the way to play it is to recognize that a dovish statement, a continuing dovish stance won't do much the markets if it's what's expected. alix: the market looks so dovish right now, will anything be a disappointment? sebastian: correct. that is what is priced in from the markets perspective, despite what we are getting from economic surveys. there is a risk to the downside here. the fed is so careful and messaging their intentions that is being data dependent. you want to look at what they will say about the balance sheet unwind. at 4.5 trillion in 2015. now, we are at 4 trillion. we have seen volatility unwind. one of the key things is whether unwind will and/or applause at the end of 2019 -- or pause at the end of 2019. david: i will put up a chart that indicates we had different projections form morgan stanley and goldman sachs and jp morgan. 3.8 trillion from morgan stanley, the redline. we don't have that much further to go. jp morgan at 3.2 trillion. will we get some indication from these minutes about where the endpoint as? michael: i don't think so. we are getting closer to t

stance,y on a dovish and does provide more of a case for weakness. recall last year, there was , not only was the fed hiking, but u.s. growth was stronger. they were in line with other if they were to converge with the rest of the world, there would be a much more compelling case for broad-based dollar weakness. obviously, the trade issue is an important one. we'll talk about that. right now, i want to get over to anglo american. or has put the commodity crisis ,ehind it, cutting its net debt for your earnings at ahead of estimates. we have got the ceo joining us now for an exclusive interview. you, whatme first ask is the signature peace of this turnaround you have engineered? the signature peace is the productivity improvements we have delivered. everyone today is producing all the amounts they were producing willyears ago, 43% cost-cutting crisis. margins are up 35%, even though prices are down. matt: i am seeing so many companies getting money back to shareholders, raising dividends. you're one of the few to not have launched a program. it probab

more dovish in the last meeting? >> they were dovish overall meeting and ember in the january statement the minutes were slightly less dovish than the revious communication in our view. so basically the statement, the ffluency statement was ambivalent with respect to what the next fed move will be, hike or a will be a cut. after the statement in january basically didn't rovide any clue in that respect. the minutes on contrary actually a d the next move could be hike still, so i think there is a little bit of tilting going forwardking rather than staying on hold or each a cut. more would get any clarity on the other wild card which is inflation. >> well, inflation will what the fed will do. it's probably not going to be the fed t, although will listen to the markets and all of that. the key determinant of what to the fed policy this year will be inflation and if accelerates this year, we will see further tightening monetary policy because the ed will not tolerate high inflation. shery: thank you for that. espite the n

look for any details on the new dovish stance. later that day, samsung holds a launch event, plenty of leaks have already revealed specs. saturday, chairman warren buffett puts out his letters to shareholders. he has released it annually since 1965, even i was not alive in 1965. nejra: [laughter] manus: investors are also awaiting earnings, glencore among others are releasing data. let's bring in our energy and commodities senior reporter david. thank you for staying so late, what will investors be focusing on? >> as you say, we are expecting earnings data from glencoe are, anglo-american, the backdrop for all is very solid. prices have been robust. on whats will focus will be do with excess cash? how much of it is coming back to investors about how much into new projects? announcedhey have 10.5 billion in shareholder returns, so expectations are a little more muted. glencore, there are expectations they could come out with a new buyback program. in terms of projects and spending, we are going to see a real focus if these companie

latestthe rbnz is the central bank to test the new dovishness. traders are betting on a rate cut later. it are markets kicking off trading in asia. let's turn to sophie. we are seeing some risk on moods already. sophie: checking in on how we we racing for this session, have the rbnz expected to hold out its policy rate. going to be getting fourth-quarter gdp growth. flipping the board to check in on the market open in tokyo, we have the nikkei 225 continuing to rebound from a one-month low. we have the nikkei 225 adding .8%. arek in on how stocks faring. stocks in seoul gaining .1% while the shares have been fluctuating in the session. we have been trading fairly flat. kiwi stocks are climbing for a sixth straight day to an october 2 high. if i can pull up very quickly, this stock gaining ground. a kyoto reportee that the company could see ¥80 billion investment from a group of chinese and taiwanese companies. we are seeing a move in sk hynix as macron string -- micron grows.h check in on sk hynix. we are seeing the stock move higher by 2.1%. dem

the fed's dovish boost is taking a backseat to the earnings and data.he face world economy is cooling. joining us now is david page, senior economist for the u.s. and you so. -- at mac so. fact theking about the markets had already replaced before we got to that dovish statement from powell. i want to talk about the curve because it steepened on the press conference. we are seeing it flattened again. we are on the 16 basis point handle. the 10 year treasury yield, the longer end, is that reflecting a dovish fed is not going to save the u.s. economy? >> i'm not sure it is. the 10 year mark is struggling to see what the direction of the fed is. 10 year yields have typically dropped out around where the fed funds rate tops out. they try to anticipate. the fed was signaling it was going to be taking a little bit above three. that's why markets were hanging around. we have a much more ambiguous outlook. jay powell saying -- some discussing cuts. the markets are drifting a little bit lower. the current high as around 250. some thing of a nominal anchor. see h

central banks are sounding more dovish and that should be supportive going forward. am sure no one was calling you an idiot. let's talk about what was going on on the end. we saw some yen softness. it was a long time since we talked about the boj in great detail. kuroda is shaking things up talking about how there could be more easing if needed. what was the message? because is ironic monday people were getting excited about the idea that maybe there is a potential tapering in play with people willing to sell their long and bonds and people are pricing in that kind of trade. kuroda is emphasizing they are into easing, as long as the boj is an inflation target, they will continue down this path. it has in a decliner and the decline is picking up pace. with the declining population it and growth below 1% it is coming in at .85%. so for as long as the boj is inflation targeting, we will continue to have easing in the central bank and that will weigh on the yen and on -- the yen on a long term basis. it is a wealthy country. it will grind weaker again. that kind of game

dovish released wednesday. thank you for joining us. how much are we going to learn from the fed minutes this week? >> i think a great deal. if you look at what happened from december to january, there was a significant shift in the fed reaction function. there was clearly some downside risk. inse risks were still there february. we had significant that speak. they are concerned about the downside risk. they are concerned about the balance sheet. i am going to be interested in what changed in their mind on the balance sheet. in december, they were talking autopilot on the balance sheet to potentially ending this year. is this a risk management approach or something else? are they seeing something in the data that is making them nervous? guy: you just give me a list of u.s. reasons why there could tensely be a problem -- potentially be a problem for the economy. the fed is the u.s. central bank, it acts as a global central bank. are there more external concerns they are worried about? >> that is a fair point. one of the biggest downside

new zealand is starting to sound quite dovish.ssibility new zealand will cut rates before australia. this is a kind of double winning that will keep yields low in both places. this spread could get even wider before it finds a stabilization point. >> i'm watching sony stock soaring more than 4%, the most since december 27 last year. we have heard sony will buy back up to 2.36% shares worth ¥100 million. that share buyback will start between february 12 and march 22. your point on monetary policy, let me turn to the rbi. we saw the surprise rate cut. we had expected them to hold. chancehere was a slight there were a few people looking for a cut, but it certainly was a consensus -- wasn't a consensus decision. the gap between bond yields and inflation is wide, so they have some cushion to work with. some may see the cut as coming early. continues,n india would do this later in the year anyway. it is such a contrast to a year ago, emerging market countries where raising interest rates. significantfirst emerging market place to lower

he was dovish but perhaps insufficiently dovish for some market participants.s unambiguous and running in one direction towards easing. shery: will we see confirmation of the u.s. tilt with the fomc minutes, not to mention nine fed speakers this week? >> we do. here is the risk with the minutes. the risk with the minutes is they are a summary of the discussions that took place. you will hear from some voices that perhaps were not as clearly dovish as the fomc statement and as chair powell was in his subsequent press conference. this is the trick with the fed. there are a lot of voices. not every voice matters at a particular juncture. george orwell said all animals are not equal. i would really look towards rich clarida at the end of the week and then chair powell's testimony to the senate and house next week. is it possible the minutes are not the biggest thing in terms of what we are waiting to hear from all of these speakers? we are waiting to hear from mario draghi as well as the rba ministers as well to give us an idea whether we are seeing the synchronize

that is arguably in dovish thing. thing.arguably a dovish that is arguably a dovish thing.erve is driving the supertanker. they have to be gradual so their message becomes consistent over time. the minutes going from very hawkish to less hawkish -- david: are we actually increasing the uncertainty and volatility here? we are getting less forward guidance moving forward. may be inevitably as we approach normal. nick: i think it's probably fair to say that there is a bit of confusion on the part of the markets. that's possibly partly due to how the markets are interpreting it and how the federal reserve is communicating it. alix: the separate dots, completely ignore them. david: misinterpreting the dots, that is not the consensus. that is our individual use. support fromer vol the fed -- what does that mean? perspective, the morece sheet, giving information about when the balance sheet tightening will there's one rate hike being taken off the table because balance sheet tightening is a way of tightening interest rates as well. that means the cyclical value sector could do a b

dovish in the case of the pause getting a bit of a boost.t may continue based on some of the charting. let's take a look at emerging markets relative to other global markets in the bloomberg. this is a chart out of the disastrous fourth quarter. what we are looking at in yellow, the s&p 500, the purple the dax. and white, china, and in blue, the emerging markets index. there is a huge selloff. china, the dax, and emerging markets overall had been selling ahead of that. the s&p 500 at an all-time high. it is those emerging markets were covering the most. that speaks to that dovish stance we have seen more recently out of the fed. as to what is moving the markets in the u.s., let's to get some of those movers for the nasdaq. apple up 1.1%. there is a report that apple is said to target combining the mac by 2021. and analog devices up 3%. they boosted their dividend. qualcomm up 1.2%. apparently their networking is qualified for amazon's alexa. here are some of the winners all the day. overall -- winners on the day, but overall waiting on the f

fed minutes on wednesday, will they be as dovish?t could send the dollar for a lot of volatility in the meantime. oil trading even higher, this day of gains. about a56 a barrel, three month high. other market stories that will be important, walmart earnings. i want to take you into my terminal to show you what options are pricing for earnings volatility. that line is here. we will see this is hitting 4.5. option traders believe walmart shares will move either up or down 4.5% today after they report earnings. that is far above the average line which is 2.5. this has been kicking up more as we got retail sales that fell 1.2% in december, and walmart margins as well as their online business comes into hyper focus. manus: let's see where the dice rolls on walmart numbers. dani burger in london, thank you. let's talk about another market. hsbc is not as upbeat after fourth-quarter results. a little lower in hong kong. short of estimates. the bank is saying it aims to meet a key financial target. i spoke earlier to the companies and i aske

's dovishnessed patd was overpriced. tell that is where people want to put protection. we will get periods in the next 18 months where recessionary alarm bells may come back. nejra: if that volatility does pick up, you are ready with what currency pairs? simon: i think traditionally would be dollar-yen. that has proven not to be the case. if we get some moved to the downside in terms of risk off, where are we to go? clearly, you will be focused on those china trades, and i think you are seeing the rest of the bottom potentially in terms of monetary policy in australia and new zealand. anything around the kiwi is where you will see volatility, and equally to the upside as well, should things start to agree with the china trade is this. you will get that moved to the upside. nejra: our next central-bank conversation is keyed up quickly. geoffrey yu, cio, ubs private banking and simon derrick, director / chief currency strategist, bank of new york mellon corp. they stay with us for the hour. when you are traveling to work, tune into bloomberg radio live on your mobile devi

that might wake people to the consequences of a dovish rbi stands today.yone is dovish now. that is not new or incremental information. everyone else is follow the fed. what do you think about the dollar? dollarime to buy the because everything else on the other side of the dollar trade seems to be weaker anyway? think from the fundamental perspective that the dollar looks overvalued. it is difficult to argue for a stronger dollar from here. tothe same time, we have change to a more dovish stance, so what complicates the picture is we are seeing a slowdown in global growth momentum. historically, that has always been beneficial for the dollar, because it typically implies the are more leverage to global trade and global growth. those are incremental pressures. with the dollar being as strong is rubbing a clear-cut. with this patch of soft growth easing by the second half of this year, we think the dollar trend could be turning. we arere two reasons why more bearish on the dollar in the longer term. the first is we think the growth in part that came through

having this dovish outlook has been a massive boost to u.s. credit right now.manda: we have seen these massive inflows in the last few sessions. one of the things we've been talking about in the weeks leading up to today, last year and this year, has been the deterioration of quality. are there still concerns now that quality is still not what it should be? >> in the new issue market, we have start to see ccc issuers come forward. that debt has been leading the charge as far as returns this year. so far up 6% or to date. while high yield is doing great, it's been led by the riskiest segment of the debt. amanda: just to get a rate, we are watching the roosevelt room at the white house, waiting for president trump to come in and make his announcement about the u.s. choice to head the world bank. theee david malpass in room, the under secretary of the treasury. he is believed to be the choice. it is an interesting one because he has been a vocal critic of the world bank, concerns expressed by analysts, that his appointment would create tensions inside the organiza

olivia: today we could get a clue as to how dovish the fed has actually become.inutes from the january meeting will be leased at 7:00 p.m. u.k. time. something kick could have an impact on the point to curve for bouncing back from under 10 basis points. starling has rallied on optimism of her brexit retool as the prime minister has to brussels. she set to eat john kline -- to meet with jean-claude juncker. he is anything but optimistic a deal is close at hand. >> there's not enough movement for me to be able to assume that it will be a productive discussion. an unregulated exit of britain from the european union would have to setting -- devastating consequences for both britain and europe. >> some even leaders are pushing for a change to antitrust rules. angela merkel and emmanuel macron are pushing for the change, as germany french companies are often the target of top merger reviews. block aws attempts to real merger. the prime minister is under pressure to reduce the deficit. leaving the government below revenues that could necessitate cuts. and a power utilit

global synchronized dovishness. >> what concerns me is i have been uncharacteristically bullish during this. >> crazy bullish. >> i don't know crazy bullish, but weirdly so it was it was uncomfortable for me but the euphoria today started to concern me. look at what we had. we've had every central bank as guy mentioned to a u-turn and say we're going to be dovish and the european central bank even suggested they might start buying back debt again maybe the fed is not going to raise rates this year. we've had the shutdown, we've gotten through that. now all of a sudden maybe we're getting somewhere near on a china deal what concerns me is what happens if we don't get a china deal i think you could get a major sell-off on that everything else is priced in so to me i'm starting to take some profits i think the odds are stacked on the favor of the bears at the point. it doesn't mean we're going to all-time lows but we're 18% off the bottom that's a pretty good run up 11% for the year. that's a good year in and of itself you could close the books and be all right. >> i feel like there's a b

we have a dovish fed.ong dollar, we actually it will not be a headwind for emerging markets because we only expect a very strong dollar if the u.s. economy is very strong given the other political issues. trading at 12 times earnings, despite the fact you have had slows. it has not become an expensive market by any means. still trading at a discount to most traditional measures we look at. anna: crowded but not expensive. so no need for it to unwind? patrick: i don't think so. when you are getting 2.8% dividend yield in emerging markets, definitely growing, that is a nice carry. 12 times earnings is not extremely high. emerging markets can fall to nine times earnings, but 12 times earnings is cheap for emerging markets, especially not growing as fast. matt: i am trying to put together an rsi chart here. what do you think about rsi generally when you are screening assets? patrick: i don't really look at it so i'm not much into the technical. something if you trade, it is probably much more important. what w

room the global shift to dovishness has created.t coordinated sentiment from central banks suggesting the only way to go is down with the level of growth we have seen. we have uncertainties in the trade war, domestically in the u.s., potentially another shut down as early as this weekend. do you think the markets have fatigue? they are struggling. that is a fair assessment. it is a case of having the markets rally extremely hard over december, now this shift over what central banks are saying. the federal reserve opened the is it a positive or rate cut that comes on the fact of global growth outlook is not so strong or just a lot of risk, we should take a breather and see what comes through? it removes a big uncertainty especially from the fed that these guys could tighten. it is a bit of reassurance on the back of that. for me it is a case of saying the pause or the idea there is risk out there in the central banks are aware of that, really goes into the idea that can lift the markets in the near term but it does beg the question w

is this being to dovish? thierry: i think so. i don't think fed will cut rates this year.l be interesting dynamics towards the back half of year. they will have to act on that hawkish sentiment. the most important thing is wages in the u.s. which will continue to rise and put pressure on inflation. eventually, the fed will go back to being in hawkish mode. that is in the back half of the year. haidi: we are seeing this bond story, falling yields, capitulation yields being the key stories so far early in the year. with you're talking about german bunds. do you see this as continuing, and at this pace, is there any of that diversion story left? thierry: we see bond yields staying steady the next few weeks or months. i don't think there is going to be anything that promotes global growth until the middle of the year when the chinese stock start stimulating and some fiscal stimulus out of europe. in the meantime, yes, bond yields will stay low but we expect to see some emergence. to that extent, currencies like the euro will stay weak against the dollar and u.s. yields will be

chairman powell at the fed flipped from hawkish to dovish.s are to a certain extent predicting maybe even a chance of a rate cut in america this year. we don't expect that. ifwill be quite interesting the bank of england later today was hawkish. i expect them to be dovish and not hawkish. there are large amount of uncertainties out there. central banks have to come to fore and give markets something. nejra: if it is fully priced now , is that fully priced in equity markets right now? martin: not in equity markets, but in bond markets. we have seen six weeks of a significant rally. a large part of that is a reverse from the crash. a lot of the markets have lagged to the u.s. performance. asian markets, european markets. arepolitical outcomes potentially very significant and we have to focus on them. very difficult to predict. etc., we haves, to take the risks as they come. central banks have given a dovish tilt. bond markets have responded to that. equity markets have more upside and you think the dollar has more upside. martin: very simple. n

dovish fed minutes today send the dollar higher or lower? guest: it should send it lower, but there's obviously a large expectation that these minutes should be dovish, and the dollar has held in there fairly well in this environment. the expectation is for dovish minutes, and over time that should lead to a weaker dollar. but again, i'm not keen on thinking the next move is going to be easier. if anything, i would expect monetary policy to be static for quite some time. vonnie: all right, michael. thank you very much. michael o'rourke, chief market strategist at jonestrading. let's check in on the bloomberg first word news. here's kailey leinz. kailey: in paris, ubs will have wasay $5 billion after it ruled that the bank help to stash funds in undeclared accounts. reportedly will visit japan in may to see the new emperor. that comes from the japanese tv network nhk. the current emperor will abdicate and be replaced by his son. meanwhile, president trump may finally get to deliver on his campaign promise to address china's management of its

what do you make of the latest fed's dovish stance?think the fed has been doing exactly what they said they were going to do. they have been saying for a while that they were in a mode of being data dependent. of course, over the first month of the year and into the end of last year, the data were not all that great when it comes to the way financial markets were behaving. i think they delivered essentially exactly what they said they were going to do. don't forget, we don't have a set of -- new set of forecasts. that will not come out until this next meeting. there is where the real story i think is going to be, in those sep forecast into whether or not there will be some further marking down of the expected movement in interest rates. of course, they can afford to be patient. they are not going to have new data on gdp until another meeting or so for the first quarter. we know what the fourth quarter of last year was so there is no news. shery: i'm curious what you see in the economy. you were the director of research in the federal r

the fed has seemed to be on the dovish side. david: when does it bottom?ate of change is still pointing down. how long before these two things -- the trade deal and consumption story in china -- when do those show up in the numbers? deyi: we expect the first quarter to be weakest in terms of gdp. looking at global gdp numbers for em's around the world, second-quarter is when we expect things could stabilize. yvonne: we have talked about how we have seen this parade of central banks turning more dovish and following the fed. is that exaggerating that we will see rate cuts? deyi: if i think about the monetary policy cycle for this part of the world, we have come to a point where we would not see any more monetary policy. i would see the central bank to cut rates following the footsteps of rbi. we don't have a rate cut in our base case, except for rbi. those at a greater rate of fp.ing would be b david: we have that on screen, trying to extrapolate. been inflation has surprising to the downside. it feels like a global phenomenon. the downside has been on the

the feds dovish pitted could recession past 2020. jay powell is coming around to a wait-and-see view. are pushed upets that are tweeting today the european and u.s. equity futures struggle for direction. warnings by the queue? nissan scraps plans to build a new car in the u.k. as theresa may renews efforts to find a plan b on brexit. good morning, everyone, and "daybreak europe." let's get to the ryanair numbers. confirming its 2019 profit guidance between 1% -- 1,000,000,002 1.1 billion euros. revenue comes up to 1.5 3 billion euros. the key here is the versus arter loss profit a year ago. ryanair saying it cannot rule out further cuts to airfares and guidance. basically, ryanair reporting a 19 point 6 million euros net loss in the third quarter and is expecting weaker fares. the passengers were offset by 6% decline in average fares due to excess winter capacity in europe. commentaryso the coming through here is that higher all prices -- higher oil prices and lower fares have created a wave of eu airline failures. also ryanair sayin

it is another dovish signal as they prepare for a new president and chief economist this year. saudi arabia has dismissed a report that mohammed bin salman wants to buy manchester united. reports say the crown prince could send billions of pounds to buy the club. saudi arabia calls the report completely untrue. global news 24 hours a day on air and tictoc on twitter, and powered by 2700 journalists and analysts in more than 120 countries. i'm sebastian salek, and this is bloomberg. inncine: european automakers focus after a u.s. probe reported to say that car imports pose a risk. this could ultimately lead to the u.s. opposing tariffs. angela merkel rejects the suggestion that german carmakers compromise u.s. national security. >> we are proud of our cars.

yvonne: the private gauge is dampening the sentiment with this dovish fed. moves from china to rescue stocks after an avalanche of profit warnings out of china. so, thehe last day or date closer, so we may see a glut. mmke a look at your g function, focusing on the data, this wider slowdown in china, especially private companies reflected in that data. the csi 300 still positive. we started off with some decent gains at the start of the open in hong kong. than expectedorse export numbers as well, but slide positivity. .he dollar coming back stronger perhaps that is the big headwind. the chinese renminbi, we broke off a rally in eight days that we saw it rise. 6.72 is where we stand. the aussie dollar falling after that pmi data. korean also selling off. seeing upside after that weakness yesterday. when it comes to the supply and damnge over that vasle disaster, perhaps we could see a retreat in iron ore prices. take a look at the data. what we were focusing on here. we were expecting slight deterioration from december, but this trade-sensitive measure issuin

rba to be waiting on the see if we get a hawkish comment after the fed turned a dovish as well as new zealand labor market down. sydney futures setting up for a modest gain of about 3/10 of 1%. let's get you the first word news now. su: president trump is reportedly ready to meet his chinese counterpart xi jinping in vietnam at the end of the month. days of talk two on the 27th and 28th. the idea was floated when chinese trade delegates were in washington last week. the president said at the time the progress is being made but no final deal would happen until he met xi. brexit is seen as one reason why nissan will not make the new suv in the u.k. the company says it is a business decision that uncertainty about britain's relationship with the eu makes it hard for companies to plan. it follows news the u.k. auto industry has seen investment almost halve in the past year. huawei has pledged never to do any harm as it faces widening accusations of espionage. said theny's chairman company would never intentionally hurt a country, an organization, or an individual. the u.s. wants its allie

nejra: dovishness brings me onto inflation.bal investors are not used to upside surprises judging by this chart i've got on the bloomberg now. is there a risk of an upside inflation surprise? you revised down your g10 10 year yield forecast, so my guess is perhaps not. richard: i think that's what happened. there were lots of fears the last six to nine months that this acceleration in which growth in the u.s. and a pickup in inflation was going to give us upside risks to these forecasts in 2019. as we got into november, december, those risks seem to have dissipated. neville we sitting growth seems to reinforce -- now, what we've seen in growth seems to reinforce that. i think it's telling us we're still in this regime. it's different from upside surprises. we're still in a sluggish recovery. nejra: 10 year yield, you see where? richard: 2.85 is the cap. nejra: 20 basis points higher than where we are now. richard kelly stays with us. break some news here. 2018 comes in at 15.3 billion euros. billionmate is 15 to 2 -- 15.2 billi

he is to dovish, the markets -- too dovish, the markets will be disappointed. peggy: one of the key things he needs to do is keep pressing upon people that he's looking at the data as yellen did. alix: what are traders going to be looking at over the next 48 hours? the lot of these times, questions are more political in nature. traders will be latching onto some elements -- the pushback against unicredit thesis and market pricing. the first to hop on the policy -- he has reintroduced the idea of hikes this year. the minutes also did so. jay powell may be trying to straddle the divide between people who think inflation is necessary and those who think as long as we don't fall apart, we can hike more. david: stay with bloomberg for full coverage starting today at 9:40 this morning eastern time. our third story, our favorite story, tesla and elon musk. out tesla madeed zero cards in 2011 -- cars in 2011, we will make 500,000 in going to theec now court saying we have a consent agreement, we would like you to hold him in contempt. the stock price went down on the n

david: a bit of a dovish turn might be an understatement.ket fact that the fed is not in a big hurry to raise rates? --y're still upside in em there is still upside in em. thomas: multiples are not where they were a year ago. you had a rally the last six weeks that is still not back where it was given the earnings growth we've seen in the u.s. em is a longer-term plate. to the extent you think the fed will do another 180, you might want to be cautious. the timing is unlikely. we can continue with fairly good economic strength without a fed tightening. they don't want to be too far on the other global easing and we expect to tighten and the dollar strengthens. david: to what extent are the markets anticipating a china put? they are counting on china coming through with stimulus that will reignite growth. thomas: i think there is a bit of a china put out there. investors look at china as a controlled economy, they can turn it on. you have to be cautious. alix: when you talk about the impulse from the fiscal stimulus, what will it take to see m

it is a little dovish but not maximally dovish and the currency went up. vonnie: in the u.s., the s&p 500 is up half a percent. most of the major movers include hilton hotels. dish network is down more than 7%. activision blizzard is paring its gains. they will cut 8% of their workforce as they restructure and they are trying to figure out how to combat these battle royale games from other game makers. let's move on and talk about the question of the day, which asks in a straightforward first, -- which cracks the s&p 500 or the treasury yield, which is around 2.8% at the moment? we have cpi data earlier on out of the united states. john stopford joins us now on set. what do you make of the risk rally does far and where would you put your chips in terms of the gains? john: that is a combination of things. the fed and other central banks have stepped away from a hawkish stance, so that is a relief. a lot of it i think was people got very short and to the end of last year and squeezed higher on a reduction in bad news. we are cautious about chasing the market

around the world to also become dovish.going to be a battle of the doves. this is giving strength to the dollar. the problem for dollar bears is there's a chronic shortage of currencies to like. in other words, going back to laundry, if dirty think it comes back to what else are you going to like at a time of great uncertainty, at a time of global economic slowing? the u.s. still looks pretty good. abigail: we have the commodity complex lower, maybe that is what is pressuring the dollar or giving it a tailwind concern that we have the risk asset of the commodity complex trading lower. over the last year, that is the case, putting and a high over the relative term back in june, leading the fourth quarter slide that we saw for stocks. for theecent weakness commodity complex, as the dollar has climbed, we have the commodity complex back below the average,ving suggesting we may see the commodity complex light further. if that happens, it could derail 2019's risk rally. u.s. equityle the rally appears to be taking a breather, ta

sounds like these minutes were dovish. >> another big week for earnings with corporate leaders looking at the micro and macro picture. >> by now, it is in reasonably good shape. >> we seeing credits in the u.k.. >> we're not seeing a slowdown in china. >> in south africa lays out a new dutch it -- budget samsung releases a ground breaking phone. >> from a technological development point, is a big step in the right direction. onit is all straight ahead on bloomberg best. emma: hello and welcome. this is "bloomberg best." your weekly review of the most important news, analysis, and interviews around the world. let's start with a day by day look at the top headline. in the u.k. parliament have been steadily rising as the deadline for britain to leave the eu approaches. withinmonday, tensions the labour party came dramatically to the surface. seven members of parliament have quit the u.k. labour party and will sit as independent over plaguing the party. >> and all conscience, we can no longer knock on doors and support a government by jeremy corbyn. wrecks could this be the beginning of an

a little less dovish than was expected.her, and we have had risk on moves that means the yen is out of favor. they yen weaker against the dollar by 0.1%. manus: juliette saly in singapore. nejra: global equities rallied the most in three weeks as president trump says he is open to extending a march 1 deadline to raise tariffs on chinese goods if they are near an agreement. -- heke to the founder discussed the market rally. >> there is a ton of buying power in the u.s. from buy backs, $1 trillion in buybacks. a lot. you have support from buy backs, support from the fed, growth is fine in the u.s. manus: what is your top trade? short dollars versus emerging markets right now. emerging markets got beat up last year. and the long equities. long equities, joining us now is colin purdie, head of global investment grade credit, aviva investors. conviction on equities in u.s. equities, how much conviction do you have in the risk on rally in credit? colin: i think we are more cautious than that, we have seen a large move in january

post the fed's dovish turn is not surprising. i don't want to make too many judgments about how successful it is going to be throughout the year, because it is going to be drip, drip, drip. the macroeconomic environment will play a part. i have concerns. share size of issuance is a concern. jonathan: the market has moved ahead of the economy. the market and the believe that the data will come to validate the price action because the chinese stimulus will work. you have doubts about that. >> one of the things that has happened recently is we saw a huge spike in about 5% of gdp in terms of new yuan loans in a single month. that is a massive number. in a historical context, what we see always around this time of year is a lunar new year, and there is not much access. much of a we see in the fx market is you have the need to pre-fund. if you compare this with something like the chinese pmi, the bigger the drop in pmi around cheney right, the bigger the spike. this is a sign of lack of confidence. you are seeing people over funding, m

dovish tilt tohe change midyear.ey say they are data dependent and we have to take them at their word. it is about language. if you say you are on autopilot and you will keep hiking and the economy is strong, the economy will not like that. -- the market will not like that. if you say we are responding to a strong labor market, the markets may like that. nejra: mark haefele, global chief investment officer, wealth management, ubs switzerland delighted to have you with us this moment. revenue slippage and more debt season isp, earnings getting underway. this is bloomberg. oomberg. nejra: this is "bloomberg daybreak: europe." i am nejra cehic in london. let's get a check on markets around the world. a little bit of a quiet session in asia, a lot of markets closed for the lunar new year. indian markets have been trading flat. are investors waiting on the sidelines? morning. you could say that they may be waiting on the sidelines. maybe that is the most crucial point to monitor. the markets have opened flat and stayed fl

the fed has been dovish late. there still seems to be that buffer to cut interest rates if they wanted to. cliff: chairman powell, by emphasizing patient -- patience did debtors around the world a huge favor. it is the best christmas present they cut a perceived. we are in a world that has a lot of debt. geitner called people like me old testament reports -- worry warts. we have something like $2 trillion of debt around the world. when powell made that sudden shift, this is an old theme, but it made me wonder whether central banks generally can raise interest rates that much in a world with so much debt. rishaad: the pain would be enormous wouldn't it? do you think that is one of the reasons why there is this lack -- this feeling that you can't raise interest rates until then, because the economic conditions don't work interest-rate hikes? cliff: i'm not sure i agree with that. i think right now, the u.s. growth is running at about, for arguments sake, 2.5%. it is about potential. if you are the fed and you want t

he was more do muchish on this issue, people are coming back into the labor es, and that's a more dovish outcome. >> and, greg, you're picking up indications that they're trying to overshoot the inflation target >> i thought that was the hidden takeaway he was asked by pat toomey, hearing all this talk, i don't like that, and his response was we have to worry about, and he went on to say that expectations are the most important determination. if you really believe that, that means you do have to compensate for the% below with above-target inflation to make sure they don't get stuck. >> hey, greg, without disagreeing with you, i disagree i think everything you said is right. i just can't see powell, who is so politically adept, navigating the fed towards a higher inflation target. >> and let me pile on to that. >> you want my cost of living to rise by 2.% -- >> here's what i don't understand, greg how can they tailor the public's expectation to 2.3%. i don't understand that at all obviously they're at the start of a multi-month evaluation. there will be a reference conference in june the

they have been more dovish. after the fed pauses on interest rate hikes, the market does well. we had to digest these headwinds like earnings growth, the dollar, the international geopolitical risk issue we have to digest. alix: the shutdown playing into that to some extent. they cut their forecast to 51% earnings growth. what do you see that is similar or different to that view? saira: earnings were better than expected. we need to work through the next three quarters of earnings and for the s&p to break out from here, we have to get to a level where earnings growth can surprise to the upside. we can do that with some sort of deal on tariffs, the dollar weakening, but we need something to lift earnings or we will stay in a trading range. david: where are we on tariffs? we forgot all about beijing. robert lighthizer will show up there tomorrow -- thursday, actually. a solitaryp took -- he saidna talks he did not want to hurt them. he wants to be able to declare victory and get a deal with china. that's part of w

. >> these minutes of were a little dovish. >> a big week of earnings with corporate, the macro picture>> the economy is room -- reasonably good shape. >> we are not seeing a slowdown in china. -- ubs facing a fine and samsung releasing a groundbreaking phone. >> from the technological development stand point it is the step in the right direction. >> all ahead on bloomberg best. >> hello and welcome i am emma is bloomberg best, your weekly review of the most important business news, analysis and interviews from bloomberg television around the world. let's start with the day by day look at the top headlines. tensions between parties in the u.k. parliament steadily rising as the deadline for britain to leave the e.u. approaches. monday, tensions in the labour party came to the surface. seven members of parliament have fled the u.k. labour party are they will sit as independents. conscience we can no longer knock on doors and support a government led by jeremy corbyn. >> could this be a beginning of the split of the labour party? corbyn's leadership, not only on brexit, it is a range of is

if we have a dovish fed, we can make the argument that the u.s.lar has are probably doesn't have much further to run. thinking about sterling, if we were to see that soft brexit, you could very well see sterling rally on the back of that. interesting to think about the applications that might have for the bank of england given that a --rling rallying in terms of the dollar, we think fairly neutral given that balance of relatively higher rates compared to the rest of the world and yet balance out with a dovish fed. from a currency perspective, if we are looking to take risk, it is primarily in the emerging market space. all of that backdrop actually goes very well from a emerging markets perspectiven. guy: thank you very much for coming to see us. it is not merger monday, but it is active monday. storyboard is said to be taking rboard has invested in papa john's. it is sending the stock up more than 30%. >> is able to interesting investment. they come in not really as an activist, but as an investor. they have come in with a fairly big position. it

this came after the fed's decision to become a bit more dovish.t is what many are saying is behind this rally. guy: fixed income is an interesting segue. deutsche bank has reported results today. germany's largest lender shrinking for an eighth straight quarter. itsbank was able to report first profit on cost-cutting. cfo miller spoke to the earlier on. >> we don't see signs of a recession. we see signs of bottlenecks in certain instances in the ability to hire staff. we don't see a drop in the order books. the external stats in terms of business confidence and economic growth has slowed in the second half of the year. fundamental strength in the economy, admittedly at a lower level. matt: how much pressure do you feel from the german government to show them targets or go into merger talks? >> we feel we are in control of our destiny. we are executing our plans. we feel strong with the milestone we set in 2018. frankly achieving financial milestones we promised the market. we intend to do the same in 2019, leverage all the work we have done with t

you notice the magnitude of the dovishness on a global scale is pretty intense.ve australia, the fed, europe, indonesia, philippines, thailand, mexico, brazil. everyone holding rates, if not cutting them or likely to cut. isaac it is a combination of both concerns with regard to global slowdown. in the case of ndi, it certainly india,bined with -- of it certainly is, combined with tame inflation. same thing with the united states and europe and japan. i think the amount of dovishness is incredible, and i contend the benefit is to the emerging markets. that is why we have been actively and aggressively pushing long positions since last year. guy: one of the things of late is that we have seen emfx follett -- we have seen emfx volatility falling quite sharply. guest: brazil is an under held asset. it is really rally seeing -- it is really rallying significantly in price, and fundamentally looks like it is picking up in e-cig of a good way. we have a market friendly president and a market that is less fearful. when there is less fear in the markets, investors are mo

the market digested a massive job growth number, a day or two after the fed pivoted towards a more dovishtance on rate hikes. here's the affect. the bond market gave back some of the strong gains from yesterday. you can't see all that yesterday and you will see that's up and then down about ten bases, 12 basis points after falling yesterday following the fed statement. nonfarm payrolls, 304. the estimate 170 so, you know, on or about double revisions did take off a lot but it still left december north of 200,000. average hourly wages, one disappointment in there. unemployment rate, it's okay that it went up. people came in the work force and you can see that in the best participation since 2013 jim bullard telling cnbc the fed should wait an see before hiking rates and robert kaplan says it's very important that the fed get out of the way here and take no action in terms of the fed funds rate for the time being. and he suggested maybe through june despite the comments, some think the fed will forced to double rates. at pantheon, we see no support here for fed's shift and it will turn to d

you think the ecb is dovish already. the comments we've already had have been dovish. do they need to do more to manage expectations? jordan: their forward guidance on rates is rates will be on hold through the end of the summer. the market is not addressing a rate hike this year at all. rate hikes,talking we're in steps of 10 or 15 basis points. because the ecb is at the lower -40 of interest rates, with basis points it is easy to price in hikes. the market does have hikes in the curve, which is different from the u.s. the ecb could do more. -- could do more to flatten the front end of the curve. that will have an impact on the fx. euro-dollar could break low on 12 if -- could break below 1.12. tros,uld hear about tl r whether they are willing to extend that sort of bank funding. we have already seen the to ants last week that led risk on and bank stocks doing well. i think tell tro's -- i think tl tros is in already. anna: thank you so much for joining us on this special program. jordan rochester with us in london. tha