japan's economy expands for a second straight quarter, beating forecasts's japanese stocks rally. and ecb treat. i'm going to be talking about it throughout the show. i'm looking at futures pretty much dead flat. dax futures lower by 14 points. manus cranny has got your tuesday morning open. >> thank you for that. we are looking at a slight drop this morning. in paris down 2/10 of 1%.

some of the key focuses. aldus agrees to buy 70%. we will have caroline go through that story. we have the story that draw he -- mario draghi may do a deal.

a guilty charge for fraud on libor. it exonerates him from a guilty plea in foreign exchange. we are waiting to see it is a huge issue marks and spencer is down. the question seems to be around margins.

the dollar is stronger going into margins. we are waiting on those minutes. day four and the decline of dollar sterling. you're looking at a 3% rise. how confident is the fed? we have to focus on price for you.

he is not making a deal yet. manus: we have vodafone stock. wednesday morning. i will bring you an update on the story. another big story in the corporate world this morning. ubs saying it will plead guilty on libor conduct and will pay fresh fines to settle. they are poised to pay fines. what do we know? >> they announced what the others are going to get to around 1:00. ubs has been implicated in the same behavior. the department of justice has been granted leniency. it still has legacy issues

related to libor back in 2012. what the department of justice has said is we will give you leniency but you signed an agreement. they said they will respectively force them to plead guilty. manus: mark: -- the ubs situation, what are they being accused of? . >> they are accused of trying to work together to manipulate various foreign exchange rates. they are engagingly called the cartel. it was essentially the most senior foreign exchange trade in

citigroup and barclays. they knew each other. they used to communicate about general business. at some point they overstepped the line. they attempt to manipulate a benchmark for an exchange rate. it was used throughout foreign exchange markets. >> you and i go back and forth about the legal issues. you get past one and another is uncovered. >> i think the banks will consider a kind of landmark because this is one of the most significant things to get over. it is looking into the foreign exchange market.

it is never over. i think as a result of all of these scandals, there has been a process of cleaning up, changing market practices, the thing like a chat room people used to use. i would never say with these large institutions you will see a wrongdoing. mark: you hear of a guilty plea --jonathan: you hear of the guilty plea. it has a dent. was it lower than many people expected? >> i think the fines were in line with expectation. there is a possibility there might be other practices that have been uncovered that haven't been uncovered before. you hear an important point that in the past a guilty plea used to be something that needed to be avoided at all costs. it could have huge

repercussions. you won't get a license to do business. these days it doesn't seem to matter. shares went up. >> you and i have kept in business for a long time. thank you for joining us this morning. time to switch things up and talk m&a. entering the u.s. market with an agreement to buy 70%. caroline hyde has the details. i have walked in, and there is a potential deal on the table. this was one half of the deal. the other half is potentially bigger. >> it does muddy it to where we will see even more frenzied buying. this is a media merry-go-round going on in terms of cable companies eating each other up or looking too. today we get the deal done. for the first time it is crossing the atlantic going into the united states.

it feels it is a fast-growing market. it is one of the largest. overall it is valued at $9.1 billion. it is paying $1 billion in cash. the rest is going to be debt. does it still have enough coffers to look at buying time warner as well? just a month ago the deal unraveled. the $64 billion him in a deal unraveled. suddenly the number two player time warner is up for grabs. let's go over three other deals that are currently being talked about. would they still be looking at time warner? would charter communications potentially by time warner?

also they are looking at the sixth biggest player in the u.s. that is bright house. so much dealmaking going on. you have netflix going on. we have new ways in which we want to be able to consume our content. cable companies consolidate. >> there is a story we talk about as well. when will vodafone get a dance partner? are we closer to finding out when that would be? >> finally we got a hold of liberty global's billionaire. john malone was on the phone with us saying the synergy and the deal with vodafone makes sense. his words were it was a great deal to pair the assets with vodafone. it's the first time we have ever

heard the billionaire make public these comments. there will be substantial synergies. in germany you have them on by liberty global. vodafone in the u.k. is not only a mobile player but looking to get into tv, looking to get into broadband. you also have the netherlands as well. analysts are agreeing citigroup has been lighting the fire saying a deal could mean 1.4 billion pounds of synergy, of cost savings. it seems to make sense. one thing to bear in mind is liberty global is smaller. liberty global is worth just $45 billion more. also, they have got very different views to how you structure companies. how would you per the different

philosophies? they want to be able to grow equity values. vodafone the philosophy is little leverage, low risk, high cash to investors. how do you square the circle? >> a lot to talk about. joined by the chief investment officer who oversees 22 billion pounds in assets. let's start with the bank. guilty pleas. does it matter for an investor buying these stocks? >> it does matter. it is a reflection on past management in discussions. how will it affect future management attitude as well. there is a fine balance between the risking a bank completely and taking on a modicum of risk.

do you get to the stage where they are so afraid of their own shadow that they don't take enough risk? my assumption is banks he risk -- derisk and are egged on to take more and more risk. manus:jonathan: as an investor, don't you want them to invest? >> the debate is about lending. banks are in the business of lending. you want them to encourage to lend sensibly. jonathan: i guess to questions. i have have the conversation with maybe a thousand different guests. when does the regulatory headwind go away? the second part of the question

is when does it ceased to influence my investment decision as well? is that now at that point? >> i think regulators will continue digging out a story. i think it is an ongoing saga. as long as they have confined the dirt, they are going to keep digging. it has been viewed as a source of funding particularly with the new york regulation. i think we have a few years more of them looking to see whether there were past misdemeanors or how their practices are currently. jonathan: a lot of news in the telecoms sector. the big news has been m&a for at least a year. when you look at some of these activities, you look at a company trying to punch its weight. we hear things like time warner being thrown about. does that concern you? mexico's

it goes back to the.com era. -- >> it goes back to the.com era. jonathan: what is your interpretation? to me it sounds like cougar. people start talking about you. is that is what happening? they are serious. >> i think they are serious. i think they see this as an opportunity. it's a land grab. everybody recognizes content is key. if you are going to be a strong player you need content. you need to grab as much as possible. there are other stocks that have been mentioned. there are large companies a few years ago people wouldn't have contemplated being a candidate as well. jonathan: it felt like the.com bubble. who wants a sneak peek of the qe

strategy? a few hedge fund managers have gotten just that before the rest of the market. it's important, and we are going to talk about it after the break. japanese equities hit a 15 year high as growth comes in above estimates. marks & spencer's announces its first share buyback program since 2008. a big story this morning. let's check on the stock movers. we see burberry lower. annual profit declining. increased uncertainty. the stock trading lower. marks & spencer's announcing the first buyback since 2008. remember, there was a report over the weekend. stocks up yesterday 8/10 of 1%. maybe we got the rally before the news. check out the stocks. that is after the break. ♪

jonathan: good morning, and welcome back. i guess we can give them a little bit of a rest. some hedge fund managers got a qe sneak peek at a before the rest of the markets. he told guess the european

central bankers frontload some of the assets before the summer low. i broke the news here. it doesn't sound good to you, does it? >> here is what we know. on monday night he was speaking to a group of investors. hedge fund was present. it was at that point he first hinted market participants or policymakers are aware of seasonal patterns in bond buying. that was a hint they would frontload some of the asset

purchases earlier in the summer. the news hit the wire at 9 a.m. the following morning. that is when we saw the euro dropped quickly. some people that weren't invited to the meeting are saying, wait a second. if important information is given at the meeting, it should have been equal. the ecb is saying they planned to put the speech at because of a technical error. they are also saying the speech was covered under chatham house rules. here is my question to you. if you receive information does that prevent you from acting on it, from trading it, or is that going to just enlighten your general intellect? jonathan: i want to keep it on the ecb quickly.

they are considering accepting more greek assets as collateral. this is the greek government is warning it will submit a payment on june 5. >> to important stories. the government ministers told local tv they will not make their 305 million euro payment on june 5 if they don't get an infusion of cash. that is the firmest deadline we have heard from greece. june 5 appears to be the deadline. then we have this other issue of what we are going to hear later today. reports are saying they will expand the amount of collateral greek banks can post for emergency liquidity assistance but there will be imposed haircuts. one final note. take a look at what it does to affect the greek economy. a fascinating study came out overnight. about 59 companies close every

day you don't have a deal. 22 million is shaved off of gdp every day. the estimate is the economy would need 25 million euros just to get it back to where it was in january because of the lost productivity due to the uncertainty. jonathan: thank you very much. let's get back to that question. still with us. let's start with you. i am not going to ask you about what happened in the markets. as someone outside, are you annoyed? >> i would have liked to have been there. i think the big issue is that something went wrong for communication. if you look at the outlook on european bonds, it was always

said that in order to buy 160 billion euros you're going to have to buy more ahead of the summer. it is not going to be possible. i think the important thing is i'm not sure he thought what he said was controversial. the timing in terms of where the market is and the treasury yields starting to have come down it was a catalyst at which point the ecb is backtracking. jonathan: if we were talking about individual stocks and chief executives doing this, we would be calling foul in a great way. in september they might have to back load. we might get a said hike as well. are they going to be able to trim some of those bond purchases?

>> i think it's going to be difficult. the backdrop is key, because we have seen huge volatility particularly over the last two or three weeks. you think the ecb would be very cautious. jonathan: they are concerned about the backup in yields not so much the direction but the speed. he has got to understand that is a big thing to say. >> yes, although you can imagine a position where beforehand it didn't seem controversial to say markets suffer from lack of liquidity. the selloff is bigger than you might have expected. you and i could have had that conversation any number of times. would we have known if we said it it would have had such a big impact?

i am more interested in the fact the ecb has intervened in one form or another at the time that peripheral spreads start to widen. the thing they hate most of all is a slightly stronger euro. it is a lack of volatility. bond yields at 70 basis points. the big thing is the ecb has been all about containing loss of confidence in peripheral spread. that was the biggest win of this nudge from the market. we are still buying enough bonds that the idea of having a blowout in peripheral bond spreads shouldn't be taken too seriously yet. i'm going to see where we go from there. i would say if the bond market starts selling off around the periphery, we see those selloff.

jonathan: maybe they will have another dinner. up next we will talk japan, after the break. ♪

johnathan loyd good morning and welcome back to "on the move." 30 minutes into the trading day. 5100 higher by not even a 10th of 1%. the cac 40 lower. a lot to talk about with retailers. i will do that in 10 minutes. the japanese markets, nikkei to twice five, 15 year high apparently good news. let's talk about japanese gdp

that is the good news ran beating expectations coming up at 2.4%. stocks going higher. managing editor of bloomberg in tokyo joins us now. ryan, i guess we have to talk about what was behind it? ryan: it was a good number better than expected. consumer spending was up. the one negative was a lot of it came from inventory buildup to recover from that recession from last year. jonathan: the inventories, how worrisome is that? brian: that could be a one-off. they might have to get some of that back in the next quarterly gdp. jonathan: if i look at the bank

of japan reaction to all of this , economists that we have surveyed, expecting more stimulus. is that still the best case? let's forget about whether they will or won't, will it make a difference? brian: today's number will feed into the narrative of recovery. that is good in terms of that. 2% inflation target does not seem to be anywhere near reachable at this point. a lot of market speculation that they will have to do something in october. the next qe effort might include eds which might explain some of the stock market points today. jonathan: the biggest hedge fund manager in the world, maybe, i will have to put that to my guest, brian, managing editor from bloomberg in tokyo.

julian killingsworth, fighting more from the bank of japan what does that do for the japanese economy? julian: and honesty, not a huge amount. the fear today is good. the pointer correspondent made it needs to take on that these standards will be volatile. overall a good number, the bank of japan is going to try and keep things moving ahead. doing unconventional things as he highlighted. donovan point the economist in you looks at those numbers and sees the jump in inventory, what do you say? >> you take the inventory buildup that out -- out and nothing will change policy. i think the real problem is one of time. i don't think i will be able to

tell you the kind of recovery it will have unless i get 18 months of data. we are in no man's land. we have had huge currency moves. to know whether it is working we will not know until all of these reforms see through several years down the line. that's where the other side of my life comes then and i say what do i do with markets? the policy temptation is to do more at exactly this point just in case. jonathan: 18 months? do you think the boj will wait 18 months? the follow-up is what do i do with dollar yen? kit: good data and the united states sends the dollar up, does not send the equity markets down.

therefore, nikkei up, dollar yen up. if we make it through 100 and 21 and a half today, i'm not sure what to do about dollar-yen. dollar yen has this habit of moving in steps. i don't think the japanese would mind going into a higher one. that would not bother them at all. jonathan: range bound? kit: i think we can break higher on the enthusiasm. everyone will push their further qqq e measures forecast into the future. jonathan: the boj will get pushed to one side, talk to me about this corporate culture in japan.

the stewardship code. i have seen some buybacks from japanese companies, is that a u.s. buyback story? or is that a change in culture? julian: our reading is that culture is changing. there is more awareness of good government in terms of relationships with shareholders and giving them more return. also looking at this enormous amount of cash that a number of japanese companies have. we could use to return to shareholders or invest in their own businesses. we view this as a early bird stage at what is going to be a very long progressive, hopefully, journey. it will take some time. this is not instant shareholder access like u.s. style. jonathan: i probably have not

got the patience to wait 18 months is that why i'm overweight japanese equities? julian: you have a bank that is a bit trigger-happy. you also have a change going on. you have an electorate of market that has been in the doldrums for nearly a generation. it seems to be rising phoenix like. jonathan: when you look at the gdp market, you see yields back up a bit, brian touched on this, the next about a stimulus could be focused on ecb a. kit: if things go wrong in japan, the bond market is a reflection of the debt, if this

does not work, if it is not get nominal gdp growth to turn around a debt level that makes greece look healthy, of course that is a worry. on the other hand, if you get to higher rates, i look at the jgb market and that is one of the reasons why japan has very low interest rates for a very long time. it is hard to see the sharp rises happen. jonathan: the other issue is immigration. we talk about an increase in tax receipts, we have seen a tight labor pocket in japan. unemployment is heading south. wage growth not there. why not do something about

immigration? why is that not being talked about? >> it is talked about. it is something that would help the demographics. one wonders either they make massive advances in robot technology, or they have to allow more immigration. one of the other. jonathan: which one? kit: more of the companies will look where the labor is. if you're a japanese manufacturer, that is what you have been doing. be prepared for corporate japan to take its wealth and be more activist in the rest of the world. it is a social issue for japan as the population slowly shrinks. jonathan: they will stay with us and talk about retail.

marks & spencer begins its first buyback program. we will talk in the nest and burberry as well. check out one stock, suspended trading in hong kong after diving 46%. the move comes the day after the annual general meeting. they say the stock has been suspended. if we had a long-term chart you would see that company stock going vertical over the last 12 months or so. an update on that later. join us into. ♪

jonathan: good morning, and welcome back. this is "on the move." if you lift the lid on the index there is a lot to talk about. caroline: let's check in on some of the biggest gainers. dmt -- altace going across the atlantic for the first time. it will be entering the u.s. market.

we understand he has already bought 70% of sunday and link -- suddenlink. could he also be eyeing up time warner? a frenzy going on in terms of cable. mna staying light under vodafone today. we heard for the first time in public from the owner of liberty global, john malone speaking out saying it would be a great thing to tie together liberty global and vodafone. we have been speculating this deal for months. the billionaire behind liberty global comes out saying it works well for us to.

vodafone and john blown -- as john malone puts it is slightly more risk averse. how would those shareholders like being leveraged up. shares on the rise. very is one of the worst performers -- are very--burberry one of the worst performers today. money coming in from europe, the euro is so weak, they say if we stick to these current fx rate we are likely to see profitability of 40 billion pounds less than previously expected. retail wholesale profit would be lower because of the fx hit area they also say uncertainty is building and a lot of their markets.

jonathan: caroline hyde, thank you very much. marks and spencer's out with numbers this morning. we were expecting a buyback program. we got one, the first one from -- since 2008. charles, an increase in profit or a buyback? charles: probably a buyback. i think the buyback signals that the peak of their capital expenditure is passed. they return capital to shareholders. their store refurbishment program is an endless cycle. they tend to dip again years later. jonathan: headlines this morning

, one of the things i noticed, new stores since -- in march 2017. what is different about marks & spencer? charles: they are opening the same stores that others are opening. more smaller food stores in places where people are commuting. this also creates a problem for their bigger stores. already more than one third of the food is purchased from simply food stores print if you open more, you take away one of the traffic drivers to large stores. jonathan: the target price, below where marks & spencer's is trading right now. do you like the stock? julian: no. we are still waiting for the management team to prove that they can deliver. we have not touched on their

other offering. it has been lamentable. they were behind the curve. can they keep the margin? they are receiving pricing pressure from tesco. charles: the big story on margin is that gross -- growth margin of going up. they have depended on legacy full-service vendors. they are now going directly to factors -- factories. they can buy cheaper, but they have the cost of shipping back to the u.k. and disturb eating themselves. jonathan: big picture retail when the oil price plunged, the story i was told that it would be great for the u.s. consumer compared to the u.k. consumer because taxes are high.

in u.k., that has not been the story, in the u.s. and walmart numbers what is the story for the u.k. retailers? charles: the story is good overall. we have a bit of a law all over the election. . peri in terms of retail salesod. you will see a bit of the renaissance coming through particularly over the summer. across the water in the state sensitivity around oil prices is great. particularly the bottom and consumer, you see the oil price go from $40 to $60, that is reflected because they have more money in their back pocket. if the price of petrol goes up they spend less.

charles: food is difficult in the u.k.. walmart was maybe disappointing yesterday, but home depot had sales ahead of expectations. people are prepared to go out and spend in the u.s.. here it is mainly making sure the merchandise is made right. people are tired of buying things just for the sake of it. jonathan: i won't comment on my shopping. thank you for joining us. as we head to the break, a check-in on one currency fair the euro. euro-dollar over the last three days, we are down by 3%. biggest three-day loss since january 26. the euro-dollar bears.

it is a fickle market. we are back in 2. back after this short break. ♪

jonathan: good morning and welcome back.

japanese growth beat expectations. they grew 2.4%. the nikkei closes at its highest in years. airbag maker agreed to the largest auto recall in history. the company's recall doubles to 34 million vehicles. yahoo! shares fell more than 7%. the irs might make it obligated for them to exit a deal. guy johnson is here. guy: andrew wilson will join us.

we have seen the euro down for a couple of days. the strong dollar has had its problems here in europe. slight issue of information release and when and where and how. i know you are taking this seriously, do you think the market is taking it as seriously as you? jonathan: market participants are not happy. guy: i don't think they are. jonathan: at the end of the day, you effectively change the strategy around qe. you are frontloading, changer strategy. guy: it is also about communication of what you see in the market as well. that is interesting about how the ecb sees the world of the moment. also how it wants to make sure

they will manage that. jonathan: also not cut and dry. as soon as you find out you have an adjustment to make, they say they will make the call in december but i don't know. guy: it will be a big part of what the ecb will have to do. they are bringing the euro down as well. jonathan: maybe that's what they wanted. guy johnson will join you in three minutes time. here his what we have for the rest of the day. guy johnson will bring you the bank of england minutes. later today at 7:00 p.m. u.k. time, federal reserve minutes. check out markets as we head to be great. the dax after a huge today rally pulls back by 27 points. biggest rally since january. we will talk about these markets . i'm on twitter.

good luck for the rest of your day. ♪

that way -- guy: ubs is find --fined. this as for other banks are said to be fined as well for fx manipulation. the french billionaire snapped up the sudden link for $9 billion. is time warner next. a great twist, liberty global john malone said a deal with vodafone would offer substantial synergies. vodafone surges.