long -- hollande later today. tonight, george osborne and the other mark carney. those of you who remember the speech last year, get ready for a rate hike that never came. more news tonight. futures lower. dax futures up 16 points. the stoxx 600 on a six-day losing streak. come over to the touch screen and i will give you an idea of what is driving trading. it's not in the equity market area it's right here in the bond market. yields on german bonds keep going higher after the worst week for the german market since 1998. yields are three basis points higher. we had to one percentage point.

if you look at the spread we have gone from 150 basis points all the way back to 190 basis points. the euro has gotten stronger. another quarter of 1% stronger. the big headline generating currency is right here with the dollar yen. governor kuroda says the yen weakens much more. the yen surges. that is a stronger yen against the dollar. here is what it looks like a cross europe. the dax off by a quarter of 1%. losses on the periphery set for a seventh day of losses.

that is europe. check out asia. those of you following will know that 2% is not a big deal in china. the shanghai composition just a little bit lower. the big news came overnight. in messy i expected to put china's stock -- msci expected to put china's stock of the index. saying it will work with the nation's security regulators to try to overcome remaining obstacles. richard has more from hong kong. great to have you with us. i guess we have got to think about whether this was a surprise decision and then think about equity market affects as well. what is the story? tax in a way, it wasn't a surprise. -- >> in a way, it wasn't a surprise. investors were leaning towards

not including it this time around. they tried to spin it very hard. they made it sound like this is just about to happen. they are working with regulators. they are trying to emerge more firmly on the world stage in terms of capital markets. they want the stoxx to be part of the benchmark index. there is still a quota. caps on the amount of money that can flow in and out. all this meant investor concerns are too much that msci cannot do it. they did say if and when these obstacles are fixed they can announce it any time.

they said the benchmark indexes would follow 12 months after the initial figures. in the end it was quite sanguine. we saw the fluctuations in stock markets. >> let's talk ipos. take a company like china national nuclear power. it went public today. we have to talk about the bids for the ipo as well. i have never seen anything like this. break it down for me. >> this is a company seeking to raise 3 billion. it got more than 200 billion in bids. if you look at its first-day performance on the first-day chinese regulators will only allow a 44% gain. that is what we have been seeing

in virtually every ipo. we saw the 44% gain. it has risen 5%. you can see why investors want to get in there. i don't think they really care what the company does. we have got i think next week there are 25 more ipos coming in. it's like winning the lottery. it hundred 86 billion u.s. dollars expected. it might be even bigger. maybe the largest in years. >> thank you for joining us in hong kong. let's keep the conversation on china. here is the global equities fund manager. we have got to start with you. china nuclear power company. china raised $2 billion.

to a lot of people it smells like a bit of a bubble. what do you say to them? >> that has been a feature of the china equity market for the last 20 years where there was always a pool of money which only plays to ipos. it is not like this money rushes in and out of the equity market itself. this type of behavior is a structural part of the market for a long time. in the last five years we haven't had many ipos. everyone forgot about this behavior. it is a separate pull of money. >> are you saying it is normal? is that kind of thing normal in

china? is that what you are saying? >> that sort of ratio is normal. in this case the numbers are bigger. most of the ipos are smaller. it is always like that. jonathan: the msci decision is not going to happen overnight. it is going to happen gradually. >> we know it is going to happen. we know the chinese government wanted to happen, so it will happen. it will just take a little bit longer. the shanghai is down. people notice delays, but that's all it is. jonathan: do you share that decision as well? as far as you are concerned it doesn't really change the picture? >> i think edward is correct. we had some commentary circled

in china over the weekend dampening down expectations. it was a bit of a selloff in the lead up to the announcement. what is interesting is they really made the language much more friendly. last year it was a cold announcement a were not going to include asia. this time it is about having a working group, making an announcement ahead of the next review and 12 months time. things generally indicate everyone is working hard to make this happen. we did not get that sense 12 months ago. jonathan: there are a lot of people sitting in london and outside of hong kong and asia, saying, this is nothing but a bubble. do you think this is a genuine bull market? >> i think people thinking like that need to do a five-year

chart and look at where china sit relative to the global indices. out of the last five years china capped going down while global indices -- kept going down while global indices kept going up. it was the worst performing equity market in the world for five years running. we basically had a big catch up i think the issue is we have valuations but the momentum in the market looks like it is going to stay with us as long as the government is pursuing credit easing policies. until inflation picks up in china, the credit easing policy is going to remain in place. jonathan: how crucial is margin lending? to a lot of people it is margin lending driving this higher.

that to a lot of people is not a genuine bull market. that is easy money from the people's bank of china. is that not what is really going on right now? >> there are two drivers to this rally. one is the credit easing policies of chinese banks. the second is the financial reforms implemented by the new leadership. they have waited more than a decade deregulation across the whole financial spectrum. there are powerful structural drivers as well as credit easing. it is the locomotives pulling the chinese equity up. it looks like from here until your and not much is going to change. we may have questions around credit easing.

for the remainder of next your we are looking at a similar situation. -- next year we are looking at a similar situation. >> the shanghai copper as it has had a huge rally. how about 2015? >> we spent it around 5000 points. certainly at 6000 and beyond is quite possible in this rally. we are less focused -- large caps will go higher. from here on in the big gains had to be made with at mid-cap growth sectors and now looking at the u.s. listed chinese stocks, which are going into the index. that's another area for people

to focus on. >> great to have you with us. thank you for joining us from hong kong. we just look at what is happening in china and say this is a bubble. i want nothing to do with this. is that the view? >> yes and no. in the short term absolutely. it is a bubble. it raises hairs in the back of my neck. we have been here before. we had a tech bubble in 2000, and it ended badly. however, let's not forget the bigger picture. we are seeing reforms by the chinese government that are intended to move the savings more into bonds and equities. at the moment, where do they have their money? it is in gold. it is not in equities at all. the chinese have an enormous savings as well. jonathan: the numbers on the

screen are not wrong. some of those stocks have risen. >> i'm not disagreeing with the fact that it looks scary. i don't think that should distract from the longer-term picture. you are going to see a wall of money moving. it is moving from cash gold property into equity over the long-term. when i hear people talk about value, it worries me. we are in the middle. it doesn't really tell us anything. jonathan: that is new to me. thank you very much. coming up, a man on a mission. alexis tsipras catches up with merkel and hollande. will that meeting even happen? what to expect from mark carney

and george osborne's speeches later today. why london >> rehousing is not bouncing back after the election. those stories and many more coming up. ♪

legs here is a picture of the market for you. this with the city of by a 10th

of 1%. that index lost a lot of weight. we are off by another 33 points. the six-day losing streak. that is the longest losing streak so far this year. i will get you up to speed over the next 45 minutes or so. let's tell you the stories you need to know about. the yen headed for its biggest gain against the dollar after bank of japan governor kuroda said it's hard to see the currency falling much more. the move paves the way for the video streaming company. netflix is the best performing stock so far this year. economists see and almost 40% chance the fed will delay an

interest rate hike. half of them say the fed would hike in september. greek prime minister tsipras plans to meet angela merkel. meanwhile, there has been no progress on negotiations this week. hans nichols is in berlin. paul gordon is in frankfurt. are we expecting anything from this meeting? >> we're expecting to see some sort of recap. i am looking for clarity. we have this international official telling bloomberg there is an impasse and no progress was made on tuesday. we have a new page proposal

through their creditors. it would quickly rejected. it not only walks back but they issued new demands. they want an additional ability to actually have great banks by more -- buy more. they want fresh money from new pots. it seems like the greeks are trading their site on other sources. in germany they are losing appetite for any sort of deal. it would require a third bailout from 30 billion euros to 60 billion euros. it is important because it gives you a state of play.

he said, we want greece to stay in the euro, but whether it is achievable depends entirely on greece. conditions have to be met. he said the lapses go back generations. the rhetoric seems to be changing ever more negative on finding some sort of yield. jonathan: we take you from the policies in berlin to frankfurt. they have got to look at this situation as a creditor. i am talking about the ecb. how does mario draghi manage all of this at the same time? >> it's a difficult balancing act. very tricky. his comments were you have got to be concerned about the health

of the greek central bank. it is something the ecb doesn't seem to want to go to at the moment. they are talking about the balancing act every week. they decide whether or not to increase the amount of emergency liquidity. tightening conditions you need a two thirds majority for that. >> i want to wrap it up with you. i guess the question is whether the differences are bigger than the difference between merkel and tsipras. what is the story? tax they are widening. it comes down to a question of contagion. schaeuble seems pretty confident

the economic contagion is manageable. merkel seems much more willing to make a compromise. if that compromises core values, that is the cause of the difference. that is minor compared to the distance merkel and tsipras seem to need to travel to be on the same page. i can answer your question. there appears to be differences but the difference is you won't get to those differences unless you close the differences. they have a long way to go. >> thank you very much for joining us this morning. stay with bloomberg. we will be speaking to one of angela merkel's key allies at 9 a.m. u.k. time. you don't want to miss that. edmund is with us. if i concentrate on the politics

of what is happening in greece i am missing what is going on in the bond market. >> i think the bond markets are much more important. and greece people have low expectations. actually, looking at what is happening in the u.s. and treasury markets, it is interesting. bill gross made a comment. he talked about head and shoulders. i was amazed. he has not actually made us aware of that. >> am i just looking at the spread between the u.s. tenure and the german tenure. it has gone to 146 as we sit here. that is driving what is happening in the euro dollar the dax as well. >> i would say do not forget it

is a seasonable index, and we are at the worst point of the year. june and september are the worst months. i mentioned in my book. you get nothing for nothing in this world. the point being that strategy really works. with the dax, one thing it says about europe, stay away from europe in the summertime because europe always underperforms. jonathan: the biggest question i get is you look what happens with the dax area did the story is the good news bad news story. the increased inflation expectations. the euro gets stronger. for me of the story going forward is at what point the correlation between bonds and stocks actually equals good news. edmund: let's just pull back.

if you buy german bonds today you are getting less than 1% a year. it's still a terrible return. i think there's a ways to go before we need to worry about it. i think we can see good news for the rest of the year. we need to get through june. it's a terrible month. people need to think about the not-too-distant future. >> there could be another 10% downsize. >> lame not seeing where the bottom is. peggy the bottom is fraught with difficulty. there is interesting value reappearing in europe. it is maybe not just the dax. maybe look to italy. we are seeing a change in credit. credit availability in europe is getting better. jonathan: what do you say to

people who say this is an fx story? what do you say to those people? >> i think it's not as simple as that. if you were a global macro hedge fund you would play that. they have had terrible results. i would say there is still upside in europe. there are fundamental changes happening. this is the biggest, most important ingle story out there. they are still very low. >> the dax coming into positive territory as we speak. the ftse 100 is in the green. up next, it could happen sooner than you expect. that was the message from mark carney regarding a rate hike. george osborne is set to steal the spotlight.

details after the break. ♪

jon: welcome back to "on the move." 30 minutes into the equity trading session, but it is the bond market delivering the ted leonsis -- the headlines. just a couple months ago we hit five basis points. we have come to 1% this morning for the first time since december 25. a big turnaround in the bond market. mid april, just five basis points. people counting down to zero. then we get the rebound all the way back to one percentage point. let's check out the equity

board. the ftse 100 opened in negative territory. the dax pretty much dead flat. this was an index north of 12,000 points in april. a 10% retracement, the worst week for the german bond since 1998. yields higher this week. you will see the picture in the fx market. it is a stronger euro. up .7%. big turnaround in that currency pair, driven by rate differentials. the euro has gone with it. the other headline of the night is in asia. dollar-yen on your screen, up by 1.3%. the biggest drop for dollar-yen this year. off the back of the governor's comments from the boj saying

that is enough weakness are now. the problem is -- weakness for now. the problem is what he says is one thing and what he does is different. this morning, a lot more to come. let's lift the lid on some of the stock indexes. ryan: surprising and interesting stories this morning. bayer agreeing to sell its diabetes business the panasonic health care. buyers of bayer very happy. intertec, the world's largest clothing retailer. profits came up 28% above what it was for the same quarter of last year. clearly investors looking for more. finally, the shares are up, despite the fact that like for like shares are down 3%. it is better than the rivals.

it is all about the competition. the discounts between the higher and and the midmarket. sainsbury's investors saying not great, but better than your rivals. jon: thank you very much. here in britain it is that time again. a year ago, bank of england governor mark carney lit a fire of speculation over a rate hike. he said there is speculation over the exact timing of the first and this is becoming more balanced. then, it could happen sooner than markets currently expect. one year later, inflation has evaporated and the bank of england has done nothing with rates. what can we expect from tonight 's mansion house event? svenya he stole the headlines last year, it looks like osborne will steal the headlines

tonight. reporter: the focus will be on financial markets. we had an unusual speech last year because we have a budget in a month extra time. -- month's time. he will be addressing leading figures tonight. there has been a lot of speculation over what he may do to appease them a little bit. we have had hsbc threatening to leave the country because they have been hit by the bank levy. he may announce a reform of the tax system. he will also emphasize the fact that fiscal responsibility still remains a priority. perhaps we should not expect too many big giveaways to the banking sector. jon: can the banks expect some appeasement tonight? on the other side, you have hsbc

dancing around and considering leaving the u.k.. is this going to be on his mind tonight? reporter: it certainly will be. if he does announce -- there is speculation that the bba had asked for an advance of the speech so it would be included tonight. that could certainly give some appeasement to hsbc, until they have a result, they will not pack up and go. a change to the system altogether would be what they are looking for. we haven't had much info on that. jon: thank you for joining us. let's bring in edmund shing. we will dig into the monetary policy side of things in just a moment, but it is set to be osborne time tonight. the big story underlying this speech, is it time to and banker

bashing? guest: i think it is. we look at the growth of credit, investment. grow the credit to be given to smaller companies to drive investment which is the heart blood of any economy. banks in the u.k. have become cautious about lending, particularly to small and medium-sized. they're riskier. the banks say if you will bash us layaway the regulations. then they say you expect me to take riskier investments. it doesn't work both ways. you cannot have your cake and eat it. hsbc. coincidental? i think not. they have been very clear. we will re-fence our u.k. liability. changing the brand.

no longer called hsbc u.k.. it means if you mess with the city more, we will mess around with a cleaver. we may float it off independently or sell it and cut our liability. don't forget that hsbc is also moving investment banking down a run. -- down a rung. they will grow the asian businesses more aggressively. moving or naturally away from the u.k. anyway. jon: is there an investment opportunity or is it all just noise? guest: i think there is. different ways to play it. the banks. the government still has a 19% slug of lloyds. what about rbs? any company that has lost money six years in a row, 18% bull -- owned by the government, and

doesn't pay a dividend and won't for a while -- not my favorite stock. lloyds pays a dividend. doesn't have a big investment banking arm to worry about. government comes with the discount. gets them in. jon: let's deal with the science. osborne has a lot to do tonight. governor mark carney, his job is not to generate the headlines from last year. i am looking at a rate hike priced in around summer next year. last year we were getting the market ready for a rate hike. a, did he do the right thing? i ask if he did the right thing because the markets were tightening. we have been talking -- had been talking about housing bubble. we are not anymore. some say maybe he said the right thing. guest: i think it is difficult. i don't think that mark carney could have anticipated the

precipitous drop in oil prices. first round affects oil prices. but the second round affects things like logistics and transportation. he could not have predicted that. we should cut the guy some slack. he is doing a difficult job. he is trying to counterbalance the easing monetary policy. all the tightening that george osborne is doing. let's see tonight whether in the mansion house or is a subtle change away from austerity. maybe some more -- whether in the mansion house there is a subtle change away from austerity. maybe some more -- jon: the politics fascinating as well. it was reported that president obama said he was not happy about dollar strength, that it was denied by the man himself.

a few days later kuroda comes out and talks about dollar-yen. quite a lot. it's something politically going on in the u.s.? guest: it is a reflection of the global currency wars. which are intensifying. obama is clearly frustrated at the poor performance of the u.s. which is largely down to the stronger dollar for which he blames the fed. he cannot be seen to compromise the independence of the fed by directly criticizing. guest: then again -- jon: then again it is the job of the treasury. would you expect it to come out at some point? guest: i think they have learned their lesson. they will be very quiet and they will pray that the events in japan and europe will do the work for them. at the moment -- janet yellen's job has already been done. the tightening of monetary

policy is already happening. stronger dollar on the one hand and stronger on deals on the other. the market is very sensitive to the bond yields. that is the tightening we have not seen in the u.k. because we depend on variable rates. jon: it has been a pleasure to have you on the show. up next, from mansion house in london to london's mention homes. wide -- mansion homes. why they are not getting the postelection bounce. after the break. ♪

jon: we are about 45 minutes into the trading day here in europe. top stories. alexis tsipras is scheduled to meet angela merkel and francois hollande in an effort to break the deadlock over financial aid. talks would take place in brussels. one official says there has been no progress for weeks. china land expects to put the mainland stocks on the index. they will work with the regulator to overcome remaining obstacles. a decision on inclusion may come at any time. the yen, after the biggest gain on the dollar this year, the

bank governor says it is hard to see the currency falling more. lament and luxury. realtors predicted a flood of money would surge into the london luxury housing market after the election. if you own one of london's most extensive homes you might be disappointed. pushing back against record high prices. our real estate reporter has the story. patrick, what happened? how did this come about? reporter: there are two camps on this. some people have said that it is george osborne's tax rises to have taken a toll on demand. others have said it is the possibility of ed miliband. we know it has not come back. prices are wallowing. the other problem is sellers. we are hearing brokers saying a 15 million pound house because cameron got back in they will put it out for 18 million

pounds. jon: the size of the luxury markets might be oversupplied. ira 2013 quite clearly when we were talking about money -- i remember 2013 quite clearly when we were talking about money coming in. he so this big surge of supply and the cranes everywhere. they are not building houses for the average person. these are multimillion pound houses. do we have a supply situation and that part of the market? reporter: it is looking like it could happen. just take mayfair. there are enough houses and plan commission therefore a 10% increase -- there for a 10% increase. a 10% rise is a lot of money. if you look at the tax situation. if you bought a 4 million pound home in 2007 you would have paid 150,000 pounds in tax bills. that same house would be more

than half a million pounds. that is thinning out the buyers. jon: do you think the house market will fall in the way we saw in 2009? not just the sub prime but the super prime. if i am a buyer i'm looking for somewhere to park my money. is the difference of a couple hundred grand on duty going to make a difference? probably not. reporter: it is london at the end of the day. there is still a lot of uncertainty. look at the eu referendum, the rules on non-doms the government might take another look at those. some small price increase in notting hill and so on but of double-digit price growth has gone for now. jon: great to have you on the show this morning. oil -- reducing a crude supply glut. ryan, give us context.

ryan: investors think that glut of oil is about to subside. we have oil market analysts looking at the industry numbers we are expecting at 10 a clock a.m. et -- 10:00 a.m. et. they think it will fall by 1.5 million errol's. the numbers -- barrels. the numbers yesterday am a they saw a 6 million barrel drop -- yesterday, they saw a 6 million barrel drop. even if it does fall that would leave us with 476 million barrels in their. still quite -- in there. still quite a drop. you can see this optimism and the oil price in proxies and chairs that act as proxies like gasprom that saw a big boost

yesterday. jon: as far as russia and putin are concerned, putin will be in italy. are you expecting anything from this meeting? ryan: it is significant in that it is a normal meeting. the russian president is going there to discuss business and politics, not only the ukraine. he will go with the italian minister to a trade fair that kicks off in an hour's time. they will check out the russian exhibits, then they will go to the italian exhibits. they will have a joint press conference and then go to rome and meet the pope. the italian president. it is quite a full on visit. it is a million miles away from the visit we saw last year from the russian president to milan. i was outside the hotel and asked him what he thought about people constantly blaming him for derailing the peace talks

and he said people are always blaming me for something. he was there as a pariah for late-night talks with merkel and other leaders but not to discuss bilateral trade. it has been a big move. it will not lead to the end of sanctions. we will get a likely extension of the sanctions the week after next. it is warming things up in europe for the future. jon: thank you very much. that is all most it for "on the move." next we will wrap up the day for you. what has happened in the markets and what you need to look out for, after the break. back in two. ♪

jon: welcome back. 53 minutes into the trading session here in europe. for the first hour of trading the ftse 100 in positive territory. we're almost at 11 k flat. that 10% correction coming back a little bit. the equity market snapping six days of losses. we were heading for seven. the longest losing streak so far this year. switch out the board to look at the other asset classes. the stronger euro is the story again. once again up .6%.

dollar-yen, the big story overnight. 1.29% down after governor kuroda gave dollar-yen a slap. the big headline, that german tenure back to 1% for the first time since september 25. that is the bond market. at 9:00 a.m. will get italian industrial production. later, u.k. industrial production at 9:30. u.s. mortgage applications at 12:00 p.m. we will hand over the market for the rest of the morning. what are you looking at mark? what will you be looking at for the rest of the day? mark: three things for you. china kuroda and german bond yields. just a taste of what i will be

focusing on for the rest of the morning. this is the shanghai composite. it is holding off from adding china's mainland stocks to the benchmark indices. it has moved between gains and losses. gains of almost 1% losses of 2.2%. it is not over. a decision on inclusion may come at any time. this is one for you jon. the yen is rising against all 31 major currencies after the governor kuroda said it is hard to see it falling more. i looked at the yen, it gave every -- against every single currency in the world. which are the only three currencies that are rising against the yen? i will put you on the spot. you can see it clearly. only three currencies are rising today. the nicaraguan, the sierra

leone, and the west samoan tala. this is for you jon, as well. we have seen the german bund yield rise against 1% for the first time since september. we have been talking a lot about the correlation. this chart shows that. the white line is the german bund yield -- sorry the white line is the dax index. it rose to an april record. the yield has been falling as the dax has been rising. the inverse of what has been happening since april. jon: great work. we will be watching that spread between the u.s. 10 year and the german tenure. coming up to 148 basis points from back in march. "the pulse" is coming up next.

they will be talking to angela merkel's key ally. they will catch up on greece after the break. good luck with the rest of your day. ♪

francine: msci defers adding china's mainland stocks to the index. the greek prime minister is set to meet angela merkel and holld ande. the german yield climbs above 1%. the mansion house speech later today.