francine: a global health of me urgency. the u.s. -- health emergency. the u.s. and japan want to avoid traveling to china, calling the coronavirus an international health crisis. p.m. u.k. time, boris surges the u.k. -- boris johnson urges the u.k. to come together. and the currency giants crushes wall street estimates. to -- set toed join alphabet in the trillion dollar crunch.

well, good morning, good afternoon, good evening, everyone, depending on where you are in the world. this is "bloomberg surveillance ." i am francine lacqua here in london. these are your markets. the sectors and the stocks that they cover, trying to figure out exactly what coronavirus means for central bank policy or global gdp. pound 1.41. the u.k. leaves the eu at 11:00 p.m. london time. today, we speak with this senate vice chair of richard clarida. do not miss that interview at 5:00 p.m. london time. here is the of yana hurtado. viviana: we begin -- viviana hurtado. viviana: the hard work of brexit is far from over. next comes the future trading future with the block and the

signals from was mr. and brussels, that may be even more contentious than the divorce agreement. today, prime minister boris johnson will urge the u.k. to unite and level up as it leaves the eu. senate majority leader mitch mcconnell likely has the votes needed to block witnesses in president donald trump's impeachment trial. it makes it increasingly likely the proceedings can wrap up today. it is all but certain to and up in the president's acquittal. pressures for the open up plus meeting has hit a roadblock in russia, worrying that the coronavirus could weaken demand. every time opec has had an emergency meeting in the last decade, it has reduced production to lift prices. supporting an economy in a downward spiral. rural may include areas and possible debt cuts.

it is expected to widen the budget deficit target for the next year. yesterday, amazon's results propelling jeff bezos's fortune to new heights. he gained over $13 billion in about 15 minutes. the world's richest man is now worth about $130 billion. his stock come up either way, propelled by the news that amazon now has 150 million prime subscribers, up from 100 million just two years ago. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. francine? francine: thank you so much, viviana. we are getting two pieces of news, first of all, potential thyssenkruppe elevated division, saying the company is facing an extremely difficult situation. once a symbol of german engineering prowess, now

fighting for survival in this manufacturing slump. we are also getting news out of gdp slumping. the italian economy contracting 0.3% in the fourth quarter from the previous quarter appeared on to our top story, the coronavirus is an international health emergency. the world health organization has initiated and coordinated a global response. now the death toll has risen to 213. the u.s. government has advised americans not to travel to china currentlyhat those there should try to leave. japan has told citizens to avoid a national travel to china. a publiceclaring health emergency of international concern over the theal outbreak of coronavirus. the main reason for this

declaration is not because of what is happening in china but because of what is happening in other countries. our greatest concern is the potential for the virus to spread to countries with weaker health assistance. francine: within the last few minutes, chief executive carrie lam says hong kong will extend full holidays until march 2 the hong kong government also plans to continue the special plan until next sunday. now let's bring in our chief north asia correspondent, stephen engle. he joins us from hong kong. stephen, the latest is the number of deaths is rising. can you tell us anything about containment? is it working at all? stephen: containment is the big issue. you have to contain it before you can get any kind of improvement on those numbers that we seem to run through every single day. yesterday when i was sitting at

talking to you, francine, we saw a day over day jump of 29% of deaths and confirmed cases. today, it isy another 25% of deaths and confirmed cases. the numbers, because of the long incubation period of up to two -- s, also the symptomatic aenzymatic characteristics of this virus is making it harder to contain. but again, as you just said, carrie lam saying -- erring on the side of caution, the chief executive of hong kong, saying schools are not going back to school until march 2. fromboth let out a yippee my 11-year-old daughter and a sigh of expiration from my wife. families across the city do not know what to do with their kids for the next few months, but that is making light of a very serious subject, because the

facemasks, they are in extreme short supply right now. hand sanitizers, you cannot find it. fresh vegetables are sold out in many grocery stores. people are preparing for the worst. francine: our people scared? i do not know whether we have any direct knowledge of the mortality rates attached to the virus and if people believe them, but what are people saying? what are people afraid of? stephen: all i can look at is the numbers, and i was here during sars 17 years ago. that was, of course, a deadly virus as well. that seemed to be more deadly than this current virus, but this one seems to be -- and again, i am not a meteorologist or a scientist, but it seems like -- virologist or a scientist, but it seems like this is more contagious. people are traveling, and of course the virus originated in china. that has no effect as well as the economy, which we have not

talked much yet, and that is of course the chinese economy is so much larger than it was 17 years ago, so a prolonged effect it does last 5, 6 months like sars did will potentially come according to economists, be much larger than the sars outbreak, which knocked about $40 billion of the global economy. francine: to actually have an idea how to model this, given that we are in the early days of this virus. stephen: yeah, i think people are coming up with their models. sachs eventoldman what, 10 days ago, i cannot even remember now, about a week ago, and people were saying well, we cannot really model it out yet, i think it is temporary, but things have changed dramatically in the last week, and i think we are looking at new models are projecting the damage to the global economy coming up. i believe andrew tilton at goldman saying gdp, his estimate, will be as low as 4%. that is down from his earlier

estimate of 5.6%, and that would mean if we have a 4% gdp growth in china in the first quarter, that means full-year of 5.5%. a significantly lower than what the government is saying. francine: stephen engle in hong kong, thank you so much. stay with "surveillance." it is finally happening, after 3.5 years, there u.k. is finally leaving the european union at 11:00 tonight. and stellar earnings is set to propel amazon into a prestigious group of companies. shares of 9% of amazon in premarket trade. this is bloomberg. ♪ ade. this is bloomberg. ♪

francine: economics, finance, politics, this is "bloomberg

surveillance." i am francine lacqua here in london. it is finally happening after three to have years of division, the u.k. is leaving the eu at 11:00 p.m. u.k. time. the starting gun began with a speech by david cameron at bloomberg's old office here in london. he expected the vote. the period since then has been one of unprecedented volatility for investors and westminster. let's get more with our anchor, anna edwards, who is up in parliament, and also maria tadeo. thank you both for joining us on what is really a historic day. so much this year. first of all, what are the priorities for the eu going forward? francine.d morning, the eu said they are ready to go for a big comprehensive trade deal, no quotas and no tariffs. they want the relationship to be

fair. there are two things they worry about. we know the timeline. only 11 months to get the deal done. when you look at the calendar, it is less than that, because the europeans will not get to the negotiating table until march. secondly, they do worry about deregulation, they worry about the united kingdom cutting taxes, perhaps even providing state aid to attract money, to attract foreign capital into the u.k., and they worry about the future of the single market. they want to protect the european internal market. this is still very much the crown jewel for the eu. two things for the timeline, so we get the trade deal done so quickly, and secondly, how closely aligned with the u.k. state to the eu in the future? francine: anna, you have been covering this from the very beginning, and, again, now starts the real work, right, boris johnson negotiating with the eu. what is one thing we need to watch out for in the next 11 months? anna: yeah, well, alignment is

really the key over here, francine. to what extent will u.k. remain aligned with the european union on various matters after brexit? point around whether they will be away from eu on safe haven and regulation, and that is one of the key focus, that is what many people will be watching for. boris johnson has also said he will not extend the negotiating period, so whether that happens, whether he sticks to that or whether he does have to be flexible with the timing is also going to be crucial. we had a couple of guests on earlier who suggest maybe he will get a simple deal rather than a comprehensive deal, maybe call it a phase one deal of brexit rather than any total wrapping up of the negotiations, but so many things remain uncertain about what exactly will be included even, how much the services will feature, 11 months of negotiations, and what will happen at the end of 2020, if we do not get to any kind of deal?

boris johnson will speak at 10:00 tonight, 11:00 u.k. time. that will of course be midnight in brussels. francine: anna, very quickly, are people celebrating in london and elsewhere today? anna: there will be. boris johnson is going to speak, as i said, to the country, and he is going to be mindful. he is speaking to two distinct different constituencies here, some who voted for this and some would not. there will be some celebrating and some holding vigil. francine: thank you for joining us, anna edwards and westminster and maria tadeo in brussels. the deputy director of the u.k. in a changing europe. more,le, what will change the u.k. or europe? clearly the u.k. will change more. it has been going forward on integration for the last 40 years. the u.k. has been with them for some of that time.

it is going to drop out, and things are going to be very, very changed, i think them over the next 10 years. not immediately, and that is very important. i do not like the military metaphors, but it will be like a war. we will not see in terms of the man or woman in the street much change until next year. francine: how will the u.k. change? if we have close alignment -- we do not know if that is true or whether there will be some crash -- but how wto rules will the u.k. change? dr. bale: i mean, what i think we will see in that sense is a gradual move apart. if we manage some kind of free-trade agreement, and i think it will have to be a bare-bones, phase one style agreement. we will just gradually see changes in maybe product regulation, labor standards, environmental standards. i do not think it is anything somebody will notice straightaway, but unless we make those changes, people will argue well, there is no point in having done this in the first place. there has to be a difference

between the u.k. as it was in the european union and the u.k. afterwards, otherwise there will be no economic benefits. francine: but what kind of change? just limiting immigration, right? if that what people voted for? dr. bale: immigration was a very good part about 2016 referendum decision. there are people who argue that low pay, low skill workers in this country will benefit if we reduce emigration from the eu, since many of those people were competing in the labor market for those jobs. personally, i am skeptical about that. the evidence does not indicate much change there, but that will in some ways change the face of the country, but it will take a long time. there are millions of eu citizens already here. we will not walk on the street and see them disappear. most of them will carry on living here. francine: how will london change? dr. bale: london is one of the cities clearlyc in the u.k., in europe, and indeed on the planet.

london has to worry about the impact on services of this change. the eu has never been a particularly can liberalize or on services, and the argument is london is a much more global city with a more global market. so i am not so sure that getting after the eu -- out of the eu will impact as negatively on banking and services. francine: thank you very much, tim bale, queen mary university of london. the professor stays with us. propel amazongs into a prestigious club of companies, with more than 1000 billion dollars. more on that later in the program. this is bloomberg. ♪ this is bloomberg. ♪

francine: let's get back to brexit and talk about the economic angle. from with us, tim bale queen mary university in london. talking about the u.k. economy and how it will change in the next 10 years. how will the economy change? dr. bale: there are two things to watch out for. the first is during this transition period of negotiations come in the meantime come up to what extent is there more uncertainty in regard to economic outlook and how much i private investment you are going to get and how much growth you are going to see. the second question is with regards to the long run, now, for example, if you have a next rotation that there is going to be a relatively bare-bones,

free-trade deal with the eu, the twowill be between economic entities, and that over time i think would be a headwind to economic growth, potentially to the supply side to the economy. it may not be a recessionary type scenario -- it probably would not be -- but it could be that drip that could overweight on the longer period of the u.k. economy. francine: what does it mean for pounds? lastrday, mark carney's press conference, that is the bank of england governor, every assumption they have is based on a deal with the eu. what if we do not get a deal with a economy? chris: if we do not have a deal with the economy, it is quite possible to see a down price of a sterling. there is more economic uncertainty out there and potentially those economic relationships could become very frayed with the u.k. and it's s most important trading partner. given the fact that there are estimates, fair value of

sterling that are significantly higher than what they currently are, 140 plus against the dollar, for example, but you can see an upside over the coming months. that is the central view that there are supportive factors of sterling. there are of downside risks with regard to the future negotiations. francine: professor bale, do we have real insight to what the prime minister wants with the eu? he has said time and time again he is not going to extend. dr. bale: he has said that, but he also said last year, and privately as well as publicly, he really was not in favor of a note yield exit -- no deal brexit. i think that is still his opinion. whether he actually declares openly that he is going for some kind of extension in the middle of this year, i very much doubt, he has made that promise, but there are ways of fudging that extension with them as he said, a phase i agreement and a bare-bones agreement. there are ways of doing this which effectively mean he does

not break his promise. francine: direct investment in the u.k. is something that is years.g us over three productivity is a big puzzle for companies as they prepare. does that change once brexit is really done? chris: well, potentially, we and other economists, notably the bank of england yesterday, have become more bearish about the u.k.'s long run potential. one is potentially future trade barriers between the u.k. in the eu. that could weigh on long-run productivity growth in the u.k. the other issue of courses is given the continued weakness in productivity growth since the financial crisis, really, i think there is reason to feel more pessimistic than we used to be. but back in the past, when we were thinking about long-run productivity growth of 1.5% to 2% in 60 years or so before the financial crisis, now we are looking at 1% looking like something that is optimistic. if you layer on top of that the

prospect of trade protectionism, i think the prospects would be to relatively cautious, even pessimistic about the productivity outlook. francine: we have a great story on the bloomberg terminal, business seeks new identity. and fiscal spending, a government that would give much more back. dr. bale: well, it has won an election on the basis it is going to spend more, however, if, as chris says, that means tax revenues will go down and there will be less money to do that. how they reconcile that, who knows? more borrowing to my guest. francine: thanks for joining us, 10 bales, queen mary university of london, and chris hare of hsbc, stay with us. this is bloomberg. ♪ th us. this is bloomberg. ♪

francine: a global health emergency. the u.s. and japan is told to

avoid traveling to china after the coronavirus is declared an international viral -- crisis. tonight at 11:00 p.m. u.k. time, boris johnson urges the u.k. to come together after years of brexit division. and in amazon spending spree pays off, crushing wall street estimates. it is set to join microsoft and apple in the trillion dollar club. good evening, everyone. this is bloomberg surveillance in london. we are keeping you up-to-date with everything happening with the coronavirus. we have all angles covered. we heard moments ago from hong kong saying that there is a complete border closure, not in line with the who, but banning visitors. i'm not sure she's banning chinese visitors, but they have closed a lot of the barriers. from theve an update

u.k. health department confirming that there are two cases of coronavirus in england. we will continue keeping an eye on what that means for how the u.k. actually operates. 1.5 hours into the trading day, let's go to anne-marie. >> it has been surging all morning as they get a lifeline 2 million to 5 million pounds. and are making a new suv down more than 3.5% even though they beat estimates. they say the 2020 outlook might mean that downgrades are on the way. and benko's have a dell down more than 10% today, one of the dellest -- and banco saba down more than 10% today, one of

the biggest losers. still struggling, francine. francine: annmarie with one of your stock movers. is in trouble according to a chief executive working to sell the elevator unit to help shore up balance sheets. the company telling shareholders they have no time to lose. they are suffering from a manufacturing slump and shrinking margins. potential buyers value the elevator division at more than 15 billion euros. the coronavirus outbreak is a global health emergency. the u.s. and japan advising residents not to travel to china . the death toll has risen to more than 210 with the number of infections jumping to 9800. the french italian economies are unexpectedly shrinking in the shadow of europe cost recovery.

-- europe's recovery. 1.3%, thehrinking most in almost seven years. one bright spot is spain growing faster than expected. executive, new chief currently head of the companies cloud and cognitive software unit. he was a principal architect of the purchase of red hat completed last year. the long-time ceo continues as executive chairman through the year and then almost after 40 years with ibm should retire. global news 24 hours a day and on quick take powered by more than 2700 journalists in more than 120 countries. this is bloomberg. francine: just looking at the updates from some of the health officials here in the u.k., one of our producers just sent me this from the department of health and social care. twitter is usually a very

reliable source and this is the latest update on the u.k. from the coronavirus. the statement confirmed that there are two cases in england and we understand that they are probably from the same family. we will take a look at how this impacts your market. of course, the economy is something that people want to focus on. i think i'm looking at earnings versus the fear of the coronavirus and european stocks pretty much unchanged. let's look at amazon, the online giant and the cost of next day delivery. news,ocks surged 12% on setting it on course for a $1 trillion valuation. richard windsor, founder of , an analystobile --cializing in mobile humans

richard, let me kick off with you. what did amazon teach us yesterday? >> i did not catch the question. >> what did amazon teach us yesterday? >> this notion of crushing estimates, the right way to think of it is that amazon has not crushed expectations. the company this quarter is less profitable than it was last year. it is not exactly news because what they are doing is investing quick deliveries, which is fine. but i think it's sets amazon up to basically be more of the same. amazon has a horrible habit of not making any money. it is fine, but that is really where my issue with the company lies. great company, good strategy.

and there were so many questions about the fact that they were overspending. does this give the strategy a bit more credence. >> absolutely. i'm the last person to criticize the strategy. if you look closer at the numbers, aws is guiding extremely well. have become an advertising juggernaut. they have 150 million amazon prime subscribers. from that perspective, things are going extremely well. they have done a reasonable job when it comes to this last mile. they made people overly cautious in terms of what would happen. given the history of suddenly reporting losses, on that front, better executional around. around.tion all francine: do results show some of these investments have huge

amounts of money in overseas markets like india and brazil? does this invalidate the strategy that the investments are paying off? >> i agree with pretty much everything richard said. the property driver is aws. that is the high-margin business. the ability to make the commerce , there areofitable big questions on that. it does swing from quarter to quarter. know about all the stocks out and what kind of business they could deliver if they wanted to. or earnings better than last year? or are they paying so much for next day shipping that they have lowered expectations? >> i think that they have

lowered expectations. you can say that it was quite clever or may a shrewd way to set expectations, appearing to be something of a blowout. coming up with big surprises that the market hasn't expected. and we see that reaction. francine: how did amazon web services do? >> quite well. growth is slowing, not because the business is weakening, it is just down from large numbers. the cloud industry is a big industry and it will grow more slowly. this is underpinning a lot of amazon investments elsewhere. in terms of the dominance of the cloud space, no real concern other than it is growing faster and very slowly beginning to catch amazon even though it is a very long way behind. happens tohat

valuation from here? >> it will go up. it is sort of expected from the overnight jump in the aftermarket. narrative evolving at amazon that goes from being the everything store to the everything company. people think the sky is the limit. of also look at the details the company closer. it is not all plain sailing. some argue the website is a bit of a mess. if you look at some of their new efforts, whole foods was one of the less positive parts of earnings yesterday. not all of those are the great success aws is. francine: chris, how does this translate to the world of economics? does it mean inflation will stay low? >> intentionally, that is the

puzzle that banks are grappling with around the world. despite this labor cost in the major economies we look at, underlying rates of inflation are very low. it looks like companies are taking a squeeze on their profit margins. it might have something to do with global competition keeping inflation low for a persistently long period of time. that is weighing on banks and one reason why they are staying the. francine: alex, richard, and chris, thank you. in the last 10 minutes, the u.k. health department has confirmed that there are two cases of coronavirus in england. and this is while the u.s. and japan advised citizens to avoid traveling to china. let's see if there is an impact on the pound. i think we have it over there. this is bloomberg. ♪

>> the government's position is to remain in a reformed european union. >> we don't have a plan b, we have a plan a to stay in the european union. in the numbers, remain 48%, leave 52%. >> the british people have made a very clear decision to take a different path. and as such, i think the country requires fresh leadership to take this direction. >> brexit means brexit. right, 242.to the the nace to the left, 391.

the no's have it. >> they must now accept their deal, their proposal, the one the prime minister put is clearly dead. >> it is in the best interest of the country for a new prime minister to lead. >> after three years and two missed deadlines, we must leave the eu on october 31. advise thesion to majesty was unlawful. >> i don't want an early election. we have gotten to the stage where we have no choice. the conservative government has given a powerful new mandate. our laws, borders, our trade, taking control of them. [applause]

francine: are look back at the brexit journey in 100 seconds. we talk a lot more about the future of the u.k., future member countries of the eu. let's focus on the economic picture. joining us is chief executive of frankfurt, describing themselves as the voice of the eurozone's leading financial center. chris is still with us. we have pretty difficult figures out of europe this morning. the french and italian economies are shrinking. this is a huge blow to the european recovery. a much worse off will germany be given that there is brexit? >> brexit is certainly bad for europe. it is bad for germany. and we expected to be bad for the u.k. where there is no winner. francine: talk to me about what

we've just heard. it french ddp falling 0.1%. how problematic is it for the eurozone and the eu that they no longer have a u.k. to help them reform and align some of the rules that are much more anglo-saxon and you see markets. >> the german economy saw somewhat better growth. the growth is bad. it looks like a pretty soft picture. we are expecting at least a gradual grind up. there is a chance that q4 was the trust. there was the trade deal between the u.s. and china. and we see a bit of improvement in manufacturing surveys, particularly in germany. household income and spending looks relatively robust.

we found out that the eurozone on employment rate have fallen to lows. all of those things point to a gradual slow grind up and growth. -- in growth. the prospect of trade barriers between the u.k. and the eu could be a headwind at the margin, but at least it is a central view. i am cautiously optimistic that q4 might've been the worst. francine: when you look at frankfurt, can you attract jobs? >> to some extent, yes. there are financial institutions that made close to 60 applications to set up in frankfurt or expand existing operations in frankfurt. one of which decided to make frankfurt the new eu hub. over onein total, billion additional investments into the city. francine: what if the bank had chosen paris? >> a clear minority.

when i say they have chosen, that means the eu hub for most of the banks. that is a change from what you have seen before. the u.k. used to be the sun in the financial system. francine: london was. have operations in frankfurt, paris, and milano at the same time. i keep on hearing with chief executives is that they are struggling to send their people to frankfurt, paris, or brussels because people don't want to live in these cities. how many jobs are we moving to new york instead of keeping it? >> that is the biggest danger. i can't give you a hard number on that.

it will go to centers outside of europe. how much do you worry about the recovery that could be coupled by what president trump threatened with davos? >> i think there is a little bit an industrial recession. for example, now that we have seen the phase one trade deal between the u.s. and china, they are opening up on a new front with regard to the digital tax. is in terms of u.s. car imports. there is a firm judgment on what it does to deal with that front. the risks are still there with regard to world trade. there are those downside risks

that are still very much apparent. francine: and we negotiate in the next 11 months what kind of relationship there will be between the eu and the u.k. >> france will be the financial center closest london. let's build a new london bridge. we believe, in terms of the u.k. and germany are closest. that is one of the reasons why it is a big loss. the relationship between the financial centers will be symbiotic. it will be in a way that london is even more international looking. frankfurt has been very international looking. we see it more inward looking. frankfurt will become more eu focused. francine: thank you both for

joining us. up, the first two cases of coronavirus in the u.k.. we will bring you more of that breaking news, next. this is bloomberg. ♪

francine: this is blumberg surveillance. i'm francine lacqua and london. -- in london. let's get more on the coronavirus. the health department we did 20 minutes ago, "we can confirm to patients in england members of the same family have tested positive for coronavirus." receiving treatment to prevent the spread of the virus. eric, this is unsurprising, right? it is spreading very quickly. what do we know? what do we expect? >> we have to find out where these cases were. they said that there were two

members of the same family. we do not know their nationality, location, details of where they might've traveled or come from. francine: what does it mean for borders? the nhs is second to none in terms of health services. do we know if they will be isolated or because of the way that the virus spreads, should we assume that it will touch others in the u.k.? eric: they will surely be isolated. that is what they are doing with cases in europe. we've seen cases in germany, italy, france, and elsewhere. it is inevitable it will spread to the u.k. at some point. they will do the best they can and they will certainly be isolated. francine: half of the european press says this is not more deadly than the normal seasonal flu and others compare it to sars and say it is much more aggressive. where is the reality? eric: it is apples and oranges. on one hand, the total deaths are much lower than the flu.

the flu kills thousands of people every year in one country alone, in the u.s. alone it killed something like 6000 people in the fourth quarter of last year. sars has a much higher death rate. somewhere in be between. francine: european stocks are edging higher, but in the last 15 minutes or so, we have confirmed the first virus case here in the u.k. bloomberg surveillance continues in the next hour. tom keene joins me and we have a conversation with the fed vice chair. we will have a full roundup of your stocks, earnings to watch out for, and volatility in markets. this is bloomberg. ♪

francine: a global health

emergency. the u.s. and japan have chosen to avoid traveling to china hours after the who declares the coronavirus an international crisis. two family members and the u.k. have been diagnosed with the virus. that's a wrap. britain and the 47 your membership ends tonight at 11 p.m. u.k. time. boris johnson urges the u.k. to come together after years of brexit division. and amazon's spending spree pays off. the e-commerce giant's earnings crush estimates as set to join and alphabetrosoft in the trillion dollar club. we have a lot to get through. we had some pretty discouraging data out of france and out of italy. the u.k. is leaving the eu tonight at 11:00 p.m. london time. the coronavirus will keep on tracking it. we have two family members and

the u.k. just diagnosed with it. data hascoronavirus really deteriorated in the last 24 hours. a lot of adjustment to gdp estimates with china going on right now. francine: we will have plenty more on that and you could see these cases, you could see a touch in the pound. here is viviana hurtado. viviana: president trump is all but certain to be acquitted because mitch mcconnell probably has the votes to end his impeachment trial. this without calling witnesses or new evidence. emma kratz need for republicans to break ranks -- democrats need four republicans to break ranks. one says he won't. died says 213 people have with the number of cases on the mainland soaring in one day by almost 2000.

about 9700 cases. two cases are confirmed in the u.k.. the u.s. and japan are urging citizens to avoid travel to china. after years of division, boris johnson will urge the country to come together. the u.k. finally leaves the european union today. in a video message, boris johnson will say brexit is not an end but a beginning. u.k. has an 11 month transition period to work out a new relationship with the eu. soaring, coming out with results crushing wall street estimates. amazon says it now has 150 million subscribers to the prime service. from two years ago, that is up 50%. than 2700 more journalists and analysts in more than 100 20 countries, i'm viviana hurtado.

this is bloomberg. tom: at me do a data check. one screen today. markets are remarkably stable. dow futures -110. but other than that, a real stasis out there given the news out of china. francine: i'm looking at similar data points. stocks are mixed with investors figuring out what earnings need. what shares from china mean. after 47 years, this is the day where the u.k. leaves the eu. we saw a bit of movement on pound. we also have two cases of coronavirus in england. tom: right now, i want to show a chart that i've stolen from stephen engle who is at home in china. our lead reporter there. this is a log chart. this is what we all know about gdp from 10% down to 6% over the

many years. the blue circle is what steve engle talked about yesterday, jp morgan with the markdown of gdp 5.6%. and the economist intelligence unit has done a survey that goes down as low as 4.4%. that is banded. not a prediction, but an idea. mr. engel joins us again from hong kong. i want to talk about how people will come back to work. morning.day, saturday what happens sunday morning and monday morning across china? >> people will probably hold off going back to work because 14 provinces including all of the eastern seaboard provinces as well as the middle part where wuhan is, the government has extended the lunar year holiday by another week.

going to go into mid february because they want to contain this. withdon't want everybody the a symptomatic nature of this virus traveling and exposing more people. it very well could look more like what we saw this week as well. people not heading back to their hometown. listen. end in theseen an number of new cases. francine: do we have any further idea from the who or from china what the incubation period is? that seems to be the big mystery. stephen: the indications i have read can be anywhere from eight days to 15 days. anywhere from one week to two weeks. it really throws a spanner in the works. havee have proven not to

any symptoms. no fever, no cough, no runny nose. so that is the scary part about it. how many people have survived the virus? when you look at the mortality rate, i think it is 1% compared to the seasonal flu. if you look at sars, it was 10%. what is this virus like? i'm not a virologist or a scientist, but i can look at the numbers and extrapolate. same.similar but not the we had more deaths and fewer confirmed cases that did not lead to death. however, there was a lot of underreporting 17 years ago. there were weeks if not months that this virus was around that china did not share the information.

this time around, we have neil ,erguson who is an economist upwards of 100,000 cases of this virus right now. again, the uncertainty is what is biting all of us right now. francine: is china handling this better than they did sars? have they learned? is it more difficult to handle? there are more people living in china and they travel more. stephen: they have been more forthcoming on information then they were 17 years ago. but keep in mind, 17 years ago, there are 20 million chinese travelers that would go abroad every year. now there are 163 million chinese tourists that go abroad every year. containing it within the borders of china is much more difficult. on the globalion economy is much more difficult to contain as well. sales arevel retail

attributed to the chinese. keep that in mind. great reporting on the ground, stephen engle joining us from hong kong. economicbout the impact, we are joined by james sley and peter traffic -- haffrick. in the last 10 minutes, we had in england.pear this could have a huge economic impact. arend really right now, we speculating. the longer china is in lockdown, it is a bigger effect. is morey when there cases, the larger and potential impact. the market is defensive. we haven't seen the sort of move that we have seen.

we have seen significant movements back to the safe haven. ismagine by and large, that the change that will be made. the dollarranc and havens.ining safe and you mentioned the edge taken from sterling gains in the last half hour or so. i think it will be a safe haven for now. dependent on the news flow, it will be what the central banks will do about this. do they need to do something about this? tom: is there a major economy

view of what we see in china? peter: china is obviously very important. we have to assess, clearly, how big the damages. having said that, we heard that from jay powell as well. it was relatively slow. it lets put it that way. it for the european situation, it was slightly different. , theren take a step back is a phase of uncertainty about a whole range of things. we were just on the verge of bouncing back. perspective, i think the crucial story, the bounceback story needs to be changed wholesale. it is early days.

in all the dynamics, the litmus paper, the markets are quiet this morning. how have you adjusted your foreign exchange clause? is there a defensive safe haven trade makes sense? of the news over the last week or 10 days, i think the strong dollar trade is very much there. it is something that many people have anticipated. certainly, the dollar remains one of the best-performing currencies. as long as there is this degree remainrtainty and people skeptical of emerging markets and risky assets, the dollar will remain pretty firm. is difficult at this stage to know how long the trade will remain relevant. this is very much in the news over the next few weeks.

on the other side, the commodities will be very sensitive to growth and very sensitive to china. on the back of that, the aussie dollar. it is very much dependent on the news flow. and the commodities will remain at their favor. and there is the swiss franc, how they continue to defend that currency. withour guests will stay us. you should also stay with surveillance. it is finally happening after three point five years. the u.k. is leaving the european union today at 11 p.m. london time. the $3 ahead and trillion empire amazon being group of to the oneanies worth over

trillion dollars. this is bloomberg. ♪

>> restoring freedom, rule of law -- francine: europe has a clear message. we heard from the european president. we saw him flanked on his left by the commission president. that the eu will stay strong and stay together. i was following on twitter with christine lagarde, giving her message to the citizens of the whatying that she regrets is happening. happening after andyears of division uncertainty. the starting gun was fired in

-- at a2013 by a speech speech by david cameron. if you expected he 2016 vote to go the way that it did. the time since then was volatile. we have been following this from the very beginning. let's kick it off. what is the mood in london today? some people celebrating. some people won't. >> it is probably all of the emotions in london, francine. there will be celebrations. willeave means leave party be holding celebrations in parliament square. vigils for the remain side will the firstplace

minister of scotland writing a message to the european union saying to leave the light on for scotland. scotland did not vote for this. is leaving the and whetherom -- that holds together. and while, lots of talk about the big path that lies ahead. negotiating this trade arrangement in record time. there are only 11 months available is no delay to that process is called for by june. the prime minister won't ask for the delay. tom: i know it is a day of big views. let me go narrow. when is there british passport line at heathrow? >> i know any transition, brits will be able to use the eu line.

on a very narrow and niche point, that is the continuity for today. it does raise questions about what exactly changes. certainly it's not that. there will not be a british line at heathrow overnight. he will still be using the eu one. there will be changes, but they will be slow to come. nothing changes overnight from a business perspective. business carries on as before even if u.k. will no longer be sending anyone to the seat at the european council table. fascinated by this been in brussels. brussels.spin in all the words, majesty, blah, blah, blah. how will they feel in brussels? >> i think people here will feel relieved. everyone is saying they are really sad.

every reality behind the scenes, the conversation has moved into future relationships. it is not really so much the u.k., but it is being undercut by business, the u.k. being unfair competitor to the eu. behind the scenes, it really is business as usual. is the one thing that they care about. future, however, means protecting the single market from perhaps the more competitive u.k. deciding to break away from the eu rules. francine: let's get back to jane and peter.

yesterday was also mark carney's last bank of england rate decision as governor. the bank of england cut the forecast, basically pouring cold water over boris johnson's ambitious growth. accuse suppose you could carney of being quite pessimistic back in 2016. he was pessimistic after the referendum and the economy held up much better than it anticipated. you can go back to that point and say in 2017, the eurozone economy recovered much better than the market expected. in a way, it definitely supported the u.k. economy. will we have that support or the bounce from europe or not? perhaps a different set of headwinds or tailwinds this time around. there is still that door open for another interest rate cut at the bank of england, perhaps taking the time to consider all of the different

variables that could come our way in the next few months. jane: i had a slightly -- peter: i had a slightly different interpretation from yesterday. look at that, given that the explicit hiking bias remains in the language, when you reduce potential growth, it means relative to your target, you are no further away than you were beforehand. i can't really detect a sort of strong bias for cutting that the market currently still implies. i would disagree with the market on that front. even if the bounce back is going weak-ish.- -- moment's friday, particularly in london. we are honored to bring you the consul general of the united kingdom in new york.

we will be joined in the next hour. please stay with us. and we will look at amazon. this is bloomberg. ♪

>> and nothing will change after brexit. thank you. tom, a number of events around the u.k. and tound europe, just listening the european commission president.

the council talking about brexit , saying that strength does not lie in isolation. but i think the general feeling is that brexit is done and the u.k. will leave the eu at 11 p.m. london time tonight. they'd is have to make sure the other 27 member states to stick together and prosper. we have a very close look at what is happening. boris johnson also due to address u.k. citizens. tom: let me look at data right now. equities are down. the news is still slow out of china with futures at -18. stay with us later. we will look at amazon. this is bloomberg. ♪

tom: bloomberg surveillance. francine lacqua and london. i'm tom keene in new york. we are getting ready for a monday when it will be a

different china. we have seen extended news on the chinese virus today without -- with the numbers a little bit grim. we will see a conversation this afternoon. later today, the vice chairman with david westin during balance of power. richard, after what we saw from governor carney yesterday and after the fed meeting of a few days ago, this will be an extraordinarily interesting interview. particularly on the timeline forward for central banks as they go in search of inflation. he is the former head of columbia university economics. first word news in new york city come here is viviana hurtado. viviana: president trumps impeachment trial could end as early as today. mitch mcconnell probably has the votes to wrap up the trial without calling witnesses. our republicansf to brink -- break ranks.

the president all but certain to be acquitted. president trump tried to steal the democratic thunder, holding a rally in des moines just four days before the iowa caucuses. the president mocking his democratic rivals. he declared joe biden's campaign is over. and the u.s. warning citizens not to travel to china. the cases we have been reporting on surveillance have been confirmed in the u.k. the death toll has risen to at least 213. the number of confirmed cases approaching 9700, up from 7700 a day ago. and at the end of 2019, the french and italian economies unexpectedly shrinking. france was hurt by strikes against the government pension reform. italy's slump was the worst since 2013. the drop is blamed on the

industrial sector and agriculture, all of this raising doubts over expectations that the your area is on firmer footing. global news powered by more than 27 hundred journalists and analysts in more than 120 countries. -- tom: peter is with us, and james foley. -- jane foley. this has been a great call for the abandoned foreign exchange market. the theoretical idea that we will see a weaker dollar. and yet, we don't. howe get slowing china gdp, does that change the dollar calculus? i think over the last 20 years, when we think about emerging markets, we have seen the growth in emerging markets. china is a country that we can talk about. we can talk about india as well as a number of others.

it reminds me of some of the essays written by bernanke when they talk about the demographic increase for u.s. dollars. when you look at times that emerging markets have been sold off, there has been a return to the dollar. this is because demand has gone up. this is because of the success, the bank of japan. the body deals are pretty negative. maybe if you are an investor and looking for a safe haven, perhaps the dollar still remains relatively attractive. dollarr the reason, the certainly has shown safe haven behaviors. and once we have the news flow that we have with the virus, i think the dollar will remain fairly stable. tom: peter, is this underestimating the street?

do we need to tilt back to a more u.s. centric place to be in international equities? peter: one of the things that is absolutely for sure is that relatively speaking, u.s. equity markets are relatively expensive. but they are expensive for a reason. was goes back to what jane saying. investors generally like u.s. assets. it gives dollar exposure and a sense of security. they have had relatively better growth rates. and if that stays the -- which despite the relative richness is still there, that will be the case. particularly europe will benefit. francine: will the rest of the world recover? we had some discouraging figures out of france and italy. peter: i don't want to sound too

dismissive, but the strikes were a big part of that. down with thebers inventories. it might well be that they understate the true facts on the ground. , theto the virus issue story in the market was we are recovering, we get that bounce back. if that story has been destroyed, it is a different story. presidentin davos trump played nice and then said he was still having tariffs on autos. happenit is unlikely to before the presidential elections and when i travel around, the biggest question i'm getting is what does a second trump term look like.

particularly europe can bounce back. that is one of the questions for the next months, can that bounce back go on or is it dead in its tracks? francine: what do you do with the swiss franc? jane: this is disappointing for the swiss national bank that you have safe haven demand. the bank of japan and the swiss national bank, the safe haven demand has been a thorn in their sides. they have low inflationary pressures and do not want currency strength. national bankiss has intervention as a public policy tool. they may use that, but i think as long as the market is concerned about the virus or other factors, it is likely the swiss franc will remain well bid. if they do use intervention, that diverts some of the flow

into the yen. do negative interest rates, the fact that the swiss national bank and the bank of japan do not want this inflow is another reason why the dollar remains attractive as a safe haven. the dollar does not have great credentials from a textbook perspective. it has a budget deficit, a current account deficit so it should not be a safe haven but it has huge amounts of liquidity and a positive yield. from that point of view, the dollar will remain firm when these negative interest rates persist. tom: we see the dollar remaining firm this morning. great conversation to get our friday going in america. we have some real bond movement. the two-year u.s. yield under point -- 1.39%. spx futures just rolled over

dramatically, a red zone, green the off the china virus of 27th of january. you can see where we are positioned. dow futures -178. from london and new york, this is bloomberg. ♪

>> the government's position will be that britain remain in a reformed european union. >> we do not have a plan. >> it is officially called. the numbers remain 48%, leave 52%. >> the british people have made

a clear decision to take a different path and as such, i think the country requires fresh leadership to take it in this direction. >> brexit means brexit. >> brexit does mean brexit. thehe ayes to the right, nays to the left. the nos habit. they might does have it. -- have it. >> it is in the best interest of the country for a new prime minister. >> after three years and two missed deadlines, we must leave the e.u. on october 31. >> the decision to advise her majesty per -- to prorogue congress is unlawful. conservativeation government has been given a powerful new mandate. on the 31st we will be out of

the e.u. we need to chart our own course. ♪ [applause] francine: to discuss more on this brexit day, and the implication it could have on intelligence sharing with the rest of the world is bronwen maddox. -- thank you for coming on surveillance. what is one thing you want answered in the next three months, what kind of deal boris johnson wants or if he is ready to extend? bronwen: the one question is what deal he wants with the e.u. and whether he is prepared to take the option of no trade deal let all.

that is almost as dramatic as no deal last autumn would have been , but is still in the cards. the government is saying a trade deal at the end of this year is a bonus, not a goal. we are not extending and that remains his position. francine: what do you think people in the u.k. will be doing today, melancholy, or are they fed up and ready to move on? bronwen: you will have both of those feelings, and people who are jubilant. it is a low-key feeling all over. some people are sad. others, even if they are delighted, it has been a long three and a half years. let's get on with it. we do not know what the future will look like. tom: if we don't know what the future will look like, who has the power in the negotiations? in every bilateral negotiation, it is not equal.

who has the power? bronwen: each side thinks it has the power, and economists and game theorists say that can make for an unpredictable outcome. the european union thinks it has the upper hand. it is larger and feels it has less to lose by taking a hard line, and has a few points where it feels it is does has a hard line. -- has a hard line. the u.k. feels more in a position to walk away from some of these things then the e.u., fromnce some of the drama last year is behind us, there is the potential for a cliff edge again this year. let's hope because there is an incentive on both sides to do a deal, that that does prevail, and the government is not in the mood for another fight. itsants to get on with

domestic agenda. tom: is it a comfortable year for your ohio and sterling? euro-sterling? jane: i think it will refract -- reflect what bronwen has been talking about. sterling behaves as if it wants to rally. januarynocked down in when there was speculation the bank of england might have cut. it didn't and sterling is stronger, looks like it might -- wants to go up. perhaps that is a speculative bet because sterling had been knocked down because of the political uncertainty. i think with sterling wanting to rally and a fair amount of optimism in that price, it would be vulnerable if these trade negotiations proved to be difficult. i think they will be, as bronwen

has eloquently described. the sides have positioned themselves differently and some negotiations could be a shock to some of the sterling bulls in the market. francine: we have a great viewer question. this person is writing in, so keep on writing in. it is not clear what kind of deal boris johnson wants. is he looking for a canada type deal? what seems to be the problem with that, because of the northern ireland situation? what deal does he want? peter: we don't know. we will probably learn something tonight when he is speaking. some say he is ready to accept a canada style trade deal. they canada trade deal is probably the best trade deal out there, or the the closest. still a far cry from where we

are currently, so even in that case there will be economic impact. jane: our best guess -- bronwen: our best guess would be that he wants a canada trade deal. the e.u. wants something more constraining. they are much closer to the e.u. and that is where the controversy might be. there is the northern ireland question. there is a risk of underestimating how controversial that is within northern ireland. and it is very fluid, still don't have a handle on what happens february, march, and april. is there active negotiations or do we slip our way through 2020? bronwen: that is not the intention on either side but it has not gotten going. both sides are forming their positions, particularly on the european side.

quickly hear much more about the shape of negotiations, and there are lots of deadlines about if the prime minister were to ask for an extension, that is right in the middle of the year. a deadline on fish, also controversial. if there is going to be a conflict, it is about this word of alignment, the european union wanting more alignment with the u.k. with its regulations than it has asked of canada or any other free-trade agreement. francine: what does this mean for pound? jane: there could be volatility. in thear many people market thought we were drawing to a close this era of political uncertainty. this will be a kolmar year -- calmer year, but we could have a lot of political volatility this

year. tom: jane foley and peter schaffrik and bronwen maddox as well. suddenlyurn, and turn to the politics of the nation, not the impeachment trial going on in washington, but the movement to iowa that will be on monday, 10:00 p.m. look for that. this is bloomberg. ♪

♪ viviana: you are watching bloomberg's "surveillance." struggling british luxury carmaker aston martin received a $656 million lifeline, agreeing to sell a stake to a canadian billionaire. aston martin will use the money to shore up its balance sheet and build a new suv. ibm hasat the top of shares rising. shna replaces longtime

executive virginia rometty who expanded their reach in cloud computing and artificial intelligence. still, they have lost a quarter of their value. that is your bloomberg business flash. tom: it was nothing short of a bombshell yesterday when amazon came out. there have been the bears and the bulls have remained quiet. a stunning move, bring up the chart. eight standard deviation move up in amazon. on airnever said that before except for a merger or acquisition take out. extraordinary. alex webb joins from london. why did so many people get this call wrong? alex: because of what amazon telegraphed.

they set expectations that they were spending a lot of money on one day delivery, and the market expected that to hit some of the profitability. higher than0% people expected. up exceeding six euros per share. the scale of surprise would not have been as great if they had not set expectations as low as they had. tom: what does it mean for walmart, target, and the rest of retail america, and their burgeoning business? what does it mean for everybody else? alex: it is not good news, they are taking a lot of share, but it is too soon to discount those guys. they are starting to ramp up. walmart has a huge presence across the u.s. where it has stores, it can make

distribution centers. it is gaining significant pace with that. markets such as india that are colossal and have high adoption of smartphones, they are challenging walmart's local business and have a huge head start. they accommodate cold, and amazon is doing well. francine: why did they beat estimates so much, because they did really well or talked the market down? alex: it is hard to know for sure. you take into account the lowering of expectations and even greater surprise. the fact is, the overall revenue growth was not that considerable and the business did not perform particularly better than a year earlier. it was better than analyst expectations and still, aws is the thing that prints money.

what you might consider the core business, the e-commerce, is not a money printing machine. francine: alex webb focuses on technology. in the next hour, dan katzive and meredith sumpter. we will talk about the virus. we will talk about forecasts coming in from the fed. we had some disappointing data from italy and france. it is the day the u.k. leaves the e.u. so talk of brexit and trade deals. this is bloomberg. ♪

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the people return to their jobs? hong kong university suspends classes into march. economists consider a gross markdown for china, below 5%. we will consider which passport line francine will be in at heathrow, brexit is so today. team bezos delivers. eight standard deviations north. how many boxesre outside your door? this is surveillance." from new york and a brexit in london, what happens tonight on the streets of london? is there a big party? what happens? francine: some people are celebrating. a lot of people will be tuned into their televisions because boris johnson will address the timen at 11:00 p.m. london

, an hour before the u.k. leaves the e.u. yesterday we had moving pictures in parliament as the parliamentarians stood up and saying the british national u.k.m because all of the mps will leave brussels today. heathrow, we will see what the negotiations over the next 11 months bring. tom: negotiations of francine lacqua with buckingham palace. deatha: we begin with the toll from the coronavirus that keeps rising. at least 213 people have died in china and the number of confirmed cases soaring by 2000, 9700 cases. -- u.k., twodoes cases. president donald trump is all but certain to be acquitted on

and hishill because impeachment trial without calling witnesses or evidence they may bring. democrats call for republicans to break ranks, but one they are calling on, lamar exile -- alexander will oppose bringing evidence. boris johnson will urge the country to come together as they leave the european union. in a video message, johnson will say brexit is not an end but a beginning. the u.k. has an 11 month transition period to work out its relationship with the e.u. shares of amazon soaring, coming out results that crushed wall street estimates. amazon has 150 million subscribers to its prime service, up 50% from two years

ago. global news 24 hours a day, on air and @quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. hurtado.ana this is bloomberg. tom: let me do a data check, one screen. i want to get to a chart on china and the virus affect. stability even with interest rates lower. u.s.d a 1.38 handle on the two year, dipping down lower in yield. francine: i wanted to show you what was happening in pound because this is the day the u.k. leaves the e.u. it did move a touch as we found out an hour ago but there are two cases of the virus in the u.k., briefly moved, and went back. rising,iser ring -- treasuries up a touch, and earnings a bit utter than expected. all the foot -- better than

expected. all the focus is on this deadly virus. tom: let's look at the chart now. china gdp logarithmic, we are beginning to see economists guesstimate the effect of this horrific virus. jp morgan out -- thank you, stephen engle in hong kong of -- jpata point of 6.5% morgan abandoned a call to a low of 4.4%. guesstimates first we are seeing of subdued growth. francine: the cases of coronavirus is in china -- coronavirus in china skyrocketed. salamat.s is rishaad

when you look at these global cases of the virus, there are about 10,000. what are chinese authorities saying about their ability or inability to get ahead of the spread? rishaad: they think they are ahead of it and one thing the world health organization said yesterday as they declared a global emergency, they did not single out china. in terms ofhe dial the global risk and standards, and the passage in mainland china. the 98% of these cases are in china. , let'sthose 9700 cases not forget the vast majority are not showing symptoms. something according to reports, 1500 of those cases are severe. at the moment, this epidemic has gone beyond what we saw with sars in 2003. sars had a 10% mortality rate.

we don't know what the word -- what the mortality rate with this is. there are accusations that beijing is under reporting, but things are more transparent than they were in 2003. francine: how difficult is it to assess the economic impact? about 20% of global imports of intermediate manufacturers come from chinese factories, so what impact are we seeing on supply chains? rishaad: look at apple and foxconn being disrupted. mcdonald's and starbucks as well. you talk about the e-commerce unit and their calculations of what will happen with chinese growth. economists are saying it could shave off more than the 2% growth we saw in 2003, but that

would be quite something. it is not all about china. the u.s. has mainland chinese business, a lot of tourists with exports out of china. goldman sachs saying they could shave off 4/10 of 1%. look at hong kong, it could not have come at a worse time when the city is reeling from protests. you have government offices and private companies asking their staff to stay away. that will hurt. withdrawal in the casino has tanked and they are expecting the worst. this is the busiest time of year where they make so much money in macau. it is not just limited to the u.s. or china or hong kong.

thailand looking at an $18 billion hit. tourism is devoted to businesses from china. it will hurt, we just do not know how much. tom: joining us now on the market function on the investment and finance side, dan katzive joins us. up for daysd her and we are thrilled to get on air meredith sumpter on this horrific virus. i read the south china morning post and i know i am getting a homogenized message. what do you read in the mandarin press? what are the chinese actually writing about this horrific crisis? meredith: it is notable in the way the chinese press are reporting. there is a difference in the level of detail about what is

coming out on the virus. versustional level media what the local level media orders sick -- citizen -- or citizen activists journalists are doing to get this out. due to rising discontent in china as to how the virus has been handled, you see broadly speaking the chinese media focusing attention on government officials who were instructed to withhold information while largely circling the wagons around xi jinping, who is taking strong in howvery he is mobilizing resources to address the virus. tom: with all your experience and the ample resources of eurasia group, will this be initiated by a federal xi movement out of beijing, or is it every city state for itself in china? meredith: every city state are

looking for resource and guidance from china. china's political system is coming under the spotlight because of the way it has handled the virus and its effects. it is not just china we are looking at. most of the cases are reporting in china. as the virus spreads beyond china to other large emerging-market countries, perhaps with state governments that do not have the resources or infrastructure to attack the outbreak of the virus as china itself does, that is where we will get concerned. we have been watching very closely the who declaration of emergency yesterday, and while this is important symbolically, it will not have a remarkable impact on the trajectory of this outbreak. we expect there will be mobilization of resources.

they will probably be more modest than they need to be. we expect more guidance coming from the who, but largely this is a virus where there is still so much we don't know about how it is transmitted, how country governments should be able to get ahead of it and contain it. uncertainty is causing a great deal of consternation across governments , and even how they are responding to that virus. francine: given the complications and given that we now know this can spread before you have symptoms, what could china have done better? toedith: this gets back china's political system, and beijing could have been more confident in coming out earlier ,n saying, we have a problem and asking for international help. when i was a diplomat in china, this is one of these issues

where we were constantly working with chinese authorities. if there was an outbreak, you would have partners from the united states and european countries and elsewhere offering support, offering scientists to come in and get ahead of where this virus is going. china's political system is such where the first inclination is to try to clamp down on information getting out, and that exacerbated the problem and the extent to which the virus was able to extent -- spread. tom: we will continue with meredith sumpter. dan katzive is taking all of this in as well. i am fascinated by renminbi and dollar dynamics. is there a trend? can you take offshore yuan and give it further weakness or you have to wait for information? dan: this caught the market off guard in that people were

thinking 2020 would be about reduced uncertainty on the trade front and improvement -- a stronger renminbi. massive uncertainty for the market. they need to recalibrate. tom: quickly, this is so important, is your world correlated into way weaker china gdp, or is that a separate thing for foreign exchange? dan: it will be a big impact on the foreign exchange market. the market also knows it is temporary and by the time you know how severe the markdown is, you are on the others of it. look at which countries have the most exposure to global trade. that gives you an indication of which currencies will be impacted the most. tom: let me look at the data right now as we go into break, futures -16, -20 something earlier. curve flattening.

yield, we had a 1.38 handle earlier. your were -- lower yields this morning. this is bloomberg. ♪

♪ francine: this is bloomberg "surveillance," tom and francine from new york and london. thes finally happening, u.k. is leaving the e.u. at 11:00 p.m. london time. few especially in the markets expected the referendum vote to go as it did and the period since then has been the most -- forecedented for volatility

investors and westminster. anna edwards has been following , and maria tadeo is in brussels. like where youd are? are people celebrating or are they fed up? anna: i feel like there is all emotions available in the u.k. parts of britain will be celebrating and parts will not. you may see the leave party celebrating. edinboro, they are holding what they call vigils this evening. some people choosing to mark it, others choosing not to mark it at all. sometimes brexit being pushed off the agenda by other matters like the coronavirus. from the case of business and

the economy, what changes, nothing immediately. 2020 there is a great deal more uncertainty and a dramatic shift in the u.k. economy. not to mention the governmental shift we will see taking place and perhaps even the emotional shift. we heard from nicola sturgeon in the last hour, talking about how she wants the e.u. to leave a light on for scotland, underlining she hopes scotland can reenter at some point. tom: how on the same page is brussels? is it every nation for itself? maria: that is a good question. when you talk to officials, the one thing they were able to do successfully is keep the e.u. 27 united, and they credit michel barnier on that.

this could change going forward, because the priorities for each country going forward are different. the sectors and industries associated with the u.k. are different. the french care about the fishing waters, the germans care about the auto industry, and the spanish care about tourism. this could be a negotiation says theythe u.k. want to look at individual sectors. det is the big concern, regulation and we could see --deregulation and we could see the unity -- tom: meredith sumpter in washington with us. will this have a happy ending? or nightmarerozen"

on 42nd street or whatever the movie is? meredith: we should expect there will be a great deal more political drama this year, even if we have greater political stability in the u.k. our take is that as both sides harden their positions and prepare for the start of negotiations, we do not expect a lot of movement in the negotiations until the second half of the year, so we are looking at july to october. our call is pretty strong, is 60% probability there will be a deal before the end of 2020, however it will be narrowly focused, mostly on goods. probabilityay 15% both sides will not be able to reach a deal. francine: meredith sumpter of eurasia group and dan katzive of bnp paribas stay with us.

the trillion dollar retail intoe, propelling amazon 1000 billion dollars, that is $1 trillion. this is bloomberg. ♪

♪ --: bluebird "of it bloomberg "surveillance." let's look at the dollar chart. dollars stability.

we are focused on 49ers-chiefs. dan katzive says the chiefs are fun to watch. forget about the super bowl, i am giving you the super bowl of the dollar. you call for dollars stability. dan: it is amazing how little net movement we have had over the year, and we do not see obvious reasons to break these ranges. we have equilibrium in place where you have a lot of negatives to the dollar, some positives, and they appear balanced. game?s it a pare is there a cover that gives a lift to the dollar? dan: we have seen a bit of that in the euro. dan katzive with us. distracted by really

deteriorating news in china, and we are thrilled meredith sumpter is with us from eurasia group as well. a historic day in the united kingdom. the council general of new york kingdom willnited join us as well. amazon with an extraordinary performance, out eight standard deviations this morning. all bringing up there buy targets on amazon. please stay with us from a brexit london. this is bloomberg. ♪

♪ a outre is potential he of jail free card and all of this, which is green which is in europe. everybody agrees there needs to

be green policies, the green new deal, green infrastructure, and it is not the central bank's job to necessarily call for green infrastructure, but is that a politically correct way to talk about spending. , the head of the imf was saying that green spending and infrastructure will cause inflation to come back, if everyone starts opening the green spigot. tom: she was on my panel in davos, and a guest of mr. weston on "wall street week." mr. weston with a modest interview today on "balance of power." we will talk with

stephanie flanders and joe weisenthal about how does monetary policy get fundamental growth growing? she talked about fiscal spending through green, and we will talk to richard clarida about that. tom: the president said he will plant trees, in davos. that is about as far as he went. david: she said she does not expect much. tom: how will you approach a conversation with the vice chairman of the fed? david: going back to the press conference with dave -- jay powell, one question is inflation and the subtle difference about what they want to do with inflation, are they aiming high to get it up? i want to talk about his approach to get it going because it favors yield curve management. he thinks maybe we should start pegging. tom: what is important with

clarida is his prodigious academics and the fact that he has a knowledge base that may be chairman powell does not have, to meet some of these goals. david: it ties back in on the eve of the iowa caucuses, how has monetary policy in the fed board connect with -- and the fed board connect with iowa and income inequality? tom: lamar alexander with his vote late last night, will we see an acquittal in the next 24 hours? david: it is likely, certainly 36. was the critical thing chief justice saying, i will not read your question, mr. paul. the democrats and republicans backed him on that. tom: francine? francine: i am sure richard

clarida will answer a few questions on the coronavirus. meredith, what would you say the chinese economy is doing now? meredith: chinese financial officials are looking at ways they can shore up the system and continueeir banks to to extend loans in this crisis environment. in that, they have the full backing of beijing and the central bank which will ensure there is enough liquidity available to make emergency liquidity available to these local banks, to assure that the spigots remain open. chinese officials are well aware of the disruption onto economic activity, not just in the factories but also in terms of the construction sites, the infrastructure investments that are so critical to china's underlying growth. they are looking at how they can

manage that. at eurasia group, we believe there are broad economic spillover effects with the coronavirus but we do not think it will be a risk to chinese economic or political stability. francine: when you look at chinese renminbi, where does it go? it crossed the seven threshold. i don't know if that means there is anxiousness in the markets or just because of the virus. dan: i think it is both. there is risk which weighed -- we trade weaker in the near term. as we said, we know that at some point this will be behind us and the market will go back to fundamentals which point people a little lower in dollar-renminbi from here. the market has to not get too one way.

tom: how important is the consumer in china? if there is an elasticity, they could rebound quickly. the virus comes to an end as all viruses do. what is the elasticity of chinese consumption? meredith: it is increasingly important now than five or eight years ago. if we look at the hit to the chinese economy, our experts are expecting a bandwidth of .52 -1% .5% to 1% impact on the gdp. on impact of the virus china's ability to adhere to the phase one trade deal commitments , the disruption of economic activity, the disruption of consumption within china will make it more challenging for china to adhere to the very

aggressive commitments to purchase more products. we don't necessarily think this will disrupt the phase one trade deal, but it certainly will put pressure on that trade deal in the second half of this year if china picks back up consumption. tom: i will add the eurasia group view to that chart. meredith sumpter with eurasia group and daniel katz eve -- e with katz i've -- katziv bnp paribas. viviana: the u.s. telling citizens not to travel to china and those already there are being told to leave. the death toll has risen to at least 213, the number of confirmed cases on the mainland approaching 9700, up from 7700 a day ago.

economies and italian unexpectedly shrinking. slump was its worst since 2013, the drop based on the industrial sector and agriculture. of ibm has the top shares rising. arvind krishna will be the new ceo. time --replaces long the longtime chief executive who expanded ibm's reach in cloud computing. shares have lost a quarter of their value. global news 24 hours a day, on air and @quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. francine: let's get a quick update on the virus in the u.k. with our bloomberg health reporter james patton at the

medical briefing in london. great to have you on the program. we found out 90 minutes ago there are two cases of the coronavirus and the u.k.. what else did the department of health's -- health tell us? with thejust came out u.k. officer she -- chris whitty. they provided very little information about these individuals. they are only saying they are being treated in a facility in newcastle in the u.k. they are two members of the same family and now they are working on tracing people who may have been in contact with them, to obviously lynn packed any -- limit any spread of this pathogen. yet know howt --

many people they have been in contact with, so they are scrambling. tom: did they say how they will handle the airports forward? james: they did not get into that too much, but they referred to a flight coming into the u.k., i believe it is today, from wuhan. all of the passengers who boarded that flight were well when they boarded. they are taking a lot of action to meet them when they arrive, ask them to limit this spreading beyond these two cases. they did say there are beliefs in recent days and weeks that new cases are not unexpected, and it is really probably a matter of time before the u.k. has joined germany and other

countries around the world in seeing infections. much,ames, thank you so with a story forward in the united kingdom on this virus. an important day for britain. as counsel general in new york to her majesty's trade commission for north america, he will give us perspective. this is bloomberg. ♪

tom: extraordinary news flow into this friday, many different themes including market futures that -18. francine lacqua in london, tom keene in new york. -- dan, dan katz eve ve and've -- katzi meredith sumpter join us. antony phillipson is joining us. you know asia, extremely well as a former commissioner to singapore. there are adjacencies. how removed is singapore and the other pacific rim countries from the virus of wuhan? antony: this is now a global issue. it was already a global issue for many of us. i follow what my friends are doing and i follow the

statements from the singapore government. they are taking this seriously. just after the chinese new year, big movement of people, so they are very adjacent to it, but we all are. this is a global issue. tom: in the next 36 hours, we will observe people move back from singapore to china, right? confidentdo not feel to comment on that at this distance. they will have a grip on it. tom: you have an interesting lens seeing the trade from new york and back. what is your observation? antony: this is a significant moment, a moment we have been preparing for since june 2016. there has been a lot of commentary on it. this is the moment when the u.k. leaves the e.u. and we are not going to be an e.u. member

state. we will be treated as a member state while we work out the next phase of our relationship, but there is no doubt, today at 11:00 gmt the u.k. ceases to be a member of the e.u., and that is significant. francine: how will it change the u.k. economy and the citizens of the u.k.? antony: the citizens of the u.k. voted to leave. over the last two and a half, three years, we have been debating what that means. we have an aspiration for a close economic and people partnership with the e.u. at the same time as forging new relationships in the world. that will have an impact on the u.k. economy and has lots of opportunities. our imperative is to maximize those opportunities while working out the next phase of

our relationship with e.u. partners. stayine: will the u.k. together in 10 years if scotland gets a referendum? does northern ireland emerge with ireland and the longer term? back to theent come u.k.? how do you make sure you have social cohesion if you are trying to be singapore on thames? antony: on the first one, the prime minister has made clear this will be a government that is committed to the union and will govern for the union. you have highlighted issues that have been raised and the government will work through those. on social cohesion, the prime minister very committed to what he calls leveling up, bringing jobs growth and productivity to all parts of the u.k. he will be holding a meeting of his cabinet today as a clear demonstration of a tent --

intent to that agenda. we need to make sure to take the decisions we need to take and maximize the opportunities as we move into this new phase. tom: you have direct experience in this. andare a director of trade partnerships in the exiting process. give us a window into the conversations, the tone, we will see with your real world experience? antony: it is a tone that is confident. there will be a moment of great significance, but the prime minister has struck a deliberate, substantive tone about this moment. there will be a tone of celebrating this moment and our latest chapter in history, but it will be now let's get back to work and deliver for people of the united kingdom, and

establish what global britain means. tom: a visceral topic, fishing rights, it goes back to tudor england or even further than that. acrimony inive no the hugely contentious fishing rights of the north sea and the channel? antony: i don't think there has to be acrimony. we have a clear agenda and some of our partners will have keen interests in the future of our economic relationship in specific areas. this is all set out in the political declaration on the future partnership. this nextt to monday, chapter in our history and relationship, those issues we will start working through. francine: what do you expect pound to do from here? dan: sterling now becomes a traditionally data-driven

currency and the drivers go from being politics to what is happening in the underlying economy. there are signs of pickup and economy -- in economic economy. the bank of england expects some recovery, and we think pound sterling versus usd can get back up to 1.35 easily. the sentiment surveys are , thenating the case things could get shakier for the currency, but it is a data dependent currency, a data dependent bank. francine: boris johnson is set to address the nation. do we have any insight into what kind of agreement he wants going forward? meredith: he wants a robust agreement and will not likely get the agreement he wants. going back to the first

question, the u.k. and social cohesion will depend on the ability of the prime minister to negotiate deals not just with the e.u., but worldwide as a single economy, that will bedevil -- be able to deliver u.k.,rity across the especially to the areas that feel left behind. the u.k. economy is hovering just above 1% growth, so a challenging position for the british prime minister. we wish the u.k. all the best in its new pathway forward. tom: meredith sumpter from ,urasia group, dan katsive counsel general, thank you so much for joining us. much more to speak about brexit in the future. not brexit, brexit is done. the united kingdom and europe in

the future. .ichard clarida this is bloomberg. good morning. ♪

francine: this is bloomberg "surveillance." tom keene has just gone to radio, so tune in for that. stellar results from amazon, recording profit that crushed wall street estimates. the stock surged, setting it on course for a $1 trillion valuation. i don't know whether this is because amazon is doing so well, or because they cut down the market, saying prime delivery is costing. matt: it is a mixture of the two. when they start to talk about these bigger costs, but what you see in the final quarter is that investment is paying off. there have been -- they beat expectations on revenue by about

a billion dollars and profit by about a billion dollars as well. costs tohe managing compensate for the step up in costs. , gocine: a lot of times after market share. does this validate that strategy? matt: they are going to a one-day delivery strategy and people have responded to that. they have over 150 million prime members and you need to be a prime member to get access to the one-day privileges. it was about 100 million two years ago. it makes life tougher for their competitors. francine: web services also did better. is there any point we should worry about? matt: people are worried 2020 will be a tougher year for amazon web services because of competition from microsoft and

google. people are less worried about the margin squeeze and maybe they can keep margins flat, but they have more money to invest to keep off the competition. tom: matthew -- francine: matthew, thank you so much. later today, david westin will speak to richard clarida, vice chairman of the federal reserve. some questions on the virus and a lot of questions about trade. that interview at 12:00 p.m. new york, 5:00 p.m. london. the u.k. leaves the e.u. and we will hear from boris johnson. this is bloomberg. ♪ when it comes to using data, everyone is different.

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u.k. prime minister boris johnson said to urge the country to come together as it officially leaves the european union. goldman warns the growth impact of the coronavirus while europe sees at lowest growth since 2013. caterpillar adds to the gloom. gains. bag of industrial we made it through the end of january on very difficult trading week for many. let's take a look at where we stack up. s&p futures down .5%. it is all about what happened to the treasury market. crude now taking a little bit of % despite copper seeing its worst month in about five years. we bring you today's market moving news from all over the world from hong kong to london to new y