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tv   Countdown  Bloomberg  April 20, 2015 1:00am-3:01am EDT

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mark: china steps up stimulus, cutting its reserve requirement ratio to the lowest in the global financial crisis began. we are live in hong kong for the reaction. global leaders -- we bring you the latest as greece runs short of time and money. caroline: a new party in charge of finland. a self-made millionaire takes power, promising to rid the country of the recession.we go live to helsinki . manus: coast bank employees say they will strike indefinitely as deutsche bank waives the sale of the retail unit. mark: eu ministers -- we are
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live in rome with the details on what could be the most deadly incident in the mediterranean. welcome to "countdown." manus: coming up on "countdown," the s&p is set to release a manifesto promising alternatives to austerity. cameron calls up thatcher style plans. we will bring you the latest on the u.k. general election -- 13 days to run. mark: fishing boats packed with an estimated 700 people seeking refuge in europe capsized and what may become the most deadly tragedy in the
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mediterranean. let's head out to kevin costello in rome. good morning. what are the details? kevin: good morning. about 700 people were on board this fishing boat. the latest reports say that there could have been up to 900. search and rescue efforts have been underway but they have only discovered about two dozen bodies so far. the chances of finding more are slim. mark: what has been the reaction, kevin, from european leaders? kevin: the reaction has been very swift and strong. the eu foreign ministers are meeting this morning and luxembourg to discuss what measures they can take. the italian prime minister has demanded an eu summit for this week to discuss what the union can do. mark: thank you very much. kevin costelloe in rome today.
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manus: the chinese central bank announced new measures to prop up ailing economy. a cut in the reserve requirements was laid out. david, a 1% cut in the requirement to bolster the banking system. david: good morning. that is what we got over the weekend. it was a one percentage point cut in the ratio that dictates how much the banks have to set aside. what is clear from the move is that it is close to $200 billion freed up. whether or not this changes the policy stance of the central bank -- whether it is tantamount easier or to help plug the massive amount of capital heading out of china -- is a whole other thing. first quarter, we saw a record drop. they simply had to smooth out
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the effects. this is what we got -- it takes effect today. $194 billion, and that takes the ratio down to 18.5%. it is still fairly high raised on historical standards and global standards. manus: we have lost a david, filling us in on that cut. it is push and pull of the chinese at the moment, isn't it? between the drop in the reserve requirements. cutting back on the amount of margin lending prepared to tolerate. we can go straight back to david -- i was just saying to carolina and mark the push and pull between the liquidity for the banks that are the same time cutting back on the amount of margins. the chinese market -- we are up
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over 80% on the year. up another 1.5% for the day? david: yes. if you take a look at the daily charts, i think we have changed directions, which highlights your point -- that we are looking at opposite forces pulling the market in all sorts of directions. we had the cut yesterday. it was partly to offset what they announced on friday which is that the securities regulator announced they are tightening up their margin financing because we have close to $200 billion in outstanding debt. that is the amount of money borrowed for equity. an unprecedented number of new accounts opened up this year because of this rally we have seen from the shanghai composite. at this point --
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just about flat. manus: thank you. caroline: let's bring it back to europe because greece isn't backing down. the imf, ecb, and barack obama ramping up the pressure. technical talks continued over the weekend, and there appears to be a new deadline of may 11. let's get out to hans nichols in berlin. hans, new deadline midma-may. hans: good morning. they will be taking stock of the talks going on -- that is the big moment. in some ways, the anticipation and urgency has been let down because we have this new deadline. however, it makes it dangerous. this will only increase pressure on all sides.
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what we heard very clearly coming out of the imf meetings that took place in washington last week was a great deal of frustration -- restoration mounting. lesson how the finance minister of france put it. >> too much time has been lost. time is not limited. i want to say something clearly -- it's something damaging happens, it will be great or greece and the greek people, not for the other countries in the eurozone. hans: and yet no sign of movement on the greece side. we just heard over the weekend -- there was an interview published by the deputy prime minister in greece saying "we don't back down from our redline." the energy minister said, the "so-called partners wouldn't be blackmailed." let's do a quick recap of where
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all the parties stand -- the imf wants to see specifics. they want to see actual numbers being proposed. from the ecb, we have clear pressure. at the same time, mario draghi is saying that some changes are taking place they are in a slightly better position and greek banks are still qualifying for emergency liquidity assistance. then you have the pressure from the finance ministers -- sure they are not talking about any contingency planning. one thing the eu is saying is what greece could do is have a public vote in parliament. here's a quote from an interview we had -- "it would be a welcome step if they agreed to reform proposals adopted by greek parliament without delay." in a million dollars in payment due today to the ecb from grace -- and are ever, we have some
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big payments coming up and the bond market is reacting negatively. last week was the worst week for greek bonds. caroline: clearly, creditors are lightning on the pressure. but we have also had barack obama joining on the side of the creditors. before he had been sympathetic degrees. -- sympathetic to greece. hans: this is a shift on the u.s. position. they were criticizing germany for more austerity and now the u.s. is saying istt's up to greece. the secretary of treasury is warning -- it is a similar note struck by the chancellor. mr. osborne recently put on his analyst cap and said that the meetings this year were watch more -- were much more "gloomy." one final note -- the ecb vice chair, member of the executive
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committee, talked about how there could be a time when greek banks can't find any partners. that is the interview that has just come out and we will read through that throughout the morning. caroline: keep an eye on how the markets react. thank you very much, hans nichols. mark: the other side of germany today -- employees of deutsche bank voted to strike indefinitely at the bank considers selling. let's bring in shane. good morning. what options is deutsche bank considering, then, as part of this strategy review? shane: good morning. we have heard that all three options are still on the table but management favors two. one would be to sell one of its bigger german banking units and the other went to take postbank
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and bundle it together with others and sell it off in an ipo. those are the two options being focused on. the third option, which has less support, is to take deeper cuts to consumer banking and its security division. it looks like one of the first two options will probably be executed. mark: what are the arguments for and against it from consumer banking? shane: consumer banking last year compared to all other divisions at deutsche bank actually had the worst return on equity and the highest cost compared to revenue. some analysts are looking at the consumer banking and saying -- if you want to boost profit, get rid of consumer banking. others are saying, you shouldn't overdo this because the securities division, which does generate a lot of money, is very reliant on deposits on the
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consumer banking division for funding. rely more on funding from asset and wealth management. mark: meanwhile, what are the employees asking for? the postbank union employees? shane: they are looking for dismissal protection. the future of postbank is up in the air. the employees in germany -- a recently voted 95% saying they were up for an indefinite strike , strike without a griffin period of length. -- a given period of length. the future is not certain and we think it will be a couple of really exciting weeks coming out of the next b--- we have heard
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the supervisor board will be meeting to review the strategic options being looked at by management. mark: thank you. caroline: let's check in on our other top stories. in finland, the center party won the national election. the self-made millionaire has promised to create 200,000 private sector jobs and remote spending policy. the $220 billion economy is one of the worst performing since the recession. n/a real estate deer were -- deal, qtr has been bought. it is the largest owner of property owning warehouses. the move will allow it to expand in key u.s. markets such as california and new jersey. pakistan and china will find
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agreement for energy and infrastructure projects worth $28 billion for the next two days. the deals will take place during the president's two-day visit to islamabad. you can find more on that story and many more on join us in the conversation on twitter. let us know what you think of the show. tell us the story you want to hear more about. stocks are trying to pull back on margin leverage. manus: coming up, europe asks greece to show what it can deliver by the middle of may. unlocking the new aid payments to avoid defaulting. we take a look after the break. ♪
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mark: greece needs to show area nations what it can deliver by mid-may to unlock new aid payments and avoid default. we are now joined by charles. good morning. april 24 deadline has been skipped, essentially.
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it is pushed back in may. you wonder if greece will have the money it needs by the middle of may. touch and go, isn't it? charles: it has been a very hard negotiation. it seems like the new government doesn't want to budge on any of their so-called redline, or any of their election promises. it makes the negotiation very hard with the rest of the eurozone. caroline: what is your base case? do you think it will go to the wire? do you think some sort of compromise will be struck? charles: ultimately i think greece will stay in the eurozone, but as time passes the probability is gradually eroding to a case where we could have a greek exitxodus.
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before then, the government may have to go down the path of anger, calling new elections are holding a referendum to provide some support or to get the support from the local population. we can no longer abide by our promise through the election so do you give us the mandate to go down that road? manus: we have mario draghi saying that we have enough instruments at this point in time -- should the worst-case scenario happen that seems to be the consensus, that europe is in a different place. but again, we have commentators saying we are underestimating the real impact. how protected is europe from a shock? charles: we note that the direct impact will be smaller, but it is not clear how spanish bonds
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italian bonds will start to trade if greece was to go and leave the eurozone. mark: they qe program shielded all these programs. charles: the qe program is not directly linked. it is shielded in a way but there are other tools that the ecb has in place, where they have the possibility to go to a secondary market. they could use those tools to stabilize, but there are limits on how much they could buy. caroline: could this derail the eurozone growth story that we are seeing? charles: it could, especially if you have the proper greek exit. the uncertainty, on confidence -- unconfidence. investment plans need to be put aside. that could create some months of
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weaker growth. manus: draghi also said don't better against the euro. from an economic point of view are all the stars in alignment? things are getting better. from an economics point of view how do you look at your up? charles: looking at europe, it is not getting worse. you are in a situation where growth is slow but not terribly low, not in a recession you have qe that should provide stimulus. one concern i have is that you still have a lot of leverage on the banking side, which makes it harder for them. similar to what you had in japan in the 1990's. that is where i would say the biggest red flag is. in general, it's an economy that is at least improving.
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mark: let's move on to matters closer to japan. china is loosening policy once again. necessary after that week growth figure? will there be further policy easing in months to come? charles: there will probably be some. we should see some more stimulus out of the chinese government coming up. we have a growth story where things are slowing, you have a concern on the real estate market over the weekend the data on house prices was relatively weak, showing declining every city. there is something there that the government sees that they need to take action to prevent any further downside risk to growth. anyway, for the global economy the chinese authorities could provide more stimulus and reduce the hard landing.
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we have seen some of the commodity currencies often improving. caroline: this is the 30th central-bank around and about to add stimulus. are you expecting a bit of an he's up with china, helping the likes of australia? will that prevent others and to stimulate yet further? are you expecting another round of stimulus? charles: for now it will have to sway into the system. some more countries could come in the next few weeks. caroline: can you name any? charles: we can mention the likes of korea. it is mainly in asia that we are seeing some of that weakness but now that china is providing stimulus, it has reduced. mark: thanks for joining us.
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manus: it's nothing like new york but when you go to monaco expect nothing but literally the finest and the most expensive. tom gibson reports, where he got some shopping tips from one of the best. tom: monaco is the ultimate when it comes to luxury car shows. former boss of london and leading luxury car dealership hr owens has some good tips. >> a lot of these cars aren't great on the road because they don't have power steering. so when you are driving them you need your own troop. they are an enormous success because it fits in with people's
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perception of where ferrari used to be in the old days. a car like this came out, we had as many as we could possibly get. this is a specialist design company that is taking either a tesla or a nissan -- and what they are doing is changing them with wheels and suspension a growing market at the moment. people want to show their cars to the guy next door. tom: a floor of boutique brands but even the local dealerships wanted to join the feeding frenzy. the organizers say 70% of last year's models sold. >> we had one particular -- tom: not bad. rmg racing are also reviving the
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golden age classics. aston martin allows them to re-create certain models, but with 21st century engineering. around 600,000 pounds versus 22 million foreign original. so you would argue that this is a good value. but it is another model that nick has his eye on. >> this is around 170,000 euros. you can customize as you want. tom: i think i might buy one. >> i think it looks great, and frankly, it offers something different. it is what i would call a great sunday lunch cars. it will be a very valuable car in the future. tom: top mark might just have something for everyone.
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caroline: beautiful cars. can a self-made millionaire guide the finish economy out of the two-year recession? -- the finnish economy out of the recession? ♪
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manus: monday morning, 6:30. what's going on in the foreign exchange market? the u.n. is down as china cuts the reserve requirement and goes for another rate cut or the add more stimulus to currency. could be the unlocking of the change in the chinese currency. the yuan trade is that 2.6018.
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the chinese joints 30 other central banks in manipulating, changing, easing -- they are seeing their currency rise by 4/10 of 1%. the aussie dollar is rising. as china cuts rates, it is a critically important market for the australians in terms of their products going to china. any resurgence in the growth of china is good news for the australians. the australian dollar is the most short it has been since february. it is the most short since february, 2014. we will get some inflation data later this week the cpi and the rate cut marks have fallen. we are up 4/10 of 1% -- have a
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look at the euro, because we are declining. last week was the longest winning streak since april last year. mario draghi warned over the weekend -- "do not get short the euro." as we run up, to the greek discussions, you are being told by politicians, by everybody -- expect no grand bargain and no great deal. as lagarde said, get down to the tedious work. the euro/dollar trades 3/10 of 1% lower. mark: the top stars on bloomberg this hour -- a meeting in luxembourg today. the growing humanitarian crisis in the mediterranean sea after a boat carrying 700 people sunk close to the libyan coast. originally scheduled for
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discussion was the civil war in libya and the development in yemen. jeffrey gundlach the foreign minister who has been 99% of his peers said that policies have yet to be felt in the market, but they will be. he said the probability of a rate hike in june is very low. asking prices for u.k. property climbs to a record in april. the average price was up 1.5%. values in london rose 2.5%. caroline: a fishing boat packed with an estimated 700 people seeking refuge in europe capsized north of the libyan coast. they could become the largest such incident in the mediterranean. delivering the news on sunday morning, 20 bodies have been recovered.
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the prime minister emphasized the importance of recognizing the human tragedy, rather than turning it into a political issue. >> our priority which is a political priority, is human dignity and national security -- to stop the trafficking of human beings. the new slave drivers cannot think europe is the second great problem compared to other great questions. caroline: let's get more with vincent kaushik tell. talk to me first about what can be done immediately to support these terrible tragedies -- to prevent these terrible tragedies. vincent: many solutions are needed on both sides of the mediterranean, what we need first and foremost -- we need the search-and-rescue operation.
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a lot of countries criticized them saying they were attracting able to the shores of europe. they decided it is a factor that it is an encouraging traffickers to get more people across the mediterranean -- that is nonsense. we need to get back to the basics. people are dying. when we have a typhoon or synonymy, we send teams of rescuers to look for survivors. i is this case different? every life matters. the european union needs to fund the search-and-rescue operation and the italian navy needs to resume. caroline: clearly, you are putting forward such proposals to the eu. using perhaps the italian navy to support this. what are they listening to your proposals?
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what has been the reaction when you have put forward such suggestions? vincent: so far, countries are divided, the cousin they are scared that any robust search and rescue operation will bring people to europe. but the land borders are closed so more people will come by see. -- by sea. other countries and north africa are going to do the search-and-rescue and people -- this is not going to happen in the short-term. there is no quick fix. they need to manage their migration to build their asylum system, but in the meantime europe has to assume responsibility for search-and-rescue. the refugees need to be returned to their country of origin. caroline: it is quite phenomenal, the numbers -- 35,000 asylum-seekers so far
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this year alone, the 1600 deaths -- do you have a view on what the numbers you are expecting? something phenomenal like 290,000 in search of asylum last year. vincent: when we look at the numbers of people that came through the eastern mediterranean last year 215,000 people crossed by sea. half were in need of international production, others were migrants. can europe managed this number? we believe that 28 countries can manage those numbers. we need better solidarity, that are distribution systems within europe. those people who arrived in greece and italy the majority of them do not live in greece and italy and they apply for asylum in germany. that is not sustainable. there has to be a better solidarity among all countries. caroline: are you hopeful at all
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that this solidarity can be found? vincent: i hope it can be found. with reasonable discussion on the fact that those numbers are manageable. if we compare those numbers to 1.7 million refugees in turkey i think europe can certainly do better. it doesn't mean there are no solutions, that we should not fight trafficking. we should do everything to fight trafficking in the mediterranean, in north african countries. but also in europe, where those people are moving. caroline: thank you very much for talking to us about a terrible human tragedy. manus: let's turn our attention to the u.k. 17 days to run until the general election.
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today, it is the scottish national party set to dominate the discussion. the manifesto will be launched. anna edwards is here with the story. this is nicolas sturridge, the woman who is not running in the u.k. election -- by gosh, is she running the agenda. anna: she couldn't have a higher profile. she is said to be poorly like -- tory-like. increasing power to scotland the s&p has been very unhappy with the level of power that it has been promised. can the manifesto, it will be a manifesto for delivery u.k. wide with an alternative to cuts. not shy at all of the questions around how legitimate is it for the scottish mp in london to
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vote on the independent scottish parliament. the manifesto will also ask mps to participate in votes major issues and south of the border such as the bill to restore the nhs in england to a fully public, publicly accountable service. they are setting out an agenda for what they would do for the whole of the u.k. -- one thing to build this union. david cameron says that smp in westminster will be very destructive. she referred it to a "triple lock" on democracy. >> i think that is the direction of travel there has to be a substantial change in circumstances. then people have to vote for the party that is proposing another referendum in the manifest or people in the referendum would have to vote for independence. anna: talking about the triple
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lock on democracy -- the three things that would need to happen to see scotland become independent, but she sees scotland with an independent future. caroline: david cameron's reaction -- talk about more of what the conservatives aren't bailing. -- are unveiling. anna: more than just -- welabor has said, you have made this announcement seven times and david cameron was saying, yes, we have sold lloyd shares before and taken the government stake in that bank down to 22%, but this is about broadening the shares to retail investors, and that -- david cameron: we want to see lloyd's back in the private sector but we haven't said there will be an individual offers so they can own shares in healthy, successful british banks.
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the crucial point is that it is more about clearing up the mess that labor left us. the taxpayers put 20 billion pounds into the bank and i want to get the money back -- and that is what we are doing. this will help us to recover billions more, to pay down the national debt. anna: do remember 1986? if we get a conservative government, we will have more of that. mark: businesses continue to voice their views. what is the latest? anna: it is the uncertainty that gets to businesses and that is where the comments have been coming. the chairman of tesco said that it was causing uncertainty for business and it is the uncertainty that is the problem. he warns that businesses could easily move their headquarters from london to other parts of europe if there was a note to eu
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membership following a conservative victory. we have heard in "the sunday mail," from richard branson -- in terms of my smaller stories, fascinating as they are from the campaign trail, ed miliband being mobbed by a hen party. perhaps all the stories about his love life in the press. mark: oh, ann! a! anna: "the sun" is worried that a baby could be born named edward. caroline: having to worry about what you name your child dependent on the election. manus: flashback to the 1980's. british telecom -- maurine
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lipman. ok. anna, thank you very much. mark: let's turn to another critical election -- this is in finland. the center party secured the victory in the national election, led by the self-made millionaire who promised to lead the country out of recession. let's get to our chief in helsinki. good morning. tell us more about the win. >> good morning. what this means is that this will be a power shift in finland. the two parties that have spent the last four years in opposition has basically become the first and second biggest in parliament, and they look like very strong candidates to be in the next coalition, which would probably be led by the center party.
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they are likely to start talks to form that governments in. -- that government soon. mark: what kind of challenges does finland case? kati: finland is one of the better economies during the euro debt crisis, when all the attention was focused on peripheral countries. during that time, many of the finnish challenges were being smashed by how bad the situation was in the eurozone. they failed to recover from the hit to the economy, during the financial crisis and debt crisis, and now it is hurting a drop in exports. what that means is public finances are getting worse, budgets have been in the red since 2008. while public debt is still pretty low, it is about 60% of gdp. the debt growth is at an alarming pace. it has doubled since 2008.
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since there is very little economic growth on the horizon, the center bank forecasts about 1% growth in the long term each year. finland has an aging population that is already shrugging the workforce. it means all of the public finance challenges are going to get worse as things progress. the main challenge for the party is how to stop that worsening in the public finances at the same time as they improve prerequisites for economic growth. all the main parties have agreed that austerity is needed it is just what kind of measures a want to propose. that is where the difference is coming. -- cthe differences come in. mark: thank youmark:. manus: coming up, mobilizing google. a move that could leave
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companies playing catch-up to update their mobile sites. stay with us. ♪
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manus: top stories at this hour -- google will overhaul the way its search recommended sites on mobile this week. the change to the logarithm will affect mobile searches in all languages, worldwide. it could penalize sites who are
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not optimized for mobile. a frozen food maker is poised to for a deal. good deal, which could be announced as early as monday but primarily be funded in cash. gm plans to spend $16 billion by 2020. that is as global automakers a step up to compete with market share in the world's largest car market. shanghai gm has a market share of more than 10% in five years. caroline: let's bring it closer to home and look at the u.k. election. it has stepped up a level over the weekend. nicola sturgeon says she is prepared to work with labor an arrangement david cameron called "frightening."
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wonderful to have you. talk to us about -- we have the manifesto, the s&p coming today. this is the theme of the entire election -- we are now multiparty. you are looking at the way the fight is currently going. >> it has been a competition on the conservatives and the labor -- there are six parties, and everyone --[indiscernible]
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mark: some of the multiparty system is here to stay -- so if the multiparty system is here to stay does that mean we have to get used to a lack of accountability and more instability in the political system? >> that is the other big question. what is coming next might even be more interesting than what is happening right now. on the one hand, they are saying we are adding -- they are not falling out any option. [indiscernible]
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british politics is becoming much more like italian politics with indeed to strike compromises. mark: we won't have as many governments here. >> of course, the duration of the government -- that was a minority government with the eu p.m. the s&p -- that didn't last very long. if you have to agree on a policy by policy basis, it will be very hard to implement a manifesto. this will be tough on labor, on the economy, and -- it will play
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on the delusional powers of scotland and on the referendum. it will be very hard also if cameron gets to power again. what about the lib dem? what if for i should -- [indiscernible] manus: you referenced italy country mired in recession, lack of continuity. is that what lies ahead in this hobbled together government? will we become italy? >> let's face it, that is a possibility. the coalition will be there -- what kind of coalition is the question because it can be a two-party or three party coalition. it will be for sure a minority
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government, but how many parties will be an accessory to add up to the main party. and of our parties there are the more difficult it is to keep up with a stable, strong, firm, long-term agenda. caroline: thank you very much or injecting some italian passion into our elections. mark: shall we have a look at our picks from i'm looking at "furious 7." this film is a phenomenon. caroline: how many of the seven have you seen? mark: at least four, possibly five. it is the top film pick with $29 million. this almost grossed $1 billion worldwide. quickest ever film to make $1 billion worldwide.
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for the seventh in a series that is phenomenal. manus: bmw brings back old-school goggles with a twist. we are talked to about the internet of things and that is what bmw wanted to do -- they are bringing back these goggles with augmented vision. blind-sides for parking. you can see -- i have got a small car now. why would you ever have a rather large or wheel drive in london? caroline: you need to talk to a lot of people in london in that respect. manus: goggles are us at bmw. caroline: i love the way all these tech startups are allowed to build ecosystems around
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themselves. coming up next "countdown" continues in the next hour. ♪
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manus: china steps up stimulus. cutting its reserve ratio to the lowest since the global -- mark: tsipras assures global leaders he has a plan to avoid default. anna:caroline: there is a new party in charge of finland. the new party promises to rid the country -- manus: employees say they will strike indefinitely as deutsche bank ways the sale of the retail
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unit. mark: the boat packed with 700 migrants on board. in rome with the deadly incident in the mediterranean. manus: also coming up today, david cameron unveils margaret thatcher's plan for lloyds banking shares. and the s&p promises to release its manifesto promising alternatives to austerity. 17 days to run. mark: the chinese central bank thomas is a new plan to prop up the economy.
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lets it over to david with the details. fresh stimulus? >> good morning, some people are calling it simply a step to offset what we have seen out of china. massive capital outflows. before i get to the equity markets to put this into context, i have a two year chart of the chinese renminbi. you have this period of weakness in 2014 and into the fourth quarter of last year. february of this year you had the same move up. keep in mind that a pboc, a record drop last quarter to smooth this because of the capital output. so back to the question, is it fresh stimulus? a more important question is it
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tantamount to a change in the policy stance of the pboc. so what do we have on the weekend. a cut in the reserve ratio requirements. it takes us back to 18.5%. that is still fairly high. so one common comment that i have seen as that it was a surprise when it comes to the size of the cut but not so much the timing. we could be seeing a couple more interest-rate cuts as well as a follow-up to that reserve cut on the weekend. let's take a look at the equity markets. a fairly volatile session. it has changed direction eight or nine times and we are firmly in the red.
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similar losses and we are seeing close to 2% out into the afternoon session. i want to mention as well, when you look at the reaction to markets, the cfr see, the securities regulator putting up new rules, tightening their grip on margin financing in+++
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you look at the shanghai composite we are seeing a big selloff. it is key to put this into context. there is a massive amount of money in china borrowed to pay off equity. you put that together with a record amount of new brokerage accounts. there are a lot of rookie traitors out there and if the market turns the other way a lot of people will be in trouble. you have the brokerages, we are down 4% to let's go back to the shanghai composite and take a look at the medium-term outlook on the market union what strategists are saying is what is announced on friday may provide some people leave some money at the table. but the two year chart up 90% on the return basis that is still pretty much intact. back to you guys. manus: greece isn't backing down. that is what the imf, the ecb and barack obama ramp-up the pressure areas talks continued over the weekend and there appears to be a new deadline. if the new deadline is mid-may,
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what are the euro every a finance minister -- euro area finance ministers going to do? hans: partly it is about specifics and partly it is about increasing pressure on greece to take a deal and provide those specifics so you can unlock the 7.2 billion euros left over in the second bailout package. frustration is mounting and we caught up with the french finance minister and you can hear him trying to increase pressure. >> too much time has been lost. if something damaging happens it will be grave for greece and the greek people not for the other countries. hans: greece is not budging. over the weekend the deputy prime minister said that greece has their own deadlines.
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and no talk about selling state assets. the energy minister warned of being blackmailed by so-called partners. everyone is saying that these meetings are pretty negative. not a lot of progress was made. a lot of talking and little to show for it. the imf wants to see specifics and mario draghi warning that if they do leave the eurozone it would be uncharted territory and mr. showing -- mr. show bulls -- shoretel's -- mr. scheubles saying -- it would be a welcome step if the agreed reform proposals are adopted without delay. that could be a public showing. we just heard from the finance
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minister of the netherlands. here is what he is saying. if you did have an exit, you could firewall it. it seems like we are getting into contingency planning. no one publicly saying that they expect a greek exit or default. default first then exit. i will try to redo this entire interview that they are talking about firewall and if you had some -- firewall ing if you had some sort of dissent. manus: obama has gone on the side of the creditors? hans: finally mr. obama has shown his cards. before he seemed sympathetic to the anti-austerity campaign but now he says that greece needs to
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make top decisions warning about the bristle affects. i was interested in the comments by mr. osborne, the finance minister out of the u.k.. he said the mood at the imf was much more gloomy than in devious years are in very difficult to come out of these meetings and look ahead and be optimistic about anything happening in terms of a negotiation with greece and their creditors. caroline: let's bring in our bloomberg reporter in london. we were just hearing about the lack of optimism, what about the 24th? >> i think we are not even halfway to a solution. we are far away from a basic compromise.
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both greece and its creditors are looking toward it. if you take a look at what the system is all about, greece is looking to add the pension to those pensioners less than 600 euros per month. at the same time there is word that the creditors are looking to lower the band of pensioners around 350 euros. you get the feeling there will be no compromise. caroline: just different numbers. >> at the moment is more political than liquidity. it is up to the tsipras administration to make a real deal with the greek people on what the road for greece is in the future. is it european or is it not? mark: so would snap elections or a referendum be the best way forward? >> at the moment, the deputy
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prime minister was saying this weekend that we are standing behind it. i am confused about what this mandate is all about. i want to be sure whether it is pro-european or anti-european. we are going down that road by june. manus: do tsipras and varoufakis still have groundswell or support? is there any doubt in the average greek mind what is the mood of the greek people? >> support is diminishing. opinion polls are down 80%, positive opinion down to 55%. manus: that is a heck of a drop. >> there is an increasing number of people seeing bankruptcy as a possible outcome. it fears people. good people don't want a grexit. there is 70% class support of
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euro for the greek people. as the impasse isn't broken people are afraid this bankruptcy -- this is what people fear about. so support for the tsipras administration -- we had 55% in the opinion poll, that is a big mover -- number. manus: christine lagarde made a question to get down and do the tedious work of detail. have they squandered five months? >> it is only natural for some of the things with greece they are buying time. i think they are buying time because they're dealing with it politically. there have been no real developments on the technical front. when their numbers get down i understand they had trouble getting the real numbers down so it is only natural that greece
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is just on the bank edge of things and not getting down to numbers. caroline: thank you very much for talking us through the potential outcomes. mark: a fishing boat packed with 700 people seeking refuge in europe has capsized in what may become the most deadly tragedy in the mediterranean. let's head to bloomberg's kevin costello. can you give us the details? >> right now, the italian news reports are that in fact there may have been up to 900 or more people on board. in luxembourg the foreign ministers of the european union on meeting to see what if anything they can do to stop the refugee influx. mark: what, if anything, can ministers do to stop the influx? what our leaders saying? >> there is the possibility of using more ships and more
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surveillance. that would mean that the european union would have to agree on these measures. that is a problem because there is a certain amount of disunity. mark: thank you. kevin costello in rome. caroline: let's get more of the top stories. in finland the center party won a national election. the self-made millionaire has promised to create 200,000 private sector jobs. the finland economy is one of the worst performing and has been in recession for three years. in a real estate deal worth $5.9 billion -- the move will allow it to expand its presence in key u.s. markets
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such as california and new jersey. you're looking at live pictures from islamabad. they get ready to sign an agreement for energy and infrastructure project. these deals will take lace during the chinese president's today visit. more on that story at manus: join us on twitter. equity markets set to bounce. we are all there. i am only here for the day. i am going to non-dom residents. caroline: another swiss trip. mark: bring us chocolate. duty-free. manus: i am not that generous. mark: after the break, we will
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ask our next guest, do you stick with the trade or locked in the game?
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caroline: welcome back. let's talk eurozone equities. they have outperformed the u.s. for the past three months. should you stick with the trade? our next guest says it is too's
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own -- too soon to rush for the exit. you say stick with european equities despite the rally in the dax? >> absolutely. a lot of reasons. the economics are looking very positive for the eurozone. relative to the u.s. where a lot of the activity has been week. we think you have a 5% to 10% selloff in the states. that is a key reason to sit with europe. europe won't be so badly affected. you have liquidity support on the ecb relative. relative m1's picking up much faster. when that happens europe tends to outperform the u.s.. you of macro reasons and things like earnings and relative valuations. manus: what is going to cause
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the drawdown by 10% in the u.s.? >> it is more likely to be the earnings story. you have a situation where economic growth is going to come down. we think the forecast for consensus is going to come down from close to 3% down to 2%. that halfway move should not come as a surprise to people. that q1 data will be week and that will take down q2. it is not just the dollar impact it will be domestic demand. that means domestic earnings impacted by the slowdown in shale and the related infrastructure plays. the transport plays being built off of that shale story. we think the big story will be the domestic earnings disappointing in this earnings round. mark: you would be looking deeper at margins and sales growth. you say the gap between u.s. and
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eurozone margins are structural. >> overall, we will start to see some of those u.s. markets get challenged. longer-term. you just a to watch out. we are not seeing structural reforms that we need in the eurozone. the qe we are seeing provides some short-term boosts. it just incentivizes the corporate sector to look like bonds. it doesn't incentivize them to grow and do the capex they ought to be doing. caroline: is that why you're skeptical of the effect of quantitative easing? it takes the urgency out? >> what we have seen in japan these bond purchase programs draw bond yields down. as you take the bonds out of circulation, the problem for the asset managers is how to replace those. draghi want some bond repurpose thing. he will get that.
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but even in germany, who is getting a big pickup, they will go by those bond like equities. companies that have kept their are a we hire -- roe higher than japan, it is what is driving it up. caroline: bigger, safer companies. yet still no to this -- >> whereas, in the united states you have the backdrop to the fed, saying we will guaranteed to messick demand having a mandate that focuses -- guaranteed domestic demand having a mandate that focuses on real employment. in the eurozone, why are we in qe? just to keep inflation expectations high. why does that incentivize any corporate to go out and change from being a bond proxy to a real growing economic entity?
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manus: mario draghi calling time on the drop of the euro. don't bet against it. >> the lesson from the japanese experience, if you go buying bonds, there are a lot of domestic holders. you have to buy them from some of the foreign holders. there aren't enough around. our expectation is in the short-term, the euro will have a nice bounce because the dollar will selloff. but we would bet against the euro going further later in the year. mark: would you bet against sterling? many have. the pound has fallen wisely -- widely. if you look at how the pound performed after the election investors are not so worried. >> what we would highlight is that if the dollar comes off
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lightly than sterling-cable has gone far enough. i think that is the stress for us coming in to the election. the u.k. is dependent on the kindness of strangers. the size of our deficit means it will be that that determines -- the international response that will be critical. not the domestic response. our expectation is that labor has typically not been capital friendly. the conservatives that end up with a minority government, will that lead to a brexit referendum? not comfortable for international investors. our sense that going into the election and the aftermath am a still a lot of uncertainty. too early to get massively bullish. caroline: what about the other asset classes?
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>> the good news is, that large exposure of u.k. stocks to international earnings -- at some point sterling gets we can off to come back -- gets weak enough to come back to the equity market. when you look at u.k. equities in dollar terms or common currency terms, u.k. equities are as low and they -- as they have been in 35 years. how bad is the real economy and the global economy compared to the political uncertainty? after the election we will probably see more people come to the equity market even if they won't come to the currency market. manus: shanghai market up it he 1%. absolute -- 81%. absolutely on a roar. would you be brave to buy that market? >> we of been a long asia and
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japan all this year. our sense is that the chinese authorities are making sure they moderate that growth. maybe that was the incentive to still 18.5% back in two dozen eight -- 2008 2009. what we also see is in a world where economic cycles are more muted, it allows politics and institutional factors to play a much bigger role. in an environment where chinese authorities are opening up. you can see these things go further. when you have not got global equities constrained by
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valuations, valuations can go to the races. caroline: thank you for having you on. manus: we will talk about the recovery after the break. ♪
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manus: monday morning. it is countdown. this is the offshore renminbi. i want to bring you to other periods. the dollar went higher and the renminbi when lower. what is the next correction of travel for the yuan? that is the question for the market. this is the renminbi. some say we should be showing
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you a different one. i want to give you a point. so, that is the renminbi. the chinese have added liquidity to the system and the prospect of lower interest rates is good news for the aussie dollar. it trades at a one-month high. the next level is 7831. fall b test followed by 7839. -- followed by 7039. they went on hold with singapore and india recently. the best bet is another rate cut. the marketplace is as sure as
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sure can be. the euro, do not bet against this currency. 107.88. we are down .20%. it is pointless to short the euro. i leave you with this irony. this week, that is the news. the euro is a little bit lower. there is a little bit of a downside. mark: luxembourg is high on the agenda. in the mediterranean sea, a boat carrying people sunk near the coast. a ukrainian-russian stand off.
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jeffrey, the bond manager who has beaten 99% of his peers says that they will be felt in the market. there is a probability of a rate hike in june. it is low. u.k. property high went to -- u.k. property went to a high and april. -- in april. the value in london rose 2.5%. >> the scottish national party is set to dominate discussions. it is going to be all about ending austerity policies. that is what the cry is. >> all about ending austerity
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policies against the u.k. you can expect the manifesto and they will not shy away from the scottish mps. they are not shying away from that and they say the manifesto will be delivered u.k.-wide. that is what they see as the centerpiece of the campaign. we have seen comments coming from the snp during the most recent weeks and there is concern about building a coalition on the left to kick the tories out of downing street. david cameron is seen as being disruptive. there is a triple lock on democracy. that is what she refers to. she sees that as the end game.
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>> scotland will become an independent country some day. people have to vote for a party to support another referendum. people have to vote for independence. >> she pointed out the things that would need to happen. mark: david cameron is dipping into the "martyred -- margaret thatcher" playbook. >> they sold down the stake and echoed the campaign of the 1980's. they try to promote among the public aspirations to own shares
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of publicly traded businesses, in regards to british gas. in this particular proposal as little as 250 pounds of shares and up 10,000 pounds of shares. i'm having flashbacks. >> look at that. >> lloyd's and david cameron speaking about the offer. david cameron: we want to see lloyd's back in the sector. we have not said it would help banks. what is crucial is cleaning up the mess labor left us. i want to get the money back. that is what we are doing. it will help us to recover billions more to pay the national debt.
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it is about getting money back for the taxpayer. manus: there are moments where you hear the political campaign and you think, what is he talking about? what about businesses? what about tesco and there from a -- and the drama this week? >> john allen the chairman at tesco, really emphasized the uncertainty and the conservatives have placed a referendum on whether we should stay in or leave the eu. countries will be able to move their headquarters if the u.k. decides to leave. the sunday mail, it said if there are things we don't like about europe, let's sort them
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out. >> stay tuned. >> let's stay with the u.k. economy. it is growing solidly, according to our next guest. he is the economic advisor and joins us for his first interview of the day. great to have you this morning. it is a political roundup and we say we are looking to the politics and things are staying strong. >> the economy is subject to a number of competing forces. it could potentially have an adverse effect on the economy. there is record low inflation and interest rates. there is the increasing sign that the euro zone economy may be recovering. the talents should allow the economy -- the election to be taken in stride.
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>> you are more optimistic than official agencies advising the government. >> we think it will grow at a similar rate next year. they have 2.5 and around that level. >> is it a balanced economy? it is consumer-led. what about other aspects, trade and investment. -- investment? >> real incomes reflect the low inflation. it is not growth on stapled that inches -- stable debt binges. we think investment will grow at a decent rate. it is heavily driven by the consumers. manus: you thought about income
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rising and make the point that spending will not keep up with the raises in disposable income. talk about the numbers. >> we think we will grow by 3.5% and it is not affected by inflation. there is a lot of real growth. we think consumers are not going back to the free and easy credit we saw. it will be more cautious about spending income and, to the extent they spend less, it is rising. >> you are blades on the euro zone and the fact that it is helping. do you think it will have any effect? is the eurozone becoming a better place to be trading with? it could change our sentiments on what is happening in europe.
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>> i guess it could. we are expecting a better picture than recent years. we are still not going to see the eurozone grow at the rate the u.s. and the u.k. having growing. >> what is the rate? >> pretty weak. mark: on the subject of the election, you have brought figures into your calculations. the week government equals a government not united. there is a government that could be occurring on a vote by vote basis. >> we think the effect on the economy may be exaggerated. the government does not have a lot of control over the economy. the bank of england forecasting has the responsibility.
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in terms of a minority coalition government, that could cause governments to stop doing anything too radical and that could be good. >> some lovely pictures there. >> we will get to kensington. >> we don't think there is a bubble. we do not think the housing market will turn into it. we will see a slowdown. caroline: risk, weakness, what are they? >> in the long run, if we want
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the economy to keep growing, we need to figure out whether it will happen or not. manus: how do you squeeze productivity in the economy? >> you get it in a more benign it way. you can be out there and generating sales. if demands pick up, they will be able to boost. manus: thank you very senior economic advisor. mark: the center party secured a victory in the national election made by the self-made millionaire. let's go to our bureau chief. tell us more about the win.
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>> good morning, the victory has been on track. they have spent the last four years in opposition. with such good results, it puts them on track to join forces with the coalition government. they will have to add to the group. mark: when the paper industry was flowing and all was going smoothly, it was a different set of challenges. >> finland has lost output in the consumer electronics with competitions from ipad and electronic media. the export economy of finland
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took several hits with euro exports now and the drop is from russia and that has hurt finances badly. government debt has doubled since that year. the pace of debt growth is alarming. the prospects for economic growth is pretty good. finland has the fastest aging population in europe and it is causing the workforce to shrink. there is little in the way of economic growth. it is at 1% a year. there is a challenge of how to stop public finances from getting worse and improving prerequisites for economic growth. all of the parties in the
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election agreed on a need for austerity measures. the means of getting there are different. mark: thank you for joining us bureau chief. up next, the euro-dollar. stay tuned. ♪
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mark: time for the barge chart.
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that is 97. it is not going to happen this year or next year. the lowest forecast is one dollar and three cents -- $1.03. it does not tell the whole story. i want to illustrate this with a series of charts. we have all the euro-dollar forecasts and there is the truth. let's start with the first chart. the horizontal line is the euro-dollar forecast in the vertical line the number of forecast. the largest number of forecast is clustered around $1.06. those are all of banks. you go in close and project and the euro will either be 1.06 -1.07.
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as we talk about parity who is forecasting parity? look at the autumn left of your screen. the investors are out on their own forecast. look at the current quarter. if you move to the right, those are forecasting parity. the bottom three are forecasting 1.01. look at the third quarter and this is probably the most interesting. the medium forecast is for $1.04. that is $1.03. as we are forecasting the euro-dollar, let's go to the outlier. it is really and with the bar
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chart. you do not hear about yes bank every day. the euro-dollar will be at 19 u.s. cents. they are forecasting $.96 between them and this is where we get to the real juice. the euro dollar parity. the bank of australia and all the way down to td securities they are forecasting the exchange rate will be at parity in the third quarter. with look at the fourth quarter and the media forecast. the bar that is the tallest is $1.05. the number of houses who believe we will see parity have increased again. who is the outlier? you guessed it.
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these bars are interesting and they tell us that there is a lot for barclays and the bank of australia. all of these forecast that the euro will reach parity against the dollar in the fourth quarter. a fascinating new chart coming back. we will come back to it. when we say the euro will not reach parity if you dig deeper you can see a number of houses who will have parity in 2015. manus: time for some of the bloomberg top stories before we go. a site on mobile's this week. mobile services in all languages worldwide. the frozen food maker behind
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fish fingers is acquired with a 2.6 million dollars deal. the deal, which could be announced as early as monday in london, will be in dutch. >> wow. we will be back. we'll look at the stocks moving. ♪
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caroline: welcome back. manus: we are just waiting. caroline: join us up next.
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jonathan: good morning and welcome to "on the move." i am jonathan ferro. moments away from the start of european trading. an ugly end to last a week. the worst week for the stoxx 600 since december of last year. looking at futures pointing to a rebound. futures of 26 points. your morning brief. china pulls the stimulus trigger. it reduces the amount of cash that lenders must set aside. commodity markets are rallying. greece is defiant. they said they would not renege on pledges of austerity. snap elections are possible.
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and lloyds on sale? the conservative party the tories reach for the playbook. the three things we will talk about during the morning. we talk about equity markets. selloff last week. futures pointing to a rebound for i wonder if the china rate cut has anything to do with it. here is manus cranny. manus: what happened and commodity gives a boost all the way around. the market is so long on oil the most bullish and the oil market in eight months. the eia is forecasting a drop in the united states of america. traders are bullish, the most bullish since august of last year. the number of


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