year floor. the greek political drama enters its final act. draghi locks greece out of bond purchases until policy questions are result. that is what we are keeping an eye on here. those bond yields equities are rising. >> let's see how we are opening up this morning. 9 seconds into trading and we are starting markets to open higher. ftse up 1/3 of 1%/ . cap 40 trading higher. it is about the ecb injecting 60 billion euros per month. they will be extended to purchase across the board not just asset based securities. it is government, agency

institutional bonds, everything up for grabs driving optimism. driving that hunger for risk. that is how stocks are opening higher. we got better and is china. the purchasing managers index in terms of manufacturing, not falling as much. it was all about the ecb yesterday. that is what happens to the euro . 1.113 at the moment versus the dollar. down almost 2%. so big moves when it comes to currency. thanks for marriott draghi. big moves in oil. sad news on the back of the death of the king of saudi arabia. he lived to a grand old age. how it is trading on the day. up pops up 2%. questions about whether his

brother will continue with his predecessor's policies. also, will they keep their oil minister? big questions but oil markets are getting a boost on the back of the saudi arabia's king abdulla's passing. this is about ecb returning. borrowing costs driving down. italy down. 1.46% italy is looking to borrow on the 10-year. spain able to access the market at 1.3%. germany still less than half a percent. bond markets getting a push high er. a quick look at a few stocks this morning. we have got m&a. it is all about telecom. at least they find a buyer for 02. 10.25 billion pounds.

talk talk had been faulted as potentially what would be bought. trading higher. wait for premier foods. mr. kipling bisto. fourth quarter triaailing. >> thank you. breaking news on -- for france manufacturing and services. the composite drops below 50. 49.5 on the french composite. showing the economy is contracting below 53. three years of no growth. that is a headline in terms of the french economy still struggling. all part of the reasons as well as the deflation story as to why the european central bank took

such action yesterday. that is how the markets have started the day. equities are rising. let's try and make some sense of these markets. he is an advisor at credit suisse. bob, great to have you here. we have gone to the headlines. 60 billion, 20 year bonds. what stood out for you in the announcement and the news conference? what do you make of it? >> the first point is you have to see what did they do relative to expectations. and the fear in the markets two or three days ago that they were going to do something which would be less than expectations. and where the ecb has succeeded and succeeded significantly is they have managed expectations very well. they have come out with a program which is well in excess of expectations. that is why we have had a successful move down in bond

yields yesterday and today. and why we have got now 10-year italy and 10-year spain below 1.5%. i think they're going to stay well below 1.5. and also, although the ecb is very careful about what it says in public, i think in private they are very happy with the devaluation of the euro. let's not forget that the euro has come down from 1.40 only last may down to where we are now -- close to 1.13. >> for you as an advisor to an asset manager company, when you hear this block buster headline -- 60 billion euro rotorazers. it is going to take us a while to find out how much sovereign they are going to buy. and how important is the complexion of what they buy to the market? >> i am not so concerned about that. we do not -have the detail- they are concerned about that.

look at the transmission mechanism. investors such as ourselves now face at least a lot -- at least six months if not longer,a period of low government bond yields. in markets we have negative yield. >> 20% of european is negative. >> core europe out to five years is negative. what is that going to? do to investor intentions it is going to drive people out of government bond markets into corporate in higher risk assets. that is exactly what the ecb wants. logically, that should be a significant stimulus to the eurozone economy. in addition, the eurozone economy has been boosted by a number of other stimuli at the moment. we have the effect of lower energy and commodity prices. that should boost consumption. and the devaluation of the euro

should have an effect. we're seeing it in german export data. a significant effect on export growth. >> what about the banks selling their bonds to the ecb, then they get negative traits when they place their cash? >> the one weakness in the eurozone economy is the banking system, because if we go back over the last three to four years, the banking system is very liquid and demand for credit has remained weak. so what will q.e. achieve -- investors moving into riskier assets? will it succeed and boosting demand for credit? and will it succeed in boosting banks thanksgiving credit? the latest data shows that the client bank credit is now forming a bottom. we are seeing a very modest increase. the next two to three months are going to be critical. i'm assuming we will see an uplifted in lending data.

but the transmission mechanism between q.e. and the demand for credit is fairly opaque. >> we will have to leave it there. we, do you think the danes will stand in defense of their peg? >> i do. the situation for the danish rkkroner is different from the swiss franc. people have the habit speculating are just wrong. in the case of the swiss franc let's not forget that we have a current account surplus of 12% of swiss gdp. therefore, one had to challenge the swiss maintaining that peg medium-term. the danes are in a very different position. >> thank you for all of your take on all things q.e. and we are going to take a quick break, but some news out of sony. the company will delay the

release of third-quarter earnings as a results of the hack attack. we are going to bring you up-to-date as we learn more on that. up next, we will add to -- out to davos. we will speak to unicredit. a take on q.e. what it means and when we come back. now also coming up on bloomberg a little bit later, do not miss our interview with the bank of japan governor. ♪

>> thank you. i'm pleased to say i am joined by the ceo of unicredit. thank you so much for joining us. braving the weather. in terms of your focus, the banks are going through a period of adjustment in europe. what you make of what the ecb announced yesterday? does it change radically the way that investors should perceive hang seng europe? -- perceived banks in europe? >> the price in the market. so sentiment is improving. business, i do not think it will change dramatically. for banks, it will mean more liquidity.

[indiscernible] customers will benefit in terms of -- the exchange rate. euro-dollar. the so be translated immediately and the real economy. what is missed is the e.u. actions. but overall, it was expected. and left some positive effects long-term. >> how much of it was priced into the shares? it had an impact on the euro. >> most was already price because the market was expecting such a move. we have some benefit as well in terms of pricing, but i do not think it will change to radically. >> give me a sense of what your biggest concern for this year was. it is quite difficult for the transmission mechanism to be clean.

if we look at the other side because the regulators and what they're asking. >> europe i would say three major concerns. one is regulation. still, the environment is not fixed yet. we have a big discussion about -- [indiscernible] you know the story about russia and ukraine. the mediterranean region in general. finally, for banks, margins. compensates i would say by an increase of commission that comes mostly from an increase of trade business, exports. and asset management. would be quite demanding in 2015. >> and you think the transmission mechanism is going to be alleviated a bit? >> we are more positive. 15 versus 14.

they have an objective reason to think the economy will benefit from prices going down. the euro level rates are good for companies and less for banks. we've seen that some countries -- some reforms coming such as labor reform. i'm more positive in 15 versus 14. buti know it will continue to be a difficult year. gradually the growth will come back. >> you also mentioned geopolitical concerns regarding the ukraine. what is your outlook for russian, given the price in oil and the weakness of the ruble? >> i think 1.15, the oil price will not change too much. it is difficult to say 75 to euro 60 80. but it will continue to be weak. gdp will suffer.

-4%. [indiscernible] our business in russia so far keeps going quite well. we enjoy some business coming to us. froma multinationals. but russia is putting some? question marks. >> in general, you expect more consolidation. i was going to ask the effect of the rents he reform -- the renzi reform. how much that will change the perception of the country? >> this reform was waiting for the last 20 years. i think the banking sector in italy has two main challenges. one was governance. the governance in this bank was not aligned with expectations of the market.

it's opened up the market. and potential consolidation looking forward. the second big task is mps. the stock is quite big. also, this topic has to be addressed hypothetically. [indiscernible] the market will become attractive for investor. >> what is the question that you get asked the most? you are italy's biggest bank. to people want to know about reforms in italy or about banks? >> we see more questions about italy. this is good. >>a lot of curiosity about italy. venti is known but not that much yet. political believe that italy -- a prime minister keeps talk

about reform. my view is that the last few months, the speed of change, is accelerating. this is have to be -- is has to be perceived in the market. >> do believe there is still a italian discount? if you had the same business, if your bank is headquartered somewhere else? >> still there. we have to be honest with ourselves. we as a country have lost some credibility. we have lost time, in the market has discounted this in multiples of our business banks and industry and credibility and trust, etc. it is not the end of the story. we can catch up but we need to move with determination. >> and when you look at the rest of the year this is almost a philosophical question but last

year was maybe the year of the central bankers. if you look at business, politicians, regulators, 2015 is the year of who? >> is the year for brave entrepreneurs. because i see a lot of potential. [indiscernible] for example, we decided to burn september 7.8 billion euro from the ecb. we are very much ahead of expectations. we are thinking to use the money within june or july of this year to complete the disbursement by the end of february. all this money goes for investment and medium turn lending. this is good. entrepreneurs to start to believe it is time to invest. government is on the other side.

investment in infrastructure. we cannot waste time in talking. >> thank you so much for answering those questions. very interesting. you also have your eye on technology. we will have to get you back on to talk about that. the seal of unicredit. we will speak to the bank of japan governor -- the ceo of unicredit. you do not want to miss that interview. we will give you -- back in a couple minutes.

>> welcome back to>> "on the move." the ecb. let's put it in context. the dramatic decision. they decided to go with quantitative easing. 60 billion euros. it sent stocks up across europe except for swiss stocks. let's go to our man on the ground who's been doing research in terms of what everyone is paying's. -- everyone things. it is jonathan ferro. the power brokers that are there in davos what has been the reaction any assessment of what draghi did?

the markets have moved. >> it was well flagged, but it was a really good job by the ecb. tehey laked a number -- they leaked a number of 50 billion. then they beat expectations. the consensus in daovos is that this was a big delivery from mario draghi. you talk at the big names and the view is that this was necessary but not sufficient. john dawson foreign said exactly that. this is what we are hearing over again and again. >> i think is welcome action from the european central bank but action from a central bank is necessary but not sufficient for a european recovery. we want to see this accompanied by a clear plan to make the european continent more competitive. to create jobs. to make sure our public finance

is in order. we have all those ingredients in the u.k., and that is why our economic plan is delivering strong economic recovery. we want to see all those ingredients in place on the european continent so the whole of europe recovers. >> we have got the monetary policy. he delivered it. it has taken years. now a new the structural reforms -- the magic word -- reforms. the view out here is that this buys time. but they have made a commitment -- a 60 billion a month. we were talking to the italian central bank governor and he intimated that that is an open-ended program. we have a mandate. we will pump the money until we hit it. >> jon, good work on the ground in davos. i am tweeting out these pictures of you in, what are they braseries? where's your google glass? >> i cannot stand the google glass.

i cannot stand the google. -- they are back at the hotel. >> i'm home on monday. >> have a great day. our davos virgin. coming up, we will speak to the ceo of cisco systems and the governor of japan's central bank. you do not want to miss these interviews. they are going to shank what -- shake what you think are john chambers is coming up. kauruda also coming up. what next for the bank? let's check in on equity markets. day seven of equity markets rising. the euro-dollar at an 11 year low. opaat an.

60 billion euros worth of quantitative easing to come. the euro is trading lower. we have not seen at this low. 2003. for the euro against the dollar. we are trading at 1.1348. join me on twitter. @manus cranny. ♪

>> welcome back. this is "on the move." i manus cranny. 30 minutes into the trading day, equity markets are rising again. day seven of equity markets on the march. the dax is the real leader here at 1.6%. qe, the announcement yesterday afternoon, all doing very nice. >> i've got a telecom for you. m&a as well. 02 will be snapped up by hutchison. they are in talks to buy it for

10.2 5 billion pounds. getting that off its chest as it cashes in on that particular asset. the m&a doesn't stop there. the telecom furor extends its tentacles to south america. altice is topping the leaderboard. the french company owns the cable company. this is a company getting its hands on portuguese assets owned by oi in brazil. telecom shareholders have said, yes, portugal telecom is allowed to be sold by oi to alticve. altice is getting its hands on portuguese assets today. that means there's more money to be spent in brazil. that's why telecom italia is moving higher. oi manages to get rid of its

portuguese assets and has cashed a splash in the brazilian market. what can it buy? [indiscernible] i apologize for my pronunciation. it is a key player in brazil and it is owned by telecom italia. a lot of wheeling and dealing. brazilian m&a in telecom is helping telefonica. altice getting a boost as it gets its hands on some portuguese assets and telefonica cashing in on the u.k. back to you. >> ok, from telecom stocks to our top stories at bloomberg. saudi arabia's king abdullah has died. he was 90 and had been suffering from pneumonia. his half-brother salman will succeed him on the throne of the world's biggest oil exporter. oil prices jumped after the announcement of abdullah's death. china's manufacturing gauge

recovered from january suggesting that stimulus measures have helped stabilize the economy. the preliminary purchasing managers index came in at 49.8, beating analyst estimates. stocks in hong kong and japan both closed up more than 1%. the crucial election in greece is in its final stretch with new polls indicating the anti-austerity syriza is in the lead. the next government will decide on expanding the bailout program that expires next month. voters have been increasingly attracted to syriza's opposition to the bailout. investors and creditors worry of the implications of its potential victory. let's focus now back to currencies. take a look at how the euro is trading. mario draghi's big decision yesterday. we are joined now by senior strategist jeffrey.

right to have you with us. we are looking at the euro, a new 11-year low this morning against the dollar. euro-yen again moving. what did you make of the 60 billion euro announcement? >> 60 billion euros a month -- surprising to the upside. they were probably expecting slightly below one trillion. it is also the flow coming through. that in itself is probably a surprise. the question is, when, and why is the euro still lower? we are going to be watching the polls closely. is that going to generate some negative effect? i think the conversation may have to shift toward, is the dollar the driving force here?

it probably isn't in a condition to cut rates or think about higher rates or nonnegative rates. >> larry summers on our panel yesterday with francine was a little bit vocal in terms of raising rates could be the policy misstep. i was just trying to think, how do you describe the dollar? i was watching it during the press announcement at the highest level since 2003. that would give them a stronger dollar again. that could have implications in terms of the recovery. >> that's the case, then we are looking at the wrong central bank. the key decision was the bank of canada. if you look at the fed's import measures, we could actually have euro-dollar below 1.10. i think the fed would be ok with it. [indiscernible]

he supports aggressive policy from europe and japan. that is coming from the fed side. what are the three most important currencies? dollar-canada, dollar-mexico, and dollar-china. dollar-cad already well through 1.20, maybe on its way toward 1.30. dollar-china is wavering right now. let's say we get a negative shock. then, dollar-mex goes through 14 15 or 3.17, 18. then, the fed has a problem. don't really think the ecb matters. the surprise decision for them was the bank of canada. the largest bilateral trade relationship in the world. >> to me, that shows a central

bank that's actually very aggressive and will fight. what does it mean for the other commodities? if canada cuts off new zealand, do you think they will go next as well? >> the immediate reaction was will australia and new zealand the next? australia is relatively liquid not as much as canada, but it is at nonzero. after the swiss move -- >> i love it. >> you are going around the world looking for -- and we are not just talking about cash rates. you are looking for the entire government benchmark. immediately after the swiss move, we saw the cash, the 10-year rate we are seeing that

allocation effect already. let's forget about china look let's forget about the cycle. they have to react. >> they have to cut rates. >> if we identify the usual suspects right now, australia canada, scandinavians singapore dollar, that could attract interest as well. hong kong-dollar as well. i think that allocation affects people chasing nonzero cash. >> chasing nonzero cash. rand, i get that. singapore, aussie canada. sterling, why not. 0.75 almost seems like a frothy rate. how do i find those trades? do i find it in yen or in euro? or have i got it wrong?

>> i think the smb is doing a good job encouraging you to fund that with swiss franc's right now. yesterday was the day when the new negative deposit rate started to take effect. we are seeing some domestic swiss banks charging account holders negative rates. if that goes lower, you could see the swiss central bank trying to get some funds out of these markets. it is very liquid right now. >> very illiquid in terms of the swiss, tell me what that means. are the big players going, we don't want anything to do with this trade, euro-swiss? >> you have to look at the two sides here. in hindsight, the big liquidity providers the swiss francs and the smb. they went away. there was alllways somebody

selling swiss franc. that tends to affect markets as well. the market makers right now are adjusting. that's one side of the liquidity story. the other side is these portfolios with large swiss franc holdings. we identify the cash flows. they need to get dollars in and euros in. normally, they should be recycling it out. that hasn't happened since the euro zone crisis. are we going to start to see -- >> so they've got to leave. they've got to vacate their space. they are going to be charged -75 basis points. take that flow -- we've got the first story, which is chasing yields. now, you've got flow of money

out of switzerland. is that where that flow of money is traveling to? is that a consequence for the bank of japan? we are about to have a conversation with kuroda. is that a fair assessment? money comes out of switzerland, where does that go to? >> keeping liquidity was the first issue. then, maybe some money did go into the euro and sterling. these are the most liquid countries in the world. you have to slightly appreciate the currency. the bank of japan is going to look at inflation forecasts. are they going to start to push away? the yen was more of a reserve currency then -- it is probably twice that amount in reality. yen is an issue. they will push back, absolutely.

>> i think we've covered the world. geoffrey yu great to have your perspective on all things foreign exchange. geoffrey yu, senior fx strategist at ubs. coming up, we head back to the snowy slopes in davos. your next ceo, it is cisco's ceo. later, you do not want to miss this conversation. it is the bank of japan governor, kuroda. ♪

>> welcome back. this is "on the move your co king abdullah of saudi arabia has died at the age of 90. king salman has succeeded him. ryan, before we begin this conversation, i'm going to give you breaking news. you and i are going to talk about what this might mean for the oil prices. the new saudi king says he will maintain policies of the predecessor. you and i were trying to put this in context. what do we know? what are the issues around his succession? >> the price of oil, wti brent, did jump over the uncertainty. nonetheless, it didn't jump that much. brent still remains at $50 a barrel.

i don't think this is a big surprise, that king salman is saying that he is going to continue the policies that king abdullah pursued. king salman when he was crowned prince gave a speech that said the oil policy will remain in place for the foreseeable future. it is as if they've been preparing us for this change. the man to watch is saudi arabia's energy minister. he, in many ways, calls the shots. when he decided and effectively forced his thinking on opec at the last meeting, that it is not in saudi arabia's interest as the largest crude producer to cut production, he knew that effectively what he was doing is entering a game of chicken with crude producers, she'll producers, around the world. saudi arabia has no interest in switching course midway. it is much more in saudi

arabia's interest to get those shale producers out of the market, remove them as competition, than cut production watch the oil price rise, and have other companies provide that capacity and enjoy those gains. he has said as much himself. >> if you ever want a lesson in the long game i suppose this is what that is. the saudi's have a financial pocket. >> they do. almost $700 billion in reserves. they can deal with a couple years of pain. don't forget, the saudi's believe they may be able to pull off the change they are seeking, shaking out those shale producers in the united states as quickly as half a year to a year. they don't think this has to be a long game. if you go back to the 1980's,

there was a time when the saudi's decided, we will cut production. what they saw was a huge amount of production in their absence come out of the north sea. >> the rigs, the shale boom, many people are saying -- you and i have spoken with other people -- the shale boom is what the north sea was, in many ways. again -- but opec doesn't have as much bang for their buck anymore, do they? >> i think that's exactly right. i think they recognize that. they control the majority of the world's reserves, but when it comes to production we are talking between 30% and 40%. the fundamentals of the market are, the united states is producing more oil than it has in 30 years, and in addition to that, inventory from the united

states remains high. we learned last week that they are about 12% over where they have been for the last five years. so, there's plenty of stockpiled oil. there's plenty of oil coming out of the ground. the russians are pumping like mad. what are the saudi's going to do? >> it is almost like defense of the realm. they will be darned if they are going to give any up. they are still selling their oil at near record low levels in terms of what they are exporting. >> when you talk about breakeven price, for the saudi's, it is almost nothing. like 10, $15. there's a lot of it. there's a different breakeven price for their budget. you and i were talking about the reserves. that can tide them over for the next few years in terms of

dealing with their budget gap. you look at other countries, that breakeven price is much higher. russia is only a little higher. the united states is higher. the way they are looking at it this is a good way to take the hit on their balance sheet, in their budget, but they are still making money as they pump oil. they just have to push through this process. it is not just as far as the saudi's are concerned. it is not just about getting rid of the shale producers that are creating this havoc in the market. they've got iran next to them. they are annoyed by iran. a lower oil price hurts iran more than the united states. >> ryan thanks for putting that in context for us. let's take a quick break. equity markets are rising. the ftse, 6831. the dax, 1.5% is where we are.

equities are rising. bond yields in spain and italy are making record lows. less than 20 four hours after the european central bank announced their quantitative easing program. ♪

>> welcome back.

i'm manus cranny in london. we just saw the euro dipped. i just had a conversation with geoffrey yu saying the fed will be more interested in what is happening with dollar-canada, dollar-mexico, dollar-china. jon ferro. >> thing you very much. 1.12 on the euro. i've got tom keene sitting next to me. remarkable moves. >> very much eurocentric. we've seen some gyrations in asia in the last 24 hours. it is clearly about urodynamics. >> when i look at the bond markets and i see yields low and i look at the two-year negative in germany and france as well as you look back on the bond markets, have you ever seen anything like this? >> absolutely not. that headline yesterday, we will buy negative yields -- to see the concept of buying paper but

to pay them to take it is surreal. >> i look at the ecb pushing down the euro, the bank of japan pushing down the yen. i go to america and i look at the federal reserve. do they keep tolerating a stronger dollar? >> that will be next month's debate. it is not 1995, but we are going to have many more conversations particularly with corporate officers, about dollar ramifications. over 50% of multinational s&p earnings in the united states come from abroad. >> we are going to leave it there. tom will have a series of interviews through the day. euro-dollar at 1.12. parity, we could be there before you know it. >> have a great weekend. say hi to tom.

nature he stays warm. stay with bloomberg. "the pulse" is up next. in just a few minutes, we will speak with the eu economic minister. we will bring you coverage of charlie rose's conversation with jack ma and we will be interviewing the bank of japan governor, haruhiko kuroda. you do not want to miss that. quantitative easing what does it mean for the bank of japan? let's check in on the equity markets. we are seeing the markets move higher. this is after the european central bank took that historic moment and announced they are buying 60 billion euros worth of bonds. you can see, the paris market up 1.75%. let's check in on euro-dollar. it is the new handle, they call

it in foreign exchange land. 1.12. we have broken through that 1.13 level. this is new territory. join me on twitter. i am @manuscranny. ♪

>> the deflation debate. after draghi's news yesterday we are speaking to japan's central bank governor. >> the man that everyone wants to meet in davos. we will hear from jack ma. >> and, saudi arabia's king abdullah has died. his brother will succeed him. good morning. welcome. you are watching "the pulse."