how much of that will been the ecb's mind? : that might be a small factor, but if you look the fiscal impulse is we just had that in a few countries because it is not across europe. it might be a quarter of a point in terms of the deficit. in this respect, it will not really be a big impulse. the realt help economy. that is where more people are talking about. look at what the imf has been saying, given the discussion we have in terms of monetary policy. economies ofasing scale. the goal of the bank of settlement has been saying at the last quarterly a port that report. i think there are two major problems. one is the stability, the other is the german chancellor. will i don't think either go anywhere simplest a maybe have some political intel either here or berlin to supersede that. michael, if i can bring it back to you on this great divergence with talking about. will we continue to see a wall of fixed income money leave europe, head to the states, even though the yield might be going ever so slightly down? is it basically a

that limits what the ecb can buy. if we hear some kind of discussion of adjusting the issuer limits, ie how much the ecb can buy or which countries they can buy, i think that would open the door to a greater euro downside here and basically say that they have more potential to buy more here. louisa? >> julia, great stuff. thank you very much. we'll see you again for the actual decision. again, that show coming up at 1:30 cet, 12:30 london time. that's it for today's "street signs." i'm louisa bojesen. "worldwide exchange" is up next. see you soon again. >>> good morning. it's decision day at the ecb. will the central bank announce more stimulus? the global markets in wait-and-see mode. >>> square's revenue beat the street. shares rising on the news. but investors still want to know if ceo jack dorsey can really run two companies at the same time. >>> and the race for the white house. sparks fly between hillary clinton and bernie sanders as focus turns towards florida and ohio. it's thursday, march 10th, 2016. "worldwid

it has been a year to the day since the ecb started buying bonds. sting to see who is better fitted when it comes to bonds and equities. his are three interesting charts. germany, the euro area and portugal, when the ecb started to buy bonds last year, the sovereign bond market and these three countries rose. they spent much of last year below the gain line. the past feween in months that germany and the euro area has sported gains according to the bloomberg sovereign debt indices. portugal, which many thought would be the best performer because of the high yields they had coming in to the ecb program, the portuguese debt market is actually down by 5%. political factors are one reason. the euro stocks 50 has not benefited at all from kiwi and this is the number that shows it -- qe and this is the number that shows it. to combatrea has had a number of issues over the last year, the emissions scandal, china, rates in the united states going up. there could be further hurdles to calm, brexit, portugal. if anded impact of qe when we get more later. the b

luke: for the ecb, that is really hard to do. rman bank would be at horror at the very thought of it. they have to call it something very different. what he is possibly trying to do is to push the physical button. instead of doing it himself, try to get the government to do it. make it very clear to them that they have to take responsibility. that is the vocals simulation we will get from mario draghi. how the talked about central banks might respond, getting into negative territory. what about elsewhere? we have been surprised the with four hours by what the european -- the new zealand central bank has done. does this have the feeling of a currency war? leaders get together at g20 and promised not to engage in some kind of currency war, but is that one of the motivations? kristine: central banks around the world are concerned about exchange rates. as is not really a new thing. it is something that all central banks will be watching. of course, if you are a small open economy like new zealand for instance, you would definitely be

global markets focused on the ecb meeting. ets waiting for mario draghi to make his next big move. >>> hillary on the hot seat. another battle with bernie sanders while the gop candidates are gearing up for more mud slinging and other stuff >>> and the fierce battle for florida and ohio. >>> and can there be too much of a good thing, like three hours of "squawk box"? no. mcdonald's doesn't think so either. that means more breakfast. it's thursday, march 10th, 2016, and "squawk box" begins right now. >>> live from new york, where business never sleeps, this is "squawk box." >>> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. the main event this morning is the ecb, which is meeting in frankfurt. policy decision is expected around 7:45 a.m. eastern time, and economists are looking for a possible cut in rates again. even below the negative rates that already exist with the european central bank widely expected to roll out more stimulus. we'll be hearing fr

the rates will stay low. very low for a long time. ecb delivers a rate cut and unprecedented stimulus package, but mario draghi puts the damper on further reductions. the biggest sale since the december 3 meeting the insurertual -- be headed for a split? the chance for an asset sale. .ust after 7:00 u.k. time welcome to "countdown," i am anna edwards. perspectiveings in for you. storyl start with the ecb and the impact we saw in the currency markets. the euro. over three days. it shows you the volatility, the price swings we saw. a raft of measures to stimulate the european economy, the europe the euro zone economy. it took less than 19 minutes for verse all itse declines. on some other risk assets. we've got german two year yields, a volatile session around the press conference. -0.4%.ng the day at oil, up by 2.3%. $38 and on.71. asia, positive territory. up 0.7% on the asia-pacific index. increasing the chinese currency by the most in four months. leading to more risk-taking in the asian session. dollar on thessie screen, highest level

that is one heck of a however we have heard from the ecb. lucy macdonald, chief investment officer at ollie aunt -- al lianz. mario draghi's credibility is on the line over his inflation target. can the ecb president convince markets he has enough firepower to reignite growth? we will look ahead at tomorrow's rate decision coming up next. ♪ to "on thelcome back move." let's get the bloomberg business flash. caroline: eon has reported its biggest ever annual loss after writing down the cost of its coal and gas-fired power plants by millions of euros. they missed a full year 6.8 billion euro loss predicted. ix has added stores and expanded online sales. the world's largest clothing retailer said net income rose 15% to 2.9 billion euros. since its 2001 ipo, the owner of zara has boosted its sales more than sixfold in aggressive expansion of its eight changes -- chain. credit agricole says it aims to boost annual profits to 4.2 billion euros by 2019. france's third-largest bank plans 900 million euros in annual cost savings over the next three ye

and europe higher one day after the ecb move to increase stimulus. markets are anticipating what the fed will do next week. mark: the international energy may haveys oil prices high-cost producers cutting back on production and what it looks like for the global economy. carson indoors is donald trump in the lead up to tuesday. wins in florida and [indiscernible] make his nomination inevitable. first, a look at the trading day. julie: looks like investors are taking a step back to take a look at the ecb action. there was so much confusion in that full arsenal of tools that the ecb throughout the economic slowdown in the eu, so that is rebounding after falling. 24has been a confusing hours. if you look at the sectors on the move on bloomberg, we have and technology and financials, the two largest for the s&p 500 also a big part of the game state. to thelping contribute game, bouncing back with microsoft, apple and amazon. they were doing relatively poorly yesterday. stocks have been relatively high of the s&pvolatility 500. take a look at the bloomberg.

that is part of what the ecb is running out on. that december was a mistake to say that these measures have averted a disastrous disinflation? how do you use the word disastrous? basically, it says slow and steady. alessio: what he alluded to in the beginning was that he aimed at doing the calibration in december. i think that he overpromised. when you go through the months , it is up to the meeting over three months that we have had now. that is where the mistake was in terms of how december was a mistake. not in delivery, but preparation. >> we will go back out to you in london. to bloombergogs in right now and judges the potency ,f this package and frankford based on what the market is doing right here, what would you tell them? i would say it has been a successful communication strategy. they have been very tightlipped. the objection was to draw the euro weaker. they wanted to put in place something that could address the poor numbers that they referred to. particularly, he asked if you put on the string. what is the cost of len

this was the ecb's policy decision day. did and saidaghi has had applications on the financial markets. julie: investors are still confused about what has happened this morning. the ecb deploying a full arsenal of stimulus. benchmark rate zero to expanding the bond buying program and making corporate bonds eligible. 80 billion euros in that arsenal for bond buying. stocks are now lower. they were bouncing around. investors still trying to figure out not only what this means, ?ut will it work will it help european economy and is at the end as mario draghi says there will not be any further interest rate cuts? if you look at the s&p 500 over the course of the session, you will see the bouncing around that we've done. after and during the comments from mario draghi, we saw stocks gain some steam and losing as we head into the afternoon. the stocks 600, the swings there are very dramatic. you can see the stocks 600 now down 1.5%. earlier, it was up 2%. that it's all perplexed what investors are staying -- still try to figure out

but because it isn't and it's left to the ecb to do all the heavy lifting. news -- ecb has to do the heavy lifting and you do for the next hour because you're sticking with us. matt winkler is staying with us. coming up, you're staying with us as well. i had a little bit of a bowtie confusion. i was overwhelmed for a moment. presence of candidates blaming wall street for the problems of main street. we heard this before. you're watching "bloomberg ." don't move a muscle. ♪ remy: this is the bloomberg business flash. the international energy agency says the price of oil may have bottomed out. the iea predicts shrinking supplies outside of opec and disruption inside the group will erode the global oil surplus. oil prices have rise 50% from the lows in january. a big break for bp involving the gulf of mexico. a court has ruled that bp will not have to face lawsuits by energy companies over losses they planned on the offshore drilling ban imposed after that disaster. bp has paid at $55 billion in damages from the spill, the worst in u.s. history. that is your

joe: it looked like the ecb unveiled the agency today.announced a new tro and that it would buy investments for credit, then we got the press conference and all of the gains we saw in the market originally, they all reversed. what is your take away from the ecb's actions, why did the market react like it did? guest: if you look back at the last five big e-zines, counting today as the fifth over the last couple of years, the ecb i would argue in terms of market reaction is batting maybe one for five. i think that the bank of japan, the easing moves to negative rates at the end of january, so a negative reaction with a lot of focus on how did we get this negative reaction? i think if you look back at all of these e-zines we have seen over the last couple of years, this is much more common. i would say that the hit for positive reaction is closer to 20%. today's impact should not really be surprising, i would argue. scarlet: we will dig a little deeper into that batting average of .200. if you look at a chart to show how three of the four e-

earlier in europe, we saw our rally on the back of the ecb announcement. s you can see behind me, the ftse, the cac 40, and the docs in frankfurt -- the dax in frankfurt, closing down. perhaps some head scratching over whether these measures will actually help the eurozone economy. we will return to the markets in a moment or so. first, let's turn difference. the french president -- let's turn to france. the french president says the government will press ahead with reform to labor laws. tens of thousands came out to protest the government proposal to do so. the labor minister has signaled she is ready for a key concession to get unions onside. delano d'souza has more. delano: a day after tens of thousands came out on the streets to protest a reformed to the labor code, the government in france says it is willing to compromise by increasing payroll taxes on short-term contracts, an issue unions have repeatedly been calling for you promote long-term jobs -- calling for to promote long-term jobs. >> the proposition exists and goes hand-in-hand with my bill. d

markets are up because of what the ecb has done. ne is the federal reserve, they have been pumping money into the u.s. economy for ands, starting back in 2009 the s&p has gone up by 200% since its low. european stocks now starting to rise because the european central bank is finally getting into the game. they put more money in during the greek crisis and let it all roll up because they were not buying bonds, they were renting them. they are starting to buy and they are actually going to pass the fed on their plans target. at some point we will see ecb cash than we have from the fed and that should be good for equities. we hope it will be good for the economy as well. mark: the understated -- david: the understated minimalism. i will not say gerrish but brighter coloring. mark: central banks do not target currencies, do they buy these unconventional methods? that is what they would have us believe. let's say they do target currencies. let's see how much success mr. draghi has had since the whole qe adventure begin. it began last janu

is it the ecb not doing enough? ical matters, heads of state and not doing enough to boost things on the fiscal side? >> if you want a silver bullet to transform the economic i putk in the eurozone, satisfactory economic recovery into something that looks more self-sustaining. im one who diminishes those tail risks i referred to earlier. in some sense, the weakness in demand is still persistently pervasive across the eurozone. it is manifesting and continued high levels of unemployment, nonperforming loans. talked about banks being another major risk to the economic backdrop great how mindful are banks? there has been commentary about the negative interest rates hurting them. it's better to ask what they might do to help the banks. for me, that's probably the area i am most worried about. it is actually vital that that continues. the stress we have seen in the financial sector in the last couple of months puts that genuinely at risk. consequence of markets being worried about negative interest rates. the ecb will pro

do you think the ecb is taking notice? really hurting their appetite for negative interest rates? >> well, for banks, it's not really having an impact per se. for the financial system overall, it's leading to problems. insurance company pension funds have real issues in this environment. this will continue. i think the general view of the ecb is this is a price worth paying if we can get the eurozone economy recovering. i will also add, this is not regime changing. you need something more than this. you need a fiscal response. you need germany in particular to step up to the plate. that's really not going to happen. so the ecb is continuing to have to do the work itself. >> i feel like i don't understand any of this. in terms of the more we move into negative deposit rates, you end up putting a tax on banks' reserves, which then works against the whole point of quantitative easing. >> well, the way it's working, for example, every time the bank goes to the market and buys a bund, that ends up at the bank as a deposit. you'r

and the ecb said it was too acron acronym. you know, we've had tremendous amounts of liquidity pumped into banks for the four or five last year. nothing really happened, okay, because it was capital and profitability and this is what it's talking about today. so this is the most unconventional thinking about the consensus of yesterday. >> and the probability was supposed. there's no wonder you see deutsche bank, commerce bank up around 5%. some people say when you looked at the reaction of the euro yet during the press conference, some hopes you would give a little and reopen the doors for more. so what is the benefit of putting everything out there and saying, don't come back for less, more or less. >> everyone was expecting a tremendous amount of liquidity to the market. which he did. but i don't think it's flowing over, you know, at the same time. because there are few of adjustments taking views. but, again, it's its own capital and i need to see a profit knowledge banks to pump money into the economy. i need profitable ban

so, the data is there and the ecb has it. t comes to this discussion, the tiering does seem to work for these other countries. guy: how do negative rates affect the worldwide system? every banker i talked to says they can't pass them on. seenoking at what we have from the evidence so far, mortgage rates went up in switzerland. bizarre, isn't it? part of it is due to the fixed floating rate. the bank is passing this negative floating charge onto someone else. there are all of these quirks at the zero bound. in fact, banks will try and make back that margin by maybe charging more. we are at a very interesting stage. we have break below zero, first of all. and for the markets to start clearing on both sides, we have to get clearly through zero. i think it is still very early days. i think this negative rate policy is only the beginning. we will look back in a few years time and discussed together, did it work or not? qe is seen as part of the central bank's talk head. back at the beginning, people said it would be inflationary, a

the ecb says it will start buying up corporate debt. the central bank has slashed its growth and inflation forecast, underlining how much the single currency needs stimulus. >> this comprehensive package will exploit the synergies between the different instruments and has been calibrated to further ease financing conditions, stimulate new credit provision, and thereby reinforce the momentum of the euro area's economic recovery and accelerate the return of inflation to levels below but close to 2%. reporter: though the case for stainless seems clear, questions remain, as the ecb pushes interest rates lower and lower, many observers wonder whether they have used up all the firepower it has. firepower it might needed later if the economic slowdown consists. -- versus. daniel: joining us to break this down is an economist at a think tank. thanks for joining me, first of all. how significant are the announcements made today? >> the measures are very important. it is a copper has, as you have mentioned. thanks cap -- banks can borrow basically

we are betting that the ecb will come out with fresh stimulus on thursday. the speculation of lower interest rates and an extension of the ecb's current bond buying program. a more radical move would be for the ecb to launch a helicopter rescue of the eurozone. what is a helicopter rescue? has been taking a closer look at that and what else the ecb might -- may have up its sleeve. it's been a year since the ecb began its bond buying program to jumpstart the sluggish economy, yet the results have been far from stellar. ecb president mario draghi has all but promised further measures. bond purchases have been increased in the current 60 billion euros per month almost 80 billion euros -- 60 million euros per month -- 60 billion euros per month to almost 80 billion euros. would be to push banks to lend to consumers by penalizing them for depositing cash with the ecb. mario draghi could also come out with more unconventional proposals, like helicopter money. it's a scenario where the ecb would directly transfer funds into people's accounts, in the hope this spurs

the main event this morning is the ecb, which is meeting in frankfurt. policy decision is expected around 7:45 a.m. eastern time, and economists are looking for a possible cut in rates again. even below the negative rates that already exist with the european central bank widely expected to roll out more stimulus. we'll be hearing from ecb president mario draghi. that's coming up at 8:30 a.m. eastern time. ahead of the decision, the u.s. futures are sliektly positive. remember yesterday we did see some modest advances for the markets. six out of seven days in a row of gains for both the s&p 500 and the dow. this morning, the dow futures are up by about 23 points. s&p futures up by 3 1/2. the nasdaq up by six. let's take a look at the early trading in europe. again, big decision that's coming out of europe. right now the markets are relatively flat. dax is flat. the cac is essentially flat. the ftse down by half a percent. the currency markets, which are going to key off this as well, if there is additional stimulus, it could very well weaken the euro and s

is it all that the ecb will do? it looks like there is a more bullish read that is happen in the u.s. and in europe. the rally to date means that for the year to date, major averages have trimmed their losses considerably, particularly the s&p and the dow, now let -- now doubtless than 2% on the year. of -- forss than 2% the year. signs ise positive counterintuitively been the losses in the high-yield. , this looks at the s&p 500 total return index in blue. the bank of america-high-yield index and he is pointing out that of the last four times we saw high yields fall on an annual basis, stocks then rallied the following year. this looks back at the prior instances when this happened and and stocks rallied. that is one of the reasons he is looking forward to be bullish. we will see if the run has more to go. isone factor everyone looking at is oil prices climbing to a 2016 high, the bullish comments from the iea. >> february 11 was the low price we saw, we have seen again about 45% since then. ati, up again today on t

what the ecb should do next. undressed treichl coming up shortly. going to sit years back to geneva. we are going to speak first to the ceo of europe's second-biggest that's second-biggest -- ♪ guy: welcome back. you're watching "on the move." a quick look at barclays and glencore. those are down this morning. nearly 6% right now. hans: that is the story of the morning. kind of expected after those numbers but quite -- but not quite so low it let's move on to geneva. the geneva motor show. more than 120 global and european premieres. ryan chilcote is standing by with our next -- i know you are a peugeot guy. the small compact peugeot guy. take it away. hands, there is nothing compact and small about their debut. take a look, it is a nine cedar. -- it is a nine cedar. tour.called the space i think it is a french word. he is the boss that tsa. the business model for a giant car isn't about my family. who is your customer? >> we have a large family. you see with this in peavy we can meet a large range of expectations. --ing from transportation people w

, minus 0.4% for the ecb. is that going to make a difference to deflation at all at this stage? >> we're seeing the initial part of the deflation cycle came from energy, but it's now starting to pervade across a broader sector of economies as prices are starting to adjust. the cycle we're in, it's not all about debt, but it's about technology, the implementation of technology across a broad range of sectors, compressing margins at the moment. every startup at the moment, their ambition is to take everything we do and reduce the price of it. that's attacking the prices and margins. so we are operating at a disinflationary cycle at the momen moment. >> all right, paul. we will keep that focus on the central banks as we await the ecb on thursday. as we came into the trading day today, people wondering if this relief rally would hold. the investors say not so. back in the red, uk miners reversing gains as well. paul kavanagh, thanks for joining us. >>> let's look at telecom italia, shares of that firm have been und

we talked about what the ecb might do. impact on the banking deeper.let's dig a bit have policymakers miscalculated the psychological effect of negative interest rates? lorenzo: for banks it's a reduction in the spread between creditor and debtor rates. the margins are going to be increased. banks have to find a way to go around this negative rate. they have to charge fees or diversify products. incentivize that new relationship between clients and banks. we are thinking about that. selling more products and charging differently. the positive effect is you have in front of you clients which are getting better and better, more solid. though interest rates are helping them to get better and becoming more solid. the quality of the client is improving. perspective,ur what is the most efficient and effective form of's kilis. is it ltro's? i would like to see other policymakers do their parts. physicalroom to have stimulus. mark: does that pop up demand? lorenzo: some countries in europe, germany certainly has, you need structura

how much is the ecb in the drivers seat?re they boxed in by the market to go another 10 basis points negative on deposit rates? >> i think so. the expectation has increased quite a lot. we've had the inflation numbers putting a lot of pressure, back into negative numbers, and the headline that just came out recently. mario draghi is again reiterating that they will do everything that is necessary to try and to obtain the inflation rate below the 2% target. it is a telltale sign that more action is in. the markets have already discounted off the deepening of the negative interest rate, and the expectation is whether qe will be expanded and deepened. that is the big discussion going on in terms of the availability of the government bond markets tightening as or supply and more amount is on by the ecb. what stayed -- is the expansion going into the investment-grade side of the equation, where they can continue to bring the cost of capital down for the corporate sector? i think that is a big move one can expect over the next few

significant moves because of what has been going on with mario draghi and the ecb. ns that we will not see further interest rate cuts going further. tracking and holding. we're down about .2 of 1%. imaginationps, the shown by mario draghi that means money comes out of gold. risk on appetite. money coming out of this safe haven and going into metals. moreve the yuan rising than it has in the last four months. stocks on. money coming out of the havens and going into the bond market. will see more bond purchases and corporate that coming from the ecb as well but yields continue to fall in german 10 year. because of the 10 basis points move by portuguese debt. money moving into the peripheral debt market and going into the periphery of europe. a friday feeling about mutual -- up 3%. south african and london-based. overall, this is a u.k. asset-based company. it will be split up. semiconductors. look out for the chipmakers. apple has announced it will be releasing a new product range. we are starting to see a benefit to those chipmakers. weatherspoon. doing verypoon is we

then all of the possible measures done by the ecb. when we see spikes like that, does it show the limit of the ecb's -- portugal's yields are above the level of when the ecb first announced their program last january. does that show its limits? >> it means we have to work harder. that's my point. we need to bring the euro zone economy to a more sustained growth. countries like portugal will gain a lot from that. course i'm sure the ecb is quite attentive. mark: do you want more bond buying? further incursion into negative interest rate territory? what do you expect from the ecb? i will not deny that this will be good news for the eurozone and also for portugal. we need also patience to see if these measures are having an effect on the real economy. mark: are we behind the days when portuguese yields were below 10%? >> i think so. the job of the government is also to reassure markets that the commitment to leaving these times behind us is very firm. for growth islook different to the european commissions. we had finance ministers tellin

anna: expectations are high that the ecb will step in for more stimulus next week. g the argument for more action, and fell to -0.2%. manus: and festers will be watching the speech -- investors will be watching the speech this morning for clues on the ecb thinking. the address in frankfurt comes ahead of the quiet period on march 5. let's bring bob parker back into the conversation. i love what you said in the break. why should we be so focused on benoit coeure? bob: he always give speeches when the ecb's concerned about the strength of the euro. this is actually unusable. betweena euro that is 108, 109. it is very clear. again, they would never say it in public, i think it is obvious that the ecb does not want a stronger euro. they do not want that. it means they do not want a euro between 112-115. ideally, they would prefer a dollar-euro rate over the next few months closer to 105. i think there is a very high probability that that will happen. and given the dovish statement from mario draghi and others, i think there is a high policy we will see monetary easing wh

peter: the ecb is the only real unifying macro policy organization there.nk said some again to put a little pressure. we need more from the fiscal authorities, more structural reform. there is only so far we can go, but, yes, he is in demand. francine: would it take so much for the markets to understand what he was trying to do? yesterday we saw a selloff, and today we see again. peter: there is a feeling that central banks are scraping the bottom of the barrel. we do not have a lot further to go here. he did pull out a lot. upside ined to the the amount that he did get done, and i am not surprised to see some retracement this morning. francine: mark gilbert wrote in "bloomberg view" the following -- this is the train of thought that maybe 20% of people we speak to think. you disagree with that totally? peter: i do. certainly the ecb's action is having a significant impact in terms of credit creation and what we are seeing in the way of growth. tom: my operative were this morning is what i heard from mario draghi -- horizon. getting out in front of asset re

tracy: where does this leave the ecb in terms of further policy options? is this it for the foreseeable future? >> absolutely not. very good meeting in my view, -- following the disappointment in december. judging by the inflation forecast they put out today, i think they will do more -- they will simply focus more on asset purchases and the provision of liquidity. we know that is effective. not concerned about the effectiveness. i just wish they would get it over with and do as much as needed to get close to 2% inflation, which right now is questionable. tracy: thank you so much. who better to talk about the ecb than a former ecb governing councilmember? coming in the next 20 minutes, canadian pacific ceo says there is not a favored son when it comes to profitable companies to acquire. who would also considered purchasing -- david: common ground on climate change. their pledge to reduce oil and gas emissions. tracy: natural gas is down 35% in the past year. we will look at how companies are dealing with record low prices. ♪ david: welcome back to bloomberg

i don't think the ecb wants to see a stronger currency at the same time. real effective exchange rate their. if you get a stronger euro it is just going to tighten policy across europe and that does go across the ecb intention. i'll think the exchange rate is a target for them but certainly for the euro is better policies they are trying to put in place. >> and they don't went anything to undo what they are doing. just drifting slowly and to further negativity, it's really a disappointment around the meeting in december. what are your expectations? >> the market is cautious going into this meeting. it still tensed overhang sentiment surrounding it. we expect them to do a 10 basis point cut. a large extent, an extension of policy. but with the markets went to hear about is how to the address these twin risks. the risk premium getting priced into european assets. it's clear that the policy just going to monetary route cannot purely focus on asset changes. it does have to do something to watch it. anna: do you want to hear talk assets with a reminder of the t

and you mentioned just the last ecb decision. heard so much more focus on the credit markets away from the fx lines we had heard mr. draghi previously state. this coming after the g-20 meeting in shanghai. do you think there was some sort of implicit agreement to the to get involved in some sort of currency war here? >> i think we have every reason to believe there was indeed some form of agreement among the major central banks in developed markets. one thing that strikes me is the fact that the ecb did not follow suit on the bank of japan's two-tier scheme for negative deposit rates as announced by the boj in february. that at the time was perceived as a fairly aggressive move on the part of the japanese central bank. the ecb did not use the same tool in mitts marat its march m. if you read the publication, they formally confirmed that they will not pursue competitive devaluations with of their currencies. so we are now in a new situation. expect the euro to stay around its current levels. i don't think the euro will go much fur

the ecbs being very clever here. oing to pay the banks to take money from it and lend it into the economy. what they're saying is there are big chunks of fresh money available for the next four quarters, ostensivably broadly unlimited in many instances. to take from the ecb, lend that money and cut the interest rate that's agreed on from 0% to minus 0.4%. in other words, the ecb is going to pay the banks to take money from them to inject into the economy. the other thing is that by the ecb saying that they can borrow large amounts of money now at zero interest, it basically means that their refunding problems that they have go away. the bonds that become due they can borrow from the ecb for four years in order to repay those. this, therefore, puts a lid on the volatility that we've seen on the bank bonds in europe. what mario draghi described as volatile and uncertain. so, as far as the banks are concerned and europe is concerned, of the four things that he's come through with, that is the freshest and the most powerf

mario draghi preparing for the ecb announcement. this measure tries to capture changes in the price of goods closely related to the margin of slack in the economy. super court isn't published by eurostat or the ecb, but bloomberg intelligence made us a graph and it has replicated the gauge. it is available on the bloomberg with that index. if you look at super core inflation, it is probably falling less and recapturing a little bit of momentum since the beginning of last year, but the markets are reading it differently. you are telling me one thing. then the markets have a mind of their own. richard: central banks have lost leadership on this. they are not explaining the situation properly. core inflation in economies is not zero. that is something brought about by an external event. i think what is interesting is that you get the first round effect that just comes through pump prices for diesel, patrol, then you get a second round effect. as people who use oil in production and supply processes get the benefit of lower cost, that fe

reaction from the ecb. it could try to devalue the current c.s not done that for quite a while. the last time they went for negative rates, they were trying to push the currency lower. scarlet: but they are not targeting the currency anymore? >> they are not. in fact, it could go the opposite direction. targeting the currency makes sense until we reach about 100. from 100-130, it becomes very about whether this is necessary. ofol: what kind opportunities does this present for currency investors? >> of the continues to tighten, we might get a positive trend in the dollar. so predictable because fears are starting to add the out of the market, starting with china. they were able to stabilize their situation. as it happens, we will probably see more diverse flow into the markets. scarlet: next week, we are getting all these central banks. after they talk, which will be the favorite trade? euro?n or the >> probably the euro. want to fund themselves in dollars. the dollar is still the major funding currency for emerging markets. the euro is secondary

than 24 hours, we will learn if the ecb is ready to pull the trigger on more stimulus measures.aces choices as he tries to pop up europe's economy. vonnie: canada's prime minister is heading to the white house for his first dinner. this agenda is laid up for his administration and the hurdles he paces. let's head to the markets with julie hyman. julie: a half hour into trading and seven years into the bull market. of 2009,he anniversary happy birthday, bull market. a step back from yesterday's decline, we also have an increase in oil prices which has been helping matters and investors and traders looking forward to the ecb for a little help on the european side. let's take a look at this market. all the way back to march 9 of 2009. at aboutmarket run 200%, although we had some pickups as of late. what has been interesting is that it is the most hated bull market of all time. take a look at the bloomberg. here is the bull market run in white and the s&p 500 climbed. -- climb. going from 2009 then werly 2012, and have seen outflows. even as we have seen stocks continue to go highe

the fundamentals are not that bad. these big negatives are being moderated one by one. ecbdoes the this into their decision-making? >> they say they are data dependent. they ought to be data dependent, and not market reactive. that's what were learning from the fed. fed officials were straightforward in saying that we are concerned that markets are volatile, but we will look at what actually happens to the data, so we don't know whether the forecast is going to be accurate or not, but it looks like the employment data is good , consumer spending holding up ,ell, auto sales pretty robust so maybe things aren't that bad. market volatility is just market volatility. scarlet: what about the ecb? >> they underwhelmed markets with their easing back in december. i think we face another risk next week, because the inflation numbers were weaker than expected. the economy is slowing down a little bit. expectations are that the ecb will do something. however, the ecb officials are saying they are concerned about the impact of negative interest rates on the banking system, having diffi

julia chatterley joins us from outside the ecb in frankfurt. at have we learned since draghi announced all of those measures and made that odd comment which turned the markets around? >> morning, sara. i think you laid out the timetable really well there. the initial positive reaction when we were bombarded with new stimulus measures. then he mentioned in the q&a, the idea that rates aren't going to go any lower. they're going to take a pause here. i think that was what made people think, hang on a second, is that it now? they're running out of options and that's when we saw the optimism, we saw the euro spike. but i think we have to understand why he said rates aren't going to go lower. just prior to that, he mentioned the impact that negative deposit rates have on the ability of bank. he said at some point, there's a tipping point .you have to be careful not to have a reverse effect where the benefits are outweighed by the down side. so i think this was an effort to support the banks. then you look at some of the other measures, the four year

the euro is the target the ecb cannot claim that they have. ere honest enough the other day to say negative rates raise asset prices and weaken the currency. if that is what they say in japan, why isn't it the same in europe? draghi wants a consistently weaker euro. he does not want it plunging to parity with the dollar, he just needs the direction of travel to be going lower and that's why he needs to keep the pressure up and maintain our expectations. great to chat with you. we will see you soon. stocks are finished for the day here. how is it looking there? vonnie: the s&p 500 is leading the pack with a gain of .5%. still below 2000. the dow jones with a gain of 65 points about two hours into the session. the nasdaq is up .3%. the 10 year rising there in germany. let's go to the nasdaq where abigail doolittle has more. abigail: we do have the nasdaq higher this morning. we have the nasdaq biotech index down about 5%. dropped below its 20 day moving average after a time of relatively flat trading. a 30%ime it was ahead of decline, so this cou

particularly it is interesting when you compare with the ecb. compare that draghi mention they do not want to talk about -- iering, because there might be the expectation they reduce rates even further. a very different scenario and japan where they introduce the tiering system. guy: how far way from the end of the road is japan? how much more can they do? marilyn: that is the $1 billion question. japan has done so much in terms of cutting rates. rates could go a lot more negative. they could buy many more assets. i think the interesting question is what is happening to the money from japanese investors? how is it influencing markets? we're seeing that money is going abroad. pension funds and other institutional investors are buying assets abroad. that is having an impact on global markets. guy: one week on from draghi, is he pushing me into credit? marilyn: i think it was positive for credit markets. is shehink the heck introduced was aimed at not only supporting the eurozone -- the package he introduced. in terms of corporate's, increasing asse

is that the ecb has had in the last year.ended up with the willingness of banco popolare, reassess andto make strong and solid capital positions. mark: will this prompt whole wave of consolidation among the country's banks? could we see overseas interest in some of those lenders? giuseppe: maybe. lower.cks are trading one of the lowest prices in the markets. , wear as bpm is concerned have gained a lot beside be our partner. -- vis-a-vis our partner. it is a 50-50 merger. we are proud of it. saying theree should have been, there could have been changes at the top. we needed fresh blood at the top. is that reflected in the shareprice decline today? what you say to those who say maybe the combined lender needed a dose of new blood at the top? giuseppe: frankly speaking, i don't know. the banking industry yesterday time lookingspent at the market. yesterday, our banks were suspended from the market. get the lows that happened yesterday. i would not put these in correlation with what you were saying. we will show how we will mana

apparently the ecb likes to look at this. per core inflation against core inflation, they say what is worrying is that although we've seen a balance in core inflation over the last six months, it has not been mimicked by super court inflation. what does it tell you about the headache the ecb is facing? index.ke the breakfast the cost of breakfast has equally gone down. what's interesting over the winter is the average european is probably 1000 euros better off than they expected. the cost of heating homes has not increased as much as asked acted and now you're seeing other measures of inflation that are pretty low. that's why confidence is not too bad. all these inflation measures matter. the effect of this has been lower expenses and higher confidence. anna: our guest stays with us. ♪ hey how's it going, hotcakes? hotcakes. this place has hotcakes. so why aren't they selling like hotcakes? with comcast business internet and wifi pro, they could be. just add a customized message to your wifi pro splash page and you'll reach yo

you mentioned the ecb bazooka. maybe it was aimed at helping the banks and it was a targeted policy aimed at getting them to lend to each other and to the real economy again. that's not a currency mechanism like flat-out qe that we saw post-financial crisis. anyway, a lot of central bank stories that are sort of moving right now. and the common theme is they're all still in easing mode and the fed this week took a big step back to move in sync with its peers. >> let's have a look at european trading. the banks are weighing on the broader index at the moment, whereas the commodity names are not. we were in negative territory half an hour ago. we've found a little i'm me us it -- impetus, but nothing to write home about. >> check out gold prices. here's what jpmorgan had to say about the precious metal on "fast money." >> i would stay with the sort value asset, and gold is one of them. these assets will benefit from the fed marginally underdelivering. that should put pressure on the dollar. >> we're also watching copp

francine: banks lead the rebound and european stocks after currency volatility as markets digest the ecb stimulus package. i.e.a. releases its monthly report. we speak to the norwegian foreign minister. 11%/che bank slashes -- by . talent?s retain so, welcome to "the pulse" live from london. i'm francine lacqua. we are getting news from the i.e.a. they're talking about supply and demand and the price of oil. they think price of oil may have bottomed. it was only a couple weeks ago we heard russia and saudi arabia agreeing that they will not put siad they would not add production. opec output has fallen. they say, the headline out of this is that the oil price, they believe, may have bottomed as high cost producers have been shut out of the markets. let's check in on the markets. it's all to do with what draghi said yesterday. banks leading the charge. the european stocks still retain some of their strength, 17% .7%. that crude is still a little bit higher for brent. i.e.a. saying that oil prices may have bottomed. let's get straight to bloomberg first word news. yuan has henshore raced i

good for the ecb. hope behind closed doors they are making it clear that they are coming to the end of the rope. ♪ ramy: you are watching "bloomberg best." let's take a look at company news starting with the deal that links money giants. >> dips in sydney after an agreement with the biggest iron ore miner. what is behind the decision? >> this is a memorandum of understanding that lies at a platform for the companies to work together and explore opportunities to create value. the key one of those is blending our ores together for our customers in china and provide a blend suited to minimize the cost of the supply chain. we can buy a stake in market. we are a minority interest. that will be at our discretion. >> tell us about this decision and the benefits of this. >> if we are able to forge a long-term relationship, it provides opportunity for us to lower our costs further. it allows us to better match our products to our customers needs and china. >> dick's sporting goods timed the fitness trend better

we will be talking about the relationships the ecb has with the boe.w on "bloomberg surveillance," a chief economist joins us at 5:00 a.m. ♪ onncine: we are surveillance, francine lacqua, tom keene in new york. let's get straight to the business flash. a shakeup atp, volkswagen's u.s. unit in the wake of the emissions testing scandal. the u.s. ceo michael lawrence has abruptly left the company. he is been in charge for little more than two years. the american cells have continued to fall, the dealers to standd for lawrence the job. $16 billion as the value of start up after a new round of financing. according to people friendly with the matter. they raised 430 million dollars from chinese investors as it prepares to expand throughout asia. the,e, the mobile payment, trying to grow beyond its origin. in the first earnings report reported sales that beat estimates. the ceo jack dorsey is pushing small businesses to use their add-on services for managing inventory as well as analyzing sales data. he says the larger companies will help square become profit

caroline: we see the ecb throwing everything they can at the situation.will be buying of 20 billion euros more per month in quantitative easing. even expected pickup more from mario draghi. we don't really see governments stepping up to the plate for fiscal side of stimulus. he's been very clear about the willingness to go ahead and continue stimulus as long as necessary and increase as needed. you figure out you put -- you put your finger on an important point. fiscal spending to take advantage of that. monetary policy is clearly reaching limits. the addition of more fiscal policy spending in areas like infrastructure could make a big difference. david: you are sitting there in washington. there has not been a lot of movement there in the long time. i do it all optimistic about the tail end of president obama's 10 year, looking ahead to the -- president obama's tenure. sonja: elections are coming up. it's difficult to get momentum there an agreement on policy. i think is the administration changes that could well be efforts in that direction. it will be

the same thing happened when the ecb took action. were already tale because there was expectation. the u.s. was hardly going to start tightening. that meant there was less room to support this. we would have to expect a weakening trend in the short-term, until the market digests the fact that fed expectations are going to go nearer to the markets, rather than being externally hawkish upfront. what you have are very strong bullish positions on the dollar. the interest rate cycle will be much more subdued. that news is now getting built -- guy: can i pick you up on this lower, longer terminal rate theory? my read of the overnight news was, yes, lower for a little bit longer, but then potentially higher after that and what you end up with is this hockey stick affect when it comes to u.s. rates. some of the inflation is here and you have to raise it more aggressively. rate: one, the terminal has been going down simply because the neutral rate is coming down. is more important factor eventually you have to move a lot faster. debtmeans all

we were talking about this delayed reaction to the ecb. mario draghi said there would be no interest rate cuts and investors were confused. they seem to result of confusion today. europe and thein u.s. rallying through the session and hovering near the highs. it has not been a super-volatile session. we see a steady uptrend here. stocks are continuing their winning streak. fourth week in a row we see stocks higher. you see the s&p 500 on a one-week basis. three quarters of 1% is enough to continue the street. one investor we're hearing from his someone who is already bullish on the stock. he has the highest target of the strategists we survey for the s&p for the year-end. one of the things he is looking at, if you take a look at bloomberg, is high-yield. this is the bank of america-merrill lynch u.s. high-yield index in white. s&p 500 total return index in blue. what he condenses the prior four contends is the prior four or five --what he contends is the prior 45 times, stocks of rally. a week year for higher yields last year he thinks that