>> coming up, the stories that shaped the week in business around the world. clashes drive markets from the ups and downs of u.s. trade with china. the question becomes when will there be a final deal made? >> speaking to the united states, i would say it is likely 80 all caps, but that does not mean it will happen. pull on brexit. . the expectation is that there is not enough time to compete the legislation needed.

>> investors plate co.'s attention as central banks publish minutes of their latest. >> we know it. sounds like these minutes were dovish. >> another big week for earnings with corporate leaders looking at the micro and macro picture. >> by now, it is in reasonably good shape. >> we seeing credits in the u.k.. >> we're not seeing a slowdown in china. >> in south africa lays out a new dutch it -- budget samsung releases a ground breaking phone. >> from a technological development point, is a big step in the right direction. onit is all straight ahead on bloomberg best. emma: hello and welcome.

this is "bloomberg best." your weekly review of the most important news, analysis, and interviews around the world. let's start with a day by day look at the top headline. in the u.k. parliament have been steadily rising as the deadline for britain to leave the eu approaches. withinmonday, tensions the labour party came dramatically to the surface. seven members of parliament have quit the u.k. labour party and will sit as independent over plaguing the party. >> and all conscience, we can no longer knock on doors and support a government by jeremy corbyn. wrecks could this be the beginning of an actual split? huge amounts of unhappiness for jeremy corbyn. there has been a range of issues

and you have heard them talking this morning about things like our relationship with nato, the response to russia, all of things they have disagreed with. they're calling not just for labour party people, but across the spectrum to come out. you can imagine more of the anti-brexit rate -- weight of the conservative party. time will tell if this is a small event or something with your legs. carmakers around the world are bracing for potential auto tariffs after the commerce department delivered his report on whether the u.s. should classify auto imports is a threat to national security. we don't know much about the details of this report. the commerce department actually told us in a three line not sayt and did anything about what was in the report or what was recommended.

still, you saw the effects of the report hit auto sectors broadly. european carmakers and supplier shares were down significantly. >> the president has 90 days to decide if he wants to take the tariffs higher. this is such a headache for the european union this point. they have made it clear they would retaliate immediately if these tariffs were to be put in place. >> wal-mart posting strong numbers. your biggest take away? >> for me, the most important number was that 43% growth in e-commerce you may recall last year that when they reported holiday result, the shares have the worst one-day guide since 1980 it had really slowed last year because they struggled with these difficulties. the fact that they were able to get back in gear and deliver these 4.2% increases in comparable sales, that is a

really well-rounded strong report. >> the u.s. is asking china to keep the value of the yuan stable. part of trade negotiations between the largest economies. how novel is this idea of using the stable yuan as a bargaining chip for trade? >> it is a long-standing concern for the u.s. how china manages its currency. normally, the direction of play that the u.s. has been pushing has been in the opposite direction. they pushed china to play less of a role in intervening in currency markets. here, the trump administration is doing something fairly novel in urging the chinese to try and intervene to do what they want with the yuan. that is something we are watching carefully and something that is interesting to see. >> this request struck me like the austin powers request for a ransom of $1 million. it is completely reasonable. the pboc also was a stable currency.

it seems very resort, very easy -- very bizarre, very easy to accommodate. i don't biggest going to complement the trade issue. >> theresa may getting hit with some defections from her conservative party. three tory mp's leaving to join the independent group in parliament. you see developments suggesting a new text being hammered out in brussels. this was out of spain from the spanish government. >> we had an interview with the spanish foreign minister who said progress is being made towards hammering out an accord on brexit. >> it is all about the wording of a legally binding document that can convince the people, in -- the attorney general and in particular the hard-line brexiteers who think that i --

-- who worry that the irish backstop will essentially trapped the u.k. into eu rules forever. >> theresa may inching closer to a fresh divorce deal. she met with jean-claude juncker. there are signs of talks. she is still facing objections over the irish backstop. after her meeting, she said she is seeking legally binding changes. >> 95% of the deal has been agreed. it is about the irish backstop. the europeans will be -- that language we don't really know, but one of the ideas is they have said before the final deal gets to a vote they would like to see if the u.k. parliament would accept the tweaks the one thing the e.u. hates and would want to avoid is to have a situation where macron and merkel of very ashley greene -- agree on new english -- language and then get rejected

by the parliament. and then theresa may is asking for more concessions. that is one thing europeans will not do. >> we're still parsing the minutes from the fomc january meeting that shed some light on the central banks dovish turn. it will favor ending the runoff of the balance sheet this year but they express uncertainty over whether they would raise rates this year. what was the number one take away you? -- for you? most important take away for me was the signaling on the balance sheet. the fact is most appropriate to end the balance sheet this year, we don't know when that will be. we know the balance sheet unwind will stop. >> to us, it sounds like the minutes were dovish compared to the statements area it sounds -- dovish compared to the statements from communication officials. sounds like there is bias in the hiking, but the timing of the next policy move is

uncertain. is offering to drastically ramp up the amount of agricultural goods they buy. this comes as the latest round of high-level talks taking off in washington this morning. we already knew china was offering to buy more soybeans from the g20 back in december. what is the latest offering from china? >> this is from bloomberg news, china offered to buy 30 billion more. what does it mean, what time, what commodities? if you are talking about in 2017, about $24 billion. that was the last clean read on the demand. their demand is not going to go up 30 billion by year. they might demand more from the u.s. and less from other places, we don't know. >> the european union is looking -- expecting theresa may to request a three-month delay to brexit. discussions suggest this will

come to parliament if they back are deal, but it is not signed off until the summit later in march. will we get a delay? >> this is an acknowledgment of how close things are getting. even if mrs. may gets something through parliament, the expectation is there is not enough time to complete the legislation needed to have the orderly exit on march 29. the europeans are expecting that now. it means mrs. may can call it a technical extension of a just a few months. but we have got another complication. there are the european parliamentary elections in may. they are trying to exclude the possibility, and we may see more moves in the following week. >> trade talks wrapping up in washington as steven mnuchin says the u.s. and china have reached a final agreement on currency. >> they are saying there is a deal on agriculture and currency. the president might use

executive order to restrict the sale of huawei 5g technology in the u.s. we should also note there really was no finalization regarding intellectual property or technology transfer. the chinese vice premier says he is extending his stay by two additional days. the president said that is a sign of positive talks. now the question becomes when exactly will there be a final deal made. president trump and president xi could come face-to-face as early as next month. >> speaking for the united states, i would say it is more likely the deal does happen. that doesn't mean it is going to happen. emma: still ahead as we review best"ek on "bloomberg more discussion , of the biggest issues facing global investors including china's economic slowdown and the impacts of brexit. with insights from jes staley.

and up next, more quarterly reports from companies around the world. top executives share perspectives on earnings. >> continue to be cautious until we see how the revenue environment plays out this year. emma: this is bloomberg. ♪

emma: this is bloomberg best. i am emma chandra. earnings season keeps rolling on. let's roll through some of the most interesting quarterly report's, starting with results from europe's largest bank hsbc. >> leaving the stoxx 600 lower. these are earnings from hsbc.

the bank has warned political tension in its key markets over china and the u.k., maybe the prognosis of 2019 for less predictable. >> we continue to be cautious until we see how the revenue environment plays out. it is volatile revenue outlook as we look at the year. >> it's that nasty fourth-quarter that took the stuffing out of it. a lot of banks in its field. we expected more growth. they tried to shrink the upbeat note in the call. they cited higher interest rates raising lending revenue in certain markets. they said the first six weeks of the year have been quite promising in global markets and the banking business, there are trying to raise expectations for what the year will be. >> bhp coming up a little short in 2019. the mining giant missed earnings.

but spiking iron or prices could raise profits. >> mines in australia had training derailment, problems with copper mining in chile so that earnings were a little lighter than expected. also, there were no real new cash immediately for dividends. cash for investors, dividends or the same. people were optimistic about the rest of the year. iron or prices are flying. they are one of the worlds biggest iron ore producers. they are optimistic about cash flow. that is likely to meet bigger payouts, buybacks for investors later in the year. >> fortescue metals with a 5% dip in half year profits. the miner beat the earnings estimates thanks to higher prices. shares managed to creep up to

two-year highs. how are you looking at pricing in the next few months? >> we are not focused on the outlook for iron ore prices. it's hard to predict. we are looking at delivering on our strategy, getting funds, being the lowest-cost producer and we saw that come through in the first half results. we saw the increase and was up to $21 per ton. this was strong improvement in our results overall. world's biggest commodity trader, is planning to cap coal output because of investor pressure on climate change. significant shift on coal but i am wondering if we might get a positive reaction from investors. because of the buyback. >> the buyback and large dividends. on the other hand, they did miss earnings and they are saying they're having to do a write down on a copper operation, which is a tight market be enormously bullish for the copper price, but not as much as

the company. it is a hodgepodge of strange stuff. anyone was listened to any glencore executive bullish on coal. nonetheless, it shows that the thestor pressure on even sternest mining companies is quite fierce and a lot of people are telling them they will not invest. american, they have puts the commodity crisis firmly behind it. they cut their net debt for a fourth straight year after a full year of earnings estimates. let me first ask you what you ofnk is the signature peace this turnaround you have engineered? the signature peace is the product improvement we have delivered your every person in the business today is producing double the amount of product they were producing five years ago. that has driven a 43%

cost-cutting process. 26 in nominal terms. 35%margins are up about even though prices are down 10% .ompared to five years ago >> earnings which beat the estimates on adjusted operating profit level. more than 60% of revenue comes in the u.s., they have seen iron expansion around the world. where is the strongest growth for you across the world? >> when you look at -- we had a solid set of results last year. we were up 2.5%. our next system side growth is up 4.8%, the best results in the decade, effectively. we were signing and opening up more hotels than a decade ago. we're are seeing great growth across the world. watching and buying new brands.

maersk's era as a conglomerate is coming to an end. the world's biggest shipping line has announced the spinoff of its drilling unit and the stock is among the biggest losers in europe today, and probably not because of the spinoff but more likely the forecast for profit missing analyst estimates. why did the analysts overestimate profitability for 2019? >> we see a world economy that is growing less this year than last year. we see a lot of trade tensions, of course, negotiations ongoing between the u.s. and china, seems like they have positive momentum, but we don't believe that is the last of trade tensions, even if a deal is made. the u.s. also want to have a discussion with europe. and we see an oil price that is creeping up which affects our input costs. >> the telecoms forecast for 2019 earnings fell short, now

regionalsing competition, the phone carrier is prepared to invest billions on 5g. this morning, the chief executive said he is confident the t-mobile and sprint merger will be approved. talk to me about this merger. you say it will go through. i believe you were in the u.s. the last couple of weeks. who did you speak to and what makes you think it will happen? -- be approved? >> i was in the u.s. last weekend. when the one-year approval process. >> we have now one year of approval process for the thousands of contents we have had. trying to convince customers and politicians about this, the 5g network we were going to build in the u.s., thinking about the competitiveness which you want to strengthen with the merger of sprint. in the first half of 2019, we are waiting for the transaction per we got already the approval from the authorities. from the services of the

transaction, now we are looking for the doj and fec. >> shares of kraft heinz plunging after hours or the food and beverage conglomerate brought down the values of some of its most well-known brands by a total of $50.4 billion. -- $15.4 billion. what does this tell you about the state of their business? >> there is a lot of bad news. that is a very big number to be writing down the value. oscar meyer as well. they missed on etf's. one thing these guys do is keep profits strong. they cut costs. sales has been elusive, but to miss on profits, costs were higher than expected. there is a subpoena, they got a question about procurement, so this is bad news for kraft heinz. ♪

emma: welcome back to "bloomberg best." , theays posted earnings ceo jes staley promised more dividends as well as the banks shared buyback since he began his tenure. he spoke with bloomberg about the state of the global economy starting with the prospect of brexit and how it is affecting the financial sector. >> whether it is consumer or small business or corporate, we are actually not seeing yet any signs of stress in terms of credit quality. provision of 150 million in the fourth quarter just to be cautious and to be prudent. but actually, what we are seeing

is increases in cash levels. our deposit base is growing more than one might expect. right now, the economy itself is not correcting for troubles in the brexit market. you do get a sense through cash levels that people are clearly being increasingly cautious as we come to the final weeks and hopefully not much longer of uncertainty around brexit. right now, the economy is reasonably in good shape. it is wise for the banking industry to be prudent in terms of extending credit and how we manage credit given the uncertainty of brexit. >> brexit is one of the uncertainties markets are grappling with, not least trade war and also the fed minutes yesterday. we are seeing equities rally today, questions over whether that rally has further to run. what is your view? >> clearly we are seeing growth slow in the global economy.

very much in europe. we have a proper recession in italy. clear signs of weakness in germany, issues in asia as well. the challenge that the market is wrestling with is very low interest rates on one level. those support asset valuations that are higher. the flipside is if we go into a recession, the bullets the central banks around the world have to use to try to support a stronger economy are limited. >> that was the barclays ceo, jes staley. emma: later on bloomberg best, we will have more from the banking sector with several european lenders in the spotlight for all the wrong reasons. but coming up, it is back to brexit . amid all the uncertainty, there was one piece of news that got the city of london breathing a sigh of relief. >> regulators on both sides of

the channel have really worked to put in measures to ensure stability. emma: this is bloomberg. ♪ i'm a veteran

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best." i'm emma chandra. top executives from companies reporting earnings spoke with bloomberg throughout the week, and the conversation took a macro turn discussions of economic headwinds and political uncertainty and cloudy forecast for global growth in the eu and china. let's start with the hsbc chief financial officer, who talked about the bank's overall outlook with manus cranny. >> how did the china slowdown manifest itself in your numbers? >> it was surprising to see that at all in 2018 numbers. we had revenue growth in hong

kong, 14% in mainland china, and is international customer revenues were up 7% for the year. i think we are seeing some credit softness is in the u.k., and the uk's the market i would be more concerned about at the moment than hong kong. >> you have capital to deploy in the u.k. i hear you are rapidly trying to grow market share. is that hard in the current environment? >> no, the team did a great job last year. revenues were up 7% in the u.k., mortgage growth at 10%. we took another 50 basis points of market share so we are certainly able to take the share we want to take at the moment, and are able to grow the u.k. business. i think we are cautious on the outlook for credit, given the lack of certainty on the direction of the u.k. economy. >> let's talk a little bit about what's happening in china, and

the slowdown. do you have any material impact on your business as a result? are you seeing any slowdown in terms of exports? >> no, we are not seeing a slowdown in china. just recently china released the , official crude steel production for the calendar year, that was up 12% to 928 million pounds, a record year of crude steel production. that was a record year of production, we see those trends continuing, driving strong demand for steel and iron ore. and let's not forget that the chinese government is investing in infrastructure, whether it is rail or airports, there is significant investment continuing, driving demand for steel and iron ore. we are not seeing a slowdown in demand. >> we have been planning for a no deal brexit for the last four or five months. it is a prudent thing to do. passengers can be confident they

can still fly, still book ahead, even with the no deal brexit. the plans are in place to achieve that. the u.k. government and the eu have done a good job of listening to the concerns about the business to make sure trade and passengers keep on flowing, even in a no deal brexit. >> how is air cargo holding up? is it increasing as people prepare for brexit? do people want to get out of the country quicker than they would normally? >> so cargo is very stabilized at the moment. most of that the trading routes out of heathrow for cargo are quite full. but we are preparing for the possibility that there will be more cargo between the u.k. and the e.u. traveling by air, just, in case there is any congestion. we'll have extra facilities available for that and we will manage that smoothly, to make sure business can keep on

flowing between the u.k. and the eu. >> as negotiators put together a brexit deal, one headache was officially solved this week. eu derivatives traders will still be able to use london clearing houses, even if the u.k. leaves the bloc with no deal in place. the mayor of london praised the decision in an interview with bloomberg television. >> the regulators on both sides of the channel have really worked to put in measures to ensure stability. it's been highly responsive on both sides, a very good outcome. >> we also had officials from the ecb saying the majority of brexit authorization related procedures for banks have been completed. they say they want banks to invest under that supervision. what's your take on that?

>> both sides, the fca and ecb have really sought to ensure continuity of business. there are still, i think, some fine-tuning required, but either way, whether it is in no deal or deal, we'll get financial stability. >> when you talk about continuity of investment, how difficult is it in your role, outward looking, to sell investment in london, to strengthen the investment trade ties, when there is no certainty when it comes to policy? you look at the various outcomes, and it is not even very binary. >> so you are right. in terms of the uncertainty, it has been very frustrating. in many ways, what brexit is masking is huge levels of innovation that have taken place in the city and across the u.k. last year, we had another growth of 18% in venture capital gain in fintech, innovation in cyber,

life-sciences. in many ways, i'm very confident that as we look beyond brexit we are going to enjoy a period of growth associated with the fourth industrial revolution. that's where the u.k.'s strengths are. >> also this week, south africa put forward its 2019 budget. the government projects the widest deficit in a decade, and announced it will spend almost $5 billion over the next two years to bailout escon, the nation's struggling power company. that reorganization plan has drawn opposition from labor unions. bloomberg spoke with the chairman of escon and south africa's public enterprises minister about the controversial proposal. >> 23 billion --it's not all we needed.

there's a lot of pressure. >> if the unions block the government's plan, what approach will you take then? >> we are optimistic. everyone recognizes that this is an essential entity for the future of our economy, and secondly that we do have a serious crisis. thirdly, all of this is in the national interest because there will be more job losses if this is not delivered by all that is required by our economy. i think we will have intense discussions, and we will begin to envision a different future.

there are possibilities, and there are deficits in terms of engineers. there are other possibilities in terms of staying within the escon environment itself. it's all of these possibilities we need to explore. even on the financial side, as announced yesterday, it's the beginning of what the states can do and what escon can do, can and there are other mechanisms being considered. once we have the details we will announce those as well. escon is receiving intense attention from government itself, and we intend to bring all stakeholders together to solve the problem. ♪

>> this is "bloomberg best." let's continue our global talk of the week's top business stories with a bloomberg scoop probing the business relationship between the president of the united states and a major european bank. >> a top executive at deutsche bank was concerned after donald trump won the presidential election in 2016. bloomberg learned that the german lender was afraid that donald trump was about to default on $400 million of loans from him. the vice president of the trump organization said it was nonsense. what does this go to the heart of? is it the relationship between deutsche bank and the trump plc? do they still have that relationship? >> it does shine a light on what

the election of donald trump, what it meant for deutsche bank, because they do have a strong business relationship with donald trump. it shows how much it surprised people at the bank, who are struggling to come to terms with it. it was obvious that donald trump or his organization would default on loans maturing in 2023 and 2024, and it shows how much was going on. it is still going on. >> ubs has been ordered to pay $5.1 million after the bank was found guilty of assisting wealthy french clients to stash undeclared funds in swiss accounts. the french probe has been going for eight years. how big of a problem is this for ubs, given that it has been going on forever? is this almost a relief? >> it's eight years and they still want to appeal it.

you can expect more of this to keep going. the fine is large, probably the largest ever that a bank has had to pay france, if it is confirmed. the benefit of appeal is that they can keep being dragged on. kick the can down the road. they have another fine they have to tend to with the u.s. justice department as well, regarding mortgage backed securities, that could be another $2 billion. we will see how much they are earmarking out of these fines. >> socgen is drawing up plans to cut jobs in the investment bank. bloomberg sources say the bank could cut hundreds or even thousands of jobs, including roles in support functions in the investor solutions unit. give us what we know here so far and when we expect it to happen. >> it's difficult times for european banks. the revenues have been under

pressure in trading at the end of the year, and banks still need to make efforts. socgen announced a couple weeks ago and now the understanding is that in terms of the jobs effort, it's going to be pretty massive. it's early stage, but it is something that will be quite important. significant, in terms of magnitude. >> ecb officials are setting up their meeting in two weeks as a key, key meeting to decide if the euro area slowdown is bad enough to warrant some sort of attention. we are hearing that a lot of action is being taken to ready the research around it, but the ecb is taking a very calm approach. >> we today, got the count of the january meeting, and the conclusion was we need analysis, but we shouldn't rush with a decision. it's quite a hefty sum, more

than 700 billion euros, and the question for the ecb right now, the question to answer during that analysis, is to what extent this will impact the liquidity of the banking sector, and to what extent this could hurt credit probes in the future? i think that is where the discussions will focus. >> nigeria's president says the election commission is incompetent, this after a vote scheduled for this past weekend was postponed hours before polling was meant to start. do we know why it was pulled? >> the election commission said it was down to logistics. this is a massive exercise which includes all the elections, including local and state elections, something that involves 90 parties and 23,000 candidates and 84 million registered voters. they say it has nothing to do with security or political

interference, but both the main parties are saying accusations against each other. one party said the election commission was in cahoots with the opposition, and the election commission is standing by what it said from the start, that this is logistics, nothing else. >> the indian government has won $4 billion ahead of the upcoming elections. narendra modi seeks funds for populist measures. how did the r.b.i. come to this decision? how big a role did the governor play in this decision? >> this is a process the r.b.i. generated in the first half of the financial year. now, the r.b.i. holds domestic and foreign currency assets of about $400 billion, profit

generated from treasury operations. that is the production cost in the value of the currency. to your second question, the qu question is yes and no, but one gets the feeling that last year, the government made a demand and there was a bit of pushback from the governor. this time around, we didn't see that kind of pushback, and the demand was met immediately. >> in a bid to rival silicon valley, china's policymakers are aiming to tie hong kong and macau closer to the mainland, as they build a high-tech metropolis with global aspirations. what is the outlook for this enormous plan? >> if you think about this whole region, 67 million people, if you put it all together, it would be a $1 trillion economy.

it's a massive economic fear. yet, hong kong and macau are separated with different legal systems, different political systems, different monetary policy. they should all be the same, according to beijing. the idea is that if you can somehow integrate them, you will be able to drive regional development and economic growth. >> the prime minister says things are still rosy with china as she faces pressure from opposition lawmakers after the government said it has major security concerns about letting huawei enter new zealand. are there any signs that china might be retaliating against new zealand over huawei? >> all the staff earlier this month was down for shanghai, forced to turn around midflight because they didn't have the right paperwork to land. it seems relatively innocuous at

the time, but there were signs that china was growing unhappy with new zealand. the prime minister's visit to beijing, which has been in the works for quite some time, remains in limbo because of scheduling issues. it does look a bit like china is trying to send new zealand the message, and the opposition is quick to jump on that. and claim that the government was mishandling this relationship. >> samsung has unveiled a new lineup of handsets in san san francisco and london. the tech giant initiated new phones with a price tag of more than $2000. at that price point, will it galvanize anyone to renew their phone? >> no, i don't think so. [laughter] i have a feeling it is going to be a bit of a novelty. but, honestly, from a

technological development standpoint, it really is a big step in the right direction. i think foldable technology will get integrated across product lines with all vendors overtime, and samsung is the innovator and the first to do it. in that sense, it is an important launch. will it sell? we will see. >> tesla's general counsel left after just two months in the wake of elon musk's run-in with fec regulators. the ceo hit send it too soon on a tweet. we did see that elon musk tweet on production numbers. he had to retract that. just hours later, this announcement of the general counsel leaving. the two, were they linked at all? >> no, i don't think so. i think the departure was going to be announced, and it was just unfortunate timing that it came after the tweet.

it brings up the whole question of elon and social media, and if there is anyone in the legal department monitoring the tweets before they go out. >> bernie sanders is giving it another go. to vermont senator has announced he will run for the democratic presidential nomination in 2020. have any of his policies changed, or is it just a more favorable environment for a self-described socialist to come back and hit the campaign trail? >> well, one of the policies he promoted in 2016 he is promoting again, but it has shifted. he lit a lot of fires under progressives, young people, and energizing them for 2016. there's now a lot of candidates in the democratic race, being warmed by those same fires, most notably elizabeth warren. so, he has a real challenge here in trying to set himself out from the rest of the pack.

he's not quite got the unique position he did before. >> one of the most influential fashion designers has died. karl lagerfeld, the longtime artistic director at chanel among many other names, he dressed celebrities from princess diana to keira knightley to almost anyone you could name. he worked for fendi and his own label. he was 85. how did he manage to keep chanel at the very top all those decades? >> although he was 85 years old, he was young at heart. he would take coco chanel's ideas and reinterpret them for a modern age. you have the quilted handbags, and tweed suits, he modernize things and had a young following. >> karl lagerfeld, in memoriam. ♪

>> bloomberg television launches a new, one-hour program showcasing the global reach of bloomberg news and the power and intelligence of the bloomberg terminal. it will be anchored by tom mackenzie and yvonne man and david in hong kong. it will bring you all the market moves as they happen, sharp analysis of the economic and policies that matter. we will be speaking with big names, u.s. china business council, china asset management, and a china chairman. that is weekdays from 8:00 p.m. new york time, 1:00 a.m. london

time, and 9:00 a.m. hong kong time on bloomberg television. now, as we come to the end of another week, the clock continues to tick toward march 29, when britain is scheduled to leave the eu under the terms of article 50. it is unclear what kind of brexit the uk's heading towards. so, how can investors play sterling? here is what we have been hearing. >> as brexit uncertainty continues to swirl, some analysts are trying to forecast events that many of their peers have said is untradable. naraj patel says that in the event of the shift toward a softer brexit, cable will strength between 1.38 and 1.40, and that a hard brexit could still boost the pound. he says it could settle between 1.34 and 1.35. but extending article 50, increasing the uk's political

limbo, it would be the worst of all, taking it to 1.30. david bloom of hsbc says staying in the eu could give sterling a surge, a level not seen since 2015. but an exit from the bloc without a trade deal could be disastrous, bringing cable down to 1.10, a level it hasn't fallen to since the 80's. none of these forecasts are the worst-case scenario. a disorderly brexit could see the pound dropped to below parity with the dollar. with time running out, with or without a deal, who knows where sterling will end up trading? >> stay tuned to bloomberg television for all the latest developments on brexit and all related business news and analysis, available on bloomberg.com as well, 24 hours a day. that will be all for "bloomberg best" this week. thanks for watching. i'm emma chandra. this is bloomberg. ♪

jonathan: from new york city, worldwide, i'm jonathan ferro. bloomberg real yield starts now. coming up, u.s.-china trade talks ramp-up in washington. little sign of anything testing the federal reserve's patients anytime soon. credit grinds tighter. we begin with the big issue. is the good news baked in? is it time to start fading the rally? >> this is a good time for investors to de-risk. >> owning more cash than normal. owning more high-quality bonds.