loomberg television has her saying she is unlikely to reverse the rate cut . we'll bring you more of the interview. do not worry about that. worth watching. the futures are lower and the dax futures are up. it is time to get the market open. >> good morning. we had them before and the concern is degrees sand the rising tensions. that is what the group calls a multitude of parish attitude. let's check in with the equity markets. almost half a percent lower here. clearly, the nervousness. the greek prime minister rejects the bailout program and is vowing to end austerity. there are notes out there saying

that the extreme rhetoric coming will not abate the worries of greece exiting the eurozone. there is worry about tensions raising in the ukraine. could the u.s. arm the ukraine? there are meetings going on and the finance minister is gathering. the leaders of germany, russia and france are getting together with the eyes on the concerns brewing in russia and the ukraine. let's look at the bond market and you can see it flowing into germany. the u.s. and money going into treasuries to drive the prices down. greece has real concern up another quarter of a percent this morning. clearly, there is risk aversion and the bond markets and europe

is up a quarter of a percent. checking in on the weekly move we are seeing something that is generally playing on the downside and is flat on the week . you can see that it is moving in a downward trajectory. let's have a look on the back of oil and what it is doing. you can see it down and there is clearly concern. we saw the reprieve last week and it was bouncing the most in 17 years. it was down a little bit. keep a lookout. we will be coming back with stories and a bad day for swiss banking for headlines and product sales being embroiled in manipulation investigation. myriad amounts of clients working on the swiss side of

hsbc and the drug cartels and terror suspects are not good headlines. some pricing issues and traffic is up. pricing is under pressure. >> great work. we are opening lower. the ftse is off and it is all about greece once again. the minister reaffirmed the rejection of the bailout program before the emergency meeting of finance ministers. really digging in. we are joined now from aphids and let's get the top line. my take away was that this was an uncompromising speech. was that the takeaway and greece? >> yes. the area he did not emphasize very much was the subject of

debt and he did not address that at length. beyond that, it was a reiteration of a lot of campaign pledging and the line was, a lot of people are saying that we are toning it down and tacking down. we are for real. all of this that we said that we were going to do we really mean it. the last few days, a lot of digging in and rejection of the bridge program that greece was asking for. we saw there was a lot of digging in and -- >> given that, we look at what is coming up for the greek government. what is next for the government? we have leaders. is this another key week after quite a few key weeks?

>> it is 18 week. we are seeing finance ministry people going back and try to put numbers on all of these policies. they asked for a bridge program and want to issue more bills. there is a long-lasting program. it will be taking it by march. they want them to sign up an extension on the government part and reject the logic of the bailout. how -- so, this puts the pressure on greece and we are proposing an extension in a

short space of time. they need to present a fully funded program with a lot of the details filled in quickly. that is what they are going to try to do at the meeting and a couple of days. >> a big thank you for your insight this morning. some strong words from the minister over the weekend. not the only one delivering strong words. greenspan waited into the debate and said it was a matter of time before greece leaves the eurozone. that is the greenspan view. i want the director cost you. -- directors view. mr. greenspan says it is a matter of time stop do you share that view? >> -- of time. do you share that view?

>> the greece and german side are not wanting to shift and it is tough negotiations going on. there is an exodus from the banks and that will be in the test of how far the money withdraws from the week -- the greek banking system. it is coming in the next few months. >> i read through this and one of the first major speeches, he does not capitulate. why are we surprised that this man says that he is willing to fill election alleges? >> ultimately, he will have to cut some winds to the germans because there is no moral hazard that can cascade down the line. that is what this is all about. it is not a question of leaving.

it is a question of other countries saying, if grissom -- if greece is given a freedom and having the same treatment. >> are we likely to see a widening as we look at the meeting with the leaders and finance ministers? is it more likely before the compromise? >> i expect the level to rise and the market to be volatile. do not forget the underlying economic fundamentals are improving because of the oil prices beginning to fit into the rising retail sales. we have seen it look slightly better. it will support the risk market. there will be a drive to inflation and negative interest rates in europe.

>> the fascinating thing is that you can listen to the noise, be distracted by the noise, and european equities have their best rally. what is the big conviction trace for you guys? >> the markets are not fully discounting the oil prices coming through. the next couple of quarters, it is a huge deal and the growth trajectory will improve across the world and the growth rate is higher than the falling oil price. the earnings will be better and the credit cycle will have the risk markets making progress across the board. >> stay with us. lower oil prices and some of the

exclusive interview with the head of the russian central bank for another big decline. stay with bloomberg. we check in with some of our top stories and the headaches continue. searching over alleged exchange. meanwhile the private banking unit is going to make profit from tax invaders. we will have more and those stocks are trading lower. stay with us. we are back in two.

>> welcome back. good morning. live in the city of london. ryan chilcote spoke to the central bank governor and ask her where she sees the russian ruble going. >> they are not expecting any change in the ruble exchange rate because the decline in the oil price was the third biggest and the extent of the debt that has to be paid is less than last year.

>> you have inflation. could it go be on 20%? >> inflation may be higher. these levels are driven by taxes. i would like to point out that the other inflation impact will subside. the contraction in economic activity and demand. on top of that, we have moderate monetary supply and that is why we expect inflation to slow down in the second quarter, in the second half of the year, and in 2016. that is why there is no reason to talk about the inevitability of a rate increase. >> wendy you see lowering your rates? >> we will make the decision

based on analysis of the situation of the economy and on the dynamics of inflation. analyzing the entire balance of risk and financial stability. >> will make a decision that is consistent with the framework of our targeting in the midterm. >> when you lower the rates you surprised almost everybody and the conversation began. are you independent? is this an arm of the kremlin? >> we made the decision and did not do it at the expense of inflation.

it was reducing inflation. we basted on a forecast of economic growth. there is a lot of criticism of the central bank and the bank of russia is used to crediting it. some gained from a week ruble and others from a strong. there have been criticisms on all sides and we are used to it. >> are you independent? >> we are independent. >> we are joined now. the question at the end is it are you independent. there are lots of questions about the central bank and the government. what is your view? what are people saying about that? >> that was where the most abrupt policy reversals we have seen from any bank in the last quarter century. after that, you can wonder if

she is really calling the shots. russia had been raising rates to its 2011 and nearly tripled rates last year. the 650 basis point rate hike that we saw in the middle of december and she said, before she reduced rates, that she needed to see a sustainable trend in the decline of inflation and we got the rate cut against a lot of criticism and a lot say that she put rates up to high. the argument to me and one of the main takeaways was that it was not important where inflation is right now because it is rising. she tells me that she expects it to go even higher in the quarter. it is where it is going and it is going to start falling in the second quarter and half of the year. it will go lower in 2016.

i guess the real answer to whether or not she is independent and doing a good job of running the central bank will be if inflation falls. if it does and she can get away with a rate cut, her arguments are validated and that will help deal with the criticism. >> we will bring more of the interview. it is also on bloomberg in its entirety. i want to bring the investor back. the rates are at 15% and we talk about the rate cut. it really changed policy and it is higher than november. the inflation expectations -- is she being overly optimistic about inflation? >> it is premature. the inflation in a few quarters will be going through a massive

recession. you look at the contractions on the annual basis and it is 14%. it is really high. it will slow the economy and the big issue has been imported inflation. it will take a couple of quarters. in the meantime, you get interest negative and the capital flight continues. there is further weakness in the currency that you are witnessing and the whole thing it's delayed. >> how you judge this? let's say you are running the central bank and you look at the situation. you know the growth is contracted and which one do you go for? >> the currency used to be weak. the big currency is taken for granted and will not change for a while. the key is inflation coming and

far more quickly. for the next couple of quarters they should really have less interest in stopping the capital flight. that will make the current side of the equation worse. more money will leave the system. >> that is the monetary system and we have a struggling political system. you go back to the time last year and any equity and company with exposure took an absolute beating. we used to have a situation where they traded on what was happening in the europe and asia. is the approach misguided? >> there is the crisis

escalating in neighboring countries and the markets absorb a lot of bad news. a lot of bad news has been priced in and the markets go a bit further before they consolidate. we see the drop in the oil price and we have to get used to the higher volatility compared to last year. >> we have dealt with greece and russia. we have a deal with china. we will talk china and the nations import. we will discuss that after the short rate.

>> welcome back. it is time to talk about china and the trade surplus. week domestic demand strikes down imports and imports are down by a stunning 19.9% and you get the picture. there are final thoughts and this is a noisy data point. , we could see them up.

you look at the economy and, is that a sign of significant weakness? >> the economy significantly. you look at the consumption and this is really low. you look at the transport volumes and they have declined at the annualized rate. there is a lot of incidental data and the economic activity is in china. you look at the borrowing costs and the current inflation that continues to go down and the borrowing costs are still more than 6%. china is high and the highest in the world. the economy is contracting and expect the growth rate to continue. the point is that china has a

lot of room to maneuver and the fiscal deficits are low. they can double the spending programs and there is a lot they can do to push the economy. the corruption drive is important. the currency looks a little off and you could see a little weakness coming in. >> politically the labor market remains strong. more rate cuts to come after that? >> more to come and interest rates with credit going to be easier available. >> privileged to have you on the show. thank you for joining us this morning. we will bring you the greek market open. that is a tradition. stay tuned for that. we will talk on's after the break.

>> good morning and welcome move back -- welcome back. this is how things are shaping up as we speak. the ftse 100 is weaker and the losses in mainland europe. off i 1.82%. concerns about greece dominate the headlines and the on compromising speech from the prime minister on friday with equities down by almost 2%. the athens stock exchange as the price coming through and that is

up by 2%. there is clearly concerns about the prime minister not compromising. i do not think many would be surprised that he has not capitulated yet. i'm looking at the queen -- the greek equity market to open and it is lower. i will give you an update and get to the top stock stories. caroline hyde has more. >> i am starting on the downward note because the exposure to russia and the ukraine. the tensions speak about the greek gyrations in the market and the tensions escalating worrying it investors. the big exposure there and the full numbers. the results will be posted later today. we are expecting a loss. there is clearly concerns about that and another lost tonight.

this is down from the cuts and jpmorgan says the price target is cut down and they say they are concerned about cost expansion. they say it could hurt returns going forward. the taxes and regulatory pressure, as well as. i will end on the high note for you. it was almost one of the biggest risers today. at last, the oil company on the rise posting the increase in profits. up in the fourth quarter with the beat and the stock going higher. >> the oil company on the rise and staying lower monday.

let's get back to the new government affirming a rejection of the bailout and saying it would like repatriations from germany. this was stuff that was not new. we have heard it over the couple of weeks. what is the reaction like in germany right now? >> to the request for repatriation for more, there has not been a reaction. there is some reporting that, if you had a greek exit and you saw jobs lost, it would bring the unemployment rate of and it is clear that he wants to exit the bailout program and we are

getting a question. >> they need a bridge loan. who is going to blank? is it going to be the greek? there will be a bridge loan. there appears to be consensus and egg knowledge meant of less of the current account surplus. . >> markets, great to have you with us. >> it is about politics. are you surprised he did not capitulate? >> clearly on a

mandate. the couple of weeks later, he would say that he would not deliver. >> a forced the germans and the ecb in a corner and politically merkel is not paying attention off and washington or back on wednesday. she is hands off on this. it is evident that there is a feeling that it can be handled and the president says, we do not do rich loans. he is not listening and it was made clear that if they have not got the plan in order and there is not enough time for europe to enact what needs to be

done to stop the cut off on february 28. >> given the restrictions, do you see them cutting off completely? >> they have given the warning and the profits are back with greek bonds and out until june. and the ecb has given a warning. the second is the greek and.

the rhetoric has been ratcheted up by the party and this is the same thing. we try for you and we go against the european dream. it has been clear to say the rules must be bridge. politically, they look at the spanish fighting against it and the portuguese. they all look really stupid here. it is not going to change the rules. >> the italian debt and spanish debt up by five basis points and that is not contagion. when do we see the spillover?

>> we want some forgiveness and the debt sorted out. >> is the same way of greece. >> a love the stuff said they want reparations and the german french, and italian banks. they say there will not be contagion if they go in it and we show the strength and the validity of the european concept. this circles the wagons and protects the things we all know. i think they might get away with that.

i think they, and do it. they do not do it now and later not have any chance of ever having any credibility. >> in two years time, greece starts to do well and recovers out there. >> it was much editor and -- much better and the government has been elected to do something. you saw the people cheering the speech and the opposing views. >> >> it deliberately distracted.

is that a policy mistake? >> he went to the corner and made the mistake. >> and raises the chances of that. >> it is probably letting it go. i do not think there is any real life it would that it allows it to happen. merkel is aware that it will take advantage out of this. they're are looking to protect themselves. in the end of the day it is a lesson for the populace. >> you subscribe to this point and would you want to hold peripheral that?

>> there will be some repricing and the end will come. i think the markets have a little bit of buffeting and it will be less than what was feared in the past. >> let's get a quick check in on the greek stocks. a lot lower. down by 4.5% and the stock exchange takes a little bit of pain of the back of the uncompromising speech. at this point, they will come to an agreement for the rest of this week and we are looking at greek bonds. the yield is up. a lack of liquidity and a signal

to the bond market. we will talk more about greece throughout the show. stay with us.

>> welcome back. good morning. i am jon ferro from london. being investigated by the u.s. justice department. caught up in the crosshairs. they reportedly are from the evil elite to the lifted. >> there were certain reports of americans evading tax.

this has to do with a security. it helps clients and is untraceable. it looks at the expansion of the expansion and the misleading of clients. and then asking questions to those involved. the question is bankers acting primarily in the currency market

and the manipulation cuts are self-contained. but it is a fine line between avoidance and evasion and hsbc finds themselves in reports they would rather not be associated with. >> this is a client list with amazing work by the international consortium of journalists. they have assets that they manage in 2007 and unveiled the account associated with people inside this. convicted cocaine dealers terror suspects, families entertainers and no issues or concerns to answer to. there seems to have been significant profit made in the accounts from an array of criminals.

this is being revealed and to the strength, they put out a statement saying they have undergone a transformation having and forced reporting requirements and initiatives. clearly, this is some of the names in charge with high profile jobs in the limelight. >> we will have more as the week progresses. we'll bring you more from this collusive interview. the big concerns. i'm sure you can guess that. .

>> do you have a favorite central anchor or central anchor outside of russia? >> i have a lot of respect for paul volcker who reduced inflation and carried the country through a difficult time. >> how often do you check the oil price? >> often.

several times a day. >> wise the central bank buying so much gold. >> we really did increase our gold purchases and did it for two reasons. we solving the problem of liquidity and there is a lack of collateral with banks. a lot of countries have this problem, this is why they are developing gold purchases. we have a big share of gold in our reserves. not the biggest gold holders. >> you have close to 39 ounces. how much gold do you need? >> we decide by situation.

>> what are you going to do with it? >> different in different situation. >> prudent met with the leaders of germany and france over the weekend. you are sitting in the central bank and the ruble strengthens and the expectations. how'd you prepare for the reaction? >> a lot of factors affect the exchange rate and we have moved. under the influence of various factors, the prize and the economy condition has the ruble rates defined by market sectors. we do not make special preparations in monitoring how this affects the ruble.

we are only in the foreign currency markets if there is a moved create stability. >> there was a moment when the ruble fell. could that happen again? >> december 16 was a particular day in a lot of ways and there was a great deal of volatility and a jump in the exchange rate. there was a day that we expected to move to the ruble. we announce that the assessment of the risk and stability read intervene. december 16, we left the market. we really left the market. that is why we increase the rate and volatility. it was driven by a shift from an

approach that we had when we controlled the exchange rate. >> that is a way to say that you do not see the ruble returning. >> i do not see any reason. >> that was the head of the bank is speaking to the polls. there was no reversal of the rate cut. they say they are seeing russia cutting the basis points and that seems to be it. >> you look at what is happening about this week and the talks are successful. you get peacekeepers on the ground and all russian assets

have a. . i would argue she is an important player in the process and has a hand tied he hind the back by the process. i agree that the pressure is on. she says this is independent. >> you bring greece into the conversation. it will be a theme in the poll's. she was talking about buying gold. i will segue that in. what a week it will be. who talk to the key advisor to merkel and greece is never far away. >> certainly on top of the agenda and a busy week is coming up with finance leaders gathered. later in the week, we turn the attention to brussels with finance at the top of the agenda. leaders meet the following day

between merkel and alexi. the stocks are trading lower. if you want to continue the conversation, i am on twitter.

>> not tens of it. in an exclusive interview russia's central bank governor said the institution is independent of the kremlin. greece's prime minister reaffirms his place to end austerity, setting up a wednesday showdown with the eu. and, banking on secrecy. a report alleges hsbc handled secret accounts for criminals including drug cartels and terror suspects. good morning. you are watching "the pulse."