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tv   Countdown  Bloomberg  April 10, 2015 1:00am-3:01am EDT

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mark: a 15 year high in asian stocks. we are live in hong kong with the latest. anna: germany's biggest bank is settling another libel investigation. we bring you the details. deutsche bank is expected to plead guilty to interest rate manipulation. mark: with days to go until the deadline, the ecb grants greece more emergency funding. finance minister tells bloomberg in an exclusive interview that and the court will be reached, but he is not looking for money outside the. -- the eu. >> our financial woes our
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bailout fallout, needs to be dealt with immediately. this government is not seeking some extra european solution to what is a european problem. anna: apple launches its first new gadget under ceo tim cook but will customers go for the smart watch? samsung lancets come back with its debut of the galaxy s6. we get our hands on both gadgets. mark: welcome to "countdown." caroline: coming up, we get an up close look at a shoemaker to the stars. he has worked with kanye west lady gaga, it is now teaming up with beyonce. we will show you how this dream
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collaboration came about. mark: gains and losses today after a 15 year high, briefly trading above the 20,000 mark. let's get over to stephen. is this a trend that could continue? stephen: good morning. the traders we spoke to think that the nikkei's rise above 20,000 for the first time since april of 2000 is a trend that could continue even though there are speculators. the nikkei 225 is up fractionally right now. earlier, it touched 20,006 the highest and some 15 years. that has pulled back a little bit and overall, asia is mostly in the green -- not the kind of gains we have seen over the last few days. in japan, we can see some of the biggest movers, including aon.
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it is soaring 5.5%. it beat estimates. not on that list is the biggest awaited stock, fast retailing. the owner of the clothing stores -- that company is reporting, boosting it profits by 20% because of better than expected sales, not only in japan but abroad. this stock, fast retailing, is above 50,000. it is the most heavily weighted stock in the nikkei. that is also helping that index creep up just fractionally. elsewhere, the big story has been the hong kong and shanghai hong kong connect all those mainland investors pouring into hong kong over the last week. that market in hong kong is upset 10.5% over those seven sessions. as you can see, the index is up just .5% after that big gain.
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perhaps a little bit of enthusiasm coming out after this rocketing. we did hear from the hong kong exchange ceo, saying that the long-term goals are to expand the quotas for that shanghai-hong kong connect. mark: we also had some china inflation earlier. what are consumer prices and producer prices telling us right now? stephen: prices and inflation -- it has been in a trend of disinflation. we were expecting a rise of 1.3% and we got 1.4%, which is the same as february. you can say that inflation is holding steady. it is not gaining or dipping and we need to look forward a few more months once we get past the seasonal distortions in january and february for any clues on whether this will lead
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to eventual policy shifts. ppi factored in that inflation. it has been in deflation 437 consecutive months. oil and commodity prices have led to a lot of it it is also weaker demand from customers in china and elsewhere that is leading to that factory deflation down 4.6% in march. we were expecting 4.8%. it is still pretty weak. mark? mark: thank you. caroline: deutsche bank has posted $1.5 billion to settle investigations and it's libel manipulation behavior. the possible deal would include both the united states and u.k. authorities. are international correspondent has the story from berlin. hans put this number into
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context. the number of banks have had to settle. every other week we have another investigation. hans: it does seem that way. when you look at the settlement alone, if this number comes in above 1.5 billion u.s. dollars, that would be with the record is right now. ubs paid $1.5 billion. in the $1.1 billion range is what barclays paid. crucially, barclays did not plead guilty. that is something we expect to happen. with deutsche bank, their u.k. subsidiaries will be guilty to a charge. voice was at 300 and $3 million. -- 300 and $3 million. -- $383 million.
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overall, they have set aside quite a bit of money. the total is about $3.6 billion -- that is what they said they put aside in december of 2014. over the last few years they have paid $7.1 billion in legal costs, a remarkable cost. this is a cloud over their head for deutsche bank. it does involve the department of justice, the commodities futures trading commissions, and crucially, the new york state regulator at the department of financial services. in the u.k. we have the financial conduct authority. what investors may like about this deal is that it doesn't include a lot of the interested parties, but it shows you to what extent and how complicated it is when deutsche bank has to deal with two to four regulators in two different countries arriving at the figure. caroline: they are about to settle in the u.s. and u.k. --
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they have already settled with the european union. any other cases? hans: they still have to deal with bath, the regulator here in germany. there is the big question about fx. there is the potential with violating iran sanctions. late last year, one ended up paying $9 billion on iran. deutsche bank was not included. that was a total of $4.3 billion. deutsche bank has been given the all clear in new york. that is important because he tends to press for higher fines. at least on the currency side that is one thing deutsche bank doesn't have to worry about. caroline: hans thank you. another bank that is slightly
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closer to home is also paying up $1.1 billion in a criminal investigation. french authorities ordered hsbc to pay bail to cover tax evasion at private banks. hsbc was told it is under and criminal investigation. hsbc says it will appeal the decision, calling it "without legal basis and that they'll is unwarranted and excessive.' mark: the meeting in paris is confident for a meeting at the ecb extends emergency cash for greek banks. >> the situation is going in the right direction. talks continue and i am comfortable that an agreement will be reached. mark: greece wants european lenders to unlock more than 7 billion euros in bailout funds.
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the prime minister came up with economic reforms. manus cranny is in paris where he spoke exclusively with the greek finance minister. he said that he is confident that a deal will be made by april 24. what did he have to say about the accord? manus: it is interesting -- he has almost come in from the cold , that he is communicating with the market. he chose to speak to me. he talked about a budget surplus that was achievable and a very european -- ihe says the tax receipts are ahead and they are on target to get themselves to deflate.
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the days of deficit are behind. the event was held at the oecd. the guy who used to run the fsa -- they came out of the bilateral meetings with him. i spent a lot of time standing outside the room. eventually, he did speak to me. the essence is this -- deficits are dead, surplus is achievable. it is a european solution, but the elements of the deal, if it comes, will be threefold. >> we need to prioritize reforms with malignancy of the great state -- the greek state. we need to deal with the ill effects of a five-year catastrophic recession, that includes loads and broken down circuits of credit investment
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both public and private, and a long-term, sustainable fiscal plan that involves three elements -- we need the prime minister not to fall into primal deficit. but we must not be excessive. we need a sensible policy for private investment for a package of public investments. from the european investment bank, from some kind of european authority or institution, and we will need essential discussion on the irrational solution -- irrational solution in a way that maximizes the value.
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manus: mark, it was interesting -- he said we don't want haircuts on the debt and we are not looking at a long-distance graph of hundreds of years of maturity. he doesn't want that to be perceived as the kind of deal he does the never-ending war loan. the irony there is that greece is talking about war reparations with germany. anyone who missed the interview go have a look on i said, are you ready for the political backlash? you will have to do compromises, the mandate of delivering for the people -- are you ready to take the political backlash that goes with that? his response was we wouldn't be fit for purpose if we were not prepared to take the political
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costs which are necessary to stabilize greece. this is a finance minister who knows he is going to have to take a fight back. mark: he just get back from russia -- what did he tell you about any deal with anyone outside europe, such as russia? manus: this is the whole point, that people are wondering why the political, very public appearance with putin was delivered. wasn't poking one in the eye, as it were, to the franco german alliance? he was very clear -- we want a european solution for a european problem with a european neighbor, and he is not getting the begging bowl for russia. >> greece is not seeking solutions for its problems in terms of a relationship outside
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the borders of europe. manus: he is ready for the backlash, ready to do the deal -- he was reasonably upbeat in regards to the economic situation. to give you some framework, this is the third time the greeks have met with the oecd. it is interesting because we spent a lot of time looking at the numbers -- 1.5% surplus where does he get the $3 million , taxes you can't find -- forget all that. the whole reason about this relationship with the oecd is by creating trust that the greeks can deliver governance and execute. that is what this deal will come down to to get those funds released. i'm fragile but i'm absolutely dependable. mark: great interview yesterday.
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he is looking good. caroline: let's shift our attention to companies. to the biggest names in tech go head-to-head with the launch of new products -- samsung debuted its galaxy s6. in 20 countries, including the u.s., u.k., and germany. preorders begin for the apple watch. here with more is amy thompson. amy, samsung is expecting sales records with this new -- i've got it on the desk. what are we thinking? could this be a comeback? amy: hopefully it is better than the s5. i don't think they are expecting it to outsell the iphone, which is having record quarters but it is definitely stepping up its game. the plastic casing is gone it
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and it has a cool, curved screen. that has a faster processor and better battery. this is an answer to the high-end smartphone. mark: it is reflected in the share price performance. since it was announced, some shares have gone one way and apple has gone the other way. amy: yes. one of the coolest parts of this phone is going to be the samsung pay element. you don't need a fancy terminal in your store for it to work. this could be one of the things that makes mobile payments take off. it works with more technology than apple. caroline: everyone is effusive about the phone -- they love the way it looks and the share places are reflected. -- share prices are reflective. is it going to be as big as the tablet, the ipad?
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amy: it might get there. apple timed it really well. they think the market is going to go five times, six times a year, so they claimed it where the market is starting to take off. the watch itself still hassan issues -- it is a little bit more complicated to use than their average apple product. criticisms have been put about app crashing -- mark: is it essential? do i need one? amy: not yet, but the vision says that it is a bionic extension of your iphone. you don't have to think about getting your phone out of your bag is the you have -- bag if you have an e-mail. unless you get a couple hundred a day like we do. it is also an entryway into the
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internet of things -- you can tap your watch to pay for things or have a train ticket or plane ticket. you become at one with the internet. caroline: it is finally with tablets -- they made it ubiquitous, the must-have object. thank you. mark: coming up, greece has one more ecb emergency counsel. have they changed their tune? our next guest think so. -- thinks so. ♪
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mark: the finance minister is confident about reaching a deal. our guest says that is a step in the right direction. we've gotten past two hurdles, haven't we? the next hurdle is probably another package that will be needed to pay off the ecb. will we reach the first one soon? >> there is a great sigh of relief. it seems like the greek communication has changed dramatically. congratulations to bloomberg for getting that landmark interview with the finance minister.
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he has got a great political career. what happened is that we have seen the game plan in terms of negotiation with ukraine. they have moved away from economic negotiations moving toward a political provocation strategy in the last week, with talk about public requests for german world war ii cash reparations. looks like they would go against debt payments abroad and the plan was taken to president clinton in russia so what we have seen is a huge shift away from that strategy towards reconciliation. the finance minister was very eu friendly, talking about and use solution, but that doesn't change the fact that greece remains in tight straits. there are huge hurdles ahead.
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ecb's ela buys more time for the government to negotiate. he is insolvent. the next big hurdle for the government now is to convince that it has got the credibility through parliament, the tough fiscal economic business friendly reforms, pension and labor reforms -- and that will require going to their voters and saying -- it still has to deal with austerity. even if the 24th of april releases the final money, it still leaves greece in the position to have to turn focus to what i would consider the cap
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gasquet issue of having to negotiate bailout. in june it is a tough time. caroline: menace said -- men anus said that he didn't want to push it off into decades or with debt restructuring. what do they do, then? how do they make this repayable? lena: to the naked eye -- to me, greece is in a clear line of negotiation. once it gets the next eu bailout, inc. is a lot more time to really go back to the beginning and turn the clock negotiations back down to zero. then you can start talking about -- it is extremely important to understand where it disagrees.
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may publicly owned stock of greek debt, and it will do one thing -- it will make greases access to eu cash conditionality free. greece will only make payments when the gdp threshold is allowed, which makes the debt repayable even when greece reaches a current asset level. in the meantime, debt repayments would only happen when the economy is in recovery. it alleviates the greek debt burden but it also makes -- mark: isn't palatable to europe? lena: this is the key -- in the short term, it will be a politically friendly thing for your to kick the greek issue into the long run which is what will happen with the debt swap. allowing greece infinite access to the ecb through european
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reconstruction funds without any conditionality increases the risk of a return to this kind of systematic problem that led greece to the crisis. ♪
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mark: welcome back. the foreign-exchange markets -- looking at the spot index. three weeks of decline, up this week by 1.5% as you can see from the charts on your screen over the last five trading days. this is the index that measures the dollar against its peers. investors right now are focusing on when the u.s. federal reserve will raise rates after minutes from the last meeting. they showed a split on the timing, some in june and some preferring later.
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some even preferring 2016. netmeeting -- that's meeting came before labor market data last friday, which -- lots to consider. a 58% probability that the fed will boost rates before the end of the year, up from 53% at the start of the week. this index is at 1.7% below the record set on march 13. quick comment from jeremy -- he says that the policy divergence story between the fed and its peers remains a reason to buy the dollar at this point. nothing in the minutes has changed our view that the market should go long. caroline: thank you. let's check in on some other top stories. hong kong's de facto central
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bank stepped in to defend itself sincef for the first time since august. benchmarks hit a seven-year high. the worlds biggest market, hong kong exchanges, expects the link with china. the exchange had record training turnover worth $1.7 billion in shares for two days. chinese investors used up their daily quota by a shanghai. britain has been sued at the european court of human rights over the massive collection of internet and phone data by his spy agency. human rights groups are challenging that the practices were legal. they argued that the massar violates -- them surveillance violates privacy. let's taken some politics closer
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to home.. 650 local elections. projections have been set from the beginning of the campaign to explain why smaller party are unsuccessful -- smaller parties are. -- are unsuccessful. >> the first half of the system helps bigger parties. labor is 32% of the vote and that translates to about 42% of the seats in parliament. the same thing happens to the conservatives. for the liberal democrats that 8% of the b vote translates into 10% of the seats. for the greens, 5% of the vote will likely turn into just a single seat -- but it doesn't have to be like that. the scottish party is about 4% of the vote.
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they could win as much as 7% of the seats. this is why smaller parties in britain support electoral reform.. mark: the u.s. masters teed off in augusta yesterday. for more on this and the business of golf, let's welcome the chair of the british golf industry association, nigel freemantle. he joins us and and next was an interview. good morning. many say that golf is in decline in mature markets. true format? nigel: it is having its problems. in decline? i would say slightly. it needs a few tweaks. i am not sure that it is in as much decline as the media is portraying. mark: what tweaks doesn't need?
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many say gulf needs to reinvent itself, to boost its appeal. nigel: i think certainly as a young man, modern technologies, tweeting facebook, that kind of stuff -- he is certainly bringing golf into a younger segment. i suppose golf, the demographics of golf is quite an aged sport. mark: many would say it is elitist as well. it doesn't focus on minorities hasn't been open to women. fair or not?? nigel co. stats out i saw this week -- the u.k. is, i believe
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34th in the table of 38, just above albania, scotland, wales and somewhere else, with a 15% female participation. whereas austria germany, are up in the sort of very high 30's. probably the traditions of golf in the u.k. have been a little bit stayed. mark: what are you doing at bgia? your job is to boost golf's appeal and participation. nigel: we have two arms to the association. bgia looks after the trade body that looks over the wholesale
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distributors, involved in golf. we also have a fund that some of the companies put into the grove golf fund something -- the grow golf fund something that has been out there for a few years. we have donated to that and other causes. this year, our second year, national golf month, which has been massively sponsored, is bringing an awareness of golf to the masses. not necessarily the golfers themselves, it will be put out on their radio stations and editorials, not golf centric. to show people that golf is a different game, it is starting
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to appeal to the families females, where you can have a lot of fun. with the national golf index second-year we are very confident that we can reach out to a hundred or thousand last golfers, females, children families -- together, a different viewpoint on golf. mark: rory mcilroy is the decline of golf, some say. closely tied to the decline of tiger woods. is rory the savior? nigel: i think he does, yes. mark: he was playing yesterday and he did ok. nigel: it was great to see him out with his kids having fun. i think what we are trying to
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purvey here is that golf is quite fun. mark: time-consuming, though. modern day we are all strained by time. can we afford to spend hours on the golf course? nigel: time -- maybe we should all make more time of our weekly stuff. when i look at people who followed football which is obviously very big in the u.k. and overseas if you look at the time of a football match, which is an hour and a half, a couple hours at most -- mark: the grand slam, is this it? nigel: it is a tough call.
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he could do it. jordan is flying, absolutely. mark: good to see you, nigel. nigel freemantle, chairman of the british golf industry association. caroline: the great finance minister is confident that his country will get a deal with the eurozone creditors to unlock a remaining 7.2 billion euros in bailout funds. the ecb once again extends emergency cash funds to its banks. we are joined from brussels. what is the next deadline? >> the eurogroup deputies are meeting again next week and they really want to see some details about the reform plan that greece has put forward. they submitted a 26 page plan last week but the eurogroup
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officials feel like there is not enough detail and that the revenue projections in the plan are too optimistic. they are going to be discussing it more with the greeks among themselves over the weekend so they can try to come up with a more detailed plan by the middle of next week. caroline: it was interesting, he was saying that he doesn't want to have a debt write-off doesn't want to extend the payment terms too much, but it seems by taking it to gdp, that is exactly what they get. >> at this point there are so many options out there it is hard to tell what people get. there are certain things that the eurogroup, that eu and the imf need to have in this renewed agreement with greece. there are certain things greece is trying to do in order to get back to the people in athens.
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the idea is to find his balance. one of the things the eurogroup is pushing for its tension and labor market -- pension and labor market reform and this is something athens doesn't want to delve into. the greeks are trying to come at it from the revenue side and the eurogroup is trying to push them to do it from the cost side. they are going to have to find a balance in there somewhere. caroline: thank you very much. up next solo asia exhibition next week -- i will ask our next guest about the business of art. ♪
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mark: top stories on bloomberg this hour -- president barack obama and roel castro had to panama to the summit. they could meet for the first time since announcing plans in december to work towards restoring diplomatic relations. both will be present at the arrival ceremony and for a photo opportunity before a formal dinner. that will be the first time cuba takes part in the summit. one of europe's largest private equity firms is said to be preparing an ipo. aipac seeks to return more than 4 billion euros to investors this year, which would give them access to permanent capital. the online education company
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valued at $1.5 billion is moving, linked in expansion across professional networking. caroline: let's change gear and look at the business of art. our next guest sells his work and is set to open his next exhibition in asia. joining us is a the ceo -- why asia? >> i have never been to asia and i think the chinese market is very important for us. we are very excited about it. it is my first exhibition in asia. caroline: where would it be? >> 22 hollywood road. caroline: tell us about who is buying you -- you are based in zurich. have chinese investors in coming
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to see your work? >> the chinese investors were from -- a few times they have entered the market, but as soon as we get out there, it is a game changer, and it is something we are very excited about. caroline: you say russia is important -- are they coming in as a heathen? >> a lot of russian buyers are buying a lot of art. they see it as a very strong asset class that has outperformed a lot of other asset classes. caroline: tell me about your new work -- you are working on a table -- are you moving out of purely canvasses? >> the table is very exciting because we are adding wizardry to artwork.
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we are manufacturing something in switzerland, the best place in the world for luxury designs. it is -- how do we define luxury in a modern era? it is through pure craftsmanship. this table is absolutely exquisite. the story behind it and engineered in switzerland -- it is amazing. caroline: would you call yourself more and luxury brand and artist -- brandon van and artist? >> we are in the process of capital raising right now. we have got many facets. we are about to launch a new technology cap which will rip -- and do technology app. caroline: how is the funding going? >> we are seeking it from
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investors and some of them are early collectors of my work. they get the concept and they understand what we are doing and how we are transitioning from paintings into a luxury brand, bringing that to people's lives. that is what it is about -- as soon as we are not innovating we are out of business. caroline: you are launching a n app. is it to bring the customer that much closer to the process? >> it is a very personalized thing for us, it is how somebody can bring us through their life. it is more than art, it is a way of life, and transitioning into a luxury brand we can't compete against those big brands unless we are innovating early. launching this will allow people around the world -- a lot of people will be touched by this
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app. caroline: what will it be called? >> artel. and that is all i can say. caroline: you are creating a brand you are developing a team to take on the creamy blue -- mccready. how can you make sure it stands for what you wanted to stand for? >> i stills oversee everything -- i still oversee everything. it is physically impossible to keep up with the demand. the team allows us to work together and produce it as a team and that is the exciting part about it. everything is done efficiently and we want these products to be efficiently executed. people are willing to pay for the best product in the world and if it is beyond the product
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it is exciting. caroline: thank you. coming up, we will be looking at our favorite stories from bloomberg's digital app including the death of a cricketing legend. ♪
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calico welcome back. -- caroline: welcome back. wehow do those dream collaborations come about? we went to meet him and find out. giuseppe zanotti makes killer heels for killer prices. issue maker for and with superstars. he is joining forces with beyonce following in the footsteps of his collaborations with kanye west. how do you team up with a megastar? >> there are two ways -- the traditional one is through secretaries, pr, agents -- it can take 12 years and costs you i don't know how many billions. the other one is you meet them by chance or at a fashion event.
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of the things that happened by chance are the nicest because you exchange phone numbers and overnight you get an e-mail from los angeles. caroline: it is a fitting combination -- his first love was music. he started out as a dj in the 1980's before taking of design. after a stint working freelance, he was able to buy a shoe factory in the 1990's and from there the business grew. today, he has 92 stores around the world, and aggressive plans for growth. >> in 18 months, we will have 30 more for a total of 120 shots. -- shops. that means having a stronghold. caroline: with annual sales of 156 million euros, he recently
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sold 30% of his business. now he is looking east. >> we are investing in repurchasing through ventures we already had in the middle east and asia. we are also investing in strengthening our production hub, which is three times its current size. caroline: what about the competition? with some of his shoes costing more than $2000, there are inevitable comparisons with red sold arrivals. >> they are a great shoemaker. the truth is they are an important brand and he is a competitor i respect. mark: my choice today is digital world, the voice of my summers
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back in the 1970's. he was quite simply, peerless -- if you speak to any broadcaster, he is the standard. very sad day for cricket. ♪
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mark: the nikkei touches a high. we are live in hong kong with the latest on the markets. text germany's biggest bank is said to be near ending another liable investigation. deutsche bank is expected to plead guilty to interest rate manipulation. mark: the finance minister yanis for an attack is -- varoufakis says an accord will be reached but he is not looking for money outside the eu.
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>> we should be clear. our financial woes need to be dealt with. this government is not seeking an extra european solution. >> apple launches its first new gadget but will customers go for smart watches? and the debut of the galaxy smartphone. we get our hands on both gadgets this morning. ♪ >> welcome to countdown. i am mark barton. >> also coming up, we get an up close look at the shoemaker to the stars. he is teaming up with they on say. we will show you how -- beyonce.
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we will show you how those come about. mark: the nikkei reached 15 year highs, briefly trading above the 20,000 mark. that's get back to stephen engle. is this a trend that could continue? stephen: there could be some legs left in this rally. that is propelling the nikkei to do five above 2000 for the first time since april of 2000. earlier this morning it reached 2006 before paring some gains. you can see some of the biggest gainers. five and a half percent in four-year profit, beat estimates. another heavily weighted stock the operator of unique low --
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uniclo. it boosted its forecast by 20%. they make that a new high. we have a frenzy in hong kong. they propped it up on the hang seng. today a bit more muted, even though we heard from the ceo. we heard there is no specified time frame for expanding those quotas. that's a quick look. mostly green.
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caroline: the possible deal. contest the story. put this into context for us. >> it would include the new york authority. this is the department of financial services. he could be driving the number even higher. that is the benchmark. that is the record paid in 2014. they had 1.1 billion. we had barclays at 451 and lloyd's around 380 3 million.
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deutsche bank has set aside 700. they paid 725 million to settle an investigation into euro and liber manipulation. they set aside 3.6 billion in legal provision, and in total it is about 7.1 billion in legal cost litigation they had to pay over the last three years. it does include the fca. we will see how much higher it goes. it is going to be north of 1.5 billion. caroline: that is on the liber manipulation side of things. there are other things that
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could be facing deutsche land. >> we still have fx. remember last year when 4.3 billion settlement on potential currency manipulation was announced, that didn't include deutsche bank, and you could have potentially something on the iran side of things. they paid 9 billion on iran and cuba. we potentially have two other areas where deutsche bank is exposed to future risks, future settlements. let's see how the market response. it looks like we have a rough number on my bar, and we will see how the market reacts. >> another bank closer to home is paying up to one point $1 billion in a criminal investigation. french authorities ordered hsbc to pay the bail that covered tax
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evasion at the private bank. they are under a criminal investigation for the private banks conduct. hsbc will appeal the decision, saying without legal basis and the bail is unwarranted and excessive. >> the finance minister is confident of a deal for greece. that is the message across the eurozone as the ecb extends emergency cash. manus cranny spoke with varoufakis. what did he have to say about the potential accord? >> he stepped away from a series of meetings. the two elements that have come up a little earlier on, the devil will be in the details. to the creditors trust the greeks to deliver the details?
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varoufakis was very definite and very upbeat about the economic and delivery of the greek side. >> first, is it realistic to reach t 1.1o 1.5%? yes, it is. it has overshot budget projection by 80% or 90%. if there is a bump in tourism as long as the negotiation produces a good outcome and you have stabilization of economic ends, then yes, it is highly reachable. regarding the debt situation, i think it's essential that we look our creditors in the eye,
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especially citizens of poorer countries that have led to the state, something i was opposed to, and say that we want to maximize the value you get back from us. the only way to do this is if we have parts of the debt swap with gdp so that it's clear the more we grow, the more money our creditors get back. we don't want to elongate maturities into the future because that would be a headache for our creditors. it is something suggested as a solution. we want to pay as much as quickly back, but we can only do this if our repayments are linked to growth. this is what we are arguing for, to have smart swaps of existing debt with instruments that lock in this kind of incentive so
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when we suggest an investment package for the private sector, our fellow european citizens realize it is in their interest this takes place so they get their money back. >> we finished off the conversation briefly where he chatted and said, are you ready for political backlash? are you ready for the political backlash if it comes? he said we would not be fit if we were not prepared to take the political costs necessary to stabilize greece and lead it to growth. let me be precise. we are prepared to make all sorts of compromises. we are not prepared to be compromised.
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stiglitz did not show up. these people were having private conversations with varoufakis in a private meeting. eventually, i corralled him. mark: see you later. manus cranny and paris. caroline: let's get more on this story. where does greece go from here next? they have got this april 24 self-imposed deadline. chances are they managed to kick the can? >> they can manage their cash. they can keep the ship moving, but the iceberg is in july when you have massive bond debts. until then, they have a billion
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here, a billion there. the real deadline is july, which means the deadline with the euro is may. a final agreement has to go to parliament. probably a month from now there has to be a path towards a real deal so they can get the next 7 billion euros. >> is the deadline really a deadline? >> there are incremental deadlines. there are hurdles they have to clear, but they are not existential. in the summer they have to have the money. caroline: we keep talking about the money hemorrhaging out of the banks. they are hand to mouth.
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how much cash to they actually have? >> for years we have been covering this. every deadline, how much money do they have? they always manage to find quarters under the rug. they can continue to juggle their cash. the banks, companies have government funds, pension funds they can manage to get the money they need to keep the lights turned on. without the ecb money. it's not official ecb money. it's all the euro system. mark: what's the endgame? you just push the can down the
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road, which ultimately suits everyone? >> no government repays its debt. it's about servicing its debt. the u.s. has how many trillions of dollars of debt. that is the issue to me. the debt servicing costs are very low for five years and out due to the last bailout deals. mark: the debt load is a worry. >> for the next few years it's not going to be a tremendous burden on big finances. caroline: thank you very much for joining us. mark: now the launch of new products.
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smartphones in 20 countries including the u.s., the u.k. and germany. >> the customers cannot take it home. they can only hold it. customers come to the buying experience table where they get to talk one-on-one with a staff member. they found 14% of australians considering buying an apple watch weren't sure when they wanted it. quite a lot of times i have my phone with me and it's a little intrusive. i think having a watch would be more subtle in terms of seeing
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messages. >> naturally apple and samsung are busy trying to steal each other's thunder. the new one going on sale for the first time in australia. >> samsung predicts shipments that smash records. a now famous curved screen. samsung expects demand for the age to outstrip supplies. >> it's not a gimmick. i have used it earlier. it works for me. it does the job. >> unlike apple, samsung customers can walk out the door. to enjoy the experience they must wait until april 24 to get their gadget. caroline: we can report there is
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no line in the london regent street store right now. let's have a look at other stories. president barack obama and cuban president roel castro head to a summit. both will be present at an arrival ceremony and a photo opportunity before a dinner. one of europe's largest eye that equity firms is said to be preparing an ipo. -- largest private equity firms is said to be preparing an ipo. linked in will buy the online education company at a deal valued at $1.5 million. you can find more on
2:18 am join us on twitter. let us know what you think of the show. let us know whether you are going to be heading to regent street or your local apple store. you can be buying them online in the united states as well. that is trending on twitter. >> richie benaud trending. a sad day. european stocks are at an all-time high. we will get a take on the opportunities after the break.
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caroline: welcome back. european stocks are at record high. let's bring in the head of equities, andrew perry. we have 69 point $8 trillion in the market capitalization of equities across the world. should we be worried? are equities too expensive? >> if you look at europe, europe is a perpetual disappointment over the last five years. we are at the point with a surprise to the upside.
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we have lower oil prices. a lot of headwinds are turning into tailwinds. we might have an earnings upside , which comes as a shock. it is just coming as the u.s. cycle seems to be peaking. the relative arbitrage finally seems in favor of europe. european stocks are at the average valuation. whereas the u.s. looks pretty expensive. mark: the low hanging fruit has been picked. what is left? what about investors who have not exposed themselves to european equities. >> you have to look for what can grow. you have to look for where you can find growth. we see growth in tech and pharma. the auto sector has been doing well. i think there is a lot of pent-up demand is confidence can
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come back. qe underscores the confidence gave countries some stability over the next few years. we see countries finally talking positively. previously when we had these rallies, you talked to the company and said, what is going on? where is this growth? now we discern there is incremental demand coming into the system. caroline: were you ever tempted to look at companies that could be m&a takeover targets? the oil deals are important as well. do you look at m&a? >> we don't generally seek out m&a, but i think that is going to be a big subject going forward. you have the u.s. dollar where it is. the u.s. earnings cycle peaking out.
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i think u.s. companies are going to be looking for new sources of growth. him in a is an obvious target and an obvious way of doing that. i think the oil sector is a place you will see that, partly because they are trading at below replacement costs. we have a slightly more positive view. we think it could spike on improving demand. caroline: what number? >> i think $70 or $80 it could surprise people. it surprises more on the upside than the downside. that means interesting opportunities. mark: what is your u.k. strategy ahead of the election? how should we strategize around
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this uncertain month? >> it is uncertain, but it is unknown uncertainty. i think people fret too much about politics. i think the economic decision-making, the constraints means there won't be much difference. we might get different political perspectives, but from an economic perspective, i don't think the election is very important. more important will be what happens with the grexit issue. that could turn out to be quite negative if we have navelgazing and decide if we want to be in or out of the euro. >> rather hoping you don't have a conservative coalition being formed. >> i just hope we don't make the
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wrong decision on europe. an emotional decision not based on economic fact. it's not about party politics. it's about making a decision on being part of europe. we have the benefit of not being in the euro, but we have the benefit of being in a big trading block. mark: could greece derail things? >> it has a ways had the potential to derail things. we have been talking about it for how many years now. i think we can be relaxed at the moment. compromise is inevitable. they have got to compromise. i think where we should never be complacent is if greece does explode out of the euro at any point. we should not believe it can be contained.
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i think it would send fractures through the euro system. it is the beginning of a messy and. -- end. >> they with us. -- stay with us. ♪
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>> time for a look at the foreign exchange markets. after three weeks of decline it is finally rising. 1.6% to be precise. this is the index that measures the dollar. right now investors are debating when the u.s. federal reserve will start raising interest rates, particularly after the minutes were raised last week. some going for 2016.
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what is interesting is it took place -- there is a 58% chance the fed will boost by the end of the year. the index is still below its high. that was a record high one .7% below that level. the head of currency strategy at canadian imperial bank commerce says the policies of urgent story between the fed and other banks remains a reason to buy the dollar. >> hong kong pasta factors central-bank set the currency
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pasce. the hang seng benchmark hit a seven-year high on thursday. the hong kong exchange expects its trading limit will be increased. the exchange had record trading turnover. chinese investors used up the daily quota to buy hong kong stocks via shanghai. britain has been sued at the european court of human rights over a massive collection of internet and phone data. human rights groups are challenging a ruling by a u.k. tribunal that they were legal. they argue the mass surveillance violates rights to privacy and freedom of expression. mark: the apple watches ready for preorder today in eight countries. it won't be ready until the 24th
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of april. one man got his hands on one already. he joins us now for a hands-on shout about the device. thanks for joining us. jonathan: i'm wearing it. mark: is that an issue? jonathan: it can be an issue. in my review, what i discovered is if you think you are going to put it on and it is going to alleviate the problem with your phone or your always taking it out and looking at it it moves it to another place. you have to have self-control. caroline: what do you think about it? there are not cues -- queues. you think people have to put it on before they buy it? jonathan: people have to be convinced they needed. when the new iphone comes out you say, i am going to upgrade. a lot of people don't wear
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watches. you have to be convinced you need something on your wrist. i think over time people will discover the features and want to get one. mark: is it the best smart watch? joshua: absolutely. mark: does that say more about the competition or the watch itself? joshua: the competition has something to cover. apple is known for taking a project that exists and making the best version of it. this is something that barely exists right now. it was not hard to make something much better. there are only a few on the market. caroline: we are expecting far more smart watches to sell this year. what is the killer app at the moment? what as it stands do you like the most? >> for me you get these
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complications. you can put the weather there. i find in incredibly useful. what's my next appointment? for me the convenience of all that information in one place is great. >> are third party apps useless? >> i wouldn't say holy useless. you are not going to read twitter on your watch. it's not something i can see people doing in the future. i think right now third parties are trying to figure out what to do with this. their first attempt have not been completely successful. caroline: is apple willing for their apps to be the dominant force for the time being? >> i think it might be a little of oath. it's such a new interface.
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there are so many ways of interact thing that it's hard to consider what it should be like. mark: what about the panic over battery life? >> if your person doesn't put it on a charger, this is hard for you. they must be very relaxed. mark: you said you have to move the risk for it to come on. >> 90% of the time it is fine. when you have that window where it is blank it is very frustrating.
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>> for 10% of the time you can't do it. >> that was one of the observations. i have to make it come to life. a watch does one thing really well. this is struggling in that department. >> i guess you are an addict when it comes to getting the latest thing. is that why you bought it? >> apple wanted to hand a few of these out for review. i was one of the lucky people on the list. i have been saying, why would i go to a store and buy this? the version i tested was worth $1000. it's hard to imagine wanting to spend $1000 on a watch in a year there will be a new version of it. caroline: i want apple to work
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with this. is it going to be like a tablet? joshua: i think there are going to be early adopters. i will probably end up eyeing one anyhow because i like the new shiny thing. mark: will it ever replace your typical watch? your rolex? i don't even wear a watch. joshua: i do love watches traditional watches. i don't know yet. it's a tough one. i'm torn because i want to go back to my watch that i wear normally. joshua: will you? -- mark: will you? joshua: i'm not willing to take it off. it could be a breakup or make it to the altar. caroline: if she just woos you a
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little more, you will be fine. great having you on. mark: join the conversation on twitter. follow him. a big day today. are you going to order the apple watch? that's our question of the day. caroline: i know i'm going to be forced to. next is the bart chart. will europe's record stock rally last? stay tuned. ♪
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mark: will europe's record stock rally last? topping the previous high reached on march 6, 2000, 2 featured -- finish at 409.16. what a run it has been. that's the green circle right there. the stoxx 600 has risen by 159 percent. it is this year that stands up. i have circled this year. this year the index is by 20% already on track for the best year ever after the steepest quarter advance since 1998.
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all indexes have risen. utilities are worse with a 7% gain. what is astonishing is individual country performance. six of the top 10 global equity markets this year out of 10 three are european. denmark is the third-best performer with a 32 percent gain. portugal follows with a 32% increase. the main indices in hungary, italy, germany, and france make up the top 10 with gains of more than 20%. there could be more to come according to the head of cross asset strategy. he says the european story is entering a second stage. all the ingredients for an outperformance have fallen into place.
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his reason is investors have been focusing on exporters. now he says they are going to shift to companies dependent on domestic rebound as ecb stimulus pervades the economy. there are warning signs the stoxx 600 is trading on 17.19 times estimated earnings. that is the highest in more than a decade. the average was 12.65. the stoxx 600 is cheaper than the s&p 500. it is trading on 17.7 times estimated earnings. the rally could depend on earnings. it could stall. earnings will rise 7.3% this year versus january predictions
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of 9.7%. another risk is greece failing to reach an accord with euro area creditors. european stocks are at a record but how long will it last? >> checkout asia. the index has increased up 2.6%. the key news is the index is going to form a stock link program. it will be completed by july. we have seen this already happen with links between mainland china and hong kong shares. we understand they will prepare for a stock link. preparation in july. this has been reported by the official news agency. >> one of europe's biggest priority equity firms -- private
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equity firms could widen access to the funds according to people with knowledge. let's bring in our private equity reporter. why are they doing this? >> they are doing this because they want access to capital. previously they had to go to the market every five to seven years and ask for more. by doing this they can bypass that and have access to money. caroline: what amount can we expect to be issued? kiel it is looking like about 250 million pounds worth of new shares will be issued. it could be between 1 billion and 2 billion. mark: what are the benefits and drawbacks? kiel: the funds have benefited strongly. they have a good story to tell the market.
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equity could reach more than double their money. the drawbacks is you are opening yourself to a lot more scrutiny. you also have issues around management fees. caroline: it's interesting. before the financial crisis, the heyday used to be we saw a flurry start to left. european private equity backed off. is that what has been putting off european private equity? why do you shy away? >> there are three factors. one is cultural. i think you get more flexibility. they like to be quieter than the u.s.. the second part is performance. when the first wave went to market partly the businesses weren't diversified enough. most european funds don't have a level of diversity. it is interesting they are
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listing the access to the fun. mark: thanks for joining us. caroline: meanwhile, let's get a live look at the city and see what it is like outside the window in central london. it is warming up. equities also warming up. join us after the break. ♪
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mark: welcome back. 10 minutes away from the start of the at the day. good morning, marshall. thank you for joining us. marshall: my pleasure. mark: let's start with the dollar. the bloomberg dollar spot index has finally risen. it is now just 1.7%, below the highs of last month. has the dollar started its rebound? >> yes, i think so. it's quite noticeable that the fed funds futures have unwound the decline they suffered. i think people were worried about weak economic indicators we were seeing for a while, but the steady decline in jobs as claims has made people think it is just because of the bad
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weather. with spring the bad weather is over, and like last year we are headed to better data. with that line of thinking comes a revival of the dollar. mark: how should we read the minutes which say the fed is split into three camps? some say raise rates in june. some say next year. which cap will prevail? >> they have been clear about it. it depends on the data. it is going to be data driven. they don't have a set timetable. i think it will wind up being a compromise. they are likely to raise rates earlier than the market expects. they will raise rates gradually after that, so the initial rate hike might come earlier, but it
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won't be every meeting 25 basis points. the rates will be stretched out. that would be a suitable compromise. mark: sterling volatility persists. the power decline persists. it is down by 2.8% over the last month. how should we place sterling ahead of the election and even after the election, depending on the results? >> we don't have a lot of records to go off of. there haven't been that many over the last couple decades, so we don't really know what happens usually after an event. the problem is almost every possible combination at the end of the day is bad for sterling.
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the markets don't particularly like it. if the conservatives win they are going to have to vote on the eu. if nobody wins you have a weak minority government. i think sterling is going to continue to decline into the election and probably once people see the results, i expect to see it continue to decline on the uncertainties. mark: we have a great story entitled the euro reserve status jeopardized as central banks dump holdings in the core of the story i know you will be aware of. the euro accounts for 22% of worldwide reserves, down from 28% before the debt crisis five years ago. dollar reserve the cladding. yet reserve declining.
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one quote said the euro is falling apart. what are the implications of this? marshall: foreign exchange reserve managers are big fund managers. they are very big buyers. they are not trying to maximize return. they want to make money for their governments, given the extraordinary low yields. it is no surprise they are moving out. also, the liquidity is worsening and worsening. i have seen a good correlation between liquidity of the bond markets and share reserves. also these reserves act as a clue to the market, an indicator of an official stamp of approval as the share goes down.
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the private sector is likely to look at that. if they don't trust it, why should we? caroline: on the move is next. stay with jonathan ferro. ♪
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jon: good morning and welcome to "on the move" just minutes away from the start of european trading. equity markets headed for a second straight week of gains marking -- marching into uncharted territory. euro stock teachers higher and ftse futures higher. record highs, european stocks start the day at an all-time high. japan breaks 20,000 points for the first time in 15 years. chinese consumer prices rose above the meatiest estimate.
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a $1.5 billion settlement deutsche bank is said to be close to resolving a multiyear probe into interest rate manipulation. of course, we will bring you more of that exclusive interview with yanis or a fact this. -- jan us varoufakis -- yanis varoufakis. futures indicate we could extend those highs. caroline: let's see how we are opening up, a three-day rally is the biggest we have had since january. similar news for the ftse 100. stock 600 up 19% this year. emerging markets stocks have been up. you talk about


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