manus: good morning from dubai. this is "bloomberg daybreak: europe." are today's top stories. a death from coronavirus reported in hong kong. it comes amid reports beijing is mulling a cut to its gdp target. stocks regain ground as pboc support continues. ' results in the iowa caucuses have not come through yet. live from des moines across the hour. miss.et results

manus: warm welcome to "daybreak europe." it was supposed to be the curtain raiser for the white house. between the likes of bernie and candidates ine iowa. chaos is the headline. democrats created an app for everyone to post their votes in this caucus. now you are looking at 1600 venues of participation, officials discovered inconsistencies. making post caucus statements and yet we do not know who has won. biden's counsel has put in a

request demanding full explanations and relevant information about the quality control and the effort before any results are released. this is a moment of chaos in the decision-making process in iowa. >> for wall street, what they are eyeing is those hints of how deep support for sanders runs and how that could catalyze a big reaction in markets. speaking of markets, still a lot of focus on earnings. i'm looking at sony, seeing its full-year operating income at ¥880 billion. it did see ¥840 billion, so that is a little lower than previously guided. in terms of other lines from sony, that is the red headline, there is another one saying it plans to fortify dividends. a little bit of a push and pull between what might be good and bad news for the market. let's pick up on that

dividend theme. nearly 30% of the overall that is the contagion effect from the coronavirus. the dividend goes up to 21 danish krone. the full-year adjusted ebit, 10.4 seven, marginally better than what the market had expected. it is a beat on the adjusted numbers in terms of earning. they are guided higher in terms of the dividends they are delivering. the financialg expenses excluding currency is going to be around 600 million danish krone. beer and tech start us off on the journey to markets on daybreak europe, to the yuan. there will be no unleashing of

the yuan. the sets the tenor for balancing act. we will be speaking to the ceo of carlsberg. my apologies for that. we will be speaking at 10:30 a.m., his first take on the volume in the emerging markets and in asia all the way around. let's have a look at the five-day chart for the yuan. they cannot let the yuan off the leash. they have to send clear signals they have control of the currency. they don't want capital flight all around the coronavirus as we see another death reported. there is this escalation in risk in the corona story. hong kong has reported a death. the world health organization says it can be minimal and slow. gold, you are seeing record highs in terms of volumes of etf's hitting a record level. jeffrey gundlach saying there is

a 90% probability the fed will cut for the oil market. a moment of reprieve as opec plus meets. of panic in the oil market. nejra: the aussie might have got hit in moments of risk off around coronavirus, but we are seeing strength. the rba held rates, but it also signaled patients on rates. you are seeing the aussie bid today. yesterday we saw the s&p 500 recover from its worst week in six months. muchies in the u.s. very in focus with iowa in terms of what could be more in focus, health care, specialty finance, ad especially in the event of sanders win. we are concerned about perhaps the global manufacturing.

expansion in the u.s.. bloomberg says it might not continue. the coronavirus is showing little signs of abating with the first death in hong kong and 20,000 cases in china. nobel prize-winning economist told bloomberg the virus could have a big impact on the economy. thet is a quarter of world's manufacturing sector, part integrated with supply chains area -- supply chains. about the things to worry is if it is a significant negative shock, and we don't know if this is the one, we don't have a lot of cushion. the fed does not have room to cut interest rates. the ecb has zero room. nejra: the eu does not see the need for blanket travel restrictions in response to the outbreak according to the eu's top health official.

made that amount of money available to encourage vaccine into finding a and looking at the details of the coronavirus, as you know, it is something that is not available at present. we want to provide all the help necessary to move forward with the research needed and to find a vaccine as soon as possible. nejra: great to have you with us . thank you for joining. we keep analyzing the market moves every day on coronavirus. how meaningfully do you think investors want to reengage with risk assets in the event we see stabilization? >> there has been a cease on motion the past couple weeks as we have been dealing with this issue. that does indicate you are -- thepeople want to

concern is we are not seeing the containment i think a lot of expected.e if you look at cases over the previous day, an 11% gain, that does not sound like containment. i do think we are setting ourselves up for more potential risk off moves here. you can see the way markets reacted today. there are relatively more positive view, but you need to be very cautious here. the dollar is the place to hide from a currency perspective in my view. moves,see these market 6, 7 percent in the trade, the save3, 4 days, you want to money. that takes money off the table. you have a dollar call and a dollar yuan call. we see this pressure from the

pboc to hold the line at seven. what do you want to spend? do you want put options? call options? how do you want to trade the one? >> you want to focus on dollar upside elsewhere. the reason i like it is the carry aspect. i respectfully disagree with paul krugman. there is question -- there is cushion in the u.s.. the u.s. economy is far more robust than anywhere else. there is no clear imbalances from a cyclical perspective. going in and owning that in a risk environment is the best place to be right here. i would not go for versus the yuan. i look for this more toward other emerging markets, those that are more susceptible and lower yielding in east asia.

taiwan dollar, singapore dollar. the g10 versus the year or the australian dollar, it is a good entry-level for you. strategyu say a carry funded through safe haven fx. is interesting and feeds into what you said about the dollar. in terms of china, we see stocks stabilize today. recorda $720 billion lost monday for chinese equities. where would you seen the best opportunity in em if you are thinking about the impact of china through the rest of the space? >> i love it that you are reading our research. thank you for that. i think that is one of the points we made in our thoughts for the week ahead.

exactly that you want to look for these relative value carry to carry trades. -- we have ae specific basket trade that is long the russian ruble, the indian ruby. we are sure to the israeli shekel, the hungarian and the baht.- thai when you have these risk off moves because they are already short, other emerging market currencies, it cards you there. we reallyce to that, do like earning in that safety hedge from the japanese yen. one of the key fines is that in extreme events, that is where you want to be in the end. we like a short, stocky yen at this point. manus: i want you to go on a quick journey with me. take a road trip.

in 2011, the g7 made an emergency response move. what is the risk in 2020? what evokes a g7 emergency response? now.do not see one right we have to see this become more of a global risk first. the tsunami disaster, the g7 became involved here with the japanese authorities asking for help from the rest of the g7 to intervene, to guard against currency strength in the yen. we are not actually seeing in dollar renminbi or dollars cnh that strength there. the chinese authorities are not -- china is going to to big resistant industrialized countries when

they themselves see themselves now -- nejra: now let's get to the first word news. russia's president putin and saudi arabia's king salman oil, that's as coronavirus hits oil demand in china. unchangedkept rates as the specter of a slowdown in china is looming over the economy. strengthen the -- gave room to wait and see. the governor said it is too soon coronavirus'ong effects on the chinese economy will last. alphabet's cloud and youtube revenue not enough to distract from underwhelming results. the cloud unit raked in just

under $9 billion, but revenue missed estimates. 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. coming up, delayed them across. we are still -- democrats. we are still waiting on the iowa caucus results. ♪

manus: this is "bloomberg daybreak: europe." results haveaucus been delayed. the party says it found inconsistencies. a spokesperson has insisted this is not to one -- due to an intrusion. this may cause hours of delay in reporting the results of the first presidential nominating contest. joining us from des moines is bloomberg's ryan teague. what we know about the delay?

>> the first thing to know is that the actual results are out there. they are not collected. at the polling places where people met for the caucuses, it was very publicly decided who had won and how many delegates had been announced. there is not really any possibility when it is all said and done that there will be any question about those results. are having isey getting all of these different caucus sites throughout the state to give that information to a central place where it can be out and they can say who won definitively across the state. biden'se have joe counsel, we have good judge declaring victory and there is

no vote tally. everyone has their own version of success and victory. what else can you tell us? like one oft is those things people complain about where everyone gets a trophy. sayinge campaigns are they did really well and that they are moving on. we don't know exactly. it is clear from what we have witnessed that joe biden did not do as well as he really needed to. whether that is fatal will depend in part on what happens in the next state and will also depend on how this plays out, if these results get held up for a couple of days, it will not have as much of an impact in new hampshire and other states. that could play out to his benefit, one reason i think you are seeing his legal counsel getting involved. that could help delay that.

manus: thank you very much. our reporter on the ground ryan teague beckwith. let's put more context around this. kathleen hunter, our government reporter, and our guest host from barclays. why is the contest so significant? issignificantly, the idea because it is the first state that votes, it is the first change the media really and other people that are paying gets to see how the candidates are doing. there was a sense this year it could be particularly significant because what usually ull the numberu of candidates. there was hope among some strategists this would winnow

down the number of candidates that could potentially be in the rates. what is happening is kind of the opposite. the fact that these results are not coming in in a timely manner and they may be delayed for several days leaves this open question of who the winner is and who might be left in the field. i remember in previous races candidates dropped out after iowa. you might not see that this time around. seen theeady have republican national committee talking about how well run and how official the republican side was.e ticket idea is the perception. the perception that is coming out of this for democrats is not great. it is also important because it cuts against the perception democrats are putting forward that the race is tipped toward

trump. manus: the technology seems to be the challenge right now. reporter.overnment let's get to the managing reporter and head of fx and em macro strategy at barclays. you talk about volatility being more of the relevant product for us to look at. how do you think volatility is going to play out for the rest the election ath play? or is it too easy to buy volatility? to early here. points about this being a different primary and that it may be more extended, because you are not seeing the same drop-off, we don't anticipate the same drop-off. you have one major candidate, the owner of this network, who is not even participating in the

early stages. he is taking a strategy we have never seen before, going straight to the big states and saying, i don't care if i lose the early states. at a democratic primary that may be going on well into april and may. that means it's going to be hard for markets to really focus on the socialist threat to u.s. economic gains until later in the year. were sayingff you the dollar is the place to hide, but people have been trading the you're a going into these caucuses. do you want to trade dollar weakness in any of the options markets against any of the g10 sciacca -- the g10's? really -- some work whether you look at it from the academic world or anywhere else establishing the lower

bound it can fall too. if you look at your-dollar vol, it is getting close to that. you can recoup almost all of your premium. your downside is limited there. there is this bias toward euro-dollar call. that is coming from the corporate sector. corporate'seuropean , we actually think the risks are to the downside here. putske owning euro-dollar here. the options are the best way to play. thank you for those thoughts on volatility. you stay with us. seeking themberg is democratic nomination for president. bloomberg is the founder and majority owner of the parent company of bloomberg news. ♪

manus: this is "bloomberg daybreak: europe." nejra: alphabet reported fourth quarter earnings that missed estimates. .outube disappointed stocks fell in extended trading. >> quite underwhelming alphabet. the topline myths and profit rose, but not as much as the same time last year. what i'm looking at his overall revenue growth. a downward trajectory for outlook just like at competitors like hulu, taking a bigger portion of new growth. a warm welcome for alphabet from wall street in that they are breaking out revenue for youtube and the cloud, which for a while they bundled together in a very

opaque part of alphabet. not enough to get that share price higher. manus: it is all about revealing what is under the hood. annmarie hordern breaking down the alphabet numbers. it has been, some would say, a technical disaster in terms of iowa. let's get back to marvin for a quick comment. in terms of the markets, one of the things that has come across from all of our guests is buy the dip. is it too early to make that call in equities and fx? >> i definitely think it is too fx around emerging markets. if you are going to do it to the point that we raised earlier, the way to do it is during some kind of relative value trade. yelder's that have sustainable

growth against currencies in east asia. manus: we will delve deeper into the lines coming through. marvin barth stays with us. ♪

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nejra: good from bloomberg's european headquarters. this is "bloomberg daybreak: europe." a death from coronavirus in hong kong. the u.s. says it is prepared for a possible pandemic amid reports beijing is mulling a cut to the gdp target. stocks regain some footing. the pboc shows support. delaying democrats. the result of the iowa caucuses have not come through yet. inconsistencies discovered in some precincts. youtube disappointed in its first ever revenue disclosure as

alphabet results miss in after hours trading, shares dip. nejra: stabilization in chinese equities after a record swipe yesterday. green on the screen in asia, also u.s. and european futures. how much of an upset could we see in u.s. markets from the iowa caucus? market action from around the world. the team.'s get to juliette saly in singapore. ah in mumbai. rebound in the chinese equity markets. macau casinos. >> that was a little bit of a stunner in has been an upbeat

session. its biggesthaving one-day jump since july last year actually plunged on an open, then quickly recovered to rise by 6%, now up over 3%. thength coming through in offshore yuan with the pboc fixing that midpoint on the stronger side of seven. hong kong stocks doing well despite that news out of macau. operations toino stem the spread of coronavirus. stock down some 2%. it fell 3.7% on the report. nejra: looking at the gaming , you are looking at auto stocks. >> good morning. i'm sure you have spoken.

tesla's market cap has eclipsed the market cap of the entire auto index in india. i understand indian auto stocks have not had a great run. that single company is valued much more than the auto index. back to you. manus: let's bring it to you da ni. we have an emergency committee meeting in vienna. the oil market paring some of its losses. >> that emergency meeting on itself really shows us how it is a long way still for oil to recover despite some of the slight gains we are seeing today. look no further than this chart. the spread and what this means is there is so much nerve in the market that the price is lower than the future price.

if you want to be exposed to oil, every much you -- month you roll over your contract, it is costing you money. we don't know the economic repercussions of the coronavirus , but it is frightening when you look at how oil is pricing in the disruption to the economy. we had that emergency meeting between the saudi's and russia. it is yet to be seen how quickly opec can put in cuts to help recover oil prices. a lot of nerve in this market. you all.ank now turning to the next brexit battle. the u.k. and eu are at odds over the kind of trade deal the sides can agree to. a highlyrnier said ambitious trade deal is on offer for the u.k. but only if boris johnson signs up for a rule to prevent unfair competition. johnson rejected his demands and insisted the u.k. will thrive even if negotiations fail.

the city of london could be a huge brexit loser. smoothly, there is very good value interestingly, there are opportunities. prices will go up. you could, depending on what the u.k. does with the rest of the world, have a reestablishment local quality food. you will not be able to get the cheaper food from europe. the entire tomato business went to the european union. if you cannot buy cheap tomatoes from europe and other countries, you have a chance to start doing it locally. however, that depends on the trade deals the u.k. does with the rest of the world. we cannot export goods we have a

huge added value want to europe. we get the worst of both worlds. barth is still with us. we saw vulnerability in the pound yesterday following the election and the latest boe decision. we do regain some ground today. do you get the sense investors want to buy on dips? >> definitely. if you look at the pound from a long-term purchasing power perspective, we are not where we were several months ago, but you are still at historic lows. if you look at this on a longer-term perspective, tremendous value here. i think there are a lot of longer-term investors coming back as we get more and more certainty over what the ultimate outcome is going to be. we ultimately now no we are w we are having brexit. we are going to get some sort of

deal. all of this is providing stabilization. while people like to focus on the financial industry, look at the london real estate market. it is booming. why? it is not the financial industry. investore a long-term looking at real estate, you can -- london class a real estate is well underpriced versus global peers at this point. you can buy into these cheap exchange rates. this is a fantastic deal. you are going to see volatility around headlines like yesterday. terms,in dollar appealing trade. something they can offer you. there is a differential, isn't there? can i ask you -- we don't know

how wrinkles on the skin will look, do we, by december? it could be a low trade deal, a slow trade deal, a mini trade deal. as you look at volatility pricing, it goes back to that estimate. my risk in sterling is that i take a leg lowered to 125 before i break 135? how do i look at the bandwidth of trade? we are more in the 130 to 135 range over the course of this year. andon't see it taking off going closer to fair value because of the volatility we talked about and lingering uncertainty about what kind of trade deal are we ultimately going to get here? but i think one of the things that is becoming increasingly clear is that the u.k. sees a very different strategy here. they are likely to pursue a sequence of sector specific

deals with lots of different countries rather than one big deal with the eu, which is going to preclude them from getting trade benefits from anybody else. it looks like they are playing the long game. mean holding to sterling in check in the near-term. nejra: you said the boe missed an opportunity to cut last week. >> one of the interesting things announcement's last week was that that they did downgrade growth. it is asot look like far away as they thought and that limits the opportunity for them to cut in the future. it actually does provide a stable -- and there are people

in the markets thinking brexit is going to put further downside. maybe it is going to be the coronavirus. there is still a chance in there. after that point, we are not looking for it. manus: thank you very much. stays with nejra and i. pandora has numbers. , thelked to the ceo world's biggest jewelry maker. ♪

manus: this is "bloomberg daybreak europe." nejra: pandora has reported fourth-quarter net income that beat estimates. the world's biggest jewelry maker sees organic growth of

negative three to -6%, not including impact from the coronavirus. to discuss the numbers, ceo of pandora, joins us. let's get your take on the impact of coronavirus. we understand you have been closing stores in china. do you foresee further disruption in terms of store closures or anything else that could impact your numbers? >> thank you for having me. first of all, we had roughly 40,000 employees on payroll, so that is our main concern. making sure these people are safe. thatonsumers walking in, we can provide a safe environment for them. we are following guidance from local authorities, which means to date we have 70 stores which are closed, which represent a third of our network in china. of course, we are following this

situation on a day by day basis. in the remaining stores, traffic is down by 90%. essentially where we stand is the business is at a standstill. we will continue following the guidance from the local authorities managing the situation right now. that is the case for now. consequence for the , the inventory bills -- is that the risk? >> not right now. our stock position in the stores is managed on a demand situation, so that is not an issue right now. we are controlling this quite well. it is more the uncertainty, let us say, about where this is going to go. does that mean you might be having to reassess your guidance based on that uncertainty and the fact that more steps need to be taken on the coronavirus?

you go back a few years when sars was happening, the impact on the country was four to six months. if that is the case, of course we will have to revise our estimates as we stand today. today, i don't know. we are following the situation. the moment we have any more information, estimates will inform the market. looks like the fourth quarter was a nice beat. the product relaunch going? what has been the driver behind the set of numbers? >> as you may recall, in 2019, we started a program called program now, essentially a catchall for the relaunch of the brand under this turnaround situation. did a number of

different things, amongst which probably an increase in investment together with much better marketing programs and strong consumer initiatives, in-store execution, i think all of those things combined helped drive numbers. nejra: can you guide the market as to when you might be achieving positive organic revenue growth? >> that is a very popular question. we remain with the view we set up under the program that started 12 months ago. we believe we will be in this situation for two years. we are into the second year. markets4, we saw some -- some of our more established markets like italy, france, and germany move into positive territory. i think it is too early to say

we can project that for all the markets. the most important thing is to continue down the current path. things we are doing our working. we have more consumers coming through our stores and in many years. we are on a good track. as you will see from the guidance, we still believe that during this year we will remain in negative territory. sequentially, we will see an improvement on sales. the figures of the market is the cost savings you projected from last year. is the number going to be the same this year? at risk orthat in -- in review because of coronavirus? before, the impact of the coronavirus is yet to be seen. it is not included in the guidance as we see today. for is that guided

we have had some underlying business issues in china and that has been provided for in the guidance. the additional exposure to the coronavirus is not in those numbers. there be more job cuts in addition to the ones you have announced? >> can you repeat that question? will there be any more job cuts in addition to the ones you already announced? anything asn't have it is today. we continue to keep developing the organization. we are building a big digital hub in copenhagen. there will be pluses and minuses, but the journey right now is about building capability in the core functions of the company. foruild a sustainable base pandora going into the future. what is in the pipeline

for 2020? some pretty unique moments for you in terms of product lineup. what can we expect this year? movies? high-fashion? i see you have a high-fashion lady joining you on the cfo side. what is for 2020? thosedon't really share stage of the game. we do quarter by quarter. rest assured, some of the events we have done with disney and warner have received very strong consumer feedback and we will continue those going forward. i want to highlight this is the 20th anniversary of pandora. each month, we will be launching one of the top-selling charms we have had over the years. the january 1 was a strawberry item, which immediately ran out

of stock. each month we will be having something new for the consumer base. nejra: thank you so much for joining us. breaking news that the iowa democratic party is not going to release the caucus results tonight. we know they have been delayed and chaos here, looking at the tliv blog, one of our reporter saying iowa has a reputation for thinning the presidential field, but that has not happened, and it may not. ♪

nejra: this is "bloomberg daybreak: europe." the u.s. democratic iowa caucus results have been delayed. results will not be released -- until tonight, i should say, perhaps is what the

party has released to us. it has found inconsistencies. a spokesperson has insisted this is not due to a hack or intrusion. important qualifications. our washington bureau chief is in des moines. they want more time to tell us the results, but they are quick to tell us it is not a hack and it is not interference. >> yes, we just learned minutes ago. bloomberg news is able to report that the iowa democratic party will not be releasing the results of the caucus tonight. they will be doing it later tuesday morning. central time, iowa time. a very dramatic development through the course of the night. the results have been delayed several hours. the party put out a statement a couple of hours ago saying they were finding, quote, inconsistencies in the result and insisted this was not a cybersecurity issue or anything like that.

we have learned the party officials have done a call with the campaigns to inform them of this. the campaigns are quite agitated about this. iowa is very closely watched. usually it sets someone on the path to the nomination. right now we have no idea who the winner is. quite an extraordinary night. nejra: where do we stand on the candidates right now? >> several candidates have essentially said they won. in the absence of official results, we have candidates claiming victory. mayor pete buttigieg essentially gave his victory speech, saying he felt confident they had done well and that the campaign released some information to try to back that up. bernie sanders' campaign has put out some results, perhaps not surprisingly showing he is the winner. amy klobuchar's campaign says she did better than expected, etc.. i would take every bit of that

with a huge grain of salt. into this information vacuum, the candidates can spin. a lot of my colleagues in the press are going to wait until what we think will be tomorrow morning when we get these official results. manus: don't you know? everyone is a winner. i should just point out, two lines. the democratic party will hold a briefing at 1 a.m. central time, so we will see what they have to say. barth, we are hearing from the bank of indonesia they are going to take bold steps. ethics intervention rather than rate cuts in the e.m. space. which is a bigger bang for the

central bank's buck? think rate cuts have more impact in g10 space, that has become an issue because some central banks don't have any more room. in emerging markets, they do. especially in a higher yield or like indonesia. a lot of these companies have to look out for this, especially countries in east asia, to be put on the much feared u.s. treasury report. ont really puts a damper intervention as a tool. >> we are seeing the 10 year yields edge up now. we are seeing it towards 150. how is that impacting your dollar call? you see dollar strength. >> that is still offering a higher yield than you are seeing from any other safe haven. the key things behind our dollar call is what we call our high yield thesis.

where in history have you seen the reserve currency, actually all filling you -- offering you the highest -- barth, thank you. ♪

anna: good morning. we are live from our european headquarters in london. i am anna edwards alongside matt berlin.n matt: stocks across the globe bounceback after yesterday's mammoth losses in china. is the worst over? the cash trade is less than one hour away. ♪