tv On the Move Bloomberg April 14, 2016 2:30am-4:01am EDT
guy: welcome to "on the move." we are counting you down to the european open. this is what we're watching, singapore slump, the central back into -- moves crisis mode. the currency plunges dragging neighbors with it. the story out of asia is interesting this morning. equity search everywhere as alarms on growth ring out across the globe. is decision day for the bank
of england as it considers the grand distortion. will get a view on what is happening on the u.k. we will work our way through this show. we saw a big stock rally, and at imf telling ushe the growth story is pretty bleak. the singaporeans telling us they need to get back into crisis mode. hans: it captures what is going on up there. some people are saying steady as it goes them we see the capacity of a single bank saying let's intervene. we could potentially have a a currencyr -- or conversation. and all that gets you excited. guy: you have to find something to get excited about. equity markets probably not going to provide that. yet, a huge rally for jp morgan.
expectations pretty low. on quarter quarter and beat expectations, but it was still down. this talk about we start morning, this is how the numbers look. similar picture, it is thursday that means a bunch of stocks going dividend in london. just be aware of that. that is called at the level stronger the most -- than most. unsurprising to see the market may be pausing. the: we saw that in oil, second day of declines for brent. it is still well north of the 40. nikkei having a great morning. powerpc -- u.s. dollar to the singapore dollar -- it is a weaker euro this morning. we will see what effect that has rest of the market. let's get the bloomberg first
use -- news now. new zealand's a central bank said a journalist leaked their surprise cut last month. an investigation found the news hub send information about the condo from a media lockout before the official release time. although the reserve bank of new zealand says there is no evidence the leak had any impact on financial market it will discontinue embargoed lockups for future decisions. the chief investment officer at goldman sachs asset management says to expect a wild ride in the world stockmarket. and not that much to show for it. bouts of volatility will continue as nervous investors dump shares of even the slightest hint of bad news. near single-digit returns with stocks on low inflation. new york city's pension plan for civil employees is exiting its
one for $5 billion portfolio of hedge fund investments. a vote to terminate the fund will come as soon as today according to a person familiar with the matter. the boat comes amid concerns of lagging performance and high fees. global news 24 hours a day powered by our 2400 journalists. singapore's dollar fell the most is cents november. least tounexpected, at me by reducing a policy last used during the 2008 global financial crisis. the monetary authority said it would seek a policy of zero appreciation against an undisclosed basket of currencies as a growth in the city grinds to a halt. bloomberg news reporter joins us
us, david, first take through the mechanics of what the policy actually is. it is slightly different than most essential banks. most will set their policy against an interest rate. they will use their exchange rate as their policy. what it does, it will set its exchange rate against the basket currencies.ed it is an undisclosed basket with unknown weightings in it. basically, it will let that basket rise against it or fall. control inflation to pull that the currency appreciate against the basket. if it wants to diminish inflation, it will let the policy go down again. that is what it has done, why has it done it? demandas we know, global
is slowing down. singapore in particular is heavily sensitive to export and import industries. total trade for singapore according to the word bank -- affected byould be these global headwinds that it is seeing. they highlight that japan, europe, and the u.s. growth is certainly slowing down. beenxport industry has heavily affected by that. therefore, it is trying to control the exchange rates to help incentivize these industries to help improve exports. up there,ll wrap it thanks for the update. it is having a significant effect on the market. joining us now is a guest. good morning, you have these forces in the market at the moment. equity markets surging yesterday. yet we of the imf feeling pretty
down about the world. the singaporeans are telling us they're back in crisis mode. explain this to me. >> the market likes a week of trajectory. of the but what doesn't like is the politics and weak growth. line.urts the nominal top it also creates these .eflationary forces that is certainly the case as we have seen in singapore. we have to move forward. to me, this is -- you have opposing forces that are keeping the change. they are to hit it out and then you know they're just bouncing away. the stock market has been trading sideways if you put a big, broad range on it. it is the 2154 more than one and a half years now. we're going nowhere in terms of the equity market. it is difficult to fit expansion
on the metrics of an environment of slow rising corporate rates. of course, the fed which is still adamant that they will have interest rate and then you ask to hold the noise of a central banks. the key here is that the world the needs the weaker dollar. it is all about the dollar, in my opinion. is singapore able to sort of intervene and affect their currency when you see the bank of japan really struggling to weaken the yen? steen: the answer is they can't. you can defy gravity short-term but it will ultimately take singapore down. they see this as a preemptive strike to move up first. this is in line with what they have done historically. singapore will be hurt because it is a small economy. those are always the first ones to feel the headwinds. to me, it is a telltale sign of how the world continues to
subpar in far -- terms of growth. the elbow for any economy in asia, and europe, and africa, and latin america, are very confused. no one is not -- everyone is willing to work harder to do reforms. the only thing they get from policymakers and central bankers is that crisis mode. abouter talk productivity, or changing the set up. it is impossible with the election and campaign and the u.s. and the brexit and election in france coming up. the election in spain is in disarray. ireland just threw out government that an 8% growth. guy: we can listen to what kuroda says, but forget all those guys. it really is about janet yellen. is that the message? federalhe is the first
--irwoman taking federal external factors as the key driver. that is never happen in u.s. history. they have always been ust messed eccentric. -- u.s. domestic centric. it is saying we don't need a strong dollar. the market needs to realize they want a weaker dollar. with central bankers, you never listen to what they say, but you observe to what they do. they do very little. to what youl listen say. we will observe you as well. he stays with us in london. up next, a bloomberg survey found a majority of analysts see no impact of the major suppliers striking a deal. we will discuss why. ♪
quarter growth rate is the slowest since 2009 as they struggle to get consumers interested in frozen pizzas and convenience meals. union labor reported first-quarter sales and line with estimates with the gains in laundry detergent offsetting falling prices in europe. underlying sales increased 4.7% compared with analysts estimates . the family said thursday that consumer demand remained fragile and volume growth slowed in the quarter. a takeover ofe the canadian tv distributive. according to people with knowledge of the situation, the london-based broadcaster has talk about a possible deal with the firm which distributed oscar-winning "spotlight." both -- through representatives from both companies declined comment. guy: let's turn from media to the oil markets.
a 50-50 chance that russia and saudi arabia will agree to freeze output sunday. either way, they don't anticipate many impact on the supply. yet into this meeting we have seen the oil price rally. ryan: you have to separate the supply with the effects of supply. there is no doubt it could affect price. meeting doesn't live up to expectation to continue will price fall. having said that, going into this meeting and going into the meeting back in february, all of -- producingcer in companies new a cap might be on the cards. byy try to cook the books pumping as much oil as they
could after they were already in a battle for market share. they all need money. so, if they do agree, they would at record levels. the russians are pumping just under 11 million barrels a day. at how much they are right now, the opec countries, about half a million barrels less than they were back in january. they could increase production any supply glut is not going to go away. guy: does dohar matter? if the dollar the critical swing factor, if we believe it needs to go lower, oil goes higher. we're always looking for some events to change the dynamic. wiset is shanghai, or else .
there is a huge inventory overhang. we have supply going through the roof if oil prices continue to rise. unitll see new supply. we need a range. we will have excess supply coming in. part of the reason why which was not mentioned just now that we have high oil prices is some disruption to the supply recently for some of the suppliers in the marketplace. the market likes to play on events. it is like watching a barcelona game, or something. in real terms, economically, don't forget it is the average price not the range. i think the average price will be 40 or 45 for the balance of this year. earlier you mentioned how janet yellen is looking abroad and taking her cues from
international benchmarks. what oil price do you think she is looking and as she makes her calculations? if you give your answer in a thick brooklyn accent. [laughter] d: she will be very happy with my answer which is we have 55 and and the upside we the downside would be 35. a scenario where oil can get out of this range. we alluded to that just before the introduction, what is really concerning is the middle east. cracksy, we've seen against that system. if you were calling him, the hotline or whatever, what would you ask? ryan: we already know the top
three questions -- economy, economy, economy. one of the reasons that vladimir putin is so popular is what he has done in syria. now into a recession and austerity. there worrying about the bread and butter issues like the economy. to know about what is going on with oil, for example. think of this as group therapy. he is there to tell them he is worried about oil as well. while the can't control the price of oil, he can do what he can to influence events. asked, ie will be would ask him about oil. i will ask him what he has offered to the other companies. he has obviously been involved in forming the russian pitch in doha and how the russian economy
will improve. we have a situation, the barcelona game, but nonetheless putin is searching around for something that he can do that is making a meaningful difference. out in seen it play it domestic policy. how stretched is the system becoming? russia onough to keep track at the moment? what is the derivative effect of the average? steen: it is not enough to make a number of countries happy. accumulating or compounding the negative impact in a country like russia. it'll be very difficult if it doesn't deliver the lowering of the sanctions or some kind of external factors to mitigate that.
and worse.ng worse, last time i flew from london to moscow, less than 25% of the cabin was actually full. i thought i missed the gate because there was no one going from the airport. no one is going to rush anymore. situationry desperate in russia. in angola, which came under imf curfew the other day. ryan: it doesn't have a budget deficit problem like saudi arabia, but can help things along a little bit. it only goes so far because then you end up with an inflation problem. they are not indexed to inflation right now. guy: thank you very much in vitro covering this story. up next, we look at some of the corporate moves as the companies tops estimates. ♪
seeing an uptick of 3.9% in the first quarter. that is more than it was expected. burberry to drop as much as 7% or 8%. such a seen deterioration over the course of 12 months. much volatility. burberry is warning about the business climate. 5%.il sales dropping the estimates were for a decline of 1%. hong kong of asia is looking good. earlier thisain week warning of course about france and the terrorism affect. clearly, burberry wants to watch that as well. guy: some stocks to watch. director is going to be joining us.
guy: good morning. you are watching "on the move." nichols.ng solongside hans hans: the city sick central-bank jumps back into the crisis mode. slowdown with a stocks rally and equities surge everywhere. and a fork in the road. it is decision day for the bank of england as it considers the grand distortion for its rate path. guy, let's take a quick look at
features. fair market values are pointing positive with the exception of it looks like spain and italy. they are down. let set it out to caroline hyde at the touchscreen. caroline: we saw phenomenal gains yesterday with banks leading the charge. it was the u.s. earnings season, kicked off by jpmorgan. this is how we closed yesterday and now we are warming up. asia is up seven straight days, the longest winning streak we have same on the asian-pacific in a year. 00 is open, the stoxx 6 slightly flat. money is coming out of the cac 40. we see once again, growth and optimism around china. let's see how oil is currently trading. we are down, ahead of the
meetings. will they managed to curtail production? brent crude is down by 1.5 percentage points. daily, there is concern about whether they will strike any sort of deal. remember, the dollar plays into the oil move. in particular, look at it against the singapore dollar. the dollar is up against the singapore dollar. we have nothing most like this is august of 2014. we get cpi data from the u.s. today. .5 percentageown points against the bank of england. nestle is up .7%. we see 3.9% growth. ats isker of kid cats it k
an obsession over coffee. unelever is down 1.5%. it was slightly slow compared to last quarter. we are expecting burberry to fall 6% on the opening. challenging is how we are hearing the opening talked about. by the are joined now director of hayes. we had overall growth of 4%, u.k..e a 3% drop in the a decent start to the day. caution in the u.k.. year.has been there for a every six weeks we have been talking.
we have been talking since last march, march 15. we never really rebounded. manufacturing has been quite cautious. business has been quite cautious. i think that has continued. with that six weeks ago that we would be down 3%. that is one of the benefits of a diversified group. we have germany up, the u.s. up, but the u.k. down. guy: what does wage growth look like? >> one year ago i thought the u.k. with the close to 3% and it is close to 2% today. hans: could you give us the wage growth picture across the continent? the numbers in germany are about 2.5%-3%. what you see the best way to growth in europe and where do you see the worst? >> from an economic
standpoint, europe is about two years behind from where the u.k. and u.s. is. we were 11% up in the quarter. in places like germany, 5%. from an inflation standpoint, we are looking at 2% to 3% in those markets will step if i go to s. if i go to spain, we have seen a rebound and we have wage inflation around 3% to 5%. we are much better than we were once year ago. hans: we make this statement about every time we get the unemployment numbers. what is the number we should focus on, when we look at unemployment? what do you really focus on? >> unemployment, i tend to say "who cares?"
you are better off looking at pmi. by the good thing across europe is more jobs are being created. a lot of businesses that did headcount productions any tough times are sliding 2-4 roles back. we have seen across europe, an improvement in employment activities. we certainly do see good activity with good foreign indicators. we are in the higher end of the salary levels. we expect growth to continue in europe at around 10% for the next year. guy: draghi must be delighted. >> he does seem to be today, looking at the unemployment rates. i think we forget sometimes that there are countries in europe that is significantly better than even the u.s. or eastern european bloc. we have spain rebounding. we have seen portugal labor costs being cheaper than germany
for the first time. losing and france are competitive power and that is being replaced by a much broader, universal green chip in terms of the fme sector, the ability to transform economies. eastern europe has become the hub. they are all growing at about 3% growth pretty much. i think that is totally in line with the fact that we see a much which is running into the political atmosphere of refugees and brexit. on the ground, i think people are willing to work hard and make the changes. they are willing to adapt to this new, whatever paradigm we an unroll. >> most business in europe is in recruitment, candidates looking to change jobs. housing will be better.
consumers will be better and retail will be better. we are faced with the growth we have got, which is candidate driven. in addition to that, part of the is refunding some of the jobs they have let go. we have seen countries like spain benefit from the restructuring they have done. we have seen manufacturing moves out of germany into eastern europe and spain. but it's improving the possibility for the german companies. i think it is a win-win for the european market. guy: let's talk a little bit about hays. this is the an hour function here at bloomberg. the yellow line is the price target for your business. we are down. the moment. what is it going to take? for yourno sales stock, but you have this spread here at the moment. what is it going to take to close that? >> our 10 years are very well
respected. secondly, we are one of the most cyclical stocks you could see. so, when i come out with a a quarter, i say, the exit rate is 5%. i think -- there is a lot of uncertainty. guy: back on the macro. >> it is a bold quarter. get through the uncertainty -- and we will -- i think we will rebound quite strongly. all the have done today is say to the market, we will profit. we are very happy with consensus and we will be up with the back of today. guy: always a pleasure to see you. venales, finance director of hays. we are going to carry on talking
guy: welcome back. european equities are fairly flat this thursday morning. here is the bloomberg first world news. bank had new zealand's an interest rate cut last month. an independent investigation found a reporter sent information about the cut from a media lock up on march 10 before the official release time. although the reserve bank of new noland said there is evidence, it will discontinue future embargoes for future rate decisions. goldman sachs asset management says expect a wild ride in the world stock markets. who oversees about $15 billion says the volatility will continue as nervous investors dump shares with even the slightest hand of bad news.
he also predicts new single digit returns with socks of low inflation in the world's biggest economy. pensionk city's tengion t billionexiting its $1.5 hedge funds for employees. this is according to a person familiar with the matter. the vote comes over concerns over lagging performance, high fees, and the riskiness of the asset class. global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. you can find more stories on bloomberg at top . up aftertle shares are they reported first-quarter revenues that beat estimates. let's go straight to nejra. it looks like coffee has given the company the kick it needed. nejra: yes, that first-quarter
increase, 3.9%, which beat the estimate of 3.6%. that was driven largely by espresso coffee. despite the beat in the numbers, a part of the reason we have seen that increase in the nestle share prices, up as much as 1.2%, that first-quarter growth rate is at its slowest pace since 2009. nestle has been struggling to get consumers interested in convenience foods. as a response, they are pushing into new areas like medical nutrition and skincare. nestle did confirm its four year outlook, but that in february it expects organic growth to be 4.2%,r to last year's below its long-term target of 5% to 6%. the increase today we have seen him pricing was a myth. -- was a miss.
unilever shares are down as much as 1.9% today with first-quarter sales growth in line with estimates. we had gains in laundry detergent and personal care units that were upsetting the prices in europe. is atill, the ceo grappling with lower consumer prices. not just in europe, but also a slowdown in emerging markets india, whicha and account for 60% of unilever's sales. guy: u.s. bank stocks rallied in the united states yesterday. jpmorgan kicked off the earnings season. expectations have not been this low for the financial sector for quite some time. investors clearly feel the same. we get figures from wells fargo, the biggest bank out there, and bank of america later today. what do we make of this? e beenations have, bee
crushed. european banks are trading on 1. 3 in certain cases. if you take a look at the banking sector, are we recovering, or are we actually beginning to see this follow part? -- fall apart? >> "fall apart" is a strong wording. this is a clear reflection of this monetary system we have with the number of the countries having negative interest rates, are very close to negative interest rates. trading revenue is down across the board. technology is a huge challenge to the business model. i think the world is over branched and overbanked in terms of the ability and i don't think the bank has transformed
itself in this new environment. facebook went from being a stationary web-based company to now having 90% of their traffic on mobile and portable. i think they need to go through the same sort of transportation, gearing to where the customers are. people want to be able to do their transferring of money instantaneously. i am nervous because they are underperforming. it makes it very difficult for them to raise capital and the regulatory framework in the u.s. keeps getting tighter and tighter. berlin.ns her ee i get to ask the same question we are always asking in terms of banks. what does it mean for deutsche bank? >> [laughter] what does it mean for doj deutsche bank? jpmorgan our best in class. they are almost a rock star and the world of banks, but i think
deutsche bank is a very different story. they have had what, four different programs to restate th emselves. deutsche bank is central to the german economy and german government. i don't think there is a risk of them going out of business, but they have to continue through the legal complications they have in terms of their structure. but i think for the marketplace, i am nervous because deutsche bank always has been one of the biggest contributors to liquidity in the marketplace. that is what really concerns me in the interest of deutsche bank. guy: take a guy like mark carney . on the one hand, he knows his job is to get a grip on the banking sector. and then, he will probably see that the bank of england has gone too far. the banks are under attack, we understand that. have central bankers and regulators screwed up? >> may certainly have been very
harsh on the banks. fundamentally, this is economics 101. the only legal entity in the entire society that can create liquidity credit is the banks. on the one hand they have political pressure. at the same time, the economy is under severe deflationary forces due to the monetary system, which is accommodative at all times and constantly in an emergency crisis. we need to go back to the thr ee-six model of banking. that is what banks need to be doing. the problem mark carney has is, a bank is not a bank. is it somebody who is a credit facility? which is what they should do and that is where the problem role is for most banks. most had global investment banks. we need banks to be credit
facilities. that is but we need in this economy, somebody who takes the responsibility to direct and create credit. hans: how far away are we from that 3-6-3 model? you add all of that up and you get 12, which is guys' handicap, but we will market into that now. >> generally, also when i talked to bankers in london, they have become far more accommodative in terms of having longer periods of what goes on. i think to some extent, we have seen the worst of the regulatory tightening, the delhi in the u.k..inly in the i think the deal done in italy, when that comes under the microscope again, i don't think people will like it.
i am a little bit nervous about one of the catalysts that is coming. these cracks in the walls of the bank and their ability to deal with that regulatory demand. at the same time, we have had enough earnings power to actually make the cover increase. i don't think they can do that. i think the banks are in a very hard spot right now. guy: they are not on the golf course. rigure othey are on thei bikes these days. >> it is not a good business model. and i never get to the golf course, which of course is very sad. guy: steen is going to stay with us. up next, it is time for battle of the charts. that competition, up next. ♪
hans: welcome back to "on the move." it is time for the battle of the charts. steen, you are going to announce the winner. i have reached that moment where i actually don't care who wins. here we see the s&p 500, that is the white line. 600, that is the blue line. we see the s&p is taking off and the stoxx 600 is not.
that is even with draghi printing off all of that money. shy do we see this th divergence? guy, what do you have? guy: let me take you through this quickly. in some ways, they are a little related. this is my chart. this is one of the rare examples of core being above inflation. i am obsessed with inflation right now, so i may be a little bit biased in terms of the inflation. in spain, we were talking with the ceo of hays. the question is, which way do we get reversion? is this a lead indicator for the rest of europe, or is this just an anomaly in the spanish economy? let's get steen's take on this. which one do you like? steen: i think it is going to be a draw in the sense that you
have the most interesting chart, but i think hans' chart is what is scaring asset managers and allocators around the world. constantly when i get research from my esteemed colleague around the world, they are alluding to the fact that it is not working. but they are all part of the same functionality. the planning of central banks,k hans, is not working. at the bare minimum, the fed is backing down for now and they are getting fuel into the market. they went from four hikes to probably one. your chart is the most is theting and hans is's most significant. it is going to be a draw guy: i have lost track of the score actually, hans. a draw does take us to an even stevens. hans: just a quick point.
guy: welcome back. earlier on this week we were talking about the coal sector. now, we are talking about the energy sector. this is the gulf coast driller after the night aunited states. and missed a couple of interest payments. as a result of that, this is running out/ it is going to be filing for chapter 11. in the meantime, the gulf coast and as you can see, the share price has absolutely collapsed. as a result, this is feeding to the five your chart. we are 30 minutes into the trading day. let's see how things are shaping
up. here is a picture of the markets to show you what is going on. a fairly mixed story, unsurprising given the rally you saw around the world yesterday in global equities. what is going on below the surface? let's take a look at some of the stock stories with caroline hyde. caroline: the leader of the pack is hays. the stock is doing the best in three years, since 2013. it all seems to be down to their numbers that came out. a big bellwether for the markets. overall growth, 4%. strong growth in continental europe. where was a cautious? in the u.k. and ireland. but the market likes it. the market does not like burberry.
the numbers are down 5% in the fourth quarter. the market was looking for a 1% drop and we are down by 6%. this is a significant drag on the rest of the luxury market. ying thatis worr they will be in the bottom of the range. they are going to be at the bottom end of that. the challenging external climate caused this. it isout mothercare, down almost 20%. mothercore, a retailer in the united kingdom, but it is also an international retailer. it has been dragged down the most since january, 2014. they say on my sales are up 5%, but international, they are affected by ongoing economic and currency headwinds.
fx downgrade by 9%. it is not pretty, guy. guy: down nearly 20%, that is amazing. we will get more from caroline later, but right now, let's talk gold. 16% this year amid stock volatility and chinese growth concerns. what does this mean for its plan for the london listing. let's find out with the company's ceo. one you ready for a lond listing? >> we are certainly ready for the listing. we are completing the prerequisite for the listing and then, we will look at the market
conditions and look at the abbott it for the gold and the appetites. we will see if we can do it at a price that is attractive for our shareholders. guy: what do you do? >> we produce gold and we are an international minor. we work in four countries. and we are an international producer, producing one million ounces of gold. at $793sustaining costs an ounce. hans here -- guy: hans? hans: hans here in berlin and guy stole my question. you probably asked in a better, way, but where succint
do you see the business going next? >> the industry right now is in stagnation. the industry is overloaded with debt and nobody is building new mines. there was a stunning statistic in the fourth quarter of last year. last year, they were spent on construction. it was 10% on what it was in the fourth quarter of 2011. with that background of stagnation and declining , this trend will continue for several years because of a lack in development and investment. our company is focused on growth. we have been developing mines in 2013. we will launch another one in 2016 this year and we will launch another in 2018. as a result, our production in 2018 will be at least 35% above today's levels.
tightening's of credit lines from banks? we has been to happen inth the oil sector with banks. >> for us, the situation is fine because we are a low cost producer. as a result, we have a strong interest from the banks and from the capital markets on a debt level. we are very confident we will continue to build with our pipeline. we will continue to build mines. first and foremost, we have cash flows because the are a low cost producer, but also we see different sources of capital available for us. guy: go to the hdhs function on bloomberg. you can see 90% of the company is what he holds. forneed a 25% free flow
london. there is a mathematical problem here. is he going to sell? >> it is going to require the issuing of new shares. guy: so, that is how it is going to work? >> the company will issue new shares to qualify for premium listing. in order to be qualified for a premium listing, we have to have 25% free flow. we are in the process right now etherlands. it is all about the markets. the times are changing. we will be monitoring market conditions very closely and obviously, our task is continue to build on our performance. we will continue to be a low cost producer and launch new mines, and build a very strong
equity story, which we hope this will make a difference in the share price. as i said, we will have levels that will not be diluted to existing shareholders. guy: that is the critical point, that last thing. gold oneaper to acquire the stock market right now than it is to get it out of the ground? what are the opportunities out there. as you said, the industry is a little stressed. what is the mma picture? is it cheaper to dig new holes or to hunt around the market? >> we are focusing on organic development. we prefer to grow by finding new projects and building new mines. that is what we did in 2013. it has paid back in less than towo years. we are looking at these projects and we have another similar project in our portfolio and we
secondnching it in the half of this year and we believe it will have a very short payback period. inare launching a new mine russia and we believe it will be a low-cost project. our approach is to continue to build our own minds. at the same time, we are watching for opportunities to arise in the market, especially in the junior market. we have acquired a couple of projects in the early stages and we are now developing those. guy: thank you very much for joining us, nikolai zelenski. hans: up next, we have german banks under pressure. we look at the sector as the country tackles the tax from asia. ♪
hans: good morning. this is "on the move." let's get to the bloomberg business flash. juliette: nestle reported first-quarter revenue that the analyst estimates. sales rose 3.9% on an organic basis. analysts had expected a 3.6% rise. the first quarter growth rate is the slowest since 2009. getle struggle to customers interested in frozen pieces. ilure to bank found fa
prevent money laundering and financial crimes. red flags were raised by employees in outside parties. they were at times ignored or dismissed. this allowed a suspected money-laundering pattern t. the matter is now being investigated by u.s. and european authorities. the german bank says it has been working to address this and is calling this work important and ongoing. burberry shares have fallen this morning in the u.k. after it said earnings this year will be at the low end of analysts estimates. wholesale revenue will drop 10% in the first half of this year. burberry is struggling to cope with having demand in asia and europe. that is your bloomberg business flash. guy: thank you very much. let's get you caught up now on
the chart of the hour. joins us. nejra: for the last three years shinzo abe could say, corporate earnings are rising and that is a sign our policies are working. that does not seem to be the case anymore. this chart shows how the nikkei 225 has been tracking the dollar yen. as it has risen, stocks have fallen. most of japan's biggest companies reported results in early may. the yen's strength is prompting stocks. to cut their fast retailing accounts from 7% of the nikkei 225. that aoneta estimates one yen change affects its
profit by 40 billion yen, the country's highest profit earner and biggest employer. anticipating a even broader slump, foreign investors are already leaving japanese stocks. billion inumped $46 shares over 13 straight weeks, the longest stretch of net sales since 1998. it is not all negative. have a rise partly because of a stronger yen, which lowers the cost of fuel prices. earnings could fall the most since 2012 this quarter. it looks like it is all about the yen. hans: moving back to this germany story. amid the controversy surrounding the pentagon papers, we spoke to a local member of the german parliament. he is the german finance minister.
he is calling for stricter and more efficient sanctions on tax evasion, including banks. here is what he had to say about how germany compares to the u.s. in dealing with tax fraud. >> i think that in germany, we have a lot of loss and we had a acts thatministration are much weaker than in the united states. if you break law in the united states, the consequences are much tougher and much harder than it is here. maybe there are some different traditions in our cultures, but i think what we have is too crime, of taxfe of inud, mike what we found these recent months and years. hans: here in berlin. thanks for joining us. the finance minister is saying bank licenses should potentially
be revoked if banks are not forthcoming with the information that they have. >> is difficult to say whether this proposal will be successful. one can say that with the panama papers, we have a new approach to basically get tougher with banks as well. hans: germany could be a leader here? how will germany lead this fight? >> whether germany will be a leader on the international basis, that is questionable. but basically, there is a lot to do probably also in germany at the moment. the question is whether there will be tougher sanctions on german banks inth the run up to this scandal. ons: where is schaeuble this? >> he has not yet come out with a clear position. licenses dohdrawing not really add much.
but he has also pointed out in his 10 point plan that really, one might have to look at giving authorities more power to basically also kind of go against banks or anybody who is basically helping offshore companies. hans: mother has been talking about this for some time. orjans hasr-b been talking about this for some time. how much have the panama papers changed the tenor of his conversation in berlin. >> there is a question as to whether this is supposed to have changed. the finance minister says, we have been doing a lot. we have been on the forefront of trying to head an exchange of information. so, we should continue and push further on an international level the automatic exchange and set up a register for offshore
companies. hans: if they do that, it could affect the big companies like deutsche bank and commerzbank. when do you see this happening? this year or next year? >> i don't think there is a timeline yet and it will depend on how long the media around his papers continue. within germany, the situation has changed. people want tougher sanctions. depending on how long this debate lasts, we will see whether this push will happen. schaeuble invest political capital, to me that is the key question. thank you for your time this morning. and guy, let's send it back to you in london. guy: let's talk about another political story, the two are interconnected. up next, the brexit shadow on
announcement at midday. let's talk about this with bloomberg first world strategist richard jones. the market is trying to do so many things with its rate path. designed to price in -- it is trying to price in with what is happening with brexit. the only thing i am looking for today is any hints that the banks are getting more dovish. richard: that is what we should be looking for. it would not expect it, but that is what we should be looking for. i thought the statement they made overnight in singapore was interesting. the most interesting thing for me was what they talked about, sort of weak global demand. for a trade sensitive economy like singapore, i think that is interesting that they are citing this eweak global demand because we have seen the fed and
boj do that. guy: in many ways, you can look at london and compare and contrast with singapore. and we live in an open economy that is where exposed to these global headwinds. there are comparisons here. richard: there are and i think it is interesting that the mas cited broad-based indicators, domestic services and manufacturing. with it being that broad-based, i would see a very gloomy perspective on global demand. i think that is what the bank of england will be looking at. hans: the dollar continues to gain this morning. most u.s. districts said growth was in the modest to moderate range. later today we will hear from dennis lockhart, who will be speaking to kathleen hays at 1:3 0 today. richard, i will take you across several oceans. let's pretend you have a private
jet. fan?ou a mets or braves richard: neither. i think it is interesting. if i was able to speak to lockhart, i would love to see what the sense of the varying views on the fomc are. how divided our policymakers. we know what janet yellen thinks, she has gone out of her way to tell us. but what do each of the regions think and how important is that for fed policy? the fed is very dovish and leading towards a cautious stance, while some of the regions are less dovish. hans: we have a budget micro-economies. new york is booming for what ever reason. maybe they have some of the shale action from pennsylvania. and then we have many recessions throughout the country. richard: yes, it is very much like europe.
we have a multi-speed europe. germany is doing much better than some of the other regions. and that is true of the u.s. as well. given the regional distortions and the regional specificities, i think that makes a lot of sense, hans. guy: richard jones, thank you. stay with bloomberg after the break. coming up in a few minutes time. a wide-ranging conversation coming up there with francine. and then, a conversation on luxury with paolo scaroni. withar themes tied up lvmh. the market is taking burberry down to the 1250 level. we are trading down 7%. they have exceeded expectations on the downside.
francine: zero appreciation. singapore surprises. he president reassure russians as they enter a second-year precession. he will be quizzed on oil and geopolitics. vote cast a long shadow over the central bank. investors push back a rate hike to as late as 2017. that decision at noon. so, welcome to "the pulse" live here in london.