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tv   On the Move  Bloomberg  February 15, 2016 2:30am-4:01am EST

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guy: welcome to "on the move." we are counting you down to the european equity open. what are we watching this morning? the biggest move for the onshore you want since 2005. china is back with a bang. it is significant. rocking the markets this morning and we are looking at a strong equity market story in europe. the topix and the nikkei soaring overnight. and, one flat mark against asia. hsbc deciding that london is where it would like to remain. it has decided not to go to hong kong.
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let's get you up to speed. here's caroline hyde. caroline: good morning. stocks have soared in tokyo, with the topix posting its biggest gain in six years as investors show that japan's economy trying less than expected last year. china's trade numbers for january underline challenges facing the economy. exports fell and imports declined after a trade surplus of more than $63 million, the biggest on record. the figures suggest that the currency's depreciation has yet to boost competitiveness of chinese industry. it is president's day in the u.s. stocks and bonds markets are closed. president obama will be at work, greeting leaders from southeast asian nations for their first u.s. summit in california. hsbc has decided to keep its global headquarters in london,
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claiming u.k. is an important and globally connected economy. hsbc has been based in the u.k. for 23 years and said remaining there is the best option for both customers and shareholders. get world news 24 hours a day. guy: thank you very, caroline. markets, monday morning may actually feel ok for you. let's look at where we think the markets are going to open. this is what you get, a lot of green for the main markets in europe. it has been a wild market for a while. risk on, risk off, a big feature of it. today, if you are long equities, risk on does seem to be the theme. i'll show you what is going on around the world.
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you have seen a big move in the onshore rmb versus the u.s. dollar, biggest move since 2005. the asian markets have been searching in terms of equities. let's show you what your week ahead looks like. today, president's day in the states. stocks and bonds are closed. later, ecb president mario draghi speaks to the european parliament economic committee in brussels. is he just going to reflect the speech he gave at the bundesbank on the fourth, i.e., we can't be in a position where we do not take action -- will he and that up? wait and see. federal reserve releases minutes from the january fomc meeting. how much concern was there about market volatility? an awful lot to be decided for the fed this year.
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on thursday, leaders of the eu governments begin a summit in brussels where the negotiation of britain's commercial terms and the refugee crisis are set to dominate. biggest move since 2005, china's yuan surging. you have to put these big moves into context. a huge move. this probably is what has predated this. the central bank governor speaking. you don't often see these interviews. voicing support for the exchange rate against the dollar. let's go to bloomberg's china market editor in shanghai. week traden the data, will the strength of the yuan be short-lived? chinese authorities watching this one very carefully. allen: exactly. speaking to trade data, it is very hard to see any good from
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today's numbers. maybe the positive we can take from today's data is maybe more monetary and fiscal stimulus in the offing, as well as more steps to boost domestic consumption. in terms of the currency, today was a one-off. a lot of investors were reassured that there will be a stir -- a stable currency. today's trading volumes will be thin as well. we are to have to wait a little while. maybe when the u.s. markets come back from holiday. guy: thank you very much indeed. ofen wan joining us out shanghai. let's bring in our guests now, jean medecin. manages 52 billion euros. good morning to you. let's talk about what has happened in asia overnight.
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it is setting the tone in europe. the biggest move for the onshore you want since 2005. the chinese are back off their lunar holiday. what message are they sending? jean: it might be too strong. we had in japan the same kind of shock movement a couple of weeks ago, when we had this negative interest rate policy coming so shortly after the bank of japan actually denied implementing such a policy. with china, what is quite interesting is the communication has been made on the fixing of the yuan versus the dollar. so, there is probably a lot of february among central banks. it is quite successful today. i would be very surprised if actually starting a new trend of
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strengthening chinese currency. guy: if that doesn't happen, and we listen to the interview delivered over the weekend from the central bank, talk to me about what the next policy move is going to be. central banks around the world trying to amp up what they are doing, trying to make moves to help their regions. what are we going to hear from the chinese? jean: i think you're going to hear more and more from central banks and have some big talks in terms of what they want to do. if they are not out of ammunition, their capacity to have an impact on inflation is actually quite diminished. can you expect more negative interest rate policy? probably, you might expect. can you expect more liquidity injections? yes, you can expect. can you expect some more guidance from the chinese central bank? yes, you can expect. the real question is not what you can expect in terms of
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communication, but what will be the impact of those measures. it is puzzling for me that today, on the day when we have some dreadful numbers for japanese gdp, we have such a bounce after japanese markets, just on this kind of risk on trend you were describing, which is in my view a very treacherous trend. guy: would you sell today's rally? jean: absolutely. guy: so any rally, you want to get in there? jean: i don't think we have any kind of inflection in terms of the economic fundamentals which is justifying if you want to really try to capture the rally and stay invested. the underlying macro picture is not very supportive. the earnings picture for corporations around the world is pretty gloomy. definitely, i don't think any reason if you want to be a lot more conservative.
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we have to take into account that even though the markets have dropped 10% to 15% depending on the regions, when you see where we've been coming from, when you see what has been the very sluggish earnings underlying outlook of the past years, we can't say the markets have become cheap all of a sudden. guy: hold that thought. lindsey moore still with jean as we go through the day. we going to speak to hamilton's chief executive following full-year profit. that story next here on "on the move." ♪
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guy: welcome back. hamilton has reported its full-year income that rose 4.3% and the company is confident the business will continue to deliver. i suspect that a few investors are breathing a sigh of relief.
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to discuss this, we are joined by david atkins from the london stock exchange. the beginning of this year, the back end of last year, really driven by market turbulence. you are a long-term investor. does it change the way you look at your business and the opportunities we see in front of us? david: as you say, we are a long-term investor. our business with 98% occupancy is backed by long-term leases. on average, we are signing 10-year leases. on the face of it, from a revenue point of view, no impact whatsoever. clearly, we are not immune from the volatility. but i still think, when you think of real estate, yielding a real cash return of 4% to 5% ,ersus long-term debt rates 2%
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benchmark rates effectively at zero, i think really trade -- real estate looks attractive and well priced. may be aarea that factor, given the volatility, is up 38% to 40%. do you think the market is tolerant and that may inhibit you? it has gone up, but it is well within our internal guideline. we have been selling assets. above bookund 10% value. there is very good demand out there. we will be selling around 300 million pounds of assets this year. down tol bring our ltv the mid 30's. even at 38%, that is low by historical comparisons. guy: let's get back to this
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issue of hard assets versus other assets. you think there is going to be greater demand for the kind of assets you hold going forward, given the volatility we are seeing elsewhere. does it make those assets more attractive? david: i think they are attractive. it is relative versus other investment medium. the real income stream backed by long-term leases, and our retail offer is where people want to shop, where retailers want space, then i think global investment demand into the u.k. as a safe haven in difficult times, asset-backed companies must be attractive. guy: you talked about yields. do you see those yields going lower? do you have an expectation of where you see the cycle going? where do yields bottom out? david: i think we are about
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there now, in a period where interest rates stay lower for longer. i think real estate looks well-priced. catalystee what is the to move them out. i think we're in a period of stability, equilibrium, and on retail, which is a later cycle play, doesn't suffer from any oversupply issue, then i think the prospects for retail look good. guy: just a quick question on brexit. you know the u.k. market. plenty of people will not have the knowledge that you had. given that we are likely to see some volatility, do you think that gives you an edge in terms of the opportunity to look through brexit, analyze brexit, understand brexit, and make smarter acquisitions?
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how do you see the next few months? opportunity or threat? david: we see it from both ends of the telescope. 30% of our assets are held in continental europe, so we are for the u.k. being in europe. it is part of our business. for me, the next two or three months will create uncertainty and doubt in investors minds. i think there may be a pause. looking beyond that, i think the u.k. with its growing economy, the prospects look good. how good will depend on the outcome of the referendum. probablyneutral and cautious in the next couple months, but neutral thereafter. guy: great to speak with you. david atkins, ceo of hammerson. jean medecin still with us. talking about yields, in terms of the property sector, yields
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in office space come down quite a lot. 5%s talking about 4% to being the range he sees himself in. where do you see those assets right now? jean: i think the comments were very sensible, but i have two caveats. when we talk about commercial real estate, this is something ultimately linked to the business cycle. there is an element you need to factor, which is vacancy. that is one thing, if you want to have a little more balanced view on the attractive eddie of the assets. it is very different from real estate for housing. i would also say that we should not forget that ultimately, it's not a very liquid asset class. the idea that you are paying a premium in terms of yield for these assets compared to u.s. treasuries -- guy: some people like that they
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don't get the volatility. jean: but it is more like a kind of accounting mirror or smokescreen. it is just because you value those assets on a regular basis based on what you estimate at lower volatility. when you look at the sharp rise, it is quite volatile. if you are looking for real ,ields and a kind of safe haven look for u.s. treasuries. 1.7% 10 years yield. in the context of deflationary pressure, the ultimate safe haven is probably the best place to hide if you want to line. guy: thank you very much indeed. we are minutes away from the open. we are going to look at the potential corporate moves. that is next, here on "on the move." ♪
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guy: welcome back. let's look at futures. we are looking for a balance on the london market. european equities bouncing. how long does it last? let's talk about some of the stocks we need to be watching. here's caroline hyde. caroline: one that is driving the ftse higher, they come out with numbers better than expected. this has been a volatile trading session. you know what it makes, painkillers. a whole wealth of products that the consumer buys into in the supermarket. they are showing fourth-quarter sales beating. they are up some 7%. we are likely to see like for like sales grow in 2016. watch reckitt benckiser. management changes in another stock. bae systems, this is the
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management function you can use. today, we have charles woodburn out as coo. he's only 46 years old. king,e soon replace ian the chief executive? that is according to people familiar. charles woodburn coming over from another u.k. company. he's now moving into bae systems. keep an eye on that management changeup. meanwhile, the two german utilities are likely to spike as well on the open. look at the erosion in valuation in these stocks. the reason they can jump, speculation that the german government could help the taxpayer take some of that burden of winding out nuclear assets. eon both having to pay for the shunning and cleaning up
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of nuclear reactors. back to you. guy: thank you very much indeed, caroline. how do you play this week tactically? walk me through the week. jean: we tactically increased our exposure to equity last week. we are now at eight. it is not going to be a major inflection point in our very conservative position, which we have kept in september of last year. we think that probably we come to the end of monetary illusion. we have this very strong market reaction. until we have more confidence on the underlying economic strength, which is definitely not our best scenario, we don't see any reason to change the market. guy: the market open is next. we think we are going to see a significant bounce in europe. a lot opportunity this year.
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that is the story we think is going to be up, 1.9% on the ftse 100. over 2%.ould be up the open is next. ♪
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guy: good morning and welcome to "on the move." i am guy johnson here in the city of london. moments away from the start of european trading. the yuan surges. china's currency the most since 2005. the exchange rate and critically strengthened the reference rate. stocks soaring in tokyo. 8%, the most in seven years. investors anticipate more stimulus from the doj did this after disappointing gop data. -- ♪ guy: ok, let's talk about the
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equity markets. as we get down to the get-go, let's talk about what we're expecting. 2%. to tokyo to get away overnight. let's look for the cash over. here is caroline hyde. caroline: a phenomenal move we saw in asia here it is have a look at what went down in asia. we saw spikes, the biggest hop in japanese stocks since 2008. brushing up concerns about the japanese economy. is gdp worse than expected echo is chinese imports and exports worse than expected? the pboc stepping in looking for support -- looking to support their own currency. you see a rocket in the nikkei, up 7%. what moves we saw over in asia. as we do overall -- as we open up, we see bigger jumps than that.
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markets start to get going. 1.5% up 1.5% -- we are up on the ftse. miners and metals start to search up. gold on the lower side. look at metals. despite data come from china, we're seeing a 2.5% pick up. money moving into what has been deemed some of the riskier areas. money coming out of that risk aversion. go down by 2%. we are not going to be seeing much in a move in oil, we are down .3%. supply issues once again good concerns iran about to send that oil over to europe. the first time we've seen europe -- we've seen those oils it on those boats. we're seeing money move into the likes of the riskier debt. we're seeing foreign costs going down for italy, portugal.
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20 basis points if you're looking at debt today. that risk appetite showing in the bond market. let's have a look at the equities. president's day, we get plenty of action in europe. you were just speaking to the company. it has been doing better than expected. keep an eye on presidential. e.on, where likely to see a spike. utilities getting help in germany because you can see the taxpayer start to pay for some of the bill when it comes to cleaning up their reactors. they are getting out of nuclear. they're going to be closing most of their plants by 2022. this is as we see numbers better than expected. sales up 7%. back to you. guy: carillon, thank you very much. let me show you a few others. this is a bloomberg imap of the stoxx 600 did two is the leader
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this morning. financials bouncing. technology also one of the massive underperformers. as caroline said, it is the underperformers that is bouncing back today. -- whetherne's point or not you want to chase this market. asia had an interesting session. let's find a what happened in hong kong. >> a rally is underway in asia. we are seeing shares in japan rising about 7% of the nikkei 225. the broader topic index indicating 8%. as chairs come up, a seven-year low in tokyo. china returns to business. the shanghai composite in the red for most of the session. banks and financials in a month of leaning decliners. sharesal and oil related among the best performers. let's take a look at some of the movers across the region. the nikkei 225 higher in the session.
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insurance did particularly well. up 12%. insurers and the hong kong session have been rallying as well. this is what we had in australia. -- you are up by seeing some resourceful shares inclining about 7% for beaches resources. let's take a look at some of the stocks that have been moving elsewhere in the region. as we said, oil producers and telecom shares, financials among those the movers. taking a look at some of the leading moves among financial shares. this is what we have. across the region, banks up 4%. these are your key advancing stocks, seven day moving to the upside, seven declining. a is a laura in japan. those japanese financials, strong game today.
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last week selling pressure permeated investor sentiment. guy: let's talk about the banking sector in a little more detail. thanks soaring this morning you'd -- thanks soaring this morning. focus, deciding to keep its global headquarters in london. following months of debate. stephen morris joins us now. medicine still with us -- jean medicine still with us. walk us through the implications of what they decided. stephen: really the big winner osborne --s so much
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is george osborne. get a lot riding on this. regulation and taxation and also making the right noises. showing the music has changed and from the perspective of the u.k. government. they are trying to keep big business here. -- guy: 8 -- it is not really a brexit. stephen: at the moment, osborne must be very happy he has managed to keep tens of thousands of employees and aliens of taxation revenue in the u.k., as opposed to moving to hong kong. guy: what is next? now that they have made this decision, does the bank change in any way echo stephen: last tactic, unveiled a new
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meaning they were going to relocate millions of assets into china. the equity is not doing so well at the moment. it has a lot to do to get the bank on track again. guy: stephen morris. let's get back to jean medicine -- how are youd positioned? we prefer the credit side, the corporate bond side of the sector. they missed how much better capitalized and transferable is the banking sector which with
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the new banking resolution how to discriminate entering the strong players in the week players. -- if you want to get exposure to the financial sector, when you look at equity, whatever the vision you have on the strength of the financial you are tiredg as of week macro environment, and you have this zero interest rate, which is very damaging for banks, we do not see a lot of upside on the equity, despite the big correction. guy: is there anything draghi can do? is there anything he can do to help the band -- to help the banking sector? jean: yes to deal with many different drivers -- he has to deal with many different drivers. for the time being, trying to profitability which means not going further into negative interest rate policy. the top oft is at
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his agenda should not expect too much support from the ecb. --terms of the liquidity that is why we believe we are not in a repeat of the crisis. guy: any position you can see guy: testis planning -- this isho guy: not something we should rule out. it would make sense if you want to extend the pool of assets he wants to buy, just by virtue that today he is a big constraint. there are many other options. [indiscernible] t to the ecb --
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in terms of how he is -- easing program. he has many ways you can relax the program. for that, we believe he is not sure. how will those be affected? guy: you take out title shorts and you see the banks beaten up. you'll see any reason to go in any way long with the eu banking sector? if you look at the key names that are out there, the deutsche, the credit suisse, how have been badly beaten, do you see the volatility story working? youdo i play volatility? think the institutions are going to be faced with the reality that a 10% move that we are seeing today, it is the reality for the stock? jean: i am not sure we will have 10% every day.
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the massive liquidity injection that we have seen over the past year, triggering this sharp movement on the upside or downside. the volatility is going to stay. i would argue that the role you should implement, you need to tread the banking sector, and if you want to buy banks which are the strong ones. that?ow do i decide is that a tier one decision? how do i make that decision? jean: you look at the capital, short-term. you look at the quality of the business model. retail banking, wealth management is much more predictable business model that investment banking. looking at this is probably the first rule. you have to look at what you want to pick in terms of instruments you want to invest.
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if you look in the credit statement, you know within the convertible space, there is a lot of stabilities. is bad thing for investors unique to do a lot of research. you can't just buy the asset class as a whole. you need to be a lot more specific. guy: you have to move today. credits weise up 7% -- credits weise up 7%. tim cook if you want to play the equity side, we have to consider where you are coming from. us the sector remains in a not very attractive position. some people were bullish, it is not because you're getting back even 10%.
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guy: great to see you. thank you so much for your time. thank you for giving us all of your thoughts. jean medecin. disappointing data. japanese gdp contracting more than expected. that discussion next. ♪
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guy: 15 minutes past 8:00 here in london. let's get you up to speed.
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this is bloomberg's first word news with nejra cehic. nejra: hsbc has decided to keep its headquarters in london. the decision was passed unanimously in a board meeting sunday, following 10 months of debate it hsbc has been based in the u.k. for 23 years and says beginning there is the best option for customers and shareholders. u.s. democrats have pushed for congress to vote on the appointment of a supreme court nominee from president obama following the death of justice antonin scalia. they will not discuss -- they will not consider desperate all caps said they will not consider a replacement until after the elections. scalia died from natural causes in texas on saturday. -- exports fell and import the climbing for a 15th straight month. --t left a service of figures suggest the depreciation has yet to boost the competitiveness of chinese interest rates. global news, 20 hours a day
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powered by our jungles -- powered by our journalist. in thee world's urges -- final three months of 2015. let's go to tokyo. brad miller is our economy leader. people are looking at this tv number and saying we're going to get more from the doj. is that the right line of thinking guy: -- line of thinking? >> if you look at the gdp numbers, you see the private consumption was week. that is very concerning to the boj and governor kuroda. he needs to see japanese consumer spending. if they are not, we're not want to get the increases we need for inflation. and not the increases in economic activity. we did see some positive signs.
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there was resilience in business spending. guy: if the boj or to do something, and given the concern surrounding the consumer, what form will likely take? -- what form will it likely take? they buy a great deal of government bonds. the by exchange traded funds, real estate funds. they have a negative rate policy now. governor kuroda says he will be creative when it comes to policy it he is happy to surprise markets to come up with something new that we have not seen before. we really can't see limits to what he is going to do. he said he will do whatever it takes to stir inflation. guy: given what happened was the negative rate surprise, do you think the fact that the yen strengthened, that there will not be the top of the toolbox, as it were?
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lower.it could go the bank indicated that when it put out the statement on january 29. that is possible. it hasn't had a major impact on the way the markets have moved in japan and the yen is being driven by a lot more than what is happening in japan. we look at what global central bank said doing. that is a big impact. -- that has a big impact. that limits what the governor can do. hostage to global events. guy: great stuff. brad miller, thank you very much -- rhett miller, thank you very much. why some investors shares have been oversold. today, the market surging ahead. the imac function tells us what is happening. everything is in the green. it is the financials that are leading the charge. that sector up 3%. telecommuting kaisha, badly --
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telecommunication, badly beaten up. it is not getting the big pickup and some of the commodity stocks. we will continue the market discussion next here on "on the move." ♪
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guy: 22 minutes past the hour. that is london. red-hot markets. london up by 1.75%. i want to talk you through what
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is happening with the banks. as you can see, trading at the -- 7.8.even spot eight the vishay the chart. everyday chart -- let me show you the chart. a three-day chart. we saw another gap this morning. we stated that rally a little bit. in the interest of seeing how people's trade around the bank. do they believe something is changed? it is going to be an interesting session, as we have draghi coming up later on. the story coming out of asia, one out of china. there was one out of tokyo as well you'd let's talk about the chart that matters. let's talk about the topics and being oversold. caroline: a great option you can get on the bloomberg, very easy to see whether the stock market
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the investors feel is oversold. it seems to have been the technical indicator when it came to topix. as you can see at the green line, 30. the red line is 70. basically anywhere below 30 is an indicator we're going to look. we're starting to see an oversold signal that it is below 30. maybe it is time to start buying. we saw that hit every 12 today. we saw topix jump. verbal intervention coming from the government and central-bank side of the equation in japan. we start to see action soon to try and reduce some of the strength of the yen as of late. also china coming in and trying to support its own currency. you can feel the desire to buy. the strength index showing it is
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oversold, time to buy. the market response. tyco your -- guy: you're on the bloomberg, you had rsi. it breaks up all of what we are saying. caroline: it is all about momentum. charts where you're going -- where you're going in terms of momentum. you can do it on any index in indy -- in any security. guy: caroline, thank you very much indeed. hide bring us this little function here. i'll to talk about what is happening on the equity front. we are seeing many of these markets surging here in europe it is financials that are leading the story. italian banks are on the rise this morning. an interesting aspect all of this.
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a lot of focus on the story. so, we will continue to focus on that. the hour, a big rally in european equities. the stoxx hundred up by 200.28%. oil a little bit later on. what is interesting is you have broken that link between brent and equity markets. equity markets on the upside brent is on the downside. -- equity markets on the upside. brent is on the downside. mckay 225.for the -- the upside for the nikkei 225. stimulus to come through for the boj. draghi is going to be talking later on. now that we have seen the latest move from the pboc, is that a call for action from mario draghi?
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is he going to surprise the market today? we're going to talk to josie. to talk draghi -- next we are going to talk draghi. ♪
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guy: welcome back. top of the hour, you're watching on the move. it is turning out to be a pretty decent start for the week. let's break the market down to a further level. let's find out which stocks on the move with caroline hyde. caroline: i have a few notable movers. it is the financials that people are keeping an eye on. , you're outals performers. given that most eaten out stocks. -- the most beaten out stocks. the reason the italian bank was being drawn up was the in fbi overall, they had a record low.
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they bounced back. a small move creates a huge amount of volatility it where up 10% as we see, appetite start biting into those italian banks. meanwhile, back at banks -- much better than expected. every type of product within your kitchen cabinet, whether it be your cleaners. this company makes it and they are outperforming when it comes to selling in the stores. they are managing to sell 7% higher in terms of their sales. outperforming where the market thought they were going. they're forecasting that sales growth to continue through 2016. are been see growth -- you going to see growth. that's very few
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falling but one of them is a ran gold. this is been one of the best performers this year. today when you have some risk appetite starting to get into the equity markets, gold falls. ran gold down to 22%. let's -- guy: let's take a look at some of the other assets. let's run you through the details before we talk about china. let's show you what is happening around the world. start off with that top number because that is important. the dollar on shore rate, the biggest move since 2005. the nikkei surging overnight. the response to economic data out of japan. shanghai composite coming back. look at the hang seng. brent trading at 33 which is again quite interesting, given the asset volatility we are seeing. the new year officially underway
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in china and markets reopening today. lots of moves to talk about u.s. surging the most since 2005. the pboc strengthening the reference rate. do.s talk to khiem he joins us from hong kong bearings. let's talk quickly about this interview that was aboutby the -- talking the stability he sees in the reserves that china has. what was designed to be communicated? khiem: what is being rmbunicated is the fact the is not linked to the u.s. dollar. importantly that currency has appreciated against the u.s. dollar. it is appreciating. guy: why then the focus on the
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dollar rate guy: nikkei medication 1 -- the dollar rate? it seems a little bit confused. basket -- khiem: it is trying very hard to contrary that's to convey that message -- to convey that message. u.s. dollar is really a distended currency around the world. he was dollar has been weakening against a lot of currencies. the rmb is yjr appreciating against it. guy: how much easier his life now that maybe we are seeing the fed backing off a little bit from its aggressive rate hiking scheduled? khiem: it is possible the fed will not raise rates in the
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market they may have to wait until april or june to consider that. the money market features is a bit too aggressive. pressing out all rate hikes for the rest of the year. we are not completely in the clear in terms of what the pboc is going to do. therefore that the lien against that a little bit. what is urgency policy involving, the fact that they had to dismiss the idea where one see capital controls being imposed, that they are going to tighten up on the flow. withre very comfortable the net flows we are seeing out of the country. why is that? i don't think one can say they are comfortable because of outflow. outflow is a concern. net totalk at the
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reserve, it is still very high, three chilean dollars. -- $3rillion dr. trillion. invest insee foreign its. also capital flows from foreign investors going into asia markets. it is not such a desperate situation in china. i think one has to monitor the flows. speculator,were a because that is the link which we have use, what would you be looking at the moment? areese authorities comfortable with the concept of speculators and what they are doing to the currency. at the same time, we live in a different world, and they have to accept some of that action. over the past few months, the outflows have been quite high. obviously, the pboc has to be
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concerned about that. that is why they have to make the statement about not trying to encourage speculation in the currency. this is the same situation as we have in recent -- as we had in the u.s. and europe in 2008 and 2009 when the authorities are discouraging shorting of aching stocks. aching-- shorting of stocks. i don't think it is out of the usual for central banks to make these kind of statements. we would like to see two-way flow. khiem do, thank you for taking the time to come and see us as morning. head of asian assets. we're going to talk about one of the other s -- one of the other risks. high noon approaching in brussels. next with a preview. ♪
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guy: 40 minutes past the hour and welcome back. here is there a chance. nejra: hsbc has decided to keep its global headquarters in london, singh the u.k. is an important connected economy. they voted unanimously in a board meeting on sunday. hsbc has been based in the u.k. for 23 years and says remaining there is the best option for customers and shareholders. banks are kicking a hatchet to their bonds trading dividends. the biggest casualties are the
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people with the most experience. 70% of credit traders cut in london last year had worked in the financial industry for more than 10 years. that is according to data compiled by hedge funds and michelangelo search. claims the formal volkswagen boss was told about the emissions cheating long ago in may 2014. wrote martin winterkorn to say the company could not offer an excavation and u.s. regulators would probably investigate. enginested that some were fitted for software to beat emissions test. india and other south asian countries flopped. chinese airlines will require 600,000 planes worth 900 billion dollars in the next decade. that is your bloomberg's -- that
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is your bloomberg business flash. guy? guy: david cameron -- britain's future in the european union. too.t could hurt you this came up after he attended a dinner at a night. angela merkel made her clears a few on the matter. wish might wish -- >> my is the united kingdom would remain an active member of the european union. this is an germany's interest and theink in britain's interest of the entire eu. guy: let's go to brussels. what message does crack cameron have for his fellow leaders -- does cameron have for his leaders? >> you're right. cameron has leverage. he is saying the rest of the eu,
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your economy could suffer. your impact on the world stage could suffer if the u.k. were to leave the eu here to give us a good deal. that is having some affect. --heard angela merkel saying there are still some sticking points. the french are unhappy with what cameron is pushing her changes to financial legislation in the eu. eastern european countries aren't that happy about some proposals for limit on migrant welfare payment. there is a long week to go before this crucial summit on thursday. guy: walk me up to that summit on thursday. what are the critical moving parts. what kind of summit is it going to be? ian: it sounds like it is going
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to be a long summit. cameron and his team are preparing for three days of long negotiations. before then, there's a lot of intense diplomacy going on. ofald tusk is in charge getting all of the leaders together, he is engaged. going to paris, athens, prague before finishing his trip in berlin. he is trying to get everybody on board. cameron is speaking to the european parliament tomorrow. a lone go before thursday's summit. guy: it is going to be a long week. let's talk about market moves. we can prove what we are seeing here financial surging, leading the european story. clear.p making it very the financials doing the heavy lifting. they are up by 3.7%. the greek financials in the mix.
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you want to check out what is happening here, check out imap. you can begin and deal with the details in which of the individual sectors are going to break up the banks. see what stocks on the move. let's turn our attention back to politics. -- the european flavor. president's day but the focus is the supreme court. the supreme court justice antonin scalia, 11 months before president obama were to leave office, has set up a huge battle of political wills between the republicans and democrats. his death the fight to succeed him is going to have a huge impact in terms of the business and domestic issues for decades to come. these women and gentlemen, when
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they get in, they don't get a room. that is how it works. -- hans nichols here to explain why this is so significant. hans: -- they will likely have to redo, because you know because you no longer have a five or vote. here's the tricky thing about it for four vote, it lets the lower courts ruling stand. it is a prounion position. is happeninghat with immigration, this has to do with a challenge to obama's decision not to deport some -- you have a war for ruling there. -- court stands but not as but it is not across the entire country. friendly confusing. here is what president obama had
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to say. >> i plan to fulfill my constitutional responsibilities to nominate a successor in due time. there will be put give time for me to do so. for the senate to fulfill its responsibility to give that person a fair hearing in a timely vote. these are responsibilities that attack response -- that i take seriously, as it should everyone. they are not in -- they are not about anyone party. they are about an institution that justice scalia dedicated his life and he can sure it continues to function as a beacon of justice. guy: that is the president's line. what we heard from which mcconnell, they want to delay any sort of nomination until after the election, leaving the supreme court without a nine-member fullback for more than -- full bench for more than
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11 months. guy: for a non-us audience, hard to understand. it is going to ripple through very quickly. hans: it is going to polarize and already polarized electorate . it is going to make congress all the more intense. you see interest groups really getting fired up. this makes the prospects for any serious legislation in the next 11 months basically dead. it could affect the trade deal. they are expecting the trade deal with asia. they are expecting that sometime this year. he want to load on it. -- they want to vote on it. this is going to poison a well. this is going to be a real challenge but for president obama and members of congress were trying to pass basic bills. in a normal election year, you can write things off in september. that accelerates the freeze.
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the freeze may be happening in mid-february. -- up: guy: hans nichols next, taking a look at what might be mario draghi's next move. he is up on the european parliament later today. ♪
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guy: welcome back. you are watching "on the move." the market is warming up.
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the market is up nearly 104 points this morning. what is happening around the european trading market. 3% this morning. the french banks really on the front foot today. the banks are leading the european charge today. i want to show you euro-dollar as well. we are currently trading at 111.89. that, -- you get the risk on environment. the second reason is with that draghi talking a little bit later. 111.89. mario draghi exit statement ahead of a policy meeting. it is going to be in front of european parliament. investors looking for clues on
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what the ecb is going to do next. , fx with us, richard jones strategist. what can we expect today from draghi? we know the markets had a big day. the chinese have done something. what is draghi going to say in response? richard: his primary job today is to try and instill a little bit of confidence. -- confidence without going too far into the policy debate. the reason for that is the volatility we have seen, part of the bad news is about more negative rates for central banks around the world. until a couple of weeks ago, options the main policy , that the ecb had. even the browser to desk given the volatility we are seeing --
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given the volatility team we are seeing, a message of the economy is probably something that draghi will be seeking to deliver. guy: reggie johnson to the conversation. richard: -- guy: let's ring richard jones into the conversation. richard: draghi is already -- is always into to the group of people he is speaking to. the fact he is speaking to a group of politicians, perhaps he will say the ecb is doing what it can to try and revitalize inflation, growth. they need some help from politicians. the ecb cannot act alone. that may be the message he tries to deliver. guy: jeff, let's come back to you. the italian banking sector front and center. how much focus is there going to
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be on the way the mechanism is working? the problems the banking sector faces? we all know, the banking sector has been one of the main sticking points for military policy -- for monetary policy. the ecb has done a lot to try and improve confidence. maybe establishment of supervision. we have seen a conference of assessment to scrub talents sheets in 2014. -- two scrub balance sheets and 2014. i think fundamentally they will not see anything very wrong. that may be a message they try to reinforce. they may try to reinforce the message that the market has oversold the banking sector. ceosyeah, i think a lot of
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would want to hear that as well. interesting to see italian banks also strongly this morning. it is a day, the opportunity for surprise. he signaled march 10. he talked about it the speech he gave on the fourth. there is no excuse for inaction, we need to step up. is today the day to get that in? we've got the pboc having to take action overnight. richard: it is an opportunity for him. if i go back to the first of december, on a trade weighted basis, the euro is over 5% stronger. that is not going to be lasting. that is an important part of what they are trying to achieve with their monetary policy. black joining us out of our bureau in frankfurt. we get a decision from the bank of england on dividends.
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that confidence story. stay with bloomberg. coming up next, and import speech delivered by mario draghi. ♪
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francine: monday after european stocks gain. ecb president mario draghi prepare us to speak ahead of a march fed decision. stimulus search, japanese -- post is biggest gain in seven years. the pboc is the helping hand. he wants urges to the most -- the yuan surges the most in a decade. ♪ francine: welcome to the pulse. live from european

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