,"y: welcome to "on the move we're counting you down to the european open. there is something happening on the hill. jonathan: fed chair janet yellen q things to say. on deck.len what a different six weeks makes. we start 2016 in the hike in march around 50%. nasa zero -- now something like zero? thing is is the only can hang my hat on that is fundamentally changed. effectively, the market has priced out these rate hikes.

we'll talk about what is happening with the shipping story. global trade, a little bit later on as well. looking forward to that conversation. then we get to deutsche bank. a big story. jonathan: in the news once again. the management is the bank is solid. thewe understand that management is considering a bond buyback. the damage has been done. you wonder whether that can last. guy: i think there is a lot of communication that needs to happen. these guys will be spending amounted over the next couple of weeks. trying to figure out exactly where they stand and where the future lies. that will be a big feature of the banking sector. versed, let's get to caroline hyde. caroline: the antiestablishment candidates have claimed victory in the new hampshire primary. easily over hillary

clinton which means the democrats can be heading for a long nomination fight. a crowded republican field with john kasich in second place. 2016 goldmanto sachs has abandoned five of its six recommended top traits. the bank was long on the dollar versus the euro. it was wrong on u.s. inflation expectations and more. that underscores the volatility that has beset to global markets. fund boosted its holdings of related debt. that is as a rush for the latest security send treasuries surging to the number one spot. the u.s. is attracting investment with 10 year yields of 1.7%. compare that to 1.2% in japan. global news 24 hours of day powered by 2400 journalists and more than 150 news bureaus

around the world. 27 minutes away from the european equity market open. let me give you a quick heads up on what we think stocks will finish. 2% down for most european markets. we have much more a positive effect. we callls you that higher at this point. wall street a little more mixed. it does look like we could see positive start in europe. but, this happened yesterday. jonathan: november of 22 of low of the ftse 100. the damage has been done. guy: the buying lasted about 30 minutes yesterday. jonathan: a lack of conviction, it seems. japanese equities down by over 2%. let's put it up on the board. the market did not

have the conviction to take heart. likewise, brent crude was exactly where we were today did finish the day much lower. sincelmost 8%, the most september. the trend is still your friend of the dollar yen. haven,k off mode, safe japanese yen benefiting for that. strongest sent october, a much stronger euro over the last couple of weeks. 0.0 year government bond at 25%, the lowest since the crazy times of last april. we have talking banks last couple of weeks. it is been a punishing year for european banks. we have been speaking to the top names in banking and government about the recent downturn. in particular, the situation with which bank. listen. -- deutsche bank. listen. >> people are selling.

looking for some signal to go back to liquidity market, they're looking toward central banks. ofthe one thing i am proud at goldman sachs -- almost all of u.s. banks -- we took our medicine early. we went out and raised capital really early in the process. then we went out and raised capital a second time. we did that for years and years ago. we really built our balance sheet up. we really do you leveraged ourselves. we built enormous excess liquidity. we made ourselves as financially secure as we could. they also the best wealth management. credit sweeps are probably in a better position than deutsche bank. it will take them longer to get there. they have to get there risk it down, and so what they can.

i don't think they will go out and raise more. >> i don't have concerns at deutsche bank. comments come as deutsche bank is considering buying back some of its bonds. what a selloff it has been. 26th, the bumblebee speech as you call it. just look at the move compared to 2012 versus where we are. guy: this is the european banking sector. this is what we're looking at. that round-trip effectively for the european banking sector driven by draghi initially and the central bank. intoive policy is coming play. a big factor in what is happening. hard to make money when you regulators on your back. look at the german curve, look at what is happening here. let's talk to a guy in as little bit about deutsche. nick george's out of frankfurt.

-- joins us out of frankfurt. talk to us about what deutsche bank could be doing with this buyback. very -- i wantis to point out it is a very preliminary consideration for the bank. it makes complete sense for them to be considering this. but, there are a lot of uncertainties which they have to weigh. not least of which is what happens with janet yellen on the hill today. the logic behind it would be deutsche bank is shrinking its balance sheet. which means it has more available liquidity. workp at that liquidity to -- why not put that liquidity to work? you could buy bonds. ward port of the would allow them to book gains because these markets are trading below. at 95,buy that it back

85 then you book that gain. that adds to your capital. reasons, for technical it makes sense. the calculations make sense. you mention whether this solves the problems for deutsche bank. is this a signaling of what they are about to do? is that important as well? isk: let's face it, this showing a bit of strength. it may make business sense. it is saying to the market we have sufficient liquidity. we could go out and do this. if they go out and do it they can say we're in a good position. goldmant forget, we had sachs saying yesterday the european banks do have sufficient liquidity. they should be playing to that effect as well. mid-to long-term, does it solve problems? absolutely not. they have this big litigation overhang we're seeing.

they must settle a lot of outstanding big cases. could be higher expenses on top of the results they have in place. will they be able to make enough revenue in that -- the core business of the trading? going on the start of the year, it looks like a pretty tough time. by no means is this a magic bullet. you with great to have us i program this morning, thank you for joining us from frankfurt. considering potentially a bond buyback, the stock of this morning in european trading -- maybe janet yellen decides the ultimate direction of deutsche bank and the whole market. that is your main event today. it is all about the fed today and janet yellen as she delivers testimony before the house financial services committee. that kicks off at 3:00 p.m. u.k. time guy: i can't wait to hear what

she has to say. every syllable -- take a look at the expectations. -- this is athis work function. the get you an idea where the market is pricing. this is the relative story. january the first seems like such a distant memory. look at how things have changed in terms of the look ahead. yellow is orange, look at that change. it is fallen off a cliff. grasping at why we're seeing what we are seeing. why have we seen such regressive pricing? >> one of the interesting thing that i will be listening for in her speech is -- does she share the concerns that mr. dudley highlighted last week? this tightening of financial conditions is weighing on the u.s.

of the fallen equity markets and the flight to safety, is this something she is concerned about? order she remain up eat as she was in december? that is something we have to get some insight on. jonathan: the market moved to one side, the narrative hasn't change radically. -- changed radically. there, themuch market has turned the volume up on the debate that existed back in december. the ultimate question -- is she more concerned about the international bank dropped versus the labor market? ,ichard: i think the thing is the september statement had a bigger emphasis on these international headwinds. december, less so. we're seeing these things come to the fore. just look at equity chart and that flights to havens.

it is plain to see. guy: the market has been a lot of tightening. if you look at what has happened, it has done some of the tightening. what i am seeing here is the equivalent of four fed rate h ikes. think aboute to that effect. richard: absolutely. but the market doing that tightening, the bond market has done loosening. really, where do we stand now? does she think that tightening of financial conditions is done work for them? is there still more to do? jonathan: what is the incentive to push against this market? that she have one -- doesn't she have one? you could take him what has changed since mid-december -- as you said, what has changed since mid-december?

guy: a credibility issue here, isn't there? we seen this huge repricing of risk. will be admit that we are wrong? sensible people change with the facts change. have the facts really changed? is there credibility question that she will have to get around and work out? the fed can't have the shadows cast upon it. jonathan: the fed has been dead wrong for years now. protecting move back to target on inflation over the next two years, they predicted that were interest rate hike for years. the fed has had the market down for a long time now. a credibility issue now. maybe should've been years ago. they have tapered, they started hiking rates. i bring up that now because

people are talking about it. people are saying that was a policy mistake. if they admit now they want hike for the rest of the year, the first hike will be called into question. rich jones joining us from bloomberg. up next, how low crude prices have effect the shipping business. remember that we need to have a i will bring ap, the charts up in just a minute. we will look at the share prices. ♪

guy: welcome back, you're watching "on the move." john, before we get to nils andersen, but for the where stock -- anderson, let's take a

look at where stocks are. and thisn maersk, gives you this chart. for the yellow line, that is the price target which is currently at 10,900. that the white line is what we currently sit at the moment. a fairly significant spread between with the market thinks the share price is going, and where it is now. een number of buys has b going up. the number of sells has been going down. jonathan: you mentioned that spread. over 33% based on that. analysts have come down. everyone is asking it -- have they come down enough? given today, i suspect a lot of analysts will be going out there looking at the models. looking at a few different numbers. the container business is suffering.

and the crude business which most people don't think about. clearly, the analysts do. really.double-whammy, it costs less to move those huge container ships around the world. jonathan: a little bit of upset. we will -- aboute will talk to nils that recently. use caroline hyde with the business flash. caroline: 2016 sales may be below the median term goal. a geopolitical and managerial uncertainty. that also reported the slowest sales growth. the paris terrorist attack led to a drop in spending. heineken had profit in line with analysts expectations. it sees organic revenue and product growth of this year.

meanwhile, carlsberg says earnings will rise this year helped but markets in asia. it will rise by a low single-digit percentage. that news comes as copenhagen-based beer maker reported fourth-quarter earnings and eat forecasts. the chief executive will be 0:05 local u.k. time. underlying resulted for the 60 moving below last year's $3.1 billion. maersk has been hurt by the oil a route saying it is breaking crude prices at $45 a barrel. it hasn't been that high since december. that is a bloomberg business flash. i think this is really interesting. justu say, i spoke to nils a couple weeks ago to talk about how the balance sheet was prepared for $30 crude. if a break even prices far north of that, we haven't been there

for a number of weeks now. guy: also interesting, the bulk of the we talked to at goldman sachs yesterday we heard from a number of people have the price someone around $40. that seems to be the consensus for the end of the year. we have tow at -- to watch carefully to see if that gets chipped down. jonathan: the other points to he talked about the increased volatility. the volatility being a function of what was happening with storage on oil specifically. dark about -- he talked about sharp moves to storage capacity. just after he says that yesterday, 8% -- bang. crude down. we were just starting to break storage capacity and you have these fishes moves -- vicious moves.

best to go below cash cost to force it. there is nowhere for the crew to go. what happened with electricity. you can extrapolate to that. that isnstantaneous, not true. the energy component of the commodity complex is much closer to that with things like metal. this greater volatility. the only upside to the conversation was -- as a result, the shift and a balancing of the market coming a little bit sooner. positive -- a short-term negative, -- jonathan: a lot of people be using the earnings. will look at what is going on in the rest of the world. 2016, it could be significant below 2015. for a number of years we looked at the shipping industry in general and talk abut

overcapacity. we haven't talked a lot about the man. we wonder if that is coming more to the forefront of the conversation now. wondering what is happening with the luxury consumer in china -- that isn't pretty either. guy: you wonder whether that is just a china specific story being transposed into the fact that people are buying handbags in paris rather than beijing. that doesn't seem to indicate at this stage the upper and suffering at this moment. people talk about this spread. low end the stuff and the high and the stuff and what is getting squeeze. nervous.y be getting do you want to go buy a new handbag when these markets are doing what they're doing? we are seeing that wealth getting eroded on a daily basis. jonathan: yesterday we caught up with gary to talk about with crude specifically. take a look at what he had to say.

in anwhere clearly oversupply oil market. that has to clear itself up. we believe that will clear itself up as we get into the spring turnaround season. we think we will get to a more rational balance oil picture. that was the goldman sachs president and ceo talking about the crude market. rebound in the crude market, if you listen to what jeff had to say could happen quicker than mining and metals. guy: a longer, and painful road. run to the stocks to watch in just a moment. i wonder, relating back into peak apple. we'll show you those moments in a few minutes time. caroline: i want you to keep an eye on -- we already saw the results out. this stock could drop of analysts are predicting at the moment.

it could drop to about 5%-8%. then numbers for 2015 are actually banging a line -- back in line with estimates. we see 2016 going to have the headwinds of economic geopolitical monetary uncertainty. this is the reality of what is happening in the market. clearly, it will be falling. we have a key chief executive interview right now. guy: let's get more from those numbers. joins usils anderson now. great to have you with us this morning. talk me to the guidance for 2016. it has been abut overcapacity for a long time. as you see things now, is a demand issue at the forefront? -- we expecteal relatively low growth for 2016

from an oil gdp level. we think the growth in shipping will be slightly higher than it was last year. with somel struggling oversupply in the market. rates are low at the moment, and it will much lower than expected. we start from a difficult place. we feelaid that, betrayed is probably picking up. in particular, for europe during this year. we're slightly optimistic. the starting point is quite difficult. guy: you were down significantly for your oil business. have you been gradually raising expectations of how big the number is going to have to be? how aggressive have you had to be with those assets? reasone didn't see any to not the -- i wouldn't say aggressive, but not to be conservative in the forecast going forward.

are using a slightly lower oil price and the consensus in the market. we haveation is -- offshore deepwater assets on our books. we have said it is not realistic that they will come on the market unless the oil price goes up significantly. we have brought them down to zero. we've taken offshore projects were we're producing now and maybe close to end of life. we just say with the present outlook we will not make the money on those fields that we expected. we have taken them down as well. if an quite aggressive. -- we have been quite aggressive. guy: what number have you plugged in on the oil price? nils: going forward? expect ayear, we do pickup. we don't believe the present oil

price is sustainable. that it couldare be that in the short-term oil price could stay word is. we think towards the end of the year that we should see some pickup from where we are now. definitely not the best in the world to predict that. we just have proven that with the drop in our fourth quarter. more specifically come we talked a number of times about making acquisitions based on the numbers. there's that take the potential for acquisitions in 2016 off the table? nikls: not at all. we still have a low debt level. we made $3 billion last year, so we have plenty of capacity to make acquisitions.

of course, it is important to are-- that the acquisitions creative. we will continue to monitor the market. if we find the right fit, we would be very interested. briefly, talk about monitoring the market. anything out there that you see that you like right now? do opportunities present themselves more frequently now? opportunitiesthe in all the areas that we do business, just make sure your long-term forecasters is solid. we see opportunities both in oil . guy: thank you very much. ♪ welcome to on the

move, i'm jonathan ferro at european headquarters in the city of london. moments away from the start of european trading. guy johnson, you have our morning brief? guy: yes. janet yellen testifies today. deutsche bank in focus as well. deutsche bank is said to consider buying banks. the results are in. anti-establishment candidates bernie sanders at donald trumpwo won the first u.s. primary. jon: futures up by 29 points. caroline hyde has the catch -- the open for you at the touchscreen. caroline: we saw risk aversion suite its way through -- suite through.p its way we need a significant rebound to

overcome seven straight days of losses. the longest losing streak we have seen since 2014. more than 860 billion euros white off the stock markets. .e are coming off of those lows it's got a be the miners in vogue at the moment and you are seeing the gold miner selloff this morning. overall, we are seeing risk appetite when it comes to equities. you mentioned, all eyes on janet yellen and what she says to congress today. we are seeing the dollar trade flat but, where have we seen the dollar moved over the course of 30 days. it's down 2.5%. the reason the dollar index has come down is that people are taking those off the table. we're's the likes of gold turn lower.

will it go even lower? chinese newend of year and seeing brent pick up 2% once again. that does really tend to wet the appetite. let's have a look at the bond market. ahead of that all-important janet yellen speech. u.s. government bonds trade black. it really has been the winning that in terms of this year. greek yields just coming down a little bit after a significant selloff. yields are still elevated versus the beginning of the year and let's have a look at the stocks to watch. i have two stocks that really sum up what we should watch. they have a perfect storm. they hit on the oil side of things and the trade side of things. there has been a phenomenal drop in profit.

once again, a perfect storm. they are talking about the global issues at stake with hermes. that is affecting their future forecast for 2016. deutsche bank with a little bit of a pop there. they could be tempted to buy back their senior hans. that may be tempting. >> guy: let's take you to the bloomberg map and show you the sectors and how they are moving today. everything is in positive territory and is caroline said, popping a little bit, the financials are leading the church. giant white if you are a deutsche bank this morning it is hard to get excited. guy: if you take it back further it gets even worse.

the 4100 up by 0.3%. the dax up about 55 points this morning. there's a lot going up and markets and lots happening in this program. as thep, strong arm chipmaker beats fourth-quarter sales estimates. next is the main event of the day as yellen heads to the hill. will she give any clues about the rate pass? later, trump comes out on top. we recap the action from the first time area of the u.s. election. guy: as he said, let's talk tech. let's welcome simon. there was concern a little while ago that we had reached peak apple and peak iphone and that would ripple into your business.

you,r a, is that worrying of thewhere are we market? >> it is slowing down. this is something everyone is expecting. smartphone growth has been phenomenal nothing continues to grow at the kind of rates we have seen their. the thing about the smartphones of the future is they will be smarter than the smartphones we've had today. armed,ad an increase in -- content. as we look to the future, we expect to see more computing power just -- deployed in smartphones. >> we will talk about product in just a moment. want to get your insight on what's happening with the stock. >> a lot of people looking at what's happening with apple and your stock pre-much traces the performance of apple over the last 12 months. do you think that's an accurate

reflection of the performance of your company? >> there is a bit of a misconception. we are in smartphones and it's all that we do. in the quarter just reported 40% of the chips slipped this season and that was 4 billion chips went into mobile devices. the rest are in an incredibly wide range of applications. we are in cars and digital tvs. we are in refrigerators. all sorts of devices. as i said the majority is not smartphones. jon: do you think the market understands the strategy right now? the stock is down about 15% on the year. how do you view what is happening with the equity? is it communication or you think the company gets caught up in a tech selloff? >> ahead of today we have not put any news into the market since october. so everything happening with our stock is about the market and the overall sentiment about

what's going on in the world. when we talk to our shareholders they are very supportive of our investment in the business for the long term and i believe they trenderstand the overall of more things being developed into more things. now is the 12 month price time that analysts have looking out. 895 at theing at moment. what do you say about the spread? is that yellow number ok? is that where you think you should be? what -- what we do is spend time working with the analysts. they are forecasts in different segments. you get a range of price targets. fundamentally we believe that the models are right, exactly how much growth happens in

different markets is something that's impossible to predict accurately but we look at the range of the forecast. inre is about a 50% range expectations in the 12 month target. pe rating of the stock and when you have that you expect volatility and we've lived to that for dexter 18 years as a company and we are in a highly unusual. . it's as volatile as i can remember. we are with that because not so focused on the's share price. we are on making investments in the business to meet the technology into the future. that's what we do. the share price should take care of itself in the wrong -- long run. >> let's talk about the product. >> over the next several years there has been so much talk on a saturation of the smartphones market. >> if this signs of saturation north of $500.

the grosses at the lower end. >> the chip designs you have brought to the moat -- market at the moment, do they take advantage of that trend? >> we look at the future profits of smartphone growth. they're going to get smarter. entry-levelwith midrange phones they are growing faster than the premium segment. we have introduced product specific with for that. version eight is the most recent version of our architecture. the average of all smartphones sold in 2015, about half contained version eight architecture. we have introduced product specifically for that festering architecture. we've introduced their graphics assessor and targeted more entry-level devices. we are expanding the product range to make sure we have the right product for the right segment of the market. jon: how does that affect your profitability question mark >> developing all of those on

requires an investment in the business. andired 681 people in 2015 as i sit here today we have more than 4000 employees but our net aphid ability is very high. our operating margin over 50% we talked15 and when to our investors, they are very supportive of us continuing to invest in the business to drive long-term growth. guy what you think the markets will be in chip amend, where are they? the internet of things is something we've for you talk about on many occasions. is it the car sector, are you having conversations. >> we talked about smartphones getting smarter. what's fascinating as a comparison with automotive, if you look at the last five years, the compute power in your pocket

has gone up by a factor of 80. when we look at the next five years of automotive with the next features of driver assistance and in vehicle manipulation and moving to self driving cars we anticipate a factor of 100 growth in compute power in cars which translates as an opportunity for a $15 billion semiconductor market that we can address. when you do the math on that you get what hundred $50 in silicone content on average in cars. big market that will require more and more processing capabilities. content in aone car is what seven to eight times of what you would find in a smartphone. it is a big market and one that we believe we can address. were doing a lot of work now to develop the next it will be shifted that future period. jon: great to have you here on the program.

up next, carlsbad and heineken both cg -- seek growth in 2016 despite a challenging climate. we dip into the industry. 0.12% and thep dax up 23 points. ♪

guy: welcome back, you're watching "on the move" here on

bloomberg television. as get caught up with nejra cehic. >> the anti-establishment candidate donald trump and bernie sanders have claimed victory in the new hampshire primary. sanders one easily over hillary clinton meeting the democrats could be had for a long and competitive domination fight. 2016 goldmans into sachs has abandoned five of its six recommended top traits for the year. the bank was wrong of the dollar versus a basket of euro and yen. on italian bonds versus their german counterparts, u.s. inflation expectations and more. chair janetreserve yellen will testify before congress later. it will be her first public appearance since the fed raised interest rates in december. they will be scrutinizing her remarks for signs of whether are not they will continue pulling back their support. day.l news 24 hours a

now, brewers, heineken and carlsbad seek growth in 2016 despite challenging market conditions in spite of the megamerger that you all know about. bloomberg spoke to the heineken ceo about the planned deal early this morning. >> abi is running a competitive option process. it's their process and we have to wait for the outcome. for obvious antitrust reasons we could not touch them. that was not even a thought that we had and that we will just wait to see who the winner will be for the future. guy what let's talk about the stocks we have been focusing on this morning. everybody is waiting for the story to evolve. that's what we're hearing from the ceos at the moment. in the meantime, they're getting

it done. the two stocks this morning, who is doing it well and who is not? heineken are further advanced and carlsbad at the moment. they haven't the exposure to carlsbad atpe but least turnout addressing that i think they're taking the capacity at a four other eight brewers in russia for it since. they're getting themselves with a should be. with some of the when the deal will be approved. jon: people are going to the earnings releases this morning. there is 20 of negative news around and i think people are looking at heineken achieving growth despite the volatility and looking at the rest of 2016 still looking for growth. is that just a standard, people don't stop treating the matter what happens? ask a think it's partly that but

heineken is done a lot of work in the last few years on innovation. we seem siders or even tequila-flavored beer if that is what you want. jon: it is not, for the record. [laughter] >> not for me either but the innovation is really kicking in and you are right, people like a treat and a they like a beer. guy: asia, they are all talking about asia and what we are seeing economically is of concern. when you listen to what the ceo's are saying, are they worried as well or is this just the gold -- golden middle-class story from which they will benefit? >> it is certainly the golden middle-class story but you have gdp growth. the issue now is currency than the underlying fundamentals of the market. long-term, that young

population and gdp growth will help volume growth in beer. you will not get that volume growth in europe but of he said some point that will come back when oil eventually passes. >> great to have you with us. the with bloomberg tv, carlsberg ceo will be speaking to our colleagues on "bloomberg surveillance." up next, oil haves and commodity rates entered a perfect storm. where are we this morning? the ftse 100 just down, circling again. it is tuesday on repeat. 20 minutes into the session the foot to 100 down by one quarter of 1%. we will break on the market in a moment stop ♪

jon: welcome back to "on the move." the ftse 100 rolling over 0.1%, across europe as well. guy: we just talking to hans about the results but the stock is definitely softening this morning and that takes us into the imap here on the bloomberg terminal. you can see where the damage is being done here in the technology sector.

technology telecom sector with oil and gas softening up a bit as well. but deutsche bank still trading 3% to the upside. let's move onto another stock we have been focusing on. if he miller. we spoke to the ceo now let's talk to caroline hyde. caroline: stormy seas or the perfect storm. as is what analysts have been bracing themselves for. i wanted to put this in on a chart to show how much oil prices have limited. the trade part of the equation. also charted on the orange line, index. your new contact this is what container rates have been doing over the past 12

months. it's done 16% versus the same period last year. they can to -- they declined 41% versus their earlier week back in june. there is overcapacity in the industry and lower demand. is hitting the container unit and we're just seeing a battering when it comes to the .rofitability -- profitability they are almost working in lockstep here. what really struck me is the fact that there make even point -- and it's in it for a long time. >> -- >> a couple of weeks ago i talked a sudden with neil anderson we talked about volume. this morning he's talking about rates. it's up the volume so much it's the rates. how much of a charging when you transport this container lines around the world question mark >> cautiously optimistic on europe.

he did seem quite nervous. quite a district as well in terms of the stock price performance. look at the ratings in the terminal, 25 still out there. 626.7% of analyst who covered the stock still have a buy rating on the business. caroline: and wonder when it battered in the price to earnings value throughout 7.5% which is well below where the rest of the industry lies in the stoxx 600. industrials are trading much higher than that. it has been hit that much more. killing her how low can ago. it is still significantly above where the 12 month rice target is. argues what many people could do with something of a split. the danish krone? jon: you may have a point there. i should have asked him about it. here is a company with exposure to an industry that suffered

from overcapacity for years. it was ok when crude was north of 100 -- it was almost a hedge for the business and then never mind splitting the stocks, splitting the company still very committed to what was happening and even though they break even, they still talked about acquisitions. guy: you wonder whether the volatility will throw up some of those acquisitions and whether or not there will be volatilities out there will stop you can look at the story in terms of the ships coming out of the cradle. caroline, thank you very much indeed. i looking at mers this morning the shipping company/oil company. up next, the fed watch. janet yellen said to give testimony as she makes her first public appearance since the rate hike and since the market has so significantly priced out the fed rate hike so we are in theory

expecting from the fomc for this year. were not going to see that. that is where european markets are right now and we will take a break. the fed is next. ♪

jon: hello and welcome back to "on the move." 30 minutes into the trading day, here is a picture of the market. the ftse 100 is down, up, down, up. you can take away that screen because we have moved away so much i will give you a recap. switch up the board then. brent crude moved lower yesterday. the biggest move since september. the story on dollar yen -- i yen it earlier, the dollar

down 4/10 of 1% in november 2014. the stronger euro is the story over the last couple of weeks. is just 0.24%. we will break down these moves. looking for stocks to watch in the first part of trading. >> it is amazing what an analyst upgrade will do to your stock in volatility. domino's pizza is gaining and is one of your best performers on the stoxx 600. the reason, credit suisse upgrading the stocks and then saying they see sustainable and resilient compound growth. 18 earnings-per-share estimates by 9% to 14%.

keep an eye on domino's pizza. there also dropping on their results. the wind of economic and geopolitical and monetary headwinds that they are outlining. this is when the volatility that the markets feel actually plays into the real earnings of the company. hermes sees it for the future as well. -- misspelled,nk i apologize, they could potentially be buying back some of the senior debt. you can look at its most traded senior debt. currently trading at just 18% of face value. is relatively a good deal for them and they just easing some of those investor concerns. on its subordinate debt.

>> thank you caroline. in: chances of a rate hike march. to have diminished. market expectations show that now nobody expects a hike next month. let's welcome the senior effects strategist. good morning. what is yellen going to say later? asked think she is going to push back too aggressively. anything otherwise would be the stabilizing. otherwise, i still think she will want to convey a positive message for the u.s. economy to stress that they are data dependent. things are going to the toilet. draghi stressing that things are improving. markets are not dying that.

if we see no justification for moves, then we will not move stop jon: -- will not move. jon: the labor market data, we can have an argument about it, it is solid on the surface of things. the wage growth is picking up. at the same time, the backdrop globally -- that's weekend. the decision gets harder and harder on what to do and where to place your bias. >> normally, the application is if wage growth picks up then you see spending growth pick up. in turn with the fallen oil prices. this whole dividend is supposed to hope -- supposed to help the global economy and the u.s. probably won't worry too much about this.

but the balance sheets are pretty solid. for emerging markets that is a different story. if you just want to rely on debasing your currencies that's i going to happen. >> you think she will understand you talk at the data, how the year is trying to impact the real economy because there are certain aspects of what we have seen here we have tighten policy for the u.s.. i would thought we are in a slightly different world now than we were six weeks ago. >> i notice that drug he said conditions have changed. i've mentioned financial conditions. if you go to the minutes of the december condition when they waste the january decision minutes. it didn't really sound too concerned about financial conditions. there is some stretch in the high-yield market for example. the have those conditions change, some degree over using that and how do you apply that will be interesting post up because even if they do nothing on rates they do nothing on qe

just with a flat balance sheet and gdp still growing. back heavilyo push against is doing it to cut first. jon: that visual full-screen -- that's a tv term but that visual element on the screen right now, the push back against that. that's a dramatic change in just six weeks. >> we push back against that because you can say markets are wrong about where they look at things on aggregate. if we look at the u.s. economy, then perhaps that is wrong. if you look at the conditions in earnest, you can say the dollar 30 -- we can say going north or south again then you will start to see a tightening effect but 90% of the u.s. economy is not manufacturing exports. single digits arts far smaller than what we see in japan and

europe. but there are not much in terms of returns -- it is time to look at other things. guy: how many clients around the world are there looking to hedge their exposure and got the dollar wrong call this year? >> right now they are worried about the volatility with a tricky start but you to separate the tactical view from the long-term strategic view. if you are more short-term focused it is a good time to go back in. the european shares are places where we still like to be over with. but play investments was longer-term themes. height netnd for worth or ultrahigh net worth, it's something we're very proud of to be honest. these are things you want to put in your portfolio. it depends on your outlook.

jon: next on this program, the central bank state front and center all stop we spoke to the ecb and the euro in the. europe stock extending their gains. deutsche bank stock this morning is up 7%. session highs for equity markets seven minutes in. ♪

guy: welcome back, you are

watching "on the move." let's get your bloomberg business flash. caroline: that run -- reporting -- nejra: they are reporting a wider than expected loss. the net losses just over $1 billion in 2015 which compares to the $788 million average estimate of those surveyed by bloomberg. the board is recommending that no dividends be paid. this it may be below the medium-term goal. the french luxury hamburg maker says that is due to the economic, political him a geopolitical uncertainties throughout the world. they also reported the lowest sales growth. danish shipping giant says the underlying results will be significantly below last year's $3.1 billion. shares are down on the news.

maerskis hurt by the -- is hurt by the oil route. that is your bloomberg business flash. jon: colleagues of yours over at ubs with what i would consider the morning must-read. are a defective tax on the banking system. mr. druggie's desire to ease eurozone policy further may have to be shaped by the implications of this taxation and more volatile times. in simple english if you're expecting a deeper cut to deposit rates in march given what's happened with bank stocks, they need -- do they need to reconsider that? >> no. transmission if you look at denmark, sweden switzerland even, it hasn't

really been attacks. it is encouraging banks to up the risk curves and increase their lending somewhat. we're supposed to be an meltdown mode but the european banks are setting off. it should be well below parity but it is not. experiment.is a big drug he thought he had reach in a couple of months ago but we are not there. just for the sake of argument, if we're 50 basis points below or maybe 51 or 50.5 is where things have to be substituted and you start to pass it on to retail. but you are not seeing any transmission issues there either. as long as they're confident that you don't see a transmission breakdown and you are seeing the banks willing to offset these charges by

increasing lending or investment or showing signs of that i think we will continue. guy: there are certain banks out there which have a good fixed income business there been pushed really hard right now. this is germany's biggest lender. that has the playing on his mind. >> that has to be playing on the month of central bankers plus kuroda included. does this pose systemic risk i think the answer is no. politicalt cause any risk? i think that ultimately will ecb step back the from this and we are not there either. jon: a lot of people have pushed back on the fx channel specifically. the credit channel, find a way to put it up on the demand has got to be there. but we have seen over the last

two months is no appetite to push down the risk curve. that's why you're seeing front action at the front end. we are pushed back to that argument the last month. >> it to separate what is going on in japan from what is going on elsewhere. the effective rate had to be still positive there so i think we will wait and see. maybe there will be a stronger effect. in terms of being pushed out of the risk curve, the demand is an issue so if you don't have growth you don't see any potential on the demand side of things. complement the ecb move to consummate further negative rates has to be a constant with the ecb as well. i think they're going to be tightlipped on that because they're having a wider asset market application. jon: is or anything they can do to cut the deposit rate?

as if you're talking about how they can read jake the program or rethink it, the shock absorbers are and all of this, tell me how draghi can take it? >> the banks with steeper curbs. have done a credible policy. but what happens when qe works. what happens after the last year wentthe ecb really gangbusters with negative rates and increased other asset purchases? the yields actually rose. you could argue that was because of the eurozone exposure to emerging markets. if you do not have that china shock made it would've been more sustainable. if you take more of the bad news which could affect the curve, then you actually inject negative rates and you get the curve to steep and again that

would actually help the banks credibility. this is why you need to do as much as you can while you still can. jon: do you change the composition and the average maturity of your bond purchases? >> i think maturity right now is perhaps less important than your risk profile. the risk to file kobe much more important. they're asking when is the u.s. 10 year or the 30 are going to go up, you know all the bad news is in the price there. that's really injecting a shock into the system. that's why japan is massively stepping up eta purchases. corona, the markets went an awfully long way very quickly. >> if we ask ago below the fear-based assumption it's a thing like 108.

if we can let them get to 110, maybe corona will step up. -- just to rev up our conversation, the euro-dollar through 100 or 10 or 114, how do you explain the move and what they are thinking in the months ahead? >> i think it is more a dollar issue. the ecb will not become trouble with this projection. the last round below 110 you can barely get to 1.7 or 1.8%. so you need a credible policy to bring that down and hopefully the benchmark for your inflation forecast will be the way you wanted to be. jon: the keyword is hope. thank you for joining us this morning. guy: up next, anti-establishment candidates take new hampshire in the net presidential primary.

we will to you what that means for the presidential race. up next. ♪

jon: welcome back to "on the move." a choppy session so far but we are extending some of the gains. the ftse 100 up by 0.9%. story over the last couple of weeks is the financials driving things again

in the first part of trading. guy: let's take a look at some of these banks. the volatility that you now get in some of these stock names is absolutely fascinating. but look at those two stocks there, hand in hand. you have unit credit up by 6.93%. this is the stocks inking sector. -- banking sector. both up strongly today following quite a lot of volatility. burningte a lot of jaw as well. you wonder whether the technicals of the bond buyback are outweighed by the sentiment that creates. guy: there is also this financial engineering that makes people nervous. it is so obvious that you can

buy back bonds at a lower rate. you are not solving the problem. it is just shuffling deck chairs. jon: it will not direct a whole lot of confidence into the market. 2016 has been brutal so far and it could get interesting politically as well. anti-establishment candidates donald trump and bernie sanders have won the primary in new hampshire. sanders easily beat hillary quentin and trunk came out on top of a crowded political field. sen. sanders: together we have sent a message that will echo from wall street to washington, from maine to california. sec. clinton: i want to begin by congratulating senator sanders on his victory tonight, and i

want to thank each and everyone of you. i want to say that i still love new hampshire and i always will. mr. trump: when i came out i heard the end of bernie's speech and some of the beginning. first of all, congratulations to bernie, we have to congratulate him. we may not like it, but i heard parts of his speech. he wants to give away our country. >> tonight we had to south carolina and we will move through south carolina all across this country and end up in the midwest. just wait. there is so much going to happen, if you do not have a seat belt, go get one. thank you very much and god bless you. guy: for more on what we learned yesterday, let's bring in hans nichols. what does it mean for sanders and what does it mean for trump

and the other candidates? hans: i think it is the other candidates that have the more difficult challenge. namely, hillary clinton finished 22 points down from a man that was not on the polls six months to a year ago. this is the anointed democratic front runner and it is a stinging rebuke. admittedly it is a state that as thisberal and progresses them ago to states that favor her more. on the republican side, it is a bigger scramble. trump is the clear winner and it is not necessarily that he just y, it's the 35% victory that he has right now. perhaps the bigger story is who is not going to make it to new hampshire on the republican side? it is difficult to see what chris christie's argument will be. he held 76 town halls in new hampshire and came in at 7% of the vote.

marco rubio could finish fifth. he was the surprise story out of ottawa until he had that -- out of iowa until he had that disastrous debate saturday night. they want to move forward. u.k., political history has told us, do not follow the polls, follow the money. i think the key overnight, look at that crowded republican field and you wonder how that consolidates down to two in the months ahead. guy: that is what they have to figure out. we need to talk about the banks, they are on a charge today. i can see our guest waiting to come on set to talk to francine lacqua. the italian banks are on shock today. after a difficult few days, much a bank one of those leading -- deutsche bank, one of those

leading the charge. .on: janet yellen hike inability of a april, 0%, march, 0%. best of luck for the rest of your day. ♪

francine: the global rout continues. asian stocks tumble into bear markets. the fed's brave face. chair yellen testifies before congress today. a vote against the establishment. donald trump and bernie sanders beat rivals in new hampshire. to "the pulse" live here in london. i'm francine lacqua. we have the check in on the markets,