tv On the Move Bloomberg March 9, 2015 4:00am-5:01am EDT
ngs show gdp expanding at 1.5% in the fourth quarter, much less than the 2.2% estimated as companies in japan unexpectedly cut investment. and a bittersweet anniversary. six years ago today marks the start of the u.s. equity bull market as u.s. stocks comes off losses. they are three of the things i'm watching this monday morning. futures pointing a little bit lower. dax futures off by 46 points. are we set for a lower open? let's get your market open with caroline hyde. caroline: just 20 seconds in, let's see how we are opening up. v-day for the ecb, bond buying begins. europe and the u.s. so stark and their contrast to what is going on. we opened down 0.3% of the foot to 100. we start that bond buying, the ecb sounding very optimistic
that they can bring inflation to their target and also start to infuse growth back into europe. meanwhile, tensions erupting once again in greece. good we see the anti-austerity government setting themselves a referendum? only been in power since january. the latest proposals they sent through to the eurogroup doesn't cut the mustard. meanwhile, the united states still reeling from the very strong jobs data we got on friday. that sent shares lower because it means we are likely to start seeing rate hikes begin. 60% chance now for them to start in september up from 50% on thursday. equities opening lower across the board in europe. borrowing costs are coming down for the likes of germany, currently at 0.38% on the 10-year. there is some concern being shown. borrowing costs rising for greece. once again concern that there
is disagreement between the new government and the eurogroup. let's look at how the euro is reacting. coming off those lows. interesting moves in oil, which are coming a little bit flatter. it has been trading lower today. there are some issues that you might see global inventories build again. so says goldman sachs. keep an eye on mining today. let's look at some of the stocks being affected. china, we saw that overall, we are starting to see commodity trade slowdown. the lunar new year holiday really crimping oil and iron ore. iron ore really starting to see the effect on bhp billiton, down more than 1% on the fact that we are seeing surplus. prices likely to fall for iron ore. wpp, biggest advertiser in the world beating analyst estimates.
it is north america and the united kingdom that made up for a slowdown in emerging markets. lloyds off by 0.2%. they are selling 500 million pounds worth of shares. that brings their total of two more than one billion raised this year. they know unless than 23% of lloyds. jonathan: caroline hyde, thank you very much. a blanket of red. i've got the dax down by about 40 points. ftse 100 in london down by almost 0.5%. it is greece set to dominate the agenda in brussels today. this as we see some cracks appearing on that very delicate greek agreement. eu officials rejected the reform measures as inadequate, prompting discussions of a referendum over in athens. rebecca christie joins us now from brussels. great to have you with us. why did the eu project the proposals and not quite clear
what this will be a referendum over. any clarity on that? >> what is going on in brussels today probably won't be a decision. the deal that greece got last month was to allow for more months for the continuation of talks over the current bailout program and what it might follow on afterwards. there weren't any decisions penciled in today. although everyone would love to have a decision made a, you can get the money the truth is they have a lot more talking to do. >> it seems the bar is pretty low for the meeting in brussels. what are we expecting from the eurogroup if anything at all? >> we are expecting a lot of discussion between the greeks and authorities. the greeks are saying, if we can't get a deal with the european authorities, we may need to consider a referendum which would be asking greek voters, do you want us to make the really tough cuts being asked for by the imf and the
euro authorities or do you want us to keep selling ahead with what we are doing? well before we get to that point, there will be many more talks between the eurogroup the greek authorities, and also the other institutions, the imf, the ecb, the european commission. according to our reporting, not so much common ground between the different sides. jonathan: never much common ground. rebecca christie, thank you very much for joining us this morning. it is time to get the investment take on greece. i'm joined by stuart richardson. stewart, great to have you with us. guest: thank you for having me. jonathan: a low bar in brussels. this referendum talk, what is it all about? one minute it is on the eurozone, then that is pushed aside. then it is a referendum on policy. what are you expecting to happen? guest: not much in the short
term. i think this whole talk of referendum is one part of the politicking that is going on between brussels and athens. maybe towards the end of the week, tensions could rise a little bit. payments could rise a couple billion euros. if greece could raise -- i don't expect any major interruptions even by the end of the week. they've given themselves for months. they are clearly some major issues to be overcome. no major interruptions. jonathan: one of the bottom line throughout all this is that it is clear that whatever syriza are voting on, it will be difficult to deliver on. do you think we could see this year another election in greece? guest: all possibilities are open. the main driving force of the current malaise we are in is that the popular vote said we don't want the current situation. and yet the current situation as
we see it is just not acceptable for brussels. something has to give. either we have another election or we go to some sort of referendum about brussels policy, staying in the euro everything open for negotiation. but the current situation cannot last. jonathan: pretty clear that greece can't come to the markets to raise money with the coupon that it is affordable, sustainable. when is the tipping point? clearly the restructuring wasn't big enough. do we carry on kicking the can and rising through all this for the next couple years? guest: this game could go on for a lot longer than people think. it has gone on for a lot longer than we would have thought. it depends on brussels and the ecb. if they decide to give them more time and they believe there is some sort of reform proposal from athens, then it could go on for another 12-18 months.
the problem is, this is just kicking the can down the road. user you go for a full debt restructuring or greece has to do something the electorate didn't vote them in for. those are some big decisions to be made. jonathan: the clocks went forward in the united states over the weekend. the early birds are waking up on wall street. i guess they are asking questions on the other side of the atlantic. one of them being, what does this mean for me? what does greece mean to me in 2015 if i'm outside of europe? guest: 2012 was a completely different year in terms of the whole greek situation. draghi in late 2012 said, i'll do whatever it takes to keep the euro together. that has worked beautifully for the whole eurozone in reducing sovereign bond yields across the board. it doesn't matter at the moment.
if the ecb and brussels were to fund them, then this kind of situation doesn't mean anything for the financial markets. of course, something not sustainable fundamentally could haunt the markets in the short-term. it is not a problem until it is. if you've got your chips in the game in europe, you run that risk every weekend. jonathan: let's strip greece out of the equation. a lot of people are very optimistic on the markets and on the economy. do you share that optimism? guest: we've not been great fans of europe for the last couple years, but for the first time with the weaker euro and the weaker oil price, europe has a chance to get a couple quarters of growth behind it. as we seen in the last 6-7 years, everyone gets very excited of europe turning the corner, but the trouble is that the longer sturm structural
dynamics of growth are not there. there's many headwinds for europe which they are not overcoming. there's still not enough structural reform. we thought that we could see a short-term cyclical pickup because of the weaker euro and week oil, but over the next couple of quarters and the second half of this year, we are not seeing that big driver from there. jonathan: another false dawn. stewart is going to stay with us. as europe launches qe, able market comes of age in the united states. today marks the sixth anniversary of the bull market on the s&p 500. we will go through the numbers when "on the move" returns. for now, the dax off. the ftse 100 almost 40 points lower. ♪
jonathan: good morning and welcome back. this is "on the move." today some of the ecb launches its qe offensive. able market comes of age in the united states. it is the sixth anniversary of that bull market. that is 2200 days over that time the index has more than tripled. the other ingredient, the fed has pumped plenty of stimulus as well. check out what happens when you
overlay fed qe with the s&p. is this what we can expect in europe? let's ask stewart richardson. we've seen this movie in the united states. we know what happens. asset prices go higher. in europe, before we sold a single bond, i've got the dax -- the ftse mib up 18%, the dax close to that. does this continue for the rest of the year? guest: the next several months it will probably take a fairly reasonable decline in the u.s. in this qe environment. as the ecb comes money in, that is going to boost equity markets. in terms of bond market, which we see the bond yields rise that's difficult to tell. we didn't see it with japan. we are not quite so sure what qe means for the bond markets.
we think the yields just drift sideways on maybe slightly lower in the periphery. jonathan: dig into the bond markets and whether this is a moment for the eurozone, but when i look at u.s. equities, worst day in two months on friday in terms of losses. a lot of speculation as to whether we will get that first rate hike. going beyond that, the first rate hike, interesting to see what happens once the fed does start rising rates. economists have crunched the numbers and typically, stocks continue to the form. the you expect that in the u.s.? guest: we've never had rates at zero for seven years. we've never had that size of fed balance sheet expansion. i think whatever happens in the industry, we have to take with a big grain of salt. we are looking at corporate earnings growth coming off more than that for the next two
quarters, maybe longer than that. there's a combination of tighter monetary policy, but at least bond yields going up and the currency strengthening. this is having an impact on the corporate sector. one of the biggest drivers is this corporate share buyback dynamic. assuming that corporate profit margins come down and there is less easy access, then maybe u.s. corporate's will continue to buy their stock back. that could be one of the drivers for a poorer equity performance from here. we are saying, yes we understand the dynamics, but markets normally do well. the economy is actually slowing down at the moment. corporate earnings are set to come down. jonathan: we can speculate what it means for the equity market. treasury yields, we've gone from almost 1.6%, getting too close to that in january on the u.s.
10-year, 32.2% as i sit here now. -- through 2.2% as i sit here now. guest: it looks a bit overdone to us. with the fed, quite a few times in the last 6-8 weeks, they've said, we want to start rising rates. it is starting. do you think the economy is strong enough to see higher bond yields and a stronger dollar? we will let you decide in a couple months time. bond markets are saying, we will test your patience as to how strong you think the u.s. economy is and whether the global headwinds coming through in a stronger dollar -- we will see what happens. this is another sort of 10 from from the bond markets. it is basically down to a decision by yellen. our view is that if push comes to shove, she may not want to raise rates here.
if the equity market is remaining quite upbeat at the june or september meeting, margins will probably go for a rate rise. a rate rise could well be off the table. jonathan: will they capitulate? big question. up next, we go from europe, much further east. as the japanese recovery weakens and chinese exports go through the roof, we will break down those figures and what they mean after this short break. ♪
jonathan: welcome back. good morning to you. happy monday if they have a monday does exist. let's talk chinese exports. big number for the month of february, jumping by 48% year on year. we need to get someone that can put this number in context. let's get out to tom or like in beijing. tom talk to me about this 48% number. i know you're going to pour some cold water on it. should we be getting that excited? guest: i'm going to pour an entire bathtub of cold water over it i'm afraid. there was wild swings in the export-import data from february. exports up 48% as you mentioned. imports collapsing 20% year on year.
in fact, those headline numbers are wildly misleading. what is really going on is, we are seeing a strong seasonal effect from chinese new year and a strong price affect from the collapse in commodity prices. if you look past those, what you see is exports up 15% so pretty good, but not nearly as strong as the 48% which the headline figures suggest. import volumes, if you strip out the prices looking fairly resilient. jonathan: when i look at the two-month average, let's take your number of 15%. that is still a strong number. d you think that number can be sustained? guest: it is a strong number and no, i don't think it can be sustained. china is already the world's largest exporter. there is not a lot of new market for them to tap. there's been years of strong wage growth, years of yuan
appreciation. the u.s. is doing a bit better but much of the rest of the world isn't doing so much better than it was last year. i think 15% growth is going to be tough to sustain. the government talked about 6% growth as a target in 2015. our expectation is that export growth is going to converge towards that number. jonathan: i want to take it from china to japan. we got another read of the fourth quarter gdp number. does this mean the recovery is off track? you and i have gone back and forth about the labor market. is the labor market the better read across? guest: there was good news and bad news in the japan gdp revision. the bad news, headline growth was revised down from 2.2% to 1.5%. the good news is that most of that revision came from adjustment in inventory.
inventory was a contributor when they did the first estimate of gdp. it was a drag when they did the second estimate of gdp. in the revision, final demand in the japanese economy is slightly stronger. put that together with some of the strong labor markets, which you mentioned, and i think there's some fairly decent numbers coming out of japan heading into the start of 2015. jonathan: always a pleasure to have you on the show. thank you for joining us this morning. it is time to get some final thoughts from stewart richardson. you listened to those comments on japan. there's some optimism in the labor market but certainly stumbling out of recession. 1.5% growth annualized not too impressive. is this what is to come in europe? guest: in terms of the similarities between europe and japan, you've got a decline in
working agent total population. in certain countries in europe you have declining populations in work. without huge increases in productivity, it is difficult to see robust long-term economic scenarios. when you've got a bit of a downturn, something like the sales tax rise in japan, you see a big drop in gdp, then the spring back. when you look at europe, you get the stimulus coming through from the monetary policy. that's sort of the biggest drag for it. when that begins to diminish, we will see a slowdown again. europe looks like it is going to be the japan of the last couple decades. one of the big things has been demographics. we are seeing some major currency swings a bit more volatility in the economic numbers, but this whole use of currency as a central policy is
moving a bit of the band around as opposed to creating new demand. jonathan: very quickly, i know what it means for the equity market. we saw this experience in japan. but for the bond market, no selloff particularly in japanese government bonds until very recently. are you expecting a cell the news moment? i'm not seeing it in the bond market? guest: with the aging profile of our populations, there's a need for income. that means you're going to see yields across governments remain suppressed. you've got a massive buyer in town. for the moment, we see no major object in bond yields. this is a distorted market. it is only staying low because of some of the distortions. jonathan: stewart richardson thank you very much for joining us this morning.
jonathan: good morning and welcome back. i'm jonathan ferro and this is "on the move." let's see how things are shaping up for the european equity market. it is a blanket of red. the dax off by 0.6%. the ftse 100 down by 0.5%. some losses this morning. let's check in on our top stock stories with caroline hyde. caroline: i'm focusing on a couple of the big laggards this morning. we were at seven-year highs on the ftse. today, we turned lower. the biggest faller is oci nv.
it is selling off its construction unit. they are being listed in dubai and egypt. this is a fertilizer producer owned by an egyptian billionaire. he's separating off the construction area to be listed in dubai. down goes oci as that change comes through its overall strategy in the way this company is put together. lafarge down by 2.3%. lafarge is a cement maker in the midst of a deal with olson -- with holcim . the deal terms may be changed. many feel that lafarge's terms are a little too favorable for it. we could see them change. analysts think overall, the deal will get concluded. perhaps not much of a win for lafarge. shares off by almost 2.3%. on the green side, one of the
banks benefiting from the unleashing of 1.1 trillion euros of bond purchases. could be helping a couple of these peripheral italian lenders. but come on capacity. -- banca monte paschi. keep an eye on that one. jonathan: thank you very much, caroline. it is the qe kickoff. mario draghi launches the fight against inflation in the eurozone with quantitative easing for europe. the ecb's asset purchase program will amount to 60 billion euros a month until at least september of 2016. the purchases will also include negative yielding debt at a deposit rate which currently stands at -0.2%. david powell joins us now for a little bit more. inflation expectations. i was in a news conference on
thursday. 2017, a long-term horizon i know, but a forecast of 1.8%. does this man feel like his job is done? guest: there's long-term expectations, but market-based measures of inflation expectations such as the five-year breakeven swap rate which went up quite a bit on the words of draghi last thursday. the qe program is off to a successful start but still about 20 basis points below the level that worried draghi in the summer at jackson hole. jonathan: when i look at the bond market and see a third of the eurozone sovereign debt talk with a negative yield, there is a flaw for their appetite. it is -0.2%. is that one of many difficulties they are going to face over the next 12-18 months? guest: i don't think that's a huge difficulty. a lot of europeans are out there
without a negative yield. that primarily effects the german bonds around the two-year duration or so. i would say draghi's biggest challenge will be one that he managed quite successfully last thursday. that is maintaining a tone of cautious optimism, allowing confidence to increase, but not being so optimistic that people start to say, we have to scale back this qe program and things like that. optimism stokes the equity market and that notion of monetary policy remaining loose for a long time will continue to provide extra stimulus to the economy. jonathan: i do want to talk about greece. finance minister varoufakis raising some objection to a historical event. that was jean-claude trichet a buying greek debt. once they bought those bonds, they couldn't be restructured. what does that say about the risk of putting bonds on the ecb when you are buying 30-your debt
in places like spain and italy. can the ecb really be sure they are not going to have something in the future? it is a long time. guest: certainly, there are worries surrounding the qe program and the risks the central bank is taking. that is largely the reason draghi announced most of the risk will stay with the national central banks. that was to address the concerns of germans who were worried about that. jonathan: do you think that's one of the reasons they can't by more than 25% of a specific issue? was the ecb thinking ahead? guest: the ecb said that some of these guidelines are due to the fact that they want to be treated as a normal creditor. that's because if they weren't markets would become worried that the ecb was exempt from that and that private bondholders would have to take a larger hit. they are saying we are going to be on the same level.
jonathan: just to wrap it up using greek debt as collateral are we expecting that to come back soon what is that eurogroup meeting take precedence? guest: some people thought it might come as early as last week. it didn't come. we have some more troubles now. if that extension is granted that eventually will come back. it is not a huge deal because those greek banks are being kept alive by the emergency liquidity assistance. jonathan: david powell, thank you very much for joining us this morning. just getting the headline that the ecb is set to begin buying german government bonds in their qe plan. the ecb is said to the in the market already. the bond market pretty well bed this morning. across most of the euro market sovereign yields are lower. our next guest thinks the 1.1 trillion euro initiative should help lift european growth in
2015-16. that guest is a european economist at schroders. he joins us live from london. great to have you with us this morning. why are you so optimistic? guest: i think the dots are lining up at this moment. we have seen the stimulus coming from the ecb starting today. we have the euro weakening now. all of a sudden, we are seeing the banking sector begin to return to normal activity. all these tailwinds are going to be hitting a region that is struggling. jonathan: let's get to the breaking news in the last couple minutes. we knew that you he began today but they are said to begin buying german government bonds. bond yields down by four basis points today. does this become a cell the news market or does this rally in the eurozone debt market continue
for the next few months? guest: i think it carries on for quite some time. there's a lot of pressure on banks and insurance companies to own high quality assets. those assets are shrinking thanks to the ecb. if you know the ecb is going to be buying until the end of next year, why do you sell today? jonathan: when you look at what the ecb are going to buy, we know they've got an appetite for negative yielding debt. that is -0.2%. is there a risk of focusing too much? let's say they are buying 5-10 year government debt. is there a risk of trying to play that game? guest: i think there's going to the quite a lot of strategists out there that start to look at where the by has been taking place. the buying will not be random. it is going to be done in conjunction with debt management
agencies to ensure enough liquidity across the curve. along with the issuance, that is where some of the purchases will be. there is potentially some room. jonathan: let's talk about political risk. we've seen it in greece. it hasn't meant much for the rest of the eurozone. going towards the end of the year, we've got a spanish collection -- spanish election. are you concerned about that? guest: i am concerned. i'm concerned that this and pastor ready rhetoric is spreading -- anti-austerity rhetoric is spreading across europe and is seen as a viable alternative to the need for structural reforms to ensure that countries don't spend more they can afford. that situation threatens spain. i wouldn't say that the current incumbents still hold a strong position. jonathan: when i look at greece led by syriza, i know it is
early days, but i look at these early days and it doesn't team like they are going to be able to achieve a lot. tell me what a spain led by podemos will look like. guest: i'm not sure what concessions they can ask for. they have to tighten fiscal policy as everybody else does. perhaps they can win some leeway on that front. unlike greece, which clearly has areas that can be changed to make the situation easier, i think spain is if you like choosing to go down this path of austerity for the sake of financial stability. jonathan: thank you very much for joining us this morning. azad zangana. greek stocks a little bit lower this morning, down by 3%. there it is.
the three-year note, the yield up on that by 33 basis points. that is the yield on the three-year note in greece. coming up, we're going to talk about tech. is it time for the apple watch? the tech giant holding its first big event of the year. how successful will the new device be for the company? ♪
jonathan: good morning and welcome back. not the greatest start this monday morning. stocks down across the board. the docs off by 0.5%. the bond market is focused on qe day. there's the 10-year. the yield off by three basis points. 0.36%. another rally in the eurozone sovereign debt market. not just in germany, in italy, spain, and france. let's get to some of the top stories on bloomberg this morning. the opec secretary-general says the global crude oil market will rebalance after a glut of 2 million barrels a day has sent prices plummeting. opec blames the plunge on weaker than expected demand growth and maintained that opec will not cut production. a russian court indicted five men on sunday in connection with the murder of opposition
politician boris nemtsov. according to interfax news agency, one of the accused admitted to a role in the murder. japan's bounceback from recession was weaker than initially estimated. according to data overnight, the jack manes economy grew -- the japanese economy grew 1.5% falling below the preliminary estimate of 2.2%. in china, exports gained a monster 48% in the month of february. that beat the 14% median estimate of analysts driven somewhat by u.s. demand and some comparables that are pretty questionable. let's talk apple. big moment. after months of anticipation, we get the details of the new apple watch. the key is for ceo tim cook to
convince us why we need his product. here is caroline hyde. caroline, what are we getting excited about? convince me that i need this watch on my wrist. caroline: that is what tim cook is going to do today. we got plenty of details already. six months ago was when we heard they are launching an apple watch. some of it is going to be in 18 karat gold. there are three models, including a sport version and high-end luxury edition. there is aluminum, steel, six different types of straps and touchscreens. i think what everyone is going berserk about is the price point. it starts at $349. what the you pay for and 18 karat gold watch that they say is harder than normal gold? it has even got a polished sapphire crystal face. $20,000? that is what some are speculating. not much compared to a rolex but
it is pushing up the price point. what is the battery? are you going to have to charge this? the promise is, it will last an entire day. we want details on that anda apps as well. tim cook wants this to open your car door for you, to monitor your health. what are the key apps that are going to make everyone want this particular model? and also, where and when is it going to start selling? they've only ever talk about the united states officially. when will it be unleashed on the rest of the world? jonathan: full disclosure for caroline hyde, a bit of rose gold, you are convinced. for me, my phone, i've got the time on it. i know everything i need is there. why do i need this on my wrist? caroline: do you have a tablet? at what point were you convinced that you needed a tablet? when they first had the ipad,
tablets were around a little bit already in the same way smart watches are being put out by samsung. but they weren't ubiquitous. it was apple that brought them into the mainstream, that made you realize i need something slightly bigger than my phone to use for other reasons. i think this is it. tim cook is going to spend a lot of time on stage at this event in san fran. they also got analysts in berlin. trying to show why this will become a big seller. many are hyped up about the fact that you've got less than 5 million mark watches -- smart watches selling last year. why do we expects 12 million this year? you're right. they've got to get on stage and tell you why you needed. jonathan: a heart from you just having the apple sign on it. you plug it into the tech world. a couple months ago, before this got launched, you were like,
where is the new product? then they had this record-breaking monster quarter and the iwatch didn't matter anymore. is there a sense that the bar has been low for this launch? caroline: i think now it is apple going behind the scenes saying, this is the only thing we care about this year. the iphone 6 was the big recent launch for them. i think for the rest of 2015, we can expect some updates to ios but their focus will purely be on making the apple watch the big seller, being the new product that tim cook has on his hat on. this is the first time he can say, i brought you a new type of wearable a whole new type of device category for apple. they've got to make this work. i think they are now focused on this. they've got to keep growing. they are at $740 billion.
they've got $200 billion in annual revenues. i don't think a watch will make a huge difference initially, but long-term, it will. not only on the career trajectory of trimmed coat -- of tim cook but the trajectory of apple. jonathan: we talk about equities in europe. the ftse mib, a market cap of 300 billion euros. apple bigger than the market cap. this is how stocks are trading. the backs off. a blanket recession this morning so far. the bond markets taking the headlines. it is qe day for the ecb. the 1.1 trillion euro bond buying plan kicks off. the 10-year german bond by three basis points. we will talk about this and more after the break. ♪
jonathan: good morning to you. that is almost it for "on the move." for our viewers on tv, "the pulse" is up next. we are joined now by guy johnson. quite a few anniversaries and birthdays as well. sixth anniversary of the bull market, the birthday for ecb qe. >> i think it has been so long that it has been largely priced in. you look at what has happened in the euro the shape of the
european curves and the way they flattened. if they are buying germany, they are probably buying further out. the curve is going to flatten even more. anniversaries, but anniversaries that have been well flag. jonathan: what is coming up? >> we are going to be talking apprenticeships. boris johnson coming up over the next couple of hours. i think the u.k. politics stuff is fascinating. we will get a take from vince on where he sees the business post-election. we will talk that, plus apprentices. what type of apprenticeship do you think boris johnson should have served. we will ask him that question. jonathan: when i look at vince cable, a lot of people talk about how this is going to the a boring budget. the lib dems don't want to the in the same company as the conservative arty. guest: -- >> i think the chancellor would
like to put it further. i think part of -- this is going to be -- this is politics. this has almost zero to do with economics. it is all about perception rather than reality. probably, you start off in that position and you understand what the machinations look like. jonathan: boris johnson, i remember the big speech of bloomberg. he would like us to think, at least the perception he was trying to give off was the reality very much about him and his role in the conservative party. not heard much from him in the months leading up to the election. what is his role? >> a to win the seat. b i think he is, and we probably haven't seen this yet, he is definitely out there to change perceptions of little bit . i think your starting point is right.
he's in a really difficult position. ideally, he'd like to see the tories lose. because then there would be a leadership challenge. he would contest. on the other hand, if he's playing the party card, he obviously wants them to win. i would have thought in some ways he's a little torn in his views. jonathan: i'm very much looking forward to that. you can catch that on "the pulse ." boris johnson with guy johnson later on. let's check in on equity markets. stocks lower across the board. if you are bullish, it is blanket bread. the ftse 100 off by 0.6%. the dax, eight weeks of gains. we are down by half of 1%. in the bond market, different story. the rally continues. the 10-year german government bond off. the ecb said to the in the
guy johnson: the ecb begins qe today. german bonds are on the shopping list. the union says the latest great reforms are not enough to we will have more from brussels. you are hired. we talk about internships with boris johnson. good morning. welcome. you're watching "the pulse." we are here in london. francine is off today.