are doing the right job in terms of comparing the markets. bond traders are moderately ready. equity traders are skittish. quite frankly, it is all about getting the message right, which is tapering is not tightening. if you get nothing else, you will get a strong message from bernanke on that. >> we will come back to the fed a little bit later on. hans, you are in germany, looking at amazon. amazon outside of headquarters here. workers are gathering. there are a couple hundred of them. they want to hamper amazon's ability to distribute packages over the holiday season. amazon is saying that there has been no effect on it and they have been able to ship packages on time. we will be back to explain the dynamics, the wages, and what some of these workers, what they are calling for. >> thank you so much. watching tiva.

>> generic viagra is coming to america because of an agreement between the israeli-based manufacturer of generic drugs and pfizer, which makes the blockbuster impotence drug. it comes down to goat weed. i will tie you exactly what i'm talking about later in the show. >> that is quite a tease. we will get back to elliot for more on that in a couple of minutes. with just a week to go before christmas, caroline hyde is taking an inside look at the chocolate business. tough assignment. >> i am in the kitchen of paul young, they are busy at work. from putting chocolates and brownies even. the array of chocolate is fascinating. using,redients he is some of the novel flavors that

they are developing are quite amazing. let's have a look. i will be telling you much more about the demand for this stuff and how much it is driving up the cost of cocoa beans. if you could smell it, you have got to be here to believe it. it is absolutely sensational. >> you are a much stronger woman than i am. i could not resist it read >> we are having a little bit of festive fun. we are also talking about the serious stories. we are talking about amazon and we are expecting a lot of data from the u.k. and the fed. >> unemployment will be something we should watch in the united kingdom. german confidence data in the ifo. there is a wonderful quote from mark carney. "the material news will be when a central bank begins to sell holdings. that is when markets may well move."

equity markets are set for a stronger opening today. unemployment numbers will come out. the drop in the jobless claims in the united kingdom most unlikely to move the story. equity markets getting a little bit of a bank this morning. texas has a beautiful piece out this morning. in the u.k., typically december is a good month for the ftse. they say that at the board level, it means the u.k. market, if it can break 6516, you could retest 68.20. one ceo from the mining industry is talking about the price of iron ore. up in 2014,ill go but it is still a good business to be in. there is going to be more supply. services,mes to world

this is a theme developing through the week. technip down 9.4%. weaker margins in their subsidy division, capital expenditure concerns that we saw coming through from cgg are overdone and overblown. exploration and what the oil majors are doing and spending. does notisse, that even really touch the signs on this story. that is the technical story. story. is the technip we then go into the nordics. 990 -- aroundd 950 million dollars. there is only one story that will dominate all of the conversation, the preparedness of the markets for the tapering event. could it happen? it is 90% priced

into the markets. it is a question of execution. whether it comes today or january, the bond markets are prepared. less so, the equity markets. this is the dollar index. it dropped ever so slightly. if you believe that the markets are fundamentally structured and ready for tape or, --for taper, the dollar is dropping. >> manus cranny with the latest on the markets. interesting that a lot of people are saying that it is priced in. joining me to discuss the possible december taper is the global head of equity trading strategies at citigroup. thank you for joining us on the program. nce thatct a 50-50 cha they do something today. between december and january. the comments will be very interesting today.

andhey start in december make long-term rates lower? do they put a message with it, we are going to keep rates low? do they say, we are going to come in january, but here is the plan? that it is priced in, at least into the core markets. june, we were a lot lower. we came back down and went back up. it looks like the market has digested it, at least on the bond side. >> give me a sense of what packages could accompany, either talk of a fed taper or a fed taper. when they change the threshold, we are going to look at other policies that may help the fed with what it is trying to achieve. >> most likely, they will talk about the size of the tapering. september, weto are talking between $10 million

and $15 billion. how do you split it between treasury and mbs? yellen will get the chair for the march meeting and that is more likely to be a march topic. as you look at treasury, a couple of things could be very interesting. -- first is that, despite even if they bring it out, the supply treasury is lower than 2013. the amount of security as a percentage of the overall supply will continue to increase as we get into 2014. as much as we talk about tapering, the size of the bank sheet for the fed will continue to grow until probably three quarters into 2014. you could get an impact in countries which are dependent in the world. >> emerging markets. >> we will talk about that in just a couple of seconds.

the global head of trading strategy at citi. here is a look at what else is coming up on "on the move." germansrotest slowdown -- amazon's german operations?

>> i am francine lacqua in london. this is "on the move" on bloomberg television, radio, streaming on your tablet, your

phone, and any windows phone as well. you can see this company down some seven percent after the company said it expects a weaker profit margin next year. this is something analysts were not expecting, which is why the stock is falling seven point five percent. workers at amazons german warehouse are on strike for a third day at the height of the christmas shopping season. they are demanding higher pay andbetter conditions. hans nichols joins us for more on the story. what is the situation like now? francine, inside these walls, inside the amazon interview shouldn't fulfillment center, it has been a hive of activity all night that is just starting to outside with these protesters. they are calling for a tariff agreement. they want higher wages, greater security, vacation money. here is where they stand on the wage factor. they make 9.50 per hour. that is the upper end of what

logistical workers are paid. i want to be thought more of as retailers. retailers make more and start in range.-11.50 what you are seeing is a slight tapering off. this is the third day. they called for them to go all week. he first day, there were about 1100, about a- fifth of the workplace. there were about 900 in two or three locations across germany. they have nine of these fulfillment centers. amazon is saying that there logistical team has made it though they have not had any slowdown in christmas deliveries. they are quite confident that they can handle it logistically. here is a quote from an amazon spokesperson.

amazon did not see any impact on customer service. this is what it gets down to. if these protesters can slowdown amazons ability to deliver packages for the holiday season, they may have a stronger case. as long as logistics inside seemed to be working better, faster than the protesters outside, amazon may have the upper hand. what are amazons options? they do not seem to be negotiating right now. a negotiatingt in mood in germany or the states. they firmly believe that they should be able to ship their products at their own wages. what they do have is the option to move elsewhere in europe. they are opening up two plants in poland. centers, three in poland and to in the czech republic. this is expansion in eastern and southern europe. there is a lingering fear that

you could potentially move some of these jobs to eastern european countries. >> thank you so much. we will be following this closely throughout the day. hans nichols, our international correspondent. the global head of equity trading strategies at citigroup. before the break, we were talking about the fed and the fact that it was riced in. we were also talking about emerging markets. how much are they priced in? extent, they are readjusted as well. we saw it and may -- in may and june when we saw countries coming on the fx side as well as the market side. i think they are expecting it and did take some steps to try to alleviate part of the situation. what can be a bit worrying with tapering is when the fed owns 50% of the problems in the u.s. and you have all of this equity flowing in from the last few

years. if you start slowing down the cap, something is going -- the tap, something is going to happen. we think the fed is in a good position. but it is difficult to envision his -- to envisage all of the impact across the globe. if we do get a selloff, it will be most likely short-lived. >> the fed will be at pains to say that a taper -- the markets seem to have understood that now. >> it is interesting. as you read the goals and people talking or the fed members speaking in the last few weeks, it is clear that the doves more abouthawks are january versus march. no one is talking about higher rates. >> we were hearing from our international correspondent at amazon.

a company like amazon, if it is a retail company or a tech company -- >> that is a good question. >> and who is strongest going into 2014? >> 2013 was about re-raising equities. the asset class became more exciting. what we now need is earnings to be able to continue. we do need better earnings. that is what is going to drive a lot of next year. in europe in particular, sectors which we like our sectors which are still on the low side of the valuation and have good, strong momentum and will be able to deliver. what may be very interesting is numbers, as we4 enter the beginning of the year next year, that will be based on which could be8,

problematic for european companies. other than that, we do see value. autos as well as financials, some of the sectors that have been highlighted by research. on the bankside, it is more about earnings. to some extent, exposure to some of the asset prices in europe. the other sectors are more global sectors, not necessarily focusing on european growth. one year to the next actually goes from negative to positive. you are still talking about growth on the low side. >> tell me about financials. can you wait to buy into it or the european central bank? i am not expecting everything goes smoothly. one difference between a periphery bank and a northern , as we selected names on the focus list, they are more

about good banks delivering rather than trying to go all the way down the curve. stronger picks and some of the italian or spanish banks. >> you are underweight some consumer staples. it is going to be the m&a story in 2014. is that not a value play? they look cheap. >> a do look cheap read -- they do look cheap. there is a massive deal with the which will putne a fair amount of money back into the sector. ,rom a research point of view the lack of leadership creates the underweight. consumer staples are more about expensive valuations. you see about a 30% gap in

valuations, which shows you that investors got exposure via em and they have probably inflated evaluation to some extent. >> 2014 is going to be the year when, whatever happens, the fed is tightening or the markets think it is tightening. the ecb and the boj will have to continue expanding and trying to stimulate the economy. what does that do for the environment overall? that will be the overarching theme. >> it is a bit of a relay race. the fed was probably a bit late in taking some away. the relay race has passed the baton back to the boj, which made some significant announcements this morning. the european side, what the ecb ends up doing in q1 is a big question. do they go for negative rates?

they cannot raise qe because of the european consideration. what else can they do? that can remain volatile. if the fed's liquid is not there anymore in the medium future, volatility should start going up. into equities, there is a bigger need to hedge. therefore, you get more hedging put in place and volatility goes up. we are still bullish. upside across the world. >> thank you so much for all of that analysis. coming up, it is the little blue billion-dollar pill, viagra. not be the only company selling the drug in the u.s. we have that story next. ♪

>> welcome back to "on the move ." i am francine lacqua here in london. here are some companies on the move. tesco is partnering with a group to enter india. tesco is likely to invest around $110 million for a 50% stake in the unit. the companies need a local partner to run supermarket chains in india. whampoa will sell the

sale of its retail arm. their stores include groceries and pharmacies in 33 markets. rio tinto expects a decline in the price of iron ore next year and says global supplies will increase. their chief executive made those comments but said it will still be a good business to be in. second-biggest exporter of iron ore. generic viagra is coming to america. pfizer makes the blockbuster impotence drug. let's head over to elliott gotkine in tel aviv. >> it is not a total victory. given how despond and some investors are with this company, they may see it as a bit of a defeat. it all dates back to 2010. that is when part of pfizer's viagra patent was ruled to be invalid because it resembles a

chinese medicine known as horny goat weed. has beenn, teva fighting to get the rest of pfizer's patent invalidated. the court dismissed requests by teva. as part of a settlement between these pharmaceutical companies, teva will be able to market generic copies of viagra in the united states. it will have to pay patent royalties divisor until the overall patent expires in 2020. also worth noting that generic viagra is already available in most of the european union, where the patent expired in june. rex a rare bit of good news for teva. it really failed to prop up the shares. >> they spiked about one percent higher in the u.s. yesterday and .3% in israel, where they have begun trading today.

so shares are up ever slightly. if you look at this company on a five-year basis. investor confidence has been ebbing away. the big issue is that a could face generic competition for its selling drug, a multiple sclerosis treatment. it is actually double the value of what pfizer gets for viagra every year. viagra is notof going to make up much of the ground. teva has a new ceo after the last one left and they're laying off some of the workforce. alsoer this year, they lost out on a patent infringement case and ended up having to pay 1.5 billion dollars to none other than pfizer. at was a case related to a heart treatment. >> thank you so much. up next, it is fed decision day.

already priceds it in? keep it right here. we are "on the move." ♪

>> welcome back to "on the move ." i am francine lacqua at bloomberg european headquarters in london. these are the bloomberg top headlines. jpmorgan and deutsche bank are cracking down on chat rooms. jpmorgan will ban traders from using chat rooms with peers at other firms. it is also reviewing one-on-one communications. the move follows ubs, which banned multiparty chat rooms last month. global regulators are scouring chat forums for evidence of wrongdoing in a range of investigations. bank of japan officials see significant boost to bond buying

to achieve its inflation target. that is according to people familiar with discussions. no decision will be made until the central bank has more chance to assess rice channels. the boj will increase stimulus after the sales tax hike in april. and it is another low for bitcoin. bitcoin operator says they can no longer accept new deposits. central bank officials told third-party payment service providers to stop offering payment services to online exchanges for the virtual currency. china regulated bitcoin for the first time this month when it banned financial institutions from using it. merkel urgedangela finance ministers to strike a deal on a banking union. this morning, she is talking about europe in the bundestag before heading to the summit in brussels. let's get to david tweed in berlin. what exactly is the message? just sat down after

giving her first policy speech since becoming the third -- since starting her third term as chancellor of germany. she was sworn in yesterday. he obviously remember that. it was a very wide-ranging speech and it touched on the banking union, further ,ntegration, youth unemployment energy policy. i am going to focus on what she had to say about the banking union. she said that there will be a banking union. it is going to come in 2014. she also pressed for further eu integration. she says that will be a major task for the next four years. she is referring to the contractual agreement which will be discussed by the eu leaders in brussels tomorrow. these are agreements that will be undertaken -- at least germany wants these countries to undertake agreements to go through certain economic reforms and make countries more competitive. there will be a bit of a tussle

over whether there will be financial incentive or countries to actually undertake these agreements. that is something angela is really pushing at the moment. speechall, it is a setting up germany's position for the next four years. , thereked about the need might be a need for treaty changes in order to bring all this together. >> euro zone finance ministers did make progress last night. do we have details of this financial backstop? >> all we know about the financials that -- the financial backstop is that the finance ministers came out and said they have got an agreement on it they said they would not say anything more. we do not know exactly how it is going to work. i can explain to you why they are to have the backstop. resolutionave the fund, which, after 10 years of banks paying into it, will be worth about 55 billion euros.

if that is not enough, they will need more money. is what the agreement is about. where will that money come from? will it be the esm, the permanent rescue fund known in europe as they europe imf? or will it come from elsewhere? we will find out more details as the rest of the finance ministers knowing their european counterparts for more talks in brussels today. >> thank you. it is fed decision day. manus cranny has more on how prepared the markets are with a possible december taper. eightrkets pricing and taper tonight? >> i think bond markets are prepared. equity markets are a little bit more skittish. flicking back on your conversation, nobody really knows the outcome. and you take sugar away from kids, it can be quite a nasty item. socgen and cross ridge capital, some of the names we have spoken to over the week. they say it is priced in,

whether it is today or the next couple of months. socgen says 90% of the market has priced it in. have a look at government bonds. up and itady trading is stuck there. the kite was flown earlier in the year before the summer and then we had this september run. the issue is this. one year money in five years time. that is really what the bond market practitioners want to focus on. that is around four percent. that is the critical level. it has never really come back from there. i mentioned the equity traders. have a look at the volatility index. if you have a good run at equity, you want to protect yourself. you can see traders buying protection. it is a long rising streak in the vix. volatility is rising in equities , not so skittish in the bond markets. i think it is very much there. it is just a question of jumping

through the hoops in terms of delivery. >> even when the fed taper begins, will the markets moved to guidance as the most critical issue? >> absolutely. pimco said you need to get a bag of guidance, possibly talking about the federal reserve any interest they taken banks. talking about some of the criteria that the federal reserve have conditionally set out for us, whether it is the unemployment rate at 6.5% or inflation, it does we do not have an inflation problem in the united states of america. i leave you with this thought. ben bernanke has only one mission, which is to reemphasize, in case you have not heard it, taper is not tightening. of course, they are not selling bonds, they are tapering. back to you. >> thank you so much. we will be bringing you special coverage of the statement at 7:00 p.m. u.k. time.

that will be followed by chairman ben bernanke is final news conference -- ben bernanke's final news conference. p.m. onat 7:30 bloomberg tv. our next guest says the fed will not taper until march and he remains positive on the dollar. he is the global head of strategy at bnp paribas. great to be on the -- great to have you on the program. talk to me a little bit about why you are not expecting them to taper. >> growth is just not strong enough in the u.s. we have not seen growth come through. inflation is very low. on that perspective, there is no strong incentive for mr. bernanke, in his final meeting, to take the helm. >> will he give us more guidance on when they will start tapering? what are you expecting today? >> we do. i will call this, the tapering starts in march of next year.

we think he will signal that tapering is coming. the clear message is going to be, we are not far away. having said that, for the dollar, referring back to some of the points manus just made, we think the point is a lack of front-end yield report for the dollar. it is very low. the gap with europe is tiny. we think that the rate in the u.s. will rise and the gap with europe will widen. from that perspective, that means it is unlikely that we will see much more dollar weakness from the current level. >> what level are you seeing in euro-dollar in the next month. >> we think we go back down towards 1.30. we have a target of 1.32. year,go further in the much longer term, we think we could easily fall back low 1.30. the key point i would make, it is all about u.s. growth and front end yields.

will start to fight back, will it not? the fed tightening, the ecb having to do more and the same with the bank of japan. >> i think that boosts the arguments even more. if you have a scenario where the u.s. does start to recover next year and tapering does come in, the ecb is increasingly frustrated with the high level of rates in the euro zone. we think not only that they cut rates, but we have a very bold call that they do quantitative easing next year. >> how? >> there are quite a few options. the key point we would make is that you going to see bond yields in the u.s. and the eurozone move in opposite directions. that would have a powerful impact on the dollar to the downside. >> a lot of people are talking about this. it is the legality, do you have to buy bonds in every single country? when are you expecting expecting around the summer or just after the summer. the key point we would make is that they are missing their

inflation guidelines. this is their price stability target. it is not happening. we talk about legality. we would argue that the law is they have to hit that price target, therefore they need to do more. you could argue that the law would force them to do more in -- as far as easing is concerned. couplehey have to buy a of bonds in each country? >> i think that is up for debate could he key point we would make is that they need to buy things across the board. qe is designed cannotr the yields, they just target italy and spain. it has got to be across the board. we would argue that what they have done in the past, buying spanish and italian bonds, is not qe. it is addressing a structural issue in the euro zone. >> give me your sense of how housing is going. >> we have a very strong view at bnp paribas. we think the u.k. will be the fastest-growing g-10 economy

next year. as a result of that, we think sterling will probably be the best performing currency next year. the best way, we think, to trade it is short euro-sterling. we think there is quite a lot of upside for the pound. >> thank you so much for all of that. the global head of fx strategy at bnp paribas. it is the job you have always wanted, designing and making chocolate. up next, we talked to a man who creates chocolate for a living. not young from his art is shop in london -- his artisinal shop in london.

>> i am francine lacqua in london. this is "on the move" on bloomberg television, streaming live on bloomberg.com, your tablet, phone, and any windows phone as well. a week away and we are taking an inside look at the business of chocolate. caroline hyde is standing by with a designer and chocolate maker in central london.

>> it is a tough life, but someone has got to do it. i am here in paul a. young's store. i am joined by paul young himself, master chocolatier. we were talking about the rising prices of cocoa and the supply not keeping up with the absolutely exuberant demand. you are now buying directly, your cocoa. >> yes. we are buying direct. we are very conscious that if we buy chocolate and make our , the growth can input more infrastructure and more support and they can invest back in and attract young people. >> give us a sense of the demand. you now have 4 stores. you managed to expand throughout

the recession. >> absolutely. it is an affordable luxury. it is reassuringly expensive. he affordable price gives you ae same kick as buying thousand pound hamburger, if you can afford that. chocolate is accessible to everybody. it is not segregated. everybody who likes chocolate can come in and buy a single chocolate or a chocolate bar. >> what about the types of people who are buying it? a lot more chinese buyers coming into your store? >> a lot more. it is unprecedented for us. they love british. we have a trouble that is reddish. -- british. have a little tried. it is salty and sweet. our english honey, all of the flavors are bought by the asian market. they love them. >> it is extraordinary. where do you get the inspiration from?

>> for me, inspiration is like an ingredient. it is about the time of year. if it is christmas, people love -- i thought, why not? let's give it a go. i still love it. end, you get the filling, not too strong. it is really festive. this will come off in the springtime. somethingabout having slightly different and having the champagne truffle dark, chocolate hair more. -- chocolate caramel. >> you are the winner of this >> i amurmet chocolate. purely speechless. this is all about being

accessible for everybody. that is the way the chocolate industry will improve. the market will embrace real chocolate, fine chocolate, by making a simple recipe. i am going to buy the beautiful chocolate to make it, the more money we can make to keep it going. otherwise, we might run out or the price will get so high that even everyday news agent chocolate will be so expensive. >> it is all about changing our perceptions. wanting to be sourced appropriately. >> absolutely. the big guys -- >> the nestles -- >> absolutely. maybe they should have a range of chocolate that is finer. it. imagine if they had the next step that makes people think they are getting the security of a brand with a much better jump in quality.

>> keeping the growers in mind. still indulgence. i am indulge. thank you so much, paul a. you chocolatier.r they call him the heston blumenthal of chocolate. back to you. >> i need to put it in order. for the newsroom, done. thank you so much. about up, "the pulse" in 15 minutes. i am joined by guy johnson. a little bit disappointed we will not be trying any chocolate on the show. but it will still be good. >> i am looking forward to it. i am sure caroline will a -- will be able to bring a little bit back to give us a little taste test. looking forward to talking to have'neil on the day. we the fed news out. that will be happening a little bit layer. -- a little bit later. jim o'neill will be joining us

with what it means. we will talk about those and some of the other countries he has been tracking as well. what are the implications for the europeans? we will take a look at the ifo number. instant reaction with jim later on. looking forward to the conversation already. >> thank you so much. "the pulse" in about 10 minutes from now. here are some companies on the move. marissa mayer is telling president obama that the backlash could make countries adopt different internet standards. she joined other executives for a meeting with the president. top of the agenda was the nsa surveillance programs. said to have bought talent agency img. it creates an agency with clients across sports and entertainment. its debutshack makes

tomorrow. the move comes more than two decades after mcdonald's opened its first russian outpost. the burger joint will sell burgers for 235 rubles, about 50% more than in new york and almost triple the price of a local big mac. stay with "on the move." final thoughts are next. ♪

>> israel has the fastest rising house prices in the oecd. according to goldman sachs, it is also a country that is most likely to see a big correction. elliott gotkine reporting. known ofl aviv's best- art, what will soon be israel's tallest residential tower and probably its most expensive. apartments in this residence, some with private pools, start which, aillion, prices few years ago, would have been unthinkable. 55%,ally house prices rose faster than norway, switzerland, and every other member of the oecd. prices he surged due to a strong economy, a lack of supply, and low interest rates.

house prices have been rising so fast, especially here in tel aviv. many israelis find themselves priced out of the market. they would love for prices to come down and in that sense, they are not alone. >> developers also want cheaper homes. showing me around this penthouse, he says the current situation helps no one. >> rising prices in the short- term term may be good for some. in the long term, it is bad for everyone. for the buyers, the prices going up, it is harder to get an apartment. even for developers, the land prices are increasing on a steady-state. up to a certain point, it becomes too risky to buy new land and go into new construction. >> he may soon get his wish. theman sachs says israel is most likely oecd country to see a house price crash. israel's finance minister does not see that happening. >> i just think housing is too expensive. go banks are telling us, you

first. make sure that the supply of new houses is much bigger. then it will enable us to be more helpful to the whole process. >> is really governments has -- have repeated -- israeli governments have repeatedly failed to build homes him a giving their housing boom yet another lift. >> for a market check, let's check in with manus cranny. we have quite a lot of things going on today. a lot of u.k. data. it is all about the fed. >> it is. you have to ask yourself, in a week, when volumes are lower, a couple of days before christmas, what happens in markets? are they going to be prepared to act today? it will probably be much more about the rhetoric and the direction. on the back of the israel package, one word -- ireland.

>> we will leave it at that. thank you, manus cranny. stayed with bloomberg tv. guy johnson and i are back with "the pulse," coming up next. ♪ .

>> with baited breath, investors wait to find out if the fed will scale back stimulus today. >> russia goes shopping in ukraine. >> and what is the store with everything except happy workers? another day of strikes over wages. we're going to be live with some of those striking workers. good morning, everybody. welcome to "the pulse" live from bloomberg's european