change the way you experience tv with x1 from xfinity. it is 6:30 and london, let's get to first news. speaks to thet turkish prime minister this morning as they try to complete lp the refugees moving into europe. assurances are made last week about turkeys eu membership talk. in that the required of travelers has been moved down. the ecb has no alternative to its recent rate cut and policy action according to people familiar with the matter. leaders theyu

should work on a clear path forward to provide reassurance about potential market distortions or risk from the latest stimulus effort. the yuan headed for the biggest two day gain in a month. the move came after a decline in the dollar that saw the bloomberg dollar index fall 1.1% 25 month low on thursday. that extends the fall after the federal reserve scaled back its forecast for interest rate increases this year. in brazil, a judge issued an thenction suspending presidency chief of staff. that is as congress restarted the impeachment process. antigovernment protests continued overnight intima brazil's biggest cities. -- in some of brazil's biggest cities.

anna: thank you very much. now let's get into our chart for the hour. guy johnson joins us with the chart. guy: it was over there. anna: it was there? manus: i apologize. [laughter] manus: this is live tv. anna: something about the dax. guy: it is rallying. but we will see today is the running out of steam of the post-fed rally. this is the chart here. don't worry about it, live television. as a result, we have seen -- what is interesting is what you the idea people are moving money out of europe. i think this is quite interesting. you've seen this underperformance which has been

quite interesting and pronounced hasite the fact that draghi done what he is done. it is a question as to whether or not this carries on. we've seen the spread between the mining stocks and the banking stocks. people, particularly the u.s. investors have been taking money out of european funds and repatriating them. anna: that is actually looking at the rest of the year. this was the big long position. that was against the 12% again. one of the other graphics we did was -- this rally. it ties back in, oil is on a tear. we have locked in 24 -- it is mike gupta 2016 losses. is this momentum in markets --

it was a vicious downside swoop. here we are in terms of a reprieve. the trust these? it may be running out of steam overtime, but ticking up on the argument -- what is the next story? if we can get some stimulus rather than austerity it does suggest that when draghi is looking at fiscal policy there is a role for that to sustain the expectation for better growth going forward. the question then is -- monetary policy authorities have done what they're done. we now move on to the next phase? the g-20 has been calling for more balance of measures. john: balance is key. if all you're doing is using the monetary policy tools, that creates a lot of imbalances. mario draghi taking all the credit overnight, by the way. he is saying i did it all.

make sure we need to do more. the central bank is increasing. a little bit of help would go a long way. lordson said that george osborne is right. to austerity,tick however that is defined in the g-20 is wrong. john: i will not just channel my father, which is what they said earlier. have the prince said i plot, i will go for fiscal stimulus as well. they can do it, because their debt to gdp ratio is fairly low. they can issue the debt at very low interest rates. guy: sounds like germany, to me. anna: guy, thank you very much.

manus: it has been a busy week and that is in understatement for central banks. to russia.re over how will they deal with the plunging price of oil? analystsajority of expect the benchmarked remain at 11%. joining us now is a russian asset reporter. what do we expect from the russian central bank today? should there be no changes? be a veryay will interesting meeting. even a few weeks ago everyone was confident that the bank of russia would not change today. in the past few days, oil trading above 40, and the dovish fed statements, the bet that the central bank might actually cut the rate by 50 basis points have picked up.

it is a very interesting day. the majority of economists expect there to be no change. the central bank signaled a message and said it might hike of the rates because we are in a totally different environment barrell sliding to $27 a with the ruble falling off the cliff. now we will see if the central bank will adjust that quickly. or whether it will choose to stay conscious and keep it unchanged today. russian assets reporter, thank you so much. anna: brazil's political wrangling has taken a new twist. teams are plan to install a predecessor as chief of staff has backfired.

has beens appointment suspended. masses of protesters of taken to the streets. our bureau chief filed this report. busy thursday in brazil that started with the swearing in of the former president as the chief of staff. her mentor and predecessor now he tries to fend off impeachment attempts. the swearing in ceremony was filled with protest inside. on the streets, people banging pots and pans, very unhappy he was taken off of this post about 30 minutes after he was sworn in, a judge or suspended and said he can't start because he is being investigated for the carwash probe. investigators reacting pretty well.

,oday was positive here brazil stocks went up, currency also strengthened. ee what happens for the rest of the week. their protests scheduled for friday. we will see what the next few sets are. that was a report there what is going on in brazil. my mind was elsewhere. that is a very specific sample of what is going on in brazil. al qaeda turmoil in that situation. you can look at other parts of the world right now and get nervous -- a lot of turmoil in that situation. you can look at other parts of the world right now and get nervous. john: political uncertainty

creates economic uncertainty. especially in the brazilian situation, it is a major market. but it is pretty isolated in terms of what goes on in south america. you look for investors, people thinking of putting money there. people will tend to shy away. going back to the european situation, again there is less support for stimulus. there is less unified views that we can spend some money and get this thing going. i think, again, when we look at economic policy going forward, we need a better balance between monetary and fiscal policy. political uncertainty limits the attempt to get that balance. talk about the u.s. elections through our prism on many occasions. using a variety of language in this country in terms of hillary clinton.

john: what do you mean? manus: i am being generous. what is our biggest market risk situation wetical find ourselves in between trump and clinton? is it polemic? think it is. the market will react to comments that individual contestants will make in the presidential race. the whiteirant to house might a comment about orde, or china, or mexico, capital gains. again, it creates a huge market move, creating uncertainty. what exactly will be the policy? that is why it is intriguing when you see a little bit of the conquernt the yuan has relative to the dollar. it is taking a little bit of fire away from the anti-chinese rhetoric. home.ys out well at

the exchange rate is adjusting. has depreciated little bit. maybe our position is a little bit better, manufacturing is better supported. this could lead well. both trump and sanders have had some currency in talking with the limits of global trade. from completely different ends of the spectrum talking about how it doesn't deliver benefits in their view for all americans. to sayt is interesting that, different ends of the spectrum. that is a good point to be made. people on the left and right concerned about the limits of trade. and the fact that in many situations trade benefits the average american consumer. on the producer side, there are people getting displaced. read china and the u.s., or listen to the fed speak, the dollar reference 20

times in december. it had x number of sightings. to make it this whole discussion about china. china doesn't matter, china is only 8% of the exports in the u.s. why, and how does china manage so much? i know the globe, without relationship with the u.s. john: in my presentations with clients there is a graph that i use. of the top seven u.s. trading partners, japan, south korea, and china are three of them. interlinked.s it is not china by itself, but the secondary impact on japan and south korea. asian trade is extremely significant for the united states. both as an importer and exporter. it does matter more than the 3% or 8% people talk about. not a terms of the actual trade, but also the perceptions of a the opportunities are going forward.

anna: do we know enough about the contestant in the presidential race, or what they would stand for? can reform and educated argument about what is best? john: i would to the answer would be no. time and again, they say once they win the primaries they drift towards the middle. what does that mean in terms of tax policy? what is drifting towards the middle mean? thes nice to play for extremes, neither have your core democratic and republican constituencies in place. i have to go for that 30% of the middle. you have to say only really going to do some of the things i talked about in the primaries? no, we are going to do something else. manus: do you think trump will step back from some of these outlandish statements? debateven in the last

many of the comments are about this is much more simple or a casual discourse. absolutely. again, the relationship between the united states and china will be for the next 50-100 years. we have to think about this is a long-term arrangement. and it doesn't help to be yelling and screaming at each other. rather, we need to work on certain things over time and that is the way we will approach it. anna: take a somewhat for spending the last 50 minutes or so with us. chief economist at wells fargo. manus: coming up next, more money these of free travel and a fast-track to eu entry. look at turkey's demands. what are they prepared to really offer? ♪

back, 648 in the

morning here in london. ubs said it is allocating 40% more money for bonuses from last year. total annual take coming in and 14.3 million. 2015 was a switzerland-based bank -- it was its most profitable year. they still plan to make the final decision to go ahead with an 18 billion pound nuclear power plant in the u.k.. that is according to people familiar with the matter. they said the approval for the project could come this month. there has been speculation about the future sense edf said the project would put the company under too much financial strain. valeant has taken steps to reassure employees over the company's plunging share price.

yesterday, he sent a memo saying the business won't go bankrupt and apologized for the recent turmoil. shares are down by 57% this week ing in value on tuesday. full control given to a systematic trading hedge fund to david borden. that focuses on macro strategies according to a person with knowledge of the matter. shot or spun off non-core money pools as part of the plan to focus on its macro hedge fund strategies. main hedge fund lost 32% during the first 14 days of march and is on course for one of its worst monthly performances. that is according to two people with knowledge of the metal. -- matter. is down 27% this

year. you very much. let's switch back to policy. the eu president's meeting with the turkish prime minister this morning all to have turkey extend the refugees into europe. what was the reaction likely to be in turkey to this possible deal? so in returnght, for deal on the refugee crisis the refugees,y to and free travel for its citizens. the latitude may be easier to accomplish. but eu membership talks a be the main sticking point. he has been striving to get into the eu for three decades. turks don't see this as a possibility in the short-term.

they struggle to pass all chapters. this because, the president is increasingly ruling with an iron fist. turkey has issues with human rights and media freedom. see what they managed to resolve. there with the latest from turkey. anna: let's get to another part of the story. we are in brussels this morning with a guest. good morning, again. : i am joined by a member of the european parliament, his them as richard ashworth he is here to talk to us about both the refugee crisis, but also other things when it comes to the u.k.. first off, i want to ask about the deal to solve this refugee crisis. in the european parliament, you are on the budget committee.

you're involved in where the 3 billion euros that the additional would come from. what does the eu have to give up to get those 3 billion euros to turkey? let's be clear, we will not solve the crisis overnight. the crisis is huge stop it is on the mic 3 million people living in turkey. but the european union has decided to do is take control of the situation rather than manager crisis. acceptg that, we have to coming to this decision. now that they have a two pronged improve the loss of the people in the camps and to regularize flow. words, to stop the people trafficking. with theit a problem u.k. and many others don't want to take in the refugees. the u.k. is planning on taking

on 20,000 over the next five years. opinion is now accepted this is a collective problem. it is everybody's problem. it needs collective funding, and a collective effort. there is money being made available. 3 billion euros have already been assigned in february. there is no more money contingent upon turkey meeting certain requirements. ryan: i puritanical heritage makes difficult for me to discuss this -- explain, was the british prime minister discussing the tampon tax? of the: that tax is part single market. if you're going to have a single market on a level playing field you have to understand that it has to be a level taxation right across the european union. currently, in fairness to the treasury, the united kingdom has an arrangement whereby the tax level is the lowest possible.

i expect people will say that is too high. i rather hope that the chancellor will put pressure on the european union colleagues to say we want that. skeptics will say it is the tip of the iceberg and a manifestation of the fact at the u.k. has lost control over its tax policy. richard: that is not the case. to the skeptics the one thing you want to remember is the single market. if you want that, you can't pick and choose. if you want a trading relationship has to be a level playing field. to turn around and say everybodythe tax and we don't, that is having your cake and eating it. you can't have it both ways. ryan: for insulation, solar panels, do you see the british prime minister bringing these things up? : he can come up at this is the nature of the thing. if to persuade other people that

this is what you want to do. we take enormous benefit from the single market. trade, that is a huge value to the united kingdom. you can't pick and choose. there are rules, and your to play by them. brian: in this battle over brexit, which is in the lead campaigners are a bit disorganized? some are saying we are a little bit lucky? richard: you might well say that. they can't seem to agree among themselves with the future looks like. they want to get over a better life out there somewhere. the message in the campaign will say look, there is no substance to their arguments. i think people will have to understand that if you leave the european union you run the risk and break up the united kingdom.

ryan: thank you very much. back to you. anna: back in two minutes. ♪

manus: the u.s. currency makes its steepest decline in more than four years. the yuan has its biggest two-day gain in a month. european leaders are for 3 billion euros to help turkey with the migrant crisis. draghi on the sidelines. the president has the eu leaders the central bank has no alternatives. ♪

manus: welcome to "countdown." anna: welcome to the program, we start with some inflation numbers. manus: or deflation numbers. anna: we have a reading of -3% coming through cents february. 6%at was an estimate of2. decline. we were expecting a fairly significant number. we got a slightly bigger decline that has been anticipated. the focus of the ecb's problems us a go further and negative territory. see how much deeper can we actually go? switching our attention to futures, it was probably more to

do with oil and the dollar move which is probably weakening. let's check in on the features at the moment. 0.9% i1% in london, at should say. banks have all driven the markets higher. you are seeing a little bit of a drawback on some of the bigger risk moves. emerging markets on the cusp. oil is still above $40. those are the things that are driving these markets. we may take a little bit off of that. let's have a look at what is moving. we have a little bit of a move in these markets. start of thisthe month and the strength in the korean yuan. adding to appetite

for emerging markets it seems whether it is currency or equities we talked about. bloomberg's first world news. >> -- first word news. >> leaders attempt to contemplate a deal to help the full refugees into europe from turkey. they will offer turkey and extra 3 billion euros but assurances made last week about turkey's eu membership talks and a waiver of these are requirements on turkish travelers of all been watered down. mario draghi told european union leaders that the ecb has no alternatives to its recent rate cuts and policy actions according to people familiar. he told leaders they should prioritize moving forward for the euro area and providing reassurance that potential market distortions.

yuan heading for the biggest two-day gain in a month. the move came after a decline in the dollar that saw the bloomberg dollar spot index fall to five month low on thursday. that extend after the federal reserve scaled back its forecast for interest rate increases this year. month in china rose last the most since march 2015. gains were led by the major hubs and come after banks eased credit in the government loosened curbs. in brazil, a judge issued an injunction suspending the chief of staff nomination for the president.

mass antigovernment protests continued overnight at some of brazil's biggest cities. global news 24 hours a day. you can follow more stories on bloomberg top . manus: let's get up to speed now, if you look at today's action we are getting back a little bit of value. in terms of the week there has been a shift in currency. good morning, we're seeing really havingwn an impact on emerging-market currencies. in research and yen, which of the nikkei close off -- elsewhere, the emerging-market currencies rallied. typically the korean yuan. bye shanghai composite up 1.75%.

it is its best weekly performance in four months. if you strip out those losses we saw in japan today, the regional benchmark index excluding japanese stocks at a high since december. up about 15% from the lows we saw back in january. it has been an extraordinary wake in that part of the region. casinos are looking very strong in hong kong. playing catch-up to what you saw in london trade yesterday. up by almost 5% in sydney today. is continuing to strengthen against the dollar. emerging-market currencies are back in focus. anna: thanks for a much. one of the things on the move as . result of the -- oil prices

they closed above $40 a barrel. the first time there done that since december. ways: elliott, i love the lead to one story. here we are, global markets, all roads lead to the dollar. elliott: it is not often i get thealk but how much -- dollar is having an impact across the board. oil is priced in dollars. when the dollar weakens as a bloomberg dollar spot index shows it has done, then that effectively makes oil cheaper for people that don't use dollars. therefore, it boosts demand and boost soil prices. interestingly, looking at the chart of the bloomberg dollar index, this is an indication of the strength of the dollar crude. wti almost a mirror image when the dollar weakens come oil prices

rise, when the dollar strengthened oil prices fall. it is quite uncanny how much of an inverse proportional relationship they have. that is just one of the things going on. lower u.s. oil production and stockpiles rising at a slower pace. in the background, the missed this thought that perhaps oil producers might agree to freeze output. anna: thank you very much. manus: west london. it is friday, i'm relieved to the markets of had a fairly good rally since that dovish fed statement driving emerging markets. stocks on the brink of a bull market. nerja: here is my magical chart. emerging market index. i attracted for this year so far. that thisled is a low

index hit in january. since then, it has surged almost 20%. meaning it is near a bull market. of 20tracking a chart emerging-market currencies. what you can see here is right at the very end it is above that 200 day average. this is for the first time since july 2014. last time this happened, this is technical signal for investors. this happened in 2006, 2009, and 2010. when it happened last time it was followed by rallies of 10% or more. of course, on a few other occasions it failed to result in lasting gains. one analyst said this dovish stance has driven this rally in emerging markets. the rally celeste legs at least for the next three months. anna: thank you very much.

may have rebounded from the grim start of the year but strategists are slashing expectations. let's talk to your next guest, on set with us this morning. good morning. put in context some of the selloffs we had seen at the start of the year. it is quite astonishing. i was saying before we came on air that keep her month ago and oil prices were $28 at a barrel and you couldn't find the floor. ande are now back at $40, we're talking about a rally. part of it is -- i don't think we anticipate the need for capital that the gulf states needed that is what drove the outflows in january. the reality is china isn't slowing faster than people thought. it is normalizing after hosting the olympics.

the same thing happened with the koreans in the 80's. this trend of the more normalized 5% growth is perfectly healthy. manus: hopefully this up the same thing that what happened in greece after the olympics. anna: different normals. owns: i am popping my balloon, trying to bring myself down of the sugar rush. rocking it, it surged 20%, 70 of the rallies of more than 1%. my question to you is fairly simple, it was the most vicious, visceral decline in stocks to the start of the year on record. here's the turnaround. do you believe it? iers: we thought at the time that it was oversold. we now know that the liquidity requirement was the driving

force. within look at the fundamentals. when i came on last time i said we are right in the middle of reporting season. it is important but bc, and hear hear, fromsee, and the companies. we are a bit cautious on the a for 2016. that is almost every year when i see people tallying up. nobody likes to overpromise and under deliver. he will because shares. what we're looking at is -- how we started to see a normalization in global demand? the reason this been depressed is the stretch -- strength of the dollar. he stepped back from 4 potential shortto now 2, and that a catalyst to get back into emerging markets. on thehey have rained dollar. do you think the dollar rally is finished? therefore, the looking at more emerging asset markets?

: i don't think it is finished because they're still in a rising mode. most area still wondering how we pump prime assistance. the fed are still on a policy to raise rates are as other central banks are not. manus: love -- i love that you bring up the mean reversion. we need to get slightly used to the fact that they will not regress to the traditional means. talking about inflation. we were just talking what the dollar. this is the biggest three-day drop we have seen in four years. my question would be -- this drop plays well, and that is what wells fargo was saying -- it plays well for them. it probably give some latitude to janet yellen to get those

rate hikes in. is this part of a bigger move? let me show you this, you can see the trend of that more precipitous decline of late. they raise rates in december and the dollar continued to strengthen. as we see them pull out of markets and liquidity, the dollar starts to weaken. now the fed is responding to markets. , and that from 4 to 2 is the move to have seen. anna: if you think about what the global economy is at the moment, you don't seem too worried. you are not seeing any sort of warning light on your dashboard telling you about slower global growth stories, maybe risk in manufacturing. seeing classic liquidity withdrawal. highlyted to see

leveraged acquisition models become common. we will see more pain in some energy stocks and the refinancing the needs to come this year will be a challenge ahead. i'm not seeing liquidity withdrawal. is one of the concerns you have, it is getting the investmentween the and growing the economy. markets don't like uncertainty. we are putting ourselves in a period of uncertainty. thank you very much. joining us from royal asset management. he stays with us. anna: up next, more money vis-a-vis travel. we look at what turkey wants and what european leaders are prepared to offer. ♪

ana: welcome back, there is shot of london on a friday morning. the ftse 100 is good bounce back at the start of trade. >> ubs has allocated more money for bonuses that last year. raise thishe to 28% total pay coming in at 14.3 million swiss francs. edf still plans to make the final decisions to go ahead with an 18 billion pound nuclear power plant in the u.k. that is according to the people familiar with the matter. this is approval could come this month. there is been speculation about the future of the plan since the

ceo resigned same the project would put the company under too much financial strain. mike pearson the ceo of valeant has taken steps to ensure employees over the company's plunging share prices. he sent a memo saying the business won't go bankrupt and apologized for the recent turmoil. shares are down by around 57% this week after having -- halv ving in value. me to the eu president the turkish prime minister this morning to discuss a deal to flow ofkey stem the refugees into europe. go onto brussels this morning. the weather looking pretty foggy , as is the politics, perhaps. ryan: look, the eu countries

agreed amongst themselves to a draft deal with the turks. now they have to get the turks on board. there are three things the turks want. first off, they want an additional 3 billion euros on top of what was already agreed as an exchange or compensation for their assistance in the refugee crisis. it looks like they will get that. the second thing they want are speedier or more intensified membership talks. there is a feeling in brussels that while few countries are prepared to accept turkey into the eu anytime soon, they can fudge around the edges politically to grant that risk -- wish to turkey. they also want free visa travel to the european union and they want that by june. amongst those three issues, that could be the biggest sticking point. many countries, france one of them, saying we are truly

prepared to do that right now for turkey. there are concerns about foreigners coming into the european union right now. that is a theme. fear is also an increasing amongst eu countries about terrorism. the new question is, will they get the deal done today? i think they politically feel that they have to get the deal done. will they get it done quickly? manus: i put my foot up one day down in parliament, they don't like you putting your foot up on the television. mario draghi save the markets, didn't he? eun: he spoke with all the leaders and said we need more clarity on what this monetary union is going. the portuguese spoke up and said exactly. at the next meeting, we would

like to discuss the banking union. it should be on the agenda. angela merkel balked, and said there is no reason to discuss that. of pressure.a lot he banking union is really not anywhere at this point. thank you very much. from him going to the day tracking the developments going from there. all rallying, i think this place and the overall risk sentiment. your oil trading above $40 a barrel. it is really swirling around in terms of the softer dollar. even the chinese had to respond to the softer dollar. he had to move their rates higher. anna: they did. let's pick up some of the conversation we were having with orion. we're joined here in the studio. piers, i know you have been

thinking a lot about brexit. how is it impacting the way you are investing? it creates a degree of uncertainty you don't feel comfortable with. we run a multi-asset business. you have to raise some questions about how much demand will be continue to see for commercial property in the u.k.? is certainly putting the brakes on that until we get a result. are other investment options you thought about but excluded because of brexit fears? piers: we stay in, but we can see a perfect the argument that comes out and says it could be a close call. years, will five the u.k. survive, will we we negotiate trade deals? absolutely we will, but it will create uncertainty in the

meantime. that is probably why we have some paring back in the budgetary forecasts. of minutes left, let's get into the markets. where's the overall momentum? china,oned the dollar, and the same 30 seconds. you've lived to the eye of the storm, do you believe the lacks -- next leg of this rally? known a have never recession caused by falling oil prices. recessions arise from rising oil prices that catches markets outside. policymakers could then respond, concerned about inflation. anna: the near the correlation between oil prices and markets going up. peggedthat is inversely

to the dollar. a weakening dollar provides that support. that is driving that in the short term. manus: a record-breaking six part deal for anheuser-busch. this is being issued into the market. do you like corporate bonds given to the ecb? them: we don't like because the ecb is getting worse. i never like when a bank is driving the price of an asset. that creates a false price. your seen that in the u.k. index and guilds. we would much rather see a natural market, and the market determine the correct price. we like them to spread. we are a buyer of corporate bonds as recently as last week. anna: thank you very much for joining us. "countdown."r

manus: an exclusive conversation coming up. futures are rallying. ♪

manus: -- guy: welcome to on the move. we're counting you down to the european open. i am guys jon tester i'm guy johnson. on cycle is on assignment. the greenback rally is cut down. what does the dollar demise mean for global markets. we are going to talk about that. why eu leaders are ducking draghi in brussels? brazil's market surges as the government pushes close -- as the government is pushed closer to the edge.

so we are just under a half hour until the european market open. i want to show you what is happening with the market. let me take you to the bloomberg and show you the air value calculation. we thought this rally was going to run out of steam in europe. it probably is. it is not great that we are pointing to. we have a .3% rise. the cac is going to outperform a little bit. a fairly flat open. absolutely fascinating. let's show you what is happening. i want to take you to japan and brazil. i want to take you to the oil markets to oil coming off a 41.29. lisicki look at where we fell on the japanese bond because that has been a spectacular move -- let's take a look at where we fell on the japanese bond because that has been a spectacular move.

-- 1.1289., 112 hello the adeeti: rate can go. -- how low the depot rate can go. here is the bloomberg first word news with kumutha ramanathan. kumutha: would be turkish prime minister as leaders are set to complete a deal to help the flow of refugees into europe. they will still offer turkey a 3 billion -- and next to 3 billion euros -- an extra 3 billion euros. a wave on visa requirements on turkish travelers. the yuan headed for the biggest two-day gain and a month after china's central bank raises rates the most since november. the move came after a decline in the dollar. onfell to a five-month low thursday.

the federal scaled back its forecast for interest rate increases this year. in brazil, a judge issued an injunction suspending -- as presidents chief of staff. mass antigovernment protests continued overnight in some of brazil's biggest cities. they have denied wrongdoing. global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. you can find more stores on the bloomberg at top . guy: thank you very much indeed. on the spotlight, the summit in brussels. ecb resident mario draghi has taken eu leaders aside with a strong comments. he told reporters "i made it clear that even though monetary policy has been the only policy driving the economy in the last

three years, it cannot address the weaknesses in the euro zone economy." have a bankerwe with us now. let's welcome the ceo of cyprus's largest bank. dids a week on since draghi what he did and made big changes to the way monetary policy is enacted here in europe. part of that was aimed at the banking sector did give us your take on what draghi is doing. >> is trying to ensure that liquidity is a -- he is trying to ensure that liquidity is inexpensive and to encourage next to lend. and also to encourage simmers to borrow. this is about making sure liquidity is not an impediment to european growth. guy: can it change your thinking? specifically. we are a sub investment-grade

economy which is beginning to recover. our story is at the periphery as we all know of the europe. this is about just trying to ensure the european central banks monetary policy conservation is positive to the potential for europe. now we need reform. guy: in trying to get the transmission mechanism to work, is he addressing the right points? he is addressing what he can address. when government, households and corporations are held to borrow, they have to either create growth or reduce borrowing or create inflation to reduce the real value of the debt. we have no inflation and we do not have enough growth and we have excess borrowing. guy: when you look at how it is going to work, i am an sme, i go to my bank. the bank struggles to lend me

money. end. get cheap money front it still looks expensive. the possibility of borrowing below 0% makes a difference? do you think that is where the sme will make a difference? interests are not good for banks generally. we transmit as much as we can in terms of margin. business models are under pressure the transition of traditional bank -- what we have is a drive for the last 10 years of the banking models to be nationally regulated. we will come back to the discussion of consolidation and in market and cross-border consolidation because of the crisis of the last seven years. is therio draghi regulator. ecb is the regulator. he talks about the need to change the business model.

how significant is the change is how significant does that change need to be? -- how significant does the change need to be? john: the consumer has to be a source. it is not any longer walking into a branch. banks have gone bust nationally, not internationally. the relation drive has been international. forave to marry the agenda the sanctity of international baking system. what -- as draghi was talking about overnight and the need to -- where the eurozone needs to go. we are still in a world, i remember talking to an agent the other day, if the german bank failed, germany would bail it out. we are still very national. how far away are we from getting the structures in place?

-- we are inopean the early stage and's -- early stages of experiencing. it is working. it is having people confidence of consistency and the averages did of course coming you do not get the national car getting played because it is driven in a consistent way across the eurozone. what we have to do is recognize the compliance costs are rising. equity returns are demanded by our shareholders. actually banking models are becoming more expensive to run which is why using the banking sector -- guy: underperforming. that suggests there an issue of different size -- of a different size and different school in each sector. we have to find a profitable model to compete as we move forward with the banking system. a lot of that is about policy at the national level.

guy: does it make it harder? easier? you are in a recovery mode. moment dueicy at the to help or hinder? john: there is incentive for people to invest in property. there is a located transfer from a depressed borrower into the banks which doesn't cost to transfer. there are reasonably good incentives at a national level. -- youur sing national. are saying internet -- you are saying national. does it make it harder or easier for you? john: it is at the national pulse because the stimulus is all around investment-grade which means in transmission to whereal economy, that is recovery occurs. that is difficult to transmit. guy: do you think you get a crowded out affect? john: the issue here is a man

for money. the cost of money if you look back is not the issue. it is the ability to put the money to work to create equity return. -- thereone presumes has to be a source of equity to create wealth. guy: absolutely. we are pushing on a piece of string here. john: we cannot provide that. guy: monetary policy is pushing on a piece of string. you can get them to reduce the cost, but until you can generate the flip side of that and that is what draghi is talking about with structural reform. you are not going to get the poll on that money. john: labor markets need to be reformed. europe needs to be more competitive. we need to deregulate. we need to be easier to export. consumers -- if consumers are not confident, you will not consumption in the economy. we have to create initiatives

where we produce an economy. us. john hourican joining up next, the president of the desk comes face-to-face in brussels. on the flown a deal of refugees. we go to brussels next. ♪

guy: 44 minutes past the hour and welcome back. let's get you up to speed. here is the business flash with kumutha ramanathan. kumutha: -- for bonuses for last raise ceo received a 20% with this total annual take francsin at 14.3 swiss -- 14.3 million swiss francs. ebs lands to make the final decision to go it -- ubs lands to go ahead with a nuclear power

plant in the u.k. before abm in may. that is according to people familiar with the matter. approval for the project could come this month. there has been spec election about the future of the plant since the cfo reside sing the project would put the company under too much financial strain. howard asset management is said to be given full control over a systematic trading hedge fund to david gordon. billionaire allen howard oakes is on strategies according to a person with knowledge of the matter. off money pulls as part of the firm's money plan to take on its macro hedge money strategy. guy? -- dealings with the refugee crisis did cyprus tests crisis.

donald tusk is due to meet with the prime minister in brussels. the meeting is the first of many. ryan chilcote is in brussels. what do we think the proposal looks like? it is more competent than it was what they were discussing 10 days ago. two big changes at one is -- changes. one is the idea is when the migrants and refugees get degrees, they would apply for asylum. that process is taken a long time up until now. the eu is looking at ways they can provide administrative assistance to greece to speed up , expedite the process of applying for asylum in greece. that is a bit of a change. what they were talking about is this idea of immediately sending them back to turkey on both without processing them. now they want to give them the

opportunity to apply for asylum. the other change is this idea that turkey proposed of one for one. they will taken one refugee for every reggie that europe takes an. no, your says we cannot do that. treating people like cattle, barter, trade here it that does not work -- trade. it does not work. if you apply for asylum in europe, we will consider and you back to turkey. the one for one exchange is basically lost. factors inone of the the mix, where are we on the cyprus position? could change -- could it change? ryan: on the face of it, the turks are looking for three things out of these talks. warriorsy, 3 billion -- 3 billion more euros. they are going to get that.

the next thing is they want their visa free travel. that might be able to be managed. the third thing is they want an intensified process, a schedule for when turkey could be a part of the european union. cyprus says this is their chance for reunification within cyprus. they do not want to give turkey a green light come -- green intensified membership opportunity in till they get turkey's assistance in the reunification of cyprus. that could be a big stepping stone here. guy: ryan chilcote joining us out of brussels. john hourican is still with us. i am sure you would like to avoid that. when you look at what the opportunity is for the unified cyprus and your bank, what is it? john: the northern territory of

cyprus, there is an immediate opportunity of 500,000 more people at the bank. there's opportunity to deploy a modern banking sector into cyprus as a unified aspect. the politics of it today look good. the economics of it need to be worked out and carefully charted. excited.sound pretty john: my entire lifetime it is been going on. focusedrnment is very on trying to get a political outcome that can create a solution. we have had the plan failed before. everyone like the politics for this -- my sign guy: a final question. let's say it was a done deal. you wanted to take your business

there, how difficult with the business look to the current business that you have. would you expand your business? john: you have to recognize the channel with which banks operate today. rapidly being cannibalized. what we have to do is create a footprint or brand but smaller, less -- smaller, more digital. that is where banks have to go. you would be foolish to roll out the existing model into a whole new territory. more distal, a much more conducted technological and digital -- more digital, a much more conducted technological and digital. guy: the ceo of the bank of cyprus. happy friday for edf. rivals cut their pay out. more on that story in a moment. ♪

guy: six minutes until market open. ubs has raised its bonus by 14%, that comes as the rival has cut. --'s talk to jeff broglie let's talk to jeff moberly. jeff: good morning. i think ubs has bucked the trend here. ahead and their restructuring when the other cuts, namely deutsche bank bonuses by 11%. restructuring their investment bank radically three other twowhere's the bonuses cut rates last year, leading to take impairment losses and their business models which have not been updated also suffered from market losses.

ubs did not have all of that and ubs had half of the provisions of that to take from his is matters. -- from business matters. guy: what happens now? talk to me about compromise when it comes to talent. what the numbers are. jeff: an interesting question. profession are people who react quickly to pay. if you can send a message like ubs did today, our bonus pool is up 14%, that is a bank where you can work. tocontrast -- in contrast where people had doubts about their business model. iss will mean ubs competitive when it is about hiring. guy: thank you very much indeed.

the market open is coming up next here looks like it is going to be played one here in europe on friday. ♪

guy: good morning, welcome. you are watching "on the move". we are moments away from the start of european trading. is cutenback's rally down by the doves. what does it mean for global markets? the ecb president says it is your turn now. why e.u. leaders are ducking draghi. do international investors really know -- let's talk about this market open now. looks like it is going to be a fairly flat out. thne.

let's get you to the market open. let show you which stocks are on the move. just before i get to the equity markets, i want to quickly show you what is happening with the dollar. up .2%. this is after we have seen the bloomberg dollar index heading for its biggest three week slide in four years. also, what has been dropping the markets today is crude, sill holding -- still holding just about $40 a barrel. wti coming off those gains a little bit now. the european equity markets. mixed trade in asia. japanese stocks gaining on a stronger yen. ftse 100 pretty much unchanged. cac 40 heading up. the dax pretty much flat. in terms of stocks we are keeping an eye on this morning, we arert