ceo tells us why he is not making contingency plans for a grexit. the rebound from a six-year low in oil prices causes the recent rally to almost be done. futures turning lower into the session. futures are down by 46 points. let's get the market open with manus cranny. manus: the bond market as you say were just coming off those highs in the german government bond market. again this contagion is right. it is going into the equity markets. let's look at the bar charts. today we get a slightly longer day.

are these yield sufficient to bring demand in? yesterday the 10 year government bond market auction has been in best to demand since 2011. are these yields offering a proposition of value in a zero interest rate environment? it is a zero interest rate market in japan. u.s. treasury yields are declining this morning. a busy equity market open. equities are declining. the dax is 8% off of its highs of the year. investors are taking money out

of europe for the first time in 2015 according to bank of america. $1.5 million, you may say is not enough -- a lot. let's go into the dax and see what is driving and asked. equities are a touch lower. some individual names making headlines. telefonica down. the orbiter, that was in line even though the net income was double the estimate. itv, good report, second most shorted stock in the european broadcast space. it is up 23% for the year, it is the highest short position by

the market since 29 -- 2009. salvatore ferragamo first quarter sales you are seeing the numbers miss by nearly 30%. luxury trading lower. the all these 8131. four-month high for the aussie dollar. lagarde currencies off. you are seeing these commodity currencies come up again. you have glenn stevens and green

wheeler, he must be crying 75.45. the new zealand dollar spiking higher. i will leave you this investors sentiment on the aussie optimism is as high as february the 20th. jonathan: manus cranny, never crying in his cornflakes. the dax off by 65 points yesterday about the dollar. full steam ahead for the dollar then something got anyway in march -- got in the way in march. yesterday a fresh blow as u.s. retail sales stagnated. economist thought again about u.s. growth rebounding this year.

the white line on your screen right now, 3% growth for the next quarter, the most bullish 5%. the bears looking for growth of half of 1%. are you a white line or a redline? >> the growth forecasts in the second quarter will not rebound a strong. retail sales figures were disappointing. they have not spent that oil. they have been through. recession and are worried about their jobs. jonathan: what is the story there? the oil prices plunge, but this is good news because the conservatives -- consumers will spend, they did not. kerry: they were worried about the outlook.

i would question the data sometimes the retail sales do not capture the economy. you have to look at the breakdown of gdp to see the consumption post. jonathan: i want to talk about the markets we get it for you -- u.s. retail sales number and a drop in the dollar, that is a breakdown in what we would usually see. what is the relationship between higher treasury yields and a weaker dollar? kerry: none of the equities look cheap. they are seeing a story that is not developing in the way they want. they want to see a strong u.s. and european economy. they are pushing back expectations. everything is bound to change. the rise in the dollar will be one of the beneficiaries of u.s.

equity markets the fear. the oil prices have held back profit. jonathan: a breakdown in the traditional relationship in the u.s., the breakdown and correlation throughout the european crisis, risk on risk off in 2012. now it is by everything, sell everything. bond yields higher, bond yields lower when things are good higher with things are bad, where is the safe haven? kerry: these yields being so low, clearly what we have seen in the last few weeks this is not risk free at all. the big question now is about the qe trade. you have to look at what the ecb is trying to do. they want banks to lend and they want a week hero w --eak euro.

jonathan: mi still looking at the euro this morning? do we just keep the focus on the euro or bond market, which one? kerry: it is about the buildup in domestic demand. it builds up and gets more growth going, ecb credit cycle turn further, look banks lend more, that is the sustainable growth. that is what you want to see. you don't want to see just about a weak euro in trade. jonathan: still bullish equities? kerry: i think it is. i think these markets had a great run. the fundamental is to say the

markets can still be supported. the euro is weaker than it was a year ago oil prices have come back a little bit. consumers -- these funnels have not changed. -- fundamentals have not changed. jonathan: he will stay with us. coming up oil split figure as u.s. state of brings the rally into perspective. housing is riding high after a surprise election in the u.k.. we breakdown the rig's report and what it means for homebuilders in the u.k.. we had to the break and here is a check in on the markets. the dax trading lower, now we get 100 points lower. the story this morning, strong currency, the euro goes from one dollar and $.14 and the dax

dropped. one euro buys me $1.24. the rate in those moves, and the yield of treasury, up by four basis points. look out for an auction later today. we will talk about oil after the break. ♪

jonathan: good morning and welcome back i'm jonathan ferro and this is "on the move." mark carney spoke earlier today. productivity has been weaker than expected for years. this is a big topic in the bank of england inflation report. the bank of england expect productivity to pick up but only modestly. we will talk about the report in 10 minutes now let me bring you up to speed with some of the top stories. sales rose 13% as businesses and

spain improve. europe's biggest phone company says it returns to growth in spain this year. honda is said to add vehicles to its global retail. they had a recall today that brings the total to 19.2 million vehicles. the amtrak train that derailed and philadelphia was traveling at a speed of 106 miles per hour for the accident. u.s. regular say that is more than double the speed limit. several were killed in the accident. stan druckenmiller says an aging population will be a massive problem in 15 years time in the u.s.. the investor it has one of the best track records in the industry. they say they will have to reduce payment for the elderly. u.s. refineries reduce crude by the most in four months.

it is the biggest slide since january. we caught up with a chief executive of italian oil giant, any. he says oil will recover. >> our review for 2015 is we will stay at a $65 average. the price now is about $67. it is a positive trend. by 2016 we could reach $70. demand is increasing. supply is reducing. jonathan: goldman sachs on oil

saying that oversupply is implying that the recent rally may be overdone as that rally from a six-year low pauses at $60 a barrel. gary craig with us at j.p. morgan asset management. in 2014i could pick any analyst and they would say opec is trying to gain market share. we get a rebound to $60, and now they are not talking about that story. does that story still hold? kerry: opec is trying to increase its market share. you'll see shale production reduced. there is finally an oversupply of oil in the world, sure. it is not exceeding the fact that there is too much oil flushing around and this will keep an oil price low. also you have concern about storage in the u.s.. the levels have come back down

in the last few weeks again under the reason to think the oil price could remain lower. jonathan: oil stocks, what is the story? bg group number two, we know why, the consolidation story that has not panned out the way you thought it would. kerry: you are hearing increased talk in the u.k., canada, and elsewhere, that is because these companies are seeing good bargains. if you look at the index as a whole, you can see earnings crashed to the floor. we have a team in the u.s. and they say across the board they can find energy stocks trading below. jonathan: in the next 5-10

years, will it be cheaper to buy a barrel of oil on wall street and then point out there and finding it yourself? kerry: i think this will take a wild for the supply and demand to balance. it will probably go lower. jonathan: how much? kerry: i don't think we will see the $40 a barrel. i think opec is winning the war. every time at his back up to $65, that is a few more shale producers and saudi has to react. jonathan: we go into the opec meeting next month, what is the story that will come out ? kerry: venezuela will have budget problems from it. the opec story will not change.

jonathan: the story in the back half of 2014 has not changed, will be saudi zakaria on tolerating this? kerry i think: until you see the market turn you will see that story play out. jonathan: checkout sterling, a fresh high for the year. yesterday was kind of a dovish inflation. i will wrap up the inflation report from yesterday, we will talk sterling, productivity, and fiscal policy meeting monetary policy. the pound, 1.5781. ♪

jonathan: good morning and welcome back. let's get you caught up to speed on where u.k. markets stand. the pound with a 2015 high. european equities trading lower. the yields above 2%. yesterday we heard from mark carney, the monetary policy committee with the inflation report. >> the economy is growing. earnings growth is improving.

there is no evidence that household spending is being delayed. in the medium-term, productivity growth is the key determinant of income growth and our shared prosperity depends on it. consumer confidence is the strongest in over a decade. household spending should be can tenured supported by the boost from lower food and energy prices. wage growth is expected to accelerate. the pickup and productivity supports higher labeler -- labor compensations. european activity should be supported by the ecb's quantitative easing program. overall despite a moderately weaker outlook for demand growth relative to our february

inflation report, a similarly weaker outlook for supply means we continue to expect a sufficient terming in an inflationary pressures to return inflation to target within two years. the question of the level of equilibrium instrument -- interest rate, mainly the rate required to keep the economy operating at capacity and inflation at target, that question comes into sharper focus. jonathan: let's get final thoughts from the global market specialist. i pick up three points, they are all related to government policy, not monetary policy. there talking about fiscal policies. he is talking about getting more clarity on the votes in the eu. are we going to experience the 2012?

kerry: the housing market has been dampened. they are running out of livers they can pull to get the economy going. the biggest problem with the u.k. economy is productivity which has not gone anywhere in five years. we need to encourage r&d. we need to upscale the labor force. at the same time there is a boost from having continuity that you know they will be harder and more of a drag on economic growth. jonathan: central banks want to get the rates off the floor. at the same time sterling is at a high even though we had a dovish report yesterday. is the count becoming a problem? kerry: the bank said it was productivity that weight on growth. looking ahead, anything about an eu referendum will start a conflict towards the u.k. and maybe see that sinking.

you are seeing that honeymoon. from the election. that move is about the dollar. donovan point will be -- jonathan: will we have problems with the bank of england? kerry: i think they have not thrown in the towel completely. you need fiscal and monetary policies to get this economy going. you need reform to get productivity up. they are saying this is our intention. jonathan:kerry craig, thank you very much. over the last half hour states and houses, homebuilders in the u.k. soared after the election but where are the best opportunities? after the break and analyst gives his picks for the sector, stay tuned for that. the pound at a 2015 hi. the euro-dollar punching higher.

a medium forecast for this pair one dollar and five cents the year and. ♪

jonathan: good morning and welcome back. this is "on the move." we are live from bloomberg headquarters in the city of london. let's get you up to speed with trading. red is the color for the third straight day. the dax is off by 69 points. before this market opened, there was an fx move. the euro goes to one dollar and $.14. a stronger euro. before the break i was talking about forecast.

the year end forecast for the euro, one point 05. let's live -- lift the lid on these indexes. caroline: we have got one trading lies coming off of its high. it looks like they will have been prone to a flat or two. they have posted their sales so far this year up. despite unfavorable results across the entire sector, the growth is strong, particularly down under. more people betting on sports. the net revenue was up as well. paddy power was the better performer. on the downside itv was one of

the worst performers of the day. i will give you much more of story behind it in just a moment. it is all to do with audience figures. they're losing eyeballs, does that put off advertising? will we see itv trading that little bit lower. tele-city saga continues. two months ago tele-city agreed to combine with other company. last week they then said they were being bid for by another company in america offering a 27% premium. another potential suitor was being speculated on yesterday. it was expected that another company was coming at it as well. digital realty says they do not intend to make an offer to

tele-city. jonathan: caroline hyde, thank you very much. the last 30 minutes or so varoufakis spoke about an economist conference in athens. let me read you the headlines. greece not looking for haircuts on its debt. the haircut word is bad. greek debt must be redesigned, that is what varoufakis said. that is the same story we had a couple of months ago. is it reducing interest rates even though the interest rate is comparable to countries in the core, we can talk about to the show. i will give you an update on what he says the next 30 minutes. from athens to london, let's talk about housing. the london housing market rebounded in april. it rose to a 10 month high because of a shortage of

property for sale. the u.k. at sector has seen big moves recently. look at these moves over the last week. they're all up significantly in the last week. where are the best opportunities in this sector? let's talk stocks with charlie campbell analyst at liver and capital. before the election, you said that a labor win would not be negative, but a conservative majority had that big pop, would you now fly that further down? charley: to think to focus on one was the micro and macro. the micro is helpful for both outcomes. the clearly thing the market has latched onto was the macroeconomic outlook under the conservative party. housing is a high ticket purchase.

maybe the feeling ate the confidence would be stronger under a conservative government. jonathan: the house building stock extravaganza started in 2013, how much is in the price is right now? charlie: it started with a scheme launched in 2013, almost an overnight move in stocks as people thought the government would support the housing sector. a lot of confidence, a lot of activity it has been strong ever since, in spite of a lull from last year. jonathan: everyone is so bullish here in the u.k. on homebuilders. it is the price and the average 12 month price target of analysts here in the u.k. on barclays you can see everyone is bullish. the price target is above what it is trading at right now.

it is the negative here? what is the downside of risk before a company that operates in u.k. like barclays? charlie: the bad case for stocks if there is one is what happens to interest rates from here? and what happens to evaluations. evaluations are at an all-time high. i think that is justified because there are things that are very much different this time. you can talk about government support, you can talk about a benign landmark here for structural reasons. those things are justifying higher evaluations and have seen before. the dividend yield was very good across the sector. there are good reasons why the

evaluations are as high as they are. jonathan: the prospect of interest rate rises, will that affect a stop light taylor wimpey? charlie: half of barclays customers do not use mortgages. barclays is the london play they are the most interesting at the moment. they have had the biggest bones -- about postelection. it is still underperforming by 25% over 12 months, even after that rise. jonathan: if i don't want to get exposure to super prime here in london, i want exposure to a 12 month story that could play out with a conservative majority, a big major main street house builder where do i go? charlie: fair way. it offers reasonable liquidity.

the great thing is it has opportunities to grow. as we look forward over the next 4-5 years, government does want more houses built across the u.k., a stock like ball away is very well placed. the big companies are giving up on volume growth. the ways is sitting nicely in the middle. it makes it an interesting stock . i think that will be the theme of the next two years, how do you get the volume growth that everyone has promised in this election. jonathan: the analysts are all bullish. they are worried about a repeat of 2009. home builders themselves are worried about a repeat of 2009. we talk about rate hikes, we're

talking about the first hike 10 point, 25 basis point, how does that rate hike cascade through the housing have a mortgage markets, and to the homebuilders. charlie: i think there'll always be a knee-jerk reaction. people asked what do you sell. i think the interesting thing is the curve, rather than where the first move is. the bank of england is saying that the rate should be one and a half percent by 2018. we are roughly at a mortgage rate of three. you may not see mortgage rates moving much on that base rate movement. those sorts of basis rate movements will only happen if wages go up. jonathan: and those inflating rate mortgages in 2007 will have to refinance at some point.

charlie: it is a dwindling proportion. either on those low rates or interest-only the problem becomes less and less of an issue nationally, from an individual perspective, they have to reconsider or refinance. jonathan: final question, you talk about cash buyers, it is not clear whether they are cash buyers. companies don't say. had he followed that story? charlie: there are two things of london, there is london at the center of capital and capital flies into london because it seems to be a safe place for money. that train has been rewarded. london house prices will be up 30% over the last five years. that has been rewarded. able to get there is a fundamental story in london as well. job growth over the last 5-6

years has been averaging 2%, which is up there with the u.s.. no surprise that london house prices have outperformed on fundamentals and technical money flow. jonathan: when you hear politicians talking about building more homes, do you think homebuilders went there to be to one or thousand homes built in this country. charlie: i think you need public sector to build more that needs more public money. it is not clear to me where that money comes from. we do need more houses, there is a shortage of housing. we under billed every year. i think the listed builders will do what they can. big builders have been scarred by the express of the last cycle and do not want to push tomorrow had. -- too far ahead. to solve the housing problem, you need more public sector building and you need dollar a buddies to come back to life. that means the banks lending money.

jonathan: the price point, what is it? charlie: they like that and they like that there is no competition for land. jonathan: winky very much for joining us. -- thank you very much for joining us. the weaker dollar, that is the story, the four-month low. sterling, just close to a 2015 hi, kicks a fresh one, 20 minutes ago. bond yields touch 0.05%. bouncing from a low crude, the rally causes at $60 a barrel. coming up on this program will take it from homebuilders to telecom, telefonica posted a big piece this morning as business in spain continues to improve. spain, just a good story at the moment, isn't it was mark we

will go over the numbers after the break. ♪

jonathan: good morning and welcome back, this is "on the move." it is time to talk about telefonica the company posting profits that more than doubled estimates. we have more from madrid. rodrigo, spain is such a good story for so many reasons and it

seems to be a good story for telefonica at the moment, at least better than it has been. rodrigo: yes and no, if you look at the numbers it teams as if there have been improvements. they were happy about it and they put out statements saying this is the first time they grew . the markets opened and the stock went down because people were apparently effecting more from spain. as one analyst said, the numbers are not bad, they were not going to be really and, but they are not as disappointing as other quarters. jonathan: outside of spain, how to the rest of the business do? rodrigo: going to these numbers as a reference which are the access points, there was growth all over the board. every country did well. in brazil, the second biggest market yesterday they reported an increase in their revenue. the problems come to retaining everywhere.

jonathan: last year almost every week i would sit here and have a conversation about consolidation in this industry. what can we expect for the future of this company after the last 12 months? rodrigo: they have been shifting with these last transactions away from europe. what we could expect basically is two things, they need an integration and the dust spain where they buy a broadcaster and they will have 85% of the pay-tv market. have to see something happening in mexico weather strategy is a bit confused. jonathan: great to have you on the show this morning. joining us live from madrid. itv across the uk's largest per

-- broadcaster and their stock is trading lower. only one person in the building can answer, caroline hyde. caroline: you know the shows you might tune into "extract or," and downton abbey." these are shows people want to watch. big fei company first quarter with ad revenue up 12%. they had a couple of wins helping them. you are more of an italian -- football man, rugby will be helping with the world cup. easter was early so we saw revenue up. it was well documented, everyone knew about it, morgan stanley raised their forecast because they thought they forced desk first order would be strong. what perhaps is the area of

concern is share of viewing, falling 3%. we are seeing less eyeballs on itv. does that still woo the companies who want to advertise? clearly we are seeing the share price down a little bit. the company is still talking a good game saying strong growth could come. the rebalancing the business. this is where it becomes crucial. the chief executive of itv does not want to be so dependent on advertising. what itv perhaps has been looking for his diversification. content is king. if we look at the numbers, it is already working online. 31% in online and pay interactive. they have in investing there and that is improving the revenue stream.

itv studios is the interesting one, revenue of 70%. they want to make their own content area "downton abbey." it will be at straw and itv did not make it, that is carnival film. they want to make in their own successes that draw in 11 million viewers. this is why they are plowing money into acquisition. the benefit is to come, but think of the things to spend the cash on. the weinstein brothers but shows. all of these productions will help in the future to prevent the ups and downs of advertising revenue. jonathan: thank you very much. i will admit it, i have never watched a full episode of "downton abbey" in my life.

caroline hyde, i am never going to. caroline: you and mark never have. you will find love in the reruns. jonathan: if we had to break, let's head to market share. the dollar at a four-month low. the euro pushing high. you see stocks turning over in the early part of the session. the dax down. the euro at 1.14 flat. that's strong dollar was the story, the analyst capitulating on that story. the dollar, 05. we are that strong dollar to come through. ♪

jonathan: >> it is a miss management crisis. >> you are talking to each other. >> starting from four years ago the european leaders transforming a financial problem of 2% in total debt, the massive

unemployment problem in europe. while you have such a politician that is not able to manage. you can add also the situation of the new government in three months they transform all of the benefit of the aid in the last two years or something. one year ago they could top the market and earn excess of the market. they are completing the ecb. the point is they have no convenience in going out from the eurozone because they have no production. this is the point the program is the mitigation from the other area. people are not able to manage crisis.

jonathan: that is the in tesla ceo. you'll hear more about that on the "the pulse." >> it was a wide-ranging interview. he spoke about profit, he doubles profit and he is expecting to continue on that trend. he promised money back to the shareholders. if he is succeeding targets that may have to the increased. he gave me a figure. jonathan: we will bring you that figure on "the pulse." as we had to break, here is what is coming up for the rest of your day u.s. initial jobless claims. mario draghi speaking at a conference in washington dc at 4:00 p.m. u.k. time. the youth u.s. treasury 30 year bond auction at 6:00 p.m. u.k. time. apparently kim kardashian is

coming up later in the day on bloomberg tv. this show, bearish kardashian, good luck for the rest of the day. ♪

' between the golf carriers and their american rivals continues. so, good morning. welcome. you are watching "the pulse" live in london. francine: let's start