i would like to start with the ecb. if you were one of the members of the ecb, would you be voting for further stimulus? because not everyone is. the germans, estonians, latvians, they say, let's just see what happens. the data is showing surprises. camp can would you be -- would you be in? charlie: as you correctly say, it is not black and white. on the other hand, if you look at inflation, it is well below the ecb's target. some of that is obviously due to oiltemporary effects, weak prices. if you strip that out, underlying inflation is well below the target of close to 2%. it is important that the ecb, that people believe it is committed to achieving that in the medium-term. betty: do you have doubts -- mark: do you have doubts they can achieve that? there are worries about credibility issues. is that -- charlie: that's precisely why it is important that the ecb sense of the message that it is committed to achieving its target. one of the problems over the past two years when the ecb has left underlying inflation slip

the ecb preview promises to behave irresponsibly. what will the surprise be at the ecb today? there a chance they could do away with the yield of floor limit at the asset purchase program? is that a possibility? >> that is a possibility. really, i think in this case, they are setting the rules by which they conducted the purchase program. removing the floor is one possibility. or, creating themselves more room to purchase. taking the floor down is an intermediate version as well. i would say at least minus 75 basis points as a probable flo or on the deposit facility rate. the experience in switzerland seems to be, once you hit 0.75, you break even from actually according notes, maybe large notes. this is clearly the downside on the deposit facility rate. that is a possibility for today as well. do they have to leave something on the table? does he have to have a plan b? or is it go for it with plan a? put all of plan a, these options in the field and see how they work. how should we think about the next few years? the next few years are a big problem for him as well. the econo

the ecb has a bunch of tools at its disposal. ey can cut the refi rate, so what are they actually going to use? my guest joins us live from geneva. what do you think they are going to do in terms of the rates? in terms of the rates, they have built up high expectations. it would be very surprising for 10% -- byo raise by 10 basis points. i would say that is the minimum they could do. what about qe taking a huge role on the balance sheet? remember it has been more than a year that they set these balance sheet targets in terms of size and composition. i guess it is not so much about the size anymore. at least it is not 3 trillion or 4 trillion. it's much more about the asset composition toward the periphery and more risky assets. we will betomorrow looking at draghi in terms of what he announces in terms of the duration of the program. in the end, for the real economy, what matters is how the ecb will buy during the course of the next few months. alix: that has been a criticism, that it helps countries like germany and france when c

the market front runs the ecb, since the yield lower and lower, and the ecb has to bend the rules question mark what is a keep cutting the deposit -- why does it keep cutting the deposit rate? has forced money out of europe to get the currency down. we have the bond yield falling while 10-year treasury yields a super rare occurrence on any kind of lasting perspective. 1994 was not a year to be looking for treasury yields to rise and bond yields to fall. think the european question is what will the ecb's further quantitative easing do for supply growth lending? possibly not very much. they will get the euro weaker if they can. -- mark: how are they yielding? perhaps by dropping any reference to september 2016. they will keep buying until they can add, perhaps by dropping some global encouragement. look, if we have to do more, we will do more. it will be difficult to keep pushing on this. it really gets difficult -- does the euro rise against the dollar, or does it fall after the thursday, because this will say a lot? kit: i think the dollar falls after the fed moves or does not move on the

the ecb needs to preserve the ammunition for the future.ark: have we seen the lows for the euro in 2015? valentin: i think we could still drift lower. we have to deal with the fed. we are still seeing demand for euro funding. global corporations and international companies are trying to benefit from the attractive funding conditions in the eurozone. they buy them and then resell them to repay expensive dollar debt. that is an important structural negative factor. $1.06.l for this year is $1.02.could reach closer to parity. will convince investors that europe is not such a bad currency after all. the long term 2017, we see the dollar drifting higher. brendan: when of the reasons we talks of much about the ecb is that there is my much -- there is very little in the way of structural reform. but that is starting to change. you have sweden's saying they will run a deficit. thatve france saying brussels, we will run a deficit and you can lump it. see -- moreing to fiscal stimulus? valentin: we are on the verge of a sustained cyclical recovery in

the blue line is the ecb balance sheet. out changing the quantitative easing, without expanding the program, since we last showed the chart a couple of months ago, mario draghi has job owned these inflation expectations up to 1.7%, where they want to be. he has achieved quite a feat setting this expectation up and now he has to meet with the market -- what the market is expecting. stephanie: what is the word on the street, you have spent the last week in london. has been positive from investors as far as the u.s. economy, but those on the ground in london, what are they saying? number one female every conversation is the future of european banking. andunited kingdom banking all of that wrapped around the single word brexit and. importancemated the of this debate about the future of the united kingdom within europe and it folds right over to the financial system. it is something to walk by the deutsche bank headquarters on the wall in london and wonder where will that london frankfurt bank, where will they be in five years? t

expectations are high ahead of the ecb announcement. how far will they go to boost inflation? the russian president is set to get his annual speech any moment now. areey, syria, and terror expected to be on his agenda. saudi speculation. opecountry may suggest an production cut in 2016. we're live from vienna ahead of the cartel's meeting. welcome. this is "the pulse." we have breaking data across the bloomberg terminal. mark, take it away. mark: pmi services, final estimate, 51 point -- 54.2. not as strong as initially forecast. the composite index, the amalgam of manufacturing and services, also weaker than the previous estimate. 54.2. the earlier estimate was 54.4. the survey by markets shows deflationary pressures persisted in november without price is declining for a second month. we did see the composite index rise less than initially reported, but it's the prices that come into focus as the ecb prepares to announce probably more stimulus. inflation pressures to the downside is the big headline from today. manus: mark, thank you very much. we are waiting to hear what the

we will get more forecasts longer-term from the ecb in march. still look kind of benign but with oil prices lower than we thought at the end of last year, it still looks likely that assets will grow on the pressure to the ecb. betty: does that lead you to believe there will be parity between a dollar and the euro in 2016? >> i certainly would not rule that out. i think the pressure on the euro will continue to be on the downside. if got some factors which play in favor of the euro like the surplus but in terms of the central bank policy the exchange rate for the euro has downside risks it >> what about manufacturing and growth in the eurozone? do you expect continued improvement with our without ecb intervention? will manufacturing data look pretty good? >> manufacturing is interesting in the european economy. it's not what's driving growth at the moment. what's driving growth is domestic consumption. it may be more neutral or slightly positive but manufacturing globally is in trouble. global trade is low and exports are suffering. within that p

how did the market and the ecb get on different pages? guest: the expectations were so high in terms of what they would deliver. they would throw the entire kitchen sink at the economy. i still think it is interesting for the ecb process at the moment. we started with the idea that we would like the euro to go lower. you built the expectation up so -- once weere was got to the meeting, the expectations were too high compared to what could be delivered. mario draghi did help stoke expectations. think it is clear that the euro area, well things are slowly getting better -- while things are slowly getting better, i still think that the clear picture is it was probably a good idea to do something. it was just the way it was managed. joe: do you think that this is not some huge mistake and that this is a brief period of extreme positioning and a slight mismatch of communication? an important is question. often, the economic data goes in a certain direction and the central bank comes along. much, the central bank has to come back to the economic

where did the ecb fail? is action that counts of course and the markets might have short-term reaction but they take the action seriously. there has been serious action today with five decisions all-important in my opinion. i expect the market to recognize these were really decisions that count. i really trust the short-term should not be considered any i would say in any way an important reaction. >> the market seems to think there needs to be more stimulus. the ecb does not. who is right? >> what is being done by the ecb and what works were the most important sentences by mario draghi today were if you do more, it's not because it failed but because it worked. i trust it is true. when you look at the economy when he look at the diminishing of unemployment which has been quite substantial coming from 11.5 to 10.7. when you compare with the pm eye, you see the hook is going in the right direction. it meets a lot of efforts. a lot of efforts a by government, social partners, those who have a stake. the central

asncine: a draghi surprise the ecb prepares to ramp up stimulus. manus: fed on edge. charles evans says a december left off makes him nervous. we will hear from janet yellen later today. francine: and the u.k. debate on syria. parliament votes on david cameron's call for extending airstrikes against islamic state. live from bloomberg's european headquarters in london, i'm francine lacqua. manus: and i'm manus cranny. eurozone inflation data set to come out in just over an hour ahead of the ecb decision tomorrow. we expect mario draghi to announce fresh stimulus to get closer to that mark of 2% inflation. francine: let's get straight to hans nichols in berlin. what are we expecting? thed this surprise change way the ecb is thinking? hans: potentially. the expectations are for 0.2% inflation increase. it would have to surprise considerably on the upside for mario draghi to scale back all the signaling he's done that he will expand the size and scope of quantitative easing. you look at the surveys we have. expectmber, about 80% the duration to be lengthened. beyond decemb

at: our focus shifts to the ecb. just as janet yellen braces for dissent mario draghi might be faced with a lack of unanimity over more quantitative easing. there and store. are we expecting dissent at the meeting today? >> that could be potential dissent. bundesbank president -- it was not that vocal and it was not enough to stop quantitative easing. readd an inflation yesterday. inflation has been stubbornly low, coming in at 0.1% giving you an indication that mario draghi does not move. this is baked into the market. there is so much expectation they're going to expand the size and scope of quantitative easing , you take a look at the deposit rate, what we could have there. it is at 0.2%, it could go to -0.3%. even a sizable majority is calling that all the way down to zero point 4%. we may have some dissent. we will see what happens at that press conference later. the only thing you can get excited about is how weak the euro is going to get or i will give you this gdp day. that is also a fun day. it is a big one.

the ecb or the hedge funds? the concern is out there in the market. to ecb has been struggling correct the perception. those hedge funds have been getting unfair access dating back to the inadvertent release of information back in may. they may 18, when disclosed sensitive market information. there were new guidelines issued october 6. what are the tricky guidelines balance? you want them to understand exactly what is going on out there. there needs to be some balance. they need to say the right things at the right time to the right group of people. paul: it is a matter of perception, balanced against getting the right people. look at december 31 bc be ecb announced policy stimulus. the markets misunderstood what they were going to do. the markets have suggested that the ecb was very doveish. nobody wanted the outcome that we got. there was a disconnect between the policy and market expectations. one way to correct that is to get in there and talk to banks and hedge funds, workout how the markets are likely to react to certain policy reforms. that is t

the ecb calling the shots. europe trading cautiously higher ahead of expected easing from the ecb while fed chair janet yellen sounding her most hawkish going into next week's anticipated rate hike. >> when the committee begins to normalize the stance of policy, doing so will be a testament also

the ecb is going to do this. e domestic factors on either side committee the service sector in the u.s. is strong. look at the car sales data. a very strong story. the u.s. is dealing with its own story. my own question on the ecb is, how fast can they get things moving? we do a little bit more on qe. we cover deposit rates. is it going to be enough? what do they need to do? what can they do above and beyond this if inflation continues to track where it is? the reality is no one knows the answer to this. neither us nor draghi himself. he has no idea how quickly monetary policy is going to translate into a rise in inflation. he can throw more stimulus at the problem because that does lead to a stronger recovery, which will eventually feed into higher inflation. he is going to want to do everything -- if we look at his two past decisions, when he hinted at a major action, the famous whatever it takes speech. it strongly hinted at qe. he surprised the markets on the upside. his style has been to hint at something and

he is a former member of the ecb and ran the ecb in cyprus. he joins us from cambridge. look at the headlines, there is a lot of emphasis on how the ecb can use further tools is needed. he is acknowledging underwhelming markets? first, i will say this is the most positive element i have seen in a press conference he gave yesterday. towent to great lengths explain the quantitative easing works, and eventually they will do more. the disappoint them twice that they did not do enough yesterday. it was clear. i was glad to see effectively communication today in new york. they are prepared to do more in order for the ecb to meet its objective. scarlet: i want to talk about what is happening at the next meeting. he is keeping his powder dry and had said there are options ecb can take. what is it do for the ecb in january after the fed liftoff? >> i do not expect anything at the next meeting. i would hope they would reevaluate their stance at the march meeting, that would give us fresh projections. one of the disappointments yesterday, and this is also from the september meeting,

the ecb? or the hedge funds?at the ecb is talking to market participants ,s not a surprise as you say increasingly away from these key meetings. it is a tricky balance. they need to be informed. how do they strike that balance? paul: it is a difficult one to do. most people would have some sympathy, the fact that the ecb doesn't need to talk to market participants. does need to talk to market participants. in its and know-how investors are going to be reacting -- it does need to know how investors are going to be reacting. it does not disclose harkin sensitive information in a disclose forum -- market sensitive information in a nonpublic or. -- nonpublic forum. isner --l gordon john paul gordon joining us there. turkey votes at christmas. will it get an interest rate decision? -- of the first markets to says fed lift off. we'll tell you what to expect coming up next. ♪ >> insightful. >> innovative. anna: welcome back you're watching countdown. turkey announces its latest rate decision. the central bank governors

jonathan:with all the arguments from the ecb, the idea that ecb of opening the door wider for the federalet a move on, higher rates, keep it gradual, do whatever. the idea that the ecb consciously took notes on a fed meeting coming up in a couple of weeks? >> i don't think that was the first consideration. in the back of their minds, they would have thought that the euro is at 105 and change. they did not want it to fall to parity. they think the fed will do some of the work for them. theye back of their mind said that we can do what we need to do in the short-term. the fed will probably help us. in the long-term, if things get dicey are coming ecb connect again. that was the de facto target range of the ecb right now, 105-110. guy: exactly what mario draghi said in new york. were doing exactly what we need to do. , peoplergence trade have had it looking like this. how far apart are the ecb and fed? >> i don't think diversions will accelerate. it will not accelerate wider. it could drift. it will take a nile -- while for the markets to digest. what will be the big trends for 2016. we've h

the ecb has to push the growth.licy plus structure reform will eventually sort out your. you could not get all of the policies together, but there are problems the u.s. doing that as about. what i do see is more labor market flexibility. i see a central bank doing its job. central deficits that have come down. that is not a bad backdrop. is, is theretion double-digit returns in europe because europe has been so beaten down? james: the double-digit returns in europe is partly because, as we talked about earlier, because europe has a yield, a recovery, meaning growth can pick up, or the u.s.pe has lagged and japan and its earning growth. that will pick up in the next couple of years. nextthe way they solve for year was when does the bank of england raise rates? back to the issue of wage ,rowth, you said in the break you were sitting there when he said he would raise rates. he hasn't. he continues to oscillate around if he will be able to do so. what do you see in the u.k. that will provide any upside for mark carney t

the ecb maintained its policy rate at the current level. ecb president draghi stressed the board's willingness to use all its available policy levers. >> given continued high structural unemployment and low potential outgrowth in the euro area, the ongoing cyclical recovery should be supported by effective structural policies. >> the ecb's new measures came amid fears of deflation in the eurozone. analysts say a further slow-down in china could hurt germany and other economies. many people in the markets had expected bolder measures from the ecb, such as expanding the amount of asset buying. so analysts say many investors disappointed and selling shares worldwide. tokyo stock prices opened sharply lower. nikkei trading lower by nearly 1.8%, 19,583 at the moment. at one point it tumbled to the lowest level since mid-november. all sectors are lower amid the downbeat sentiment. the euro jumped against other major courage cies after the ecb announcement. the single currency hit a one-month high against the dollar. the dollar fell against the yen

the ecb wants to push them out the door.would assume the current policy is not working, but mario draghi seems to have faith in it. back on theyou go chart, previous efforts to lower the deposit rate helped push out reserves, and they believe that will happen again. they made another cut of 10 basis points yesterday. the markets wanted more. vonnie: that is why there was so much talk about a potential two-tier system, one for the deposit then another for just -- michael: the ecb has a two-tier system now, the rates that the banks pay each other. and they have a deposit rate. what they are talking about is if they had cut the deposit rate too much, it would affect bank profits, so there would be a lower rate for smaller banks that could not afford to absorb that. they decided not to go with that. vonnie: thank you so much. a wonderful single best chart, which i am sure you will tweet out. follow us on twitter. i am vonnie quinn as well. let's take a look at some photos making news today. -- aliber three photo immediatelling f

we are expecting the ecb tomorrow. will they add to the stimulus. 100% of the economists we spoke , we will see more stimulus coming from the ecb tomorrow. inflation data set to be poor later today. 2% target.ff the go here tog way to still more room for stimulus. this is why we are seeing the euro down against the dollar. 1.06. parityll reach below come next year. meanwhile, we have on the flipside the dollar creeping up. we are coming off of the highs. anticipation we'll see janet yellen add to raining back the stimulus. inwill see a rate hike come december. we get the first speech coming from janet yellen today. will she stick to her more hawkish tones? oil down by .1%. 44.99.trading it that is brent. that is as we anticipate the vienna meeting. oil ministers gather to decide whether -- where they're going to put oil production. they decided if they would go for oil share rather than prices. let's have a look at some of the stocks to watch. i've got apple trading flat. you --ot ad court for accor for you. they are re

the ecb same thing if you look at the 10 year.g if you look in -- you see the same thing if you look in gold. more interesting is oil. oil dropped after bloomberg news reported the ceiling for opec's production would be raised rather than lowered, which you might expect. i just want to point out on the isrg terminal, opec a great function. it gives you so much information on opec. saudi is the biggest piece of the pipe. they produce 32% of the oil that all of opec makes. one of the few opec makers that has excess capacity of. they could produce more but they do not. everyone else with the exception nigeria, produces as much oil as it can possibly get out of the ground because they need that money. betty: at some point during this year, they were producing as much as 32 billion barrels. they'reat is when ceiling was only 30 billion barrels. they are always producing more than they are allowed to because saudi can not hold the poorest states in check and those states are asking saudi to cut their own production. betty: thank yo

we have a hawkish low from the ecb. and is the impact of draghi the ecb? >> that is a great quote. ink, to me, the thing i have been focused on throughout the past week is, what is the impact going to be on the euro dollar exchange rate? we have talked about this various times on and off this week. i don't think the ecb wanted the euro to be trading at parity in a short space of time. jonathan: you have said that. >> they don't want it trading at $1.15, but they are pretty happy with it trading at $1.05. if you look at the inflation forecasts, $1.09 is the rate they used, which is where we are right now. the market disappointed, but i don't know necessarily, if draghi would be disappointed. jonathan: when you have the market move against you with that vicious and aggressive move against the euro, that stinks of a policy missteps and a communication error. that is hard to say that is not what happened this month. >> i would argue that the price moved against those that shortened the euro yesterday. nths andwind 2-3 mo look at what is changed on the governing council. the deposit rate

the ecb calling the shots. europe trading cautiously higher ahead of expected easing from the ecb while fed chair janet yellen sounding her most hawkish going into next week's anticipated rate hike. >> when the committee begins to normalize the stance of policy, doing so will be a testament also to how far our economy has come in recovering from the effects of the financial crisis and the great recession. >> the san bernardino police force says terrorism is not ruled out in the motive behind a shooting in california that left 14 people dead and 17 wounded. >> based upon what we have seen and how they were equipped there had to have been some degree of planning that went into this. i don't think they just ran home and put on these clothes and grabbed guns and came back on a spur of the moment thing. we have not ruled out terrorism. >> tkey will regret what it did. strong words from vladimir putin that said the world will not ignore turkish aiding of terrorists. >> brazil house improves impeachment proceedings ag

they are charging banks with the ecb. ure that will make the banks take money away from the ecb, take the money away and push it out into the economy and lend it. they will not see gains in lending. we'll have more pressure and squeeze profit margins. they will have to do something. but so far, there hasn't been enough of an effect. where you are seeing the bond market, traders keep bedding that they may move lower. >> right. >> and they push down rates. the ecb changes a moving target. in this case because he disappointed, yields have gone back up. we could see possibly a positive impact. it is quite a take a while to play out. betty liu: we are going to take you to bloomberg radio where our team is speaking. >> this is in train now. gothey are certainly set to and something i have been encouraging for a while. it not because of the fact that wages are increasing. wages were up .2%. there is no pressure from the standpoint of wages but the fed is ready to go. i think because of concerns on the real economy, and it is an i

we are talking about the euro, ecb. ack with us, the chief market strategist at an enterprise financial. so much going on. so many moves coming off of european central bank decisions today. what stood up for you? >> primarily the fact that the european central banks seem to have underwhelmed the market after raising expectations that they would come with barrels blazing. they did not. carol: why didn't they? >> i think you have to take mario draghi at his word when he said we think this is enough. if that is the case, if he believes that, there is always the ability to do more. , why do moreght than he thinks he needs to? clearly, the market for expecting more, and now you see it reflected in the currency markets. do you thinkch mario draghi and ecb is looking at the global macro picture, just as we have seen with the fed and janet yellen, keeping an eye on china or other overseas developments that impact the global market? >> clearly that is important, more important to the eurozone debt it is to the u.s. they are much

the ecb is focused on. an: scott, to talk about the european economy, let's talk of the bond market. what is the biggest riser for the ecb or the fed? what is going to guide global sovereign debt markets? the frontush high at and have some sort of feet through into the european bond market as well? scott: the ecb is going to keep monetary policy very easy for very long time. we can talk about whether they disappointed the market. the front end of germany price disappointing it -- disappointing. the idea being that despite disappointing the market to some extent of the qe program, maybe the size of the rate cut, they were pretty accommodative. to bemind, that is going a major driver of valuations in the european bond market. there is a substitution effect that goes across these markets. that is the risk free space. investors will swap treasuries for deals. boone's for treasuries. what you get to investing in peripheral markets like portugal, yet to take some view around ecb monetary policy. i would take one a

they are charging banks with the ecb. they will make the banks take the money away and push it out into the economy and lend it. gains in not see lensing. have more pressure and squeeze profit margins. they will have to do something. the bond are seeing market, traders keep bedding that they may move lower. and the ecb changes a moving target. in this case because he disappointed, yields have gone back up. we could see possibly a positive impact. it is quite a take a while to play out. guest: we are going to take you to bloomberg radio where our team is speaking. is in train now. >> based on my goal. it is something that i have been encouraging for a a while. wages were .2%. there is no pressure from the standpoint of wages but the fed is ready to go. because of concerns on the real economy, and it is an interesting experiment over the next three months or so. as they shift to a new policy in terms of determining the fed rate. quest please address for the international audience how janet yellen can avoid international medi

the ecb is expecting fireworks to send stocks lower. click job stay in the usa, the fed signaled a liftoff, what would it take to delay a rate hike? caroline: some opec nations call for production cuts. we wait for a decision and vienna later today. ♪ caroline: welcome to countdown, i'm anna edwards print manus point: what a day. stocks and bonds all took a thrashing. stocks jobbing the most since august. the euro soaring the most in five years. manus: the question is, this is yesterday's move. a rally about 3%. the biggest move since 2009 when the fed said they would buy $300 million off the treasuries. the question i am asking is, is this euro drop me -- euro rally debt? -- bed? dead? anna: we have the jobs report of the u.s.. how week with that number have to be to keep the fed from raising? manus: we go for an unemployment rate of 5%. yellen has given us the curtain raise. anna: let's get a first word news. slipped: the euro has the most since 2009. investors shift their addition -- attention to the rate hike. it was versus the dolla

we will bring you the ecb meeting live. gold up. ly pushing that lower yesterday, she speaks once again. 600, the metals feeling the pain. tom: that spread speaks of the distortions that are out there , america,ithin europe but across the atlantic as well. we thought we would bring you a voice of sanity. virginie maisonneuve has been .xtremely important full disclosure, i am a member. she has provided a public service to all of those in the so-called long only by side of advanced -- investment. extremist square through ups and downs through the equity markets. career through ups and downs through the equity markets. do or one of our mayor mortal viewers? what do you do in the stock market given the history? >> you want to be careful because clearly, we have the appeal of a short-term positive, --qeis european kiwi and and the beginning of the normalization in the u.s. however, what we don't know is the path beyond that. if we look at growth in the u.s., yes, it is better than the rest of the world, however, it is not that strong and

the day for the ecb meeting is coming closer. e bit of data today that was really interesting was the euro-area confliction data. for the month of november. economists were looking for .2%. the view the ecb will have to do something tomorrow. mario draghi only said a few weeks ago he will do what he must to inflate inflation which is below the goal of 2%. of 2017, it has been nowhere near that target. this is one spot that is standing out. also, the world's big steel center, the company will be even lower next year after a collapse in prices of steel. there is no recommendation from .eutral to buy they are saying they jumped the gun and upgrading the shares in october. it has been downgraded in december. the not want to bang drum's. it is all about the ecb, and we are so nearly there. betty: one more day. i will see you in a little bit for the european close. is live fromttle the nasdaq where she is looking at 2 early winners. yahoo! is one of the big winners after it was reported the board is considering if the company should sel

mark, you are keeping your eye on this and also the euro and it gains after the ecb. rk: it is rising for the second executive week, gaining about 30% versus the dollar since mario draghi unveiled the rebooted stimulus package that fell short of many expectations. jeremy french is here. meeting chickset -- fed meeting change the euro-dollar dynamic since last thursday? it is rising for two weeks. it has not done that since october. how does wednesday change the dynamic when it comes to euro-dollar? jeremy: the assumption initially that the federal reserve will hike rate. we are seeing a degree of volatility this afternoon. maybe people will become a little reticent pricing that to the same degree come wednesday. assuming they do raise, where do we go from here? how far do we go for tightening in 2016? if the markets anticipate the fed is going to be more aggressive in discounting currently, that might encourage a little bit of a pullback. we are in a new trading range for euro-dollar. we will not see pullbacks below this level we were trading at immediately ahead of th

if the ecb is underwhelming, the outlook does not get stronger. is a mediocre outlook at best globally. this week we have taken down growth forecasts in japan, india, brazil, left them unchanged in europe, and a below consensus in china. it is not a solid growth outlook globally. the u.s. is the one bright spot at 2.5%. the marketg about reaction i found interesting is that if mario draghi over delivered on stimulus yesterday, we might have seen a dramatic strengthening in the dollar. janet yellen and the fed clearly do not want that. do you think the federal reserve and the ecb may have coordinated? >> i think they talk, but i don't think they coordinated this. the viewer central bankers as you take care of your shop and i would take care of mine. the ecb eases, the easier it is for the fed to go because it reduces downside risks. there is communication, but i don't think this was coordinated. when the chair talks about the dollar it is because everywhere else is weak and the u.s. can only diverge at a certain pace, and the more monetary policy t

of course, a lot was happening yesterday with the ecb. e jobs report, which could be the crucial jobs report, most likely the last before a rate hike -- what do we need to see? eal: it is about meeting market expectations for the view that the fed will raise interest rates. we have a very wide range of forecasts today. of ftn financial says if we get in the 150,000 or greater range, that will do the job for wall street. the consensus is 200,000. still strong -- we are hiring for holidays right now. the unemployment rate, no change forecast. that could pick up a little bit based on rounding, and we should see some wage gain. but overall, it is satisfying the market and the fed will be satisfied. vonnie: there has been some concern that december is not the best month for a rate increase, year-end positions and market liquidity. but there it have to be some sort of outside surprise for there to not be a hike. michael: absolutely. you have to have some really knolow number. we have some liquidity issues, but i this point, is it really going to

the ecb is in an easing stance doing qe. it doesn't destroy the longer term story but it has made us hook at our 1 to 3 month forecast and question them for now. >> how are you repositioning your fixed income strategy right now? any changes after that shock? >> it's a bit of a sigh of relief. we think the euro zone is going to recouple over the next year or so so the move wes have been seeing until yesterday were the ones we were worried about. the correction we've seen now which could go further is something we have been calling for really. >> but surely the fed can't only be looking at the nonfarm payroll data for today. we had a strong print the month before november. what would a disappointing print be today? 150? 100? >> the payrolls is always so volatile i would be surprised if they paid much attention to it on the day. >> precisely. >> the earnings is the big th g thing. that's what needs to keep accelerating whatever they might be doing. they want to see evidence they're tightening up so when they hike they feel confi

they are charging banks to leave money with the ecb. ure that will make the banks taken away and portion into the economy and lend it. but that is not happening. we are not seeing huge gains in lending. we will have to put more pressure on them to squeeze profit margins. where you are seeing the impact is the bond market. where they are moving lower and they pushed down rates. the ecb changes a moving target. in this case because he disappointed, yields have gone back up. we could see possibly a positive impact. it is quite a take a while to play out. betty liu: we are going to take you to bloomberg radio where our -- stephanie: we are going to take you to bloomberg radio where our team is speaking. >> this is in train now. bill gross: well yes. they are certainly set to go and something i have been encouraging for a while. it not because of the fact that wages are increasing. or the tightness of the labor market. as a matter of fact, wages were up .2%. there is no pressure from the standpoint of wages but the fed is ready to go. i think

the euro dollar was interesting yesterday. right after we had that ecb announcement we didn't see much movement and we were in the region of 105-106 which is where we have been for awhile now and then suddenly overnight we saw this massive drop in the euro dollar. currently at 108, a rise in the euro dollar. we're currently lower but on the weekly picture to the upside by 3%. he justified his actions despite decent from some board members. >> we're doing more because it works. not because it fails. we want to consolidate something that's been a success. >> yeah. we will be speaking to vito vitor constancio in an exclusive interview with the ecb vice president later this morning. stay tuned for that. >> oil is trading higher as they will cooperate to help balance the crude market. this as the oil minister says the oversupply is catastrophic for oil markets. steve is at the opec meeting and you got a chance to talk to a number of those ministers, steve. >> yes. i did. i even spoke off camera as well and i said why did everyone always want saudi to do the h

it certainly looks that the ecb has cold feet, the germans did not want to go down this road.lay mario just draghi talking about the successes in europe. i wrote down 10.7% unemployment, half of euro area countries in deflation, and retail sales today cell today -- sale and france and germany. if that is good news, i'm afraid bad news dominates. too little, too late. they are paying the consequences of raising rates too soon in 2 011. the fed must beware. david: mario draghi said they were doing more because, quote, it works. then, the inclusion of local and regional debt in the program -- explain the significance of that move. danny: the idea is that you can broaden things that the fed can't do. the intention is to try and make this qe program rather more effective, because in some sense there are limits to what you can buy, but this apparently is mostly going to be german and spanish debt they can purchase. the bottom line is it's not going to generate that much of an extra impact. negativen is that the rate cut was very small. there really was very little additional qe goin

you can refer that to the fed the ecb or the bank of england. what is the answer?eil: there isn't much ammunition at all. it is boxed in. it is left interest rates too low for too long and now does that the mercy of external factors whether that is china or a stronger dollar or whatever it is. it could circumcise the fed's ability to raise rates in the way that it will want to. mark: where do you stand? neil: i think they will go again in march but it will be difficult after. there is a presidential election in november. not that they are necessarily obliged to do anything with the election but i think you have to know that the election will have a bearing. and we are sure what will happen to the u.s. economy. they are expected to announce an interest rate hike and then announce the economy was uncertain or the outlook was on shore. she said what she had to shape. -- had to say. the outlook is not clear. 2% growth, 2% inflation, pretty unexciting. betty: it is still certainly cautious, i would say, on the outlook. they seem to be more certain and that is supported

the ecb did cut rates and ease policy last week. must likely they will raise rates and tighten policy going forward, and i know some of my colleagues -- even if the first rate hike is priced in, what about the next one? the federal reserve has told us that they expect the rate hike to be appropriate once a quarter, or every other meeting next year. the march hike is not priced yet. i think it should be a greater chance than 50/50. chance, andut a 40% i think it should be something well over 50% given the strength of the jobs data and signals of the federal reserve. page, i am looking at our and you are absolutely right about that. rachael, i think mark brings up some good points and i am curious overall. doubts theink anyone dollar will weaken and the euro will strengthen, it is a question of how much. rates, the ecb did cut however it did disappoint market expectations. stock are trying to take and think about exactly how far and how fast we could see the euro weakened. betty: what is really behind that strengthened euro last week?

the ecb just began theirs. joe: the hiking cycle, one of the topics we will be talking next year as the pace. where do you stand on this question? to herree that we get three next year. i'm not sure about that fourth one they are penciling in. there are large investment makes saying four hikes. but what makes us different is they have a couple of tools they did not have before. one of them is the size of the fed's balance sheet. $4 trillion. about $220 billion of the u.s. treasury is in short next year. sured next year. maybe letting some of that expire and rolloff the battle in sheet, will create some tightening that could create a point rate hike. scarlet: and the fed has a target range as opposed to a fixed point. do you see a return to the fixed point target anytime soon? >> it is very important that the fed has arrange this time, because for the first time the federal reserve pays interest on excess reserves. it is a key way they have created this excess reserve since the balance sheets exploded. they need

the ecb is meeting in frankfurt right now. then president mario draghi will hold a news conference 45 minutes later. expected to expand the central bank's bond buying program. they're also looking for a deposit rate cut. the euro is under a bit of pressure. let's also take a look at european stocks at this hour. you're looking at a picture of -- well, things look increasingly better. this is the injection issue that we always talk about. we're also watching the energy markets this morning, opec ministers are gathering for a meeting tomorrow. reuters reporting saw day rab i can't is going to be proposal the cartel cut output by 1 million barrels a day next year. they resisted calls for any market intervention. oil trading right now, wti is at 40.73. here are a few of the other agenda items likely to drive trading. fed chair janet yellen will be testifying before the joint economic committee meeting at 10:00 eastern time. lots of data including weekly jobless claims. and factory orders and a number of consumer names on the earnin

an opec meeting begins and the ecb, which delivers a disappointing expansion of policy. futures have been whipsawed very quickly. europe is down as much as 2%. we'll watch that. the ten-year yield, around 2.22. watch oil trying to swim around 40. >>> we are going to go live to the scene in san ber nar dae know. >> more easing for the urine central bank. what mario draghi's decisions mean. >> the rake hike clues we need to watch for. >>> first up, this news out of mario draghi saying that they are expanding at least the duration of this program through march of 2017. in his words, we are doing more because it works, but he had set up the market to expect, in some cases,a lot more. >> i wonder whether he set it up or the opposite of what was happening in this country. our supply chance would come out of 48 this week. that was shocking. dramatic decline back to the levels of 2009. there it is the opposite. the most recent data is very strong in europe. i think that what's happened is that he is catching up to the data. he is a data dependant man. he recognizes that there are

as the ecb extends its unprecedented want to buy. s become the was conservative mp to say that he will campaign for the u.k. to leave the eu. it is time for the u.k. to recover its birthright. a fundamental change and britain's relationship with the european union. more importantly, the change in the direction for the european union itself away from the concept of ever closing union and towards a looser association of sovereign states. that is clearly not going to happen. we all have to make up our own minds in the next few months. for me, it is clear the direction i think we should take as a country. >> the new star wars movie has smashed ticket sales records in north america. the seventh film in the star wars franchise collected $238 million during the weekend theing the top -- topping 208 million dollars taken in june by jurassic world. further $279 million was brought in from overseas, and that was without china. we will be speaking to bob iger at 1:00 p.m. london time here on bloomberg tv. story onead in that the terminal that th

the ecb dilemma as mario look at theres to euro area inflation. inflation is unchanged. ice.from janet yellen the u.s. jobs report on friday. nbn, we get the iaea report on iran today. good morning. this is "bloomberg markets." i am francine lacqua. we have tom keene. we have mario draghi tomorrow. let's get more on euro-area inflation. let's go to our international correspondent, hans nichols. pointthe survey was 40 two, this is below, 0.1. it shows no inflation and will increase pressure on draghi to do something big and bold with quantitative easing. one of the guys at talking about his expectations and sees it expanded to another half a billion euros for a longer duration. will they do about the deposit rate? this will be talked about when they meet in frankfurt tomorrow. erik: what do you see in the of europe as it knocks on what mario draghi will do. is it improving or slowing? hans: when we look at all of the eyes, it seems the german economy is a little stronger than the inflation numbers filtering through. wage increases in germany. we have not seen that happen w