welcome to the program. it looks like we will see a pop in equities this morning. you are going to see that market underperforming a little bit. let's check in on the open with nejra cehic. nejra: what we saw from the fed of course, was no change to rates and a bit more of a dovish stance in terms of the future path of rate rise. overnight, we are seeing futures point higher. if we take a look at how the equities are opening. the ftse 100 is up 3/10 of 1%. the cac 40 is unchanged at the moment -- there we go, up 9/10 of 1%. a little bit of risk appetite is seeping in here and we are waiting for the dax open. may get -- let me get you a check on the currency markets. with of the bloomberg dollar index dropped the most in one month. it hit its lowest in almost five months. and if you look at what the pound is doing, pretty much unchanged ahead of that rate

decision. the bank of england is delivering that later today. no change expected to raise there either. we are watching lafargeholcim, the world's biggest cement maker. it has been under a lot of pressure. cement, we gotg running from them as well. with lafargeholcim what we saw profit actually fell in 2015. it is expected to grow in 2016. some slowdown in emerging markets led that slowdown last year. heidelberg is heading higher. we're still waiting for the open.fthansa to guy: thank you very much indeed. another stock to watch this morning, gsk, it is opening higher as well. i will take you to the imap.

energy stocks are leading the charge and we are up by 1.4 percent. we are rotating towards materials and financials. we thought rotation out of that yesterday and that continues today, which is interesting. we are watching what is happening with gsk. now, let's talk about the fed, striking a dovish tone. took down the policy rate hike concerns. >> global and economic financial developments continue to pose risks. thenst this backdrop committee judged it prudent to maintain the current policy stance. the committee expects that with gradual adjustments in the stance of monetary policy, economic activity will continue to expand at a moderate pace. market indicators will continue to strengthen.

concerns about global economic prospects have led to increased financial market volatility. and somewhat tighter financial conditions in the united states. in addition, economic growth abroad appears to be running at a somewhat softer pace than previously expected. these unanticipated developments however, have not resulted in material changes to the committee's baseline outlook. most participants do continue envision that if economic theyopments unfold as expect that further increases in the federal funds rate will prove appropriate overtime. every meeting is a live meeting. april remains a live meeting. and we will be tracking incoming data. it is a slightly shorter period, so that is certainly a live possibility.

with us now we have the investment director at london and capital. good morning. the that is going to wait. -- fed is going to wait. it is going to see inflation come and then start hiking. how do i invest with that? we e are saying that the -- are seeing that the terminal rate is being brought down. we are in a soft interest rate environment. of course, it means the risk as that has another sucker in the sense they will be held up for longer. really, it is a question of where can you find value in such a vulnerable market. youe will be found where can find credit recycling or where you can see the corporate earning's momentum still quite positive. guy: where are they, what are they?

ashok: we still have the employment cycle, very positive. cycle is still positive, reason by 1%. the savings return has been very slowly spent. all this year we will get that spending coming through. it means the consumption cycle will be well supported and that will hold up the global growth. guy: the global consumer that is going to make this work -- are we going to see inflation come back? it is incredibly low at the moment and priced incredibly low as well. ashok: at this point in time, we don't have tightness. that would be an indication that the market is getting a little tighter. rates areipation going down. guy: look at the wide measures. ashok: we are getting near to

the point at which inflation might come back. level, we global still have a lot of access capacity across the board. pricing very little power in many of the main industries. i think inflation is not a very short-term issue. it is a much more medium to longer term issue. again, very low expectations. in fact, the expectation has gone downward a little bit, rather than up. at this point in time, the inflation picture is very dormant and nothing to be worried about. guy: nothing to worry about, i like to look at the tails on outcomes. one of those says inflation might come back stronger than we anticipate. if that were to happen, a significant does that change my investment outlook? -- how significantly does that change my significant outlook?

>> that is significant. all assets rises begin to give back. i think that means what you want is to be much more risk constrained. cash levels may need to go up. you need to be much more defensive. of course in being defensive, one of the classic ways to be defensive was going to common bond markets. those have become incredibly vulnerable. they are going to be hit very hard. going to, they are not move as long as the central bankers keep buying and supporting them, but that support becomes weaker and we sure as inflation rises. real negative interest rates start to dip further and further, but once support is removed, they are very vulnerable.

we have a biggest deepening in at the u.s. curve overnight. the bics this morning is trading lower this morning. ashok is going to stay with us. close to call. how the dilemma facing the south african reserve bank has left the market guessing about its rate decision. that decision is due later today. ♪

guy: equity markets are on the front foot, following yellen. here is the first word news. reporter: the yuan fell to a 15 month low. that is a smaller than is to made it increase -- that is a smaller than estimated increase. the monetary authority raised its daily reference rates by 0.32%, compared with a 1.1% drop in the strength of the dollar. protestsigovernment broke out in brazil after the federal judge released recordings between president dilma rousseff and her predecessor. s she wassay bringing him into her government.

leaders and the turkish prime minister will meet in brussels today to complete a deal to stem the flow of migrants into europe. stood firm as permanent border closing. turkey made a proposal to take back refugees fleeing into greece and exchange for more funds, visa free travel, and further eu talks. 24 hours a day, powered by 2400 journalists and more than 150 news bureaus around the world. guy: thank you very much. we are just a week away from the ecb's announcement that it will start buying non bank corporate debt. this all make euro bond history.

joining us now, simon ballard. ashrok, still with us. one week on, where are we? >> we are stronger today thanks to the fomc. there are still question marks as to how the parameters will work. we're not going to find that out for three or four weeks. did look again at the end of q2. we always had a very strong risk on reaction to the ecb's announcement last week. ecb will be buying secretary, rather than -- will be buying secondary, rather than primary. we want the bonds to be seasoned and secondary. guy: this is the investment grade.

>> it is showing investment-grade trends. we traded a little bit monday and tuesday. now, with the fomc becoming more dovish, prolonging that cold turkey stance. it is net positive for risk. guy: you were chuckling at this. ashrok: i think this is exactly the desired effect. they will bring the cost of capital down for the corporate. they will linkage in a capital spending cycle to create sustainable growth and employment. lot morexpect a issues, but they will be readily absorbed. means the cost of capital comes down, not only for the investment-grade, but it will come down for the rest of the risk market. guy: give me the derivative

trade of this. how far can i go into the market where i see the effect continuing? i think all risk markets are connected in some ways. a line for the implied differential rate. the whole idea of bringing the cost of capital down is to bring those implied rates down. yield is going to come down and eventually, it is connected to equities. that means the risk factor will be supported very nicely with what the ecb is doing right now. guy: it was next and how much more assurance will we see? slow down arobably little bit now. we need some time to digest this. the momentum is there any positive sentiment is there. in order to raise that money, you need to know you can't invested because you have a consumer-based at the end that warrants that investment. in terms of where the next trade is, i would look across the

curve. you will look at crowding out effects from ecb. where is liquidity within nig? from an investment perspective, you will be looking at high-yield. we have seen that in high-yield cash bonds over the last 72 hours. simon.ry nice, ashok is going to stay with us. there are a slew of great decisions being made today. we are closely watching south africa. it is broiled within economic and political uncertainty. let's go to johannesburg, where we are standing by. i want to start with the politics. we have interrelated scandals here. one is affecting jacob zuma. one is affecting the new finance minister. walk us through the story. >> scandals indeed, guy.

south africa has been embroiled with political uncertainty. financety prim minister joined us. son isy with which his also closely tied in business affiliations with. he offered him the job of the former finance minister before he was fired on december 9 last year. of course, that is something that through the markets into turmoil. bonds rose and equities plunged. that is one of the scandals that have come out today against president jacob zuma. he is due to answer questions before lawmakers later today and political parties have stated that they want to hold him accountable as to what a family

would think they have the right to offer certain individuals cabinet positions. guy: what is going on with prav in gordhan? >> and of course we have the finance minister that was reappointed. he was fired suddenly in december and of course, pravin gordhan is facing a possible probe by the official investigative unit. they had gone back and forth on questions he has to answer about a possible rogue unit at the department, which is the revenue collector. a lot of an decision is coming out of the government at this time. and they have a rate decision later today. we have a scandal affecting brazil. we have a scandal -- scandals affecting south africa. you need to stay away from this stuff because the fed is making

emerging markets look at little bit more attractive. ashrok: if you look at the valuations in brazil, we had a massive negative corporate earnings cycle. everything was going wrong for the currency. i think it is getting to a time where we have reached the extreme in the bottoming out process. it is time to begin thinking about the risk content -- it is very high. we need to see things calm down a little bit. i think it might be one or two quarters until the commodity market stabilizes at the bottom. guy: is the fed -- how have significant of a part will be fed play in that? markets inging particular, had a lot of u.s. dollar debt. that means the raising of the interest rates would have destabilized a large part of the world.

that would have gone back into the u.s. and we would have had again, consequences and terms of the exchange rate on the back of the interest rate cycle. i think the fed has rightly acknowledged the expansion of risk. can get very multiply. it eventually comes back to the u.s. in times of lower commodity prices. companies are trying to avoid default by trying to export more at lower prices. i think it is all tied in. this gives us a chance to recover and to stabilize and the recoveryecoverin down the line. guy: ashok, is going to stay with us. up next, what do you think was the fed's decision -- the dollar or treasuries? that is next on "on the move." ♪

guy: it is all about the fed. you could make money betting on the fed this week. let's get more now with nejra cehic. what have we got? nejra: it is this chart we have tracking the bloomberg dollar index. what is really interesting to look at is yes, we did see the dollar rally ahead of the fed meeting, but in one month through tuesday, we saw the dollar slumped 1.3%, whereas

two-year treasury yields rose. the question is, do you follow the dollar or the yields? it looks like you should have followed the dollar because since we got that dovish outlook for the future path of the rate rises, both the dollar and the u.s. two-year treasury yields are coming down. this is interesting because even ahead of the meeting looking at funds cut their future debts to do lowest since -- to the lowest since july 2014. u.s. treasuries are actually boosting their expectation for higher u.s. yields. some of the bond markets biggest names, including pimco and goldman sachs, went into that fed meeting confident that policymakers would outline at least three rate increases. whereas if you look at what citigroup is saying, the world's biggest fx trader, you should

have been expecting the dovish reaction. guy: ashok, let's talk a little bit about how the dynamic of this one works its way through the dollar. how will inflation fit into the u.s. curve? how do you see the curve developing? ashok: first, we need to look at what happened when the bank of japan took possession and the yen strengthened. the same thing happened when the ecb took action. tellwere already tale because there was expectation. the u.s. was hardly going to start tightening. that meant there was less room to support this. we would have to expect a weakening trend in the short-term, until the market

digests the fact that fed expectations are going to go nearer to the markets, rather than being externally hawkish upfront. what you have are very strong bullish positions on the dollar. the interest rate cycle will be much more subdued. that news is now getting built -- guy: can i pick you up on this lower, longer terminal rate theory? my read of the overnight news was, yes, lower for a little bit longer, but then potentially higher after that and what you end up with is this hockey stick affect when it comes to u.s. rates. some of the inflation is here and you have to raise it more aggressively. rate: one, the terminal has been going down simply because the neutral rate is coming down. is more important factor eventually you have to move a

lot faster. debtmeans all of your wiulll shift. the volatility has just been delayed. guy: thank you very much. see you in a moment ♪

guy: welcome back. you are watching "on the move." european equities are on the front foot, but i want to take you to the s&p and break that down for you as well. the snb is coming out with its decision and is maintaining its -.75%. rate at it is promising to intervene if required with the fx markets. there is not a lot of movement coming through. you can see 2016 gdp at 1.5%. 1.5%.recasted number was we are seeing a downgrading of

the expectations. the franc is still significantly overvalued. i will show you their thoughts on overvaluation because we all remember this, which was something of a change in policy. the snb says it will remain "active" in the currency markets. ashok is still with us. how big a problem does the snb have? its flows have changed a little bit, but we still are in a very volatile world. safe haven trade has not gone away. k: thery are getting off 10 years of negative interest rates. that means historically, all assets, are going to be wanted as days and weeks go by. the swiss franc is no different,

in the sense of being treated as a kind of asset. i think the swiss national bank will have to do more to weaken the swiss franc is the flows will keep coming in.g they will have to deepen the negative rates. we have already seen them break the boundaries during the negative effect. probably works different for a small open economy like switzerland. i want to talk about what is happening with vw. about theing possibility of a setting up funds with the u.s. -- two funds to pay for pollution. they will play national and california polluting funds. visit deal might not be finalized for the march 24 quarter hearing. we have a bit of breaking news on this. it is not the definitive "we have a deal" coming through, but we are getting positive news,

you could argue if you are a vw shareholder. we will see if we can actually put this one behind us. i also want to mention, back on the snb story that you can find tlv is on top live, the function. you can see live blogging of the decision. it is worth paying attention to. the snb is amongst the first to adopt negative rates and since then, many have followed. he caught up with bill gross, who had this to say about what negative really means. and the central bankers globally are beginning to be aware that there are many aspects to negative interest rates. the negative or zero interest rates provided a long time to stimulate economic growth.

think some of the members of the fed are beginning to sense that negative interest rates, and the lower you go, the old model is not necessarily effective when you get to zero or below. guy: bill gross, casting doubt on the effectiveness of negative rates. we have heard that from draghi. what is interesting is we have not heard it yet from lesetja kganyag kuroda. it would appear that the fact that the yen strengthened rapidly, is it was not what they wanted in terms of inflation. whether they move more deeply negative, the problem is they will not qualify for negative rates. isarge percent of the cash bringing positive returns. the negative interest rates are not effective unless you have a

much bigger boost at the short end of the yield curve. guy: is the negative race not working? ashok: i think it is the tearing that is making it -- the tiering that is making it complicated. that makes the policy that much less effective. in order to make a more effective, they have to go went deeper for those that are actually cut in the negative interest rate gap. guy: how much lower can snb go? .he snb is already below that ashok: we are reaching the limit, but nobody knows where the real limit lies. the real important thing is how far along the yield curve is the negative curve getting extended. we have done what we can in terms of the negative rate structure. from here on, we don't know what

the unintended consequences are going to be. we just about what the unknown is. we don't have previous long-term examples to analyze. we just have to wait to see how , and howmists respond the coppers respond, to a deep negative interest rate structure for a long duration -- bonds as well. kuroda oru work were draghi, would you have been shouting at the tv screen last night? in some ways, the fed is making their lives harder. ashok: if everybody was easing much more aggressively, by definition on a relative basis, the fed is tightening. it is a relative game, after all. the currencies are all relative. to that extent, if the other currencies are already strengthening, then the u.s.

economy is already getting relief for the weaker dollar. guy: the u.s. economy is getting relief, that is what we want right now. at least the engine is firing. another cluen lies as to why the fed could have fought for a delayed interest cycle. we are waiting for evidence of how the negative interest rates will help the rest of the world. we want eventual economic recovery. if the world was growing more robustly, the extra capacity would begin to get used up and then, we might get some inflationary pressures gripping. i think unemployment levels and europe are so high that it will be sometime before the wages pick up significantly. the competition is so intense in asia that it is difficult to see how wages can rise a

significantly for now. i think this is beginning to happen in the u.s., where we 5%. now seen a rate under get realnk we could tightness creeping into the market in the u.s. in the meantime, we just wait and watch the numbers as they come out. we have already seen the wages rising around a 3% rate so, i think telltale signs that things are not as bad on the labor market. i think we need the tightness to work through any participation rate to go a bit further -- and the participation rate to go a bit further. guy: ashok, it has been a great pleasure this morning. thanks for sharing your time. oil, we will talk about that in just a moment. res these company's sha

have been on a roller coaster ride. who is this company and what are they doing right now? the ceo will be in the studio with us. ♪

guy: this is "on the move." here is the bloomberg business flash. reporter: rio tinto, the world's

second-biggest mining company, announced jean-sebastien jacques will be pointed chief executive in july. he will succeed sam walsh. jean-sebastien jacques is currently the head of the copper and coal division. andrew witty plans to step down in 2017. the board will begin a search for a successor and a says it will consider internal candidates for the role. he left the company after a 20 year career at the company. finally, toshiba is under investigation by the u.s. over allegations that it hit $1.3 billion in losses at its nuclear power operations. they said he authorities are scrutinizing allegations made in an internal review published

last year by the tokyo-based company. shares plunged over 8% in tokyo. toshiba declined to comment. guy: i want to show you what is happening with the price of crude this morning. this is purely fed and dollar related. crude is spiking this morning. we are up 2.3%. up 2.83%.t is let's look him the stocks we need to pay attention to this morning with nejra cehic. nejra: i am starting with rio tinto. this of course, is one of the biggest gainers on the stock 600 today, pulling up other mining shares. what has happened of course, is the company will replace sam walsh, the ceo, with its top copper executive, jean-sebastien jacques. why is this happening? one analyst put it like this.

he said sam walsh oversaw the expansion into iron ore by rio tinto. when they made that transition, they used their top iron ore guy. now they are getting excited about copper and they want their top copper guy. rio tinto has been challenged by the slowdown in china. will this change make a difference? we have seen shareholders react positively. ng,delberg cement is gaini and is of the highest level since 2007. this is the world's second-biggest cement maker. lafargeholcim reported profits fell in 2016. heidelberg cement is gaining more. ufthansa had with soml operating profit jump in 2015, but they did forecast of the earnings would arise only

slightly because weak ticket pricing means it can't fully benefit from lower oil prices. guy: thank you very much, indeed. it is the u.k.'s first mine in 40 years. 93% lastals surged year when the project was given the green light. this study is paving the way for a production capacity of around 20 million tom's of the fertilizer. -- 20 million tons of the fertilizer. the morning, nice to see you this morning. sometimes it is better to travel than arrive and maybe that is what we are seeing this morning. august the what you're doing here and why. it is a combination of a huge amount of engineering and design work. we are designing how we are going to live with this 100 year plus is an is. the next step is to outline exactly what we need and when we

need the capital. guy: it is very extensive. >> well, it is a large project that will deliver a huge amount of earnings. through various phases of his life, it will produce between $1 billion and $3 billion each year in cash flow. it is a project that will be around for over 100 years. guy: $3 billion? point $6 billion is the capital requirement and we are doing that in three stages. put in the context of what the project can deliver, i think these are pretty compelling economics. guy: you know your way around a bond when it comes to raising money. >> that is right. here we have looked at the nature of the returns and the nature of the risk and implementation of the project and we are putting together a structured plan that basically takes these pretty significant economic returns and works out where the possible capital is.

guy: you look at the mining cycle right now and it is a difficult place to be. is a copper company different from a potash company? or are both affected by the same tide? potassium,s part of which is part of our product. but yes, they are very important. where the mining cycle is right now is beneficial to us. because with that cycle remaining relatively soft, that means it is a great time to go out and get construction contracts and pur proof you are metal and a steel -- and steel. metal and all of these dynamics are very long-term. that is exactly where our project will fade into. guy: what will the cost of the

project be? >> what we're looking at is obviously, within the equities. whether or not that is strategic equity with partners coming into the project, or whether we do institutional equity, which is how we have raised the $.25 billion we have invested so far. when we get into the debt sector, we are looking at a mix of structured high-yielding debt and then as we progress through and move into the senior debt component of this project, that is where we back down towards typical project finances. guy: just out of curiosity, you saw abm yesterday. down prettyken effectively because there is this sense that central banks are affecting the credit market. the timing is pretty good. do you see that? >> certainly, for us being able to offer pretty significant yields into capital products in

a market where you have got such a low risk dynamic -- obviously, having the project here in the u.k. is fantastic. guy: it is not a volatile place. [laughter] >> it is a great time to be going out there and offer a really high quality investment position. it will take time for people to understand what the numbers are because a lot of information hit the market today. next fewe spend the weeks making sure people understand what this opportunity is about. boj up next, as the ecb and struggled to find a formula for growth, we discuss the next central-bank policy. that is next here on "on the move." ♪

>> obviously, it is a more dovish fed. it seems to me stanley fischer followed the word of janet yellen, to some extent. i still think it is interesting that the market, in terms of expectations for fed funds, only anticipated 30-40 basis points a year. the fed is still looking at 100. the fed is still way above the market and to the extent the market is lower tr.

two a certain extent, markets are priced at these low. guy: i think the line about stanley fischer is really important. stanley fischer i expect, is not a guy that will be quiet for long. we have more central bank action still to come. the bank of england comes out at noon, u.k. time. get to the south african reserve bank. we also get rate decisions out of egypt, serbia, chile, and indonesia today. tonty for richard jones think about. i want to come back to the issue with stanley fischer, though. stanley fischer before this meeting was banging the drum about inflation. where did that go? richard: what the fed it did last night is say the u.s. economy is doing fine, but we will mop be completely

insulated. -- we will not be completely insulated. this is probably not the right time to raise rates as aggressively as they suggested they would in december. guy: we are not going to shut down the only engine that is firing right now, is the message. >> notwithstanding the decent numbers we have seen out of the u.s., it is not strong enough to drag the global economy higher. the fed it knowledged that. that is why we looked at the international headlines last night. my words are coming up of my mouth. you look at how the dynamics of this are going to work. front end implied volatility gets suppressed. is this a couple of years out? is inflation going to come back?

it's all of that story going to be there for us? inflationoing to let get to hear before they start hiking and as a result, the curve will be steeper. are willing to let inflation run a little bit hot because if you think about it, they are textbooks on how to deal with that. central bank is really concerned about disinflation. they don't have any sort of textbook response to that. i think they will remain lower for longer and it is more dovish than anyone thought they were going to be and that is because of the uncertainty. guy: what is next? how do we react to this? walk me through this. richard: what i think will be interesting and challenging for any non-us central bank, certainly in the developed world, is what this means for the dollar. the bloomberg dollar index has fallen a good 1.5% or 2% over the past couple days.

does this trend continue? this causes a problem for the boj and the ecb. guy: when the ecb did what it did, the euro went up and not down. that trend was already there a little bit. richard: could it be that investors thought -- guy: that the market was right, you mean? [laughter] richard: yes. pricedw has barely one in for this year. i think investors are ahead of the curve. happy st. patrick's day and nice tie. we will speak with the canadian prime minister, justin trudeau. we are moments away from a decision in norway. don't miss our conversation with the federal bank governor, coming up as well. forave a busy morning here

you on bloomberg television. london is looking lovely and the markets are higher. 62.15 upis trading at systems by 1%. "surveillance" is up next. ♪

anna: global growth concerns worry the fomc. global stocks rally. we look at emerging-market currencies and the pound. as we interview the canadian prime minister, we look at potential follow from the brexit. can the eu-u.k. relationship mirror u.s. and canada? tom, what a day. after that that coverage you had