bloomberg chief and finance advisor speak and this minute -- this morning any minute now mario draghi speaks. as we wrap up the week check out the movement in the futures markets. 0.6%, 36es higher up i points higher and if you look at the week another week of gains and to manus cranny that would make it a fifth week of gains. greath had two conversations on countdown which i think encapsulates the top news flow. farage. and is a due to u.k. risk the party, the risk for the u.k. is the treasury in a not a kingdom at 2.09 percent but risk would rise and that is a big kingdomhe united

potentially going for folks and raise thecould indeed risk, andrew bosworth here in the studio. q e? the ecb was almost ordering in the ways, they have divisions in the same way, let the monitory -- monetary policy has divisions, and assembly have divisions in the federal reserve so to your divisions in the ecb. ultimately the market is expecting qe and that -- to that end baltimore said you wanted a little bit of a periphery, i'm doing a slight gesture there. if and when qe comes this is where you will see it. cramer am a her. says spain cannot borrow -- mr. says spain cannot borrow more cheaply than the united states.

,hat would mario draghi say china factory orders at a six-month low, a little bit of reprieve coming through in today's trade. michael in france saying it would be tough for them to hit a the complexion of the bond markets and the equity markets and the euro coming a little bit lower. eyes the yen that caught my as the finance minister basically said that the yen had moved too far too fast that is the yen rising and the dollar down. the sharpest rise in the yen pairing a five-week drop, the biggest drop since 1995. the currency is according to statistics oversold. it has gone too far, too fast.

that is the finance minister in saying it is too quick to bear with. market opener, that is how things are shaping, one of the top stories of course is that today is the u.k. independence party victory right here. mark reckless took the second parliamentary seat after defecting to ukip in september, he said this when is just the beginning. i would try had words to express how grateful i am, this is your victory. ourk of it, rochester was 271st most winnable seat, if we can win here we can win across the country. getou vote ukip, you ukip. took 42% of the vote

beating conservatives by less than 3000 ballots but all of the mainstream parties took a beating losing large portions of their popularity. the share of the vote dropped by over 10 percentage points each. for more let's bring in our guests for the next 30 minutes or so. great to have you here. the mainstream take a beating. this sets the tone for next year's general elections, doesn't it? >> it is a little premature because it is only the second vote but it is a concern. germany is the biggest trading partner and the problem is that cameron in trying to appease the independence party of the voters is alienating europe. >> when you look at the market's reaction to this, going into next year's general election if it looks like a referendum is on the cards is that negative?

for the conservatives this will be a nice picture with a certain lead in the polls will he take a hit? >> i think the starting assets are probably fairly valued and the investors we talked to are not taking this as concern. as we get closer to the may elections, the conservative led party or coalition would be unsettling investors but we know willingp are not really to compromise into coalition. >> you spent a lot of time traveling europe and ukip is happening to the popular dissent but in areas like paris or elsewhere you have seen the rise of anti-establishment parties, are they a knowledge and that political risk abroad? >> yes, totally. we've seen it with what happened with yunkirk.

they called for a vote of confidence and the fact that the movement with the left and the right have not agreed on the next step has been creating the necessary opportunity for investors. >> how do i invest around this? i now have to trade the u.k.. if the risk of the u.k. leaving the eu hums about you could punish sterling assets, what do you do in europe? >> i think it is more of a u.k. problem as opposed to a european problem. a spiral ofacerbate discussions around is this the beginning? that is a problem. u.k.an stop trading to the and investors are not really paying attention, they don't think it is a serious enough issue to merit taking a position but i think the next step they are thinking is that it is the

beginning of a broader discussion. >> i want to look at europe when i look at france, the closer we she leads7 the longer in polls, what does that mean for french assets? french debt has been completely insulated but surely at some point the penny drops. boones and french bonds, i think it is at a stage were they have been artificially standard very tight regardless of their credit worthiness and the fact they have not enacted structural , --rms >> we will talk about the ecb and what asian policy means, up next, the yen backtracks, the year of massive devaluations,

the yen recovers slightly after the nation's finance minister says it moved too fast. be careful what you wish for. ♪ >> welcome back i am jonathan

ferro life in the city of london, streaming everything online. let's talk japan, the yen is

gaining for the first time in a week after the japanese finance minister said the recent decline was too fast. the comet sent the currency down slightly after it approached 1.19 against the dollar but the currency is still trading just up from a seven-year low. over the last month the moves have been stunning, whether against the euro, the dollar or the chinese currency, while europe fights the prospect of deflation asia is fighting their own battle. of deutsche asset management is still with us. this is what you sent me, what is it telling you? everyoneer of things, is focusing on europe and quantitative easing when and rather what. the devaluation of the yen and the five-week devaluation which is the longest and fastest since 1995 and i was in japan last

week and it was funny because i asked a japanese investor, what do you make of this? of course you are serious and i said yes we are, and of course this will mean a reevaluation of japanese assets and i said yes, but the bank of japan seems quite unhappy with it. in the sales tax will put additional strain on the wet and the response was, have the biggest problem and the world with demographics and a 50% tax rate on inheritance tax so it will solve itself. >> do they really believe that can help boost confidence in the treasury? >> there is 15 trillion in private wealth in japan and we know they have an aging inheritancend 50% tax is ¥300 million which is not so high for international standards. backup andthe chart

a look at the move in the chinese currency versus the japanese, how important is that cross? >> that is very important, the question is the japanese economy, china the moment that asia in general and east asia specifically and korea and taiwan and the fuji's and singapore and china itself has had declining producer prices for some time and china has had 32 consecutive months, so if you go back to china in the top three priorities when i talked to chinese investors say it is deleveraging, addressing the massive capacity and creating household wealth in order to create a consumption led economy not only credit lead. those are the top three priorities but then you have a

situation like 1998 we had devaluation of the yen and 50% since 2012 so this is very meaningful. you know that this is creating a problem in this is filtering in to the consumer and this is delaying a potential deleverage of your debt. 25% ins been leveraging the last six years so this is a big problem and nominal gdp cannot keep up with falling prices which sounds very familiar and is happening in europe today. in that situation they may add a fourth element which is that it is time to add in a monetary devaluation. >> if they do that is that more inflation to europe? >> i think the odd man out is europe because the u.s. has its own growth during i was there a month ago and it is obvious. the country is moving -- booming

and now with gas prices adding $1 billion the u.s. consumer is spending $1 billion a day on gasoline so you're adding $400 to every household in the u.s. going into consumer spending. the u.s. is fine and the stimulus on the oil has been a tremendous opportunity. europe and asia now have to address this problem. we are still talking to qe in europe and we have a situation. >> you could take a decision on cannot fight the decline in commodity prices? >> the answer is it is probably not, i think it is unnecessary but you need to have on top of monetary stimulus structural reforms. that areof reforms

straining relationships in paris, london and rome. france is delaying some of the structural reforms and until they address that that is really what will make a difference. believego ahead and we there will be a discussion into q1 but probably the effectiveness is to be debated. >> if they ecb and the eurozone is a victim of deflation and let's say the bank of japan wins that currency war, what happens in other asset classes. talk to me about the concern around the government japanese bond market. they are buying at an aggressive pace. >> that is a question i asked a number of japanese investors because i said is quite obvious that double their change in who is going to buy it and the answer is it is still a domestic

problem. the bond yields will not move massively but i do think it is concerning to see the movement in the european bond market, and in the event of deflation it's an asset by. we are continuing to talk to investors about unconstrained fixed income. >> to wrap it up what are they saying about debt here in europe with a yields in spain approaching 2% and the yields in germany on the 10 year around 0.8%, is anyone investing in that? >> that is a funny question, to take a short is-ish and it seems every no-brainer, yet investor i talked to said it seemed like a no-brainer at one and a half. i don't want to play that game. joining us this morning, thank you very much. coming up, getting crushed. can digital prove

they are not just a one hit wonder with a follow-up to candy crushed. back in two. ♪ >> welcome back to "on the move

." i am jonathan ferro in a very gray london this morning. 1%, let's 4/10 of bring you up to speed with some companies on the move this morning. ish mont -- richemont considering opening an online retailer they are and talk with banks to discuss options for the company and may consider a sale. porter iser -- net a not profitable. but the owner is set to consider ipo for 2015. carlo saysxecutive the company would reach its goal of a 10% up rise in march at this time it may change. the chipmaker set at deadline for the middle of 2015.

the chief executive is stepping down after 14 years at the helm after there was a bit of property battle with daniel lope. the ceo has been under pressure to cut costs and increase shareholder values. doing a research for the replacement. the car sharing service struggles with legal challenges that have forced its love of crisis and eliminated profits for uber drivers and turned it into one of the many share write services that have existed in germany for decades. king digital, the maker of the candy crushed saga has released a follow-up to the hugely successful franchise but can the new game prove it is more than a one trick pony. caroline, the new game and the same old question, better than the last one? >> they are actually taking a

different tactic they are employing the cult of the brand candy crushed, usually they would add saga but now they are dining out on candy crushed. and why wouldn't you? from thison a pulled game in the first half, one of the top grossing games ever since it was launched. the amount of times it is an played is according to 71 times the world population, 71 times 7 billion. you add soda soda, and it turns gravity up and down and there are new ways to get involved in the game and they are marketing this hard. are you a fan? >> kind of. river into ad the soda fountain display and had a seven meter high candy bear. >> this is what happens to

productivity in this country across the western world. >> we are all suddenly commuting, this is about general easy to play games but what is interesting is the company having to admit that this is incredibly hard to get anywhere to try to re-create the je ne se quoi that gets candy crushed happen. >> it is hard for anyone to beat it with a massive success it had , the players love it and the early indication is that they do. >> they have tried but as i said before they have employed the saga tactic, farm heroes saga, pet rescue saga and have done pretty well and have at one point and in the top 10 worldwide and this is why king digital has managed to rack up 500 million active users, that is more than the entire population of the united states

but the worry is they are not diversified enough in the worry is more than half of the revenues are coming from candy crushed saga and that we are starting to see revenues fall off. profit down 38% in many to show off that they are not just a one trick pony that they have a diverse pool of games. >> i talked about productivity losses, talk to me about the breakdown, is this 15-year-old kid sitting there in the u.s. in the u.k., where is the growth? if you get on the tube in london it is not 15-year-old kids, it is 40-year-olds. play general trivia as you are commuting but what is interesting the amount they pay lip service to asia. it seems to be about capturing that flow of growth they talk about japan, korea and china but they also say look we have to keep global in our perspective. >> there is big potential in

countries like india where the market comes at the right price point so i think all of those territories are interesting for us and currently with a big market growth is proven is in china but the other territories are also in the future. >> it is all about asia for them $84interestingly i think million in singapore. it is also not going to be an average easy to play game, not casual games anymore. they really start to broaden their typology. i asked them about the reality and they said when i goes mainstream, they might be in? >> more productivity loss. andng up a win for ukip rochester and what it could mean for may general election. up, the dax 62

points higher, you what to talk markets anyone a talk ukip you know where i am on twitter. ♪ >> welcome back to "on the move

." this is what the market looks like right now, the dax up by 1/10 of 1%, 73 points higher. everyone isman watching right now, mario draghi speaking at the banking congress in frankfurt. he's talking about declining inflation expectations, monetary policy and the single supervisory mechanisms. now these are the three stocks to watch this morning. >> m&a back on the table as if

it were ever off. we are talking about the holding company for the cable companies owned by patrick draw he, they are saying week telecom is a natural fit. massive synergies. meanwhile stmicroelectronics the chipmaker down. the ceo has been talking in a conference in barcelona and says look, we are going to take longer potentially to reach our key profit target because we have problems with demand shift and market trends. if that persists it will take longer than 2015 to get our margins. energy talking emanate -- author and -- ophir energy talking mergers.

thank you caroline hyde, mario draghi speaking at the european banking croson this -- conference in frankfurt. >> inflation is 0.4%. downward movement of inflation was primarily driven by the kleins and energy of food prices and inflation which are two components that tend to be --atile -- by food prices energy andeclines in food prices and inflation which are two components that tend to be volatile. they give valuable support to economic activity by raising disposable income. that inflation is low and the inflation rate that

strips out these temporary components. the rate of change in core inflation has been consistently low 1% with the latest reading for october at 0.7%. a low reading for core inflation for such a. of time indicates -- for such a period of time indicates that it is not only temporary factors that are affected but underlying demand weakness is also playing a role. indeed we have clear signs from data that week demand is contributing to low pricing power among firms. we also know that with high unemployment and many countries, workers have less power to negotiate higher wages which reduces inflation pressures. compensation per employee increased by 1.1% year on year in the second quarter and the lowest increase in three years.

we had no headline inflation in the past driven high energy prices, it was even negative in 2009 but at that time core inflation was already moving upward and said the economy was rebounding which provided us with comfort that inflation would pick up over the medium term. this time around the picture is different. complacent, have the very watchful that low inflation does not start economy is in the outlook. there are several channels which low inflation can have this effect, including a complicated price adjustments between countries and worsening the effects of it overhang. that -- debt overhang.

two prolonged periods of inflation become embedded in inflation expectations. the current manual for inflation expectations is critical under any circumstances as it ensures that temporary movements to not feed into wages and prices and become permanent. it is more critical in the circumstances we face today, this is because if inflation expectations fall the real which is the rises interest rate that matters most for investment decisions. because nominal short-term rates have already reached the affective lower bound they cannot be adjusted downward further to compensate for this. any da great --

de-anchoring of expectations would cause the opposite of what we want to see. we are currently seeing volatility in expectations and indicators are on the whole in a range with what we consider consistent with price stability. over shorter horizons, indicators have been declining to levels i would deem excessively low. survey-based measures of inflation expectations have generally been more stable but the latest survey of professional forecasters indicates some decline at all horizons, if we put this all together we see that it has been a sanction the ecb has acted and continues to act to bring inflation back to 2% and underpinning inflation

expectations, so how have we responded? our response is certainly been unconventional in the sense that are measures are unprecedented but it is far from unorthodox to. we have responded -- on orthodox hodoxed.ort we responded as any bank would do. the first step was to lower interest rates to their effective lower bound including below zero. point andached this if inflation is still too low and more monetary stimulus needed the central bank has to adopt new instruments to fulfill its mandate. the next logical step to ease monetary conditions is to ancient -- influence more directly the term structure interest rates which we did by introducing forward guidance last year. reaffirmed oury

forward guidance and the key policy rates which they low for an extended. of time in line with a subdued outlook. in the targeted long-term refinancing operations we have back to this up. as a result the level of the forward interest rate curve is currently uniformly lower than it has ever been. any point inan at the u.s. since the start of the financial crisis. both these steps have in common that they operate through steering current and forward money market rates. once the margin here becomes

exhausted, that is overnight the new york money market rates are both lower bound than a third step becomes necessary. further monetary stimulus is needed central banks need to bypass the money market and intervene directly in other asset markets to affect through crisis and quantities the various transmission channels of monetary policy. speaking in answer them early this year, i clarify the circumstances under which the ecb will need to resolve to asset purchases to increase meaningfully accommodation -- accommodation. to aggregate demand that woods threaten our baseline /or loosenecovery and the expectations. this is the point the ecb has reached but the governing

council's decision to initiate purchases of asset-backed securities and covered bonds. with our monetary policy decisions in june and september we have transitioned from a monetary policy framework aced moreced liquidity to a actively controlled balance sheet. this means there are no changes in the size and composition that determine our monetary policy stance, or to be more specific the markets in which we intervene in the magnitude and pace of our purchases. we expect such interventions to affect output and deflation through two main channels. the first is by addressing impairments in financial markets that have a direct effect to the real economy. this effect will naturally be

stronger in this market that is more important for the transition of monetary policy. began ourin mind we shift to actively deploy our balance sheet by focusing on the abs market. as this was a market that was both impaired and that had a tight link with bank lending which is the main transition mechanism of monetary policy in the euro area. our overall and two and sure your are no barriers to create supply -- and to ensure there are no barriers to create supply and increased demand. they would push down market spreads and reduce volumes available for investors in those markets and thereby encourage banks to relieve scarcity by originating more abs. if they can only do this by creating more loans then this

hopes to increase the supply of credit and reduce the price at which it is granted. the impact of these purchases will be bolstered with us ailing telltros.tell true -- theks it's manning on condition they expand lows to households and firms than the teltro will increase credit supply. both these measures will arise in the context of successful completion of comprehensive assessment. which puts bank and a stronger position to transmit our new monetary policy impulse. indeed there is already evidence that in expectation of the rollout of these measures that tanks are lower in lending ratings and increasing loan volumes. our latest bank lending survey

reported a net easing of credit status on loans and more general ly suggest we have passed a turning point in credit growth. channel through which we expect asset or just to work is the broad portfolio balance. let me explain how in principle that channel operates. as we buy assets, investors are likely to substitute the lower risk assets we buy with equities and possibly real estate. effects andl-known interest rates across the curve. via higher equity. therefore on balance sheets more generally. there are silly? 's as to how strong these effects are in the area, we do

not have precedents and therefore empirical data for economies such as ours which has a different financial structure from the one in the u.s. or japan. there is no question as to the size of these effects, it is clearly positive. given our relatively greater reliance on banks as social finance these banks could work particularly through the bank lending channel. asset bankside rising rices will free up capital resources for additional lending. combined with a general improvement in economic prospects and enhanced future earnings that can expand their capacity to borrow. substitution of assets can take place across jurisdictions which would take the form of investors rebalancing portfolios

away from euro denominated assets toward other jurisdictions and currencies providing higher yields. there is evidence that both the various large-scale asset purchase programs of the fed, as well as the bank of japan, quantitative and qualitative easing program led to a significant depreciation of their respective exchange rates, even in a situation where long-term yields were already very low, as in japan. the central bank can also expect to have a strong signaling effect. they signal that they will use all means available to us within our mandate to return inflation toward our objective without any delay. helps expectations and

lowers real interest rates. boosting activity and inflation. theory andic international experience suggests that the magnitude of portfolio balance affects is a function of the size of the central bank balance sheet. as this effect stems from the displacement of portfolios it is logical that the greater the purpose -- >> that is mario draghi speaking at the congress in frankfurt, i have lost mount -- lost count of the amount of times he referenced inflation but he talked about broadening the balance sheet to do just that. the move to the markets are the story, the euro-dollar drops below 1.25, 1.249 as he speaks now. where do you think the money is going?

spain, italy, yields at spain on the 10 year going toward 2%. you heard the comments, dovish, more of the same? >> more of the same but i think there are reinsurance -- reassurances that the market moves, had he said anything different over the what he said the past couple of months but that message is a comfort. >> what the headline say right now is at the qe has led to significant aspects of depreciation and i want to look at the euro-yen trade. qethe bank of japan is doing insignificant amounts and even though the ecb has done it rest against most currencies it has been relatively successful. than they have come down very quickly so yes the euro again as not gone the same way. >> we have to leave this on and

talk about politics, the of the political backdrop as well and here in the u.s. -- u.k. mark reckless who resigned from the conservative party was elected leaderiament and ukip spoke to nigel -- anna edwards this morning. >> victory in rochester is true and they have their second mp in westminster this is the u.k. independent party. the question i wanted to put is what ambitions they now have for the may election and what would this find success this is what he said. we hold thest if balance of power is to force and make sure that the british people get a free and fair recommend them -- referendum so we can decide whether to govern our country or not. >> he said he was to hold the balance of power in rochester, this by election he went on to

say has thrown british politics up in the air and many would agree with that. how has this change the politicking we see from the main party, we had a panel of commentators and tony blair and eduardo's personality and both of them agreed from a line we ard out of you go -- out of yougove, so the interesting to see if we see the parties talk about more about the agenda, immigration or whether we see them deliberately distanced himself from that and take the conversations to other areas. >> great work and a let's bring back philip shaw, he says it could be more than three parties competing for a spot in the coalition at next year us general election. morningg to nigel this you said it could be more of a

coalition and he says forget about no one can predict next year. is that the sentiment around politics? >> we do know there are a lot of disaffected people in the u.k. battling for parties and that means the idea of an overall conservative government or labor government is looking less likely in the question then is what sort of coalitions or agreements could we get in may. depends on ay number of issues and the dynamic does itkip vote and how take those votes away from the conservative party and the labour party and look at scotland, what does the national party do? does it take more than half of the seats in london, lots of things to consider. >> you're getting into bed and waking up with the miliband, that is the message from prime minister cameron but the message

from his acceptance speech last night, that is not a dig at the conservative hearty that is a dig at labor. >> if you look at the shares of voting in the election last night, labor's share of the vote drops almost as much as the conservative vote so the idea kip takes three votes in the conservative so was and everyone is labored it does not pan out. election it the may is hugely uncertain. it amazes me, you see mario draghi speaking of stimulus and growth and they all need you cap 's reason to want out of the u e and then you have the prime minister with strong growth at home and he has completely failed to translate that. even when the economy starts

growing, people don't get the feel precise, that is fairly typical. the economy is somewhere around 3.5% bigger. inh a gdp growing it was 2008. >> population growth does help apparently. thank you to philip shah, chief economist. back in two. ♪ is reportedlynt

considering an ipo next year. why are they considering the at the time when a lot of companies are shelving plans to consider ipos they are talking to advisors and considering how to structure and how to determine pay out. the main thing is there is still appetite for well-known brands, so jimmy choo also doing an ipo and companies are also preparing for next year. question, we be my know this brand in the u k and there is the male version as well but from an investor perspective we have seen several ipo's cancel, is that going to

pick up again? >> there will be a market window in which an investor who will be hungry for these type of thoughts, i think that is what richemont is considering. what do we do with this brand and how do we put value to the had we put more value to it, they are talking to advisors and getting some feedback on whether it will be an ipo or a sale. there was a condition of a few months ago about whether richemont would sell the brand and it seems that an ipo is the option. >> this was your scoop this morning, thank you for joining us. that is it for "on the move." 56 minutes into the trading session, only one thing to look at euro-dollar, that tells you

everything you need to know about mario draghi's speech. dovish. if you talk market follow me on twitter. good luck for the rest of your day. ♪

>> reckless wins in rochester. ukip takes its second seat in westminster as the anti-eu party delivers a blow across the political mainstream. presidentghi, the ecb says it is essential to get inflation back to target without delay. speaks in justk over an hour at the same event. and, crowning the king. can the maker of candy crush deliver a sequel to extend its rain? we are going to look at the future of mobile gaming.