rate. -- the stock exchange opens in 30 minutes time. at the market open you will be looking at bp stock. finally they agreed to buy ee for 12.5 billion pounds. dax futures down by 52 points, futures up by 34 points, manus cranny has your market open. manus: down eight tenths of 1% is more than a little. based on the reaction in new york, it really set it all. this meeting with the ecb was a regular meeting, we understand now from standard chartered. it is pressure on the government that banks will be able to turn to their central bank and the real risk we understand will be when the european central bank begins to tighten the chances on

the greek central bank. today it is greek -- greece versus germany. warren buffett is saying the fed will find it tough to tighten rates. let's check in on some of the stock moves is see this morning. they have their numbers down 1.4% in terms of some of the individual names, bt did the deal of 12.5 billion pounds giving deutsche calm a stake in the business -- deutschecome a stake in the business. what you have there is a delivery by para boss -- paribas, the lowest annual income since this company was put together, bnp and paribas.

corporate and investment banking did a little bit better year on year. 556 billion euros. legal costs of 1.1 billion. this is the big gear producer in switzerland. demand up $.72 for the salesman and they have appointed a new chairman. they say all the growth this year will be around 10%. jonathan: so much to watch this morning. looking at a lower market open here. the dax is a little lower as well. since the market opened here in europe, of course it opened dominated by the story of the day, the ecb turning the screws on greece. the european central bank announcing they would restrict loans to the nation. that came hours after the greek finance minister met with mario draghi.

how do you think that meeting went? greek stocks opened up in less than half an our time but if you want a hint, check out shares in the u.s. listed etf. you see that etf plunging on the back of that news. the greek of finance minister continues to talk today, he meets with the german finance minister later on. let's get with hans nichols. what are we expecting from that meeting? hans: we are expecting the german finance minister to present this unified european front. what you saw, out of the ecb last night when they announced they would not be accepting recruit -- pre-collateral greek debt as collateral for ecb loans. there is a separate issue greece's ability to issue new get. they're running against their limit.

they want to get it up to 25 billion, a 10 billion bridge. but they need acquiescence from the ecb, the imf and the troika. we don't know if that will be granted, but the hardline last night on using greek debt as collateral suggests that might not be the case. the greek finance minister tried to put a brave face on this. they said the greek banking system remained adequately capitalized and fully protected under emergency liquidity assistance. he did answer interview with german television last night, it is still more of what he told in the interview that he has obligations to his own people to try to relieve the onerous obligations on then. jonathan: we go back to the ecb

story it looks like greek banks will still have some access to ecb windows, what is available and for how long? hans: you have ela's, emergency liquidity assistance. every two weeks it is reviewed whether a country can have access to these. they still have access to that it is reviewed every two weeks. one important thing is the cost of borrowing under the ela window is much higher. when you look at what is taken away from greece last night, they were given an annual rate of .05 percent. it is considerably higher and will put pressure not only on greek banks but on the greek government. then they will see if they have the long-term availability to access these great -- greek banks if they leave the bailout program.

then things can get really ugly. jonathan: as if it wasn't ugly enough. andy joins us now the executive director at schroder investment management. andy, great to have you with us. take the inside the financial system here. on the surface it sounds like they turned off some liquidity. hans:andy: when you get announcements like this, and you think who will take the pain? the stabilization funds, currently owns or 4% of the greek bond market and those bonds have a average duration of 32 years. if the whole thing goes pete and the greeks -- peak and the greeks believe, there will be a huge -- on those bonds.

at the moment, they will have to pony up the money. if you are hsbc, you will be looking at your exposure, how much greek bond on your balance sheet. you probably don't want any and they will be selling those. if you are in greece, we have seen them withdrawing billions of euros. when that starts it is very hard to stop. all the fighting is invariably leaving to the excel a ration of greece leaving the euro. jonathan: what is stopping me from taking my money out and putting it in another european bank? andy: nothing at the moment. if they get restricted funding, then they haven't at the cash. thanks, in theory, cannot alter it up and say i will have my money back. people will be looking at the euro saying it is not worth the

same -- printed in greece is not worth the same as someone else. jonathan: is it strange that we could get capital controls in grace? andy: they will run out of money and then they restrict funding. you solid happened interest cyprus, people said i want my money back and they said you cannot have it that you can have a bond tied to the share price of the bank and you might get something back in 10 years time. you might see crowds in greasing i want my money out now. if they -- crowds in greece saying i want my money out now. if they do -- jonathan: they are playing with fire. in your opinion, are they abusing their power? andy: it is a bit like being a parent. i have three kids. if one of them comes up to me

and i give in to them, the other two ask for the same. labor the ecb -- same favor. the ecb are in that position now. if they give into greece, they have spanish elections in may and the italians will say -- why are you looking out for that country? why are you looking out for that child? an impossible position. jonathan: we will talk more about the politics and what this means after the break. a quick check on the top stock stories. bt will finally by ee for 12.5 billion pounds. over in germany diamler beats estimates. that stock trading a little bit lower and bnp paribas france's largest bank reported a surge in fourth-quarter stock.

we spoke with the company cfo. >> of course there is a major exception the fine paid to u.s. authorities but as you know the bank has taken remedial action and this is basically the top line. it has blown in all -- grown in all businesses. ♪

jonathan: welcome back, i am

jonathan ferro live from the city of london. greece dominating the headlines. the ecb tightening the screws on greece was drifting after restricting access to funding. -- restricting access to funding. i want to start with you, talk to me about the politics. you have a meeting with the greek of finance minister and then a couple hours later a decision. not exactly a ringing endorsement of greek politics. i think the ecb is sending a clear message that greece will have to comply to the program because the deadlines are very strict. at the same time it is also sending a message to the rest of europe. because as i said the deadlines are very strict. greece is going to be running

out of money if we don't get a new program. jonathan: andy what is your take on the cash crunch? could the 20 days or a month? andy: if you see people queuing outside banks, like over here when people are queuing outside northern rock, it disappears overnight. if you're sitting in greece watching bloomberg, which they are, they could be saying i need to get to the bank and have my money back. then as we saw in cyprus, they suddenly go. it is the rest of europe that pays the price. vasileios: i fully agree with that. i don't think it is so much of the additional cost burden accessing liquidity through a more costly operation, i think it is much more about a signal. we have a firm stance right there. and you need to get your act together.

jonathan: a signal for spain as well? andy: look at some of the opinion polls in spain. they look like they have a good shout running up and spain is a big economy and then you go to italy, the third-largest odd market in the world and even germany cannot say that. are we seeing the whole project unwind? let's sacrifice greece and hopefully hold the whole thing together. jonathan: and he said to me before the program started, in football germany always wins, i asked if they win this time? you see the people in greece push toward making this very decision. the extreme left if you want to call it that. how does that the -- political contagion rollout? vasileios: i am not entirely

sure about greece. voters rolling over to the left -- there was a good article in which it was really discussed that basically the anti-euro austerity voters did not increase in size but reshuffled themselves. from smaller parties. i wouldn't call it a matter of winning or losing, but i will say this -- i think the equalization government will have to grow through very serious contention enter terms of what they have actually announced in the pre-election. andy: what europe desperately needs is inflation. you are getting cuts in salaries

and deflation across europe -- the moody report, one of the top firms in london said their downgrading the german life insurance interest-rate -- industry because they cannot make any money off the interest rates. vasileios: personally, i think we will start seeing some sort of a pickup in demand and inflation. i think this is largely going to be filtering through laurel -- lower oil prices. jonathan: when i look at the italian bond market, up a couple basis points. that is good news for the rest of europe and if europe once the tie i hard line they have the markets on their side. andy: the bond markets have been so distorted by qe, no one knows the right price for a bond.

and that causes a dilemma because everything is priced off the bond market. people say equities are cheap, if they are cheap next of bonds, but if bonds are expensive, what does that mean? what we're seeing now -- because of qe intra-europe, a negative -- because of qe in europe, a negative bond? vasileios: i think the observation is very right in terms that the market is not pray -- paying attention to greece. not only in the bond market, you can see with the euro, as well as the equity market, it is now the first year that we are seeing a strong outperformance related to u.s. equities. jonathan: they missed an 8% pop. vasileios: the market is taking

a view that we don't care so much about greece right now. jonathan: the bond market needs to decide what a bond is worth and no one seems to know, the ecb is coming to the market in march and i look at the greek banking system and stocks. does that pose systemic risk? have we been lulled into a false sense of security? andy: no one knows from where we sit how many of these greek bonds or loans sit on the balance sheets of u.k. banks. european banks could be quite exposed. the danger is if greece is force-out then you have to write down the value of your assets which means you can lend less money. the u.k. has been through this and the u.s., the european banks haven't taken any haircuts as such.

the last thing they want to see is that. if that happens then the banks lend less money and europe continues its downward path. jonathan: another reason to sell the euro? vasileios: i think risk for the downside remains firmly in place. unless the unthinkable happened in which greece exits the euro where there will be a period of time with excessive a la tillie, the euro will not be traded on the back of greek development. it is still trading on the diversions between the fed and the major central banks as well as all the discussions about qe. having said all that, i don't think the euro will relapse to parity or below that. i think it could start providing cushion further down the road.

we have to take into account that we are seeing some improvement in service. jonathan: it seems that ecb still holds all the cards, thank you for joining me this morning. thank you both. up next, more about greece. and bt has agreed to buy ee. more on that 12.5 billion pound deal after the break. ♪

jonathan: welcome back to "on the move." bt has decided to buy ee for 12.5 billion pounds. caroline hyde joins me now they finally confirmed the deal. caroline: a lovely quote on twitter saying, the end of the foreplay, now let's talk about quad play. they want to be able to open mobile as well as tv and landline. that is worth 12.5 billion pounds. there could be some regulatory issues. we are ready have the ceo of vodafone saying competition is

the market authority, it will need clearance but we think this will go through because the number one player -- the way they will do this is they will be funding it with debt and one billion pound share placement. interesting they are inching higher. nevertheless, the winners intra-this are deutsche telekom -- the winners in this are deutsche telekom. they are keeping 12% in the enlarged bt and cash from the orange defense player who wants 3.4 billion pounds in cash. but this dealmaking is rife. we have patterson saying this is

a world-class digital infrastructure. jonathan: can we expect more? caroline: we still have players to come. bt plus ee, it is eyeing up 02, could it by telefonica's 02 unit. sky has got into bed with o2 offering mobile services with broadband and television, it has quad play down. vodafone has signed a deal with bt to offer broadband. it wants to build its own tv network itself. but noticeably absent in terms of m&a. jonathan: the other big story is greece. we will be talking about it after the break. reacting to last night's decision to restrict some liquidity to the greek banks by the ecb. the yield up 278 basis points.

hardly any liquidity in this market we will be talking about bonds. stay tuned for that. ♪

jonathan: welcome back to "on the move." i am jonathan ferro. 30 minutes into the trading day. here is your picture of the markets. ftse 100 lower by half of 1%. the dax is up by almost one third of 1%. ftse mib in italy. the greek stock markets just start to open up. many people expect losses to

accelerate through the morning. the ecb removes some financing for greek banks. that is the equity market story. the moves in the greek bond market are quite significant. there is very little liquidity here and only a few trades, but a three-year up 330. greek yields are higher. we want to dive into these markets and look through some of the top stories, with caroline hyde. caroline: doom and gloom if you happen to be on the equity market. security us, -- securitas they provide guarding, they give you armed guards to monitor safety at these areas.

it is the second biggest guarding service provider. the shares for -- are at the highest level for 12 years. meanwhile, nokia and ring cap -- gnocchi and rent cap -- nokian renkaat, third quarter sales beat analyst estimates. they say, they will be a little bit lower than previous years. there seems to be relief that the sales have beaten and it -- analyst estimates. meanwhile swatch, feeling the pain of the swiss franc.

the worst performer on the stoxx 600 this morning. i'm changed for the first time in five years. clearly this is a company that no longer wants to promise handouts to investors. putting off sales of course saying they are already seeing some of their brands raising prices as much as 7% to upset the surge in the frank. --franc. if you're selling intra-europe, less bang for your buck. they say, already 138 million francs have eaten into their gross revenue. they say we are selling well but when you convert that back and it does not look so pretty. jonathan: swatch having a tough time and greek assets having a

rough ride as well. the ast getting slammed it now up by 9%. the yield on the 10 year increased by over 100 basis points. the yield up i over 300 basis points. not much liquidity yes 81% of greek debt is housed in the official sector that still pretty ugly. greek bonds are the story this morning. the focus after the ecb decided to cut off some financing for greek banks. that is the news just hours after the greek finance minister met with mario draghi in frankfurt. let's go straight to hans nichols. all eyes on berlin today. hans: all eyes on berlin and

whether or not he can walk act this crucial aspect which seems to be the approximate cause of the precipitating event. they have decided to leave the bailout program. that expires february 28. after that, greece has said they want to be on their own. what the ecb is saying is, not so fast. if you are going to be on your own, you'll have a difficult time borrowing. a couple of issues, their ability to use greek debt as collateral and the other issue, can they issue more t-bills. more short-term debt? they had went to get bridge financing, if they don't do that, they will have until february 25 then they will run out of cash. before, they will have enough

money to go all the way into the summer. it is just one of the many crunch dates. one thing he said, even though we might be the first, no, we are not responsible or the domino effect. we are but the canary in the coal mine saying we are not to blame if this goes south. jonathan: you will be all over this story i'm sure on "the pulse" and "on the move." i'm joined by the fixed income and i share strategist over at blackrock thank you for joining us. i am looking at a three-year note in greece. what can you read into that? stephen: i think what that tells you is where he worked six months ago when greek yields were getting lower and lower and

lower, there is dramatic change and i think to us the key thing is what is the contagion outside of greece. what happens to greek assets and what happens to european equities? three years ago, anything like this you would see an immediate reaction. in the last couple of weeks what you have seen has been fairly muted. they have underwritten to enter extent the other bond markets. jonathan: i look at the 10 year in italy, up just a couple basis points. for you guys, you sit at the table at blackrock, the word "grexit" is that coming up? stephen: it comes up a fair amount. we still believe that ultimately we will end up with some kind of compromise. i think there is a lot to lose on both sides.

what you saw with the ecb last night was to say this cannot keep dragging on. the ecb is a huge player and mario draghi will be worried about the contagion risk throughout europe which he has worked hard to undo. greek exit is definitely a risk. clearly you cannot ignore the rest. jonathan: i look at the banks this morning and the equities in grace, down over 20% as ecb tightens up some of the financing when you look outside of that and look to the debt markets -- and the credit space, what are you seeing? is it brutal in the sovereign debt market for greece? stephen: yes, there are some liquidity issues around good credit. the thing we have seen is bifurcation over the last three

or four months. you have this race to the bottom led by the ecb and the boj, driving these yields lower, pushing money into other markets. it is going into guilds, treasuries and high-quality investment-grade debt. then you see the crossover into the higher quality of high yields. they have not touched the triple c space. it is driven not so much by greece, but by the easing of the central banks. jonathan: let's talk about that, taking it a little way and greece, it is still connected. is there still risk in italy and spain? when you see yields this low that started out with high-grade paper and lose the long maturities for the 10 year and the 30 year in switzerland and the 30 year in germany now we

enter the corporate space with a negative yield on nestle, how much risk is being taken? stephen: i think that is a trillion dollar question in terms of the idea of where does this journey and -- and end? it has been moving lower and lower and works its way into credit. what is starting to happen is we are starting to see more idiosyncratic risk. we have a lot of m&a. a lot of companies paying dividends and doing share buybacks. we are starting to see that filter into more leverage in some parts of the economy. a little bit more aggressive m&a. companies being downgraded.

we've seen some accounting issues as well. there is the idiosyncratic risk starting to build up particularly in the lower part of the credit market. kind of the by everything impression that we have seen over the last couple years is not the market at the moment. that is one of the stories that will of all this year. jonathan: have you changed your strategy as we come into this year? stephen: it has become more selective. you have to be careful around the names and we have seen what can happen when energy drops. look at the yueh fight oil market, that has started to settle but outside these things like fixed energy are very important. it will depend on greece and contagion and we have seen that the contagion will not grow. the fact that ecb is doing what

it is doing and we have seen 15 central banks cut rates, that is anchoring the yields and will lead to supportive credit markets. jonathan: before we go, when is the boone market vulnerable to inflation rate? as i look near a record low of -20 basis points, when does that boon market become foldable to inflation trade? stephen: it is hard to see inflation coming back anytime soon. the challenge is that the ecb will be effectively buying more bonds out there. it becomes quite a distorted market and what you have seen in jgb in japan and you might start to see in bundses, is that the market might start to become very technical.

i think that is something to watch for. jonathan: just one auction away from .8 basis points like we have seen japan? stephen: absolutely, if you think where the 10 year yield is , that is a big range for government bonds and that is what happens when you have one buyer in the market. so, do you start to see -- what is the impact of the purchase program? jonathan: thank you very much the strategist over at blackrock. up next, it is a big day with earnings released this morning. after seneca down 2.4% you saw the move -- astra seneca down 2.4%, you saw the move. a big move in of uti, climbing double what was expected.

we will talk oil after the break as well. ♪

jonathan: welcome back, i am jonathan ferro life from london this is "on the move." it is not all about greece, but i do want to talk about other things anyway. astrazeneca falling this

morning. bloomberg intelligence, sam joins us now. it was a miss. a, what should we expect this year? what is the story there? sam: the story for a while has been can they stabilize their business? they seem to have been indicating now that in the fourth quarter things are stabilizing and they have a bunch of new contracts for their drug and that is interesting because they said the same kind of thing last year, it didn't quite pan out. this year it seems to a tie in with whatstra -- with what astra has been telling us, they will see some more pressure here and that ties in perfectly. it indicates what they are saying.

what we want to see is sales growth in the prescription business. jonathan: has that been the story for the sector this year? sam: yes, one of the companies we don't talk much about here abbvie they were down almost 8% last night. very interesting dynamics. normally, when a drug launches and it is a great drug, you start with a good price and over the years to start negotiating your price down and giving discounts to the payers. here, within one quarter am a we're seeing the rebates averaging around 46% which is what gilead the big gorilla in this market, this is unprecedented. jonathan: when you get this

price pressure it usually points to a lot of come petition and that leads to consolidation, is that going to be the story as well? sam: the only one out there still banging the drum -- if you look at the results today from astra and yesterday, it is all about competitive pressure on pricing. there are issues on the restrictive front and with atlantis. the numbers came in slightly ahead of expectations and they are talking about getting their ceo in place in the first quarter but sanofi was also under pressure. it is all surrounding that issue. jonathan: pricing pressure is the story for 2015. thank you very much for joining us this morning. as we had to the break let's

check in on greek markets. the s&p down 5.5%. the greek government bond three-year reacting, up 370 basis points on a three-year yield. so much to talk about. we will do that after the break.

jonathan: welcome back to "on the move." i am jonathan ferro, live from

london. greece is taking the headlines. the nation's finance minister is in berlin to meet with his german counterpart. i am looking at the athens stock exchange down 5.5%. some of these banks are still down about 20%. we have hans nichols and host of "the pulse" joining us now. hans i want to start with you, i look at the german factory orders this morning and their strong. two things that are just another set of strong cards for germany not to blink over the greece issue. hans: that is one way to look at. the other is the pre-volatile index, yes it was up for the month of december but it was down in november. maybe something happened in december, with diamel we see the

strength of their brand and strategy. it has led to their operating profit of 2.8 billion euros or the fourth quarter. remember him a we will see -- remember, we will see the extent to which the weaker euro is helping their sale. it will hurt a little bit when they repatriate that number that they could hurt a little bit. one thing about mercedes, they have four new suv models they are still in third place behind bmw and audi. they sold 1.6 5 million cars last year and they want to take over their rivals. they have their s class, i could see one of you guys being chauffeured in that. jonathan: thank you very much, i will bring guy johnson in. being driven around in an s class? guy: the question i want to ask

has nothing to do with the cars, but how much are you paying your guys? that is what draghi is worried about, second round effects coming in. friday, if this guy is not paying his guys a lot more maybe there is evidence of the second round effects from the lower oil price in inflation coming through. that brings us to draw the, i was -- drahghi, i was pretty shocked, i should not be shocked. once you start reading back, it was on the cards. jonathan: not the move itself, perhaps the timing. a lot of people expected this to be flagged and then a few hours after mixing with this. guy: that meeting clearly did not go well. we chatted about this yesterday.

we talked about the fact they were going through an exercise in saying nothing and mario draghi was in an exercise of saying something. and actions big out her words and he delivered a big rebuke. jonathan: do you think the ecb was political? guy: it feels political. it shouldn't. this is meant to be at her independent central bank. it stuck to its guidelines in a slightly german way, we are not deviating, that we all know that mario draghi is a political animal. jonathan: the biggest voice in europe it would seem. that is almost it for "on the move," that we cannot leave without checking the greek equity markets. a move to greece, the athens stock exchange down by over 5%.

banks are getting crushed, that is not a session low that we are down about 13% very volatile. if you want to continue the conversation i am on twitter. good luck for the rest of your day. ♪

guy: draghi draws the line. the ecb puts grace on emergency funding. this as their attack is prepares for a showdown with his german counterpart. francine: bt goes mobile. the british carrier buys ee in a 12.5 billion pound deal. guy: and, a sales surge. daimler reports a profit increase as it races to overtake vw and bmw in the luxury sector. we are going to speak to daimler's ceo in just over an hour.