what the ecb can do will help, i'm sure. but it cannot just come from the ecb. the national governments and joint cooperation in the euro group has to stay strong to do the work that we have to do, we, ministers. >> is the euro really too high, currently 1.36. not too long ago we saw it trading closer to 1.40. is it really too high? spain and germany are doing well in terms of the export sector. maybe the strong euro is an excuse for the lack of competitiveness in countries like france. >> certainly we have to work on competitiveness, whatever the exchange rate is. i think exchange rates should reflect the true economic strength of a region. at the moment we are an exporting region and we will probably, hopefully, remain so. that will be reflected in our currency. let's not focus too much on the exchange rates. let's do what we can do in order to improve that competitiveness which has to be brought up to a higher level throughout europe. >> so dijsselbloem, you've done work on the banking system in europe but we are seeing a very aggressive department of justice

and may not continue unless the ecb actually steps in. >> can the ecb put growth into the economy?he government's issues that need to do this? >> bo edge are necessary conditions for growth. in the short term, the european central bank we expect it actually to reduce the policy rate and perhaps move into the negative territory. >> it won't have much meaning, will it? >> probably not because the main target, the ecb would be to boost lending across the eurozone. boosting lending equals increasing investment and in the short term, this should help the growth. in the long run, the structural issues, the labor market is still a huge problem with unemployment rates 11.7%. so to boost lending, the ecb probably would have to be inventive. some sort of quantitative easing has been discussed but it's not probably going to be effective on the open market. because sovereign yields -- because of the transactions and the bond market, the corporate bond market is small compared to the u.s. what the ecb could potentially do, they came up with long-term refinancing operations years back. those are

there are plenty of things that the ecb can do.aveats with all of them. >> expectations are just built up so high. we all think we are going to see rate cuts and liquidity injections. there is talk of asset purchases. this is a little unfair to ask you, how is the market position going into the meeting? i had to read a few things. one note came out last night talking about that the market is moderately short the euro going into this meeting. you could see a short covering rally if we see disappointment that mario draghi does not deliver enough. those that know him know that he is capable of delivering surprises. you can forget the, i'll do whatever it takes speech. one guy that knows him quite well is jim o'neill. he thinks that mario draghi may go the extra step. >> thanks to guy johnson, live for us in frankfurt. sure tot to --be stay tuned to bloomberg for mario draghi's position. the bank of england is conflicted between mark carney's view and those who favor higher borrowing costs. stay tuned for all of our coverage. the bank

the ecb is lowering -- what mario draghi came up with. the ecb is lowering its benchmark interest rate cut to just zero point 15%. it is also becoming the first major central bank to introduce a negative deposit rate. that is an attempt to boost lending to small and medium-size businesses. loansb is also offering to other banks, but on the condition that banks lend more to eurozone is this is. that, mario draghi said the ecb could take more measures if needed. we are not finished here, that is what he said as he spoke during his monthly press -- press conference in front for. as to what countermeasures the ecb would come up with, earlier i asked jesper lawlor in london. i asked him whether he is firing a bazooka or a peashooter. >> i do think that a couple of hours from now, the ecb has largely met expectations going into this. there were a number of policy tools that were a possibility before this and i think they have tics most of those boss -- boxes. on the face, expectations have been met for this meeting, but it is more a question of

the ecb had already felt sterilized in the ecb program, and some of that was already in the market.he result so an announcement in the form of a new credit targeting acronym to the of of that soup of the ecb. >> peltro. >> it was a very bold tag of 400 billion. these are only coming later, after the bank stress tests. the ecb understands ultimately cost of liquidity, it is the supply. we have a lot of announcements. comings of what is an of the short-term and what is coming after, there is the question. drivemight be trying to the short-term market reaction, which has been short-lived. the longer-term impact, try to give us a figure of how much, aside from the 400 billion coming later, try to give a figure how much extreme liquidity is put into the markets, how successfully could be in getting money out to these businesses who need it. >> it looks like abe big bazooka in the short-term. the end of sterilization it will theoretically leave 300 billion in the bank accounts on the ecb balance sheet, together government bonds that have not matured. in the short term, that will increase

the ecb intr oduced.bank liquidity, to help think lending -- did it help bank lending? >> you have intervention in every advanced nation, it is having a diminishing effect. we talk about transmission mechanisms. let's say we were able to get cash to people who could put out. where is the loan demand? >> mario draghi delivered a speech a couple weeks ago. he is not worried about long demand now but in the next six months, the second half of this year's. if the demand is taking up and supplies not there you have a bigger problem. >> into the air :00 hour, dan alpert, i want you to summarize what this means for americans. -year confusion, half of america is flat on their back, chair yellen is doing the best she can, mario draghi is doing the best he can. there is abenomics, china, this. synthesize what these actions mean for americans. >> fighting the last were we are going to have to fight after the crisis, the war against this inflation, deflation, low inflation, i don't care what you call it. there is way

do you add to that position now, given what the ecb has done? >> yeah, i think what we're looking to do is become more selective because europe has rallied in anticipation of that over the last two years with all the rhetoric from mario draghi and the addition of ltro. so we're targeting specific pockets to see where is more of the attractive value within europe? and so germany remains a strong area, although it may not be reacting as strongly today over the long course because of its exports capabilities and the banking sectors that it has. we think that's going to be beneficiary and also italy from its valuation perspective. >> thanks, gentlemen. good to see you. ty, up to you. >> soue, thank you. >>> to general motors, releasing its much anticipated internal report into its ignition switch problems that led to at least 13 deaths. ceo mary barra speaking about it, congress planning new hearings. cnbc's phil lebeau is live at a gm dealership in warren, michigan. dismissals but no high-level firings. is that curious to you? >> reporter: no. when

waiting on the ecb.ario an draghi do to give the eurozone a boost and what will it mean for the action on wall street. that discussion is straight ahead. plus, an exclusive interview with tech visionary, marc andreessen. >> by the end of the decade, basically everyone on the planet will have a smartphone. >> what do you use? >> oh, i use everything. >> the second hour of "squawk box" begins right now. >>> good morning, everyone. welcome back to "squawk box" here on cnbc. i'm becky quick along with jeff horken and andrew ross sorkin. things have barely budged, because things are waiting on the ecb decision that's coming in about 45 minutes. and also take a look at the ten-year. right now our ten-year is yielding 2.548%. but the big story the this morning is what's happening with the euro. the euro is trading near a four-month low as they await that decision from the federal bank, that is expected with the ecb widely expected to push its deposit rate into negative territory. we'll have the details when the

spread, the is the spread between the ecb and the fed. trade going to continue despite the fact that what you are saying it will be a since the ecb is not behind the curve but nonetheless draghi said he is not done yet. despite data disappoint all the late, is probably still on rails when it comes to the taper. it changed a little. nevertheless, your sense of the trade is an active one. >> if you take where we are now, since october, the u.s. has moved a tiny bit. europe has continued to gallop along. we have interest rate and ecb has basically said up to september 16, will not have rate hikes. that is locking in at a big spread we have right now between europe and the u.s. maturity beyond five years, that spread is very wide and marketable stay wide for a long keynote of time. that is opportunity. that should compress. dost of all, the fed will earlier than the market -- and flatten in the u.s. traction, ecb takes that should stephen the european curve. -- steepen the european curve. >> you the five years out? >> i think so. >> stay with

the ecb has not been tightening.o the u.s. it's a big week for economic data here. with this outlook you've suggested, higher growth, certainly better numbers, better stock market, do you think that there is a risk then that starts thinking about a federal reserve tightening interest rates, we get back to normalization of central bank policy and that could sort of hold the euphoria in the markets? >> i think this is what -- this what is the bond market has been reacting to, why instead of 3.03 on the ten year e we have 2.55. janet yellen has changed the fed's forward guidance. stop getting investors focused on when we go from zero to nonzero. she's giving guidance across the whole curve. she's now saying whatever happens in the economy, whatever you think the fed funds rate should be, five or six years from now, depending on how everything will happen, we'll be 2% lessp. that's going to lower long-term interest rates and great for the economy and stocks. the only break on that, if we get an inflation outbreak. thankf

nonetheless, with inflation being below what the ecb has promised, the ecb had a case. i'm not sure that what the ecb actually did last week will make a lot of difference. but it's very clear it won't do any harm trying to ease the credit crunch for small enterprises in italy and spain. >> come in here. >> i have -- hello. i have a question for you on the mandate. can it be that mario draghi tries to change the mandate of the ecb through the back door because it seems as if he was trying to take also care of broader economic matters here. >> well, i don't think he has changed the mandate in any significant way. he's clearly explained what he is doing is there to deliver on the ecb, inflation, close to but below 2%. that in order to get inflation from very low levels now to the level the ecb wants that in order to do so, he may have to do unconventional matters where we learned since lehman that there are situations when central banks have to do unconventional matters. i don't think it's a change in the mandate. he's not trying with rate policy or other policy to change

lated to what ecb did or what they might do? >> i think this time is a consequence of what they did. we were as the market was expecting this to have a package target. not financial corporate. actually seeing what could be given to banks is bonds. the end gold bond until of sept. >> is it because it is not prescriptive? >> not as prescriptive as sls out of the bank of england if there was a penalty if you are not helping lending. >> does it mean lending will not get through to the private sector? >> it is supposed to help the real economy. >> it does not mean that. the target giving an advantage to loan up to the private sector. that is a key of this. big banks have to lend at a lower cost. >> what about the demand for credit? is there a demand in the eurozone? >> it depends on the price. there is a big decrease in the cost of a banks. , and italy, ag could gain two percentage points. 50%, you could see more demand in italy and in spain. >> do you think european businesses that have not been bothering with rates as low would be

your thought on what the ecb did.as another whatever it takes moment by draghi. they basically are thousand starting the -- now starting the process of going unconventional. they've brought interest rates down to almost close to zero, and now what they did is they basically are providing a pretty incident liquidity for banks. the size is 400 billion euro, the term is four years, and the rate is low at only 25 basis points, so this is a pretty big move, and that's why we've seen markets respond favorably -- liz: well, yeah. that's about 560-570 billion u.s. dollars. so do you think it'll have its intended effect, and that is to stimulate lending and to stimulate the eurozone markets? >> well, that will be yet to be determined, but i think markets are going to front run that and buy risk assets, because if you think about it, the process that we've been going through over the last three or four years is that with inflation low and jobless rates high, central banks are increasingly going all in, and they're going to try

what does the ecb's action mean for them today?you have deutsche bank doubling down on its fixed income into it, raised a lot of -- unit, raise a lot of capital. nomura has been bolstering it u.s. capitol market debt unit. they are wagering on an increase in volatility. so there's a question of whether the ecb action actually makes them wait longer for the profitability to come back in a major way. on the flip side, you have the banking, you have more people borrowing. that is why people have been emphasizing the underwriting. the fees from their have to support the lack of these, the waning these on the trading sales side. >> to be continued. lisa abramowitz, you can see her reporting on bloomberg.com. thank you. she was talking about banking, in a few minutes, frank sorrentino, the president of connect one bank about m&a activity in the community bank space. boomer television is on the markets. jonathan has the details. >> let's get you caught up on the action. gains across the board. the s&p 500 is at a record high. a comprehens

the dax post the ecb closing up 0.2%. the cac current was not looking too badly yesterday, up about a percent. this morning down. the ftse mib, we saw a fall in the yields. yesterday it was up well off 1.5% as well. let's show you where we stand. the nikkei fairly flat. shanghai composite off 0.5%. in india, the sensex up a percent. bond rates very important ahead of today's employment report. looking for a jobs creation of around 210,000. treasuryiels, just over a week ago of course that we hit the fresh 11-month lows. 2.42% was the yield on the ten-year. just back down a little bit as well. italian yields have continued to decline this morning. before the ecb we were around about a 3% yield. this morning back down to 2.84%. that's where we're seeing evidence of continued impact from the ecb announcements. big impact on the euro/dollar during the session. 1.3647. very volatile couple of hours yesterday afternoon. just to remind you, just before the ecb announcement, we were trading around 1.36. we went down to 1.3505 whi

what's really changed from then apart from the ecb?e a number of things he said. >>> more on your top story that ecb unprecedented move to make overnight lending rates negative. let us bring in cnbc contributor rick santelli. first to you, sir. was there any shock and awe on the floor of the cme in chicago, or was this pretty much expected like david tepper talked about? >> reporter: let's play a game here. negative interest rates on deposits of excess euros overnight. that would be important. how many excess euros do you think were deposited last night? >> based on your tone, i'm guessing not much. >> reporter: about 32 million. >> chump change. >> reporter: okay. i rest my case. and in terms of purchases, what type of asset-backed market do they have right now? >> not much. >> reporter: not a very advanced one. but i think bill, always hitting the salient point, i think the ltro in the 400 billion is something important. but you can't force banks to loan. my guess is they may do the same thing they've been doing. take that money at 2

credibility and the ecb.e are getting to a point where mario draghi has to talk about five or 10 basis points in order to maintain the idea that there is forward guidance in place. the pointting to where it becomes incredulous. will the market believes that the ecb has any credibility left when they are talking about tinkering at the edges? course, thats, of we get measures from the ecb tomorrow and the market says, what is next? worsening ine a the meter jim term -- medium-term. an optionve easing is there. the ecb says they're within their mandate. there may be some weakening in the inflation outlook. not major. still, potentially, some weakening. if that continues, that may be the next step. it is not expected that the markets will continue to speculate. it could be further down the line. >> thank you very much indeed. we will have an update and mario draghi's news conference. >> news of the company. why ford is treading lightly with their truck later on in the polls. >> welcome back. trains, planes, now,

the ecb does go lower. if there are cases for an emergency, then the ecb has to act. but whether quantitative easing, buying sovereign bonds is the right action or whether it's better in bank-based financial system to increase these targets which are now limited to a relatively small number, that's a debate that the ecb will have. >> one of the most boldest moves by margo graggy was negative deposit rates. at this stage, are we seeing evidence of bank lending again? >> well, not yet. we will get new data in the coming weeks for me. so far, we only have the april data and the april data was weak still. i don't think that may will not that much better and that will be before the ecb actions take place. i do think the timing was very good. that's when the asset kwaut is over, banks should have a certainty about themselves and each other so they can start lending to each other. there will be more liquidity injected. the negative rate policy will apply and make banks treat like hot liquidity to pass around to each other. the only thing that needs to be debated at this stag

that would be a massive step for the ecb.io draghi is talking up the action that they could implement in the future. it looks like the bundesbank has given not for the ecb to go down the nonconventional route. this is very important. i will keep you updated on the of language, the nuances that come out of this press conference over the next hour. >> thank you, john. jonathan ferro, our markets reporter. you can watch the press conference on our live event channel. it is streaming on your ipad app. lisa gersh will be joining me after this break. ♪ >> google published a demographic breakdown of its workforce. their staff is white. diversityores a broad problem. google offers one explanation. joining us is the cofounder and ceo of a startup that uses big data to help find and hire software engineers. also with us is sallie krawcheck. what do you think of google's explanation -- there is not a >> whenool for them? we're talking about technical folks, software engineers, i believe that is true. we do have that issue. when you look

how concerned do you think the ecb will be that the u.s. regulators are whacking european banks with big fines? >> i don't think it is specific to european banks. banks that settled a few months ago get away with much lower [indiscernible] usually, they have to pay much more in a. -- much more now. >> stay with us. we have plenty more coming up. >> welcome back. you are watching "on the move." this was-based company, some m&a in the retail world of this morning. the stock is up 5.7%. we will be talking with the companies ceo in zero later on in the program. good news out of the -- ceo in zÜrich later on in the program. good news out of the retail sector. numbers better than expected. the historic low could be good news. shares climbed this morning. let's put it in perspective. ryan, remind us of the numbers first of all. >> the big thing here is philip clarke, the ceo of tesco, saying that in his 40 years at the company, he has never seen a sales drop like this. saving grace, shares were up as much as 2.5% this morning. the drop in like-fou

what action do you think the ecb will take this week?ative rates, introduce an asset purchase program, ltro or do nothing? on twitter using #traderpoll. or go to traderpoll.cnbc.com. >>> that's where we are with eurozone inflation. right now ahead of the u.s. opening today, futures are indicating we all move higher, not by much for the dow. the dow yesterday up 0.2%, up 24 points. right now it is called higher by around about 15 points. the s&p 500 is called lower by a point after being up 0.1% yesterday and the nasdaq at the moment is called fairly flat, lower by a point. it slipped slightly during monday's trade. european equities have been down during the session, off 0.3% for the ftse 100. the ftse mib down a third. treasury yields have continued to edge higher. we're yielding 2.54% on the ten-year. last thursday, we were down 11-month low of 2.42%. but those higher bond yields have helped out the u.s. dollar, the dollar index up near four-month highs. the euro dollar unmoved by the inflation number which would suggest perhaps whatev

this on the ecb delivery day, if you will.nd ahead of really tomorrow, which is the big day, and that's the jobs report. everybody's going to be focused on that. the screen may not look like it does right now tomorrow. who knows. >> you never know. 8:30 eastern is when all that fun begins. meantime, stocks are hitting all-time highs. can it last though? with us now in an exclusive interview, joel greenblatt from gotham asset management. welcome back. your whole approach is identifying most overvalid, most undervalued parts of the market. can you give us some examples of places where there is still value and opportunity? >> sure. way we do things in general is especially for our long/short mutual funds, we look at the 2,000 largest companies in the u.s. and rank them on a daily basis from 1 to 2,000 based on their discount of our assessment of their value. prices are changing daily. we generally buy about 300 of the cheapest relative to our assessment of value and short 300 the most expensive. and we put more weight into those

the ecb did what was expected.owever, they did hold out potential to do more with, you know, sort of vague promises of buying abs and vague promises of not continuing to drain some of the other purchases that they've already had. i think they've delivered on what their promises are and held up some potential to do more going forward. draghi is pretty good at that. pretty good at holding the carrot out there and keeping the market moving along. >> do you think it will work, ward, the desired effects he's trying to do? >> well, i think the desired effects are number one, to get the euro to weaken and that will happen over a period of time. and number two, to get banks lending. neither is an immediate solution, but it's the ecb had to address and they will continue to focus on and try to accomplish. this isn't the end. >> you've got the detail here, there could be a further liquidity injection of super cheap money, $400 billion euros. getting over half a trillion dollars more of lending to the banks, do you not --s th

of course denmark not part of the ecb.ied negative interest rates and the central bank, central bank official said of that experiment, and i'm quoting here, the effect on the real economy has been for all practical purposes zero. so if it didn't work there, why would it work now? >> well, denmark was facing some other challenges at the time. i don't think they only concerning denmark was to revamp the economy. i think they also had some challenges in terms of standardization of the exchanges rates as you, recall. they are not part of the eurozone. i think the real question is another one. this may work in the short term to prevent deflation but the long term for euro is to have a more growth and in order to achieve that, you nodeneed to have a more competitive economies, you needed to have more structural reform. you need to reduce the public sector size. nothing of that can be done by the central bank. david: boy that's a terrific point. by the way, that's a point that we could also make here. in fact richard fisher has d

the ecb is trying to change that.e of the appropriate channels to get funding to small and medium enterprises in the periphery where that credit hasn't gotten before. i think the big change in the meeting was one that we'd actually seen foreshadowed a couple weeks before in president draghi's speech in portugal, he's basically taking a whatever it takes attitude. they are going to defeat disinflation and deflation. that's why you're seeing the euro weaken there. >> let me get your thoughts on flashes that have come through here within the last couple of minutes with one of the ecb council members, he talks about how they need a more holistic approach to abs regulatory treatment, he says the european commission must identify in a few weeks which abss are high quality and liquid. the efforts are under way to improve transparency. he talks about how they could streamline abs reporting requirements and the rating agencies could publish abs ratings absent of sovereign cap, provide more transparency on how ratings are deviv

he walked through concerns he had only a month ago and talked about obviously the ecb, chinese growth, and the stimulative policy there and whether or not it was happen, instability in the ukraine and then of course u.s. growth or the lack thereof. as of today he says the bottom line is all of those things alleviated one by one by one to a certain extent and obviously today's move was actually -- was also huge in that regard. so my sense is from talking to him, although he was a man of few words on this score today, that his nerves had eased a little bit. i don't know if he thinks we're totally out of woods, carl, but he certainly thinks the ecb is taking the right steps. >> and think back to those initial comments regarding nervous time, part of it is the -- the description for that was because he thought the ecb was behind the curve. right? >> yes. he thought easing today would be absolutely essential, but he even said as i recall i'm not sure it's even enough. it may be too late for them to be able to stimulate the economy in europe as it needs to be stimulated. however, today obvi

as i said, the ecb is expected to deliver rate cuts today.enchmark refi rate and the deposit rate. according to two european , keepingank officials borrowing costs low. so hear from the bank of england today. divided between governor mark carney's view that the rates are still needed and those leaning towards higher borrowing costs. we kick off with the boe at midday followed by the ecb. we will bring you these live and 130 p.m. london time. french president francois hollande says the potential fine against bnp could hit european bank stability. $10 billion to settle there is a that violation of trade sanctions. he wants to raise the issue when he meets with u.s. president barack obama tonight in paris. getting some breaking earnings intreau.i contr that is a big brand suffering from a slowdown in the demand for cognac in china. nothing is crossing the bloomberg terminal as of yet, but the company already announced a warning on its profits in april. they said they expected a profit on its core basis to plunge between 35%-40% this year after r

the ecb president hinted that a cut may be on. see thented to projections that will come out in early june. are in frankfurt and mario draghi will deliver the central bank possibly just interest-rate decisions. looking into the crystal ball, what will he decide? >> well, we have been hearing from the central bank that something is going to happen today. the question is, what? cuts are first on the agenda. we'll see a negative deposit rate and the bank is going to be charging commercial institutions and that has been a negative deposit rate. it has never really been that way at a central bank. it is a dipping of the toe in the water. a small deposit cut to see what is happening to the markets. these commercial institutions -- all of that is something we can expect. interestinginto territories. what will we see with credit easing? longe likely to get a more term liquidity operation to flush money into the system. thank you try to preserve capital and do not want to lend. they have enough liquidity. maybe the bank of england, which h

inthe ecb isn't engaged quantitative easing.be another explanation for why italian bond yields are lower than american on yields. >> people are believing that it is ledger straits -- inter-slates -- interest rates low for a. of time. people are willing to believe that it is going to happen somehow. it is forward guidance at its best. they lost a little of that in the markets. right now they are accepting. even though the risk is greater with italian aper and spanish paper, you can borrow it for five years at a cheaper rate than you can in the united states. that is why we are seeing bonds go down in the united states in general. it has widened overall. same kind ofhe higher yield in the united states. it is risk free. why not put your money into it? >> we are talking about two economies in different stages of recovery. thehen you look at much biggerou get a real yield in europe because of inflation. you get a smaller yield in the united states because inflation is lower. you have to figure that in. >> all right. thank you. back,

ecb was top of the list. i remember him saying at the time, look, they need to ease in june, which of course is today now, but he wasn't even sure at the time that would be enough to alleviate some of his and other people's concerns about the markets, but it might be too lilt, too late. however, he indicated he was pleased by what he saw today, saying if you looked at the ecb and their actions today, not just rates but other step, chinese stimulative policy we've seen unfolding in recent weeks, instability in ukraine starting to settle down a little bit, and the u.s. growth picture improving slightly since he spoke, he said the bottom line is all of those things alleviated one by one by one to a certain extent. so, you know, he's being very, very cautious in what he says, but i read that as i'm a little less nervous. >> you alluded to it, kate. we were both there. i think some people misconstrued what tepper said out at salt. nervous time by no means meant bearish time and he was still long and still longer t

they borrowed one trillion euros fourth of loans from the ecb. they started giving them back to the ecb. we have a whole set of message -- set of measures. pretty much everything is in sync. one was another round of cheap money with conditions. the second was a plan for asset person does -- asset purchases. the bank will borrow that money and will the plan remain just a plan and will this balance sheet continue to contract? being told about divergent balance sheet and divergent central-bank policy, that may not be as emphatic as you may think. a quick look at stocks because we have a busy week and busy day, record high on the s&p 500. record high on the dow jones as well. their work.done the jobs is a sweet spot. back to you. >> welcome back to the second half-hour of bottom line on bloomberg television. thank you for staying with us. -- the check the stop top stories. the suspect charged with killing three wild mountie canadian police was arrested unarmed. he had been armed with high-powered long firearms and had been spotted three times on thur

we are waiting for the payroll this friday and we are waiting for what the ecb does.g our clients to remain overweight risk assets in the back half of the year. equities and u.s. high-yield wants. we recognize for a lot of clients is feels like we are telling them to go to the gym. they will be glad they did it. >> what do you expect from the ecb, what is the minimum requirement and what might shock you? we like to see is the consensus around the deposit rate and the refinancing rate lowering vat. we also like to see some mechanism that they are willing to support small businesses. strong hand ofhe mario draghi we think the markets are going to look forward to the easing bias that comes out of europe at a time when the u.s. because of its economic recovery plans to continue with the taper. >> interesting comments coming through from the former euro strength is temporary and he does not see euro strength as a reason to act. how would you interpret those views? cautiousnessat the from the people, policymakers in europe has been there for a long time. let's wait and see

the view fromat the ecb is. some companies -- we mentioned in initial public offerings. we will wait for those prices to come through. the valuation at 1.3 billion pounds. a little less. devin nims is a big retail stock. hams is anumbs -- deben big retail stock. they said, we have made three offers. they did invite. take a look at some of the currencies on the move. that's a moment of darkness for me. >> the lights went out. the music stopped. what have thet. reactions been? approved the have offer. some analysts are saying this could reduce the cash component. they have improved the cash component of their bid by one point 2 billion euros. i talked to union leaders. the reactions were quite mixed. some are saying the new numbers on the jobs front were reassuring. >> new job guarantees are stronger. it's still about creating 1000 jobs in the next three years. jeffrey a melt is ready to pay penalties if after three years an independent agency was to say not there. >> they will be meeting today. we already got a few reactions this morning from different officials. the ener

you have had this tightening helped by the ecb action last week.obably, spain can continue to grind tight a little bit. france trends very tight to germany and would not expected to go anywhere too much. but we have very low inflation in europe, which is keeping yields down, possibly more from the ecb. we have a divergent passing in europe compared to the u.s. >> i looked at the ecb last week and the biggest things they did are some -- is maybe something they did not do. they have talked about a quantitative easing program. the second one was a new long-term financing operation, a targeted operation. but those things have not been implement it yet. does the plan remain the plan? and does the new funding program, what is the take-up of the banks going to be? how effective will those things be in the second half of this year? cleared the board, they also cut rates. i think they have -- they are kind of done, i think. draghi was clear that they can do more in terms of asset purchases. inflation remains very low, then asset purchases will be the next t

>> the ecb meeting tomorrow? didn't know that was going on. >> yeah, right. >> i was at an event yesterday at chatham house in london. i was sitting in the exact seat or location where mario made his famous comments nearly two years ago. it reminds me obviously, having worked with the guy at some point that he shouldn't be underestimated. i think the key is what he says as opposed to what they do. he knows what he's done by selling the market up to have strong expectations of some rate cut and maybe more. i think the thing to watch will be what he has to say about any follow up moves, any subtleties about the importance. i think what he'll try to create is the notion that the oil has no upside from here, so the market may as well sell for him. it would take pressure off the ecb doing more. that would be my hunch. >> do you think the market is going to get what the market wants? because there's been so much uncertainty over what's going to happen. even out at the big salt conference in las vegas, you know, one of

first, though, what will the ecb do tomorrow? have our first ever ecb results. >>> as we head to a break, a look at yesterday's winners and losers. when you run a business, you can't settle for slow. that's why i always choose the fastest intern. the fastest printer. the fastest lunch. turkey club. the fastest pencil sharpener. the fastest elevator. the fastest speed dial. the fastest office plant. so why wouldn't i choose the fastest wifi? i would. switch to comcast business internet and get the fastest wifi included. comcast business. built for business. (man speaking chinese) >>> good morning and welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin. our top story this morning, the may adp report. economists are looking for it to show a gain of 210,000 private sector jobs last month. i know what you're thinking. you can't always count on adp. we showed you the chart earlier this week, they're close. they're close. the standard deviation. is it less with zandi, the standard devi

instead of classic ecb. i suspect the moment has passed and they probably should have done it a year ago. >> well, of yours, we want to get out to turkey. stay there. protests in turkey clashed over the weekend on the first anniversary of the deadly government protests. the flashpoint of the 2013 protests, tear gas was fired at a number of people with a number of them arrested. this was sparked by police crackdown on rallies against the redevelopment of the square leaving three people dead and thousands injured. joining us with his thoughts, the credit analyst at commerce bank. postulus, thank you for joining us. what is your view for turkish debt instruments? >> well, clearly what we have seen the last events, the first anniversary for the markets has been clearly a lot more milder than the events that we have seen in the build up of the march municipal elections and also during the corruption early in december and january. so it is evident that investors are getting more accustomed to the ongoing political

just like the fed, the ecb is very engaged.ntities are not sufficiently engaged. executing the ecb will have to employ some sort of qe-style ?rogram, mohamed >> i think i will. they will need to take some time to see how the measures works out. it is complicated. they will have to see if there are unintended consequences. if growth remains in, if inflation remains stuck, they will take another step and mr. draghi made it clear when he said we are not finished yet. that was his phrase. >> what time frame are we talking about before another move? to >> probably to three -- >> probably three to four months. >> not too far ahead. does that have any implications for the fed? >> it means we are on a multi-speed world of banking. think about the ecb stepping on the accelerator while the fed is taking it off while continuing .o taper we will see a multi-speed world of central banking, something we have not seen in a while, and only an interesting theme for the markets over the remainder of the year and into the next year. >> mohamed, t

ecb is telling you they're not going to get there.ntially saying they will be easing for a very long time. that is probably true. we delevered in a painful but rapid fashion relative to what we saw in europe. >> i think the fed feels mandated to lie, though. >> john, thanks. we haven't settled the baby thing. now my other thing is -- >> john, thank you for joining us. >> thanks, john. >> if you want to stay and continue. work with me. >> sorkin got out of prison. they couldn't keep him in. no psychiatric help. guns would not have prevented this guy from killing four more people. it was the mental illness thing. is it guns or the mental illness? we have to settle that. i'm kidding. >> jobs. the struggle to pay the mortgage "squawk box" returns with that and maybe more information about babies on plains in just a moment. in a world that's changing faster than ever, we believe outshining the competition tomorrow quires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run diffe

here we are ready for the ecb meeting with a massive that on on a accommodative ecb. a rare event. >> very rare. as low as our rates, in germany the 10 year yield is 1.4%. >> calling it a priced to perfection. >> everyone focused on the ecb meeting. we will translate that for you with a number of our guests, dr.uding mark farber >> doom. >> getting to the front page. france is warning the u.s. against pushing ahead with the $10 billion fine against bnp paribas. he has made the government's first public comment. he says the $10 million fine could hurt trans-atlantic trade talks. linking this to something larger. he says it would be completely unreasonable. the backstory is u.s. regulators want to find them for breaking sanctions. say u.s. regulators. is it true? is a washington regulators or new york city type regulators jacob there is a whole set of players in this. >> that is a good point. this is potentially $10 billion. five quarters worth of profit. 10,000,004 bnp paribas is a bigger percentage of its profit. makes 20eve jpmorgan i -- 25 billion per year, so cap t

factare highlighting the that the ecb has a significant problem with disinflation.te data out from germany. one of the few to be showing a positive number. other state it is negative ahead of the national day that tomorrow which will further rusher a 0.6 reads. mario draghi has artie promised that we will see action. -- has already promised that we will see action. hans, you can't resist a good sports story, particularly one involving insider trade story with carl icahn. >> is a remarkable story that broke over the weekend. the wall street journal and the new york times had it as well that there is an sec probe that carl icahn and phil mickelson the golfer are being investigated for potential insider trading. both people have denied any wrongdoing. our own trish regan got carl icahn on the phone. he said, i have done nothing wrong. this blemish is a 50 year record. a remarkable story. the latest is, because the news broke, government authorities were able to use wiretaps. there is another wrinkle. the news breaking is going to present any sort of conclusion from thi

we think the real brights bought is strong support from the ecb.sting0 wehi could see rates low to the end of 2016. he was talking about how banks will have access to unlimited 2016, suggesting that is some sort of guidance. is that your view? are we going to see this accommodative start to the end of pointy 16? >> we have seen in the measures of 2016. -- by the end >> we have seen in the measures announced they are looking at low rates. these comments are just adding fuel to this package of measures and announcements. think is very important and may be missed by investors is when the ecb has announced , theyd of the program have told us a sickly they are happy with quantitative easing. they supported it in two stages. first in the eurozone. now they don't stabilize them anymore. say it has been overcome. >> perhaps not enough for people at the imf who have been suggesting the ecb perhaps needs to do something a little bit more like quantitative easing even if you suggest that is a start. >> maybe the ecb hasn't been as proactive as the central ban

the message from the ecb is clear.he message from the bank of japan is unclear. >> the message from the ecb is clear as you say, what is the message from the ecb going to lead to outright bond buying? bond buying on the scale we have witnessed from the likes of the boj, the federal reserve and the bank of england? >> it is a weapon. , ifecb has already stated necessary, we will do a bond buying program without stabilization. the balance sheet of the ecb would rise significantly. .f necessary in the meantime, you have u.s. growth acceleration, u.k. acceleration, a new grand coalition spending. i don't believe they will have to use it. >> alain, good to chat to you. good luck to france. i think they are playing honduras in the next couple of days. good luck to france in the world cup. threatendebt could britain's recovery. rate hikes could come sooner than expected. that is according to mark carney. for more, let's bring in caroline hyde. rise and byl rates how much? what is the view? expectations is that we will see a r

>> one very is everyone -- one theory is everyone is rising in ecb action.n relatively speaking, these treasury yields to look more attractive. if the ecb says, you know what? we are worried about how much the yields are rising. we will not do as much stimulus, that could make people reassess the relative value of treasuries at current yield. >> that is why i am here. the news is from europe. thank you very much. "street smart" up next. ♪ >> stocks fluctuated. regan and "street smart" starts now. ♪ welcome to the most important hour of the session. up today, my guest, donald sterling's lawyer. what he hopes to a comment by suing the nba and how long he plans to fight it

. >> in doing so, the ecb entered uncharted waters, taking one of its key interest rates into negative territory for the first time. >> this means that banks will actually be charged for parking runs at the ecb, in the hope that they will instead lend those funds onto businesses and consumers. >> the news that markets soaring, but for those on fixed income or trying to save for the future, this move is a real blow. >> it was the most anticipated announcement by the european central bank in years. interest rates cut to historic lows and a negative deposit rate for banks. ecb president mario draghi says he is aware changes may not be popular for those with savings or other investments. >> these are people who signed assurance policies with insurance companies, and they see the value of these insurance policies going down. these concerns are serious. here, the answer is that interest rates will go up. will go up when the recovery will come back. when growth will come back. >> for now, money is cheaper than ever. to encourage lending, institutions will now be charged for parking their mone

in other words, the ecb is trying to manage structural changes and reforms.done a very good job. but i think that alarm clock is much longer than the alarm that's ringing by the people. i think the social anxiety that's demonstrated in those two articles is going to be the bigger point, and i think the market's starting to grapple with that. it's another reason why interest rates in this country may be lower, because the ultimate fate of the euro, in my opinion, is really called into question. >> we're going to learn a lot more later on this week. thanks, rick. when we come back, the developers take away from the ddcb from a younger perspective in just a moment. in a world that's changing faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs

even if the ecb didn't do anything i don't think that will have a drastic affect, however employment and later in the week that's going to be a biggie. > > alright we had this big ism snafu to talk about yesterday, a number came out and then a correction and then another correction. what was your final feel for this number? > > it was a really good number. initially, you saw the 53.2 come out, it was revised to 55.4 which was a good number and in the hour and a half in between some economists were saying something had to be wrong. so it was a solid number in all aspects of it, so going forward i think you have non manufacturing i s m coming out thursday. look at that, those are going to be strong numbers as well. > > where would you put your money than, daniel? > > right now, i'm not going to get overly excited because even though we have good numbers coming in here, there's two things that worry me: one thing in the ism releases-- we had high prices component so we might have some inflationary problems, and the other thing to remember: let's say on friday we have a really good emplo

we have an ecb rate decision.s cranny at the touchscreen with three stocks to watch. --let's check in on one part one of the carriers, the discount carriers. easyjet down over 3.9%. , earnings pera share click. the upgrade cycle in this overall industry group has almost run its course. they cut easyjet to underperform from neutral. they dropped the price target down by 22%. they say, you had your rub in this industry group. today it is about tax. they are getting a tax rebate from the canadians. $248 million. another $162 million to follow. it is not a takeover story, it is about a tax rebate. anglo american up 0.6%. the market is considering selling assets inside africa for some $4 billion. return on equity is king within mining. will they make it? back to you. >> thank you very much. these are the bloomberg top headlines this hour. bnp paribas is planning a guilty plea today to end a criminal globe into u.s. sanctions violations. the bank is said to have won a reprieve which gives it six before the ban on handli

saying the ecb needs to do more. >> on june 4th, the hsbc number is coming in near 1%.u just how low the reading is on italy do. the ecb measures do anything to try to correctly help the divide taking place across the euro zone? >> i think the ecb's latest measures, in particular the targeted lpro, is not targeted nirlly and that any bank can take the money up to 7% of the eligible assets initially, but the banks most likely to take up the liquidity are more likely to be the banks in southern europe because they put a chance to redo the financing with the cost of funding, but to some degree china could benefit more from what is coming through in the ecb. >> the measures have been opposed to the market. and you have to assume the central market will take time to assess how successful the measures will be. how long will that timeframe be before we look at the monetary policy? >> we are still looking at several months. maybe on thursday in august we'll get more technical detail about the nature of the targeted refinancing operations. but i think we all know that bank thems

the consequences of the ecb's action to reduce the risk of deflation is to stabilize the currency or to get the currency down. who benefits mostly from that is germany. it makes them more competitive for exports. that means all their international earnings will improve. in the first corner of this year, we had a situation were earnings were being downgraded because of the strength of the euro versus other currencies. we think that has a chance to reverse as the year progresses. >> that makes a think of the two new members of the mpc. they are both saying that something is amiss if spain can borrow at the same rate as britain. do they have a point? >> parley. -- partly. the german bond yield is incredibly low at the moment whereas the sterling rate is set off. money policy committee actions are relative to the u.s. there are two different factors. >> thank you so much for coming. let's turn to our bluebird exclusive. -- bloomberg exclusive. avatar -- what did he have to say to you? l'oreals right, announced last night the acquisition of nyx cosmetics based in los angeles. it is a way