oice. the billboard music awards, live sunday may 22nd, 8/5 pacific, only on abc. guy: welcome to on the move, 7:30 in london, 8:30 in berlin. i am guy johnson alongside caroline hyde she is in berlin in this is what we're watching. is it to's last a on the job? the senate will vote on the brazilian president's impeachment later today. backing the block. goldman traders think that people are missed pricing the fed. and delivering on growth. poses a double-digit

product -- profit increase but can it be sustained? we'll find out when we speak to the cfo in 45 minutes time. we are now half an hour away from the european open, caroline let's take it look at where we think it will take us this morning. it looks like a mildly negative start for the european day. this is the fair value calculation. the dax :00 it will be just positive, everything else looks like it will be negative but only just. it looks like a fairly flat open. rebound iny we saw a minors when it came to europe and that seems to move into asia, helped by copper trading up 0.8%. brent crude oil is currently flat. there have been concerns about nigeria and the niger delta being evacuated and concerns about the safety. there seems to be a supply-demand dynamic. yesterday andckup

it seems that commodities go higher and so do stocks. we will be digging so much more into the dollar index because it's down a quarter percent but goldman's sex says go long on the dollar. we are underestimating where the fed could go. also on japanese debt, it is still negative on the tenure but they say a tantrum could be in the waiting and we could see japanese bonds starting to sell off yields go higher and this could sell off and the rest of the bond market as we see japan get real on its fiscal and monetary stimulus. let's get to bloomberg's first word news with shery ahn. president brazilian dilma rousseff says she is facing what may be her last day in office. the senate is gearing up for a vote that would force her out impeachment-- in battle she looks unlikely to win. least 50 votes more

than the simple majority they need to move toward impeachment. donald trump has won the west virginia and the prescott primaries a week after driving his competitors out of the republican race for the white house. ted cruz's name was still on the ballot and he said he might reenter the contest if he performed well. bernie sanders is a projected winner in west virginia, the only primary on the democratic side. it would be his 19th state victory but has just 37 delegates up for grabs. >> canadian oil facilities representing more than 90% of production taken off-line during the alberta wildfire have emerged unscathed. operations are already bringing back some of the roughly one million barrels per day of supply. officials say that although fort mcmurray lost almost 2.5 thousand buildings, the vast majority survived, including the airport, water treatment plant,

hospitals and schools. britonsthan half of think that the only way to curb immigration is for the u.k. to vote to leave the european union and the referendum. that is according to a poll by ifs is maury. 95% of people backing brexit say it's the only with the cut immigration. even one and five who want to remain in the 28 nation bloc feel the same. >> toyota has said annual net income will probably decline for the first time in five years. japan largest company predicted the net income dropped to 13.8 billion dollars for the fiscal year ending in march. that is below analyst estimates and comes as currency swings have spurned record rough it's a now pose stiff headwinds. the list with four hours a day powered by point 400 journalists in more than 115 years fewer --

news bureaus around the world. >> thank you indeed. let's dig more into that goldman sachs call saying that the dollar slump is over. the greenback has rallied almost 1% from a yet -- one year low reached last week. goldman says that the post payroll rally shows that market expectations for economic growth and fed interest rate increases may have fallen too far, too fast. positioning the currency for a rebound. the bank estimates the dollar will advance 15% during the next two years. very pleased to say that joining of benson.he cio let's get straight into this because we really want your take on whether the market is getting too negative on rate hikes. are you anticipating one at least because the market doesn't see one until 2017. >> i think you're right, there

was a lot of negativity in terms of rate expectations but if you listen to what the fed chair is saying, she was a taken very gradual and she is very cautious against the backdrop of what has been strong economic data. she's looking further afield outside the u.s. at the macro headwinds it could cause a slowdown in the pace of interest rates. disagreed that it is poised to rally from here. >> a what happens. walk us through what the trajectory is going to look like. to get the dollar call right you get pre-much anything else right. what is going to happen? >> if you say the underlying thesis is high rates or a rate pass over the next couple of years that will lead to a dollar rally the expectations are at the fed will be lower for longer. and a huge debt over to hang in a fragile economy that is not as robust as the fed would like to see. with that undermined the dollar

is likely to remain under pressure or there could be a scenario where it doesn't move for the next couple of years. guy: how bad is that for emerging markets, european growth? what does that mean for the chinese? you pivot off back for everything else. >> a stronger dollar is good for the emerging market. it weakens their currencies and allows them to push on their export strategies. for them, what they are looking for is a stronger dollar and what they have seen is that the weakness has been counterproductive. guy: you think a stronger dollar is good for the yen? works it weakens their currencies. them -- paint them all with the same rush. debt,ve others with huge dollar debt that will come under pressure because they have to service that debt. >> that's an interesting take didn't announce

that the total return fund is going shorter and shorter. been about a quarter of their holdings a few years ago. which asset class is he looking at or should one be analyzing. is it the credit market or the equities? emerging markets are as a whole, whether it's the debt or equity are attractively valued relative to develop markets. >> they offer attractive yields and from a valuation standpoint are still quite attractive. that comes with risk whether its currency risk or geopolitical risk in some of those countries, that will drive some of the shorter term sentiment but a longer time horizon there's definitely value in the emerging markets. the what about europe on dollar? we have the euro trading at elevated levels, maybe too elevated.

if you are mario draghi or try to figure out what to do. you would probably like the euro to be a bit lower from here. >> if you are an easing central bank you want your currency to be weak. that definitely helps you and in europe that is definitely the case. the two major central banks this year that have pushed on quantitative easing have had a counterintuitive reaction. guy: so what do they do? >> they carry on doing the same thing and what's happened is that has backfired in the short ,un, but the hope for them because it is a trial and error strategy is that will reverse in the medium term. guy: mohammed will stay with us. up next were joined by the cfo of elian's after the insurer announced its profit dropped on outflows to pimco.

caroline: welcome back to a very sunny berlin. this is "on the move." alliance reported -- profit in its management vision did drop due to pimco outflows. joins us now. wonderful to have us on the show. let's dig into initially some of the cost basis we are seeing within the business because we are starting to see continued

worsening in your cost income ratio. you have been saying this is due to net revenue falling but how are you going to drive down costs not only at pimco but at elian's -- allianz? >> thank you for your question. i hope you can hear me because your voice was cutting in and out. askingstood you are after our cost position in various areas. revenue management a dropping with continued outflows. the outflows are actually now at market level at pimco i think it's clearly fully on track with this -- in the field of active fixed income management. the cost will naturally be better in the following quarters as we have still some special

incentive plans which we are booking in the first half of the year which we will not book in the second half of the year so the cost income ratio builds a natural improvement. pimco very confident that will return to positive net inflows in the second half of the year. although it is very much in fashion in the banking industry, which are not announcing any special cost-cutting programs in our businesses. our lifeue to bring businesses back to a 10% level. by entity and the entities not making it we're going to dispose as we dispose korea announced a few weeks ago and we announced that we dispose of half of our business.

>> you said that this is a great start to the year amid a challenging environment. give us a sense of what you are starting to see? >> in our pnc business we are fully on track with our mid-to long-term growth which has a 3% growth rate which is ahead of gdp for all of the markets where we are active. so therefore i think we are doing fine on growth. on the life side we are in transition with guarantees to modify guarantees which are fit for purpose in this difficult financial market. things whicheate

allow us to invest more in real assets and not fixed income. which is returning nothing. guy: i have a couple of questions on that, but first of all i want to take you back to what you said a couple moments ago. you talked about it being fashionable in the banking sector to cut back on fixed income, why these to the world differently than the rest of the banking sector. what are they sing that you are not. where is your business model so significantly different that you don't face the pressures that they do? on expenses not fixed income. guy: i misunderstood. >> on expense we are not announcing an expense cut program as many did. on fixed income, we are changing the volume in a way that which

allows us to invest more in the real assets, alternative investments real estate, public and private equity and products which are suited to this in our capital regime will stop that's the challenge and today's world. fixed income is not an area where you can make money from. we are also absolutely in line with the forecast that we don't see a recovery of interest rates so soon. on whatt to follow-up you talked about in terms of changing the nature of the portfolio do think you are making it more risky as a result? >> the portfolio yes naturally will be more risky but it is a sharing with the customer and the question is how can it be constructed in a way that we all benefit from the long-term

return of these real assets and not having to bear the quarterly volatility. riskiness on our own balance sheet means quarterly volatility where old age provisioning and savings for old age you can spend as a private person a lot of volatility when you have 30 years until you retire -- it doesn't matter whether prices are down the next couple of weeks. the question is how much return you make in 30 years. guy: just a quick question to wrap up, spain will be selling fifty-year maturity paper. i think france is done and belgium has done it all stop are you comfortable buying fifty-year paper with the kind of yield this will have attached to it? >> that is a very good question and actually it's better not to have fifty-year liabilities than being forced to buy fifty-year

papers where we have liabilities of this nature from the past then we are also buying fifty-year papers to match it but this matching we have mainly completed in the past so there is less need to buy fifty-year papers. guy: thank you very much indeed for your time. allianz's cfo. guy: up next to look at the potential corporate movers.

guy: that is london. and that is berlin. caroline hyde i think i will be following you to berlin very shortly because it looks lovely. caroline: it is dreamy. it's been solid fun since i've arrived. would like to say it's down to me but i doubt it. overall it is sunny and we will see how the dax performs on the morning. >> have heard a rumor that you have a bicycle that we will talk about that later. arounde hyde pedaling berlin but we need more information. as you say, it's a lovely day in berlin. what's been happening in asia here is shery ahn.

>> a mixed picture here in asia. lacking clear direction, japan giving up its earlier gain, it did manage to figure in positive territory. percent200 rose half a gaining for five consecutive days and we are also seeing surges in the philippines with more than a 3% rally for the second consecutive day after the declared victory in the presidential race. despite experts showing the declined more than 50%. a few minutes more to go for the shanghai composite getting hortense of a percent but the hang seng index declining half a percent. we are seeing chinese stock seeing a tough week they are headed now for another loss for the second time in eight days. the cost also finished done 1/10 of a percent. we have bit be ok rate decision coming up this week.

we're seeing it falling more than 4% after saying they will seat tough conditions ahead. it is our earnings season in japan. the peak approaching quite soon. today we are seeing 180 companies on the topics reporting. a little bit ago had toyota and that we are seeing earnings sing their profits do not look too toyota is now, a stronger five year. net income make up to $14.8 million in these are companies that also announced earnings. earnings,looking at it will be affecting the market open here in europe stop minutes away. let's check in on the stocks you should be looking at. the french telecoms company could fall 10% on the open.

many of the reports i'm seeing are from its numbers. also, look how for the likes of carlsberg we could see a 1% gain on its feet. it is been rallying into these numbers. still lackluster in russia. the could rise on the open. the german stock likely to bounce after we found out it will be selling off another asset. some 50 brands. a few key stocks to watch. guy: talking of the stock market, it it's like will see a negative start across europe. germany may be one of the bright points but the euro stock is down by 0.1%. the dax is turning

into negative territory as well so we have a negative start penciled in here and europe but a lot of stock market news to you with. you'll see how the market works its way through. ♪

guy: good morning and welcome. i'm guy johnson and european headquarters. caroline hyde is over in berlin. we're moments away from the start of european trading. caroline has your morning brief. caroline: i do indeed. gildan's last day on the job. -- dilma's last day on the job. backing the buck. goldman sachs thinks traders are mispricing the fed, and it will rise of the next two years. and delivering on growth. deutsche post has a double-digit profit increased, by canopy sustained? we will find out in 15 minutes.

meanwhile, we are seeing a flat, will open at the futures. we are looking at the screen, down about 2/10 of 1%. thecac being pulled lower, numbers really disappointing. dax 10 flat to lower0, inching into the greens. we're 10 seconds after the market open, so let's get to nejra cehic. nejra: thanks. in asia, we saw the msci asia-pacific index unchanged, but it was materials leading the gains. we will have to see whether it is metals leading gains in. subduedit looks pretty as futures are pointing to the stoxx 600 pretty much unchanged, same for the ftse 100. we are still waiting for the tax to get moving and the cac 40 as

well. let's move on to some of the stocks you watching this morning -- a lot of earnings to keep an eye on. we start with carlsberg, the world's fourth-largest brewer. sales beat estimates on the rebound in eastern europe. a restaurant percent, double analyst estimate. the office said that currency movements unless adverse and before. we delivered a solid start to the year is what the ceo said, although it looks like we are seeing the move higher at the moment. we got earnings here as well, saying it will sell to focus on mass tourism. arst-half revenue was beat. the first half underlying a loss, not as great as analysts had expected. profit slipping on

lower commission income, so we're waiting to see if that opens. we will throw it back to you. caroline: we will be keeping a close eye on the french stocks. let's dig into some more industries. unicredit chief executive fritter we could does any faced a torrent of questions over the bank's capital strength after it led to an erosion of the buffer the third quarter. and he says he is not worried about unicredit's financial strength, and he is confident they will meet earnings targets. mispoke to us in th the lan. >> we keep working to boost capital. we are ahead of schedule. we announced a plan about six months ago. we created capital organically,

and we continue in this way. the plan -- our capital is not profitable enough and we are working. we never gain any number, but that isn't to say the target is met. first-quarter, a loss after an increased provision of bad loans. gain approval for their merger. let's talk about italian banks, bringing back our guest, the cio at clymer benson. i just want to get the numbers on unicredit. trades at .37. that is cheap. is that enough? >> well, all the banks are

trading at discounts. i guess the case in italy specifically is that they're facing the big headwind of bad loans that they accumulated over the recession in recent years. by some estimates, close to 400 billion euros. combine that with all the regulatory changes, what european central bankers are doing, it becomes a very challenging environment. there is discounted valuation in italy. guy: what will it take investors to get convinced that they should be investing money here? there was an ipo last week, unicredit was the underwriter. yet this new fund had to take the bulk of the stock because investors on the open market weren't interested. how do we change that? does the government need to do more? there's so many questions surrounding the story. >> yeah. you are absolutely right.

if you think of the single biggest reason why they are trading at a discount -- the only way to resolve that is to have some reform in the way to tell you banks can offload the loans. if you look at the repossession laws in italy, there are about four years of the european average, taking longer to work out the bad loans in italy than elsewhere. the government has made pledges along that path. the question is a need to implement them now before investors get excited. caroline: mohammed, give us a sense of which sectors you may be dabbling in, which areas you will be looking for growth. we are getting the numbers in, missing forecasts, not looking pretty. is the total, sector of interest? >> yeah. the telecom sector is a staple, and it has a set of the growth dynamics that you typically associate with technology, but it has also become more of a staple, more like the consumer

staples sector and services. is thegest challenge banks and energy sectors and those tend to be very volatile and exposed. caroline: give us a sense of your perspective on earning headwinds in general. the banking sector, you say, has been suffering the most. where are you preceding the first quarter to be? what are you looking at in south second quarter? -- in the second quarter? >> it depends on how you put that question -- if it is relative to expectation, chances are earnings will come in stronger because expectations are so low. talk about bank specifically, earnings were expected to be 20% lower and yet they were quite upbeat. in the u.s.,season even against the backdrop of weaker earnings expectations,

came in ahead of analyst forecasts. chances are that q2 will deliver much of the same, and a proven on the earnings picture. guy: are you worried about dividend cover? we will have to see some of this being maintained. ony of the sectors we rely for the kind of dividends that income funds need so much they be looking a little scratched. >> dividend cover will always be a challenge in an environment where investors are now dependent on the income from their stocks because they aren't getting it from bonds. from that perspective, companies that failed to deliver will lose that credibility for a very long time. are very focused on making sure they are worthuing to deliver, they failed to do that, they give it up. guy: that has been a morning where we haven't seen enough of you, but unfortunately the earnings story gets in the way. we will see you again soon. thank you for spinning time with us today.

next, we will speak to the cfo of deutsche post, a return to double-digit profit growth. ♪ >> welcome back t

guy: where would you rather be right now -- there is london, looking london like; there is berlin, looking white and blue. we will talk about where the markets are doing; let's show

you what's happening around europe. a kind of reflects the weather. the ftse 100 down 1/10 of 1%. metaphor.a stop the to be honest, this should be your first port of call, to give you an idea of what's going on. it gives you an idea of what's going on. big news in the philippines; we should reference that as well, give you an idea of what's happening around the world, highlight of major moves, certainly worth talking about. in terms of this equity market move, it is bouncing off session lows -- what is moving us around? caroline: let's dig into the key movers, because there are special numbers based on earnings. let's go on the higher side of the equation, because he has seen deutsche post, one of the best performers, about to speak, up 3%. it seems some of the key withes are paying off

interest earnings and tax up. down, off by 9% because we are seeing its second-quarter options. it seems as though the area they are looking at is pretty lackluster. just 3% organic growth. hsbc,ys cut the stock, across the board stock analysts saying time to get out. numericable, that numbers across the board. there are your biggest movers. we are seeing it on the downside. let's get you to the first word news. shery: the brazilian president dilma rousseff is facing what may be her last day in office. the senate is gearing up for a vote that would force her out and to an impeachment trial she

is unlikely to win. surveys by major news outlets suggest that their opponents need 50" more than the simple majority of the 81 seats they need to move to impeachment. west virginiaon and nebraska primaries a week after driving his competitors out of the race for the white house. name -- says his still his name was still on the ballot. bernie sanders is the projected virginia, the only primary on the democratic side. it would be his 19th state victory, with just 37 delegates up for grabs. greenbackchs says the is rebounding from a one-year low, extending gains even after poor april job data. postan sachs says that the payroll rally shows market

expectations for economic growth and fed interest rate increases have fallen too far, too fast, positioning the currency for a rebound. the bank estimates the dollar will advance 15% during the next two years as u.s. monetary policy normalizes. facilitiesl representing more than 90% of production are taken off-line during the alberta wildfire, emerging unscathed. operations north of fort mcmurray are bringing back some of the roughly one million barrels per day. meanwhile, officials say although fort mcmurray lost two and a half thousand buildings, the vast majority that survived, including the airport and water treatment plant and hospital, and all the schools. britons think of the only way to curb immigration is for the u.k. to vote to stay in the european union, according to a poll. 95% of people backing up brexit

say it is the only way to cut immigration, as to 63% of undecided voters. one in five who want to remain in the bloc say the same. annual netsaid income will probably decline for the first time in five years. japan's largest company predicted net income may dropped to $13.8 billion for the fiscal year ending in march. that is below analyst estimates, and calm as currency swings now pose stiff headwinds. 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, shery ahn. up next, the cfo of deutsche post. a return to double-digit profit growth. the stock is trading higher.

lawrence rosen will join us very shortly. ♪

guy: welcome back. you are watching "on the move." deutsche post operating profit has risen for the fastest rate in 30 quarters. they boosted results for the world's largest courier company. shares are trading higher.

joining me now is the company's cfo; good morning to you, sir. can you maintain double-digit growth? >> good morning. yes, we certainly plan for 2016 to have a strong growth throughout the year. we are at 21% for the first quarter. our guidance implies something like a 40% increase more than 1 billion euros in total. we feel very good about our chances to continue to have strong growth in 2016 compared to the transition year of 2015. guy: which divisions are going to drive that, if you excuse the pun? >> [laughter] yeah, i think we will get a good contribution from other divisions. just as we saw in the first quarter, we had good growth in

all four divisions. are pet division grew more than 3%; expressed division around 8%. we tripled what was admittedly a low result in q1 of last year for our fleet division, and the supply division more than doubled compared to first quarter last year. i think we see a good trend from all four divisions. caroline: mr. rosen, you are plowing in terms of investment, up 50%. will you sustain this? can where are the most crucial areas? we are increasing the investment by around 10% this year. inwill continue to invest many of the strategic initiatives that we have started in previous years. certainly the express network, both the air fleet and the hub

and gateway networks, as well as the ground fleet and the expansion of our parcel and germany,e business in but also outside of germany. those will be the biggest areas of investment and account for the 10% increase you mentioned. caroline: you have a great global perspective, and you are saying in terms of the global economy that you anticipate moderate growth, economically. where are you seeing stellar growth in terms of regions? where are you seeing some nervousness, some sentiment changes? think it is hard to find somewhere you would characterize as stellar growth. i think we continue to see good growth, so, in asia, in the single-digit range. something like 6% for the whole year is our current forecast.

we continue to see moderate growth in europe and also in the u.s.. overall, the whole global economy, we expect around the same performance, 3% real gdp growth, as we had in 2015. so not completely satisfying, not stellar, but not too bad, and not a global recession. lawrence, what do you think it will take to get amazon to expand more in germany? know, i think they see what we also see, and that is the dynamic future for the e-commerce business. stronginue to see very growth worldwide of the move from traditional retail, online and that is amazon's

business and our business to. we continue to expand in germany, where we are the market leader. we are expanding aggressively outside of germany -- we are already in 15 countries in europe, a number of countries in asia and also in the americas. it's a global industry, increasingly harder. we see dynamic growth in the coming years. countries moreme attuned to this as a concept for the way they shop and others? i think there has been a stronger penetration, a greater penetration in the mature economies. where emerging markets,

there was not already a strong retail infrastructure, we are also seeing very strong growth rates, where the market is growing directly to online retail. we see that especially in india, for example, in other countries, in southeast asia, in some countries in latin america. there is strong growth worldwide, certainly the biggest markets so far are the mature markets, china, but we continue to see very strong growth also when the emerging markets. caroline: in terms of your revenue number, it was down 6%. you talk about a negative fx rate impact. where are you seeing foreign currency trends throughout the rest of 2016? where will you be hit hardest? are you anticipating more rate hikes in a stronger dollar?

so -- we don't land much of a change from the levels that we see today. of mostlyontinuation weaker emerging-market currencies. we don't plan on a big change in the euro-dollar pair. i think we will see pretty much a continuation of what we saw in the second half of last year in the first quarter of this year. caroline: it has been great speaking to you. a real global perspective on the trends in e-commerce and global growth. lawrence rosen thank you very much,. stock trading higher, one of the best performers. let's get our chart of the hour. here is nejra cehic. digging deep -- what do you have? nejra: thanks. i have tracked the athens stock exchange against the stoxx 600,

because the athens stock exchange tumbled more than 20 23%. by february it had dropped 30% year to date, the world's biggest loser. now it is the winner, staging the best rally of 93 markets tracked by bloomberg, almost erasing all of its annual losses. while the stoxx 600 remains down 8.1%. is theis is about prospect of the first ever plans for debt relief after these talks that happened earlier this week. guy: it's amazing. as you say, this depends on where you start. nejra: absolutely. and people are divided on whether the rally is losing steam. jpmorgan says an agreement is likely, that the economic reality will curb the exuberance. on the other hand, morgan stanley is recommending shares of lenders. people are divided on where this rally will go. guy: thank you very much.

rousseff's the dilma last day on the job? well could force her from office, next. ♪

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you can never get enough of it. change the way you experience tv with xfinity x1. guy: half an hour into the equity market session; let's see how things are shaping up. here's a picture for equities across europe. we are fading, seeing even more losses being piled on. stoxx 600 down. we are certainly down. the italian banks are certainly under pressure. they are trading off this morning. fairly interesting stock stories driving the market's lower. i think the market is not really feeling any clear sense of direction, the dax trading just below 10. years nejra cehic. nejra: we start with deutsche

port, caroline just spoke to the cfo. this stock is moving higher after earnings before interest and taxes jumped 21% in the first quarter. that is the fastest rate in 13 years, and it was propelled by moving parcel deliveries for online retailers, but also savings from reorganization of the supply chain businesses. this story heading higher, another company heading higher is metro. second-quarter sales met estimates, basically, but sales in germany were up 1.1%. perhaps that positive number for germany is driving the stock higher. we are about a year away from the company actually splitting. performers isst down almost 6.5% at the moment. this of course is the french altice.n of lt'

numbers were missed across the saw a miss ono we the sales number as well. caroline, guy? guy: thank you. i am trying to the together a chart for what's been happening with the brazilian stock market. let me show you; this is the context for today. huge, huge day in that country. this is the brazilian stock market -- this rally has been significant. we have gone from the mid-threes to the midsize. quite a significant rally. in for the senate to, in front of the maine legislature, you have this wall that has been built, because you have those that support dilma rousseff on one side and those that don't on the other side. it is going to be a massive day.

the brazilian president is facing what could be her last day in office, gearing up for a vote that could force her out. if there was a vote for impeachment today, and it looks unlikely, she is going to win, she would be effectively stood down from the post. are the implications, the trading of locations? we are joined on set -- good morning. it has been quite a ride on the upside for the equity markets, and the currency, as we watch what has happened with this impeachment story. is it actually happens, if the reality turns out what most people forecast, what then? >> i think you will see a further rally in the fixed income market, because that is where you have fundamental economic reasons, inflation is likely to come off. it will be that much more comfortable that they will not be under pressure, and therefore they will be able to cut rates. the equity market, i think, has more than priced in political change in brazil.

i think they will have to face the reality of what comes next. what kind of policies and the new set of what we have? what kind of economic advisers? will they be able to get the system back under control? there will be more questions. i don't think equity makes more sense; i think that still does. guy: is the country still ready for change? despite some fairly brutal can they deliver that kind of thing? that vice president desk at he deliver what he has done? >> i think it is the right comparison. even for him, argentina is coming from much longer pure. around,brazil can turn but you have to really bite the bullet in terms of response. will the new president have the popularity for the reform?

this is not necessarily true in dilma because although has been unpopular, so has the vice president. can he win confidence within the parliament and then turn it around? i think the signs are that you should be able to build a coalition. i think he seems to me going for the right economic advisers, so it looks promising. the problem is what's preston is more than that. we are moving to a medium-term improvement of valuations and we still have a gut wrenching economic recession in brazil, which is not likely to go away. i don't think there is likely to be a rebound -- given how negative the risk premium is i think it makes more sense. are going to be digging into particular sectors, we are seeing soybeans rallying

amid concerns of drought. is agriculture and area to look at? and whererovement, they can benefit the most? >> i think it's an important point. to have to remember that brazil has also been helped by massive easing from china and some changes in their reaction of the fed, which led to a big increase in material prices. we think most of that is now completely priced in. in sectors where the market has rotated, we will be taking profit of that and moving away. whereas private sector financials -- and i say private sector carefully, because i think public sector is still under a huge clout in many countries, and brazil is one of them -- i think you will see private sector financials doing quite well. i think we are reaching the later stages of the materials in

the energy sector. fed,ine: you talk of the and i want to bring back -- we had a conversation with the i/o, talking about strengthening the dollar. where do you lie on the future of emerging markets, as we tend to listen to the underpricing? we have pimco getting out of emerging markets -- are you optimistic pessimistic? >> i think there is a lot of misunderstanding about what rate hikes will do -- with most important is the cause. the fed hikes because the u.s. is in a better place. there are certainly markets that india is one,- mexico is another. the reality of emerging markets that you have

become much more level than you were which means you have become a counter event on the u.s. while passive level it may not a great emerging markets selective markets, perhaps some parts, are likely to do well, where others like africa, turkey, indonesia, are more financially geared to the u.s., which is a fancy way of saying they have borrowed in dollars but don't benefit from u.s. recovery. i think you will see a much greater split in the performance. guy: we were talking to deutsche post earlier. there's a question about the brazilian unit. there are plenty of countries around the world that are looking at brazil thinking, what do we do next? will your advice be to those guys running the companies? is now the time to double down, to step back? how do you work if you are a business try to figure out how to invest? >> i think it will be a while

before we can go into brazil, and say this is where we want foreign investment to go. the economies are at the very early stages, and we have still got a few very difficult years ahead of us. brazil, to be fair, has begun that process. china has not even begun the process. we are still in the early stages. we are looking for two to three years of poor growth in brazil. as companies typically think about it, as investors typically think about it, there is the bottom? we have hit close to the bottom, but it will be an l-shaped recovery for some time. brazil will go through some pretty difficult times and a very low level of growth. if you make a few mistakes, you could go down the wrong route, with fiscal unsustainability. i don't think we are at the stage where you could say this is the bottom. we have completed the process where the rock is not going to

continue but i don't think we are at a major recovery. guy: is the private sector culture -- i have been digging for what the country looks like. you look at the political story, you have the crowding out effect of government. does the private sector -- when the private sector starts -- >> from a fairly low position. it is government investment that is the highest priority. 38% of gdp is government spending. if is split that further, a lot of it is nonproductive. this is not capital expenditure, this is current expenditure. they have been crowded out for some time. from here, you would really need to decline the footprint of the government, which goes back to the fiscal reform. unpopular; that will hurt the markets as well, because you are going to see taxes being raised. you are going to see taxes raised, which will hurt the market, which will hurt

sentiment, and that is why it's not clear you will see a major recovery in the near term. i think the private sector in brazil is entrepreneurial; i think it's vibrant. but because they have been clouded over so much, i don't think it is a matter of quarters. i think it's a matter of years before they come back. guy: always great to see you. thank you for spending time with us. the at an emerging market cross asset strategy at ubs. next, a myriad of challenges, and a major power potentially walking away. we are talking about brexit. can european cohesion recover? we will discuss that next. ♪

guy: 45 minutes of the session; this is "on the move." let's get your bloomberg business flash. shery: thanks. carlsberg has reported sales that beat estimates and that growth in eastern europe and asia for the world's fourth-largest brewer had net revenue rise to percent among adjusted basies. the median estimate of analysts surveyed was for 1.3%. eon's first-quarter profit rose 30% after a one-time adjustment of the natural gas contract,

underlying net income rose to $1.31 billion in the three months since the end of march. agreement and a two-year long arbitration process and enabled them to cancel some provisions recorded in earlier years, boosting first-quarter earnings by 400 billion euros. is part of a process of focusing of its mainland tourism operations. the unit comprises more than 50 travel brands, which generated 1.8 4 billion euros in revenue and 56 point 2 million euros and underlying operating profit last year. europe's largest operator says it will retain only thompson lakes and mountains businesses. tui shares are trading lower this morning. has said annual net income will probably decline for the first time in more than five years.

japan's largest company predicts the net income may drop 35% to $13.8 billion for the fiscal year, and again march. that is below analyst estimates and comes as profit swings of spurred record profits, now posting stiff headwinds. disney shares have fallen in extended trading after a miss of second-quarter earnings; that is as abc struggles. earnings were $1.36 per share; analysts projected $1.40 per share. disney says they are closing its infinity game unit. note, theme park profit bounced 10% ahead of disneyland shanghai's opening. that's your bloomberg business flash. caroline: shery ahn, thank you.

with one of the major powers of the european union potentially about to walk away, and a lack of joined up thinking on key challenges, is eu's cohesion in a worse state than ever? we are joined by josef janning. you have what's known as an eu cohesion monitor. you are saying they are struggling like never before. is brexit the key division? is the refugee crisis? what is at the heart of this? >> we have looked at a range of factors that make cohesion, that find europeans together. we find that overall it is a little more robust than we feel, divisions it is -- over the future course in terms of politics and economics have a strong impact of this feeling of togetherness, and that is why the financial crisis we have looked at specifically for the refugee crisis now have such an enormous impact on the way

europeans feel about europe. guy: good morning, josef. if we over here in the u k walk away from the eu, what effects will that have on the kind of cohesion you're talking about? >> well, it will have a significant effect. notably in britain, but also around europe. when we compare all member states, we have seen the potential of cohesion in the u.k., when we compare the structural factors, the macro factors and the micro factors, is weakest among the eu member states. we can see why there is such a fundamental debate in the country, and why it is entirely possible that the british could walk away from the eu. we see that when the linkages between member states are weak , lots of things can happen that will change the scene. caroline: there has been great work done -- if we see one dice fall, one domino fall, we could

see a domino effect across other countries. if we do see a brexit, with this mean in unraveling of the eu? would cohesion fall apart? >> no, i don't think so. i think there is still, and even with the u.k. after a brexit, there is still a lot that links us, which is economic ties, investments. but also mobility patterns among europeans. this will hurt britain more than it would hurt europe, but it will hurt the confidence of the europeans, that the track they are on is a track that leaves them to somewhere. with member states departing, this is not so sure anymore. wrong?s -- >> when he said what? guy: when he talks about ever closer union. his home mandate, his whole process, his whole energy toward

europe was toward ever closer union. haply proven that that may be reached its limits, or do you think it wil could go further? >> i think it could go further and i think it will go further, because there is still a lot of dynamics at play. when you look at our cohesion 2007-2014d look at that we did specifically, you will see that there are countries suffering because of the financial crisis -- at the same time, there is almost a revolution in cohesion potential any central europe, as these countries didn't begin to cash in on the benefits of their membership. the structural ties to the european union grow significantly. it doesn't grow to the same degree in the minds of people, but on a structural level, on the macro level of economics and finance and mobility, there is a whole lot happening. i would still say that they have -- we will see more

growth over time. caroline: mind over matter. we will see. josef janning. discussing the eu cohesion monitor. up next, is the dollar do for a rebound? goldman sachs calls the bottom, saying expectations have fallen to four, too fast. - too f too fastar ♪

caroline: welcome back to a very sunny berlin. you are watching "on the move." the dax index is off by half a percentage point. down after we saw profit driving 30% on a technical issue. nevertheless, let's look at your day ahead. at midday u.k. time, we get a snapshot of the u.s. property market. brazil's lower, house of congress is scheduled to vote on the impeachment of president dilma rousseff. 15 minutes after george osborne will be questioned by the house of treasury select committee about a report of the permanent economic damage of brexit. you can watch that on life go. guy: let's talk about with

happening in the currency markets. richard jones joins us. this is caught my eye and yours as well -- a piece of "the telegraph." a part of the speech carney gave in nottingham. carney tells amanda said down the u.k. base rates could go to 3.5%. i brought up a chart of u.k. base rates -- this is a five-year chart. let me see if i can get a bigger. yeah. .5% for the last forever. 3.5%, really? richard: you really have to look at what investor expectations are. amazing. richard: partly because -- the brexit impact is something that i think, in the near-term, will

provide more economic uncertainty. mp and thetrot in thu expectations. guy: the idea is -- the bank of england might mandate, which could be something. richard: a change, wouldn't it? the near-term conservative be about growth, and i think that will study the ship, given the fact that the data has been softening. richard, thank you very much. we want to give you much more on the dollar and where rates are set to go. goldman sachs had an interesting call, that the dollar will go 15% higher in the next few years, and we could see a selloff in japanese debt. richard jones, great to have you. pulse,"e, we have "the francine back at the helm. keep an eye on what we will be digging into. some of the big movers, a continued stockmarket selloff. miners were the only a performers today; every other industry group falling.

ftse off by 2/10 of 1%, amid a dismal day. the dax off. francine will talk is of the rest of the market. ♪

friend cooking dollar is back at goldman sachs post the bottom. 50% surge in the next few years. to discourage -- japan's biggest company braces for its first quarter profit drop as the strength -- as the yen strength crushes the outlook. president roosevelt is lost in office. -- president rousseff is lost in office. ♪ francine: welcome to the post. live from -- to the pulse live from