call or go online and switch to x1. only with xfinity. guy: welcome to "on the move." we are counting you down to the european open. i'm guy johnson. the boj is holding it stimulus. the yen is surging. wants to geturoda into the effects of negative rates, but is he really just assessing the damage? is basically path unchanged, according to the market, but the fed remains reserved. and deutsche bank has a net

income of two under 40 million -- 214 million euros. less than 30 minutes away from the european equity market open. the pace is being set by what is happening out in japan. let me sure you what is happening with the expected "to some of the stock stories are interesting. -- let me show you what is happening with the expected open. some of these stock stories are interesting. we are going to open lower 100.e foo ftse deutsche bank is expected to open 3% to 4% higher this morning. look at the story coming out of asia, absently fascinating. thinking when you look that is negative rate so

tory? draghi has already made of his mind. the dollar yen is on the move. the nikkei is falling. the kiwis are getting very excited about their currency as well. this morning.reen they are watching very carefully to see what will happen next. .8% thisde is down by morning. let's bring this all together very nicely and get you to the first word news. the press conference with kuroda has just started. david inglis is here with the first word news. david: a big story there and of course, let's take a look at the y en. it is surging. ine of half the economists the bloomberg survey had predicted action from the central bank. this underscores

the challenge in japan of breaking free from deflation. in the u.s., the fed skips an interest rate hike for the third straight meeting. in a statement, the fomc repeated language that global, economic, and financial development continue to pose risks. instead, officials said they would closely monitor the world situation. and deutsche bank is posting a first-quarter profit, defying analysts. they still down 61% from the year earlier. the co ceo is drinking europe's biggest investment bank. they are trying to restore market confidence.

global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. you can find more stories on the bloomberg. .ind top guy: there we go. kuroda following the decision not to do anything on the stimulus front out of japan. you look at this and you think, what is going on? draghi has clearly decided that things are not working on the negative front. finagle his way around this tory? we are just waiting and watching at this point. we will bring you the news as it comes out of this race conference. now, let's analyze what is happening here. the leading money managers in the world are in switzerland. carolinestraight to cowan ha hyde.

caroline: the cio of the global credit market is here. we are hearing from the bank of japan is speaking right now. you are expecting more stimulus to come from kuroda eventually? >> we are because if you look at japan, the ecb, even with the updated economic projections we saw this morning from the boj, they are not even going to get to 2% inflation for the and is couple years. with low inflation around the world, in japan and in europe, qe will have to expand and you'll likely see more equity directes and more lending from the central bank. despite no action today, look for a continued qe by central banks, particularly in europe and japan. ratesne: and that drives even further lower into negative territory. that means you are jetting around the world of the moment because everybody wants a piece of credit. >> rates are so low right now all over the world that 75% are

yielding negative rates. investors are moving into credit and in the u.s. market for example, you can earn 4% to 8%, which is near an equity return, the volatility of equities. caroline: where should we be looking in terms of the investment market? are you dabbling in high yield? >> the diversified opportunities that can yield anywhere from 4% to a present. we are finding many credits t trajectoryedi is improving. if you look out two years from now, the fundamental by getting better. now is the time to move in that is why we are building the case of credit around the world. caroline: what sectors? whichlike banks,

ironically, have underperformed this year, but we think they will bounce back as a central banks turn to more qe. we like the consumer. we think housing is very strong. finally, in january we have added to the energy bonds. that really has continued with oil prices recovering. caroline: what about the european corporate bonds? we just had deutsche bank profit you voting, but it is better than expected. >> we have been purchasing u.k. banks because there has been brexit concerns. u.k. banks have been the biggest underperformer. caroline: you are not worried about the brexit? but if youorried, look at rates, currency, and credit, credit spreads have moved too much relative to every other market. the capital is a most double the u.k. banks. so, thanks a very safe. if you stress test these banks, they can actually handle brexit, particularly the senior bonds.

broadly across europe, we like cable, telecom, autos, and ban ks. but overall, there is more money in the u.s.. caroline: what about fx? are you looking at purchasing the sterling bonds of u.k. banks? or do you just hedge yourself in general? >> right now the dollar-denominated debt around the world is the cheapest. last year with the $1.2 trillion of issuance. the corporate bonds are the cheapest in the u.s.. when we purchase u.k. issues, they are going to become cheaper if you purchase u.k dollar denominated. caroline: we think they could go further than people expect. >> we think they will probably go a little bit faster than what is priced in. there is only a 20% priced in

probability for june. we think they will go one or two times this year. if you look at the domestic economy, yellen is pretty confident. she cited the labor market and downplayed the weakness in the first quarter. they also take up the risks of global, economic, and financial developments. all of that is a little more hawkish. that leaves the framework of the in theork for rate hikes future, but obviously, that will depend on inflation developments, the labor market, and what is happening with global markets. caroline: you have been on a plane a lot. you have been to france, europe, and switzerland. we are you finding interesting discoveries of new clients coming to you at the moment? >> this is what is amazing. no matter where we travel, whether it is all across asia, europe, or the u.s., investors all around the world have the same dilemma, where do we put money today given how low rates are? as the u.s. credit market is standing out around the world.

science in tokyo are putting more money into investment grade. clients who traditionally invested in equities are moving into the high-yield. this 4% to the present return prospect is very attractive today. it is really a one in four year event. caroline: your optimism is keeping you warm today. of pimco's global credit marketi is a stronger man than i am. up in thisp particular cold weather. guy: i have to say, i was expecting it to look a little bit warmer, but it still looks a little bit like winter over there. carry on, caroline. now, let's look to japan. kuroda is making at a press conference in tokyo following the decision by the central bank to do nothing. you have seen the fx on the currency.

that is the dollar falling against the yen. just to give you some details on what he is saying, they are still open to adding more stimulus to the economy. i think that is a given from most market participants' points of view. what he is indicating is that they are waiting and watching. we have similar lines coming from draghi, though i think he might be one more step removed from the negative rate story then kuroda is. he is making it very clear that there is still the opportunity to add more stimulus, but probably more in the credit channel. draghi is leaving the door open to further rate cuts that they at the ecb. we are going to take a very quick look at other asset classes when we return. up next, we will talk to the head of the global emerging markets. ♪

guy: kuroda is still speaking in tokyo. i love this line we have up on the screen at the moment. helicopter money not legally allowed in japan. what he said was under the current circumstances, under the current legal structure -- you change the legal structure, it might give us the opportunity to do that, but monetization might be been, for that -- might be the moment for that. academic.cally an

that has no relevance to the real world. it is interesting that kuroda is saying that the boj will add easing in all three dimensions if needed. that is very sci fi out in tokyo. let's get back to switzerland, where the world management summit is being held. caroline hyde is there with another guest. back to you. snowine: yes, and the continues to fall. warm.afael is keeping me clients inking to brazil and mexico. what is the risk sentiment at the moment? >> given the volatility, most clients have been quite shocked given the decline in the market . at the moment, there is a relative sideline mindset. most clients are considered

about the risk. they are already shy regarding taking on large positions. the key for wealth management is really the risk versus the relative return. the clients are very mindful of ensuring that in terms of their lineile, they are in with their own risk appetite. it is quite difficult time for investor sentiment at the moment. caroline: we are some of the most obvious nerves? can you put it down to geography? how is brazil at the moment, given the political instability? >> i think emerging-market-based investors are moving away from what historically over the last 10 years has been a home bias. returns have been good in turkey, brazil, russia in the past. so, we have had a tennessee to go with what is familiar and invest back home. beck is against the principle of the diversification. so, increasingly, i think they are looking, even though perhaps

they might be based in brazil, at investing globally. it is a world they know less of, which is why the risk appetite is a little higher. but i think they are quite concerned about risk also outside of their own home countries. it is a bit of a conundrum. risk at home and risk abroad. appetite to invest globally, but they are going to be cautious. caroline: the are starting to in other asset classes. are you seeing a shift in sentiment? >> most of these countries also have a geopolitical angle. a lot of the clients based in those markets really do have a wealth creation dimension through commodities, but they also have some concerns on domestic growth, domestic macroeconomics, and geopolitics. east, ande middle

brazil have had significant macro and geopolitical challenges. theseof the clients in regions are not only exposed to commodities, but to the sentiments. despite the stabilization, clients are still quite cautious in terms of investing back home. for example, you asked about brazil. theite the recent unrest, process is still going on and the succession is not clear. this potential corruption scandal that is out there, that is not only potentially the president, but quite a few of the potential successors. situation we have to watch and certainly, the clients are watching quite closely. caroline: i know you are a man, when you are out, you are gauging your client's risk appetite and then you pass it on to the investors have to put in action that risk appetite, but where are you generally hearing that they want to put their money? ar do they go by asset class, or do

they want to put it into the states?the united >> interestingly, clients have to think more about institutions. it is not only about a return target or caution on risk. it is really about setting your risk appetite and maximizing the return based on that risk. it is easier said than done. even the risk appetite to retain the risk where it should be in volatile markets is not easy for someone who has got a full-time job doing somebody else, entrepreneur or company owner. we feel it is something we are quite actively helping on. in terms of areas where they may be interested in, globally, they are looking more and more at defensive kind of investments with some yield. they are looking at global high-yield, european high-yield. they are looking at ways of selling volatility in a high takingvironment,

advantage of currency volatility. they're looking at companies who exhibit certain characteristics, perhaps with high dividend stocks, globally defensive stocks, consumer stocks, or companies that have perhaps an inflation hedge indebted where they have pricing power. dded, where they have pricing power. diversification is becoming much more important for private clients, compared to the old days of betting on a stock or on a tip, or on a friend's conversation over dinner. that certainly plays to our strengths and in the current not easyent, it is to implement all of that. it is more about asset classes and asset behaviors than it is about recent asset allocation. caroline: what do you talk to

them when you are trying to educate them about the rate market and rate developments? are you expecting to get more from the boj? >> from our client base, that is the single biggest challenge. it was assumed that upon retirement they could rely upon 5%-15% interest rates. that is the longer the case. so, the hunt for returns candidly them to do things that are beyond their risk appetite. this challenge is the one that we actually can help them most on. to number one, make sure the risk is where it should be. and secondly, setting their risk, really looking at marginal returns. we talked about the volatility plays, high-yield, dividends. and there is a limit for secular growth trends. for example, things like sustainable investing, there are a number of themes they are

looking at. they want to get away from short-term volatility o and look at the long end of expectations on the return. caroline: this negative yield environment is causing conundrums. give us a sense of the one place you are having to fly to at the most at the moment, or the most interesting area that is clamoring for your help. they wan have a lot of money and they want to take it out of their country. >> it is not a question of in or out, it is a question of global advice. increasingly, the two areas that are most in need of advice are the areas that are full of commodity prices. so, middle eastern investors are very keen on saying we are clearly very largely exposed to commodities. the middle east is an area we are spending a lot of time on. russia, likewise. abig commodity exporter, as you know.

the third is probably brazil. for the reasons we outlined earlier. caroline: wonderful speaking to you. thank you for giving yourself warm. aphael articulating where he has to give the most advice. interestingly, it does seem to be the commodities area. ael, head ofr raph emerging markets. thank you very much, caroline. let me take you back to tokyo to talk about what is being said there by kuroda. what he is saying is that the criticism of negative rates is not hindering his view of whether or not he can or cannot cut going forward. what i think is interesting is that sense he has been speaking, we have seen the yen continuing to make gains. the dell again, we will flash we willthe dollar yen,

flash this back up on the screen for you. we are at session lows as kuroda continues to speak. we will have more from him throughout the day and it will be interesting to see exactly how he wraps this one. i think we are still at the level as last time. let's talk a little bit about what is happening in the stocks we need to be paying attention to. we talked about sonafi, going hostile now. they made a $9.3 billion bid on medivation. $52.50 inat is cash per share. it is a drug therapy company that deals in oncology and the isnch pharma company pushing pretty hard and does not understand why it is getting more back from san francisco on that story. i want to bring your attention

to the fact that the dax is going to open software, but will perform better than some of the other european markets. and maybe that is because we are going to get a better open for deutsche this morning. they have been a great job in managing expectations down there. as a result of which, the company has beaten this time around oout of frankfurt. the stock looks like it could very strongly pop when we get to the open. that open is now five minutes away, four minutes away. let me run you where we think european markets are going to open. is down by .6%. the cac 40 is to buy .6%. by .1%.dax is only down this after a significant falloff in tokyo. it looks like we are going to

get a negative start to the day, but keep an eye on deutsche. watch the weather as well. it is freezing cold outside. the market opens in four minutes time. ♪

guy: good morning, welcome you are watching "on the move." we are just moments away from the start of the trading. the boj withholds more stimulus. wants to gokuroda to effective negative rates, but is he really affecting damage? the fed remains reserved. and deutsche bank me to the net income line of just 240 million euros. we expecting a negative start. we just may be soften up a

little bit more down by around half a percent. we worked our way into the open. as we get to that open, let's find out what is going on. nejra is you tell us what is going to happen. stockswe saw that asia were initially rising, we then saw them reverse those it gains in japan. as you say, futures were pointing lower. now, it looks at the are seeing a weaker open. , euro stoxx 50 is down as well. toll waiting for the dax open. it looks at the moment like we are seeing a majority of red across european equity markets. let's take a look at the stoxx

600. ,t is red across the board every industry group has a low on the stoxx 600 today. the worst performers are financials down 1.2%. the -- let's take a look at dollar yen come with broken through 109, the yen actually jumped the most against the dollar. the best-performing major currency against the greenback today. dollar yen is the white line, u.s. futures are the blue line. u.s. futures are also slumping. let's take a look at some of the stocks we are keeping an eye on. profit sliding here, it's it first-quarter earnings fell 23%, this is on setbacks. you can see, the stock openings lower their down 4.2%. ,oving on to lloyds

first-quarter profits little changed. that is down to 1.8%. of course, it was a beat here. analysts are expecting a loss for deutsche bahn. guy: rumor, it is thursday and all stocks are going next dividend. so that is probably one of the factors when we are seeing the financial sector being dragged a little lower than you would anticipate. one of the factors in the mix is what is happening with deutsche bank. is to beat estimates, estimates work jumping quite a bit lower. let's bring in our finance managing editor, she joins us on what i guess you could call a

positive surprise. how positive really is this? >> there are a few things to bear in mind. estimates were ranging very wildly because the company is going to read deep restructuring and a difficult trading environment. it was difficult for analysts to have much visibility. it isn't a surprise that you could see the reaction at the open. that is because an investment bank was doing better. there was also an improvement, numbers driven primarily by lower legal charges. it is a very difficult legal environment for the bank in many cases it is looking to resolve that here. you're also seeing an erosion of the buffers and capital. s investors worried because if you are not generating enough earnings, you will struggle to both of those capital buffers. it is a lingering concern that the bank have to pass investors

again to bolster that capital. guy: the stock price is one gauge the could use, i'm not sure it is necessarily the best one. talk to me about what is happening with the credit. washat we have seen,w hich heightened, the default swaps widen. if you investors be concerned that the constraint capital rule makes it very difficult for deutsche bank to pay certain coupons. this is continuing concern we're seeing in the markets, even though some of the share reaction and measure has improved in the last week. he says it is unclear if we will see a loss or a profit in 2016. as you say, huge variation in terms of the analyst expectations. how should we judge whether this

restructuring is going according to plan? >> i think it is probably early days given that they came on and july and put the finishing touches on to the plan in october. it was a very difficult trading conditions before some of the competitors. it push through even deeper restructuring and cost cuts. we haven't seen that from deutsche bank, the costs are coming down. -- withheld held last year. i think it is early days, you are seeing them saying that he is not sure how 2016 is going to unfold. largely, that will depend from a profit standpoint on how many of their legal cases they can resolve and at what cost. guy: we will leave it there, thank you very much indeed. a wraparound with what is happening with deutsche.

on the conversation with our london guest, james, is deutsche investable as we see it at the moment? we don't really understand how this process is going to work. it is right difficult to judge. james: at the same time, they will be contrary investors who will say there is a price for everything. actually, if you look at the financial results over what we've had so far, there are some good results coming out of u.s. regional banks. those will be making market checks again. onxpect investors will focus the financials on the back of the q1 results. guy: expectations have been downgraded by the big banks by such big degrees, the bars are -- why do we -- why we hear? that: i share your view

investment banking activity took a huge hit in q1. we also had bad news coming through still on exposure to the hydrocarbon segment. it has been really bad for results. but the banks have posted excellent results. have haderitrade's amazing results. this is an issue where stockpicking become very important. i think the lloyd's numbers are pretty important. it was broadly expected, no real surprises. nothing in terms of the news that was surprising. yes, this has some brexit hereure, that that kind of with the senior credit-rating pretty well. james: and a clear plan. guy: i want to take us back to what is coming out of mr. kuroda

at the moment. we see dollar yen being the focus of attention this morning. and where he sees negative rates going from here. he doesn't see it's taking 6-12 months, indication being they aren't having an effect at the moment. what youick of line on think is actually happening here. is this kuroda pausing, and wanted to get a better understanding of what is going on? or is he saying maybe i made a mistake here? focus on ae is a big price keeping operation. he is dancing on the sidelines. guy: where does that take us? or 20 years of partial growth still to come to japan. where the wholesale sector

essentially pays the bills. guy: ok, we'll come back and talk about the. up next, we look at the best and worst performing stocks after a busy morning of earnings out of europe. we will talk banks and how you make a plan. ftse 100 is down. ♪

back, it is 11 minutes into the trading session

and the spanish section is down pretty hard. here is david inglis with bloomberg world news. david: let's get started in japan for the japanese yen is surging right now after japan maintaining its record stimulus. they had predicted action from the central bank, meanwhile the core consumer prices in japan after sinking last month by the most since april of 2013, underscore and the challenges for japan. meanwhile, in the u.s., the federal reserve skipping an interest rate hike for the third straight meeting. admittedement, they previous language the global economic and financial developments continue to pose risks. instead, saying officials will closely monitor the world situation. our next now on deutsche bank have posted a first-quarter profit.

loss, a half billion euro still down 61% from the year earlier. there is a slump in trading revenue. their shrinking the biggest investment to back. also, riskier assets and scrap to restore a attempt market confidence. global news 24 hours a day powered by our 2400 journalists. you can find more stories on the bloomberg at talk go. thank you very much, indeed. it has been a busy day for earnings. the spanish bank missing, we just talked about what is going on with the stock price there. airbus is also in the red. these two newest jets suffering delays. one stock in the green, electrolux is leading the stoxx

600 and beat estimate of a healthy u.s. growth. let you freelance a bit, walking me through some of those stocks there. what are you seeing in europe? what is this telling us about the investment case? the investment story is her a clear that expectations remain relatively high and there will have to be a major fall back. look at the u.s. data, the long-term earnings numbers for companies in the s&p 500 is still at 10 percentage points. that just doesn't match the low great environment janet was talking about last night. that would be the first issue. guy: you're saying that expectations are still too high despite some key sectors like a banks and materials and oil have been managed aggressively lower? the rest of the market still needs to catch up? to draw am trying

distinction between the short-term analyst forecasts. we so have this crazy overreaction to short-term news. however, the long-term earnings numbers are so penciled in at plus 10%. if we were to sign up with the premise which i subscribe to that will have a relatively long time of low growth in the developing markets, it is hard to get to plus 10 where companies have already pulled so many rabbits out of their hats with buying back shares, restructuring, and outsourcing. it is hard to see where that plus 10 can come from. guy: on the u.s. consumer, which is apparently buying washing machines and vacuum cleaners. james: the u.s. consumer has been a beacon of hope within the developing markets. it is equally clear they have yet to spend any of the benefit that came from the reduction in oil prices in reduction -- comparison to the u.k. and

europe where that has already been spent. guy: airbus? operational difficulties delivering some key planes, because they're pretty complicated things, but nevertheless, you wonder whether if the lower oil price great and environment whether i don't need some of these new planes which fly very efficiently. the story, iplay think this is a story to play. i would play it that in the coming companies very well placed to take long-term market share gains to generate long-term returns for the many people said we shouldn't go near rolls-royce, if you look at the benefit it gets on its service contract, it is very interesting. they take a loss when they sell an engine. if you look at the service

price, they'll make a huge amount of money down the line. i think that rolls-royce will come back with the numbers over ae years ahead that could be surprise. that is putting the share price much higher. guy: what about maybe ge that has more exposure to the wide bodies? james: to become it is a base. amount thatt the airbus has been dependent on emerging market flag carriers. the extent to which we are seeing building overcapacity in some of those areas. airbus asee the proficient as some are projecting. dated sideswiped by the bigger macro players for the we have some time there -- santander, and in the market that is

extremely cautious, it could be a bad day for them. tomorrow is really terrifying for those not familiar with what is going on with the right decision from done amanda bradstreet on portuguese. if they downgrade, the last agency that said that technically the ecb could no debt. buy that if one were to look at the structure of the national balance sheet, they will be in real trouble. this could be serious bad move for the eu and the euro zone. guy: is the issue creeping back up on us? now calling an emergency summit. portugal could the about to see a significant downgrade. james: the portugal already issue is already centerstage tomorrow.

piercing to rating agencies do this, and coming up with all sorts reasons why it is not necessary. if you look at the hard reality of the annual deficit in the funding of the deficit, that the downgrade is appropriate. then have a problem. guy: james, stay with us. up next, we look at facebook as they passg expectations. the rest of the tech sector has been struggling. ♪

guy: welcome back, you are watching "on the move." facebook shares jumping, the is up 52% from the same quarter last year in earnings. mark zuckerberg wants to issue a new class of nonvoting shares so we can continue to make a big bets. what weins us now with have. on to go past the migration to mobile, this company is gone from strength, to strengthen. nejra: this is the latest at record earnings and sales and profit going past estimates. it was about the booming mobile advertising. moreook is giving immersive it videos.

as you said, the result sent the stocks in after-hours trade surging. but first was this new class in shares. the acyclic, this is about zuckerberg maintaining control. a can be involved in leadership role even after pledging to give away most of his stock. he said he can keep founder control of facebook so we can continue to build for the long-term. this is key, because most of the tension is now focused on the long-term. he laid out a 10 year vision and away from the main the social network is investing in a more virtuals bet, including reality and artificial intelligence. don't forget that facebook's main competitor alphabet issued a special share class that he gave the founders company control and freedom to make a bets on risky new technologies. off butthose bets put

have stumbled, and facebook has to keep up. facebook spending rose again in the first quarter. but mark zuckerberg said is he's he's more bold moves ahead rather than behind. guy: are you in? on, facebook has demonstrated an extraordinary capacity to monetize the flow that it receives from viewers and participant in a way that many people just said it is not going to happen. they've done it very successfully. it is truly ordinary. it is very targeted advertising. let's broaden the conversation. last year, you are invested in these guys. the startss, this is of the year. facebook, amazon, netbooks, google, and facebook is the only one year to date that is in positive territory and delivering for shareholders. which one are you in and wish

you were out? james: everything other than netflix. that is the bad boy on the block in terms of share price performance. beinglutely don't regret in those companies because of thick long-term the capacity to value isderlying robust. buyingthat creates opportunities. an awfulompanies went long way very quickly. now, we are getting down to maybe be more granular in terms of understanding. that creates bigger swings. the valuations between these companies are now very wide. you want have long-term growth trends, or high multiples, really clearly picking the terms

they want to operate. be, includedshould in a portfolio. say absolutely people should take it vantage of the short-term downswing in alphabet. microsoft, many people wrote that often people said it stumbled because of the cloud story. i was a holder of microsoft in anticipation it was to chea p and miss valued. i equally think that there will be areas in car manufacturing where at the moment we don't necessarily regard them as technologies. but they are for sure clearly capable of demonstrating long-term growth trends. guy: james, who will come back to you. actually, i think the actually wrapping up this conversation. nejra joining us as well.

we go livesurging, to tokyo, next. ♪

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simply by using your voice. the billboard music awards, live sunday may 22nd, 8/5 pacific, only on abc. guy: welcome back. you are watching "on the move." we have had an interesting norming. 600 is down by .5%. the ftse 100 is down by .5%. i want to take you to friends as well. the cac is down by .5%. made an unsolicited offer to purchase medivation. the reason they are doing this is because well, san francisco refuses to pick up the phone.

we're now joined by bloomberg intelligence to give us wha an idea of what is going on. is it as simple as that, they are not responding to our e-mail? >> it seems to be. it is great to see such a hostile situation like this. guy: what do they want? >> we have done this analysis as the rumors on medivation have been circulating. it does fit really well with sanofi. they have enough debt capacity to do this and debt is quite cheap at the moment. lucrative foris them and cash is very easy. this would give them a 2% left eps.ft of their we will see how the share prices react today, but i expect somebody will go for the opening offer.

even if i push up the numbers to 20% to $63, it still makes sense. that is the point we should be getting into. of how much debt capacity sanofi may have. if they go about $63 per share, they might have to consider ac going with some equity. but if it fits with their strategy, this is great for sanofi. with all the numbers. they did grow. they had said previously that they would be approaching double digit growth. and now, we have got 10% to 12%. the point of the whole thing is, we need to see re-stabilization of the business, which they have almost got. the new products kind of made up

for a little bit of that, but we need to stabilize the rest of the business. guy: back into this year. we are talking growth, i think. >> everybody is expecting growth. you mean -- that would be good to see. guy: it certainly would. thank you, sam on the sanofi story. let me take you back to the main event of the day, boj governor kuroda. the press conference has ramped up, and this is after the boj pretty much did nothing. they are hoping to upset the impact of negative rates. we're standing by in tokyo with more. we should have seen this one coming, right? >> well, i would say so. the economists, we survey, more than half of them tdid

forecast action today. if the boj wanted to take action, they had ample opportunity. they had great excuse, they had cpi data released this morning show inflationary pressure in japan all but gone. having said that, kuroda has consistently said in the past that once steps are taken, it takes sometimes for the effect to filter through the economy and that has been a big part about what his comments were today in his press conference. he said, we cannot say how long it will take, but it will not take six months to 12 months to see the effect. communicating with the government and mr. abe? is he saying, step it up? >> that is a good question. it is quite possible. lately, a lot of people and japan have started to say that the economic progress should not be called abenomics. it should be called kurodaomics.

it relies so heavily on the boj. it could well be a message to mr.abe that we need to see more from your side for this to work. they cannot be just a one engine source of growth. we do think abe will come through with some sort of fiscal package sometime in the next month, well ahead of the g7 summit that will be hosted here at the end of may. kurodanomics does not quite have the same ring to it and it is harder to say. were you surprised? >> moderately, i suppose. given that the boj had indicated negative interest rates could be back on the agenda and then, we have nothing at all, what are they up to? guy: what are they up to? >> the thought crossed my mind

which,rning as something maybe central banks are just realizing that there are limits to what they can do. we have had the fed, the boj, the ecb, they are all putting huge amounts of liquidity into the market. it is not relate boosting economic activity or stimulating inflation. be saying, let's take a pause and figure out where we are. guy: is this signaling to governments, do more, get on with the physical push? -- with the fiscal push? >> everything has been done by monetary policy. governments to the last seven years have refrained from expansion, despite the fact that the imf told him it would not be

a bad idea. so, yes maybe this is the message. guy: do you think the negative rates were not such a great idea? >> i would certainly go along with that. the idea that negative interest rates stimulate additional lending is fine as long as there are additional demand for the liquidity made available. guy: this strikes me that draghi has already made that decision, we are going to attack the credit channel. to be honest, that did not work and we are going to try something else. is kuroda just taking longer to get to that view? >> phoebe cates is, but let's not forget that the boj -- maybe he is, but let's not forget that the boj has a longer history of this. in aggregate terms, it does not look so good. when you're trying to stimulate inflation by giving more money to an aging population that does not want to spend, it does not seem to work. llar yen isll again io

trading 1.05 now. >> we might hear something from the different press conference, but frankly, i doubt it. guy: when you get to that level, you get a kind of instant reaction. you get the boj saying, we have to control this? >> i would have thought so. if you want to stimulate yen would a waker yeaker the way to do this. if we get to 1.05 and have to do something, you would see that what happened overnight was a mistake. guy: what is more stimulus look like? >> i think, from an aggregate point of view, they need more fiscal stimulus. we need to think about actually using public works policies to give the economy a lift. something which depend tried 20 years ago. it did not work. now we have to use more fiscal

stimulus. monetary policy will remains supportive. maybe, use a little bit more qe, but we need to have a whole package of measures here. guy: stay with us. i would like to talk about the ecb and maybe use a little portugal twist there. we breakdown last night's fed decision, next. ♪

guy: we are 41 minutes into the equity's vision. let's get to the bloomberg business flash. david: le it is capitalizing on the new apple products, with the new galaxy sf7 smartphone. the share has also announced a buyback for 1.8 billion dollars. and deutsche bank has posted first court of profits defined analyst estimates as well. the predicted almost half a billion euro loss. the have slow down 50% from a year ago. the co ceo is a shrinking the investment bank, pledging to cut and scrap less riskie

risky assets. the biggest lenders have be profits. analystnds secreted the forecast. chief executive officer has been under pressure to intensify cost-cutting amid concerns over slowing economic growth in the u.k. airbus has reported a 23% decline in first-quarter earnings this morning as an engine glitch stalled the jet. supply issues have also taken part. they said the cutbacks should not affect the business. their goal of delivering 650 aircraft this year, want to at least match the earnings from last year. that is your bloomberg business flash. guy: thanks very much indeed.

the fed left rates unchanged, shocker. in the statement, the fomc admitted previous language that financial developments continue to pose risk. they said officials will continue to closely monitor the e global situation. here are some of the takeaways from our guests. >> it is much ado about nothing. they did downgrade the global situation i suppose. they did not mention june. they did not learn much. >> the fed really has to watch the inflation ball. inflation expectations are very important in terms of the evolution of inflation. indeed, the fed should not be raising rates unless they are confident that inflation will rise to the 2% target. and that is not clear right now. >> i actually think the emphasis on gradualism in the interest rate movements is overplayed.

should beat they more willing to be more responsive to the data, and perhaps respond aggressively to the data when it comes along. guy: let's carry on the conversation. let's bring in bloomberg first word strategist richard jones, and our guest peter dixon joining us from commerzbank. peter, i will start from you. i think the fed took its eye on the rest of the world a little bit more. >> probably not now. this afternoon, we are going to get a fairly weak first-quarter gdp rating. the unemployment rate is low. the debt market looks good, but overall, the numbers are not fantastic. inflation remains low. i still think the fed with the opportunities to raise rates in 2014 and early 2015.

now, it is being overtaken by events. guy: what is the market saying? >> we had a little jump initially with the headlines, but we have got ten year yields a two basis points lower than where they were. june is still about a one in five chance for a rate rise. it is a steady as you were kind of thing. guy: the market is more optimistic than the fed, regarding the possibility of rate hikes. >> it would not surprise me if they shifted the possibility of two rate hikes in june to one. that is probably what we will see. ance,ve a two in three ch and i think that is right. the first quarter gdp ratings fter, that was reference to the latest data they have. that is what is going to determine what they are going to do. so, june i don't think it is

anymore in play now. guy: june is still too soon. peter, one this year? >> i think so. think where it stands right now, one more rate hikes. guy: what are the up side and the downsides? >> i am fairly neutral to that one. i think they will raise rates, it will not do it yet. as long as the international environment clears up -- don't forget the next fed rate decision comes just before the break. september will come back into play, but if they get to september and december is still an option. guy: you think the market will become trouble with a hike? it is hard to say without the data. >> i think if they give them sufficient morning. if the fed cells this message to them like they did in the latter part of 2015, then yes, they could live with it. but let's face it. the fed has done a lot to

support markets. i think they might have to give a little bit back. guy: tomorrow, a decision on the ratings of portugal. they have gotten stable at the moment. they are the only ones that have gotten with an investment grade. they don't have them on negative watch. to get over that cut would be a big deal, but if they do cut the ecb cannot buy any more portugal debt. hawkley through what you think the market reaction to that would be. -- walk me through what you think the market reaction to that would be. it is interesting within the broader spectrum because i think a lot of what is driving the lea brexit on the referendum is the fact that europe has many problems. reinforces that

story. >> it really does and then we get grexit resurfacing again. it would be a big deal. guy: the ri ramifications of this in your mind, would be huge. the ecb would be put in a difficult position. there is a significant risk that this will happen. ofthe strategy to buy bonds struggling companies, if you can do that anymore, it puts them in a vulnerable position. guy: so, you think the pressure is being applied? despite the fact that the three other agencies have said, we think there is a legitimate case for having this country of speculative grade. >> i don't think it is over pressure, but i think

they realize the more they do, the more difficult the situation. it might just be prudent to step back and avoid anymore market turmoil than necessary. let's face it. it is not the most stable environment. guy: what would be the ripple effect across europe? greece reasonably insulated last summer, would withbe the same case portugal? >> probably. i think the markets it so far, they care about portugal, but it is a relatively contained problem. effect would be fairly limited. yes, you might get a short move in euro dominated assets, but it will raise questions again about grexit. and certainly, the possibility greek debt, coming back

into the forefront of investor's minds. a clearly has not gone away. guy: we will wrap up the conversation there. thanks to richard jones and peter dixon. we are moments away from german unemployment figures. we will bring you those figures, next. ♪

guy: welcome back. 53 minutes into the market session. equities are fading this morning.

doember though, in london we have a bunch of stocks at dividend. but the market is off over 1%. we can see other softness as well. what do we have coming up for you? we have got euros some consumer confidence that more data will come from germany this afternoon with inflation figures at 1:00. it is gdp expectations that we are looking for a little bit later on q1 numbers. it will be interesting to see exactly what is being progressed. let's talk about the markets. we are 54 minutes into the market session and we are down by .9%. the ftse 100 is down by a round 1%. .8% in thedown by cac 40 is down by .9%. we are watching deutsche bank. that is one of those we are

paying attention to and beer certainly watching bba in spain. by 3.2%.bank is up bba is down by 7.4%. we are just waiting for some details to come through in terms of the german numbers. we will put those up for you. we have some breaking news for you. let me see if i can put those on the screen for you. 16,000 jobs down, estimates flat. so, a little bit of softer data coming through in terms of the german numbers. we are joined now out of frankfurt to give us details on what this will do to policy. first of all, is this number is significant surprise? >> well, it is quite a big number. it is a stronger number than expected. a drop in implement rate of 16,000 compared to no change. in germany, the economy remains quite strong, although they have

seen some slackening in momentum this quarter. but you have this other factor, which is refugees andriy the workforce. in the long-term, that is a necessity for germany because they have an aging demographic. but in the short term, there is a skills mismatch. there is concern that as those advantage of that search for work, that will push unemployment numbers higher. that clearly, has not started this month at least. guy: is there any impact on policy here from the ecb? >> i don't think so. germany is not a driver from policy. -- is not a driver of policy. this should not have much impact, no. guy: we will see what happens with portugal tomorrow. thank you for joining us out of frankfurt. stay with bloomberg television. next with" is

francine mike waufle. .- with francine equities are lower. electrolux, next. ♪

francine: central banks hold fire. the fed skips the hike believes june on the table. the bank of japan holds up extra stimulus. deutsche bank beats, shares jumping. the ceo cuts costs. upwardly mobile. facebook tops estimates; zuckerberg pushes for more control. ♪ francine: welcome to "the pulse," live