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>> welcome back. good morning to you. 30 minutes into the trading session in europe. the ftse pretty much dead flat. we stayed 20-30 points away from the all-time high on the ftse on a closing basis. the dax in new territory. and then we come back a little bit. we left it unchanged at an all-time high north of 11,000 points. some of these levels of the equity markets telling a much bigger story. the ftse taking it back to 1999. highest we have ever seen in two decades. let's get some of our top stock stories this morning with care headline hyde. >> going to focus on the green this morning. the top stock to be watching. b.h.p. billiton, one of the key movers on the stoxx 600. biggest miner in the world.

stock up 4% in u.k. trading. better than expected first half results. underlying profit a cool $5.4 billion. the mining sector in general, they are managing to cut costs cutting project spending to the lowest since 2010. it will fall to $12.6 billion. 15% below initial estimates. many investors lying what is going on there. -- liking what going on there. inmarsat going down. selling shares. more than 20 million. we're seeing the likes of kddi selling 21 million share. keep an eye on this. this is just a technical issue. some companies just getting out,

selling shares therefore down go the stocks. meanwhile the banking stock down the most. down some 6%. danish lender. current economic conditions they say looking -- we have the larl low interest rates. a negative deposit rate. we have been looking at the currency wars going on. this is hitting banks where it hurts. they propose no dividend for 2014. >> thank you very much. of course we have to take it back to athens. greek markets just opening up after government officials confirm they submitted reforms to finance chiefs. yesterday was a public holiday in greece so we're playing catchup. what you're seeing the athens stock exchange up .4%. things take a while to warm up

on this particular index. if you look at the government bond market, the three-year note, the yield down almost 140 basis points. i can tell you that yield on a three-year note was up 21% earlier this month. we're down to 13.68%. still high but a little bit of a -- at least. erik schatzker is life in ath witness the latest. a little bit of apt msci in these markets. we know -- optimistic in these markets. we know how volatile they can be. >> it takes a while for the equity market to warm up. there was a bit of a rally yesterday while the markets were closed for a national holiday. some optimism was beginning to drift in. one of the key things for us to watch will be the reaction in bank stocks. that is because we understand from the government that part of these reform measures that are

being proposed to the eurozone will include some legislative proposal to deal with nonperforming loans at greek's backbone banks, euro bank, alpha bank, have been rocketing higher. and at the same time we have seen an outflow of deposits. citigroup estimates a further $15 deposits drained out of greek banks over the past few weeks and we have a drop of $20 billion in deposits since the end of november. citigroup on the very same note saying this agreement reached with the eurozone finance ministers is going to provide for more access for the greek banks to -- the e.c.b. financing and also funding under the emergency liquidity assistance such that 25% of greek assets will be backed by these measures versus 15% at the end of november. and so again, this is all

contingency on that being included -- contingent on that being clut. -- included. it is contingent on aprusme by the eurozone ministers. the official submission has been made. it is all a matter of timing. the markets are used to seeing these kind of hiccups and playing the waiting game and that is what you and i are playing now. we need to see how the germans and spanish react. all we have to go on is the greek who is a spokesman for the e.u. saying that this is a valid starting point but a valid starting point is not finish line. back to you. >> thank you very much, erik. markets showing their approval for now. as eric pointed out, it is all about the banks. national bank of greece up 14%. euro bank higher by over 10%.

rally in the equity market. up 7%. a rally in the bond market. government bond yields down by over 100 basis points. relief in greece at least for now seems to be the takeaway, the sentiment. but a very rell default risk still casts a shadow. let's bring in the senior f.x. strategist. great to have you with us. the default risk. this agreement as fragile as it is it takes us to the end of june, july. big bond redemptions at the e.c.b. are we going to be here again doing the same thing at the end of june? >> if not earlier. a lot of this is predicated on the view that it is going to fail. a few parliaments have to vote on this as well. in the short-term breathing

space, then i think the finance ministers and the e.c.b. for that matter are going to be crunching the numbers how much in terms of contingency like it are they going to be receiving? a greater chunk of greek deposits, who'll be on the hook for any loss there? germany. it is going to test the tolerance levels on all sides. if there is no structural solution then it will get more interesting. >> you see the redeposition 3.5 billion in july. hsbc saying default risk remains -- do you agree with that sentiment? >> it has never gone away. there is actually a good deal. what greece needs is an outright haircut but that is not going on

the allowed by the core european countries. the issue at hand is what does a favorable structural solution -- for both sides what does it look like? i don't think we're even close to beginning that conversation yet. until that conversation begins, these problems always linger. >> what is the going to be the sticking point in the next set of negotiations? >> i think the next set is if growth fails to pick up, if the surfaces -- if the greek government is still in place by then comes back and says we need more concessions from your side, otherwise this government or -- they are going to have issues. i think that is where the crunching point is. no tolerance levels within the core countries is going to be a breaking point. >> let's talk markets. greek government bond yields rallying.

bonds rallying. the equity market higher today. these are penny stocks. they are volatile. they bounce up and down to extreme levels. up 10% down 10 pocket. what is the trade mere? >> i think euro dollar hasn't factored in greece in the first place. the euro/dollar into crunch talks last friday. one way or another the system would resolve itself. a few people were arguing. it is going to be to look better over the long-term. i think we need to shift more to the dollar, euro leg. going to talk about the language. looking at international development and worried about the -- how much tight thangs dollar gain since 2005.

tightening terms from the fed's point of view. back down from the language. kind of a addition position. we need to look at these issues. euro/dollar would factor in too much. >> euro swiss, we still think the risks are to the downside in the short-term. there has been a relief rally. driving swiss lower. if you're holding swiss now, it is going to cost you. once people is start to absorb that, passing it on to clients then maybe that market will settle. >> euro/dollar, euro swiss, the race to 110, who wins? >> euro/dollar wins. euro/swiss southbound would be happy with but if you look at where the eurozone is, you

should go the other way. >> he is going to stay with us. don't miss that. for now, though, we go to the break. check in on greek markets. above 5%. 6.3%. solid rally in the government bond market as well. still yielding a hefty 13.53%. after the break, we talk about the year ofing. that is what it has been all around the globe. two prepare to go the other way and potentially hike rates? what does it mean for markets when "on the move" returns. ♪

>> it is the year of easing for central banks across the world. we have seen countless monetary policies expanding. yesterday even israel cut rates. it is having a big impact. profelling dollar to new highs and one particular central bank in focus. the federal reserve. the other of course the bank of england. today confession s of a central banker. testimony of janet yellen and mark carney. yellen heads to capitol hill and carney faces the treasury select committee. geoff is still with us. confession s of a central banker. who is going to make the

headlines today? >> yellen. she will probably need to address sooner or later and probably sooner rather than later would be prudent and also you know, is she confident enough with the dollar where it is and international demand. are they still comfortable? i think right now the verdict would be yes. all of these major moves in currencies. if you go back to the fed minutes, they are being supportive of this. if you have stronger demand, i think the u.s. stands to benefit from that. >> i want to bring up that point. i don't think many predicted the amount of easing we have seen so far this year. 2 the buffer point has been the stronger dollar. the dollar goes higher higher, higher. one line over the federal reserve minutes says persistent strength would harm exports. >> even if you look at the last fomc meeting at the on the other

hand january for example, the dollar was rising that is extreme tightening. i think it is important to look at who is easing relative to the fed. e.c.b., bodily injury again, it is -- b.o.j., it is good for u.s. demand efforts. that is where you get a direct import price drop and the transmission is faster. maybe that is something they want to look at down the line. you have a few metrix basically you think it is 130 135, it shoots through 15. as it shoots through 640, 6 50rks then i think the fed will a problem. it is interesting today yellen not in front of an academic audience moves in congress now

to attach currency legislation. maybe we're going to get agrees senators or tomorrow from members of the house on this matter. hopefully she will be able to steer the fed away from it and leave it to the treasury. >> some people are saying it could be boring. you'll have all of those fx questions. when are we going to get rate hike? >> leading toward a greater after makings that they are comfortable with an earlier move rather than later. i think it is reasonable for her to signal that. >> the labor market. signs of the labor market is tightening. forget unplofmente and wages -- unemployment and wages. carries on pushing higher. people watching this show now wonder why on earth would a high rate mean anything about a higher labor market. do you attach much weight to

those kind of things? >> the rate is on the transmission. ultimately for the majority of -- if that means higher wages and higher core inflation, not withstanding everything else then it is going to be important. given it is the retail sector, con sention -- higher g.d.p. growth than anything else is significant as well. they are going to need benefits evidence of sustainable wage gains, transmitting into high consumption and price gains. it is not exactly orthodox but they will concur on inflation and i'll be seeing signs in the u.s. >> it depends what they use the money for. they could use it to pay down debt. are we moving to a place where last year we said rates could be

garagal? -- grad wall? are we moving down that road now? >> i think the fed is inclined to moving down that road. again, talking about stagnation all the time. i think that is weighing on the mind of a lot of central bankers globally. that is why evidence in the form of data is so important. 25 by a spoiptses doesn't mean that much as long as you -- in inspectations. it is something that the market ask handle. there are two strands of thought behind it. one is conventional responding inflational expectationsened that general policy and we're no longer -- we're -- it is time to say, just be consistent now where the economy is. >> the only negativity, we just saw on the screen. stronger dollar, stronger

dollar, stronger dollar. in london, political risks aside, final question, who gow goes first? >> fed still goes first but i'm astonished that the bank of england did not choose to talk more about sterling, the last inflation report compared to the november inflation report. it needs to come down, etc. the november report, he said look. sterling strength has cost 70 basis points. sterling is actually higher now compared to where it was. that is where i'm a bit uncomfortable. if sterling is -- at these levels why is it sterling driven? that is a very powerful draw now. even with risk aside, that is going to anchor euro sterling. if you get downward surprises in inflation, how can you talk about hikes in that kind of environment?

i'm not saying they should start to talk down sterling now. it helps with the consumption as well, especially with oil prices. it is a net positive. but are you going to see that in time? it could be a problem for the b.o.e. as well. >> thank you very much. as we speak, trading at a low. maybe not good for the u.k. great if you're going on holiday. 10:00 a.m. here in london, mark carney will testify before the treasury celebrity committee on the inflation report. expect a lot of questions there. later today, fed chair janet yell listen testify before the banking committee on the u.s. economy. now let's get a quick check on the markets. the ftse trade pretty much dead flat. the headlines in greek markets. the three-year note yield down 150 basis points. a little bit of optimistic

around greece for now. outside of greece athens, a beautiful day here in london. back after the short break. ♪

>> welcome back to "on the move." good morning to you. six minutes away from "the pulse" at the top of the hour. we're joined by one of the hosts, guy johnson. we'll start with greece.

>> greece is fascinating. so many questions i still don't have answers to. how does greece fund itself? does this deal stop the deposit night? if it doesn't, then we still have a significant problem here. there are so many questions that still need to be answered. we have -- details about what they are pushing forward. we don't know whether there will be agreement and -- >> knee-jerk reaction. optimism. bond market rally. we have this movie a couple of times. >> priffrell -- peripheral spreads tighten up. pretty much penny stocks. there is still so much to get through here. you wondering -- this is the warm-up act for battle that comes further down the road. >> we have greek politics and politics in the ukraine. a rate decision from turkey. now the question i would ask is

if they cut rates -- he has been very vocal about getting this central bank to cut rates. >> i talked to a number of policy makers about this. i remember being on a panel in athens with the greek central bank. i asked him this very question how much political pressure he was under. he resorted to poet prism the only way he could -- the language. a very nice way of dealing with the question but it was only the way around. the political pressure is definitely there. a bit like russia. >> turkey in focus. the bank of england in focus as well. 10:00 a.m. mark carney will testify before the treasury celebrity committee. later today fed chair janet yellen goes before the senate banking committee. now, it is all about greece. a little bit of optimism. stocks go higher.

bond yield goes lower. optimism for now. you want to continue the conversation, i'm on twitter at ferro tv. good luck for the rest of your day. ♪

>> athens commits. greece submits a plan to improve budget management. >> the equity market is up more than 5% on the news as yields drop. >> carney and yellen will address lawmakers in london and washington as investors look for crews on the first hike in interest rates. good morning, welcome. you're watching "the pulse" live from bloomberg's european headquarters. we're here in london. i'm guy guy. >> i'm francine lacqua.