we are from the deputy crown prince earlier -- later. policymerkel for refugee . the president wraps his tour with a g5 meeting. car troubles. the emissions scandal hangs over the beijing auto show. urges clearer rules. ♪ francine: welcome to the pulse, live from bluebirds european headquarters. i'm francine lacqua.

getting break news. analysts we have spoken to expecting a slightly higher number, they were respecting 107.1. let's take a look at the fallout listed the market board up. asian shares were a little bit lower in terms of what we saw earlier today. we saw all of that decline. .17 -- 111.17.11 the german evoke confidence it fell to 106.6. let's get to the bloomberg first word news with near chance. nejra: the bank of japan has become a top 10 shareholder and about 90% of the nikkei 225 companies.

that is according to estimates compiled by bloomberg from public beta. vanguard which oversees more than $3 trillion. the boj's influence in stocks risks distorting valuations and undermining efforts to improve corporate governance. officials today unveiled deputy crown prince vision for the kingdom of saudi arabia. he is looking to reduce reliance on oil. koch sayse charles that hillary clinton may make a better president than any of the republican candidates. immigrants were not thrilled -- democrats were not thrilled. news, 24 hours a day,

powered by our 2400 journalists, in more than 150 news bureaus around the world. fencing. francine: -- francine. francine: the boj making policy announcements. mario draghi signaled did ecb will wait to see how measures pan out. could that open the door for janet yellen to raise rates? first i want to bring you my chart of the hour. 7.8 trillion dollars in government bonds have been driven below zero by worries over global growth. money managers are going into debt with maturity for over 100 years. you can see more church by heading to, the story only bloomberg calls it the most dangerous bond market in history. let's welcome with that nice

little intro, dangerous trade. very of cookare investment given the incredibly low level of yields. very difficult investment given the incredibly low level of yields. francine: if you look at the 40 year gdp with the white line, the blue line is a 30 year. now we are around 0.4% which is quite credible. do you buy anything in terms of environment echo scott: it is tough because the intervention by the bank is still massive. terms of environment? scott: it is tough because the intervention by the bank is still massive.

that is a big problem for japanese banks who said lending rates based on these longer data maturities. the bank of japan in our view is reaching the outer limits of their qb. francine: governor kuroda keep saying --k keeps keeps saying -- scott: it reverted very quickly. theapan, given the rise of intervention, they are very focused on what the bank can do. francine: what are you expecting the boj to do this week? scott: nothing in the immediate near-term. clearly they are focused on expanding the tv program or further dipping into the market. -- expandingm or the qe program or further dipping into the market.

what is happening in japanese bankshares is the market realized it is difficult for banks to that and therefore eroding their profitability. it will be hard but at some point if the rate gets pushed down to negative they're going to post -- they are going to have to pass it along. at the moment we are very focused on the yen's movement because it has been very volatile. that is best way to play the view around the bank. francine: what kind of level lucy for dollar yen by the summer? to continuepect yen to appreciate. it depends on the bank intervention. 120 is where the bank would want to go. francine: was a mistake -- was it a mistake for kuroda to go into negative rates?

-- five days after that he goes negative. scott: and mistake is hard to pass judgment. it is a new frontier for central bankers. francine: it has not worked. the psyche in the market makes it more difficult for him. mentallye harder it is , that is the situation they find themselves in. i find it hard to explain to anybody why you would have a negative interest rate to begin with. i understand the need for it is very short-term. his hands are getting tied. that is the flattening of the yen yield curve we are seeing. we have some volatility that is happening with the yen. francine: their thinking of going negative for loans. -- they are thinking of going

for -- going negative for loans. is this experimental policy that could backfire? or is this a way of protecting the banks in this type of environment? lending standards have eased as the ecb has moved into negative rates and moved into a qe program. i understand the rationale. it gets that the outskirts of effective monetary policy. what obviously is economic growth. francine: we will talk a little but more about that and stay with the pulse. plenty coming up including saudi declares its independence from oil. how the world's biggest crude explorer that's exporter is planning for the world without petroleum -- crude explorer is planning to -- planning for the

world without petroleum. we're getting live pictures from hanover. where hanover trade fair. and the merkel is hosting -- angela merkel is hosting president obama. ♪

francine: we are right on the post this get to the bloomberg near -- bloomberg business flash with nejra cehic. nejra: first quarter adjusted earnings before taxes and amortization rose to 374 million euros beating analyst amit -- analyst estimates. >> we are in a process of evaluation for looking both at private business as well as an ipo. we have not taken a final position. improvingy markets and ipo is a more likely scenario, but the decision needs to be taken which we expect in the second quarter. bhs expects to file for administration as soon as the day, putting an 11,000 jobs at

risk. it's own acquisition is expected to happen today -- to revise the fortunes of the struggling company, that is according to bbc. the chain opened its first door almost nine decades ago. mitsubishi motors shares have dipped again after losing more than 40% last week over its fuel efficiency scandal. the carmaker is mulling a delay. that is according to a person familiar. the company says it needs more time to measure the effects and extent of buying costs related to the data. that is the bloomberg business flash. francine: commercial quantities oil.

officials are set to unveil the vision for the world post oil. meanwhile, the imf has reported economic -- is said to slow down significantly in the next five years. northeast and south africa bloomberg -- he is setting out his vision. he needs to deal with a new era of low oil prices. click right, this is what they call the saudi vision 2030. the idea is they want to transform the saudi economy from an economy that is largely reliant on oil revenue to flexion for growth to an economy which is reliant on investment. has fourned division elements. there is national transmission program which will be announced in about a month.

they will talk about how they are going to do the business of running the economy, government in a different manner. the second element is the .estructuring of saudi aramco it is basically an oil company into a company that is an energy and industrial conglomerate. andplan is to put aramco turn it into the world's largest sovereign wealth fund here it -- wealth fund. to find ways to create extra income for the broader economy. that is not reliant on oil income. francine: our managing editor for the middle east. breaking news from the news conference from saudi from shortly. let's go back to our guest,

scott teal. thank you for sticking around. when you look at oil, is there a correlation in the markets. you are telling me that correlation is not something to be broken. is that healthy? scott: that means investors can stop worrying about the bid. and they start looking at the fundamentals. as he mentioned, the correlation to oil has broken down a little bit as we move through time, we have seen with the stability of oil prices, but obviously a stability in the high-yield market. francine: it is unclear to me why we were so correlated. people were concerned about inflation expectations. there was something more sinister about the oil outlook in terms of growth. scott: and think oil prices -- i think oil prices and chinese

valuations were all tied together. oil -- you can to that moving around. those three things are very interrelated. we have had some clarity on two of them. chinese valuations are less likely in the near-term. the monetary policy in the u.s., it seems to be more dovish than the market had expected, therefore the consistent or prices this consistent oil -- consistent oil prices -- francine: the a look in the u.s. is not looking bad at all. are you concerned the markets may be surprised at a rate hike that we are not pricing in? is huge.e u.s. economy 85% of united states gdp growth

is witn the united states. how concerned she is with so in manyctors, and respects, is she going to be less concerned about china? oil prices? u.s.herefore focus on the economic situation. in which case she should move more quickly than the market expects. francine: issue less concerned about outside factors? is she less concerned about outside factors? it seems we are in a better place than january. scott: you have to take a deep breath and see where we are in terms of monetary policy. the reinvestment of the coupon. the interest rate. but the u.s. economy is suggesting is that level of -- she ision transitioning very slowly.

francine: what does it look like for your investment strategy and treasuries? scott: they are not as attractive to us. the risks that investors are taking are not that attractive to us. we are focused on the higher-yielding part of the market. the local markets have done very well. there's quite a bit to go there. high yields have done very well. francine: scott, thank you so much for now. we will talk more about brexit. ofef investment officer fundamental fixed income at blackrock. next, clouded by scandal, we are live at the beijing motor show. controversies blighting vw and mitsubishi. ♪

>> when it comes to regulation, we can say, i am talking about nissan, we are -- if you don't conform -- now on specific technology, there are what we call the real driving emissions, where the performance of carmakers are way above the level that is defined. this is where there is a

misunderstanding about why this is happening. the best solution is to say to the regulator, what do you expect in real driving emission? european committee has defined expectation in driving emissions which is fine. at least now the rules are very clear. francine: that was the nissan ceo carlos goes -- carlos goes in -- ghosn. ahead of the event, the ceo for ford in diameter want about the editorial environment -- ford and daimler warned about the editorial environment. >> we talked with the ceo of volvo. they were looking at all of their operations and confident

they were sticking to the rules as well. ceo abouto the ford the regulatory pressures and whether or not they were sticking to the lesser of the -- the letter of the law. he says he expects regulations in china to be -- and the future. you can take a look at what he had to say. >> when you look at emissions, we need all applicable -- we meet all applicable emissions requirements. our purchase make sure we meet the letter of the law -- our approach is to make sure we meet the letter of the law. >> the most strict over the next five years in terms of reduction in the world. whatever that is, we will work to meet that. tom: that was mark fields speaking to us. we heard from daimler ceo. he was saying that there needs

to be more transparency but also saying there is a gap that has widened between the lab tests and the real results you get when driving. he said it is closing but needs to close further. i think it was interesting to hear from carlos goes in--carlos ghosn. the regulators need to be clearer about what they want from us and our testing. that was a plea from carlos ghosn as this continues to unfold. people here have wanted to focus on things like suvs, the demand for those falling in china. mercedes e class being rolled out last night for chinese consumers. an extra large vehicle. the development of electronic vehicles. as well as some semi-autonomous

driving features. toncine: tom, as we try match growth forecasts, i was looking at escalator sales good what about car sales in china? -- escalator sales? what about car sales in china? ins 2015 -- in 2015. that demand is still very strong. they are safer on very dangerous roads here. the focus is on a tax cut that the government implemented when cars with -- if that cut continues toward the end of this year, that is going to incentivize automakers as well. that is something the chinese government is going to have to look at. francine: tom mackenzie in beijing. up next, the obama effect.

the u.s. president weighs in on the brexit debate. thiel.back with scott ♪

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change the way you experience tv with xfinity x1. francine: welcome to the polls, life from bloomberg european headquarters. let's get straight to the bloomberg first word news. nejra: the bank of japan has become a top 10 shareholder and about 90% of nikkei companies according to estimates compiled by bloomberg. it is now a major owner of more chinese blue chips than black hawk and vanguard. isics say the boj distorting valuation.

an increasing number of bank of japan officials think the government should do more to spare the country's stagnant economy. while most of the officials are said to be concerned that the administration needs to accelerate reforms to raise japan's protection growth rate, some also suggest more fiscal spending would help. officials will unveil deputy crown prince mohammed bin salman us vision for the kingdom of saudi arabia to reduce the reliance on crude export. they will focus on economic, social, and other programs. charles koch says hillary clinton make that may make a president a better than either of the gop candidates. clinton tweeted, not interested

in an endorsement. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. francine: the markets lower this morning, mark barton with your asset check. the stoxx 600 is down by three quarters of 1%. crude, we had three weeks of decline prior to friday. the boj meeting, the federal reserve meeting, just to show the impact that central banks have had on stocks and commodities, check out this chart, which shows the blue line is the bloomberg commodity index, a gauge of 23 commodities, the white line is the msci all world index. the boj adopted negative

interest rates at the end of january, not a big lift to come out of the sox -- stocks, then we saw the ecb record stimulus. fedshing off with the lowering their forecast for 2016, rate hike. you have seen the trend very much an upward one driven by central-bank action in 2015. on the matter of central banks, the dollar on friday rose by 2.1% against the yen. this is a two a chart. that was the biggest increase since october 2014, bloomberg reporting the boj may consider helping banks by offering a negative rate on some loans. thursday, 23 at a 40 18 economists surveyed expect the boj to expand stimulus this week. 19 predict the boj will increase

purchases of etf's. eight expect to boost and bond buying and eight project that boj will lower its rate. this is the dollar-yen in the , down 1.6.ys the big corporate story today is royal phillips. the big news today, it is leaning towards holding an ipo with its historic lighting business. quarter earnings missed estimates, which is why shares are down 4% today. rise in reported a 14% adjusted earnings before interest, taxes, and amortization. 374 million euros. francine: mark barton with your asset check. charts if you are a bloomberg user. as president obama meets with

leaders and his european tour is behind, he is meeting controversy. >> i think it is fair to say that maybe at some point down the line there might be a u.k.-u.s. trade agreement. that is not going to happen anytime soon because our focus is on negotiating with the european union. now let's get the thoughts of scott thiel from blackrock. this is an amazing story of last friday. as a journalist, it was immensely pleasurable to follow. what does it mean for brexit? how do you've you and model brexit? scott: it is a very, very important issue and the fact the president is playing in on that, obviously it has the attention of world leaders.

brexit is very important, not only for u.k. assets but for european assets more generally. what we have found as we have had about a 12% selloff in trade since the end of last year. ashas recovered by about 2% the market has moved more to the view that we will remain, but this is a critical issue for the british pound and for european personal bonds. francine: basically looking at the chart, looking at pound versus euro, we really do not know what euro would do, if it would also we can a lot further, but i have not seen that much impact on guild. mark: the guild market is -- scott: the gilt market is a little more difficult to figure out. have performed very well there recently have underperformed in the last two weeks, but

generally are on par. -- would they be concerned about the state of the economy. wednesday be concerned about the rating? scott: i do not consider there to be any credit risk with u.k. obligations. any change of sentiment on the total risk reacts that is different. the reason this is very important for investors is that the u.k. economy, take out the brexit debate, is doing very well. very strong growth, relatively low unemployment, inflation is moving higher. at the end of the day, monetary policy in the u.k., which has been suspended because of the brexit debate, may come back into focus, which i think and have a strong impact on the

british pound. francine: the pound is headed lower no matter what happens, and you would argue that is not true? what mark carney could hike rates or lower them. scott: the immediate impact, this is not immediate, but suffice to say the expectations for the u.k. rate increase have moved two to three years away. not that long ago they were right now. the economic situation clearly has changed a little bit. brexit has slowed down activity in the u.k. but once that slowdown is pushed through if we go to remain, it is possible the monetary policy could begin to normalize at the end of this year or the beginning of next. francine: scott, great to have you on the program. we will have more on brexit tomorrow when we speak to one of the campaign's leading figures.

that is around 9:30 u.k. time. tune in to "the pulse" tomorrow. friday, bloomberg will be hosting a debate on the implications of brexit where i will be joined by politicians before a global audience. that is an 8:30 a.m. london time. next, is politics dominated by too many white men in suits. that is the view of our next guest. ♪

francine: we are right on the pulse. let's get to the bloomberg business flash. nejra: phillips shares are lower after it set an initial public offering is more likely. quarter adjusted earnings before taxes and amortization rose to 374 million euros, beating estimates of 362 million. >> we are in a careful process of evaluation or looking both at private bids as well as an ipo, so we have not taken a final position. what it is like this morning is with equity markets improving, and ipo is a more likely scenario, but this position still mates to be taken which we

expect in the second quarter. nejra:+++

francine: it seems like an easy and obvious solution. told tonk we have been long that the quality is hard.ing

quality is simply a matter of saying this is priority. establish a system of actually paying part-time workers. say, i'm going to contract services from businesses but do the same, because i want london to be an equal opportunity. francine: i have heard a lot of people saying that the brexit debate leaves something out and we have not been able to provide a narrative. >> i think it is very telling. what is happening is that we are not discussing brexit or an agenda lens. it has gone very quickly to a very traditional male centered, aggressive punch in duty type of ,olitics that puts women off

because we are not hearing a discussion. women make the economic decisions for their households and they want to know what is going to happen to the cost of living, the cost of transport, the cost of care, particularly when there is a crisis of care and much is being done by cheap foreign labor, if you like. we can talk about women in terms of the brexit debate. francine: we are just getting some breaking news. we will come back to see whether this is a problem with more of the established politicians in general. deutsche bank, executives have been acquitted in the trial. we knew that this trial was going on, did not exactly know when it would come out. a lot of the questions that we have been talking to analysts of the banking sector is exactly

what the perception of deutsche bank is and how they can change it. the fact that these bank executives for the moment have been acquitted in this investigation on fraud. i do not know whether they can appeal or not, but we will get more on this and bring it to you. youinal question on whether are a party that is antiestablishment because you feel that you have been left out and many women have been left out. does this go to voter angst around the world, what you see is happening in austria, the u.s., and other parts of the world? >> i think what we are seeing in britain is an echo of what is happening around the world, people are feeling disenfranchised. we want to bring a whole diversity, because when you talk to women you are not talking to a homogenous mass. you are talking to disabled women, a whole

sector of the population who want to see their experiences reflected in the policies being presented. francine: sophie walker, london mayoral candidate and leader of the women's equality party. the election to be held on may the fifth. you can see the list of the main candidates on your screen now. president obama tells germany on the last day of his european tour at the trade relationship is important. all he convinces allies at the g5 meaning? breaking news from deutsche bank according a lot of the people implicated in this fraud trial. this is after a year-long trial. we will break down what deutsche bank findings made. ♪

francine: later today, u.s. president barack obama will meet in hanover with several leaders. tony, the mood seemed warm when merkel and obama met in hanover county: obama is coming to germany at a time when merkel is having a rough patch because of the refugee crisis that has mainly hit germany but is really a pan-european crisis, as well as a crisis for the european union. words,some encouraging

telling her she is on the right side of history. in general, it is good for merkel is obama comes here because he is still very highly regarded. francine: tony, obama is in germany to promote the trade agreement. how is that going? tony: it has been a long-standing issue in germany, and a recent poll showed that i think 13% of people actually ttp.rt ,ig corporations like seamen who they visited today, they supported, but it is an issue for smaller and that's as companies -- smaller and midsize companies because they see issues with that, and the public is not very enthusiastic about it because they fear that standards will be compromised. francine: tony, thank you so

much for joining us. howard german governor -- our german government editor. deutsche bank co-chief executive and other former bank officials were acquitted of charges that they lied to judges in a more than 14-year-old dispute -- a 14 month dispute. the men were cleared on tuesday about 10 minutes ago after almost one year of trial at this munich court. the charges against defendants included josef ackermann and rolf breuer. this is something that john cryan will be happy about because it does not put deutsche bank in the spotlight with a negative light. deutsche bank, you can see the share price down some 3.4%. stay with bloomberg. supervisorh the ecb later. that is in the european close at

10:00 a.m. new york time. we also have a very big week of head of us. here's a snack -- snapshot. merkelmerkel -- anglo posting the g5 leaders today. as well as earnings from apple, capital one, and twitter. the fed rate decision on wednesday as well as policy decision from the boj on thursday as well as u.s. gdp. we round the week off with the rate decision from russia and the swiss national bank's shareholder meeting. a very busy week, so everyone take vitamins. we have a great guest lined up. we will interview the former defense secretary leon fox at 9:30 on the pulse. stay with bloomberg surveillance is up next. i will be joined by michael mckee from new york, and we start a conversation and talk

central banks and negative rates. ♪

francine: life after oil, saudi arabia will outline its plan for a post crude world. we hear from the deputy crown prince later on. --ack obama urges post transatlantic ties as he praises angola merkel. tort -- hishis g4 european tour. china's biggest banks found exposed. we talked a greek -- banking all around the world. this is bloomberg surveillance, i amnc