european finance ministers descend on luxembourg for a deal. guy: the german chancellor will give a speech and berlin, she is speaking before parliament. we will be monitoring her comments, she is talking about greece. in the meantime, for what you need to know what we don't know yet is how the european market are doing. caroline: we are 17 seconds in coming from the federal reserve, managing to dictate what she needs to be saying to the markets, yes, you will get a hike this year, but it will be slower than expected. the u.s. rose on some of the comments coming from janet yellen. hsl -- asia fell.

janet yellen paid lip service to fragile economic conditions, she is warning about the spillover effect to greece -- from greece. alexis tsipras, talking very tough about contingency plans being built by the rest of the eurozone. still waiting for germany to open. italy is flat at the moment. we are generally seeing a downgrade on the stock market. the greece crisis has cost us $838 billion. you have seen what it has done to the stock market the euro

remains resolutely high despite all this turmoil, the reason is the dollar. the euro is up a 10th of a percent. you can see that rate hike pushed back to december. you can see a slower rate increase for 2016. let's have a look and cb move we saw on the dollar, down by .75%. i want to show you what has been happening with the euro, and the swiss bank. we are expecting no change, in the forward trajectory are we going to see deeper cuts into negative territory. you have seen the euro, swiss franc stay flat, the swiss desperate to see the swiss franc weaken further. let's take a look at bond markets, not too much concern.

greek foreign markets are down by eight basis points. not a sudden move there is still a search for safety. greek foreign cost coming down. on the back, a dovish tone coming from the federal reserve. let's have a look at some of the stocks to watch for in -- to watch for. this is likely to fall 5% german engineer is selling unit a power business. they will be selling for posted profit warnings. s.a.p. showing poor profitability, poor sales.

it is missing estimates in the u.s., that will feed into the european rival. lastly, swatch, off by .90. over to you. guideline -- guy: let me take you to germany chancellor merkel is speaking. we will look for some headlines as soon as we get them. merkel seems to be one of the few that appears to have a calm head as we had negotiate -- as we negotiate in the final hours of what could be an interesting weekend for greece. folks are gathering in luxembourg no surprise, greece

is front and center. the lack of progress on greece is a headache for switzerland, which is setting rates. we have hans nichols in luxembourg. hans, with talk about the meeting, i would hope the conversation around greece would be short. hunts point it will dominate -- hans: it will dominate. maybe merkel can change things by altering the difference, i look at a lot of signs that all -- are all pessimistic. the main comes from the french prime minister, he has been pessimistic, but in an interview he was talking for a need for a

deal. he said that europe is better protected than in the past. whenever i hear finance ministers, especially those in favor of finding some sort solution making the case that the contagion not be spreading countries need to make contingency plans, that means negotiations are far from anywhere, even on the same page. you saw this this morning when mr. cyprus was in russia -- alexis tsipras was in russia. he said the germans were paying the salaries of greek silver summer -- civil servants. they said it was up to the eu the creditors to come up with the plan. we were -- we are in the same place as we were 48 hours ago. we have a staring contest. we are getting close to the deadline. the ecb did increase the

emergency liquidity assistance up to 1.1 billion euros. they did get a little bit of a lifeline from the ecb, but there is still little pressure. guy: i wonder if that was draghi committee kidding by the bank we will talk about that later. jonathan, if anyone is praying for a deal, it has to be swiss. jonathan: absolutely. the best case scenario is today they would downgrade. the cap is gone. the cap is dead, it is unlikely they will bring it back. rates are at -0.75%. we know the smb are good at surprises, the question is, what form does that price take?

the guy is in the middle of a storm, within the eurozone crisis how do they react to a grexit? euros swiss, as strong as it was these guys have another option, crossing their fingers. i think that is the best case. guy: you will be talking to the main man later, is that the conversation? jonathan: number one, the eurozone officials can respond to a grexit. the credibility question, three months ago i said to the president, the swiss is strong what are you going to do? three months later, the euro swiss is still trading at 105, it is not working in the case of the central bank when janet yellen said the dollar needs to

go lower, it goes lower when draghi says the euro needs to go lower, it does. the swiss franc needs to weaken, it is not weakening anymore. guy: looking for to the interview, jonathan, thank you very much. i think i am in the wrong place today, jonathan ferro in beautiful switzerland. i am sitting in a room with no windows. the man next to me, in this room with no windows, mark parker -- bob barker. are we heading for capital controls this weekend, or a deal? bob: it is difficult to say. what you want to look at is what are the stress points for greece and what are the stress points for the markets? the primary stress points for greece are the outflows of deposits in their banking

system. yesterday the greek banks were thrown a short-term lifeline. having said that, it looks as though deposit outflows from the rate banks are averaging between 200 -- 200 million and 500 million per day, the outflows remain intense. if this continues, that stress point will result in capital controls on outflows from a greek banks at some stage, that could be sooner than later. that is stress .1, stress point to is can the greek government pay its domestic suppliers, can it pay public-sector workers, can it pay pensions? there are delays in paying suppliers although so far they are continuing to pay the public-sector workers. clearly, that is a point of significant stress. guy: how did you read the intervention by the greek

central banks yesterday? they made a strong political statement, they just had a increase in the ela, and the greek bank came out with a strongly worded so that statement, do the statements that together? bob: clearly, the central banks have to tread carefully in not getting involved in politics. having said that, the reality is there is a high probability that this was a message indirectly from the ecb to the greek government. let's also look at the data, we know now that the ecb has lending exposure to the greek banks collateralized with greek bonds well above 80 billion now. in addition, the national central banks in the eurozone plus the ecb have significant direct exposure to greek

government bonds. clearly there is that kind of -- that contagion risk. the european central banking system has to make a significant right off -- write off. guy: which is more significant the fed or greece? bob: i think the fed. in a statement from janet yellen, interest rates will go up, but the pace will be slow, and the quantum will be as well. i stick to my view, the fed rates will raise 50 basis points . hedge funds rates will go to 1%. the size of the fed balance sheet is important. since lehman brothers went bust

the balance sheet increased 3.6 trillion. i am assuming they will hold their balance sheet to current levels. if they start to reduce the size of the balance sheet, that is something we have to watch carefully, that would be negative for markets. the statement from the fed underpins markets for the moment. i think it is interesting, coming back to the swiss bank, a number of the external stress points are either swiss bank or gold are not moving that much. guy: we will talk more about the rate trajectory. merkel is still speaking in berlin. hands -- hans was talking about the greek communication with the german people this morning. this is her putting the german

point of view clearly across she is talking about russia right now. we will get back to that. coming up, carry on -- we will carry on the conversation about the fed. we will speak to randy kroszner and get his sense of where yellen is going to take us. we will talk about these with national bank and what we need to know about this strong swiss franc. we will go to russia, st. petersburg for the international forum and it will be's eking with some of the biggest names in russian business and politics. we are looking forward to it, hope you are. we will see you after this short break. ♪

guy: welcome back, i'm guy johnson in london. this is "on the move." let me give you a heads up on how the markets are doing. negative open by and large for european equities. we are watching the greek conversation carefully in luxembourg. people are watching and trying to get an understanding of what is happening with the fed. the federal reserve signaled a pickup in the economy that effectively is keeping it on track to raise rates this year. however, rate increases could be a little more gradual than anticipated.

investigate -- investors focusing on those dovish comments. the euro is picking up quite strongly. let's talk to peter cook. peter: the federal reserve moved closer to its first interest rate increase since 2006, the exact timing remains in play. janet yellen says progress has been made. they are confident that inflation is moving back to its 2% target. >> no decision has been made by the committee about what the right timing is of an increase. it will depend on unfolding data in the months ahead. certainly an increase this year is possible. we could certainly see data that could justify that. peter: the economic projections reveal that policymakers

anticipate an increase this year. yellen stressed that the for -- focus on the first move is misplaced, what matters is that the fed plans to raise rates gradually. she also said that fed tightening would threaten finance shall stability. yelling: we cannot -- >> we cannot promise there will not be volatility, we can do our very best to communicate clearly about our policy and expectations to avoid needless misunderstanding of our policy that this could create volatility in the market. it avoid on other issues, yellen said a greek exit could have issues -- effects on the markets. even in the united states has had limited exposure to greece the spillover could be felt by the united states. the domestic economy in the u.s. mains the feds focus.

peter cook, bloomberg washington. guy: peter cook, giving us his take on what we need to know by the fed last night. randy kroszner served as -- joins us in's with dylan. -- joins us in switzerland. randy: there is a lot of caution that the fed will try to provide support for the economy. they have not seen enough improvement in the labor market to move now or in the immediate future. guy: do you think the

probability of two rate hikes this year is too much? do you think one is more likely? randy: i would say so. part of this depends on if they move in december or september. it is dependent on how the markets moved. if the fed moves by .25% that will slow down the next move. guy: market dependent, data dependent, or dollar dependent which is the most important? randy: it is dependent on all of them. yellen has made it clear she will be looking at all of them. they made it clear the market reaction will have some impact.

guy: how can you -- is it wrong to think about raising rates when inflation is so low? wage growth is beginning to pick up a little bit, the economy is picking up, inflation is still stubbornly low. you look at the system and think, does it need a rate hike? randy: the key is that they have enough confidence in the system, there is some recovery. that is one of the issues. the fed has been spending years trying to fight threat of deflation. they don't want to move so slowly that the fed talks about

slowing down. guy: you bring up the issue of greece, as did janet yellen last night a largely aggregate arian economy will have some impact on whether or not the fed raises rates. what is she worried about greece? randy: i think it is not greece in and of itself. it is about the direct impacts on the u.s.. as janet yellen said last night, there is little direct exposure. if this cannot be managed in a way that avoids chaos, and there are questions about what is next. that is the concern. guy: do you think -- if we get through greece, what does the rate look like?

what do you think we will get to? how long will it take to get there? randy: it will take a while to get there no matter what and less inflation really spikes. i don't see that right now. inflation expectation will move faster otherwise i think it will be a slow process to move back into the range of between three and 3.5%. if you look at the forecast, it has been coming down. it always used to be 2% they are moving down my guess is they will move beyond that. guy: how do you think other central banks will react when we get the first hikes coming through from the fed? it was interesting to hear mr.

kuroda talking about what he has the yen to. draghi probably has the euro lower. we are going to get policy divergence, how does that fit with the global picture? randy: it is clear that the fed is on a path. i think the world will be surprised at that. the fed has also said they will do something gradual. i think it will take into account the financial impact the u.s. economy, the ability to as -- export, but i don't think that will change policy that much of the other central banks

because they have known about this for quite some time, i don't think this is something new. guy: final question, christine lagarde is clearly -- are we going to get a taper tantrum? i would positions for this rate hike? where do you see the market? randy: the key thing will be how the market interprets the mayor of. -- interprets the market of the move. they're concerned about what impact that will have on flows across market. to some extent it will be dependent on how the markets react. if we get something that is smooth, like when we had the beginning of the taper in the u.s., you wouldn't find any impact on the market when they started to do it. it was the talking about it that caused the obstruction.

the same here, my guess is there will be glitches along the way on what the market will do. once they hit a path, hopefully it will not be too chaotic. guy: randy kroszner thank you very much indeed. we will take a break. ♪

guy: welcome back. the swiss national bank is out with its decision that it has maintained its deposit rate. it is aggressive. no surprise there. i am fascinated to hear what happened later -- what happens later on. we will get more analysis because we're talking to thomas jordan. in the meantime, caroline hyde is that the desk. caroline: the swiss franc remained resolutely high.

really not many tools left in the toolkit to be able to manage that. as you are saying, everything remains as it was. we are seeing a negative deposit rate, a record low. interesting low -- interestingly, some economists do feel this will go into deeper negative territory as the time goes on. we could see as low as minus 1%. they could pull out more negative positive rates, yet further a reason not to put your money into switzerland to go forward. they want people to spend, banks

to lend, that is why they got a negative deposit rate. for the time being it remains that negative .75%. as they say, limited tools left as they exited the cap. we are expecting another negative performance in the second quarter. meanwhile, we see the swiss bank remains resolutely overvalued. we are seeing the swiss watches data coming out. poor sales in hong kong, china, the united states, this is hurting the economy. guide: -- guy: the bank is saying it does believe we will see a return to positive growth this year and

the negative rates will help the frank we can over time. not a lot of evidence at the moment. a are firming up some of their inflation outlooks. have a -1% red -1.1 was the previous. let's get bob parker's take on this. bob: i think they are relaxed that the fact that the currency is stable at the moment. i think they would be really worried if we saw significant upward pressure pushing the swiss franc against the euro through gain. that does not seem to be happening. i think the negative interest rates do put a ceiling on the swiss francs at the moment. guy voice --

guy: the s&p did flip a switch. bob: they did. the key question is, where will be swiss franc be against the euro? my guess is it will be close to day -- to where it is today. i think an interesting question is what is happening to inflation in europe and succulent? -- switzerland? we have seen a tick up partly due to oil prices are close to $40 a barrel and we are now at up to $60 a barrel. that effect is having and an impact on inflationary expectations. let's say it goes back to zero or close to zero towards the end of the year, we get some element of positive rope -- growth.

the negative interest rate policy overtime is going to stop the swiss rate being a safe haven. guy: they are saying before exchange markets will influence monetary decisions. over what time frames should we think about? bob: if this negative policy does not work, let's say we have a situation where the swiss franc does attract safe haven. guy: they are talking about greece. greece's pup -- problematic flow start to step in? bob: that would trigger

intervention. guy: what is the mechanical effect at the moment inside the economy? when you talk to people there what sense did they give you about the conditions in which they are operating? bob: there are clearly certain areas of the swiss economy that are being badly affected. you have the tourist industry. it is expensive to go there. likewise, swiss exporters are being hit hard. if you have a swiss franc cost space, that is expensive. that's overtime will impact the data for exports and that feeds into the growth data. yes, i can see domestic consumption coming back i can see that boosting growth back into positive territory. if you look at the swiss economy over the next one-two years, it

will be less of an export economy, more of a domestic consumer led economy. guy: bob parker advisor at assets management. he will stay with us through the day. jonathan ferro is sitting down with the head of the swiss national bank, thomas jordan, he will be here later on bloomberg television. we will get the insight that we need right from the horse's mouth thomas jordan, swiss national chairman, coming up. what does a $60 oil prices mean for the suppliers? we are back with one of the biggest pipeline manufacturers. ♪

guy: welcome back, i'm guy johnson, this is "on the move." the main markets are trading lower. there is a mix of nervousness about what is happening with greece, people are factoring in the fed. ironically, given the fact that we are heading to the luxembourg meeting about race, the ten-year market is higher, however, it is down by 17% over the last five

days. it is not a great bounds -- bou nce. let's find out what stocks are moving the stock market. caroline: we are watching a german engineer pulling the stock 600 lower. bill finger is off this is a company that cannot catch a break. his key decision is the fact they will be selling off their unprofitable power business the numbers are bad. the review found 100 million euros worth of losses to be taken by this particular unit this year. people worried about that and the speed at which will finger will turn itself around bilfi

nger off by 13%. gold is getting a bit of a bounce ringgold -- randgold is increasing by 2.35%. what does that mean for the overall gold price? the dollar is weakening, gold is getting a bounce. some of the other gold companies rallying on the stoxx -- on the market. national bank of greece is up 1.66%. this is a highly volatile stock

i don't get needs -- need that much optimism for a deal today. guy: caroline hyde on the key stocks this morning. the st. petersburg forum is this week, ryan chilcote is there this week. ryan: the chairman of team k coming the world largest height maker by volume. he can give us real insight to what is going on. as well as what is going on with oil prices you have business in russia, the united states, there is a lot to talk about. one of the things i am asking all of my guests is how our sanctions affecting business?

you have 20% of your sales last year. >> our main domestic markets are russian and pakistan. about 60% of revenue was in russia. we have disadvantages to be sanctions. we stopped our joint r&b between russia and the united states now are engineers speak to each other through lawyers.

ryan: you are russian and engine -- your russian and english engineers can only talk to each other if there is a lawyer. because some of them target technology transfers. a chinese wall. >> we have some advantages in the russian market. ryan: this market share you are gaining, at the expense of value wreck and foreign pipe makers that are leaving. >> they leave due to sanctions.

we had problems with funding. ryan: it is hard to find inexpensive, when you do find it. >> there is a private russian bank -- rot -- ryan: reduce your debt. >> yes. he finds sources in russia, but it became more difficult. ryan: sanctions as a problem versus the oil price, i looked at this last night. one year ago, brent was it $113 we are in the low 60's now, what is more painful the fall in the oil price or sanctions?

>> for the moment, oil prices because the oil prices we could not leave. the main problem is the u.s. market due to a slump in prices, our customers -- ryan: and your customers are the shale producers? >> about -- our share of premium connections in shale is about 65%.

ryan: what are your customers telling you about what they need before they start deploying more rigs and ordering more pipes from you to put underneath the rigs? >> my point of view, they need to -- ryan: raise oil prices? >> they need access to international market. according to u.s. legislation, they should have special permission -- not every producer could go to international market. we expect that this permission could be given by governments and that gives explosive impact

to market. ryan: in terms of price, what they telling you in terms of what kind of price they need to see? and for how long do they need to see it before they start deploying more rigs? >> the demand and consumption depends on oil prices. i think if oil prices stay in the $50-$60 mark, people should start to drill again. consumption of our product will go above. ryan: one thing we have been surprised about by the shale producers is their ability to cut costs. that is at your expense. could be squeeze you more --

could base we see more -- could they squeeze you more? >> it is normal. it is a difficult situation. ryan: i know you wanted to ipo your business in the united states given what has happened to the oil price i know that is off the table. are you still committed to your u.s. business? >> strategically we believe in the u.s. market, it is one of the biggest free markets. we presented strongly -- ryan: thank you very much for your time. guy: ryan, thank you very much indeed. we have plenty more great

interviews coming up from st. petersburg. we have charlie rose and his conversation with the russian president. we'll be right here on bloomberg television. we will bring you live coverage of the event as well from noon time here, that is u.k. time on bloomberg tv. we are really looking forward to what he has to say. i'm sure charlie will extract every last bit from vladimir putin in terms of his position with europe. remember, he will be talking to alexis tsipras on friday. fitbit raises money in its ipo. ♪

guy: will come back, you are watching "on the move." fitbit which makes those wearable things on your wrists raised $52 billion last night. -- $4.1 billion. caroline: they promised sales, marketing, capital expenditures as well. this company claims to have 85% of the u.s. market when it comes

to wearable devices. they even have obama as a fan. they started $60, just under. if you start to want to have your heart rate monitor, if you want a watch that text messages, $250. they were able to of the price therefore increase the amount they were selling. demand was there and they managed to keep the voting power in the inner sanctum. guy: that seems to be the norm at the moment. how do they avoid becoming the next blackberry? caroline: they have to rmb, research and develop. they have to try to market slightly more feminine ones. guy: they work together. caroline: about one third of where is toss them off after six

months. how do they get us addicted to them? how do they get other developers involved? maybe they allow third-party developers to get involved and make it a platform? how do they fend off the lawsuits like library. there have been cases against them, clearly one is on patents, the other is about trade secrets. it has to be about staying a step ahead of become petition. guy: thank you very much. caroline hyde on fitbit. what else are we watching? the head of the swiss national bank will be giving a press conference. jonathan ferro will be sitting down with him for an interview. u.k. retail sales. and then u.s. inflation,

fascinating after what we heard from the fed yesterday. plus we will be building up to the 2:00 p.m. start of the meeting in luxembourg. still to come "the pulse" is up next. see you in a moment. ♪

guy: fading fast. optimism over a greek deal is in short supply as european finance ministers prepare to meet in luxembourg. angela merkel is accusing the greek government of dragging its feet on reforms. hike ahead? the u.s. says the economy is on track to raise interest rates this year. sanctions and low oil prices push russia towards recession.