wait for the dove's to fly or the hawks to circle. >> we will be watching the diplomatic efforts in the ukraine. in a broadcast here in berlin, the ukrainian foreign minister called for a plan for the ukraine. we will be looking at what that means and potential -- in a potential resolution for the conflict. >> the european markets are just opening. if you look back over the week. that second week since february. >> john i will go in a slightly inverted way. who is driving who? equity markets in the states, in terms of the nasdaq, you are touching numbers we haven't seen

since 2000. investors are vying to protect themselves at the fastest rate since 2012. $1 billion went in. those are options to protect yourself on the nasdaq. play thatent is in dovish equity market in europe. just pausing as you said, we have had a fairly good run. waiting to see what comes of russia and the ukraine. merkel travels to the ukraine tomorrow. holell speak with jackson a little bit later today. interesting, burberry is up. caroline has a story this morning. having to discount their product in china.

let's have a look at some of the bond markets. a bit of a move in terms of bond. we saw the bond hit a record low, a borrowing rate yesterday. markets, powerless to wait for something more substantial to come. when it comes to the big daddy of the markets, it is this market. the treasury market. groups, economic surprises are the highest since february in the united states of america. the bond markets are preparing for something more aggressive. in terms of translating that into the dollar, this is the backdrop to all foreign exchange moves. the dollar is coming off a six-month high. just how dovish will she be?

an editorial piece this morning at bloomberg, a say if you strip out the long-term unemployed, the people who aren't coming back to look for a job, the real rate of unemployment is somewhere around 4%. that is the editorial view, that is not my view. sterling, down again. the dollar getting a little bit of a reprieve. at 1.6588. down for seven weeks in a row on sterling. thank you very much manus cranny, that is your market open. allen higgins, chief investment officer, good morning. >> how are you doing? >> i'm pretty well, i see the record high.

what happened to the summer correction? >> there isn't much of one. for us, that is absolutely key. i've mentioned it before previously. allocation, bonds or equities, we see that in japan. we look at the corporate structure, something i have never seen before in my career. if you look at hundreds of companies, the corporate on yield is lower than the dividend yield. we are seeing elements of that. it means that companies are incentivized to be shareholder friendly. to save hard cash. issuing a corporate bond, getting tax relief, buying back equity, you are saving hard cash. an unusual environment. crucial to the market.

of yourng at some calls, reduced exposure to proliferate debt. what is a high now? debt are in proliferate for a while. we sold it a bit too soon. we still have a little bit of island in there. too soon afits a bit couple of months ago in italy and spain. it became a bit of a crowded train. high-yield again. we sold out on portfolios where we could because it is a 10 day selloff. we sold out about a month ago. a crowded trade. a little bit more expensive. now it is somewhere in the middle. do you consider that a high-yield space? is this something that could develop into something of a

concern for you? yes, in the sense that it is crowded trade, they are always a concern. of all the money that goes into high-yield, it does concern me that that could be a little of an accident. talked about it in the selloff, it was a sharp selloff and they started to get shorted quite dramatically. that is an issue. i would say the underlying environment of low inflation, the zero rate structure, isn't enough to make it terminal. we just took some money out. big call that stood out --your market note to me, >> it's good to not feel confident. i should say i'm confident where we can, because not all work folios can be bought from

russian equity. we went quickly down what he percent, and that culmination of the equity, but in my experience the less confident you are, the better the investment. 20%, upve been down 20%. a choppy ride. >> russia has been cheap for a long while, even relative to its cheapness, it is ultra cheap. we like to buy cheap assets. >> here's a look at what else is coming up in "on the move," this morning. fedpoke to one of these talks about the u.s. tightening timeline. volcanic disruption, airlines prepare for cancellations across the busiest international travel market. the u.s. talks tough on more military action. we are on the ground in iraq with the latest development. what a week for european equities, headed for the best

gain since february. "on the move," is back into. ♪ >> welcome back, i am jonathan

ferro. this is "on the move". today, isarket event

the speech in jackson hole, wyoming. ahead of the speech, michael mckee sat down with one of the feds. president. fed we have seen significant progress in the labor market. they have been broad-based and that is a encouraging sign. just said seven times last year as a voter, wanting to raise rates sooner. would you vote the same way right now? are you on board with the consensus view? in 2013 weres around the large-scale assets, or qe3, we are now not only well into that program, we are beginning to decelerate purchases each month. there is a process to working through that. i believe the economy will be ready if it continues the

progress we have seen to be ready to lift off at zero and have more normal interest rates. >> the chair had suggested you wait a while, because labor markets aren't healed enough. many who would oppose or argue that where is the inflation that we should fear? >> so it looks to be stable, but you have to look ahead. we have to beep repaired to see where the economy is going and not where it is today. in that sense we see progress being made. 6.2% unemployment. not far from what may be full employment, it looks to be stable. we should start talking about normalization. >> are you worried about an overshoot? >> inflation can work in funny ways. inflationponents of that are healthy with food and rent, even though the overall measures look calm, we know from

history those can change. ellen can make a that as thosee, policies are withdrawn, is that demand going to be self-sustaining? >> that is one of the things the committee will have to judge at the point of its decision to lift off with zero interest rates. as we've looked at the performance of the economy over the last year, i think they are encouraging fine with the job market, with how consumer spending has held up, it would lead us to think we might be getting close? >> would the dip contribute to aggregate demand? that demand has been weaker in previous recoveries, does that tell you that the fed has pretty much done all that it can do? we have seen, this recession was not like past

recessions either, and terms of the consequence to the economy. the transmission of monetary policy has been different this time. in an economy where there was too much yet, the appetite to take on debt has been different. now as we look at the healing we have seen in the economy, we are in a good place to talk about normalization. >> one of the dissents you raise last year it was about market stability, a lot of people worried about what happens when qe ends and the feds start talking about raising rates. is that a major concern for you? far, thats like so between the committee, the market has responded in the fed has not responded in some movements. they have kept a more long-term focus. so far, so good. the nextove into

phase, there could be some volatility. we have been at low for a long time, it will be important to communicate and to be communicating how the path of interest will go. >> that was bloomberg. sitting down with esther george. alex higgins, chief investor officer. george,en to esther anyone that knows her, those comments won't be a surprise at all. we have those comments 18 months ago. >> she talks a lot of sense. she's looking to be preemptive. big picture wee have seen is deleveraging. a bit less so in the united states, but very unusual. before i talked about, very unusual at the equity deal is higher, what else is unusual is the fact that we have negative

bank lending. it has picked up in the u.k. and europe but it is a d leveraging world. the puzzle of a strong economy and weak inflation is at the heart of it. we hadn't seen that before. with the u.s. lending picking up, the economy picking up, the u.s. will be the first to go. yellen is in charge, she is dovish, this is a 2015 story. >> is she in charge? you hear the likes of fisher, making a lot of noise. is his community starting to yellen, at theet core of the dovish camp and the one holding it together right now? is seven to in the u.k., i don't know the score in the u.s., but it is close to the middle. i think our interpretation is

rates are on hold. "ifs," and "butts," he compares it to going out verge shooting, but you have to shoot at the front of the flight path get your target. are they going to go to early. -- early? a risk.is always i would say the underlying economy looks strong enough. ist she is talking about wage inflation. she is keen to see signs of wage inflation. or the population earning some decent money in real terms. a 2015 why it seems like story for hiking rates. sees as bad in the u.s., she must really feel bad. surprised because

doing full qe is tough with 18 different countries involved and 18 different bond markets. i would be surprised if we get anything new. he's got a tough job. that is where you have real deleveraging. those bond yields are really helping. it helps big companies finance their debt long-term at low levels. >> what is the challenge right is it mary of drug and he rio, is that his main challenge right now to get these guys to reform? >> his most recent speech would indicate reform. it is exactly what he should be

doing. the successing at stories of portugal and spain. you have seen some reform, and recovery. you've gone from current account deficits to current account surplus. that and think, the medicine is working. economist, i'm an interpreter, but that seems to be the direction. maybe we will see some praise for sport -- portugal. >> thank you for joining us this morning. up next, an icelandic volcano that i will not name could leave flight stranded across europe and the u.s.. we look at the technology aiding the volcanic disruptor. ♪ >> welcome back, coming up

europe keeping its eyes north as one of the biggest volcanoes finds a life. expert can't say if another eruption is imminent but they are taking no chances. belies thelness activity happening hundreds of meters below. this giant a central icelandic is awakening. if that magma reaches the

surface, or comes out of the ground, that is when we get an a russian. >> it happened in 2010. the eruption close european airspace. stranding 10 million passengers. grounded.ights were costing airlines, $1.7 billion. ash quite a cloud of high into the atmosphere, that combined with the jetstream moving the wind down toward europe. those two factors combined mend the ash spread throughout europe. lies underano iceland's biggest glacier. it hits a wall, the result is explosive steam and lots of ash. the glasslike particles can strip the metal from jet wings and stop turbines by congealing

inside of them. easyjet, and a norwegian company have developed technology that spots flying ash plumes from a distance. plane dumped a ton of icelandic ash into the atmosphere, the other uses infrared cameras to detect the conference ration -- concentration of the ash. it is called the avoid system. it works. meaning, in the future, easyjet won't necessarily be grounded i interruption. there is just one hitch. due to belogy isn't fitted to the fleet until 2015. in the meantime, it is one of a handful of airlines, watching and waiting. story we aren the

expert, howiation did we get here? saw a variety of earthquakes around the rim of the volcano. it is all happening under a huge glacier. it was enough to prompt the icelandic authorities to issue an orange alert, the second-highest alert. and to evacuate the area. a lot of airlines are keeping a sharp eye out. 2010, is this in equal? in 2011,t think so, you had another volcano which was a more forceful volcano but you didn't see anywhere near the disruption. in 2010 you had a perfect storm of events. the weather pattern loading things in this direction, the ash volume was high, and you had

rules which weren't the right rules in place. has done since then is put the onus on the airlines to make this decision, there has been technology used, the use of ash density data to make decisions whether to fly or not, this is being given to the airlines so they can see on a map, which routes will be the most affected them a and which flights can go and which can't. >> if we get the eruption, are they prepared? 2010e biggest impact in was on the low cost carrier. e jet is one of the ones leading the way here. pilot can see the ash cloud and avoid it. >> how do you pronounce the name of this ok no? newot a good try on the one.

russian aids may cross the ukrainian border later today. aids -- aides may cross the ukrainian border later today.

like,s is what it looks the dax is down 10%. the equity benchmark is pretty much unchanged. headed for the best week since february. we will head for the correction, these equity markets have been pushing higher. at comes a little bit later on, for now, three stocks to watch. a bit of excitement for a friday. >> happy friday. >> young man currently trading

at the best performer of the morning. raised by conviction from goldman sachs. the change to analysis is moving the market. look, thechs says balance sheet is pretty good, the ramp-up is pretty good in terms of production coming from , conviction by. -- buy. many seem to be doing so. so much speculation is right across the u.s. -- u.k. press. is at&t coming back to the table. it was more than six months ago that they had to show their cards and say yeah we are ready interested in vodafone. nice rhenium, stock

trading high on that speculation. meanwhile on the downside, exotica continues to trade down. is the chief executive set to leave? that has been speculation in the italian press. we understand now there is potentially a board meeting on september 1 where the future of the ceo will be discussed when the cfo takes over the reins. what the strategy is, what the management shakeup might be, currently trading the lowest. back on the luxury spend, that is what happens to these companies. you.op headlines for investors await clues on the target interest rates from federal reserve chair janet yellen. -- gathering in jackson hole. stocks from the u.s. to asia rose yesterday after a

manufacturing report showed strengthening in the world's largest economy. israel is vowing to target more hamas leaders after killing three commanders. israel's offenses they will continue to hunt down and attack hamas where ever they may be. hamas has vowed revenge for the killing. ben-gurion airport is a top target. islamic state poses an imminent threat according to five islamic officials. meanwhile, president obama says these groups can only be defined it by tackling them in syria. that would be a substantial escalation of america's military campaign in iraq. onto the ukraine now, the foreign minister one subbing for his country. correspondentnal joins us from berlin.

what is a merkel? give me some color. what theeems to be foreign minister hinted at in the interview with a german broadcaster that was broadcasting are in berlin. he wants economic aid for his to hold he wants merkel his country more toward europe, more tour the u.s.. he praised merkel very much. thisars noting, amid all talk of diplomacy, there is a lot of diplomacy going on, this fighting continues. yes the convoy, that international aid convoy is close to coming in, but overnight the ukrainian government claims they killed 100 separatists, destroyed three tanks. we haven't verified that yet. and all the diplomacy fighting, you have the president

of the ukraine talking about the need for peace. ukraine ism him, seeking peace, the whole world is tired of war. yesterday the russian foreign minister spoke with his german counterpart, and of course uporrow it all heats tuesday. will there be substance to talk about, or the same sort of reality. ukraine says no to a cease-fire as long as they think russia is sending in arms and ammunition, and potentially people. the international politics covered. let's talk about the domestic politics. early elections? made. the government is seriously talking about calling snap elections that would dissolve parliament on the 24th. that is in a couple of days. you dissolve parliament you need a new parliament.

the backdrop, a lot of infighting. the economy minister has resigned the cause a deputy was appointed without his knowing. it doesn't seem like there is a whole lot of unity inside the government in kiev. >> let's keep this conversation going on russia with a look at an investment strategy. stephen good morning. >> you are a buyer of russian equity. much a buyer at this moment in time, i'm just pointing out that despite three rounds of sanctions, the market has been resilient. if you look at how to trade in merger markets generally, the time to buy is when there is light on the streets to quote lord rothchild. if you had gone and when they had a crisis, you would've seen

a good entry point. russia is a big country, it is very cheap. it was cheap before. selectively, mobile telephone they are good, sound businesses making money, paying dividends. they should not be ignored. this is a political crisis, and has to be solved politically. i hope that merkel will listen to history. shouldn'taid you fight a war on two fronts. the west is fighting a war on two fronts. the one in the middle east, regrettably. and another with russia. the reality is that russia has genuine interests in that part of eastern ukraine. some sort of accommodation needs to take place. any emerging market investment in raja is a real emerging market. you have to be looking longer-term. i'm looking at 2-5 years.

scale into these markets, you are patient, and you buy securities when they are cheap, a global rising market for assets, the global picture. if we were in a air market, or uncomfortable about asset prices, but we are not, we are seeing the easy credit conditions. look at european bonds to support being fully invested. russia should be a part of that story. >> let's talk internationally beyond russia. tension in the middle east. in is 10% off a high we hit june. is this a story that voice to something in the old market or something fundamental for growth? >> i think it's a canary in the coal mine. if you look at the deep analysis about why the oil prices have fallen, it has been through lack of demand, particularly in

europe and china. the broader picture of other commodities as well is that global growth is in trouble. that tells you the same story. that is the key picture, that we are seeing some serious fallback in demand. it is a big concern. >> the growth next year in the u.s., at a rate of 3%, and your mind is that wrong? >> every economic forecast for the u.s. has had scale back at some stage in the year. not just europe, but other countries. i think it is a bold forecast. months. is more than 60 into an economic expansion. historically, after 60 months, has been the average length of every economic expansion since the second world war. verynk the chair has been

cautious about this, and has been muted in her talk. there are genuine concerns that with the global picture rolling over, the u.s. cannot necessarily carry on at that level. >> is that how she addresses things today? has always been more focused on international matters. we will see what she has to say. think, he will be bending her ear, and cautioning her that an abrupt change in u.s. policy would be disastrous for europe. the euro has been a conundrum. everyone has been talking about a weaker euro for a long time. it has been surprisingly stable. it is effectively unchanged. the euro is a trade surplus. where is the u.s. is a trade deficit. you have natural flows coming

into euros all the time. , you name it. the think the currency is solution. it would be great, it would save a great deal of heartache, but i'm not sure it will happen. >> some people might call him politician dragging at the moment. at jackson hole, does he have a message for france? >> they have to have a very close eye on the politics. draghi is no fool at all. about whatoncerned is happening in france. france is a black hole in europe. when we had the last euro crisis , those countries have done oftty well out of membership the euro. when it came for them to take the medicine, which they did in terms of reforming their

society, they were prepared inch by inch to achieve something. france is a different kettle of fish. -- france while on the campaign trail said that france is not a normal country. the very painful reforms that sarkozy took a lot of stick for. has a reformist government in place, but in reality nothing has happened, and nothing will happen. what the french are looking for is the germans to ride to the rescue and some sort of monetary solution to the problem. the germans are very fearful. presidential elections in 2016. they were ahead in the polls, they won the european elections. a lot of people are concerned about france. that is what is driving monetary policy. the politics.

he hinted, that he is very sensitive. and the -- a lot of decisions being made behind the curve are reluctant. this big black: the europe, we will talk more about that, i'm sure. have to leave it there stephen, coming up on the move, we had to iraq for the latest on the ground as u.s. officials ratchet up the rhetoric. ♪ >> live from the city of london,

45 minutes into your trading day. capital has been the boomtown of iraq. pouring billions of dollars into the real estate. of the islamic state has put these ambitious plans on hold. theust a couple hours from iraq he conflicts own, a small slice of the american dream. his first self-proclaimed subdivision. >> how much would one of these houses cost? $250,000. between the land and the construction cost. spends hiskurd who

time between northern virginia and northern iraq. >> you can see most of the development, big developers in iraq, and lebanon, or in turkey they start to move to do business. he and their european partners sank $6 million, and received another $10 million from a private lending arm of the u.s. government. back then, iraq and its sectarian bloodshed hardly encouraged outside investment. but in recent years, the oil economy helped the surrounding area develop malls and high-rises at unprecedented rates. >> we are able to include the kurds into the economy. economy is helped by the staff members of the oil companies.

it brings cash and business to the area. its -- many off the cranes stand still. when they come to attack the kurdish area, it makes people worry about construction. some people start to not invest. in 2012, the most expensive property sold for $600,000. local kurds, including government ministers, were hoping to rent to families of oil workers -- oil companies. less -- left the area on sellable. happened, and the last months everything has been slowed down. currently caters to fewer customers. leaving developers to debate kurdistan's future.

run, aeed stability to rack should be stable. -- iraq should be stable. stability may not return for some time. >> for more on the latest out of willem marx is standing by. how bad is business in northern iraq. any sectors that are not struggling? i would say that the ones doing very well are the local refineries. iraq isest refinery in off-line, because of isis. the local refineries are therefore making a killing. even the small refineries are

much money per day, and are able to charge much more than people were paying. that strikes me as the one area where people are doing well. >> what about local energy options? of gasoline, it's very expensive. none of the private gas stations oil, you had to get it from the government-subsidized ones. that becomes inconvenient area in terms of electricity, the power station is not far from here, and that was very close to dam. across kurdistan, this is a problem. the refineries are near the front lines. talk to me about the

relationship between the kurds and the government of baghdad. are they working together? >> they are, we were at the moz a few daysmosul dam ago. it was a very frightening moment a mile from the dam at the iraq humvees few came through. the reality is that they have butbeen heavily involved, the iraq he army guys are claiming credit for the victory. the sides are not cooperating. >> thank you very much. willem marx from iraq. joined us from the newsroom. >> did you know?

had you heard? a gathering of central bankers and jackson hole. heavilyoing to be previewing what will be said by yellen, and perhaps more interesting why president druggie of the ecb. mario draghi of the ecb. and a comfortable -- what a comfortable irruption in iceland could do to the airline industry. the industry says it is better per pair now, but ash still strikes fear into many airline executives. we will be talking the business of technology and summer vacation. we'll be meeting the guys at firefly. in two.e move is back

>> welcome back to on the move, 55 minutes into your trading day. three companies for you, start with softbank. billion for investments. this comes with the merger of sprint in the u.s.. citigroup earned less than the bank of japan then it's mobile

chief executive salary last year. citibank japan has made a profit of 12.9 million dollars. compared with the compensation of $14.5 million. back and explain why they're considering selling the business. $256ge has thrown out a billion lawsuit by a whistleblower, who claims the company's production was unsafe. he says it was ultimately about paperwork wrinkles than engineering shortcuts. mixed to say the least. on the week, what a week. in focus, and janet yellen's speech. or want to talk about that market, i am on twitter.

♪

>> waiting for yellen. markets are set for the fed chair's speech. minister seekign aid from terminally, as angela merkel meets poroshenko tomorrow. ash alert. a volcanic eruption threatens flights. a warm welcome to "the pulse" live from london.