oil is going up and is going to help the ecb's work, but what the ecb really needs is wages and serviceso rise again because this would make the level of inflation sustainable and stable. let's not forget, this is important because higher foration means it is easier other countries to work down there pile of debt. this is important for countries like italy and greece. betty: i want to talk about the german jobs numbers, unemployment falling to a record. how much of that can be a treated to what we have seen so far? -- attributed to what we have seen so far? the german economy has to the ecb because of low rates and the weaker euro is helping and more consumer spending because of the low inflation and low rate. it is all helping the german economy to do well, right now. consumer spending is high, generalment is low and environment is better and let's not forget that the euro area is recovering and it also helps the german economy because it means that the u.n. can i german exports. betty: is all of that turning sentiment around on the ecb? something like a quarter of a trillion dollars in

i hope he will tell us the secret formula that the ecb will going to be -- that the ecb is going to bened world gdp. here is world gdp back 20 years with a presidential four-year moving average. here is the nirvana of the moment before the crisis for world gdp. we came down ugly but we have rebounded. why do we feel so miserable if we have come back not to where we were but pretty close? carl: is that the growth rate or the level? tom: that is the year over year growth rate. levelgraph out the world of gdp. it has not come back. draw up the level of g7 or world industrial production. tom: which is a lot worse. carl: we are down 10% from where we were in 2008. we have seen a period of growth after the crash, but we have not recovered. tom: we will look at industrial production with carl weinberg. coming up later today, lori at robert shiller of yale university. look for that in the 10:00 a.m. hour. ller on our exuberance. "bloomberg surveillance." ♪ tom: good "bloomberg surveillance" morning. right now, i was a bit distracted this weekend, i don't know about you. megan murphy is with a

no emergency for the ecb to jump in.arly this concern of negative interest rates hurting interest income into small savers is something that warns the ecb. >> you're staying with us. get your fx questions through. if you want to know where the dollar is going, the aussie dollar. >> there's just too much option with the fed. >> that, too. get them. we're at twitter. >> @nancy cnbc. >> @louisabojesen. >>> if you're thinking of studying, this is a course that might be interesting. angelina jolie has been appointed visiting professor at the london school of economics. the hollywood actress will be teaching a masters course on the impact of war on women at the university center for women, peace and security. that's a department that she co-founded with the former british secretary william haig. jolie was also special enjoy for the u.n.'s refugee agency says she's lacking forward to sharing experiences with students. women and children are the most vulnerable and some would argue the greatest victims of war. abuse to no end. a

mark: the next ecb meeting is on thursday.t expecting any stimulus, so what is the message likely to be? paul: it is an intriguing one for the ecb given there is not going to be much to announce in the way of news. maybe we will hear more about the corporate bond purchase program and optimistic talk about an ongoing long-term banking program, but mediocre credit numbers published today and credit to households slowed. i think you will see a lot of mario draghi telling governments they need to get their act together. rather lackluster in their reforms. message, get your because monetary policy cannot do it alone and cannot do it forever. mark: paul gordon, thank you very much. have a look at what is happening to the asset classes i have chosen today. stocks are a little bit lower in europe but still the stoxx 600 is on track for the fourth weekly gain, the most since march. it is on track for its third straight monthly gain, the most since march 2015. the bloomberg dollar spot index, it has risen seven consecutive mays. sell in

ecb easing happened much later than easing in the u.s. or the u.k.e is seeing the fruits of that easing now. the ecb probably eased more later this year as well. mark: nicolas, stay there. more in a second. up next, thousands demonstrated in greece as the government considers pension and tax reform. will the changes be enough to appease the country's creditors? we are live in athens, next. ♪ mark: let's get the bloomberg business flash. to buytotal has agreed french battery maker safed in a 959 euro deal. offer50 euro a share represents an almost 40% premium to saft's closing price. the owner of the world's biggest shipping line says negative interest rates are hurting the industry by delaying consolidation. the ceo of moeller-maersk said the environment means that consolidation will be much slower because it is easy for banks to keep week shipping companies above water. an example of how negative interest rate are distorting markets. disney's new shanghai theme park is proving popular the for its official opening. the company held a trial run and pu

what do we think the ecb will do?hink there is a good chance that the next six months, we have a bit of a paul's because pause.it of a -- the credit to the private sector is improving. a natural case for waiting and do a little bit less. it might very well fit in nicely with the german election cycle without ecb doing something different as of the german election cycle. but because data is stabilizing. the only change will probably expect is the closer we come to end, which is indicated as much 2017 and will push that out more. matt: guys question is fascinating. we had last week in the u.s., robert kaplan saying the fed does not care about the political situation and could raise rates into election-year if they feel that is a proper move. is the ecb more political? especially considering the possibility of a brexit here. the ecb seems have more than just the fed simple dual economic mandate. it seems to be a political organization. michael: i think what you -- a larges just number of different countries and central b

i think ecb want a virtual cycle here. they want companies to level out.t's been shown that european companies have been proven for too long. in a way, they're at risk, if they don't level out they'll be bought themselves. the ecb feels if they can motivate the leveraging in europe, we can get more bond supply. we can buy back and it becomes a virtual cycle. >> i think you've brought some charts as well. maybe just put up one of the charts. i'm not sure what the gallery is, you talk about the negative as the new norm. >> yes. >> here we go. the new norm for the time being, the new norm for the future, a couple years, how long is that new norm? >> new norm until we can generate sustainable impressionable recession in countries. everybody wants currency weakness.dollar is weak, the euro is getting stronger. so increasingly, we're in a world of more and morme and mormon tear policy. >> as we get closer to the g-7, you can bet that's a topic of discussion. you made the point that ecb wants the corporates to level out and spend. in we get there how do you think

ecb policy is essential to restoring a robust economy. he is defending the ecb.s yesterday, in the face of german criticism. up next, profit plunges at ubs, and sergio ermotti says conditions remain tough. we haven't speaking to the ceo. that's next. ♪ anna: welcome back. move." "on the ubs reported first quarter profits dropped by 64%, stock trading sharply lower this morning, down by 4.2% this hour. sergio ermotti spoke to guy johnson about the earnings figures. >> if i look at the kind of market conditions we have been operating at as a result of resilience, a profitability in those environments is not easy. most importantly, we have been doing that while keeping the opportunity and the possibility in a more normalized environment to deliver stronger results. areink that overall, there -- i would say that considering the environment, i am pleased to see how we operated. guy: you pretty much warned that things would be tough. you should have been even more clear. >> i think i was pretty clear. think that it is our responsibility to work to the market conditions

we think the ecb is down for now.k we will continue to have low interest rates coming from the ecb and this discussion may not accelerate -- we are closely watching the inflation forecast numbers they put out for 2018, but we think the ecb is done for now. favor, iomes to german think there is a lot of discussion and controversy about low interest rates but on the other hand if you look at private consumption german consumers are out there quite solidly. consumption has been growing to close to 2%. guy: isn't that the point? you want savers out there? you want to spend money and not save money? this is evidence of the fact that they are being punished. >> right. but at the same time they are consuming like they have really done before. the average private consumption between 95 and 2005 was below 1% and nowadays are 2%. you look at consumer confidence measures and that number has rarely been higher. i don't want to sound too optimistic, but i think low interest rates are hurting german growth by increasing savings. it

the ecb will probably adopt similar language than we did last time.see the fruits of our labor and let our impact of place. have done take one of the interesting metrics that we look at and one of the goals that the ecb had when they started qe was to get their balance sheet of to levels that we saw in 2012. mark: these are the two peaks, aren't they? that is what you said in september 2014. richard: qe is going to go on until least next year so they will exceed the balance sheets from 2012, so from that point of view, mission a couple o couple accomplished. richard: the pmi data in europe was weaker as well. ,he ecb says we have the tools but we have yet to see that really take hold and i think that is the thing investors are looking at going forward. mark: thanks for joining us, richard jones. let's now take a look at the broader u.s. markets. onare seeing the s&p 500 track for the biggest weekly event, rising 3/10 of 1%. , butow is up 2/10 of 1% fluctuating a bit ahead of that speech that we have from the fed chair janet yellen this afternoon. abig

the ecb, i think that then poses a huge issue.ause their next meeting of choice in september, and if we choose to leave in june, i think in september we cut into the rate game. and taking it even more negative. they will be doing more qe even longer. not this issue for the u.k., more european more generally. anna: we see markets reacting to a series of paul's this week that look increasingly leaning toward on the remaining cider. not just the paul's, but the bookmakers, and the function on the bloomberg. now forecasting below 20% probability. this is the number crunching score. we have seen some of these moves in the polls as well. but when you look at them, we think the breakup towards the remain side, every time we have come back to this sort of 50-50 split once again. how does it feel as we get closer to june? onlinethis issue of polling. let us be clear. there are too many. the online polls are basically 50-50. and the other ones are more like 67% on balance in favor of remaining. that has been the case for the last few weeks.

do you think there is a lesson here for the ecb?esting -- what is interesting is that the riksbank is very sensitive to what the ecb is doing. the strength of the krone is what they are most scared about. in terms of the ecb, the riks bank does not have a lot of freedom to act. they have to act in order of what the ecb is doing. they are being proactive to try to prevent that krone strengthening from happening. mark: thank you for joining us. that's our bloomberg news reporter in stockholm. coming up, it is battle of the charts. it is sherry's first time as a judge. you better be fair. sherry: i'm going to be judging and what you look like or if the charts are pretty or not, i guess. ♪ sherry: it is time now for our global battle of the charts where we take a look at some of the most telling charts of the day and what they mean for investors. you can access these charts on bloomberg by running the function features at the bottom of your screen. kicking things off is all over .enick coul talk about pessimistic. oliver: what i'm looki

going into the ecb meeting on thursday, the ecb will take the latest data to revise its inflation projectionsand next year. we also expect upgrades to the growth projections. on the whole, more constructive outlook expected from the governing council. it hasng the data today, to be a big disappointment relative to the consensus of change. 's not overly happy about what it is seeing but it is not as disappointed as it used to be in recent quarters. on the whole, and improving and fairly constructive outlook for the eurozone expected to be signaled on thursday. caroline: how do we play that fx point of view? -- to whats a case extent will that be credible and we are what extent seeing draghi act. on the whole, we think there will be two key implications. especiallyd recover if it signals the euro is not a regarding appreciation. because it is focused on the domestic side of the economy. side, depending on how credible the message is, the markets will be encouraged by risks or could turn more defensive. in juneto the meeting or july we do expect a rate hike. may not beput extended anytime soon.

that is the problem the ecb has had.ks have not been able to pass on the credit to get the lending the ecb would want. guy: whose fault is that? is that management's fault or the regulator's fault? jonathan: we come back to regulation. the regulation- had a tough position. do you scare people by telling them the banks are not solvent, or, do you let earnings slowly repair the balance sheets? that is what the ecb has allowed them to do. the regulator is complicit with management. guy: is deutsche a special case? other investment banks, other uisse, ubs,its they have other ways to reshapes the portfolio. jonathan: there are clearly banks that are able to withstand what is going on, they can withstand the crisis better than others. there are differences, but it is a pan eurozone banking problem. the u.k. has been slightly better at raising capital earlier, writing off loans quicker, not as quickly as they -- but they are one stage further than the eurozone banks. when we are talking about the recovery in europe, hopefully w

what does it talk about the conditions or restrictions of the ecb?> one of the conditions of the ecb is to increase for a total of 1 billion. yesterday, the ceo said is we're going to do another half, more or less. so, yeah, surprised not that much. let's be honest. the market is not taking it well. but there is another half billion of further provision to be taken. and also the increase is not going to happen tomorrow. it's going to take a few weeks more. so a large increase. bancopopolare at 1%. >> did it give the green light? >> the major is going to go on. subject to increase, the measure is going to be approved so we have to expect the closing later apparently. >> let's talk about some of the banks, larger banks, unicredit results came in a bit strong. are investors right to be worried about this. >> yes, they are, as they are with deutsche bank. the regulation in europe is tightening for a time. and will be tightening. so you have banks, large banks like unicredit and deutsche bank that are struggling to keep the amount of assets low. as the as

the ecb's corporate bond purchase program. because you have talked about high yield but that is not included. so looking elsewhere what do you expect when this kicks off in two weeks. >> super powerful what the are ecb is doing. what you are creating for corporate bonds and government bonds is net negative supply. with a kicker. the kicker of course is that negative deposit rate of minus 40 basis points. so that will keep yields low. and some obvious beneficiaries of that. the likes of spain, italy, other periphery countries should see their yields at decline. and when you look at the corporate side that should further drive those yields lower. >> the european financials, has been one of the main --. we have spoke on the quests on this show recently saying there are values to be found in pockets. one talking about value in the french banking sector he thought. is it time now to buy into these banks given all the stimulus the ecb is pushing forth? >> it is. banks in aggregate look good in europe. europe is now growing. banks in

the question is, is this enough to satisfy the ecb? >> well, this is a question that is good for carige, but also for banca which held a board meeting during the night to decide the price for its right issue that will have to gather 1 billion euro to save the bank. in general, we are here in front of this italian central bank. with the report in a few minute, it's not business as usual. italian banks had such a tough and difficult year. if you look at numbers of the market, we are down 41% with the banks leaning 12 months, 30%, year to date which is an underperformer, nearly 50% on the stoxx 600 of the banks. why is that? is that because fundamentals are so bad? not exactly. but there's a lack of trust on the quality of these banks. and we had to respond how much and how long will it take to start here in a real market of nonperforming loans? atlanta, a newly launched fund in april will start to invest in nonperforming loans but the market is asking will it be enough? do they have enough money to not only save the two banks, intesa, bu

ecb policy has been to improve the financial transmission mechanism.he banks have started to complain that negative interest rates are hurting their ability to lend. the ecb is trying to do the best thing by keeping money cheat but is hurting them online for the banks. francine: so you are lucky you don't work for a bank right now. but i guess you miss priced risk , or financial assets are being mispriced. does that link into your world? lars: we have an interesting situation. we're not borrowing money. you are generating cash. francine: good problem to have. lars: but our shareholders, they in some ways would prefer we invested the money. they can't invest the money elsewhere in guinea return. we are very prudent about this. we don't want to accumulate liquidity. we give excess liquidity knocked to the shareholders every year. francine: lars, great conversation. lars rhodium sorenson -- lars rebien soerensen. we will be talking about accident pound next. breaking news out of honda. there has been quite a lot of news out of carmakers. volkswagen reduci

we have the ecb potentially pollute more stimulus after the recess.e have seen the incremental impact of these policy measures by the bank of japan and the ecb, they are not having the impact on their currency. tom: we will continue with kamal sharma, particularly the yield curve. the yield curve is flattening. francine, i want to drive that microsoft story forward. this is a bomber disaster. no other way to push it. look at the phone transaction of microsoft, and this is one step in the debacle. a near $1 billion impairment. francine: the other news we have speak of is apple. we understand that a court ruling in the last 15 minutes says that apple cannot open standalone stores in india. francine: -- tom: i missed that completely. up,ng up, he cannot -- economic finance. fromtien galy will join us deutsche bank. good morning. ♪ francine: welcome back. inm francie blackwell london. we need to talk about greece and the corporate stories. let's get to the bloomberg business flash. >> as we reported, job cuts are on the way in microsoft. the company will

mark: the ecb vice president with bloomberg's matt miller today.ot some breaking news on herbalife. julie: the company has come to a settlement over a probe as to whether or not is it is a pyramid scheme as bill ackman famously alleged, is citingyork post" an announcement between herbalife and the fcc today. the post said it cannot learn what financial penalty was involved, although it is said to be a sizable one. it is notwever that likely to change the fundamental business model of herbalife. shares are taking a leg up on this news. they have done well over the last year because the company has made indications that a settlement was at least approaching here. there seems to be some optimism that herbalife might be able to put this chapter behind it. that is one of the reasons we have seen the stock rally not just today but over the past six months or so as this has seemed to get closer. i'm sending it back to you, but i will see you in a few minutes because we are going head-to-head. mark: it is the battle of the charts. i face off with our very

the ecb still doing a huge much of stimulus.e fed wants to move rates, how will that impact the dollar or will it tighten financial conditions and create a slowdown? >> i think the market is pushing back on that. >> what are your expectations. what is your expectation when you get a move. we are hearing in july, what is a press conference between friends? >> we would still say the second half of the year is more likely. like to see q2 growth move forward. those middle of q1 we had sorts of numbers and look where we ended up. the last report was pretty lackluster against expectations. if that continues to trail down they will really question whether tonight is the right time. i have a nice chart here on the bloomberg. we are talking about low levels on the u.s. 10 year. we haven't seen these kinds of level since 1962. expectations around inflation are pretty low. >> you could say that. the other thing is huge demand for u.s. assets. if you look at a global government bond index a universe of court government bonds is about $22 tr

this is central-bank policy out of the ecb and japan. mark: that is true.ds globally are very very low. the attractiveness of the yield is relatively high. guy: so, what happens to the front end of the curve, to you think? treasuries look fairly anchored. the demand is great. but it is hard to see how the tenure portion of the curve is going to move. mark: that is right. we see a bit of a flattening. we don't see interest rates going up aggressively anyway, but there are going to be rate rises. coming through. but that is not going to push bond yields much higher, we don't think. matt: i wonder if this opens the door for more selling. obviously, well, canada is a very small country compared to the u.s. as far as population is concerned, but trudeau is forcing his agenda for more spending on infrastructure. we had that call with the u.s. as well. obviously, the japanese are spending as much as. they can hardly going to see -- as much as they can. are we going to see more sovereign debt flooding the market,? mark: that is going to be hard to see. i can see wh

and the big one would be the ecb as the fed continues to ease further and further. the announcement in march shows them increasing the program further. that's doing wonders for the vending standards in the eurozone that couldn't to cheapen. and the big one where they stop by the corporate bonds in the region. that's naturally going to yield hungry investors of the risk curve into the high-end space supported as well. >> it's having a ripple effect even though the high bonds are included in the ecb bond itself. what does this mean from the corporate angle? today we are looking at the mega merger coming from bayer and the proposed part is somewhat in debt. is the this a sign to take on more favorable questions as a result of the easing of the ecb conditions? >> yeah, absolutely. we have seen increased flow and issuance into the eurozone high end market because of that lending or borrowing right now that is much cheaper than in the u.s. so it continues to be an attractive place to wish you debt. and because the fields and risks of goods, investors are hungry for it. >>

payrolls friday, and ecb decision and opec in vienna.hina csi 300 trading much higher, closing up 3.35%. a flash crash in the futures market having a lot of attention in china. that is the big event payrolls, it is a softer dollar coming off a two month high. as risk comes off the boil just a little bit, look to the commodity market, gold on a nine day losing streak. 1%.nap that, up 6/10 of .rent down about one half of 1% wti trading at a little bit of a premium to brent, down for tenths of 1%. what a week we have over the next four days. david: we have a lot to look forward to. we are just under two hours before the opening bell. euro area consumer prices failed to increase for a fourth consecutive month. quite a day of trading in asia. chinese stock index futures plunged by the daily lannett before snapping back in less than a minute. the csi" 4%. profit at volkswagen crumbled 86%, highlighting the challenge the carmaker faces emerging from the cheating emissions scandal. , governmentraq forces are slowly making process -- progress in

ecb on hold? chris: i think so, for now. european recovery looks better than many other parts of the world. i think so. anna: we had all of those ecb voices in the last conversation, talking about the need for structural change. does feel like a baton passing. chris watling, ceo and chief market strategist at longview economics. up next, joined by sir make rake, getting his thoughts on everything from brexit to telecom, to the middle east to banking. we will spend half an hour with mike rake, here on "countdown." 6:26 here. we will take a short break. ♪ anna: welcome back. 6:30 in london. 7:30 in brussels. let us get the bloomberg first word news. here is selina wang. ina: the $2.9 trillion hedge fund industry may lose a quarter, according to tony james, blackstone's billionaire president. he said the industry, having the worst start since the global financial crisis, faces a day of reckoning and shrinking that will be pretty painful for a lot of places. alibaba shares have fallen the most in four months, after the e-commerc

of course, we had that interview with vitor constancio, ecb vice president.lenge for sure. that does it for "bloomberg ." very much. "bloomberg markets" continues next with a rally in global equity markets. the dollar yen on the move and a significantly stronger pound to go with it. ♪ are i am shery ahn. mark: this is a bloomberg markets on bloomberg television. let's go straight to our markets desk. julie hyman is standing by to break some numbers. julie: they're surprisingly good. we are seeing this coming in at 19,000. print it also meets the month over month again. new home sales have been lagging. this is aike surprisingly strong month for these numbers. something to note, it's a much smaller orton of the housing market than existing home sales. this is something we've been watching lag to some degree. i've got a chart from bloomberg intelligence from the

ecb as a major buyer. how much will this be affecting liquidity?e corporate markets, the nonfinancial markets, it has outperformed other assets for example. that is only basis that we know have this big, less price sensitive buyer that will take quite out quite a bit of paper y month. in my view, the corporate market in europe, which has a yield of 1.5%, you have to factor in the ecb purchase program to make sense of that number. but is very interesting is that the treasury market component has a negative yield. therefore, you get more on spread in corporate, than you do in yield. it has been that way for a little while, but that spread continues to widen. so, corporate spreads are wider than corporate bond yields. it is very and usual, this discussion around negative interest rates, and how long and how sustainable is that. the ecb seems to be moving from further rate cuts to more asset purchases, which would suggest the bond market looks very expensive. guy: how do you look at a car company? as something that makes cars and gives them to us and t

is there any way out of this for gom with ecb continuing to negative? does the central bank have to turn around before banks can start to become a good investment? george: that has confounded a lot of market participants. i would argue you don't need the ecb to reverse their rate loosening regime to have .uropean banks work ar general uncertainty macro economically, banks are going to be the focal point with respect to that and markets will selloff. rates have split people but what the ecb has done is created a profitable negative rate regime where the banks can make money in negative rates unlike what you are seeing in japan. i don't think when you think about fundamentals that is going to be dispositive. matt: you are helping to manage more than $4 billion in global assets. how important for you is this brexit vote? do you try to look at investments without taking a possible british exit from the eu into account? george: i think it's irresponsible not to account for the risk of brexit. we try to do is think about the ramifications of such an exit both

we hear from the ecb vice president. that interview, including his thoughts on how banks might absorb a brexit shot. next. ♪ scarlet: i'm scarlet fu. computer sciences says that it's merging with the tech services division of hewlett-packard enterprises. exchange has stock an expected shareholder value of a $.5 billion. it's expected to create 1.5 billion dollars in its first year, with each company owning roughly half of the entity. shares of both companies are soaring in late trading. employees were fired at the request of u.s. authorities, among two the people dismissed in 2014 as part of their settlement with the u.s. over valley -- violations of american law. they won their jobs back after filing wrongful dismissal cases. are making athey strategic investment in uber and will offer auto leases for the drivers. by leasing the cars they will expand their program including enterprise holdings. that is the bloomberg is this rush. europeanoday the central bank issued a warning to markets over issues of slowing growth in

the ecb supporting this act tivoli?tois better goes every transaction including in the united states. deal.ot a dublin like tax it goes back to the idea that there is week nominal gdp and here is a new ceo and we have to row, how do you do that much of my you by monsanto. jon: the big report in the financial world friday was the moody's report for non-financial u.s. companies of about $1 trillion. tom: i would suggest that there is a bet by elite corporations like bayer and monsanto that we will not get a boy and gdp. buoyant and gdp -- a gdp. jon: it's a fascinating story, thank you. tune in to bloomberg radio. tom: my bowtie today is the same as vonnie's look. vonnie: we seem to be sinking up together. coming up, oil is lower for a fourth day as producers in canada resume operations and they boost exports. is this the end of the oil rally? we will discuss that next. ♪ vonnie: this is "bloomberg ." up, steve ratner will join us. time for the bloomberg business flash. erry: there is an order from 100 jets. is moree

the ecb makes it easier for politicians to sit on their haunches, but it is simply not the ecb's problemry clearly defined objectives, and they are trying to achieve it. francine: and also, when you listen to mario draghi, he says i am giving you a government when it will, so use it wisely. michelle: it is definitely -- willem: it is definitely not the ecb's fall. it is the political classes that have continued to do so. no fiscal stimulus, minimal reform, and a lot of talk, and indeed verbal abuse at times of mr. draghi. it is very undeserving. francine: thank you so much, willem buiter. coming up on bloomberg markets, .t is mohamed el-erian that is at 11:00 a.m. in new york, 4:00 p.m. in london. it is jobs day. a lot of the markets around the world are taking it in their stride, selling off a little bit , futures at the negative. ♪ jobs day.it is francine lacqua with tom keene. let's get to bloomberg first word news with nejra cehic. nejra: in the u.k., voters in global and regional elections gave no sign they are ready to defy their leaders and leave the european union. david cameron

should the ecb get rid of them?i think there is no justification for getting rid of the 500 euros note. clearly, savers should be worried, but interest rates are low because the economic situation is still fragile. i think that if europe gets back to growth, interest rates will also increase. nots really in the interest just of the unemployed, but also of savers, to get structural reforms going so that a recovery really comes. fuest, thank you very much indeed. that is it for "countdown." "on the move" is next, with me. ♪ show me movies with romance. show me more like this. show me "previously watched." what's recommended for me. x1 makes it easy to find what you love. call or go online and switch to x1. only with xfinity. show show me more like this. s. show me "previously watched." what's recommended for me. x1 makes it easy to find what blows you away. call or go online and switch to x1. only with xfinity. guy: welcome to "on the move." we are counting you down to the european open. i am guy johnson. japanese sto

the ecb president hits back at critics and that savers cannot expect returns without economic reforms to rekindle demand. it is just gone 6:00 here in london. it has just gone 7:00 in berlin. in terms of these nubbers from commerzbank, the net profit, that is against a forecast of 160 million euros. just a touch above or in line of the forecast. in the ratio. 148loan-loss provision million and the estimate was 170 million so it looks as if they're having to make fewer provisions for loan losses than had been expected. before loan-loss provisions or 2.3 one billion -- 2.31 billion. the low interest rate we find ourselves in means that barclays suggesting that net interest income would most likely be dampened. keep an eye on what they say about that. another big theme has been cost-cutting. they are talking about aiming to keep their cost base stable. this deal see a full year moderate loss in long provisions. there talking about considering increasing the strategy of market share. we had already heard from the ceo at the agm that matching last year's profit would be tougher given the s

the ecb has done that through credit easing; boj may follow.u very much for joining us; good to have you on the program. the head of emerging markets macro at invesco. that will do it for "countdown." "on the move" is up next. market looking a bit sluggish at the start of european trading. ♪ guy: welcome to "on the move." 7:30 in london. we are counting you down to the european open; i'm guy johnson alongside caroline hyde in germany. this is what we are watching. as thelears her desk impeachment debate drags on in it now looksd clear that it will be her last day as president. what next for brazil? nissan and mitsubishi enter talks amid a fuel economy scandal, but will it really be in the driving seat? nd

the ecb, we're getting headlines accommodative policy stance have warranted.llar continues to strengthen from here, isn't that bad news for all emerging market investments? the: it is bad news for commodity exporter, such as brazil, mexico, south africa and countries which are dependent on foreign capital. turkey would be one of those. south africa, again another one of those. the countries that have large surpluses that have a huge foreign exchange reserves, such as china, korea, taiwan, those countries will be less affected. overall, the benchmark that we have seen will probably give up some of its gains. within emerging markets, partly the asian economy and the ones with strong external balances will do better. matt: what you think about the asian economy right now? china has been a topic of conversation a lot lately, as lending seems to be getting out of control their -- out of control there. the sinking yuan makes it difficult for the japanese to strengthen their yen. a summer dollar -- a stronger dollar is a blessing across the board. gary: china has bee

borrowers to dig into that give her pocket of money when the ecb starts buying.lice: does that turn off if we continue to see spreads widen? >> i think it will turn off for the more opportunistic guys look the real cheap funding, as prices normalize, the stronger balance sheet guys are the ones who will still need to come and refinance. alex len if you see there is a widening we're seeing, -- alix: if you see there is a widening were seeing, how long will this go? >> last couple of weeks, we are susceptible to headlines. there is a huge amount of doubt although the words we had earlier today had little impact. the risk is priced in already. we have many headlines to trade through. i think volatility will pick up in the short term. alice: most risk, europe or u.s.? >> i would probably by the european debt because of the package in june. longer-term from a fundamental perspective. alix: good to have you. still ahead, another intense 24 hours in brazil after the senate most to suspend -- and the vice president named acting president. the challenges he faces in terms

the ecb meets tomorrow, opec begins its meeting in vienna on thursday. what's on the agenda. stocksemerging-market are back, rising to its highest levels in three weeks. filledrency gap has been by men at the biggest banks but now women are taking the reins. what is causing the shift? 30 mi

we will speak with the vice president of the ecb. aflac, a business that has a lot of business in japan. we will talk about how he is handling those negative interest rates. that is coming up on bloomberg . tom: it is a joy to speak with richard haass on the council of foreign relations -- on the council on foreign relations. was the black fry -- the black fly at the commencement speech? richard: fortunately not. tom: there is ambassador haass, robed for the students. there was no passion, right? you did not go to passionate. what did you say? theard: that this was beginning of their education, not the end. and a piece of that education going forward, how to be about the world. simply the world of globalization will be so fundamental to their lives, that they had to understand it. tom: what is different here, it the excitement of digital and speed and logistics making for a new globalization. richard: there is opportunity, risk, but either way it is reality. whether as a citizen or a worker, you have to know about the world in or

helicopter money is not a topic for the ecb.e is not in favor of the helicopter money discussions. i want to wrap this slightly back to brexit if you will allow me. he is not in favor of helicopter money. the head of the bank of england defended his position to talk about recession. michael: the helicopter money discussion is an interesting one. if you break it down, what is it? it is not throwing money out of a helicopter but having the central bank keep policy loose and buy government bonds. demand up.mestic looking at the history, you can already see the distinction between the eu and bit -- the eurozone at the u.k.. last time, when we did qe, the government kept -- kept the budget deficits high. eurozonerasts with the where during the crisis, there was a lot of pressure on governments to reduce their spending to get within the gdp deficits. what that means is we have the where it in the u.k. has not gone as far as helicopter money. you can see the impact of what happens when you have a central bank that keeps policy loose. a

with negative yields out to eight years, that as a result of the ecb buying.g to start by -- it's the buying is going to stop by march of 2017, there has to be a correction. vonnie: it does not have to stop, though. carl: yes it does. it is law. it comes from bankruptcy law with europe. allowed to do that. tom: i have to rip up the script right now. renzirence, italy, mr. says he has discussed japanese investments in italy, and most abertantly counts on mr. for success. you have to be kidding me. japan is fighting for their lives. g7y do not give a dam about success, do they? carl: they invented zero and negative ventures rates first. to take your phrase, they are completely off the map as far as foreign policy is concerned. tom: i want to give jeff degraaf the final word here. this is the under performance of deutsche bank, the outperformance of storage -- of jpmorgan as well. stay with the winner, jpmorgan with a nice bounce up recently, or is there a huge failure trap or opportunity here within deutsche bank? jeff: maybe there is an opportunity at some poin

you are essentially now having an ecb which is competing to lend to businesses. just getting harder for them. about the banks in more detail, but let's take you back to what is happening right now. how much of this is a bet, how much do you like? we talk about arithmetic leaders, he is definitely one of them. he has been transformational that is driven so much that what has happened within the group. how important is he your investment thesis? tim: the cynical investor would say it took a long time to get them talking. actually,g ideas, but one of his skills is as a diplomat. he is very good at negotiating the sort of political environment that comes with not just the firm, but take away the japanese companies. i think he has been very good at doing that. he probably cannot replicate what is done with nissan with mitsubishi. i think he is probably the right man for the job. guy: staying with us come up next week talk banks. quarterly profit falls. we talk about what the starting season has delivered. ♪ guy: welcome back, with 12 minutes into the equity market ses

these are not just, all of a sudden the ecb went to -25.e imf pointed out a year ago, the business model for most european banks is unsound. there are only a few that are making it. that is less true in the u.s. but there is still an issue that you cannot make money just doing normal banking, at least not very high profits. more importantly, we live in a world where the new normal is the new mediocre. in the new mediocre you are not going to be getting away from these negative rates. it is less about geoffrey's clients -- go ahead. francine: i understand christine lagarde has been talking about the new mediocre but it feels like it has shifted from the new mediocre to a darn difficult environment. that is morethink a question of certain industries talking their books and people making excuses rather than adapting. last time you had me on, we talked about this. it's a sustainable growth rate now. these countries, including much of western europe, it is not debt fueled growth, it is not fiscal field, it is sustainable, low growth. tom: what w

as long as we are there, the ecb can feel fairly comfortable.is something that is not playing in their camp. tom: let me introduce a chart we are going to use. the wake-up call last week. the white line as amazon, redline is macy's. they are in sync and something changes two years ago. having a little to do that. i am sure you are seeing that in europe, the new consumer, the new consumption, the new retail. will there be a consumer spirit in europe? there already is. it is one of the things that has changed. in most countries, it is a contribution to growth. contribution from trade is neutral the negative. investment is not ready to take the lead. in many cases, it is happening. the key is when you look at the --son why we have domestic doing ok, most cases you would find it is a reflection of a fiscal push. spending is doing well because there is a better sentiment in europe. in most cases, the driving forces because we moved to a fiscal --. the thing that we will monitor for the remainder of the year is whether or not we have the means fiscali

similarly, the ecb, happy days. euro-dollar is going down, allowing them a little stimulus.he u.s. treasury do have to manage this. francine: jane, thank you so much for now. jane foley, head of fx strategy at radel bank. up next, more on the yen. traders think the currencies tumble could be short-lived. ♪ francine welcome back. top of the agenda, g7 meeting, is how to revitalize global growth. growth,ars of sluggish perhaps an appropriate topic. i want to sell you something which illustrates -- show you something which illustrates negative interest rate. savings are still rising faster than loans in japan. april saw deposit sexy borrowing by 217 trillion -- saw deposits trillionrrowing by 217 yen. jane foley, we are talking a little bit about yen strength and i guess yen gets a little relief from fed policy, as does mario draghi. when you look at the fundamentals underlying abenomics, is it to zeus soon to call it a failure? jane: you can look at japan for 25 years and say where are the successes. this is a big problem that carries on. there's been lots of disappointments w

there are questions about what the ecb is doing. is an awful lot as usual, going on in the political sphere and we have not even talk about greece. absolutely, brexit is not the only show in town, but it is a major piece of the economic and political uncertainty in europe is missing right now. my expectation is it to be fairly stable in the run-up to this. if we did vote to leave, i think the pound would fall more than the euro. this is now going to question the institutional framework of the confident. but absolutely, i think we need to separate two different types of issues. one is the country leaving the eu and changing the political makeup of the continent. the other is the c country leaving the euro. this could create systemic stress. this is in a different league of us leaving the eu. anna: good to get that in perspective. david, thanks for joining us today. david dubs joining us from j.p. morgan asset management. when we come back, we will be two michael o'leary and talk about ryanair. they give us their numbers. ♪ thes: germ

the only positive i can give started qe,e ecb inflation was negative 0.6%. a year and a half later, we are negative 0.2%. draghi, the president of the ecb, will be hoping that march's boost to stimulus will stimulate inflation as well. we will be here to tell you all about it. betty: let's check in on the "b loomberg first word news." willce president joe biden announce new rules on overtime that may give more than 4 million americans a pay raise. it may also give them a reason to vote for democrats in november. the new rule says workers must be paid at least $47,000 before they can be considered managers that are ineligible for overtime pay, twice as much as the current threshold. onto california. it was a split decision last night for hillary clinton and bernie sanders. the democratic presidential primary in oregon, while clinton claimed victory in kentucky. sanders is running out of chances to stop clinton. june 7, big tests are primaries in california, new jersey, and four other states. california water officials will consider dropping a mandate that req

opec, ecb and jobs day. mario draghi is going to say, so friday, what we get from the federal reserve, june or pushing june back even more and the market will get very sensitive to any small moves in the data. jon: jon: we will have some -- vonnie: we will have some kind of move next week. david: the biggest job stay in history since the last one. jon: you are getting used to aren't you? vonnie: you never do. discussed aterns .he g7 di and the race for the white house .eats up is the stock market price for all this new wants and everything that will happen in the next week? >> relative to where we are with interest rates, the stock market is priced ok. at 17 times forward earnings, you would think it is expensive, but with zero interest rates and a low trajectory of rates going forward, probably riced about right. -- priced about right. we had this monster rally in the last several days. volatile, right? it is very hard to predict. low volatility are typically followed by times of higher volatility. jon: we

the ecb has eased policy. not yet buying corporate bonds that they promised in march. we will see that in june. but yes, europe still has as much problems. talking about fiscal policy being talked about at the g-7. som e easing would help in euroe as well. francine: what does it mean for european equities? we were talking about the euchre plan. -- the juncker plan. moves quite slowly. and that frustrates investors as well. to be fair to europe, we have a few years ago europe was in recession. now it is at least growing. somewhat the deflation all thing in europe is caused by lower oil prices. now oil prices back about 50. eventually that drag on inflation which has been so negative. to disappear. and europe has got some -- there are labor market reforms in different countries going on at the moment. we see the problems in france, for example, but there is some -- going on. yeah, infrastructure would also help, too. but it takes sometimes. francine: are a lot of european companies healthy? because of the weakness in the euro it has given a boost to exporters. sarah: the

. >> ecb technology. >> we will be able to do the same sorts of things for both. we would be able to push it out and get it operating again on the commercial side. we will be adding value. >> it can last longer and be maintained more easily in faith. have you gotten response to this so far? >> they are interested in being our partner and are interested in using the services. >> before we start providing these services, it will be a testing time. they say we have a satellite you can play with. give everybody the confidence that it will do what we say. there is a bunch of laboratory testing going on. it has some of the key expertise in both software and hardware to make this successful. when we are finished with the demonstrations, people are pretty confident there is a new game in the space. >> that is all next week -- this week. tune in next time were we bring you the most interesting innovations. be sure to check out the latest news and analysis at defense news.com. thanks f [music] >> dr. charles stanley: we are prone to become like the people we associate with.

i don't think the ecb is going to buy 50 year bonds. actually relying on the credit quality of spain. david: do you think we will see that in the u.s.? michael: there have been longer issuance. mr. -- mexico, other countries. , it makes a issue lot of sense for countries with rates so low to take advantage of it. not stays., rates will down forever. it is a good idea for the treasury to extend. david: what are your thoughts on market complacency? we are still focused on china and europe, a lot of undermining factors. forael: yield is not free investors. usually give something up or take a risk. if you invest in u.s. treasuries, investors outside u.s. like them because they are positive areas but there is risk. you look at the job market, we are starting to see wage pressures in the u.s. economy and the fed looking to continue to raise rates albeit relatively slowly. that is nothing to be a great investment -- that does not seem to be a great investment when you have those yields behind you. so the investors are not factoring in the risk