anna: bankers beware. as markets are pricing in further cuts, lenders brace for more pain. the euro in focus. it is the world worst-performing major currency. cease to inflation, chinese consumer prices surged the most since 2014 as food costs merged for the lunar new year. welcome to "the pulse," live from lac london.

. we will be speaking to the head of deco, the european market they are thects -- largest provider of temporary workers of the world. , the ecb day, and the euro world's worst-performing major currency, currently at 109.62, some people calling for it to reach parity and other saying it will never happen. miners are leading the chart. this is on the back of and whatss out there mario draghi can do. let's get to the first word news with nejra cehic. nejra: china's consumer prices jumped by the most since mid 2014, driven higher by phone costs. cpi rose 2.3% from a year earlier as prices surged.

the producer price index fell almost 5%, extending declines to a record 48 months in a row. the man who led volkswagen through the emissions scandal has unexpectedly quit. he is said to be leaving my mutual agreement. inbecame the u.s. ceo january, 2014. he improved dealer relations so much that when he came to light, independent retailers lobbied for him to stay, saying his removal would be catastrophic. he will be replaced for now. -- former salomon brothers has died at the age of 86. he was proclaimed the king of wall street in 1986. he was deposed after a trading scandal. day,l news, 24 hours a powered by 2400 journalists and 150 news bureaus around the world.

francine: thank you. eight interest rate cuts, to a long-term loan programs, extended and expanded since taking over as ecb president. mario draghi has been busy, very busy, but the market wants more. investors are clearly expecting further stimulus. , who speak to david ellen manages assets of $7 billion -- great to have you. when you look at the ecb it seems like mario draghi is stuck because the markets are already pricing in. >> you can do a lot around the edges. tearing, andce speed up the bond buying. forward guidance is key. his reinvestment point -- they have to reinvest and he can make

them -- francine: does forward guidance work? >> it does. and interesting paper was published on the bank of england, looking at qe in the u.k.. interest rates in the eurozone are still coming down. i made this point about swiss mortgage rates going up from low levels. there is a lot more scope to do more. francine: how concerned are you about negative rates if they stay negative for a prolonged period of time? >> it is more a sign of stability. running fixed incomes and with more fixed income -- francine: is in a small issue or an issue we should be thinking about? >> in terms of the wider financial ramifications we should be concerned -- how do they cope at these levels?

, italian and spanish banks have no money -- they are not directly impacted at all. all the money in the system is within germany, france, and the netherlands. what draghi needs to do is try and get this money in the system working much more effectively. francine: you look at japan -- do it differently from governor corona -- or will it be the same? everyone was excited and then a couple weeks later they got battered. >> i think the direct impact on banks -- francine: it is psychology, right? the banks in japan were hit because investors saw the problem with lacking weakness. >> japan is stuck at zero bound so there is no model gdp growth.

it is almost recovering at the same right now as the u.k. so the problem is generating inflation. i think the eurozone is moving in the right direction. that is pretty significant. saying the ecb has it easy -- they can't do it alone. , youeed a regime change need governments to spend more money. francine: people keep saying that all the time, but no one really does anything about it. what do you expect them to do? >> i really don't know. let's be clear -- mario draghi wants the federal reserve to raise interest rates and obviously the u.s. continues to normalize. think that maybe the new

model. francine: how many questions on brexit? >> that's an interesting question -- for him it is a major risk. it is his biggest risk inside europe. are the markets pricing -- the brexit uncertainty makes his job more difficult. >> it does, but they have a press conference in decision in june. he has almost reached the point at which he can't cut the rate further. there is a limit to what he can do. needs dry powder. thank you so much. pulse."h "the coming up the deco chief calls on draghi to do more.

then, bad news for science and the bank of england. rate hikes -- we break down the latest argument in the brexit debate. inflation, whyow is the price of gold slowing? ♪

francine: we are right on "the pulse," let's get straight to the business/.

-- the business flash. nejra: -- to the top of the u.s. options market. the transaction could also have funded another acquisition. the company is in merger talks with the london stock exchange. banks from outside america including hsbc and deutsche bank are pushing back against the fed's proposals to end too big to fail. they say they are burdensome and unfair to the u.s. unit. under the proposal, u.s. units of foreign banks would need an extra layer of debt to be wiped out in a crisis on top of securities qualifying as total loss observing capacity. barclays africa says there is no lack of interest from others. the parent company reduced its 62.3% holding to less than 20%. >> we keep emphasizing that

there will be a lot of trade involved, and what we think regulations would look at is the long-term stability. even when somebody who was a long-term investor, a stable we have to look at what management would look at. nejra: we will be speaking life to the barclays ceo at 12:15 u.k. time. that's your bloomberg business flash. francine: i'm really looking forward to hearing from him. there are a lot of questions -- he hasn't been on the job for very long and he is probably finding it tough. with worries over euro area deflation and unemployment stubbornly above 10%, economists are in doubt that the ecb will unleash more monetary stimulus. world's largest provider of temporary staff is with us. thank you for joining us. you perfectly encapsulate the troubles, and you have a feeling

on the ground of what the economy is like. overall, the french economy is a little bit better. does it feel better, or is it still tough out there? >> what we have said regarding 2015, and also the fourth quarter of 2015, we see a continuation of the modest growth, a difference from continental continent. we haveart with europe, always said france would be the last to recover, and that is exactly what we have seen. besides france, we see a very good traction in the southern european countries -- italy, spain -- countries which have taken really drastic measures during the recession, and we see now ther results of these measures. france has a long way to go. and we see a more mature market in the cycle, u.k. with six

years of positive gdp, modest growth. germany also in good figures, modest growth. then if you go to north america, there is also adequate growth for more than five years. we see in the usa continuation of that. francine: talk to me about the relationship you have with industry groups. hasn't changed? we talk about positivity puzzle, a lot of companies wanting more flexible workers. in a period of downturn or uncertainty, do certain industry groups such as construction come to you for temporary workers more than when things are booming? >> we have two types of patterns. if you are in a terminal of uncertainty, negative uncertainty, then we are the first going out. in case of uncertainty, positive exactlynty, not knowing

the amplitude of the recovery, then we will be the first going into the companies. that is what we are seeing in france, that progress of gdp. it was 1.1 last year and should be 1.3 this year. we say that the market has recovered. q2,ad a growth of 1.5% in and in q4 it is at 5%. for january and february combined, we have a growth of 6%. francine: what is the mood like amongst ceos? it is very different from the markets. they latched onto one piece of bad news and recovered saying that we sold too much. ceos seem to be much more uncertain. they aren't worried about their future, either. do you see that on how they would use you? >> what we see is that all

customers are consciously optimistic. in asia, if we take figures in japan, we have up 4%, which is good. for sure, there is a lot of uncertainty and lack of visibility regarding china, and we know today that there are a lot of uncertainties. in europe, in china, brexit, spain -- francine: are you concerned that this modest growth, compounding by what central banks have done, will lead to modest growth's for decade to come? >> i think what the banks and the ecb bank has to do is really to support this recovery, and make sure that the support is translated in the real economy. i would love the ecb to take some action regarding infrastructure investment.

in europe, we are making a lot of countries with infrastructure investment. if we invest in infrastructure, it will create growth and employment. francine: do you think mario draghi so far has only tried to fight inflation without success? do we need what we call helicopter money? the money, maybe 1000 euros more or less directly into the pockets of every european individual? >> to continue on helicopter money, i think the money has come down to a certain level, mainly in the financial system, but the money has to come on the ground, to create -- francine: how? >> that's the challenge. but on one hand, the ecb has to allow this, but on the other hand, the country and the government's have also to decrease it, to make sure they are becoming more competitive and more attractive on the

global scene. francine: that's what a lot of ceos are telling us. thank you so much. he stays with us. we will be talking in-depth about brexit. more from adecco on why he is not worried about a brexit just yet. ♪

francine: you are watching the

pulse. we talked about the ecb and the impact of negative rates on the real economy. does the demand for temporary workers automatically rise? and what is it mean for the staffing industry? cco is the largest temporary staffing company and the ceo still with me. when you look at the u.k., it seems like the uncertainty -- it is difficult to quantify what the uncertainty of a brexit is doing on the real economy. as impacted your operations questio? >> it hasn't. the british people will have to make their decision -- personally, i think that the u.k. would be stronger with europe and th europe would be stronger with the u.k. and regarding the economy

uncertainty -- there is a lack of employment and therefore -- but having said that, at this stage, we don't see any sign of figures. francine: this is something that i have been trying to figure out -- how does your market operate? do you bring workers from the european union to work in the u.k.? do you think london would suffer in the case of a brexit? >> in the majority of the cases we are working with local customers of local subsidiaries with local people -- that is the maturity. having said that, what we measure every year is what we call the global competitive index. is what wekey points call the brain sick relation.

seven,.k. is at number which is very good. out of that by going the european union, attraction of u.k. for talent will be diminished and on the long-term consequences -- regarding the attractiveness and afterwards the competitiveness of the british economy could be endangered. it is more of a long-term issue we see for the u.k. than today any sign of any negative sign for business. attraction is very important regarding the global competitiveness. francine: we focus a lot on the labor market -- give me a sense -- the types of jobs available for temporary workers have changed.

millennials are working in a different way, technology impacts in a different way, or is it similar to precrisis levels? >> it depends on the different country. if you take the u.k., 50% of the growth of the employment has been realized with low skill jobs. that is where you have seen a pickup of the growth and somehow that is the challenge of a lot of economies, to put low skill people at work. really -- the challenge is for all the countries and especially with the new technology trends, globalization, automation, big a lot of jobs are lost. these jobs are mainly those with

low skill, repetitive functions, and without any sort of creativity, social intelligence. francine: we want to show you the share price -- it hasn't done as badly as some of your competitors. you have been in the job for six months -- do you look at the share price on a daily basis? share prices for me -- the result of your work on the longer-term and every day we are working to improve the state of the company, we are working to improve the satisfaction for customers and candidates. at the end, if this work is recognized, the share price will go up. that is the way i am looking at it, that is the result of your work. francine: in the last six months, down 18.9% -- it has

been brutal. .here has been a lot of turmoil give me a sense of what the banking sector is going through. time,ough and at the same there are better jobs but less paid. you get more demand for temporary workers in banking? >> we say to trends in the bank. one trend is the impact of the technology. the fact that the world is becoming more digital, more banks have to face these technologies, has to somehow address the size of the network, and also the type of compensation may have in the company. but on the other side, as the word is changing, you have new competency and it is their

challenge to the attractive, to restructure and on the other to attract new combatants. francine: a very fast-changing world. that was the ceo of the world's largest provider of temporary staff. we will be back. ♪

pulse,e: welcome to the live from bloomberg headquarters in london. i am francine lacqua. let's get to the bloomberg first word news. nejra: china consumer prices jumped by the most since mid-2014, driven higher by the food costs. they rose 2.3% from an earlier year. the producer price index fell over 5%, extending declines to a record 48 months in a row.

canadian prime minister will meet with president obama for a widely anticipated visit that could object no momentum into i bilateral agenda that has been strained over u.s. labeling requirements and the proposed keystone xl pipeline. in brazil, the sao paulo state prosecutor's office charged a former president on allegations of hiding assets. office saysor's they will explain the accusations. a judge would have to accept the charges against lula for the former president to be formally indicted. global news 24 hours a day hour-by-hour 2400 journalists and over 150 news bureaus around the world. francine: european stocks trading slightly higher today ahead of the ecb meeting. a check on the markets with mark barkin.

mark: next fortunes for europe's main markets. it has been a year to the day since the ecb started buying bonds. interesting to see who is better fitted when it comes to bonds and equities. his are three interesting charts. germany, the euro area and portugal, when the ecb started to buy bonds last year, the sovereign bond market and these three countries rose. they spent much of last year below the gain line. the past feween in months that germany and the euro area has sported gains according to the bloomberg sovereign debt indices. portugal, which many thought would be the best performer because of the high yields they

had coming in to the ecb program, the portuguese debt market is actually down by 5%. political factors are one reason. the euro stocks 50 has not benefited at all from kiwi and this is the number that shows it -- qe and this is the number that shows it. to combatrea has had a number of issues over the last year, the emissions scandal, china, rates in the united states going up. there could be further hurdles to calm, brexit, portugal. if anded impact of qe when we get more later. the big story today is new zealand, which is a big shopper -- shocker. the central bank unexpectedly cutting rates by a quarter point to 2.5%. they said further easing may be needed. this is a chart for the new zealand dollar.

by two .7%,is up all the major currencies are rising against the new zealand dollar. , keeping consumer prices below the one to 3% target. the other side of the world, the bigger story that could be happening on this side of the world in just a few hours time. francine: mark barton with the bloomberg. the outcome of the uk's referendum on the membership is too close to call so what would a brexit mean for the u.k.? david allen is here. thank you so much for sticking around. .e spoke about the ecb it seems like everywhere there is a risk. what is the risk about brexit? can we believe the polls? david: i was going to john is theand the view

telephone baseball is more reliable and has been more consistent. it is 60/40. francine: to stay in? david: exactly. looking at how the u.k. first phase the eu -- for sees the eu -- francine: you think i have kids, i have family, i need to make sure i can pay my sovereignties. david: exactly. it all comes down to economics. if you think you can do better outside the eu, you can leave. francine: you really think there is a 30% chance, a 40% chance of the u.k. leaving? david: it is such an emotional subject, and nobody knows for sure. all we know is it will be very

messy for least two years. over the ten-year, the u.k. will do ok, so that is the rise i'm looking out for, for my family. -- at thenderstand end of the day, i think people will vote to stay. francine: so we have four months of uncertainty, four months of the sacrament is fight within the cabinet. doesn't mean that productivity will fall -- does it mean that productivity will fall? probably see low growth in the second quarter. going into the brexit itself, most senior people will put it on hold. institutions,jor you have to deal with contingents. francine: what is your contingency? david: we have to think about

what we are going to do and you have to prevail. negotiations will kick off on the 23rd of june. it could take at least two years so you have a lot of time to do things, but a lot of big decisions will be put on hold and certainly the housing market , we are just waiting to see what will happen. francine: you are a european economist. when germany benefit? david: no one. the eu as a whole would be weakened. , is on the verge of voting to leave i think they will downgrade the eu more generally. the u.k. can be seen as a competitive force to make the european economy more generally better. but this in context, the economic story, if you put a single market and services, european growth could be 1% higher going forward.

-- who wants a single market and services? the u.k. outside the system will be weaker. francine: what happens the next day? i know it is a two year .egotiation period i know banks in every big institution will try and draft new contracts, but fundamentally are we going to see a recession? can mario draghi support it? will it be a draft? david: we would have to go to them, the brits, and basically instigate a motion. at that point they decide with the terms of the negotiations are. francine: we do not know who negotiates. david: and that period, i think the economy will weaken. -- they will be

doing essentially more qe. will have the ecb liquidity and demand and will be thinking about doing more. francine: david allen, thank you so much for joining us. inflation,d of low why the price of gold is soaring. it is a haven. we will talk a little bit more next. ♪

francine: we are on the pulse, let's get straight to the business flash. nejra: nasdaq has agreed to buy deutsche and shook securities the transaction could also help deutsche fund another acquisition. they are in merger talks with the london exchange. banks from outside america, including hsbc and deutsche bank are pushing back against the fed's proposals on limiting rules for too big to fails. proposal, the u.s. units of foreign banks when needed an extra layer of debt available to be wiped out in a

crisis. africa says there is no lack of interest from buyers seeking a south -- a stake in south africa's third-largest lender. to reducenced plans their 63% holding to less than 20%. >> there's going to be a lot of -- involved. is there long-term stability? you are going to want someone who is a stable investor. regulators and ourselves as management with look at. nejra: we will be speaking live to barclays ceo today at 12:15. francine: it has been the best start to a year for gold since i do 74, investors seeking shelter. it has risen 17% this year. mayer, the, john

part at as dutch partner at sp angle. risks comesese true, i buy gold. his gold going to go on? john: there are a lot of issues at the moment and you are right to say there are risks. the global banking system, the policymakers are running out of ammunition on global q8 and we will see the ecb figures later today, what they decide. it is a warring world and at the same time you have russia and china buying gold and looking to erode the u.s. dollar cost significance as a global -- u.s. allar's significance as global currency. investors are generally moving back into gold. we see total etf holdings increasing to 55.6 million

ounces. that says confidence is returning. influxhad such a big after the lehman brothers went bust, and buying into that. francine: john made a great chart. it basically shows the linkage between inflation and gold broken. in 2016, that has changed because it is moving on the back of other things that you were just talking about. doesn't mean that we will not go back to the model as long as negative rates, as long as there is no yield value? john: i think the model still exists. we had a big shift with lots of big investors in the u.s. selling out of gold. those big gold funds that had of runs after the bust lehman brothers, they sold out, that has finished, and i think on golditional charts

against oil, gold against inflation will look more normal again. i would it not expect those relationships to be different. francine: correlations have not changed? john: once we take out these big macro trends to do with the sale of goal -- gold, i think is correlations are still there. i was looking at this yesterday on gold versus oil. both gold and oil came down together for slightly different reasons. when you look at the shorter term trading, they are still negatively correlated. francine: if i think the world is going to collapse, how do i get into gold? i cannot i it and store it, that would be difficult. john: buying etf's is one way but that is still subject to the risks of the international banking system. the traditional way is to go and

buy physical gold. francine: where do i store it? i am not fort knox. it under can store your mattress, maybe not the most advisable thing. there are people that will store these things for you and it is a very normal mechanism. let's go and buy gold and get someone to store it. you could buy the company to store it, that would be a big -- a good play. gold producers, particularly the small ones are starting to do much better. they are benefiting from weaker currencies, all the things that help miners improve their margins. francine: what happened with iron ore? we had this two standard deviation on monday. john: the market was pretty impressed by that and a lot of the chinao do with

national people's congress going on at the moment, expectations for the chinese government to say we are going to build more infrastructure. know they are planning on moving at least one .8 million people out of the coal mining industries and steal mining industries into new consumer led industries, and i think into new towns. as part of that process a will build more infrastructure projects. that is what i think has led the price higher. francine: 33% higher year to date. can i or still go up? .ohn: short can the smaller play -- sure it can. the smaller players are really struggling so we are seeing this move toward higher prices. i think they will be vindicated and the way they have done things. francine: you can also buy

jewelry made out of iron ore. it is called hematite. john: it is very good quality. francine: what is your favorite metal? is there something you can see the price surging? john: 10 would be our favorite -- tin would be our favorite. i think for most investors, copper is still the way to go. i think china is still going to consume a lot more copper going forward, and the market is very closely balanced. what tends to happen is forecasts get it into deficit as the year goes on, as mining companies disappoint. francine: thank you so much, john mayer. up next, what will it take ahead of the crucial ecb decision? avoid suchraghi are

-- disappointing high hopes? ♪

the ecb president mario draghi take center stage today. comes in underon three hours and investor hopes are pretty high. this is a europe market check. in terms of where the euro is, it is the worst performing major currency over the past month.

investors bracing over that ecb announcement. gordonet more with paul to join us from frankfurt. investors and economists are pretty keyed up on this. paul: they certainly anticipate something is going to happen. bets on an even better increase have started to rise. at 1:40 five frankfurt time, you would expect to get that rate cut. if not, there is going to be some disappointment and they will turn to the press conference 45 minutes later to see what draghi has to add, will there be more qe? maybe an extension of the bond purchase program, maybe new asset classes. on the deposit rate, maybe something to make sure the banks are not too burdened.

there's an awful lot in the mix here but anticipation is high there is going to be some form of stimulus coming through. francine: we were looking at the options. we made a chart on the chances of more negative rates, more qe. on negative rates, there has been so much talk about the side effects. is there any way mario draghi can do it differently to try not to hurt the banks? we know the ecb is studying what other banks with negative rates do, and they largely have tiered systems. the bank of japan, the swiss national bank, danish and swedish central banks have all got these. down totively boils making sure the banks to not pay the negative deposit rates on all of their deposits. there are exemptions. how you set that exemption is something that will be quite

heavily debated in the governing council. it is always possible that it will be decided that none is needed or it should be done further down the line, that the banks are shouting. francine: what are you expecting? the most questions will be on whether central banks are doing too much, or how he prepares for a possible brexit? paul: there is a pervasive concern that central banks are bearing too much of the burden and this was raised at the g-20 in shanghai. mario draghi has often castigated governments for not pushing through structural reforms. some countries are not using the fiscal space they have to actually go out and spend it. that is normally thought to have been targeted to germany although it does not mention them by name. he will not say the ecb is out of ammunition. that will be a dangerous use of

words. governments have got to get their act together. francine: paul gordon leading our central bank coverage for the ecb. stay with bloomberg for full coverage of the ecb decision at 12:45 u.k. time and we will bring you the news conference live and in full beginning at 1:30 u.k. time. that have a disappointment may be played through euro-dollar stocks, they were gaining they are now falling. seems markets are little bit nervous. there is a little bit of volatility overall as they are trying to place themselves overall ahead of that crucial ecb decision. -- barclays ceo, an exclusive with erik schatzker. .oming up here is surveillance i will be joined by tom keene talking to the former imf

analyst. we will be talking about china. paul donovan also talks of negative rates next. ♪

francine: bankers beware as bankts are pricing -- chiefs braise for more pain -- brace for more pain. hold? weish positions speak to olivier blanchard. prices rise the most since mid-2014 as food costs surge for lanyard new year holidays. -- lynn are new year holidays --