bonds. what they decide to do is increase significantly the balance sheet. that will have a significant impact over time, together with other policies like fiscal policy and structural reforms. >> stay with us. you can enjoy that full conversation later in the program. ryan chilcote is inside wales in berlin. was cooking today? two here at the nato summit. 60 world leaders discussing both ukraine and syria and iraq. two things to watch today. the eu poised to introduce new sanctions against russia. also, those peace talks in belarus, the ukrainian president says he may introduce a cease-fire today. over to you.

>> ryan, thank you. we are here at the conference in berlin. we are talking tech, the internet of things, connected homes. manus, we have your christmas present picked out. it is a robotic vacuum cleaner. it will clean your living room. we will be looking at all these things, how expensive they are, and the future of tech. >> glad to know you are buying me a christmas present. equity markets are underway. let's talk to caroline hyde in terms of the morning after the day before. >> we are just one minute into thee and stocks, of course euphoria of yesterday turning a little bit more cautious. roubini calling this a effectively quantitative easing. perhaps by stealth. on to the risky

asset-backed securities. what about corporate bonds, sovereign bonds, that is what he is anticipating. currently, ftse just flat. the dax, we will see if that needs updating. france trading flat. spain off by a quarter of a percent. let's check on that euphoria of yesterday. the euro down by 1.6% yesterday. this is but the market reacted to. we got rate cuts from mario draghi. we got asset-backed securities and not too much concern that we don't have full-blown quantitative easing. germany dead set against that for the time being. 1.2944, we are below that 1.30 level. we are the lowest since july, 2009. let's check on the bond markets. -- we seem toan be having a little bit of a technical difficulty.

bonds seem to be where a lot of the action is moving. we are seeing borrowing costs on the downside. there we go. you need to warm up these things in the morning. let's have a look at the bond markets. markets nowan bond have negative borrow costs. germany, you actually paid for the privilege of borrowing. so much in demand is that two-year debt. same goes for france, austria, ireland. ireland, your home nation, manus. you should be proud. the united states seeing a turning. are we going to see u.s. yields rising? quantitative easing, we are going to see that come to an end in the united states. real divergence in central bank policy. japan and europe on one side. on the other side, the united kingdom and the united states easing back. a quick check on a few stocks.

bp recovering a little bit from yesterday. over the gulfent of mexico oil spill. up 0.3%. that gap over the united states like for like sales far worse than anticipated. look out for london stock exchange this morning. off by 3%. its biggest shareholder is selling some of its stake. it currently owns a 3% stake. selling it at 220. clearly having a bit of an impact. >> thanks for that. maybe ireland is benefiting from structural reform. that seems to be one of the ideas in europe. joining us to consider the impact of yesterday's unexpected ecb decisions is the chief fx strategist at citi, and patrick

armstrong. very welcome. of gettingthe honor your teeth into deciding whether -- was itby the ecb unexpected? 51 of the 57 that we monitor say they didn't expect this. is draghi playing to the gallery? >> it was unexpected. took markets by surprise. i think that is partly the idea, to take the markets by surprise. it shows. the euro did come off. rates are lower and that was part of draghi's intention, i think. >> patrick, good for you? a good signal to markets? >> a good signal. i think that he actually acted yesterday. a lot of people were expecting quantitative easing. that was the consensus view.

the fact that he has done something now is a very powerful -- >> he has actually done something now. they are going to have to put their hands in their pockets and begin to consider. but they are nowhere near the size and scale of the fed and they don't have the germans on board. we are calling it qe-might here at bloomberg. >> we don't know how much of an expansion will, on the back of all these measures. ltro, that is close to 800 billion until 2018. draghi did indicate they are maybe hoping 500 billion expansion on the backs of the new measures. if you look at the markets breakdown of eligible assets, abs market is close to 700 billion euros. on top of that, the bank-covered bonds, that is what draghi also indicated they may be buying.

clearly, they will be selective. >> they only want high-quality. >> still, it could represent a very significant and spansion of their balance sheet. anything, i certainly think perspective,fx markets will be facing quite a significant expansion. >> our next balance sheet is going to get back to where it was six months ago. the lt ro saw the balance sheet contracting. this is something much needed. they still have billions and billions to catch up with other central banks. equities, ifropean you have got global companies with dollar revenues selling to asian consumers, those are very attractive. they were hit hard with the ukraine-russia crisis. are selling with non-euro revenues, very attractive. >> stay with me.

patrick armstrong and valentin marinov. coming up, more on that exclusive interview nouriel plus, we tackle the world's biggest threat. tom ridge joins me. ♪

>> this is "on the move" streaming online, on your phone, apple tv and amazon fire tv. earlier this morning, we spoke to nouriel roubini.

he told us yesterday's ecb decision was a step in the right direction. when asked about the global picture, he gave us these words of warning. clacks -- >> the global economy feels fragile. the euro zone back to near recession. the recovery of japan is faltering. even the data on emerging markets and china are mixed. some are doing better, some are doing worse. over the medium-term, i expect the chinese growth will slow down to 6% or below. risk is on rather than off. >> the bank of japan governor said that the ukraine crisis was his single biggest concern for the global economic recovery. where does geopolitics fit in

your worry table right now? certainly there are many geopolitical stocks that are risky from russia, ukraine, the middle east. arear, financial markets not strongly reacting to these geopolitical risks. take iraq. 90% of oil production is either in kurdistan or under control of shiites. there has not been a shock to the supply of oil. in ukraine and russia, there has been a cough of the supply of gas to ukraine but not to europe . unless the conflicts escalate, there is not going to be a shock to the supply of gas to europe. these geopolitical factors are a matter of potential risk for economic activity and financial markets. as long as they are contained

and don't have an impact on the select -- the direct supply of gas and oil, their impact is going to be limited. >> that was nouriel roubini. still with us for their views, valentin marinov and patrick armstrong. guys, let's get into this. perspective, give me a little bit more meat on the bone. you say the euro is the carry trade. how do i play that? iseuro is going to be, -- becoming a funding choice. investors will be using it to fund long positions in higher yielding currencies. the ecb has become the first menstrual -- the first central bank to penalize the banks for not spending. that is a turbocharged affect

and that should ultimately drive europe out of the eurozone really having all the incentives to sell euro against high-yielding currencies. euro against emerging-market currencies like south african rand, to a degree, even high-yield currencies in europe may look attractive. >> patrick, let's transferred to you. you have some positions and we will come to those. we were talking about property in the commercial break. who benefits the most? how do you play it? policy is now,cb it is a complete disconnect. economy, you have negative interest rates. that is going to influence property in one way or another. if you look at the residential property companies, getting a 4% yield on properties, you can

borrow at next to nothing and buy more properties. interest rates that are too low for the economy always translate into property bubbles. roadmap --ake a .benomics, now draghinomics i know there is a dispute over who owns the title. abenomics set the roadmap for a stellar performance in the nikkei. do you believe that is the roadmap we are now on? >> i believe the japanese yen is a template for the euro. the pronounced negative correlation we are seeing between the japanese yen and japanese stocks could indeed become a reality for the euro. there will be also selling of the euro for the same reason. the caseorrelated in

of euro and european assets. >> patrick, when you look at european companies, you mentioned some companies that were earning in dollars. i want to see if you agree with goldman sachs on parity by 2018. how does that play for you? you mentioned a couple of companies. they are emerging-market facing. lvmh, these are companies that, if you have no volume growth, you just get a big tailwind in your earnings because of the currency. you have that head wind for these european domiciled companies. they have been delivering on profit margins and volume growth. >> this is a gift for european equities. saidd socgen in and they 1.25 would add

0.5% to europe. where do you go with everything you have said? as a does the euro go to benchmark as against the dollar and sterling? our carry is 1.25 by year-end. remember that the eurozone is still a country with substantial current-account noteus and we also have to that that current-account surplus may indeed grow if european savings continue to grow. there is a limit to which europe could depreciate against the dollar. there still is a current-account deficit currency. 1.20 over aially longer keep him of time. >> let's move the agenda to the longer -- to the united states. fincher last night

saying that interest rates on riskier credits in the u.s. market have become overheated. equities are coming off. interest rates are not low enough. there is still a great deal of divergence in thinking about where we are with u.s. rates. where are you looking at the world now? you have japan ready to do more, the ecb kicking in and the u.s. going in a different direction. >> we were short the stoxx 50 in august. we changed that to shorting the s&p as it hit all-time highs. it has been a strong performer and you will get the currency headwinds for these u.s. companies. they are going to have euro revenues that will be a drag on u.s. earnings going forward. underperformance from the euro stoxx 50 makes it attractive. >> dollar has had a good run. bloomberg --at our

over the past three months, up 3.32%. does that momentum continue? >> for the time being, we think the dollar against euro and the yen may have further to go. that is fueled by expectation of potential earlier rate hikes from the fed. there is a limit to which the dollar could strengthen. currency appreciation having an impact on inflation, which is still rather low in the u.s., there are other implications for the economy which may be unwelcome for the fed. the safer bets for now would be to be short euro against the dollar and shortly and against the dollar. over time, the dollar may start traveling against high-yielding currencies. >> patrick, what is your biggest risk?

is it ukraine, russia, the fed? >> geopolitical risks are concerning me. russia and what is going on in the middle east as well. having commodities in your portfolio is a nice hedge. obviously, the interesting thing about the euro was there was a confluence of risks. that makes it such an attractive trade. it is difficult to find a more attractive trade. want to hedgeyou against potential fed escalation in geopolitical risk. >> you just can't get enough, can you? gentlemen, thank you so much for coming in. patrick armstrong and valentin marinov. break, we head back to newport and wales. day to of the nato summit. the eu threatens sanctions as

officials meet with rebels to work out a potential cease-fire. ♪

>> nato meets in wales. meanwhile, ukraine's president is hopeful of a cease-fire. a little bit later today in belarus with the ukrainian and rebel officials meeting. ryan chilcote has been following

the nato summit. the eu were talking about more sanctions. that seems to be the call as well coming from cameron. ryan, you know and understand europe's proclivity to deliver. do you think they are going to go for more sanctions? >> that is a good question. based on the foreign ministers that i have spoken with, what we have heard from the world leaders thus far, i think they would like to. are supposedalks to happen early in the morning. it is possible they can have their cake and eat it too. they can watch what happens in minsk and introduce sanctions after. the russian that president has already done enough to earn this next batch of sanctions. and should be introduced, if indeed there is a cease-fire and if the cease-fire is maintained, they can always be

rolled back. deeds, rather than words, that matter. we have seen russia going into different commitments several times and violating them. we are fairly tired of the words. they hope that all countries have appetite to stop this country in ukraine. decidedpean council that european kitchen has to make concrete proposals. it was a unanimous decision. >> for lack of a better way of putting it, there are sanctions and then there are sanctions. of coarse, what we are talking about right now, what the german chancellor indicated might be coming, are quite mild. effectively doing more of what they have already done. oftricting the access

russian companies to european capital markets. so far that has been focused on defense companies and banks. maybe some of russia's energy companies would be barred from raising equities and selling debt within the eu. the reality is, as you heard the estonian minister say, there isn't an appetite for what might happen with retaliatory actions. we had that european union food ban from the russian president. i was reminded what that meant here in europe just as i was getting breakfast this morning. pears, the russian president took a bite out of pear prices. they are down about 70% in some places. that is why there is a reluctance to go further when it comes to economic sanctions. >> ryan, we have to leave it there. i trust you to find something unique to talk about in south

wales. thank you so much for that, ryan chilcote. we are going to have a conversation on that very subject with a former u.n. secretary of homeland security. ♪

>> welcome back to "on the move ." i am manus cranny in london. 30 minutes into the trading day. stoxx 600 down by an eighth at this juncture. looking at the details, qe-light. that is what we are calling the actions by the european central bank. the germans didn't come on board. the ability of european central bank to really put its foot to the floor as the bank of japan and the federal reserve did seems limited. we are seeing a little bit of a foot stepping back on these equity markets as we wait for the jobs report later in the day. peace discussions going on in

minsk. one lady who has three stocks for you to watch, caroline hyde. >> i am kicking off with a very sexy company. let's talk equipment that helps open your mail. it does software and the like. neo-post. it is sexy today because it is the top of the leaderboard when it comes to the stoxx 600. up almost 6%. sales are expected to rise this year. they are sticking to full-year guidance. they are looking to line up some syndicated that. because ubs,ising one of its rivals is weighing in, saying earnings are set to improve. no less than 10% per year. they are expecting a u.s. settlement. they see cost cuts on the

horizon. julius baer lifted by ubs and up more than 2%. on the downside, the london stock exchange. shares down by almost 3% because its biggest shareholder is selling a 3% stake. dubai. of course now $87 billion that european and middle eastern investors have cashed in in terms of selling stake this year. exchange fares rather badly on the back of that trade. >> caroline, thank you very much. here are your bloomberg headlines. economists are forecasting a rise of 230,000 in today's u.s. jobs report. it will be the seven consecutive monthly gross. the jobless rate is also inecast to fall to 6.1%

august. the abe administration gave its clear signal of concern about the damage to the japanese economy. finance minister says that the will belan for stimulus declared. decideinister abe will by the end of the year whether to boost sales tax to 10% as planned. u.k. prime minister david cameron urged european leaders to refrain from paying ransoms as a british citizen remains a hostage of islam is state extremists. cameron told u.k. lawmakers that he has no doubt that the millions of dollars paid to the islamic state is going towards terrorism. swift and brutal advance of the islamic state is one of the leading topics at the nato summit. cameron calls it the organization, a greater and deeper threat to our security than we have known before.

for more, we are joined by tom ridge. governor of pennsylvania. he joins us from the 40th annual forum in chernobyl you. thank you so much for joining us today. when you hear statements like that from prime minister cameron, and other statements wem u.s. congressman saying are facing the greatest threat since 9/11, do you agree? is isis the greatest threat since 9/11? i think in large measure it is a greater threat. frankly i think it is a different thread. the primeink either minister or my colleagues in the united states have overstated the short-term and long-term impact of isis. i don't think there is any hyperbole in those statements.

>> what do they need to do in iraq? u.s. and u.k. to step up their actions in terms of military participation? think we needl, i to understand the ideology. what are the circumstances that allowed isis to grow into this monster? european leaders 18 months ago said, beware of this group. you have unrest in syria, a major civil war going. maliki incited promises to the united states and allies to form a coalition government against the sunnis, the kurds. you had these lawless conditions in two contiguous regions and this history missed group conformed. -- this extremist group formed. i think the world would be best

served if there is a military coalition and a diplomatic coalition that involves the united states, nato, and this is a war within islam as well. unless and until we have countries like saudi arabia and the emirates, jordan and turkey involved in the execution of this military and diplomatic effort, it will fail to put the maximum amount of pressure on isis. -- it will require concerted action across the significantding players within the muslim community. >> you touched on the political solution. a lot of what i read and here is very reminiscent of everything that we were told about weapons of mass distraction, what was happening in iraq at the time. why has this only come to the fore in the past couple of months?

can we trust what we are being told here? i think one of the reasons that we should be more confident in our assessment is because of their own ability to promote themselves in social media. i don't think there is any question that they have literally killed thousands. there is no question that they beheaded two american journalists and i suspect others. they have assassinated, murdered, mowed down defenseless iraqi soldiers and syrians. at the end of the day, in terms of a terrorist threat, it is a different kind of threat. a military organization than a terrorist organization. they are more centralized. world tries to deal with al qaeda, it is an intelligence game. we don't do that here. amount of massive

people controlling an enormous amount of territory. apparently, some strategic and tactical leadership, probably from some generals that work in saddam;'s armies. whether or not they morph into these isolated sleeper cells in western europe and the an edit states remains to be seen. until that time, they are a threat to the region. until the iraqi government creates a coalition, we aggregate the capabilities, they will continue this monstrous march through that part of the world. >> let's just move the agenda forward. is a great deal made of cyber security and cyberattacks. the preparedness of the world, the western world for the cyberattacks, how concerned

should we be? is it part of the conversation you are having in cernobbio? what are the biggest conversations that you are having right now? your mention of cyber security is very timely. i think we have to understand that we live in a world that i call the digital forever more. it is the backbone to how government operates and how business operates, the nervous system of a global economy. it is the beans -- the means by which countries can steal as corporate espionage. ,he cyber security threat government to government or government to the private sector , is with us for the long term. i think this has to have a very definite mindset change as they are dealing with the cyber

issue. it is not a technology problem anymore. it is a business risk. it is as much a risk as anything they have ever seen before and something they have to deal with. it affects brand reputation, profitability and the like. it can't be dismissed. it is a 21st-century forever more business risk. >> tom, very precisely put. enjoy the rest of your conversations in cernobbio. former u.s. secretary of homeland security discussing isis and the global political risks. appliances your start to conspire and your home gets smarter, we speak to the man who is bringing your house to life. ♪

>> this is "on the move." our coverage of germany's electronics show continues. we look at the rise of the smart appliances. our international correspondent, hans nichols is standing by. over to you. >> manus, architect is a good way to describe our next guest. jan brockmann, chief technology officer of electrolux. what are the big trends we see coming into the home?

the internet of things coming into all categories and also coming together. advances, itat the is truly to make professional experience is relevant to the domestic consumer and to continue to raise sustainability and energy efficiency. >> obviously that is on people's minds. where else will consumers need to be forced to be more energy-efficient? fridges andnce, washing machines. new energyction of is tied to performance. >> you put on an exciting cooking demonstration. we are going to have steam in our ovens. what am i missing? >> you should have it. should do it because you get

the best results, best nutrition , and it is more than anything else, a better result. >> does it cooks faster? >> it cooks more accurate and it prevents food from drying out. the smart steam oven will help you get professional results. >> tell me how integrated the christian -- the kitchen will be? how is the kitchen going to look different? >> the kitchen will be more professional. the internet of things, which also comes into the kitchen, will help you get the recipe , process through it as a professional chef, and maybe go out of the kitchen, into the living room to socialize with your friends and watch what is happening in your oven and have that peace of mind and control that you want to have while you

are cooking. >> so you can guarantee i will not burn my rice anymore. >> you will have a good time, watch tv, have red wine with your friends, or the quick laminate with your kids depending on the situation. >> these items cost a lot of money. when do these become more affordable? you will see it soon be affordable. when you look at steam as the professional ingredient, we will see it down to mass price points so it becomes available to the broad domestic consumer base. >> give me a time on that. , and it is more about communicating the benefits that will make it grow in the market. today, i think we are at 10% steam ovens. that should grow to 50% over the next three years. >> there are obviously security

concerns. the do you do to guard privacy of someone's castle? put the, we communication into the home, not out of the home. we have joined an alliance that aims at securing, making the home secure. i assure you, that will be a key development on which we base the consumer insight features. >> that is an assurance that your home will be secure because they will put the technology inside the home. manus, i think you are still going to be burning your rice for some time to come. >> all about the steam. let's leave it there. great interview. coming up, more from cernobbio, italy. we will be talking ukraine, the cost of energy and the ecb action with the ceo of italy's

largest utility company. ♪

>> back to italy now. ceo, the ceo francesco starace. thank you so much for taking the time to speak with us. , youre there at cernobbio have seen the european central

bank move again on interest rates, begin the process of qe-light. as a major ceo in europe, are you impressed? i think this is a very good move. an indication of attention and drive from the european institution. all in all, good timing. i think the market has reacted very well. we believe this is maybe not alone going to change everything but it is a big push in the right direction. good idea, good move. >> this alone will not change everything. matteo renzi, the pm in your home country, mario draghi, and italian himself. the do you think is possibility of real structural

reform in italy. it must be pretty darn hard. >> i think structural reforms are needed in the country. ,hey are being addressed starting from the top, which is the senate. they are continuing in the next months. i think it is true what our prime minister said recently, this is a marathon, not a 100-meter dash. it takes time and it takes some conscious that this is going to take a while and last for a long time. >> is renzi the man for you? today, yes. today he is very strong. he has a very strong grip on a very large party. he has the support from the fromtutions, and also

large parts of the business community. in my opinion, he has a very strong chance. >> francesco, let's talk about the business. the process ofin rearranging some of your assets. where are we with that transaction? what is the thinking? howis that going to change you face international operations? >> what we are doing is basically carrying out a rationalization of the structure of the company, separating latin american assets from iberian assets. are a greatassets set of assets but they deal with european themes. consolidation, concentration on technology. what are the themes outside of europe? andastructure, investment, demand growth. completely different framesets, completely different approaches. we need two separate management

teams to tackle these diverging worlds. this is what we are doing. we are basically putting -- separating the holding company that has all the assets in latin company putting this into our own facility in spain and europe. >> would you consider selling assets in the form of a share sale? is that the end-goal? iberia, we have three possible outcomes. one is selling more to the market. -- we see spain in particular going strong on the market. another possible outcome is de-, list the company and have it emerge.

the third option is doing nothing, which is also possible. we are exploring these three alternatives and we will make a decision in the next 30 days. >> francesco, we are hoping to see petro poroshenko meet with vladimir putin today to talk about putin's seven-point plan. last week, you said that ukraine is the biggest security issue, more than gas supply. what do you want to see, what do you want to hear from this belarus meeting, that would say to you, there is progress rather than bluff? >> i really would like to see a structural process that will aim to resolve the ukraine-russia situation in the next month or

in the next year, but not continuing buildup of tension in the region. inhink gas is a small detail this context. i think we are moving in the right direction. there are interesting moves. the fact that these people start to meet and discuss things is a very encouraging sign. what i would like to see is just a process starting. i don't dream of a solution overnight. but the fact that there is a process, that is the best news you can expect. , thank you so much for joining us this morning from cernobbio. enjoy the rest of the day. stay with bloomberg. anna edwards is up next with "the pulse." we are going to continue that conversation. we will speak with a former ecb board member.

stay with us. we are going to talk about the ecb. join me on twitter. the euro has the potential go to 1.25. that is it for "on the move." ♪

>> nouriel roubini calls draghi's one trillion dollar stimulus plan a step in the right direction. an expert opinion. we speak with former ecb executive board member lorenzo bini smaghi/ . plus, nato leaders gather for the last day as the eu considers new sanctions against russia. obama and david cameron urged nato to confront the islamic state. we are live in south wales.