anna: so there are doubters at the ecb.he minutes that perhaps the government counsel is not united in what it was to do here. in the fourth of december in new york, we heard mario draghi, he himself saying there cannot be limits to how far we are willing to deploy the answer meant that his disposal. you think that he takes those doubters with him? question. very good there are doubters and we think they are a minority. if worst comes to worst they will still act forcefully as long as they have something to use. it does take a nice trigger. new forecast of. there are arguments on both sides. in march we will have these. in march they may still get their forecast in line with them fulfilling their press billy targets. in june, it will be too late and they will probably have to act. jon: if you didn't have a global recession to worry about or disinflationary fears, he has this to contend with. indices of foreign exchange. we have a rally in the euro of 2.71% and it has only been trumped by the yen and the dollar. i love the b

decision inthe ecb about 10 seconds. decision, it will roll across the terminal at any moment, we will look at a rate right now of 0.5%. brendan points out that nobody expects that to change. and is the benchmark rate indeed, we got the decision out that rates are unchanged. in johnson is standing by london. we didn't expect the rate to change but are we going to get any kind of smaller decisions about the benchmark rate? guy: no, i don't think you will get anything. it has been six weeks since the measures were announced by mario draghi so it is unlikely that you will see anything. the press conference is all going to be about the tone. how dovish will he be? that is the real question the market is asking. the ecb has a single mandate and that is inflation. it needs to get inflation up and it has been too low for too long. you also have the deflationary andlse coming out of china, the ecb will do something in 2016 and it may be in march when we get the next projections out from the ecb and we seek further provisions or

this is the only mandate the ecb has.his is a one metric we have on whether or not draghi is meeting his targets. and he has missed for three years and it looks like he will miss for four. belowthey are going to be 2%. there is a raging academic debate on whether or not quantitative easing actually has the firepower to go ahead and increase inflation. you look at what they have done, for half a year, they increased it back in december for another 360 billion in assets purchases. we will see if that will move the needle. it hasn't in germany. .2%.ation came in at before that, the expectations for the entire eurozone .4$%. we are now expecting .3%. we are still so far below that 2% target. it is raising serious questions about the ecb's ability to meet its mandate. francine: hans nichols in berlin. mostxt, as opec's two important members caught double medic ties, we are asking why the oil market is shrugging off any supplies? ♪ francine: welcome back to "the pulse." now let's talk about the escalating diplomatic conflict be

clearly the ecb has to do something.s been doing a lot but mario draghi has been making the case to do more and get inflation back to where it is supposed to be as fast as possible. guy: how threatened is ecb credibility right now? aboutt used to talk having a single needle and the compass and therefore we need to make sure that is what the focus was. the ecb has not had inflation at target for a very long time. >> yes. yes, indeed. this is not helping. at the same time, it can be clearly argued that a lot of this fall in inflation is viewed to the oil price love which is do littlethe ecb can about. what is more worrying is that inflation expectations, the prices people expect to have down the road, are also u becoming unstuck. they are falling more and more the path of oil price. market start to believe less that the ecb can keep euro area on track. this is what is worrying mario draghi. guy: thank you very much. joining us from frankfurt ahead of what 's going to be an interesting meeting on march 10. andrew bailey wil

guy: what will we learn from the ecb's meeting in december?how much pressure mario draghi was under by the committee. bloomberg prison reported five members didn't want to do more or have a lower deposit rate. we get a sense of just how strong that opposition was. he was only able to bring it .3% menacing it could 4% that gives you an indication of what expectations are for inflation five years out. that is down to its lowest levels since october. that is driving some speculation that the ecb will have to do more, especially will miss the soft inflation data. we get the latest figures we will see how much pressure mario draghi is under to do more to get to that price stability goal. given much, indeed. hans nichols running is out of berlin. we have a number of things going on right now. the bank of england is out at 12:00 noon. bridget jones will be joining us. outmarkets are now priced until 2017. will be veryey consistent with what they said over the past couple of meetings. it will highlight the headwinds that they are facing to achieve tha

remember, the ecb's single sodate is an inflation one, that was really the ecb on the spot because theyarkdown. what can they do? back to the question of the positive rate cuts because that will cut their currency, as simon mentioned before, and that will benefit with inflation. so not many choices. francine: antonio, what inflations can you look at? mark carney gave a great speech where he was saying this is what we should be looking at because it showsisinflation, up in court inflation. as a central bank, how do you know how to predict where oil goes? antonio: it is true. headline -- inflation. they escape from that mandate, but they are right -- but you are right, the best way to go coret is to look at inflation. it is very persistent, the weak oil prices, and you have a problem. the core issue here is asset price inflation. i think that has been the story for the last 15 years and has been inflated by what central banks are doing. what they are looking at now is concern and they will see a rapid unraveling. that is where the european central bank is right now. i am not saying that i

you have expectations the ecb will ease.flat, you have risk aversion, the euro swiss goes higher when you would expect it to go lower. richard: the key take away from me was that monetary policy will be easier than anyone thought it -- going to be than anyone than anyone thought it would be directly after the meeting last month. fixed income has been the place to invest so far. jonathan: every year we come into a new year everyone says yields must go higher, and they go lower. my question, we had five years being years of bad as good news because it meant easy fed policy. thes different in the sense bond market has been pricing and the federal reserve will find it hard to go anywhere soon. the market in general, the sentiment shifting from the fed could be damaging for markets? the fed raising rates last month sent a signal that toy would like to be able get off of zero and return to some sort of normality for monetary policy. i think that that spent the markets. as a result, because of the tightening of financial conditions

you also quizzed him on the ecb. of course, he has a previous form when it comes to the ecb.meets tomorrow. he is not confident the ecb will meet its goal this year or next year. he is also not thinking the ecb will have to do too much more on the stimulus front coming is he? more, but he much thinks they will do a little bit on lowering that negative deposit rate and bring it down further into negative territory . it must be said that axel weber 's crystal ball is pretty good. people make outrageous predictions about the price of oil, but they do not come to pass. with axel weber, they have come to pass. ecb wouldthat the come nowhere near their 2% goal of price stability. in 2016 anding that 2017 they will not reach it. it's not that although a call because it does not differ that much from the ecb's own internal forecast. mark: we look forward to that tomorrow. hans nichols, two men to that coverage. it starts tomorrow at 7:45 a.m. new york time in 12:45 p.m. in london. you can tune in on bloomberg television, radio, and bloomberg.com. betty: i know you will be ready for t

it's very important for the ecb. that's what they are concerned about in terms of the outlook for inflation. but i also think that the euro is very important for the ecb. if we see a financial tightening, that's something that could force them to ease again. the euro is strengthening. we look for euro-dollar to go higher on a 12-month horizon, so that's a head wind for the ecb. >> what would drive us? at the same time, if you've got a strengthening u.s. economy, shouldn't the dollar then be heading up? do you still anticipate the fed is going to be tightening? with the bank of japan's move, you could argue that's become less certain whether or not the fed is going to still be hiking the four times they seem to be forecasting. >> that's definitely what the market is speculating about at the moment. only one hike is priced in now. we think relative rates have been in play for quite some time now, but it's more going to be fundamental. that's why we look for it to strengthen. >> okay. thank you very much. very good to s

furtherthat prompt easing from the ecb?t was her cbiz you cannot blame that on oil dip it tells disappointeddraghi the market but the box still has tools. there is no broken senses like we have had in the past few years. calls on different dollar-yen so it will be an interesting payout for this year. the yen could be initially stronger but it will not last. >> thank you for being with us. betty, we're heading to san francisco next. to equity markets are set close in four minutes and we should close higher. ♪ betty: welcome back to "bloomberg markets." markets in europe are finishing their trading day. mark barton is standing by in london with that chart showing not as much read as yesterday. mark what a day, yesterday. of the lossesome from yesterday. up.currency was propped a lot of money into money markets. susan some of the nerves d some of-- it soothe the nerves globally. yesterday had the biggest increase when scheiner devalued its currency. by 3%.e in london is up they were the big decline or yesterday. vw was the big

. -- and the ecb. >> welcome back to countdown in london. it is 19 minutes past 8:00 in frankfurt. department justice accuses volkswagen of installing illegal devices on 600,000 vehicles with a complaint filed on the company. they received from an area of -- approaches and an offer was made. a $30 billion man has been named a chief investment officer. the world's largest asset manager says they could struggle and the federal reserve raises interest rates and sovereign debt lost 2.5%, according to bloomberg. for more on those stories, customers can head to bloomberg. we are talking about challenges in the directory and the weather. >> let's not put too fine a part -- a point on it. these numbers are terrible and will send a shiver down the spines of global competitors. they numbers are down with the sales of the estimates and the directory online presence is up in a fifth of what the market and the estimate was at 5.8% and i cannot tell you the outlier and the silver lining midst to outperform the market with most of the sales coming from fur

that is what the ecb is concerned about. policy for all of europe, not for germany alone. jonathan: the markets are unconvinced at this stage that the authorities have a handle on it. we will do it all tomorrow. "the pulse" is next. ♪ francine: china steps in. after a $590 billion cello. -- seelll off as oil continues this decline. regrets. iran expresses her more sober the attack on the saudi arabian embassy. -- to "the pulse" live in london. i'm francine lacqua.

the ecb.o, they cannot afford to give the impression they are pushing it embassy out into the future and that we will attain their target sometime maybe end of 2017, maybe 2018. that is simply a credibility disaster for them. so, they have to really make it look like they are ready to go. then it's a judgment call about how serious this oil slip is. jonathan: i've asked the question of guess a couple of times -- if you target headline inflation, you'd knowledge it is a problem because of what is happening with the commodity markets, is it really bonds you should be buying? should you go to the commodity markets. if you think that is ridiculous, then why targeted to begin with? jeff: there is a debate. other central banks are doing this as well. earlier this week, the ri was presented as i suggested they need to think about more flexibility in which measure of inflation they target. so, there's something going on in this area. ecb views we cannot simpl, drop our mandate. ourthan: jeff black, se

but the cbr the boj ecb. this is a time when we have slowing global growth. risk premium remains very high. this is a difficult thing for the central banks to try to get on top of. they are continuing to struggle. they have been saying for years now there is only so much they could do. yet fiscal policy makers are doing very little. we think the law diminishing returns kicks in. unintended consequences will become more palpable. francine: when you look at governor kuroda, he's at the forefront of this. and the fact that he is saying he is losing credibility by telling the markets, guiding the markets in one direction. this must've been planned. is it just to show he will do whatever it takes? >> my guess is that in terms of more action they were thinking more of the q.e. territory. i do not think they have -- it m ight be because they realize -- g weake been gettin data in japan this week. given the price and that there has been upside pressure for the thn, more q.e. will not do e trick. if market will buy yen deep they were to do more q.e. the market is thin

ecb president mario draghi, the european close starts right now.re taking you from new york to london in the next hour -- betty: we are taking you from new york to london. >> he says the ecb has plenty of at theents determination, the willingness, and the capacity to use them as well. european stocks rally right across the region. we are on track for our first weekly rise. at the top, the biggest two day increase in over four years. addedllion euros has been in the last couple of days. where oiln a year stocks has been decimated. we have seen basic resources up 7%. forget it was last friday when the stoxx 600 entered a their market falling 20% from its april high. the euro is falling for a third day against the dollar. remember the goldman sachs chief currency strategist? back then on december the third, when the ecb disappointed many in the markets, robin rooks said the euro could fall 3%. goldman sachs said it wasn't so bearish on the euro. brooks has his tail between his legs today. is going to hit $.95 against the u.s. dollar in the next 12 mon

the ecb is conducting quantitative easing. market forces the negative consequences and they ceased to exist. are there any negative consequences at all if running a deficit above 3% at the moment it doesn't seem that there is? what are they? that has to be reimbursed. it is a burden to all of us. jonathan: why does it matter? you cannot do anything under public services. you cannot finance education. you cannot finance environment. you cannot finance security. it is about gaining room to maneuver in order to have a proper economy. we need to go on about the ecb to show great respect not only the way it communicates, but in decisions. they were always appropriate. monetary policies are important, but it cannot do and if he thing -- cannot do everything. this cool consolidation, flexibility, also launching investment. lastly, the states muska want to structural reforms. the key is there. we have to leave it there, thank you very much for joining us. the eu economic affairs commissioner. we come up to the market open, futures are

since the height of optimism around ecb qe. it's happened in stages and even at the end of 2015 markets have clawed back a lot of recent losses. i think that is important to step back, when we are considering the fact that global data has been week. risks around the chinese currency has an weekend and you have also had a pre-severe equity selloff already. it is also interesting if we think about the last six years all stop it was such an easy time and markets rallied significantly -- that is not true. from january 2010 to the middle of 2012, 2.5 years, global equity markets went sideways. so what we are in is another point of those consolidation modes. we do not think there is in our base case another 10% downside from here. we do think markets will continue to chop along and that credit is a more attractive place to be than equities until he have more stability and clarity on the economic front. guy: what would another move by the ecb do? we did see a rally when draghi adicated that we could see reevaluation of monetary policy

what have ecb officials decided? >> they've decided not to make additional moves just yet. they want more time to see the impact of recent market volatility in the region. but going forward there may be something ecb president mario draghi suggested new stimulus could be in store at the next policy meeting. >> euro area inflation dynamics also continue to be weaker than expected. it will therefore be necessarily to review and possibly reconsider our monetary policy stance at our next meeting in early march. >> draghi was speaking after ecb members met at headquarters in germany. they decided to keep the key interest rate unchanged at 0.05%, a record low. they said they will maintain the current scale of their quantitative easing measures. the policymakers decided last month to extend the ecb's bond purchase program by six months. draghi said that downside risks have increased due to a slowdown in emerging economies and volatility in financial markets. >>> stock markets in europe and the u.s. rallied after draghi's dovish comments. tokyo's nikkei opened higher, up 3.13%, 16,

after the ecb left interest rates unchanged. whether they believe further policy has any meaning at all. what does this tell us. >> i think it has tremendous meaning if you sell your product in euros. he managed to crush the euro once again. this i the quarter where our international companies are taking it on the chin. we were looking at the real numbers. we used to do currency. it is very bad for international companies. if this couples with oil going down because the dollar is getting stronger, would mean you shouldn't buy the sucker opening. the only thing that was really important was our jobs claims spike. if there is someone from the fed, they might say, we have to go with draghi, because or inflation rate is low. mr. bull regard said, if inflation keeps going down i-there is no need to continue to raise rates this rapidly. i am looking at employment claims and the economy is soft. >> you did make the comment right before we went on air, jim, that given be that, the dollar is strengthening against the euro. what are we, 1

they really have a tougher job arguably versus the ecb. they need the yen as a tail wind as well for corporates, for the earnings translation. it was a big disappointment last year. they really need to ramp up the pressure this year. a weak yen is going to be an integral part of the process. >> jeffrey, so the call this week is what in terms of fx? we have the fed and bank of japan. what's the obvious play if there is one? >> i think the obvious play is still for the bank of japan right now. the fed caution, that's pretty much in the price. for the boj and fed, how would they react to the ecb last week? they will continue to do whatever it takes to hit their inflation targets. arguably, you know, japan, u.s., they are just as exposed to global head winds on prices. if the ecb is really going to aggressively turn the other way and pursue more easing, then both the central banks are going to be called into question as well. we still think more pressure is going to be on the yen side. on the flip side, though, if you're not too worried about

when 50% of economists surveyed predict the ecb will announce more stimulus this year.s is up 40% from december. that is because the renewed oil price slump. what is your view on that? >> i think it is feasible. the timing -- he will want to keep as much ammunition as he can. we know that draghi strategy is the word qe, doing as much as he can and talks and keeps his ammunition for when it is needed. it is a question of what happens in the global environment, and we are seeing what i believe, a u.s. economy doing much better than the rest of the world. we are seeing secondary derivative numbers falling. we are clearly seeing china on a path that i see as positive for many reasons. the adjustment of expectations to that is still taking place. we had this unknown in terms of what the market forecast is -- terrorism, unanticipated events -- i think the valuations are not cheap. if the market was a bit cheaper, you would need to be at that lower level to bring new buyers into the market. at that point in time, action from the cbe might be better received. nejra: wonderful.

the boj, the ecb and the fed. yes it's up over the week for the month it was like it will fall about 7%. worst month since august. worst january since 2008. every single industry group on the stoxx 600 is going to fall in the month of january led by the banks, the autos, and the resources. roughly 500 stocks have fallen this month. volatility has risen this month. europe's big fear gauge has risen by 26% in january. the most since august. whenever surpassed the levels we saw in august when china devalued the yuan. it was about bonds. bond yields falling to record lows. look at the two-year portion of the curve. record lows in france, belgium, holland and germany. all negative. u.k. two-year debt has had its best year since 2009. back in 2009 the bank of england was buying debt. the bank of england buying debt. i asked simon smith how soon it could be the for the bank of england buys that again. let's check some hardwoods at him. betty: i like what you say about crafty -- what is your name for druggie? -- draghi? s

all of this ahead of the big ecb decision later today. we'll be bringing you special coverage of that decision live from davos and london from 1:30 p.m. cet. >>> welcome back to street signs. the world economic forum in davos. >> and i'm nancy in london. these are your headline. >> to markets in europe trading cautiously following yesterday's heavy selling. investors turning to the ecb meeting in frankfurt for any glimmer of fresh policy measures. >> don't panic. that's my clear message and don't cut at the point of maximum pain. the money in equity tends to be made the days after the really bad days. >> stairs in deutsche bank fall more than 8% after posting a record 6 billion euro loss as litigation and write downs hit the bottom line. >> meanwhile the italian prime minister says the government is concerned by banking sector tensions but the head of investment bank tells cnbc the selling is overdone. >> it's really panicked selling. there's no real understanding. a bit of confusion about the situation in italy. the market is not really

mpc quite clear that the and the ecb rate rises around the table and they are increasingly at the feds well. betty: we're going to have to leave it right there. thank you so much. returning to the european markets, italian starks are the most loved. they are the big losers of 2016 so far. italian banks are dragging down the shares. the finance minister of italy says the our conduct in talks with the commission on a plan to help banks offload bad debt and -- debt. >> we are working on the stream --. talks will not be stalled. we already have in place measures that will help. mark: let's bring in dan. how important is it? in: it's very important here number one, the sheer amount of bad debt that italian banks are holding, over 200 billion euros. it's clearly weighing on the economy. italy is trying to rebound from a recession. growth is still lagging. providing to start credit to businesses and households. they need to have a solution to reduce this level which is among the highest in europe. at the same time, they need to get this issue resolved. italian a banking urges still have to t

david: the ecb would keep the system in play. the ecb with step out.trillion euros in size and would expand further. we have no doubt that the eurozone would stay in tact. the ecb would be causing that. at the end of the day, there will be a price to pay. the yield spreads would be high. germany's major trading partner is the u.k. outside of the eurozone. a weaker sterling, which seems inevitable if the u.k. leaves, with slow growth in germany. julie: thank you. brexit caution for the ecb. futures in the green. gdp, coming up. ♪ david: welcome back to "bloomberg ." futures up a little bit. s&p, dow and nasdaq as well. tom giles can always good to have you. we also joined by brendan greeley. steve will be talking about gdp numbers. we are waiting to find out how we are doing. how the u.s. economy is doing. do we have them? julie: growth a little bit slower than estimated. 0.7%. 0.8% was the estimate. estimates have been coming down gradually. 0.7% was the growth in the fourth quarter. the gdp price index or core pce, the measure of inflation the fed

ecb giving his first policy meeting of the year. >> the european central bank has been struggling to navigate the different -- difficult economic conditions we have seen in 2016. ahead of the ecb, mario draghi did not announce any new measures and he left interest rates unchanged, but he did hint at more stimulus for the european economy in the coming months. that could include reducing banks deposited. cited growing uncertainty and volatility as well as lower oil prices and a slowdown in china, saying the ecb would do whatever it takes to cushion the eu economy, a nudge in inflation towards its 2% goal. >> first of all, we have the power, the willingness, and the determination to act. there are no limits to how far we are willing to deploy our instruments within our mandate to achieve our objective for the rate of inflation, which is below but close to percent. -- 2%. there should not be any doubt about that. we have plenty of instruments, as we know. anchor: draghi's comments were the driving force for the european markets. nearlyices ended with a 2% boost, welcoming the prospect o

we are so far away from the ecb's 2%. we have u.k.acturing, which unexpectedly slowed as well. the message in the u.k. economy is clear, it is primarily led by domestic spending. we are not going to see a u.k. rates hike until at least later this year. betty: mark, let's check in on the bloomberg first word news. courtney donohoe has more. the house returns to work today and repealing obamacare tops its agenda. thise such votes before, could reach the president's desk. adald trump's first campaign will begin airing in new hampshire and iowa. his republicanns rivals. his campaign says he plans to spend $2 million a week. bill clinton spent the first eight months of his wife's presidential campaign behind the scenes and that changes today. he is headlining two rallies in new hampshire. will have more events around the country. traffic is moving again on the mississippi river, but with some restrictions. the mississippi rose quickly after 10 inches of raise -- rain fell. a stretch of the illinois river remains closed and it is still risi

we had those ecb comments. we just got crude inventories and energy is, in fact, helping lead the markets higher. investors looking at all kinds of cues, including the ceo of morgan stanley. james joins "squawk box" this morning and gave us his take on the markets. take a listen to that. every single one of them is down. in three weeks. what happened? what was the trigger point here? you could imagine a correction off the highs. i'm not seeing this kind of violence. >> joining us fidelity investments. it's good to have you back. good morning. >> the market has become uncoupled from fundamentals. do you think that's anywhere near being true? >>. >> certainly the u.s. economy domestically remains in good shape. we're kind of in a mid-cycle expansion heading towards late cycle. what's going on in my mind is a liquidity event. you know, the china story with the yuan coming down and the chinese central bank trying to make that slide more orderly. they draw down on the foreign exchange reserves, and at the same time

the ecb releases the december meeting later today.t month, the announced fresh stimulus packages which failed to excite investors. that would be an understatement. anna: perhaps so. market turmoil spreading from china, spreading for the ecb to take further actions. hans nichols joins us from berlin. what are investors looking for in the report that the ecb will put out later today? hans: well, clarity. we will get the minutes from that the december 3 meeting, where mario draghi disappointed. investors may found out just how much mario draghi was constrained by that faction of hawks. we think from our own reporting, it was about five members that prevented him from doing more. maybe on the negative deposit rate of olivia down from 0.3 to 0.4. need to look at the data out there, i want to talk about five-year forward swaps, a good indication for inflation expectation in five years time. when you look at that, it is the lowest since october. that is spurring some speculation that the ecb will do more in their march meeting. adding to all

i think one important difference between the fed and the ecb is that the ecb has a press conference after meeting. i think that's the direction the fed needs to go because it would be really helpful for fed officials to explain next week how they are reading the latest data and what implications it has relatives to what they were thinking in december. as it is, we will have to wait a few more weeks. janet yellen will give testimony in february to congress, monetary policy testimony. that will be in important opportunity for her to explain how the thinking is evolving. that said, i think there are two scenarios we should have in mind here for the coming year. one of them is that payroll growth continues to be strong in the united states. consumer spending picks up again. i think that scenario would be closer to what fed officials were thinking a month ago. in that scenario, they seem prepared to tighten several times this year will probably bring in the short-term interest rates up to close to 1%. scenario, which is the one i'm concerned about, is the drop in the manufacturing sector and m

the difference is you have ecb contending with q.e. and u.s. raising rates.t will create a challenge for markets. francine: we will talk about the you. -- nthe u.k. next. up next, david cameron has to germany to meet angela merkel. we talk about the referendum. ♪ francine: welcome to "the pulse" live from london. i'm francine lacqua. we are getting breaking news. u.k. pmi numbers are ok. -- are out. mark: risks including a brexit weighing on hiring, weighing on business expectations which fe ll to a three year low. the pmi falling to 55.5 from 5 5.9 in november. economists in a survey had forecast a reading of 55.6 themarket also say today report with the latest service of manufacturing and construction indicates the economy grew .5% in the final quarter of the year, down from the initial .6% estimate less month. the findings suggest the domestic economy, which has been the big path of the economy in the u.k., may have troubles as firms prepare for an increase in the minimum wage, continued fiscal alterity, and this referendum on whether britain should stay o

how will the oil price play into this afternoon's ecb rate decision? and christine lagarde weighs in on the recent turmoil. >> in a way, having a summary of volatility is all right, and it is compatible with this market-driven principle that china is enduring. when you say government can manage volatility, if volatility becomes excessive, yes, but intervening is limited. francine: good morning, this is "surveillance," live from davos. i'm with tom keene. we have had a busy morning. we talkedpanel -- about yuan devaluation. tom: and a fabulous backdrop to a second day of turmoil. here we are with some really -- that was a backdrop to what we heard from it on lagarde. francine: we've been trying to explore the theme of whether central banks have ammunition or something were to go wrong. i think there is a lot of conversation that is needed to reverse the hike. tom: i'm not there yet, but there is a discussion about u.s. banking policy, given the lack of tools left in the toolbox. francine: and nobody can answer the question of when and where we find a fa

guy: we get new data from the ecb in march as well eerie at -- as well.flation are probably coming down. >> i think the december numbers were based on oil north of $50. you are going to get some rejigging to that. jonathan: business conference at the top of the hour. are you expecting that feedback loop from what's happening in markets into the confidence of consumers, investors, and the real economy? >> economists are expecting a giveback on those numbers from the previous readings. you'd be really surprised given the amount of turbulence across markets this year. wouldn't surprise me if there was some feedback into that. jonathan: twos and tens, the lowest since 2008 last week. the market spacing their petition on treasuries. you're not going to hike anytime soon. if you do, one, maybe two. if the fed has to catch-up with that view, i wonder whether it is that using or the pessimism. [indiscernible] >> that will be the turnaround. we had a pretty positive assessment in december. if they suddenly change course, your idea that perhaps there's pessimism is

ecb stimulus, the improving domestic economy. bases, european stocks are trading on 14.2 times estimated earnings. 9% to load the u.s. peers and the cheapest level in almost two years. year we woulds have risen for five consecutive years. last friday the stoxx 600 fell 20% from the april record. >> let's check in on the bloomberg first world news this hour. much more ahead. courtney: forecasters say the store may be one for the record books. a blizzard taking aim at the east coast. it may drop a few feet of snow on washington. new york may get up to a foot by tomorrow. has become a nightmare. all must 5000 flights have been canceled for the next two days. there is a report that russian president vladimir putin and -- vladimir putin asked the shot al-assad to step down. putin sent the head of the military intelligence to deliver the message. putin is a sod's most powerful protector. removal as a precaution. the new stadium for the nfl's return to los angeles hasn't even been built yet. could interfere with radar at los angeles int

we are also seeing inflation well below the ecb's target of 2%. the last inflation number we had was 0.2% in december. what more can the ecb do? can it cut the deposit rate further, or buy concrete bonds? >> first, if we look at the eurozone economy, it is picking up. we had a growth of 1.5% last year, and we expect 1.7% this year. inflation remains too low, it's true, but facing the situation, we have been active and effective. active, look at the decisions of december 3 last year. we decreased interest rates at -.3%, and we expanded our asset purchase programs to march 17. we said we would reinvesting principal. we have been very active and it is effective. converging studies that this policy will bring about half a percentage point of additional inflation this year and almost the same for growth. for the future, let us first look at economic data. this is the most important point. if needed, and i stress the "if," we have the tools in capacity of action. caroline: are these solutions? >> they are on the table. we use them in the past. the first

at the year went on, they looked more like the ecb. brexit wrist and the referendum are things that will create uncertainty. that will make the banks job more difficult. bottom or the year. -- for the year. scottish referendum. in the general elections. the pound is selling off seems premature. right selling the pound now are running the risk of the -- any rate hike decision will depend on the eu referendum. francine: what are the chances of the u.k. leaving the eu? >> less than 20% chance. thank you so much for joining us. he will stick around as our guest for the hour. here are some of the data you should be watching for the week. wednesday, we have the fed minutes and then it is -- job stay on friday. we will see you in a couple of minutes. ♪ francine: welcome back to the health live in bluebirds european headquarters in london. let's head to our courtney at the market desk. mark: we are getting to manufacturing data out of u.k. it cooled in december. it suggests little contribution it to the economy in the final quarter of last yea

it is not the ecb that will solve unemployment.io draghi must give the message the ecb will ensure financial markets continue to function, but the real economy depends elsewhere. francine: this is a great analysis, a great analysis, as knowledge you believe the markets are not preemptive of more sinister. some kind of deflationary spiral . that oil will tangle and shoot back up, or they do not show was with the markets are worried about a debt bubble bursting in china. jacob: oil is a major issue with an implication on every one. everyone. i came back from russia, and i can say you cannot have a conversation without talking about oil, unless you talk about ukraine and syria. oil is a key issue. the newdgment, equilibrium price is much below what it should be. only withw that not jpmorgan, but valuing from $51 to $40 this morning. in your visit to russia we see the dovetail of a weaker oil and a russian ruble touching 84 second. nevertheless, is the currency in freefall. israel,r expertise in do you have a confidence in russian or c

the boj, the ecb and the fed.up over the week for the month it was like it will fall about 7%. worst month since august. worst january since 2008. every single industry group on the stoxx 600 is going to fall in the month of january led by the banks, the

in that perspective, -- in that respect, i don't think it is anything for the ecb to be relieved abouton't have enough in terms of bank credit momentum. things have not improved enough. and a we have political constraints and volatility in europe through the elections in spain and in portugal but through the wave of immigration crisis that stands in the way of full market in -- full market integration. anyonei don't think could put more problems in one sentence that europe is experiencing and you just did. this is portuguese government bonds. this is the explosion -- -- theyse market bonds are the highest since quantity -- quantitative easing was introduced. when there is risk in europe, who cares about qe because they will sell the bonds. lena: this is remarkable. it shows us the widening of the portuguese and german benchmark shows the ecb has to do more quantitative easing. come theback to the peripheraln credit that we are seeing in the emerging markets has been down to the global expansion of central bank balance sheets with the fed no longer printing. manus: i thought that was wh

so far the only game has been the ecb, three or four years after the fed.rprised to see america plan. we have the marshall plan after the second world war. you had one million people come into europe, and you might as well see -- you might will see fiscal stimulus in europe. financing portugal at 1% 10-year is better off. the u.s., growing at 2%, 3%, with full-time unemployment, what difference is it going to make? in equity, we have to sample the price book of asia, at all-time low. if we look at europe, pre-crisis -- francine: based on commodity. davide: we are 35% below. the currency is 35% below. up s&p is 30% or 40% precrisis. tom: we are going to continue this discussion. steven major of hsbc, and davide serra is with us as well. we begin strong on radio. in the next hour, david alpert will join us. he has talked about this for months and months and months. we will do that on bloomberg radio. worldwide, and coast-to-coast. stay with us. ♪ tom: let me first state i am a citizen of the united states. that was one of the themes last night at the debate,

the comment he made to francine right at the start about the ecb. he said mario draghi had a problem with the markets in december and that expectations were way ahead of what the ecb actually did. today president draghi was very forceful. they will have to manage the communication strategy between now and march much more effectively. communication as a two-way street. that really resonated. beatty: the central bank in china is struggling with communications right now, too. we have part of the press conference with mario draghi this morning. adapting our instruments to the changing conditions. the conditions change because some factors are at play. and we are doing whatever is necessary to comply with our mandate. surrendering in front of these global factors, actions. betty: do you think the markets misunderstood the ecb, as george soros is saying? daniel: this was about as clear a signal as a central banker is going to give. the reference to technical stuff was interesting. that makes us wonder, are they going to try something more? they could move

scarlet: you had the ecb and the boj hinting at stimulus. how many of those will follow up with action, or is this rhetoric? >> the bank of canada will wait .o-three months they have a good incentive to do so. the ecb has a good incentive also, and probably will hit the button and the negative for the euro. on the boj side, uncertain. we have a lot of money coming into the dollar in fixed income for safety. is this a cyclical change or structural change and how humans invest in the market? >> it is a structural change. we have people who don't take a they have been a fixed part of the market. u.s. andada and the europe have been investing in foreign equities unhedged basis. what's going to happen is will invest more it home and less abroad, less equities and more on the hedge basis, depending on the country, and a wired to -- a wider variety of fixed income properties. more diversification then. thank you very much. alix: there's a belief in the market that oil prices will be longer, and we are going to dispel the smith, coming up. ♪ -- disp

remember, we do have an ecb meeting and a press later today. >> nicole: u.s. stock market futures this morning. we are off the lows in the morning. that's good news. dow futures down 81, s&p down 8. >> lauren: oil is $28 and 33 cents and gold is $1,098 an ounce. >> nicole: here is how the u.s. dollar is trading. the euro is stronger against the dollar, right now we are looking at the yen, the yen has been -- >> lauren: absolutely. it did go below 2% yesterday and we will update that quote for you momentarily. >> nicole: former pharmaceutical ceo has a date before congress. widely scorn for price gouging. last month the 32-year-old was arrested in new york charged with security, fraud and conspiracy. >> lauren: here is a look at the headlines in today's edition in the wall street journal. here we go. taiwan offer 5.3 billion to take over sharp. then you have gm enters car sharing business. the auto maker is going to compete in the short-term car rental business. they are looking at the future here. red-hot properties as investors retrench. >> nicole: coming up

the ecb press conference yesterday, really a key driver of this pair. here's euro spot against the dollar. 108.52. draghi effectively said he would do whatever it takes and the march meeting is live for changes to monetary policy. another interested observer on what mr. draghi is doing joins us now on bloomberg television. let me take you back out to davos and francine lacqua. francine: thank you so much. i'm pleased to welcome george osborne, the u.k. chancellor of the exchequer. what's so much about going on in the world. china is slowing down. we have economies on the brink. is going toent it be a tougher year? mr. osborne: definitely a tougher start to the year. i would look a bit beyond the markets and say, what's driving these things? china is moving to a consumption-based economy. energy is cheaper. that is a good thing for most families, businesses, and countries in the world. not everyone. got here in europe, you've the eurozone and the european central bank acting like a central bank does in the united states or united kingdom. i would look be

largely, the market will remain aware of the ecb's vigilance.t is unless inflation starts picking up with the euro. if that happens, the risk to the euro will go higher. in terms of the other currencies , if you look at cable, i think it is stored right now. the fundamental case for the u.k. steel remains one for cable appreciation. story about commodity prices, which means they are bottoming out with mild increases further in 2016 plays out, i definitely see further upside in commodities. pronounced, the most is the canadian dollar. it has undergone some extreme pressure in the second half of 2015. guy: we will come back to this. we will talk about commodities in a few minutes. up next, tensions rise and so does the price of oil. saudi arabia cut ties with iran. ♪ jonathan: welcome back to "on the move." the 5100 is down by 1.8% this. .8% this morning. caroline: asian stocks traded lower. escalating middle east tensions made investors reconsider risk assets. this has been the longest weakening streak since 2009. ferrari started trading on the m

>> it is less than what the ecb did in the past. bit of shakespeare, signifying really nothing. this is on new deposits that the bank puts at the bank, so this is only on marginal deposits. this is more symbolic than anything else and it had an impact on markets in japan, particularly j jp markets. this is probably where they wanted to do with those markets. joe: when i saw the news, there was a lot of eye rolling, this will really work, they have a reputation for throwing seemingly and that now working. you do not think this will have an effect? >> this is not really meaningful in the sense of the economy. they have a history of underwhelming. it is a 5-4 vote, so it was barely passed. it is on new deposits, not existing deposits. it is more symbolic than anything else and maybe some reaction is the expectation that by taking this action, they will maybe put action on the parts of other banks to follow. the: that is a great point yen is against the u.n. so this has more pressure in china? >> keep it in perspective. the yen was down

we will talk about the next move chinae fed, the ecb and and how much more dovish the ecb is going to be. we are live from the world economic forum that starts tomorrow morning. we will be talking the biggest , includingsiness jpmorgan, blackstone and marriott. ♪ betty: good morning and welcome back, we are one week away from the first fed meeting of the year. should we expect any surprises? so, he thinksks the damage is done by the interest rate increase, already. >> in december 16 increase was ill advised, i think they should've done that more than two years ago when the bug is when the bubble was less -- was much smaller. duringfor a rate cut sometime in 2016. it is a matter of whether they raise it one more time in 2016 -- in march. betty: i want to bring back pim co's managing director. 2016? cut in >> that is the world we have been living in since the great financial crisis. every central bank that height interest rates since 2009 has been forced to climb back down. it is different for the fed, so i think it is unlikely that that that will have to cut rates this year. i don't se

when comes to china or what the ecb is doing? mark: the fed is looking at the headwinds of the stronger dollar and that will clearly impact trade and exports. upsetting that is the fact that government is going to contribute to growth this year about half a percent. the consumer is as strong as they've been in 10 years and the banks are healthy. if you actually look going the economy is going to go from headwinds to tailwind. tom: can any central-bank get out front of the debate? is there any proof they will be successful in that? mickey: their data dependent. don't lose sight of their long-term policy statement. estimate of their the natural rate of unemployment because wages have not increased yet. it is clear they are having a serious internal debate about their inflation forecasts. that will show up in the minutes. tom: the idea that inflation dynamics link into labor dynamics. natural ratee predict what does it mean to see that so-called natural rate come down? the: you're talking about rate of employment when we see labor m

contrast to the ecb and the bank of england.ft, weaying is need to focus on asset bubbles. >> i have always taken the view, that was wrong. one cannot ignore asset bubbles. >> we have a few more issues to get to. it is a busy day, which kicks off the first few days of 2016. inflation numbers are due out tomorrow. on wednesday, we get the fed minutes for the december meeting. manus: will invalidate the unanimous decision to hike interest rates? year takeext, new over. the island could announce a deal as early as this week. we have full analysis next. ♪ anna: welcome back, this is "countdown." caroline: a drugmaker is in advanced talks to buy arrival -- a rival. the deal may be announced as soon as this week. search the most in a year overnight. japanese carmakers may provide support for the company. it is involved in the biggest recall in history. for already starts trading -- --rari straight trading started trading. the chrysler distributed remaining 8% stake to shareholders. thank you very much. the price tag is $32 million. th