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. what are we watching this friday morning? dead or alive. will today's payroll figure change the markets mind about the hike at the june fed meeting? a big question. that story we're talking about. disinflation down under. aussie dollar drops to a low. fts, the italian lenders -- the numbers out later

today is the worst -- today. is the worst behind this now? -- behind us now? iss than an hour from open, -- let's take you to the bloomberg and show you what is happening in terms of expectation. this could all change later on. at the moment we are called down in europe. your stocks down .6%. -- euro stoxx down .6%. dax is off .4%. payrolls could change everything. let's take you to the other assets around the world. clearly the aussie is focused, down 1%. 53.90 is where we are trading. how far behind the curve is the aussie gain? are we going to see further cuts? brent trading down. shanghai down 1.64.

barely flat. what do you need to know? here's earthward news with juliette saly. juliette: the aussie dollar has dropped to a record after it reduced its outlook for core inflation. underlying inflation of 1% to 2%, down from the 2% to 3% forecast in february. it will be a challenge for governor phillip low. u.k. voters have given their first verdict on germany korman's -- jeremy corbyn's labour party. it sustained losses across england. the brightest spot for labor may .e the london mayoral election con has run a pro-business

campaign. the election results may also give him the voter sentiment ahead of june's referendum. japan may be able -- may not be able to ignore the yen growing the -- the yen's growing strength much longer. -- he says the exchange rate us be stabilized and japan must carefully watch and respond to these movements as necessary. it weaker yen has been a linchpin. --id cameron has used japan speaking at a news conference cameron said britain could benefit to the tune of 5 billion pounds. ask we want to see more -- >> we want to see more for our two great countries. we both agree that the way to do that is through a comprehensive

japan-eu trade agreement. this deal to be worth 5 billion pounds a year to u.k. economy, that is 200 pounds per household. prime minister abe have agreed to redouble our efforts to get this signed as quickly as possible so that we can all start reaping the benefits. juliette: goldman sachs is cutting more jobs extending reductions in fixed income operations. 2% of workers there -- that is according to people with knowledge. targeted had already fixed income personnel through last month. 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 at top . guy: thank you very much. it is payroll friday. the report is out at 1:30 u.k. time. 200,000 jobs, the forecast.

a strong number could make the case for a june meeting. many defend are talking about this being a live -- many in the fed are talking about this being a live meeting. let's talk to mom and a key set ronan:amin macky sall -- -- ramin: that had a effect on commodities. if they do hike, that will continue. we think we are expecting to hikes. that's expecting two hikes. hikes.cting two i think the market is too pessimistic. the fed governors have pointed that out. there has to be some kind of reckoning here. it could be rapid. markets will rise to increase

the probability toward the end of the year. that will be the guidance that we get from fed governors. --: the nonvoting members ask line >> the market was based can too much of the probability. -- was basing in too much of the probability. story.e weights it is a story that we see around the world. it is a story in europe, japan and the united states. the falling unemployment story. this is a stagnant story. you wonder whether or not monetary policy could solve what is going on. whether or not the fed will be -- how do you deal with that echoed it is a conundrum that is being faced worldwide. ramin: it seems

to be flatter. the question is whether you are going to reach a point where he searches the acceleration? in germany we have seen signs of growth. out -- i would not rule i would not say the phillips curve is dead, that is a bit premature. guy: do we get a much more hawkish figure? only getting this gaggle -- are we getting this? ramin: that would be a big policy shift from the fed. to hike more aggressively. that is not our expectation that we do think the phillips curve -- i think we will see some signs of wage improvement in the u.s. toward the end of this year. guy: ramin is going to stay with

us joining us from ubs. up next, the donald backs the brexit. he says u.k. would be better off outside of the eu. the things but in favor of those voting to leave? or remain? we will talk about that. ♪

guy: 20 minutes until the european market open. let's get you caught up. here is juliette saly.

juliette: first quarter profit dropped 33%, that is the world biggest dealmaker that with a slump and a decline in iron ore. it maintained its full-year earnings profit. 40 million air bag inflator's will be added to that recall. takata said it will cooperate but it is not aware of any risks from the products in question. the time bank seeking a buyer to shore up its finance is. -- it's finances. the income fell to 93.2 million 143 million a year earlier. up toand sap are joining

deliver software for iphones and ipads. it opens a new avenue to apple to reach businesses at a time where cells have tapered. -- where sales have tapered. that is your bloomberg business flash. guy: juliette, thank you very much indeed. delivered their first verdict on jeremy corbyn's labour party. losses across england the scott just scotland. -- england and scotland. let's get more from alan crawford. he joins us out of edinburgh. if i am watching in berlin, paris, is there anything i could take away in terms of the political story developing toward the brexit? arguably with the results

of the english council elections and across scotland and wales, it doesn't feel like a country on the verge of revolution. gains theid see anti-eu party in england, they were relatively modest, something like 20 seats out of 2500 that were up for election. the results are not filling in. also present stand to gain every seat in scotland. more than 13% of the vote in wales. , but very hard to predict i thought we would be looking at . a far bigger u.k. vote that would've caused concern on behalf of the par minister.

-- on behalf of the prime minister. guy: is that good campaigning for the brexit -- is that good for those campaigning for the brexit vacco -- brexit? >> we had to take trump seriously now. of presidention obama on the other side arguing very strongly that the u.k. would be better to stay in the eu. join then't, it would back of the queue for any trade deal. that suggests that had some modest impact on the voter sentiment. i imagine trumps intervention would not have any particular impact. he made very clear that america first so any weakening of the eu

would play into that narrative. the prime minister has been article of trump's comments on muslims and reinforce that message yesterday. the timing looks somewhat predictable. stuff.an, interesting on crawford joining us out of edinburgh on the latest coming out of the u.k. regional elections. we're looking for to getting results later here in london. joining me now is ramin the keys nakisa. talk to me about what you just saw about the u.k. ramin: we saw conservatives gain a lot of ground. think the key for the u.k., passing a very good brexit age on bloomberg -- also the

volatility which you have thrown up on the chart. we have seen a fall in volatility and a reduction in the skew as looks more likely that the u.k. is going to stay in the eu as polls have shifted toward the direction. this is probably the best barometer to look at. guy: the market has lost a lot of money on a trade. -- buyection on the hot on that side. up.es that was up, up, a lot of people came out and said you are insane if you are buying the stuff. did the pendulum swing too far -- pendulumn: -- 24 wing too far vacco exit, we we do get an

think it could be up to 30% fall in the trade weighted value of sterling. guy: what if it doesn't go that way? you look at where money is going at the moment. it is pretty convincing that u.k. is going to remain. not always the best indicator but it has proved reliable. what happened to the u.k. decides to stay? ramin: we think the effect is going to be on the currency. you look at what is happening to the equity market, it is hardly changed at all. it is hardly shifted. -- it has hardly shifted. that is where we see the -- we will see the big impact. strengthening in sterling versus the dollar. 159 is our call for the end of year.

that do for mark carney? mark carney dancing around the elephant in the room. when is the first rate hike coming in echo is the market pricing it in correctly -- coming in? is the market pricing it incorrectly? ramin: there are various ways to think of this. if we do have the exit, they will be very cautious. they are much less likely to hike in the near-term, unless we see large outflows. there would be weakening of growth in the u.k. and that is what we would expect. in that case, -- what the bank of england would have to do. if we do stay in, there is much more like an -- likelihood there is a hike. that is a primary effect on the market. guy: the u.k. economy is

slowing, isn't it? people byre seeing yield -- buy gild. it is a global problem. that is why we are looking for assets where they don't give you the extra growth in this low, nominal growth world. that is equity in europe. guy: we will come back and talk about what that is in a moment. we are moments away from the start of european trading. 11 minutes to go. we need to take a look. the italian bank firmly in focus today. we have 10 minutes until the market open. sterling is very flat. we are going to have a cautious morning in terms of assets. we do have payroll out a little bit later on today. ♪

guy: seven minutes until the market open. payroll day in the united states. let's check on the markets in asia. juliette saly standing by. juliette: not such a great end to the trading week in asia. a little bit of nervousness from investors ahead of that u.s. nonfarm payrolls number. then the track to be

longest weekly loss and their biggest weekly drop since february. we are nearing the close. the shanghai market down by 2.6%, extending the losses from earlier in the session. the hang seng down 1.4%. we have seen five sessions of losses on the hong kong market. we have seen investors bailed out -- in china and hong kong. elsewhere, we're seeing a pickup in new zealand and heading to the close from australia as well. japan coming back on for the first time since monday and adding to that 3% drop that we saw on monday. by .5%.ei down .25%. -- friday, oilm

and gas -- as has financials. the regional index excluding japan, eight sessions of losses. that is its longest losing streak since december of last year. --king about the cost to takata down by 9% in trade today. macquarrie came through with his four years numbers. .uy -- guy:liette saly juliette saly, thank you very much indeed. the mps out talking about shoring up its finances, posting its first-quarter profits beating analyst estimates. dealing with slumping prices and what is happening in china. a whole bunch of markets were closed yesterday.

some are still closed today. as a result of which you may see some outside moves from those markets as they play catch-up. pay attention to that. from ramin. comment , buyern equity markets ramin: byy or sell? the mystically -- by the domestic companies. we go to the cyclical sectors. that is media, autos and television. those are the three sectors and credit that we like. financials we would like based on fundamentals but they are so highly correlated to oil which i do not like because they drown out the fundamentals. that is not what you want at this point. guy: stairway from anything with

an oil by. open, we, the market are four minutes away. if you little quirks with to make life -- a few little quirks they can make life interesting.

guy: welcome. you are watching "on the move." moments away from the start of european trading. alive? will today's payroll figure change the mind about a hike at the june fed meeting? inflation down under. the aussie dollar drops to an eight-week low after core inflation is likely to reach the bottom of its target this year. a beat at the italian lenders, surging. #out today -- is the worst behind us for the italian banking story? let's tell you what we think will happen. likely to be fairly negative

start, and you're likely to see fairly light volume. markets are playing catch-up. in austria,case which had yesterday off. the markets are back. let's get into this market open with nejra cehic. nejra: thanks. we saw a broad-based selloff in asia, futures looking like we could see losses in europe. we are just seeing the sectors open up on the stoxx 600. i will come back when they had a chance to settle, but we are definitely seeing more red than green. european stocks gain for the first time in five days, it looks like the rebound may not hold. most industry groups in the red. in currency markets, you have to follow on the aussie dollar. forecast, inflation the worst performer out of major currencies against the greenback, dropping to a two-month low.

and of course, a lot of focus on the dollar ahead of that jobs data. the bloomberg dollar index is unchanged today, but it is heading for a weekly gain, headed for its biggest weekly gain, in fact, in six months. let's take a look at how the markets are shaping up in europe here at the open. you can see that the stoxx 600 is off by 5/10 of 1%, the f tse and dax down, leaving the losses in futures markets, down almost 8/10 of 1%. in terms of some of the stock that we are watching, the individual movers, looking at profit, which is dropping 33% of the world's biggest steelmaker. it has been contending with sloping steel and iron ore prices -- although it did maintain its four-year earnings target, it still that stock is down. intercontinental hotels group --

what we saw here is the first quarter revenue rising even as weaker oil markets hit the middle east travel and an early easter holiday slow demand in europe. we are seeing that stock down at the open despite that rare part number coming in. a bank with profit surpassing estimates on a bad loan provisions to the lowest in four years. a lot of focus on italian banks today, of course. come back to me quickly on the eye. it is energy stocks leading the losses, down almost 1%. guy: thank you. as.aggard in secure it if you take a look at the board then you see those stocks, that's the reason why -- just be aware. let's talk about the italian banking sector. mps posted its first quarter

profit that beat analyst estimates. declining to a four-year low. deadlyjoined by'danle thing. -- >> i'm not sure most people would agree with that. analystsrs were good; we saw this morning are positive because the bank was able to lower the loan-loss provisions, as the ceo emphasized late yesterday on a conference call after the earnings release, that maybe the worst is behind. in the first quarter, which is really turbulent, markets are going down negative interest rates and deposits flowing out. they are on the road to stabilization of this issue of the nonperforming loans. at the same time, the reason for caution is this bank has been

searching for a merger partner for more than a year now and there is still no solution in sight. guy: is that the biggest challenge? is that really what management will spend its time focusing on? we know that npl's are a problem for italian banks -- is that we should focus? what is the challenge? viola on theceo of conference call certainly emphasized missed half the house before him to reduce the incidence of nonperforming loans. he says that banks are on track to meet this target of 3.5 billion euros of leverages over the next two years until 2018. he didn't really talk a lot about finding a merger partner. perhaps he is betting that this will take care of itself. once the bank shows continued improvement on this theme, in this quarter, then obviously the

bank's chances of finding a partner will increase. this is a bank that lost half its market value so far this year, if you remember. guy: yeah. -- great stuff. thank you. dan leaf. that's the story, but it is only part of the banking story. if the big week for european banks. we have had earnings from many, many of the big players in europe, in what was a fairly harrowing bank earnings season. >> we are seeing a very challenging environment, because none of the issues we have had in the last few quarters are disappearing. >> we had a very difficult first quarter, like almost all of their peers. >> the start of the year was very awkward. on the economy, on the oil price, on china.

but of course it was a particularly unfavorable market environment, particularly at the start of the year. >> you see a lot of factors that may affect markets, and in that sense, you see volatility, but it is not the kind of volatility that is transient. guy: that's the voices of the executives that run the institutions. ubs, 10.4% over the week; socgen, bnp 14%; paribas, down 4%, 5%. painful, painful numbers. i will go to much about what's going on there, but nevertheless, harrowing is the right word. things we all knew, because they told us this would be a bad quarter. my question -- when do they get better?

this q2 start to improve? q3? is in a reverse of 2015? how does it work? >> it does seem doom and gloom in europe. if you look at the earnings revisions, or at least the broker forecasts, there were downward revisions starting in the middle of last year, a very sharp move. it's been negative ever since. but if you look at last month's numbers, it started to inverse upwards. upwardsn inflection which means it is less negative. we lookthat sounds -- at the leading indicators and i was will we always look for. we are seeing a reduction of the downgrades; we are seeing a peak in npl's, even in italy. back at point to the market that has been crushed, maybe oversold, so i think that could actually -- guy: what is it going to take for people to stop wanting to

transact against? >> i think we're going to need to see some kind of firming up of earnings in europe. as of a story we have a telling for a long time. owners have been crushed in europe. they haven't really recovered since the sovereign crisis. we should see the start to pick up. we are forecasting a percent growth this year; if that starts materialized, i think we will see a big rally in europe. theywhen they pop -- popped a massively this morning. when this story turns will it turn aggressively,, or will it be a slow grind by the shares? >> i think they will pop for the moment, but i think we will see gradual improvement in the earnings, simply because the macro looks ok. if that is the case, that banks or cover. you can't get gdp growth without banks benefiting in some way; it has never happened in the past. it won't happen this time. that's a positive story. guy: we had this war on savings,

which is adding into all of this. draghi, buto from -- you wonder whether this is the next really big scene that comes through from central banking. these pools ofe savings that exist around europe and around the world, we need to get them moving. >> negative rates will do that. if you are getting 0% in your bank account, i think the big move might be to have negative rates. some of the banks have been very effective in reducing their deposit interest rates in line with what the ecb is doing. if we start to see them making negative saving rates, that would incite people to invest in things like equity, and also to move into more risky assets. guy: to buy gold? >> well, gold is interesting. if you have negative interest

rates, it is no longer a reaping asset. what would you buy? i would buy something that would forgive me a return. creditor equity, which gives you 3.6%. a very fat dividend for european equity. guy: are they sustainable? i look at a whole bunch of sectors at the moment, and the cover is not there. >> if we see the earnings growth, yes. guy: so everything hangs around -- >> these have got to go through. guy: when i look at why i should -- why not invest in the united states? i know valuations are different, but they are going to sit there in my mind. with these earmarked understand, and europe is just late in with issues at the moment. >> at the moment, if you look at valuations in the u.s., we are at something like 18 times earnings. if you compare that with your, 15 times. away; u.s. we are only 6% in europe, 20% away.

if we see margins start to come down -- margins are at record levels, and they have been there for a long time. if we see the wage growth we were talking about earlier, it would reduce the margins. they would release the m&a activity, and it would be a big drag on u.s. earnings. guy: they might be an economy doing well. we'll come back. thank you. up next, the fall of the turkish prime minister may disrupt the eu migrant deal. merkel insists that it must be resolved. we are live in berlin. ♪

guy: welcome back. we are 14 minutes into the equity market session here in europe. let's talk about the movers. the mmr function; the nps in italy rising. a 4% move in a stock that is valued -- it bounces around all over the place. the bottom have a list is interesting, because there a whole range of equities in here. i think -- it's a whole bunch of negative stocks, down not because of anything they have done a particular other than paying out the money to their investors, or they will. so that's really where we are seeing the losses. the italian banks get more interesting later on, when we get tesla posting numbers.

let's get the first word news with juliette saly. juliette: thanks. japan may not be able to ignore the yen's growing strength much longer. abe saysister shinzo he is ready to respond to extended currency moves, going so far as to say that he may raise the issue at the talks later this month. he says the exchange rate must be stabilized, and that japan would carefully watch and respond to these movements as necessary. a weaker yen has been a linchpin of abenomics. david cameron has used japan to present his case for written within the europ britaie european union. >> we both want to see more -- more jobs, greater growth, and increased prosperity for our two great countries. we both agree that the way to do that is with a comprehensive japan eu free-trade agreement. this deal could be worth 5 billion pounds per year to the

u.k. economy, 200 pounds per household. the prime minister and i have agreed today to redouble our efforts, to do everything we can to get signed as quickly as possible so we can all start reaping the benefits. sachs is goldman cutting more jobs in it securities unit, extending reductions in fixed-income operations to roughly 10% of workers, according to people with with knowledge of thh with knowledge of the matter. global news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. you can find more stories on the bloomberg at top . guy: thank you very much. juliette sally. insisted minister has that the deal with turkey on migrants must be implemented that has triggered doubts over whether the eu can

pursue an agreement to send refugees back across the agency. egean sea.an does this mean the end of the deal? >> uh, no. i don't think so, or certainly it is too early to tell. thato have to remember this was the man who negotiated the deal, the turkish face on the deal. he's quite a suave diplomat; he went to brussels numerous times. he is connected with it. but we know, that the european union and in particular on the r angela merkel, said,

listen, this deal is on the books, we are ready to meet our commitments and we assume that sense is mutual, that turkey will stick to it. guy: erdogan is much harder to deal with. he has been very controversial in so many ways. r angela merkel, said, listen, this deal is on the when you look at the progression of the relationship, and this is a pivotal piece of what she's doing in terms of dealing with immigration story, it is going to get harder, isn't it? >> yeah. i think it will get harder for her domestically, or it could very well get harder. mean, there was an immediate response from one of her senior lawmakers who said, look, this is turkey's choice now, which direction you want to go? do you want to become more european, do you want to draw closer to europe? or does this mean you're pulling

away in terms of all the issues that are important among other things in germany, such as human rights and press freedom? new element to the makes and german domestic politics, which is an additional complication, no question. guy: and if we were to see problems, it would recommend to other parts of europe. thank you very much. let's bring back in our global macro strategist from ubs. debt that deal fails -- if that deal fails, the impact for germany is huge; the impact for the french presidential election is substantial; for greece, substantial. this is a serious, serious development from the european point of view. >> and also for the u.s. the u.s. is obviously partnered trying to quash isis. for them it is a big strategic

relationship, and they will be very worried about will happen to that relationship, given this development. and i was in the office late on wednesday -- we watched in horror, the strategist who has been there for a while -- it devalued by 4.5% in a matter of minutes. the market impacts will be large initially, but as you say, the centrifugal forces that occur as a result of the migrant crisis would much more damaging, particularly for the brexit campaign, but also for marine le pen. guy: and we have elections coming up. talking turkey more specifically, wednesday night, big move. it came out the little but the next day. the market is clearly nervous that we are heading toward an executive president, and it is so hard to understand what that would ultimately mean. we have a new guy at the central bank. how does he deal with all of this? happens with the right path in turkey? so many imponderables.

with the current account deficit they are running, so many risks surrounding the economy. >> and also they are very dependent on foreign funding, that's a major concern. that corporate bond market is in foreign currency which is harder to service. that's the primary concern about the balance sheet for turkey. corporate bonds and weakening currency and weak trade. those are the key problems we see, that is obviously going to weaken the lira, and also affect corporate bond markets and the equity market. guy: with the fed element to this as well. >> obviously. we will have to see what happens at the payrolls. guy: always comes back to that. we will carry on t with that throughout the sh. spending so much time with us -- we appreciate it. next, high drama in the foreign exchange market. will bring you a currency that is unfazed, in our chart of the hour.

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guy: 24 minutes past the hour. let's show you some of the stocks on the move. up quiteof italy, nicely over the last couple days, the rally beginning to fade from earlier on. we are now only up 3%. remember that we are in advanced payrolls and the markets have been cautious. talking of caution, let's get

to our chart of the hour. here's nejra cehic, talking the foreign exchange market. nejra: we are looking at a chart about brexit risk and how the foreign exchange markets are pricing in. if we look at the chart, it might look complicated, for what it is saying is for the simple. if you look at the blue, purple, and pink, they are showing risk reversal on euro-dollar, cable, installer frank. what you see is that this steep drop, which shows an increase in n increase in the premium to price against pound weakness, euro weakness, dollar weakness against the franc. guy: we have the sku moving in favor -- nejra: exactly. it's obvious lie on cable, but on the dollar it's another proxy to brings at risk. but interestingly, what's not moving that way is dollar-yen.

we were talking about the break-in, that it has other issues to contend with. we are looking ahead to the fed meeting in the yen is a separate story with the bank of japan stimulus, or lack of so far. currency pairne that dozens into the pricing in brexit risks. --: is quite interesting particularly for the u.k. on -- the options expire before the brexit. it will have an interesting pricing all around. thank you very much. fed --rate hike from theguy: ♪

show me movies with explosions. show me more like this. show me "previously watched." what's recommended for me. x1 makes it easy to find what blows you away. call or go online and switch to x1. only with xfinity. shoshow me more like this.e. show me "previously watched." what's recommended for me.

x1 makes it easy to find what you love. call or go online and switch to x1. only with xfinity. guy: will come back. 30 minutes into the trading day. remember, it's payrolls day.

we had a lot of equities in the market as well. -- dropping to the lowest in four years. we got sao paulo reporting later, a lot of focus on italian banks. others are seeing a good reaction; first quarter profit dropping 33%. of the world's biggest dealmaker has been contending with slumping prices for steel and iron ore. even though the number was in line with estimates and it did maintain its for your earnings target, we are still seeing you as one of the worst performers on the stoxx 600 this morning, and the worst performer is man group, down on the 6.4% at the moment. tell, this seems to be down to the fact that it has been cut to a sell. guy: thanks very much. itsdollar is poised for first weekly gain against all 16 major peers since the middle of march. the bloomberg dollar spot index has advanced since november, but is this about to change? what will happen? what about next year?

the bloomberg dollar gauge has strengthened in may in nine of the past 11 years, so let's welcome socgen's global strategist and get his take. i was asked to show you this which i think tells us everything -- the randall have a bad time, emerging currencies, but the dollar is on the front foot. >> yeah. you have to put in the context of last week in the beginning of this week when it was breaking lower against almost everything and looking pretty sick. it hit a psychological levels and balanced -- it is a make or break day for it and we will see where we go. i another we have seen the end of the retracement of the dollar resumesthink the rally at some point in the second quarter of this year and i when

one ahead my hat on anything, frankly for the -- frankly. psychologically, we are pretty is to clearing out the dollar bullish positions, the bearish , the pain of those positions we have seen everywhere else euro bears becoming yen bulls, all of that positioning is what undermines the dollar and that is pretty much done. now with the market pricing very little from the said with a market getting more optimistic about the outlook, but has forgotten about china as well as , it wouldn't take much in the way of u.s. economic strength to rock the boat -- wouldn't take much in terms of risk aversion coming back. two, itbetween those could get squeezed at some point. guy: said officials are telling

us -- >> fed officials are trying to lean against the happy feel of markets over the last few weeks that maybe they think that the dollar is stronger, because they are leaning. they let us into this feeling that the june meeting was not live. are they micromanaging the equity market? global market sentiment? certainly they are watching marketed markets are watching them but i'm much are that's healthy in any shape or form. now that we are not pressing 1.5 rate hikes by the end of next year, if we price more than that , i think we will get back to a stronger dollar and he returned to risk aversion. guy: walk me through -- we saw earlier this year, it didn't end well. >> well, historically, a stronger dollar is not always

associated with rate times. -- with great times. it puts pressure on other currencies, so it brings back trouble for the chinese. attempts to push down commodity prices in dollar terms. it will hurt oil producers, because it tends to not be good for oil. in a historical linkage -- there is a strong dollar associated with the u.s. economy doing ander, the dollar stronger, that is a good thing, because the global economy is doing well overall and we don't have to have hyper correlated markets every minute of our lives. guy: that's not my experience, but hey. >> it's friday, be happy. guy: [laughter] when you look at how the narrative works over the next few weeks, i want a technical point of view. north does it have to

be before the market believes in june? where the pivot points? >> i would guess that today, the market sentiment is probably 190,000-ish. you probably need something around 230 to look like a strong number. although one standard deviation of this payroll series is about 70,000. 300,000 is a proper number for me. to .5% on wage growth, above unemployment,% those of the numbers people would say -- hang on a second, there's a danger that they will get behind the curve and they need to think about june. guy: we will talk about another central bank behind the curve in just a minute. he will stay with us. inflation down under expectations. that has been a roller coaster week for the australian dollar. ♪

guy: welcome back. you are watching "on the move." first things first -- a sunny day in london. second thing, the market is down. but don't worry about that; payrolls day. we will see what happens later on. the first thing is need to listen to juliette saly. she has everything you need to know. juliette: shares in bnp has are

s are high after they posted numbers that beat analyst estimates. income fell to 93.2 million euros from 143.7 earlier, compared with 23.4 million euro average estimate. 33%t quarter profit dropped in the world's biggest steelmaker, contending with slumping prices of the material and a decline in iron ore. us the company has maintained its for your earnings target. shares are lower in this morning's trade, down by almost 3%. takata shares plunged in tokyo as it added to the doubling of u.s.ecall he knein the they say they will cooperate

with the national highway traffic safety ministration, but fears it is not aware of any substantial risk for the product in question. apple and sap are joining up to deliver software for iphones and ipads. it launches a new avenue for apple to reach businesses. it can develop hundreds of apps specifically designed for their operating system. they say the deal has the potential to attract millions of software developers and sell millions of devices. that your bloomberg business flash. guy: thank you. disinflation down under; the aussie dollar plunged after the rba said they were unlikely to reach the bottom of the target. juckes.ing in kit rba,ve a new boss at the and apparently he is a specialist in dealing with central banking and low inflationary environment. he is always the first guy coming into the rba that doesn't have the inflation story to deal with. how are they going to deal with this?

more than any other central bank a have been following, has targeted moves in terms of trade and its currency and has allowed the currency to weaken when they need it, allowed it to rise when they don't, and have tried to managed investec inflation on the other side. they have been very open and clear about what they are trying to achieve, and at the moment there's not much wage pressure, and i would have thought he would be coming in and saying i have no reason to be anything other than very accommodative and we will use macro prudential measures -- that's what you would look like if you took it at face value. with the economy, with -- --: macro takes the weight

you see this in a number of areas around the world at the moment. >> yeah. i wouldn't be looking for a turnaround; whether we get not, byrate cut or the end of this year -- pretty convinced that we have another cut coming in australia. -- when you look at where policy goes, then what? because 175 can become 125. they have room to cut if they need, if the economy requires it. but i think they would love the currency to be weaker. i can think there's anything the rba would mind about reversing more of the currency. guy: so when you look at what is going to move, how much of it is going to be domestic? how much will be rba, china?

there are silly forces in that story, and you start to get china doing better or worse -- put the international perspective over top of it. >> when china is doing better, when the fed is dovish, 175 may feel low to some people, but it is high relative when commodity prices are stable. it tends to rise. what the army has effectively been doing is leaning against that. if we getory changes, back to a stronger dollar more generally, to a more hawkish fed, if that brings back some concerns about china, than i think you'll see another leg down in the australian dollar. my impression is in a disinflation or environment they will do nothing to lean against the. -- against that. guy: there is a chart that shows -- explain. >> em volatility hasn't got much of a driver at the moment.

oil prices stabilizing, china's story -- e.m. volatility goes in jumps and then settles down. , volatility ist higher to some degree. then there is becoming in bowls; sterling bowls are flattened. you have had a big move in new zealand, when they had low inflation; a big move in australia when they cut rates. we have had a bunch of trends going on, possibly more than anything else. we have had a comfortable consensus, a dollar bullish view. badly, anded really that's not good. guy: i was talking to sergio ermotti earlier this week, clients getting freaked out and paralyzed into doing nothing. what does the back end of the year look like? every trade you put on, crashed

out of it, whatever it is, it hurts. what does the back end of the year look like? >> we could a chopping around a fair bit. i had a debate with friends and colleagues -- is the emerging market rally running out of steam? i will have both sides of that debate pretty easily, and it is hard to be completely sure. is the third big dollar bull market of my career now in its last stage, ending if not ended? you can have a lively debate about that. to some degree, we are going to answer those questions later this year. i don't know how long the hiatus and china can really last before debt levels become a big problem again. i don't think dollar-yen is anything like stable like where it is today. we still have a slowing economy in the u.k., and we now have a

completely split opinion on what's happening in the states. before i get to the end of the year, i think we will have a lively summary. guy: this is going to get more interesting. >> q3 is more interesting than q2, and not necessarily in a good way. guy: a lot of bankers getting quite nervous. an interesting year. socgen's global strategist. next, as kim jong-il and as i doubt what his policy direction, we are going live to pyongyang. ♪

guy: north korea is most important political meeting in 36 years gets underway in pyongyang. tom mackenzie reports from the country's capital on what to expect. tom: north korea's leadership is putting on a show, and everyone is expected to be in lockstep, even the kids. congress isparty likely to cement kim jong-il's power. analysts say a new central committee will be appointed, and key loyalists will be given top positions. it's a chance for the 33-year-old leader to present a united front to his people and the world.

we had hoped to report on the economy in the run-up, but our government told us to cut here -- john youngs children's palace. pyongyang's children's palace. this is proof that he is the filling his standards, developing nuclear arms missiles at the same time. town, we were driven to an old armory, a reminder of the army's central and continuing role in north korean life. we have been taken to see some military history here in pyongyang. wifemorning was -- this and later his son, all apparently hit alt bull's-eyes. hitting economic targets will be harder. there are hopes that the party will enact reforms to formalize a nascent market economy.

much of the population remains poor and well-nourished. sanctions against north korea are the toughest in 20 years. weak commodity prices have hit what little the country does export, in the government continues to rely on china for aide. most will have to wait for the curtain to come down on this piece of political pageantry before we get a clearer insight into north korea's future. --: as you can imagine getting a live satellite out of north korea is a tricky technical feat and we are trying to make this happen. in the meantime, let's talk about what we can expect for the ahead. it is exciting.

a snapshot of the banking industry, and and our and half later we get the big 1 -- u.s. nonfarm payroll. then sovereign ratings updates for a whole bunch of countries around the world, including turkey, the netherlands, and portugal. let's talk about the main event with richard jones. that's the nonfarm payroll number. 2:30. do we get to a june meeting being live? what does it take to get the marketa snapshot of the banking industry, and and our and half later we get the big 1 -- u.s. nonfarm payroll. convinced/ ? richard: i took a look at the data, and i have arranged on a headline number between 150 and 300. anything within that range is probably not going to shift the dial. near the bottom of the range we get some tweaking; your the top we do. but unless we break out of that range we won't get some serious -- guy: maybe 300 would be what we need to get -- richard: more below 150. 2.5 i don't think it will move that much. one of my colleagues wrote,

overnight, euro-dollar volatility -- which encapsulates payroll, is at its lowest level in 19 months. that leads me to believe that traders aren't putting a lot of stock -- they don't expect a big outlier today. if they did, it would be a lot higher. and looks to me like unless we get something widely away from that sort of convinced/ range, it will probably carry on with price action. guy: the market must be a little bit nervous. it sent the dollar little higher. , but yesterday when mr. bollard was talking repeating the same, line about the fed encore, u.s. yields started to tick lower. 50-50 attill a 10%, the end of the year. we haven't seen a shift that dial all that much, and in terms of fx price action we have seen

some pretty big moves in the dollar, and this week has been a bit of the snap back. i don't see today's number really shifting that tylenol. -- that dial at all. guy: quasi--- how long will they -- aussie, how low will they go? >> we had, i think, after the rate decision on tuesday, we had august very much in play, and now i think we are moving that up so we could get a rate cut earlier than that, and further on down the curve. that isit's important the rba is looking at their inflation forecast, i think it's a big indicator. the aussie economy is very dependent on global trade, and what does it say about global trade if there inflation and growth forecasts are being slashed? guy: has the market take anything away from the elections in the u.k.? >> i don't think so.

now we have these elections out of the way, i think the results of the next. it is hard to draw any conclusions and extrapolate. we have got seven weeks left in the campaign, and then we have super thursday, so we will see with the bank of england has to say. we now focus on brexit. the thing is, the data coming in over the past couple weeks has softening. pmi's were weak, gdp was weaker than it was in the fourth quarter last year. i think u.k. data is softening. there is some brexit impact in their, that i think we have seen weakness. and will be interesting to see what tax they will take. guy: richard jones, thank you very much. stay with bloomberg television -- plenty more coming up. we have numbers coming out later on; the payroll coverage as well, which we will pay a great deal of attention to. it is stunning outside. we have a lot to think about.

what is going on in the world right now? markets are little bit softer, down for tenths of 1%. have a great weekend. ♪

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simply by using your voice. the billboard music awards, live sunday may 22nd, 8/5 pacific, only on abc. ne live.: keeping ju markets aren't so sure. u.s. jobs data today. the selloff in global equities gathers pace. drba follows the eu in training expectations. callsngyang, kim jong-un the first congress of the ruling party since the 1980's. bloomberg is there, live.