in 1989. dropping below 0% later this year. and downsizing. deutsche bank second to be looking at shrinking is trading business as it reviews options to boost profitability. and of course, we will bring you much more of the exclusive interview with billionaire george soros later. he said there's a 50% chance of a greek exiting the euro. the berlin showdown. someday heat and negotiations between germany and greece. nothing substantial from the other side. futures lower across much of europe. dax up by another 50.3 of a lot of data through the morning. i will break it down. the morning open with manus cranny. manus: rising to 7%. with the making game after game and the stock analysts has been trumped -- we have been making gain after gain and the stock

analysts have been trumped. china is slowing down. how much a concern is that versus the stimulus to come from the chinese central bank. chinese factory orders contracting at 49.2%. will li step in and help the market out? let's see what is coming lower. torture bank there you go. deutsche bank is one of the only gainers. we will talk about that for you have bmw down. on the downside. london making the new record trading day yesterday. lloyds is up 0.3%. we will take a look at some of the individual names that are running through the market. the other end is this. fisher saying there is -- 1937 scenario and the san francisco

federal government saying midyear. the same as the message of yesterday. the heat and humidity has been taken out of the dollar. you can see that when the euro trying to trade up back at 110 level. [indiscernible] the biggest 2-day rally. china is about 11% of the world's oil production. copper, the chinese is buying copper. around 8% in the past three days three it closed above 100 day moving. gold down. it is off of its two-week high. the commodities for the individual names. deutsche bank will it sell and scale back? we will talk about that in more detail. raising the dividend by 10% in taking a charge of 40 million

pounds. marches are improving margins are improving. -- margins are improving. jonathan: we got breaking news out of france. the pmi for manufacturing, very day. manufacturing data at 48.2% better than the previous month but below estimates. services data below the previous 52.8 but better than a survey. you've been looking at the composite and we are below the previous month. also below the survey of 51.9. very mixed french pmi. we'll get the biggest from the eurozone germany, manufacturing services. the other key manufacturing reading came out overnight. pmi from china. the gauge of hsbc data fell into a contraction.

an 11 year low. out to the data master. he is in a whole,. -- he is in hong kong. dan run us through. dan: the headline tells the story. the estimate was 50.5. in this part of the world when the estimate is so far off, that is a concern in the big thing about the numbers and the sub factors, not a good news. march is doing what we thought might happen in february, going soft. the data we are seeing more recent times. chinese data has been on the softer side and more underwhelming side. a big take away a 49.2 versus contractionary number first what we expected a small expansion. pmi case, it has flown through to the currencies.

we are seeing the fed signaling possibly raising rates in the latter part of the year which is been a welcome relief from commodity price currencies and the kiwi. they will take no joy of the report. and really to say, it is a terrible read. not what the markets expecting. we really wait and see what the gdp numbers reflect in the first quarter. simply put, just seeing such a weak and anemic number was the real shock. policymakers and china have their work cut out for them. jonathan: going forward, do you think the numbers come out periodically and they seem to be tweaking things are around the edges. a few rate cuts and no big stimulus packages is that what you expect as the year progresses? she playing around the fringes? or do they have to think about going big?

dan: they were at the start doing big soon enough. and the case of the chinese, looking at the data, in the first quarter, you have that factor and then they do start to build things off. to go to the point, really nice to explosive numbers in the growth we saw last -- probably the last five years. what the chinese will do is -- whether they like it or not, that will have to go in aggressively. at some point, when chinese tracking like that one, they need to keep the proverbial engine running. sometimes a rather crude instrument. very effective and blunt instrument in doing that. a big challenge ahead of them. not only is it a transition going on for domestic consumption, they will have to do something. they cannot really be what the

rest of the world and the u.s. because currently, 7% and people are going what is to worry about? maintain their target? it seems to be somewhat challenging in this environment as opposed to 2008. jonathan: what is the rate for your home country? australia with a slightly weaker aussie dollar. what will see in the past when you get pmi 50 out of china usually a bit of selloff in the aussie. what is the story here? dan: the market has chosen to ignore what we saw quite surprising. i must admit, the dollar almost up. things are going to get better. that is what is implied. we see a big fixation on the move. what janet yellen is saying. certainly has been a huge --

four majors in australia and that seems to be policy people saying moving to the chinese data as saying we can take a bad report. it is really the idea of the said targeting later has given the aussie some -- again, very strange to see pmi almost in this case ignored by the currencies for you again, one thing i should add is the kiwi/dollar the parity. we do live in extraordinary times and at the moment. jonathan: extraordinary times. daniel petrie, a big thanks for i want to bring in a strategist. more tweaks around the edges or do the authorities have to capitulate the second part of this year? guest: we have reached a new stage in the critical moment was last week's fomc meeting where

we saw the dollar stabilized. now we are seeing what your colleague was called is stored in every markets. what we have is continuation of strong data and then very weak data and all kinds of confusion. this morning, very weak data. it is concerning and the thing we expected out of europe. you need to step back and look at what is happening this year. for the first three months european stock markets rally. why is that? mainly the success of the weaker euro policy. that policy is now coming to a sudden end because janet yellen has put a lien under the dollar. it is interesting to see stocks wobble the way japan stocks wobble assumes you get the yen going higher. well situation where the fed and all the speeches yesterday, more today, stanley fischer, a number

of them saying the same thing. basically boils down to when conditions are right which would not be soon, later. we are now into the lower or longer economy. that has all types of implications not just for stocks but for the bond market. some a bond markets despite sitting here saying, my god, the top of an enormous a bubble. some markets are looking investable again. jonathan: that's what i was going to ask you. a country like china, a property bubble and some people say is bursting in authorities want to keep the rates low globally. buy bonds? bill blain: china is a case on its own. there will be problems that will be addressed in a different way. for investors trying to hemorrhage real money. what we will see i suspect, more

stimulus out of china. jonathan: more stimulus. let's keep on the low inflation story. anticipating to slow even more. while more after the break. the data dropped in over an hour's time. we will await german pmi data. eurozone pmi at 9:00 and u.k. in u.s. inflation later. we are back in k2. -- in 2. ♪

jonathan: good morning and welcome back. i am jonathan ferro. this is "on the move." we will get u.k. inflation figures. measure the data. 39 items were added. they make it in and eight items were removed. let's get to the business end. analysts surveyed by bloomberg expected to drop in february, the weakest on record going back to 1989. expanding it to drop below zero in over five decades free is a tragic? -- five decades. -- is a tragic? we are joined by jamie and bill

blain. what is behind this and should we be concerned? jamie: the thing that is different this month than last month, the fall in inflation will not to because of by falling fuel prices. for it to follow 2.1% your deceit goods and services. to some extent, we are expecting that. and is going -- it is going to feed beyond field. it may be skewed upwards. jonathan: when you hear some of the noise from the bank of england we should anticipate a cut rate as much as perhaps a rate hike 2.7%, unemployment close to 5.5% why should we be cutting rates? bill blain: it is difficult to argue why we should be raising

rates. we still have very low wages. we have low energy cost. interest rates are still low/ we are only getting growth from that number. why would you want to put any pressure on it at all? where in a longer scenario. they want to see how long they can get away with it. the dangers of deflation are clear and present, but the dangers are doing anything precipitous the whole global economy remains -- it is a bit of a problem that would rather avoid. jonathan: the spanish vice chair seems to have ripped off the script not just from the federal reserve but the bank of england. we have been told again and again when rates rise, stanley fischer said yesterday upward and the federal reserve will not be realized. do we need to think about that

for the bank of england as well? jamie: i think you do. the bank of england said it they intended and it depends on what happens to wage growth. we may be in a position about wage growth and get estimates the start taking off a lot and the bank will find it hard to not start communicating. bill: they will listen to the other numbers and i stick to my view they will they the tough things. jonathan: to your world bonds. inflation could be negative in the middle of the year a you have a situation where we do not know what the government is. is that by guilt? bill blain: we have to wonder about the guild market. people are still buying fields -- guilds. there is tremendous liquidity if

you buy anything apart from guilts. i can take from my experience trying to find long and bon -- long-end bonds because everybody has locked up the market. my personal scenario about the s&p is going to be a decision-maker if we end up with a close election, i got to the stage is the scotsman and considered voting conservative. do not worry, i've managed to stop the foul idea. it is that serious. just the bank i will take up -- jonathan: i will take it to inflation. last week, disinflation boom. the political spin. i could say real wage growth is looking good it now. jamie: nominal pay is not really moving at all. that's what the bank of england

is looking at. the effect of oil is pervasive. probably upward of .8 cents inflation. the rest is flat. looking for a turnaround. bill blain: we've got to have time for that to work through the economy. the scenario and see if it creates inflation further down. jonathan: a big thanks to jamie murray a bloomberg intelligence. bill blain will stay with us. we talk bank. talks at the deutsche bank is considering a sale of its consumer banking. ♪

jonathan: good morning. a quick market check. a big turnaround in the dax. the dax was lower as much as 0.5%. it is up by six points. we come back for the pmi number. i will keep it on germany. deutsche bank said to be rear is strategy at a look stumbles profitability and make cut investment banking by as much as 1/5. what is going on with the deutsche bank? manus: releasing the attention and fixed income trader and he

excels they even deutsche bank no longer can play in that field . what i mean by that? not good as any more. nowhere you are not making money and what part of the investment bank carries big capital. that is interest rate business. a couple of options. three on the table punt to the board. -- put on a billboard. one was put in the consumer banking postbank together. one would be selling consumer bank. it is the biggest part as bill riley said, this a global bank and maybe with misrepresented, a german bank. so, that's a second. the third option one of the do what anthony jenkins has done it is doing and sergio has done and what another is about to do. bill blain: and he understands

the whole global banking environment has completely changed. they are going to an evolutionary change. it is almost like the old dinosaur has been struck by a meteor. what we do not know is a very different market that faces them. the smart banks of the was like credit suisse and now deutsche bank are making the necessary changes to survive. that point of the old bank being in a german bank they want to get out as soon as possible focus deutsche is a global institution for global investors. manus: anthony jenkins said the universal banking model is dead. you use the word "global." bill blain: global is different. a department store providing everything. look a successful department store and is not a single storm

but a whole bunch of franchises brought under one roof -- roof. does it work for banks? probably not for you if you can do so that it do it well like deutsche has done historically in is trading businesses in the past and then something new that works. trading businesses are unprofitable because of legislated and regulated out of existence. that is why they needed to change at we are going to get a new deutsche bank and i and they will be a survivor. jonathan: is that we shop as they take away? bill blain: it is evolutions. jonathan: in the united states, you have a republican ted cruz they think he is running for president and his wife stepping down from her rank. it is an image problem. manus: that is --

jonathan: manus cranny, bill blain thank you. is it the ecb blackmailing greece? ♪ >> when you look at the exposures we have with degrees ecb has 104 billion exposure to greece. this is equal to 65% of greek gdp. that is the highest exposure in the eurozone. so, it does what kind of blackmail is this? jonathan: a very punchy mario draghi. we will discuss that. a quick check. ftse 100 and 10 new record highs this morning. the dax reaching positive territory. -- ftse 100 reaching new record highs this morning. join us in 2. ♪

jonathan: good morning and welcome back to "on the move." i am jonathan ferro. getting breaking data out of germany. the german manufacturing pmi comes in at 52.4. better than a survey of 51.5. likewise for services pmi. 51.3. better than the previous month and above the survey. looking at the compositors. better than the survey at 53.1 in the previous month as well. let's check in all euros dollar for you. -- euro/dollar for you. it is up 0.3 percent on at day.

as for equities, dax rallying from a morning of losses. the cac up by 0.2 5%. out to germany with hans nichols. these numbers, not bad. hans: not a bad for germany compared to france and was we talked about in january and february, the virgin economies. beat on both the services. -- diverging economies. what we got from france and you saw manufacturing pick up slightly but below the crucial 50% which is a signal of expansion. a similar story with of the services coming down a bit. services are up above the 50 level and their composite was it great. german manufacturing composite number above 55. let's wait and see how the euro

digests all of this. it looks like exceedingly strong number four march. jonathan? jonathan: i take you back to berlin yesterday the meeting between angela merkel and alexis tsipras. making up could be one way of looking at it. nothing's essential on the other side. the left stays with germany. -- the leverage stays with the germany. greece will play hardball. hans: if you have angela merkel and tsipras kissing and making up, you're sourcing is better than mine. clearly, and the public part, they were trying to play nice and not say anything inflammatory. merkel nudging tsipras. she did not have the ability to release any of the liquidity funds that are left over. it seems symbolically they are heading in the right direction and want to play nicely one interesting side and no.

mr. tsipras got full of military honors pretty he will be meeting with opposition leaders later today, the green party chair and chair of the left. that's a little bit of a departure from military state visit that gets military honors. we will see how it plays out. half military and half meeting with opposition which is much more sympathetic to mr. tsipras' argument of austerity. jonathan: hans nichols, thank you. let's keep the conversation on it europe. our next guest. i am pleased to say he joins us. not to very excited about the data but the germany number? guest: surprise out of the eurozone. a contrast between that and coming out of the u.s.. historically, the divergence in

data has been supporting of the euro-dollar and offer some support for euro-dollar on the day. longer-term, we still expect data in the u.s. to stabilize after the weakness. we do see the offset hiking rates which combined with the persistence of politics -- policy easing should push the euro-dollar lower. jonathan: i want to talk about the euro-dollar. toward parity a couple of weeks ago and then we come back and now 110. do you still expect parity by the end of the year? a lot of people were slashing where do you stand now? valentin: we are seeing positioning all dollar long from your role buying on the back of

investors finally realizing they qe may be working. it could improve more. inflation may stage a return. that is the broader picture that doesn't change. it is a funding currency. the dollar is still the best for you best currency money can buy energy 10 a give and that is the case and we expect over time for a rate hike by the fed, expected to comment in the third quarter this year. . the euro-dollar should draft a lower. jonathan: the speed seems to be the debate right now. stanley fischer, talking about this earlier really ripped up the script. we were told rate hikes would be slow and gradual. it is really no man's land. is that key? valentin marinov: that was a extension of a message we have

inherent for a while. by the vice chair fischer any hikes will not move in a straight line. really cautious and indeed contained by historic standards for all is said it was important of what the message from the fed seems to be they want to introduce risk and to the dollar. they were not intervene into the currency. however, they want to see investors leave the dollar alone for now. 20% like the last 12 months. that is quite a lot. especially given the rate not going higher anytime soon. the fed is comfortable with a relatively strong dollar. they do not see imminent threat for the domestic economy. they know if they do not respond, before long the dollar could be higher. they are trying to injured his

volatility and to the dollar. they are succeeding and extending. that -- the point of the potential inflows into the eurozone as investors and get encourage. it is important to note. if you look at the various data sources, the payment data, it is suggesting the tide may be turning into the eurozone for the first time. the thing about inflows, it is right to be hatched. you have been paid to be short in europe. even if you want to buy european assets, you would rather hedge book is it will boost your performance. and it will enhance the performance of your positions. at inflows may resume or accelerate from here. the euro is unlikely to benefit. jonathan: the theme of the show

for the has week or no, do the inflows increase as the exchange rate increases? if you are a confident player? valentin marinov: we are dealing with different types of layers area -- different types of players. real-time money of buying assets and bonds given the low level yields. that is changing. a change from last year where we saw steady outflows out of europe. the fx market, talking about steady flows having the perceived certain of your bets will turn not a you will make money when you are investing in the fx market. on the back of buying the dollar, one way of trading a no-brainer trade. the fed is still on course to deliver hikes.

that was a consistent trade and attracted a lot of flows. then the fed came last wednesday and we introduced and that is now dissipating. slowing the flows into the fx market. i do not think it will be a trend lower for the dollar. jonathan: fx and we center and talk about these big consist trades. stunning absolutely yes. a lot of people were calling it. your call for this year and the one that stands out is there a look. one 50's seven and that not been -- 157 and that is not been a consists. why are you at 157 and others at 145? valentin marinov: it is the case most economists are doing well. at the moment as it stands, it is where it is or the pound is where it is very uncertainty

going into the election. the election or sterling negative, a lot has been said about if conservatives win. if you look at polls, no real popular support anymore. the polls are changing. if conservatives were to form a minority government such a vote or referendum might the delayed for a period of time. and then labor and that is the case, if you go back not really try to derail if anything a domestic demand recovery. and quite comforting and that inflation is falling and earnings growth is stable and we should keep it. in the current environment, global growth slowed down, the economy that should do best is run by domestic demand. the u.s. a u.k., stronger

current position. jonathan: we will have the shakeout uncertainty, but you are an optimistic man. valentin marinov: i would call a domestic demand resilience and appearing back into the economy should prevent any deflation and the u.k. and that should help the bank of england hike rates. john the bank valentin marinov thank you -- jonathan: valentin marinov thank you for joining us. 110 euro-dollar for the first time. on the express train through two parity. the story of dollar weakness over the week or so. up next, we will take it to the u.k. shareholders turn up the heat on tesco. property overstatement, when

will tesco troubles end? not anytime soon it seems/♪

jonathan: good morning and welcome back. some of bloomberg's top stories. china manufacturing all into can -- contraction. it is also an 11 month alone. investors did not seem so discourage.

the shanghai closed 0.1% higher. deutsche bank is said to be shrinking its services and will consider several options. one is cutting investment bank toe almost 1/5. hsbc and rbs have to rewrite plays in showing how they could unwind in a bankruptcy in the u.s. they will have to resubmit their so-called a living wills to u.s. regulators after they said their plans were not credible. it is required by the dodd frank act. shareholders turn up the heat on tesco. plans to bring action against a u.k. grosser after it overstated profits. the lives of tesco's troubles. our bloomberg analyst joins us. what is the problem? is it reputational thing or the number? charles: i am sure it is the number.

we have to put the number in context. it was 263 million pound overstatement. realistically, the consensus has fallen from somewhere over 3.5 billion to somewhere over 7.1 billion and so a comparative. to a certain extent symptom of what was a fellow the business. jonathan: look at the stop price gauge the news this morning, stock is down 0.4%. in terms of material impact on the business from this investigation, charles, june expected to be minimal? charles: it will not be a huge amount and that comes back to it. it was 250 million pounds which is a large amount of money but compared to its profitability. jonathan: let's talk about h&m and what is going on there.

a beat for h&m. investors seemed to like it. stock is up more. what is the business doing? charles: first quarter was better than everybody expected. a number of good news for you margin was good. a benefit from the weakness of the krone. going forward, a stronger dollar. we know asia in dollars and as something of a concern that the cost of goods will go up. the other currencies are not working quite as well for them. there are mitigating circumstances. the china a u.s. are nearly 20% off sales. 10 years ago well under 10%. secondly, that can shift manufacturing base around to lower-cost countries. jonathan: in terms of the krone the strength of the dollar and positive impact dollar sort of

balance is out in the second half. and on a net basis is no real impact here? charles: probably not. even if we look at where it is now compared to the second quarter of last year, something like 7% benefit. that is down 2% or 3% now. where as the dollar is still a multiple of that stronger against the euro. jonathan: charles allen, thank you for joining us. as we had to the break, a picture of the markets. equity markets across europe higher. dax, the by -- up by 38 points. euro-dollar goals from 110 in a number of weeks. german pmi much much stronger. the political risk is still there. george soros said russia is at a

risk but a 50% chance of a grexit. we will bring you the interview next. ♪

jonathan: good morning and welcome back. i am jonathan ferro. i want to bring things to ukraine. natalie jaresko spoke to

bloomberg. ryan chilcote asked her how the country plans to reach access to markets. natalie: it requires us to reach an agreement now and the reform program and really structurally do the things we have committed to do and to do them on time. stay on the imf program. it means reform deregulation and making this is easier. there are variety of things have flows into what i believe by 2017 the restoration of our ability. jonathan: that is the message from the finest minister. francine lacqua spoke to billionaire george soros and said the situation is concerning. and ukraine will deteriorate. francine asked him how he rates the new government so far. george soros: the task is -- you know, in minutes and they have not done everything right.

and the reforms have actually been rather slow. and they are just beginning to -- beginning to see the actual performance. practically every day, there is an advance. but interestingly, what happens this ukraine is up against not only putin's russia will but to what i call the old ukraine that was to be the opposite all the old ukraine but in the old ukraine is there. francine: the west becomes tougher or the west continues as it is what happens if the west continues as it is? ? how bad is it going to get george soros: one is ukraine collapses.

this is putin's sort of objective goal to have a financial collapse, political infighting, and he can then step back and say, i didn't cause it i am a good boy. lift the sanctions and that is what he hopes for. jonathan: we are pleased by francine lacqua who brought us the exclusive concert -- conversation with george soros. i really liked the fact making an example of russia by making sure ukraine succeeds. what is your take? francine: he is feisty and is passionate about ukraine. he is trying to spur the international community, the west to try to be proactive. i asked him how do you become more proactive and he said it is a show of unity.

it is difficult for europe and the west to show unity because of greece. he linked the 2 and is passionate about ukraine. it is just unfair. jonathan: you talk about other subjects and one that stood out was greece. a 50/50 chance a solid chance they could leave the eurozone. the basic scenario for this guy is 50/50. what else did he have to say on greece? francine: he was tightlipped because he was there to talk about ukraine. he said whatever happens, it a lose-lose situation. they -- he said they euro went about it the wrong way. he was very tightlipped. basically, he said, greece is going to be a disaster whatever happens because they are muddling through. and whether they should ask germans for more support or if he thought they should be -- she

let me know about the whole thing. francine: -- jonathan: you probed him. francine: he is funny. he said because of the divergence of central banks, he thinks the fed will do something this year. i asked him about the value of the dollar and he says a great great time for hedge funds. he said, i do not money manager anymore. jonathan: all of the excitement and more on "the pulse." for those on the radio, first word is up next. francine is common got. a busy morning for data. eurozone pmi moments away. francine will bring you that. and if the u.s. reading of cpi will come in at 12:30 p.m. gmt. euro strength come back to 109.

german pmi much better than expected. if you want to talk to me, i am on twitter. good luck the rest of your day. ♪

francine: greece continues to remain at risk. 50% -- that is what george soros told me in an exclusive interview. pound under pressure. sterling continues its two-day drop. we will look at election risk. good morning to our viewers in europe.