in august the chinese government devalued its currency 4%, creating a regional currency war really in that area involving australia, malaysia and south korea. they all caused their currencies to fall. all of those fell against the united states dollar, making their imports to the united states less expensive, our exports to their countries more expensive. and it happens just that way. former federal reserve chairman paul volcker, one of the great heroes of the economic rebound of the 1980's, has said that years of trade negotiations could be wiped out in minutes by currency manipulation. and i don't think there's any doubt about that. so these depreciations throughout asia further disadvantaged american workers because they force our workers to compete against international competitors who receive discounts, in effect, on their exported goods in the form of arartificially depressed currencies. these devaluations have a real impact. i spoke at length with steelworkers in my state and they have all told me that steel manufacturing is being hammered by this kind of currency manipulation

the extent that one currency as high relative to another currency, they can trade.itrage that out. the market has become so effective, arbitrage and out the slight differences is taking away the effectiveness of local monetary policy, and we need much more global approach. >> what does that do then for the fed? we can talk about the effectiveness to a certain extent of monetary policy. about moment, people talk -- does the fed need to counter this aggressive policy from all the other central banks? maybe even reverse course? >> it's an interesting discussion. and china are the two countries left that have allowed their currency to be relatively strong versus the other countries. that is a tough position to be in. where the value of your currency is being dictated by the actions of others, not by your actions. that theomething chinese are contemplating, and something the fed has to contemplate. when ay in a position currency that is at the right level for the economic growth and potential economic growth for the united states? that is something the pboc is looking at

the currencies -- which basket of currencies is it going to be? i think better and more communication would serve that transition better. i tend to agree with the assessment of mr. dalio, but we believe that all of those changes are perfectly manageable, if the right policies are taken. given the large amount of reserves, the large amount of buffers that the country has. from our perspective, we are forecasting a 6.5% growth for, you know, next year. and we believe that the chinese authorities can legitimately accept that this growth rate as fine for china as it is for the exchange rate to be aligned with a basket of currencies. francine: does china need to decide if they are a free market or not? or have they decided, but have they not communicated enough? mr. cohn: many of these fundamental transitions that china is going through are real. when you go from an economy, where you're building infrastructure to consumers driving the economy, that is a long transition. you cannot monitor or affect consumer discretionary spending. it is called consume

war good -- currency war.sts say you will see an outright devaluation in the yuan in the near term. thanks so much. enda curran in hong kong. another push either pboc to stay ahead of the market. isn't working? can a control capital enough? still with us is enter perry -- still with us is andrew perry. we have turmoil and the markets were down 5% overall. channels close because of the tax year. this is a new china we're seeing. what is your take away. that's what is your take away? go --t is your take away what is your take away? andrew: this is going to take many years. president doesn't have people authority many thought he would. people standing against his reform. it won't be until next year that you will have that full authority. francine: as an investor, is the endgame, you want to know if they are competitive? andrew: the message has been quite clear. a riskier yuan was very important to the chinese. if you get ongoing weakness, it is an emergency record -- emergency ripcord. there are a lot of negative

to falling currencies.e get a very good tailwind from currencies and fuel. our job is to manage it. therefore we hold the operations accountable. that is where we are pushing the sales. francine: do you think there is a supply crunch coming in gold? i know you're working on the company, but the external factors in this case -- >> the macro market in gold is changing. gold was the first commodity to all back in 2012. you're going to see a supply crunch come. the question around u.s. interest rates, there is talk about negative real interest rates coming through here it in addition to that, people were criticizing gold for having lost its safe haven status. again inhat crop up the last two months of the year. that is before you take into account global inflation creeping in which is what most of the central banks are targeting. francine: what is your target for the price of gold? you must have a price in which you model with? joinede: -- >> when i the market, someone told me i can tell you that goal will go u

dollar and other major currencies and emerging-market currencies.or market currencies have been floating. we haven't intervened in years. is question you are asking if it is a time to take a look at that. it is time for a new plaza. in number of pundits asked that on the meeting in shanghai and so on. the dollar, even though it looks pretty major, it is not compared to how strong the dollar was in 1985. more importantly, it is so obviously based on economic fundamentals, which was not clear in 1985. hasreason why the dollar been so strong is because u.s. economy has been relatively strong compared to training partners. and we had the end of quantitative easing by the fed. taking those fundamentals is given and it makes perfect sense the dollar has appreciated so much. which has more influence, essential bank monetary policy and intervention or the markets? you take a look at what happened to the yen you would be surprised. >> that was surprising. -- if you areding fighting fundamentals by intervening, then it is pretty hopeless. a must you have very

try to have a controlled devaluation of the currency.ely, you cannot defy the economic fundamentals. the fundamentals are crying out for a devaluation. >> what are we seeing in the markets? is there a sense that the selloff has been overdone? concerns over the european banking sector has been overstated. problem of the banks, not a balance sheet problem. it is a profitability problem. the central banks are talking about there is no limits as to how low they will take interest rates. >> is it not more a function of other tools. we keep talking about central banks, there is a growing consensus that monetary policy has run its course. there is only so much you can do. otherup to politicians or policymakers to put in that extra push. >> it is, absolutely. onn you rely so much monetary policy, governments do not have to take the difficult decisions in terms of restructuring that they really need to take. they can hide from that. we have seen that in japan, this famous third arrow has never happened. happen ast have to long as the boj is there

echoine: with currencies -- currencies? mohamed: currencies have been hit. we are in russia, we are in africa. we look at changes to buy into this market. we're thinking long-term and whether it is in the countries that we are in. emerging markets. when there is a challenge, we see it as an opportunity. the thing is we think is a family office, long-term, we do not have any exits that says we have to be out in a certain period. in just awill be back couple of minutes. coming up, we speak to sweden's central banks governor. we will be trying to concern -- try to figure out how concerned he is on going into negative rates echo and the effect that could have. ♪ tom: where are my glasses? to look at the data board. what you need to know is it is a correlated move in markets. at the mark -- at the bottom, swedish historic move. francine look want will lead our interview with swedish central bank in a moment. two cents spread made headlines yesterday afternoon, blowing through 100 basis points. latter yield curve -- flatter yield curve. let's get to bloomberg busi

the currencies -- which basket of currencies is it going to be? think better and more communication would serve that transition better. i tend to agree with the assessment of mr. dalio, but we believe that all of those changes are perfectly manageable, if the right policies are taken. given the large amount of reserves, the large amount of buffers that the country has. from our perspective, we are forecasting a 6.5% growth for, you know, next year. and we believe that the chinese authorities can legitimately accept that this growth rate as fine for china as it is for the exchange rate to be aligned with a basket of currencies. francine: does china need to decide if they are a free market or not? or have they decided, but have they not communicated enough? mr. cohn: many of these fundamental transitions that china is going through are real. when you go from an economy, where you're building infrastructure to consumers driving the economy, that is a long transition. you cannot monitor or affect consumer discretionary spending. it is called consumer

switzerland is still defending its currency. these are small, open currencies.f you are trying to reinvigorate your economy, boost inflation, the general review is that is not going to work. that is pretty bad news for the ecb and the bank of japan. mark: they were also asked how much lower rates could go and for how much longer. paul: what did you discover? economists feel that negative going to work, central bankers have pinned their hopes on them. the view was, they are going to be around for a wild. the key is that the negative devalue your currency for a while. but if you are in a take economy, you end up sparking a currency war. the euro and the yen have both risen against the dollar this year. what happens? we have negative rates for a long time. we don't get the boost in growth. you might get unintended consequences. that is worrying some economists and policymakers as well. mark: bloomberg's paul gordon. great story. sanjiv shah, cio at some global investors, you described low rates as a war against savers. do you worry about the unintended consequences

he pound is a special currency.ts a country with an external budget sheet with 600% gdp. the u.s. is at 180%. do the hands on that. jump in here. about 180% of the gdp here is the banking. six times up here is what you got in the united kingdom. francine: that does put it into perspective somewhat. you are talking about oil weakness and the u.k. being a huge big bank but is this also at -- also markets at play? a.b. be there is not enough liquidity so this move is exasperated? it is not all about breaks it -- about brexit. this is boris johnson. shahab: the way to think about this is that the underlying thist is liquid anyway at point in time. so many different currencies are moving in unusual ways, surprising ways, because of a lack of the quiddity. people talk about reasons for that. of thetalk about all different reasons for that but t,e point is, if you get brexi the biggest event for the u.k. economy for 50 years, in a anyway, it is liquid is dependent on external inflows then really going to 1.2 is not as spec

they are working with a currency, the japanese are working with their currency, the europeans are workingrrency to ensure that they will remain competitive. 10's spreads. if the fed is wrong, does the yield come in and stay under 100 basis points? george: the fed, if it does not hike one and twice this year, it will be hard for the rates to rise. under 1% is something that you will have to have a referendum on. the fed actually did the wrong thing. tom: george goncalves and dan alpert with us as well. a very important note on twitter. a massive twitter skeptic has just reverted to a sell. scott the was been usually cautious and he pushes it right back to a sell this morning. coming up on bloomberg, an extended conversation with dennis gartman on your global economics. stay with us. from london, from new york, this is "bloomberg surveillance." ♪ francine: this is your data check. with the markets on the move, we had to do some extra data check. profit fell 91%, missing -- .91%, missing estimates. we are expecting some kind of renegotiation drop today with the e.u.. it is time for the "morn

you could see the dollar do well against commodity currencies.ne of our calls is we think it still goes lower, even in an environment where the dollar struggles. jonathan: your thoughts on that? david: this idea that inflation -- where did they get that from western you walk along the corridor and open a steel door. there are a lot of boxes. there is inflation in it. it is called inflation. as soon as there is a small sign of it somewhere -- come on. jonathan: last year, around march, it was just after fed chair janet yellen spoke. you said it was over and it was all priced in. your colleague said that 10-year yields would come down. we did it yesterday. you can take the rest of 2016 off. my question to you was this. haven't we just shifted completely the other way? the bias is already one and done. isn't this move done now or is there more to come? david: that is a good point. where do we go from here westmark we went from the possibility of normalization in december 2 two months later, complete have normalization -- abnormalization. we do not g

do they focus on the currency? if they start supporting the economy, they have to allow the currency to decline a little bit. that, people are putting money into foreign investors and china. they do not want a further depreciation of the currency, so they are going to pull it out. the pboc is caught between a rock and a very hard place. there are very few options. it will be really interesting. after the lunar new year holiday, the pboc comes back, what it does. so far, a lot of liquidity in the market. it will be interesting to see what these guys do when they return. i think the depreciation for the currency is still intact. manus: thank you very much. robin, our asian bonds editor. are talking to the head of global asset allocation at ubs wealth management. great to have you on the program this morning. what do you think the response is going to be from the chinese with regards to foreign exchange reserves? are they going to continue spending at this rate? they could reach what the imf calls the line in the sand

should not devalue its currency. our guest says the weaker renminbi will not fix the problems of china's economy. we begin of course with the markets. julie mentioned this earlier, hard to mention but this is the first back-to-back loss for the major indexes in about three weeks. it felt a lot worse. today we had a steady risk selloff. there's that correlation were still trying to get our head around. only dupont rose, and i was just looking at the brand. alix: yields at the lowest level in almost 10 months on the 10 year. if we look at the two-year and the tenure spread, can we talk about the flattening yield curve? can not talk about an inverted curve yet, but it is flattening, and that is a concern. what does that end up meaning for the feds? were driven by some of the same concerns that have been churning their way through the market the last couple of weeks. chevron was taking 27 points off the dow. , oil continues to permeate through the market when it comes to downgrades of the big guys. scarlet: they are lead

the issue is who gets to that who has the weakest currency -- who has the weakest currency?ncine: does the ecb need to go negative? or is it too dangerous? if you are marriott draghi looking at stirling, banks have lost their mind. all of this effort of the last two years to weaken the euro, that has to be a motivating factor. francine: if you look at japan, this is terrible. much that has to do with yen. the global ramifications of it not, are they as big as a possible brexit? -- i think it means mark is absolutely right. you focus on the ecb itself. look at the impact when they only went 10 basis point in december. the aim is to weaken the euro or at least keep it stable where it is. you can't disappoint the market. has a tendency to increase its expectations. if people a start thinking about -45 and 50 basis points. it disappoints, then the negative reaction of europe. he saw the policy reaction and it was huge. he is forced to do 20%, that is -- if they are not going to see the stock market blunder under increasing pressure, they have to at least mark with ecb does. it b

but it is also a currency move as well.of japan's decision was reflective of the yen's strength. francine: one of the biggest policy mace takes or risks is that policy mistakes from a major central banks. where do you think that might come from? >> policy error from a major central bank? we think probably the fed waited too throng raise rates and certainly if it started the rate raising process earlier, it would have had better growth conditions to raise rates than now. the problem is that it looks like they moved too soon. actuality, they waited too long. tom: in our next hour, michael moore will join bloomberg news in london and talk about the important news out of the standard chartered banks. a conversation with gary schilling and we will speak to christopher veroneabout the excitement of support and resistance. all of that coming up. futures, anything sieve six. stay with us. -- negative six. stay with us. ♪ global markets this morning go in search of the bid. there are china concerns, there are standard charter and ba

that will get demand up and get these currencies to strengthen.is any coordination, it is not the central banks -- it is global fiscal correlation. yields are so low. start investing. there is no appetite for that yet. people will to germany and say you are the country that can spend it, you can lift demand. why isn't that happening? vonnie: the real effective exchange rate, which is the one you look at in order to, and your opinion, tell us where the dollar is found in terms of world currency, and the renminbi, for example? geoffrey: right now for the dollar, the u.s. has its own $ index on the bloomberg. i think that is what they will be looking at. it is only against developed markets currencies. that will follow the line closely. severalsaying they have ascus, including the one they just launched, so that is important, but ultimately it is about the daily fixing. if it is to see exiting the country, and right now they are still worried. tom: jeffrey real -- geoffrey yu, thank you so much for coming up, hans humes of gray like capital. this is

they are not pursuing a so-called currency war to cheapen the currency to help exporters.olatility in the yuan. it's not going to be that unusual. for then a one-way that best part of a decade. you are going to see some volatility with the u.s. dollar. he was reinforcing some points we heard before, but the fact that he came out and made those points ahead of the g20 meeting is significant. shery: let's talk about the disappointing trade numbers. does this mean that the yuan is not really bearing fruit after the depreciation? >> the move has been modest in the overall sense of, we are not getting any bang for our buck in that regard. shery: thanks a lot for that. pboc.test on the back to our other top story, japan contracting once again. preliminary numbers show growth hit a major snag in the last three months of 2015. david: the point is, we already knew that the gdp read for the fourth quarter was going to be bad. we got a number of -1.4%. it was worse than the median forecast. , japane mitsubishi research institute, seeing this coming. quarterly growth figures. during t

in that chart, the result seems to be the weaker currency. do you call it a currency war?of course, although i think the u.s. dollar is missing here. yes, this is a currency war, everyone would like to have a weaker currency and it feels good to have a week currency at first but then you are trading with a great deal of limits. alix: if you take a look at what happened to the yen after the boj an ounce negative rates at the end of january, you have the yen fall immediately but then if rallied. there you see the inversion. so as the dollar declines, the yen gets stronger. so does this work? course it doesn't. it doesn't fix structural issues. for so many years and last summer, the fed took the lid off the pressure cooker by saying they will pursue an exit. the fed is the biggest elephant in the room. they are all desperately trying to weaken the currency but keep in mind this is in the context of years when we were told that the fed would hike rates when everything was great in the u.s.. coming down ine the u.s. that we will not be hiking as aggressively. we are scrambling

that is playing out on the currency markets.his has more to do with liquidity than real eggs, that is the debate for the hour. crew 38.97. european stoxx 600 i concerned about growth and valuation. tom: i will break a rule. it is good to do this. usually i have the single best chart and separately the bloomberg. today, i am combining them. the chart is so important. let's look at pound sterling he started working at socgen in the 70's. this is a long-term 30 year trend of sterling with 2 standard deviations down. it sets the ball down to 1.37. we are almost there. there are becoming more outlier 1.30,of getting out to to 1.20 discussion down level. this is truly unprecedented. moments ago on twitter making clear that this is the brexit, but there's a lot more going on. francine: it is about what other central banks around the world are doing and what mark carney is not. globaloined by strategist kit juckes. when you look at the pound, one point 40 is psychological. will he go to one point 30. is it angst? the currency markets ar

how will that currency play into kuroda's options? bank of japan is probably very conscious about not being seen to play the currency war game. he don't want to raise the pressure on the chinese, for example. so that they then themselves start to depreciate. the result will is asian that if they were to move to aggressively and push it to 130 with monetary policy, then pe anps the pboc would have excuse. i think it was some minimization in japan that they don't want to push to aggressively on the currency. you want to avoid an appreciation but also a massive depreciation so that then the pboc says we're in the game as well. in all bets are off. you have to choose a currency for the rest of the year to do your trades in, where will the market look like? i would not suggest sterling. there are other issues begin come onto at the moment. i think it will be the case that it could be a combination of either the euro or the yen. having said that, in terms of the context of the euro the second half of the year made proved to be a more constr

if our currency falls more into line with other currencies, we could be at the higher end. >> policee dollar really drive up last year. it has tapered off a little bit. do you think these are sustainable levels? >> it is all going to depend on monetary policy. there's a lot going on with central-bank policy. the g-20 meaning in shanghai, one of the big topics i would be talking about, is more coordination of global monetary policy. we've got global problems with growth. we can't fix these with local monetary policy. we have to talk about monetary policy today more globally than we ever have. worked,it still monetary policy? all guns blazing with the exception of the fed. we have the boj, the ecb, 6, 7 years of rates being at these levels. what have we achieved? >> that is a little bit of my point. we've been five to seven years, even longer in places like japan, of low interest rates with very little growth to prove for it and almost no inflation. that leaves one to question, how effective has this monetary policy been? what this monetary policy has been more effective at initially i

the yen has gained against every currency in the world.t of travel to japan is actually more expensive now. a little bit more expensive, but that would've likely pushed tourists to look elsewhere. it is obviously timely to talk about this because the yen has started to reverse course. have a look at this. the appreciation of the yen. let me just switch this. bear with me very quickly as i tried to type while looking. yen" on your bloomberg first story. have a look at this chart. appreciation has basically put the yen on the verge of breaching this lower and. since --irst time, it the first time since shinzo abe took power in 2012. 2010.t it has been since wholesee how this all over the next few weeks. coming up, osman profits and revenues missing estimates. ♪ >> hong kong police say 90 officers were injured in rioting over the lunar new year. the violence began when protesters tried to -- when officers tried to stop unauthorized hawkers. the commissioner has defended police actions, promising what he calls resolute enforcement against any

because of the latin american currencies.our businesses, we expect to do very well, but we will be dragged down by the currency when we convert our earnings into -- into euros. we hedge our capital 100%, so that is not an issue. it is very difficult to know what the fair value of the euro is. i do not know if it is 115, or 112, 118. usually currencies tend to overshoot, so we had the euro at 135, 140. clearly that was not -- you know, the purchasing power parity was not there. it is probably more at 115, so it is roughly where we are today. if it overshoots, it is very hard to know. at the end, currencies move according to improvements. again, our business in europe we expect to do better over the next few years because our customers are doing better. you know, i was just with a customer who buys a lot of things from china, and consumption is going up in spain. and the cost of, you know, of all those products to import is going down, so they are going to be very competitive. spain has been growing exports in a very significan

the all conquering currency today is this currency -- the japanese yen.up by 7% month to 2008 amidbest since speculation that the yen will gain against the dollar, driving it to a four-month high. this is a great chart that shows the price of gold against the msci all country world index -- it was normalized at 100. the global corporate bond indexes the red line. priceite line, the gold is up by 15%, so gold outperforming all those asset classes, coming off the back of three years of declines, the worst losing stretch, very much the haven asset in these uncertain times. there is the yield -- this is the 2011 peak when irish bonds were yielding close to 14%. we have an inconclusive election which will announce an unprecedented alliance between the traditional rival and the pm's party. the inconclusive election dozens in to be doing too much in the bond market today. guy: thank you very much. our next guest says emerging-market assets are setting themselves up for a major disappointment. good morning. earlier -- aubs top-down macro economist saying he think

some of it was people trying to get into hard currency.ecause there is in a my motherof china currency depreciate and the wealthy chinese are the big companies who do not want to be left holding a weaker currency and that is what they are trying to swap it out. to make the broader point, not all capital flight, but some of it is. and capital outflow would be, for instance, the government giving the one inside its borders and looking to invest its own project rather than buying treasuries? what they are, doing on the other side of the ledger is selling treasuries, burning reserves to keep the flow on the yuan. they need to keep a base under the yuan to offset the capital outflow. that is what is putting pressure on the reserve. so if you wind up having foreign investors able to move their money more freely in and out of the country, what kind of risk is that those? you might get it in but it leaves quickly. something we talk about is how investors might not understand the chinese market. enda: that is entirely correct, and that is where hot

must avoid currency wars.ders will argue on how to tackle the global economy's immediate challenges. david was there for us. david: it is easy to come up with a must to do list, where the you get there is another thing altogether. back to where we are, no groundbreaking agreement, and in knowledge meant -- and it knowledge meant that the recovery has hit a snag, but were not in crisis. that was one of the key messages. , they playvolatility down in effect and say it did not reflect the underlying fundamentals of the global economy. in fact, they also singled out growth in key emerging market economies. i would imagine that's partly directed a china, remaining strong. more should come from the girl from -- the governments if the fundamentals worsen. let's move things along. next up was the issue of currency wars. publicly the message was a reassurance not to engage in stealing each other's growth, but the problem is should there be a need to become more aggressive, let the other person know ahead of time. liste

which currency is the most bearish outlook? tie between the british pound and the chinese yuan. i have to say on that, i said the chinese yuan just because of that outside risk of a big devaluation. it could continue to tick lower, but they might have been holding things up, trying to regain confidence. they might hit us at some point this year with something more meaningful. >> but every single currency got a vote, which shows you they're be bearish. futures are selling off. those losses sort of deteriorating. dow down 132. s&p down 15. nasdaq futures down 39. "squawk box" will pick that up. that story on the falling oil price and stocks. >> equities dancing to the tune of oil this morning. that's it for "worldwide exchange." "squawk box" is coming up next. have a lovely morning. oh remotes, you've had it tough. watching tvs get sharper, bigger, smugger. and you? rubbery buttons. enter the x1 voice remote. now when someone says... show me funny movies. watch discovery. record this. voila. remotes, come out from the cushions, y

the issue with currency is the of the perceived as one most liquid and emerging-market currencies. it may be the case that it can be used for other things. the plan of changing the intervention pattern and leaving the possibility of doing discretionary intervention precisely tries to break that .ycle that makes the peso all in all, it was very refreshing to see an orthodox dose of economic policy in a well coordinated manner in a world in which negative interest rates are becoming -- alix: you will have the central bank on the one side trying to support the peso and get speculative out of the market and the market on the other hand wants to short the peso as a process that -- proxy for risk. what do you do as an investor? >> we need to separate the announcement. one has to do with preparing the economy better for a complex external environment. of thiswhy the timing go policy, that is the right medicine that an economy needs in these deteriorating environment. basically,r hand, mexico has been doing aprils has been doing-- a rules-based approach great that was not working. that is

usually currencies tend to overshoot, so we have the euro at 135, 140.ly that was not -- the purchasing power parity was not there. it is probably more at 115. it is roughly where we are today. if it overshoots, it is very hard to know. at the end, currencies move according to improvements so relative productivity improvement in america. again, our business in europe we expect to do better over the next few years because our customers are doing better. i was just with a customer who buys a lot of things from china and consumption is going up in spain. the cost of all those products to import is going down so they are going to be very competitive. spain has been growing exports in a very significant way over the last 12 months. and so, you know, that should be -- that is one of the effects of the cheaper euro. francine: what is your main concern overall? if we have a global recession, is there something the markets or you think bankers are not really seeing the moment? ana: well, my biggest challenge is really executing on a strategy. we know where we wan

if our currency falls more and long with other currencies, we could be in the higher end of the spectrumgrowth. dollar drive up last year. it is tapered off a little bit now. are these a sustainable levels? >> is going to depend on monetary policy. there is a lot going on with central-bank policy. here,k the g-20 meeting one of the topics i would be talking about, if i were a ofber, is more coordination global monetary policy. we have global problems with growth. we cannot fix these with local monetary policy. we have to talk about monetary policy will global today than we ever have. >> does is still working, monetary policy, all guns blazing, with the exception of the fed, we want to get into the details, but we are looking at seven years of rights -- rates being at these levels. we have been five to seven years, and even longer if you look at japan in places like that, a relatively low interest rate, and almost no inflation. that leaves one to question how effective has this monetary policy again. what this monetary policy has been more effective at initially is countries trying to use

the yen is a fine currency, and i will remain long in it.nohat merit in being long yen, short korean won. korea is much more directly impacted by weakness in china, by fears of capital controls and china, and if the currency were to weaken faster. we will see what happens when the stock market opens again on monday in china. that'll be the trader have against the u.s. dollar, to benefit from that. i would expect that to continue. on the: you have a trade pound, shorting it first at the dollar. where are we in the brexit debate? people are questioning whether there is global recession in the cards, does brexit become a bigger issue? >> i think briggs it remains as a source of massive uncertainty. brexit remains as a source of massive uncertainty. a vote to leave the european with everybody revising down rate expectations, economy slowing, and a big current account deficit, a cocktail that i would love you to get the pound up before i go skiing. but i am bearish about it. joe: what are some of the em currencies that everyone hated last year, c

joe: let's talk about some specific countries and currencies.g a veryso strong week after that surprise hike. today, the finance minister telling bloomberg news that there could be more intervention , that the mexican central bank has the tools to continue to do more. this was a currency that are a lot of people like for a long time and kept getting slammed. is this finally it for a turnaround? or is it just about oil and commodities? >> there are a lot of things in the question. the currency may go to lower again it eventually, but i think what has happened here is that the mexican peso has been extraordinarily weak, much weaker than the fundamentals would warrant, and i think the central bank was just letting -- wasn't reacting to that, because there was no passes through from the weaker peso to inflation, and therefore they did not see any particular reason to raise rates and what is a soft economy to deal with an inflation threat that did not seem to be there, and so i think the surprise about this week is very helpful to the peso short-term

he try to talk up confidence in the currency.t is quite a combined push from chinese authorities to regain confidence in what is happening here. th governors and central bankers and no shortage of talk -- us with thejoining latest on the chinese story. let's continue our conversation around china and the risk that poses for foreign exchange. derek halpenny is still with us. let's talk about the chinese. they had been moving, cutting the reference rate on the currency once again. hasn't cost the same level of nervousness and markets that move might have done in early january. it should be remarked on nonetheless. is this is a sign of anything to come? you are in the camp that says the chinese are going to devalue their currency even though they told us they are fixating -- they are not fixating on that. derek: i would not use the word devalue. that brings to mind what happened last august when you have a one-off, big shift in the currency. but when you look at the fundamentals, there are many reasons to justify a weakening of the

i think a key message when it comes to currency and currency wars and currency devaluations was thatto have a policy that might have a side effect of driving down your currency. but, it is important to communicate it with others. overall, the message that they put forward was this, we reaffirm what the committed to before, we will not involve ourselves in this, but, if it does happen to fall, the currency, then at least we have told each other. -- these how this comments on currency devaluations and how it is to have it, but not really. the best way to stop currency devaluation is to refrain from a completely if your monetary policy measures would have an effect on the rate of currency. inform your colleagues, inform your partners in the g-20. so there are no surprises. >> i think the language on exchange rates is very important. it was an important commitment in turkey. to refrain from competitive devaluation. it is important that in this communique, there is an additional commitment to consult and that means that it is a commitment that will keep each other informed and that we wil

, and we live in a world of currency, so you have to factor in currency.t is declining. we were talking yesterday about the stock performance. the stock had been doing great this year as people looked at it as a flight to safety, the safe haven. is there a recession? there is the assumption that shoppers will go down to walmart. we have seen minimum wage increases. maybe today was a reminder that there still are issues with the company. the company is not growing. why have your money in walmart rather than amazon. alix: a fair point. oliver, let's go to currencies. all of the chatter last year was that the stronger dollar has been stalled, the covert has dealt with it. what happened yet go oliver: -- what happened? oliver: it is a big deal. revenue growth is slow from straight up flat from this year. alix: can't they hedge, though? oliver: you have to pay the proper with the algebra with the fx. the consumer could be saving a little bit instead of spending. we do have low gas prices, low unemployment, and rising minimum wages. -- we prefermart costco right

>> john currence: yeah, it sure is. >> anthony: what kinda socialist, communist -- are you up to, currenceood kind of guy. >> anthony: me, too. i've been here only a week. my sentences, they're starting to change already. 'cause it's not just a physical, a rhythm to the speech, but the way i'm organizing my thoughts is starting to change. some of the oxford writers from last night managed to make it out of bed. heads pounding no doubt, filled with the shame and self-loathing surely familiar for writers. but like such greats of the past as malcolm lowry, f. scott fitzgerald, and charles bukowski, they, too, have learned that more alcohol first thing will often make you feel better about the world. particularly if accompanied by freshly baked cornbread, biscuits, pulled pork off that whole hog, sweet jerk chicken, and brisket. hell, i feel better already. >> man: the mississippi that i've received is not the mississippi that i've had in my head. i was surprised on how sold i was off the bat. if you wanna write, you come to oxford. >> anthony: do you think that's true? well, apparently yes. >

looking at pressure on currencies, particularly on the are we on the cusp of a currency regime, willre be a painful transition? so. think you are talking about negative rights, you are talking about th yuan, the uk's inflation outlook does not look too good. i think it is a matter of time before the fed gets more dovish and it looks like they may alter their interest rate rises. there could be some downside in the dollar as well. when we talk about currency wars, we are seeing what is happening in europe today. in was actually pretty good europe. is that reflecting any underlying strength, or do we go back to your thesis, that we are looking at currency differences? we tend to look at the change in inflation expectations. in japan, inflation expectations have halted. australia and canada, the weakness has halted as well. u.s., our, the inflation expectations, our data shows that it will continue to drop off. i don't think there will be any rate rises as disinflation continues. mark: where are we seeing rising inflation? how does that affect our investment horizon? >> any inflation an

it is creating a downdraft on the currency.rm, i think it's likely interest rates remain an important driver of relative valuation of currency. sterling has more upside than the euro. anna: you do look to shelter from some of the turmoil and markets. is there anything you can do, either completely away from the u.k. or u.k. assets that might be less affected by what we are seeing here? eijan: we specialize in the that hasinvesting relative value positions, so you are not necessarily having to own assets. you can be shorting. we have managed within our flagship funds to not go down. positiveelivered returns, which is only possible by having that kind of flexibility. date, the return fund is positive. that's because we have these relative value opportunities. i think if you are simply buying assets and holding them, it's very important to be able to sift through. there is a temptation at times to jump out of the markets, which is precisely the wrong thing to do. so, if you are committing to the market, i think it's very important

china's currency the most since 2005.xchange rate and critically strengthened the reference rate. stocks soaring in tokyo. 8%, the most in seven years. investors anticipate more stimulus from the doj did this after disappointing gop data. -- ♪ guy: ok, let's talk about the equity markets. as we get down to the get-go, let's talk about what we're expecting. 2%. to tokyo to get away overnight. let's look for the cash over. here is caroline hyde. caroline: a phenomenal move we saw in asia here it is have a look at what went down in asia. we saw spikes, the biggest hop in japanese stocks since 2008. brushing up concerns about the japanese economy. is gdp worse than expected echo is chinese imports and exports worse than expected? the pboc stepping in looking for support -- looking to support their own currency. you see a rocket in the nikkei, up 7%. what moves we saw over in asia. as we do overall -- as we open up, we see bigger jumps than that. markets start to get going. 1.5% up 1.5% -- we are up on the ftse. miners and met

what the pboc is doing to the chinese currency. ♪ guest things the chinese currency is unsustainablecurrent levels. he sees a sharp depreciation of ahead. he joins us now from tokyo. you are suggesting that the efforts by the pboc and other bodies to shore up the yuan is a fools errand? i think they are. a lot of the outflows from china are temporary. revenuers closing off left over from the renminbi trade, and chinese companies repaying debts. there is some capital smuggling in high net areas. i did a deep dive into the chinese balance of payments, line by line, and the most i can come up with is 45 alien dollars a month presently flowing out of the country that will stop. it would still leave china with the reserve loss of $55 billion. i don't think investors will become double that. we will be back to the situation that we have been in for the last few months, where investors know that no matter how big your reserves are, if you're intervening every month to keep the exchange rate up, at some point you have to give in and let it float. rishaad: surely the whole to not just valued

where we have seen an impact as the currency, the pound against a number of currencies which have fallenvolatility gauges are jumping to multiyear highs. at what juncture will visit us -- will business investment suffer? jaclyn: i think it is impacted now. uncertainty is impacted. mark: are you sensing in your business? jacqueline: definitely. the sooner we make a decision, the better. u.k. inlling it to the the best possible way or not? u.k.u were to front to the camp, how would you sell it to the u.k.? jacqueline: i cap of myself in that position. as a country, we have to decide what it is we want for britain. do we want britain to go backwards? spiller,t to be an closed, or do we want to be open, forward thinking, engaging, and confident in our role in the world? that is where i see the future. that is where i see the future. how global, in your outlook are you right now? we have to remember that up and down the country, businesses .f all sizes and summers was a small business at one point. we are ambitious and growing. we want every opportunity to grow our business through the best d

people aren't sure about currencies. lowve got low growth and interest rates, and one of the overheatedsks is the state of the chinese economy, and generally in asia, that big surprise in japan, and all that helps. on the flipside, the supply-side of gold is still probably too high, and still not profitable, and i think that is something we need to reduce, as far as new gold supply goes, and i think we are slowly seeing the industry and the company starting to have a very stressed market. everything looks positive. francine francine: it looks positive, but we also have comments from the anglo american ceo, a frank and brutal assessment of the industry. it may benefit goal because it is a haven, but how tough is 2016 going to be for the world economy? >> i think the world in 2016 will be tough for everyone. i think the gold industry is probably getting a better gasario than the oil and industry, and i think generally, when companies are so standard groceries around the world are having to cut jobs and struggle to survive,

i still think the impact is likely on the currency. we talk about the implications of the policies in the u.s. quantitative easing took the fed interest rate from the equivalent of -3% to 0. will we see them hike their rate? are we going to see the u.s. moving to negative interest rates? that is a huge question. jonathan: what do you think the chances are? gabriel: i think it is reasonable if we do not see economic recovery. i worry that the fomc statement was still very domestic in focus and not enough about the global economy. i would rather see the fed have a greater focus on what is going on in the big world, particularly with regard to u.s. oil. about -- jonathan: james bevan and gabriel stein are both going to stay with us. coming up, another conundrum for china's policy makers. we look at what new pmi data tells us about the state of the country's economy. 20 minutes away from the open. futures around europe pretty much dead flat. ♪ guy: 43 minutes past the hour. welcome back. you are watching "on the move." here is caroline hyd

one currency's high relative to another currency, they can trade that.ne interest rate is high bills of to another interest rate, they can arbitrage that out. the market is so effective that they are arbitrage and out the slight differences in the world that has taken away the effectiveness of local monetary policy and we need much more of a global approach to monetary policy. david: what does that do, then, for the fed? we can talk about the effectiveness to a certain extent of monetary policy. but at the moment, does the fed thisd to counter aggressive policy from all the central banks and maybe reverse course? gary: it is an interesting discussion. like i say, the fed and china more or less are the two countries left that have allowed their currency to be relatively strong versus the other countries. that is a tough position to be in, where the value of your currency is being dictated by the actions of others, not by your actions. i think that is something that the chinese are contemplating, and i think that is something the fed has to contemplate. ar

a currency that really promotes the community, that if they have less money, they use the currency so that they can be able to access the goods and services that they need to be used at home. >> reporter: here is how it works. after selling her bites, she can go to a shop that accepts the vouchers. she buys bred using boertdz her hard currency and the voucher. the shop keeper can then by vegetables for his family in the next store with the vam voucher. >> translation: i used to by 3 kilos of pae day toes-- potatos, but now i can buy enough for a week. >> reporter: to get the vouchers you must have a business, either a shop, a restaurant, vegetable store, have a product or service that can benefit the next trader, but many people here say they cannot afford to own a business. they find themselves excluded from the scheme as they have barely enough money to feed their families let alone start a business, but it's a concepts that has worked in other developing companies like brazil and south africa. >> it takes a lot of time for them to understand how these vouchers work in the community

ashley: the default currency is the dollar, which makes it tough for our companies. charles: that's right. look what i just did. i just spent what two and a half minutes on china, foreign currency reverve with no buzzer, don't put it on me now. >> just don't talk about golf, real real really. charles: let's look at oil please. oil down, stocks down, that's part of the story today. we were, well, we were at the $29 level a few moments ago. oil down, stocks down, again, that's part of the story along with china. that's why we're going to be down so sharply at the opening bell. here is the good news, i think that is great news. look at that, that's the national average for regular gasoline, that's $1.73. dropping like a stone, don't you love it. wait for it. the cheapest gas m america, $1.11 a gallon at a 7-eleven in oklahoma city. it's only a matter of time before somebody puts out 99 cents. ashley: yeah. charles: it's coming.

if they allow their currency or the market to push their currency down, other countries go down in orderd losing competitiveness. it is certainly not china's fault all this is happening. many countries are using currency devaluation for a variety of reasons to stimulate growth and exports, which in turn stimulates growth. every country has to avoid using the exchange rate as the way -- as the default position for similar to economy. china just happens to be the biggest. that was the vice chairman of kissinger associates this morning on bloomberg television. still ahead on "bloomberg ," one of the biggest corporations --"bloomberg markets," one of the biggest corporations is giving up the fight after the death of antonin scalia a. tracy: let's start with the headlines on a very busy day. we have bloomberg first word is with mark crumpton. mark: a very busy day indeed. chris christie endorsing donald trump for president. they are campaigning today in texas, one of 11 states holding primaries or caucuses on super tuesday. governor christie says mr. trump is the most qualified candidate.