tv On the Move Bloomberg April 21, 2016 2:30am-4:01am EDT
guy: you are watching "on the move." here's the bloomberg business flash. reporter: thank you, guy. first quarter earnings were reported that barely the estimates. that is above analyst's estimates. that comes after the company lost patent protection on its best-selling cancer medicine. erickson has reported first-quarter sales that missed analyst's estimates. $6.4 billion.% to operators continue to pull back on spending to expand and upgrade networks. the bid has been raised to 779 million pounds. investors would receive 145 pence per share. the move comes as the company
tries to see off a rival bid from steinhoff international. softbank have called on the board to investigate and possibly dismiss the company's second-in-command. the group is questioning whether there is a conflict of interest with his senior role. softbank says arora has done nothing wrong. that is your bloomberg business flash. let's talk about china now. the billionaire says china's debt feel economy resembles 2008..' in 2007 and speaking at asia society event, soros said it should be viewed as a warning sign.
hans: the founder of warned about a potential crash in china six years ago. but now he is much more bullish. francineto friend lacqua, he no longer has the concerns. hendry: china does not concern me. i think china has the power to without any catastrophic consequences in terms of having to revalue its currency. i think we are safe. i think china now is beginning to see statistics with demonstrate that. hans: joining us now in london, charles newsom. charles, when you take a look at what you hear out there on c hina, what is your read on this? so much data comes out of china. there is so much we are not quite certain that we can believe. what do you trust and what don't
you trust? >> i can't help thinking of late, china has initially wanted to create a manufacturing recovery. and now, it appears to be boosting asset values and property prices, which always begins to worry me. i think one needs to take notice of what this season investor has to say. he has a good reputation. guy: the market is priced at the moment. look at what is happening in terms of the perception and what investors are saying. you always say you should listen to the market. the market is signaling something else. charles: possibly. we will be what happens with china. for me, it is crucial that we understand what is going on with china. and understanding some of the
messages we have seen is confusing. there is a little bit of me that always says, try and to now to some of the stories we hear about china because it dominates investors' thinking. guy: i just want to get a little bit too granular. there are many people out there who are wealthy. he is their report about china. my question is, if we are to be worried about china, should we be word about it this year, next year, or the year after? is this something that will impact the near cycle, or be further down the cycle? charles: probably over all of those periods. people are going to continue to worry about it. longer-term, it is more of a concern to me what happens, but investor sentiment over china seems very mixed and seems to change a lot. me if i keep, ding
bringing this back to oil, but when you see the china and the oil story together, do you see the oil price being a demand story or a supply story? es: i have absolutely no idea. somewe are seeing in oil, of the venues we saw over the weekend of doha was obviously a disappointment, but investors have clearly reviewed the and thought, maybe oil will go higher from here. guy: there has been interesting talk around the terminal showing e and ae in iron or steel prices, which could be down to what the chinese are doing, pushing consumption and pushing buildings. when you look at how europe will develop in terms of the equity market story, you are clearly concerned about the banks. tell me about this rally in the mining stocks. because for a london market participant, it has been a very big feature since the start of
the year. if we are pricing up china in the short-term, does that really still have legs? miners became very oversold and any slight pick up in the raw material prices of some of their iron ore was going to lead to a substantial rally because there were some huge short positions in some of those miners. they had just got oversold. i personally think as an investor, i would avoid them for the time being. we have low exposure to mining because the are not convinced about what happens from here. go back and just there in mind that the scale of the force we have seen in miners was going to lead to a pretty strong, bear market rally. a pretty strong rally. guy: charles, stay with us. charles newsom from investec staying with us. we are now 10 minutes away from the market open.
let's cross over to caroline hyde with her stuff to watch. caroline: may be time to have a quick look at your risks. -- your wrist. what watch you are wearing. keep an eye on what is going to be happening on the swiss market . keep an eye on swatch. cartier, iwc. they are going to be hit because of the recent export numbers coming out of switzerland. 60% fall in march alone. 16% fall in march alone. -- every single market they say was hit. hong kong we saw significant drop. hong kong down 38%. the u.s. down 33%. we have similar correlation between swatch and reese more share prices. this number likely to sink even
further. keep an eye not only on luxury watches, keep an eye on ericsson . look how much their stock has fallen. continued concern about ericsson's growth within europe, asia. they're been hit by some of the competition. they have been trying to reorient this business, trying to get into the more profitable areas. at the moment it is not going to make up for the slowdown and network equipment sales. this stock could fall 5% on the open. guy: thank you very much indeed, caroline. markets looking like they are going to open very positively in europe. i want to show you this chart. this is the stoxx 600. this is been the trading channel we have been in for the last month. it looks like it is going to pop out of that. what is a good to take to keep
european stocks on an upward subject three? -- upward trajectory? the banking system is working properly within europe. over the longer term. did we trust the banks? it is crucial that the europe banking system is functioning. guy: do you think investors need to get past the brexit? when you look at what is happening in the world, u.s. investors are looking at europe. inthere is a lot on deck terms of european policy to deal with, particularly around immigration. that, and deal with some of the other issues, then i cannot see worldwide investors getting really positive about it, european equities. guy: thank you very much indeed
guy: you are watching "on the move." i'm guy johnson. hans nichols is over in berlin. we are minutes away from the start of the morning trading. hans has the morning brief. ecb is expected to nothing today, but recent history suggests we should expect a bumpy ride. scandal looks set to cost volkswagen $10 billion. the stock has fallen 30% in two days. debt warns that china's fueled growth resembles the
u.s. just before the global recession. futures though, are pointing at a positive direction. especially if you look at the price value, up almost .7%. let's get over to caroline hyde that the touchscreen. caroline: hans, thank you. as we rev up into trading, we are expecting a fourth day of gains in europe. we are on a three-day winning streak. global stocks are currently at their highest since december. remember, 16% higher than in february. is trading up. we're likely to see falls with ericsson. which industry groups are moving with the ftse 100? the miners are leading the charge. glencore is on the higher side. let's check on oil it has really been driving stocks higher.
to $45. .4%, up producers get together. will be see a freeze in production? eye on the euro as we go to the ecb meeting. complete unchanged. let's see what is on the move. i wanted to show you a little bit of luxury because swiss exports have yet to rev up. let's wait for this stock to fall. stop there down 2.4%. not satisfied with our overall growth and profitability developments, so says the chief executive. ontch is likely to sebe the downside as well. they had their worst quartersince 2009. we saw a 16% slump in march. clearly, watch that. and volkswagen, it is a bit tooe early in trade.
vw would like to gain on the back of the hopes that a deal has been done. could they be close to that agreement, an accord with judges where they pay on time ut $10 million. was up really sharply yesterday. it will be fascinating to see exactly how vw opens. we will have to watch the taker. we need to see exactly what is going on here. we are waiting to see what volkswagen does, but as you can see, at the moment it is an energy story driving these european markets. materials are trading on the upside as well. utilities are down by .2%, but definitely a risk on morning here. it will be fascinating to see how we trade later on in the day.
economists are virtually certain that mario draghi won't touch interest rates today. based on recent history, whatever happens will bring stock volatility. let's bring in sophia. sophia, a really nice piece this morning. draghi over the last few meetings, really generated fairly big bounces and fairly big drops in terms of european equity markets. why are we sing this phenomenon? sophia: last meeting was the most volatile meeting for the ecb since 2011. the problem with draghi is he is dealing with very fragile markets at the moment. the less market he did everything the market wanted and then some more. more bond purchases. he cut interest rates. he made corporate debt eligible for the bond purchase program. but then it was that one sentence, when he limited the scope of further interest rate cuts, that made markets really
nervous. so, what we're looking for is a really boring ecb meeting today. we wanted to be boring and we want draghi to restore confidence that his hands are not tied. because economists actually predict he will increase stimulus by the end of the year. if he makes any comment that he won't do anything else, that could breathe more volatility today. hans: charles, we are going to deputize you and give you the first question, the first hypothetical question to mario draghi. we are going to give you a temporary press pass. what would be your first question to draghi? charles: how you have been addressing what you think the banks need to do next in europe. hans: so, a banking based question. you are not trying to get him on helicopter money and get him in big trouble here with the germans. if he says anything, the one thing i am looking for from had
he says, whether anything on helicopter money -- ut rules itlet out rules iflat o out or keeps it open. what are they looking open in terms of comments from draghi what do they want to hear on helicopter money? sophia: hans, i think is the case where we want draghi to be as calm, as predictable as possible. nothing you woul would be a good thing. we need him to restore confidence that he has room for further action. we don't need him to say that he will do anything. it is a case of him just telling us that he is ready to act, if need be. if growth concerns get worse, if we get data out of china that shows the global economy is slowing, if even data out of europe shows that qe is not working, the market needs to know that draghi is there to step it up. he can't tie his hands today,
hans. guy: how does he signaled that he will have a meaningful impact on european earnings? they are saying, we are not seeing much here. and figure outry a way of convincing people that that will be the story that comes as a result of all of this. sophia: exactly. we need growth and there is no earnings growth in europe. european earnings keep on disappointing. tractions actually predict that european equities will end the year lower. draghi has a big impact on the euro. if we do see it go lower again first is the dollar, that would be a big boost for earnings. but lately, it has been climbing quite strongly against the dollar. that is the impact draghi can have. give growth comes through, that is what european companies need. you, sophia costa
and charles knenewsome. a couple of stocks we need to focus on this morning. we are seeing fairly big moves and ericsson and vw. ericsson is down nearly 10% this morning. is popping. cap is a really sensational performance, considering where it was yesterday as well. it was up yesterday and it is up again today. we may be conflating a whole bunch of stories here. not as hardix is as it was suggested, but anyway volkswagen stock is popping sharply. up next, we will be joined by the only economist who correctly predicted the policy cocktail accused by mario draghi last month. that story, next. ♪
interesting. vw is a really popping. ericsson though, is down by 9%, the biggest move in a year. but check out this vw stock. movewas after a big yesterday. we have continued that trend and we are seeing a bunch of stories come together, but the headline we are going with on bloomberg is pushing this $10 million line. thatudge in the u.s., number way below some of the pessimistic expectations and stocks are rallying on the back of this. let's get you caught up on everything you need to know with bloomberg first world news. reporter: good to see you. mitsubishi motors stock has plunged 20%. it is manipulating fuel efficiency data. that follows yesterday's 15% slide. the company's president had
described the scandal as "shameful." vw has agreed to set aside $10 billion to resolve claims by the u.s. government and losses by american car owners. that is according to a person with direct knowledge of the matter. a comes ahead of the deadline set by a federal judge for the carmaker to say how it will fix the vehicle. before filing on tuesday, vw expected t reach a settlement. george soros says china's debt fueled economy resembles the u.s.'s economy in 2007 and 2008, before the recession. the figures far exceeded forecasts should be viewed as a warning sign. 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 ant go.
hans: it is all about the ecb and joining us now from geneva, i am pleased to welcome frederick, the senior economist who predicted the cocktail of policies brought in by mario draghi last month correctly. thank you for joining us this morning. i have a quick question and then i will let guy bit into the serious stuff. what will the dollar euro and the day at and the month at? >> is difficult to say because they are conflicting forces. obviously, it depends on what hgi will tell us tela today and what other central banks will tell us. i would say arranged trading for the moment is the most likely scenario. guy: it is guy. how does draghi walks the line between saying, "i have done enough thus far," and still
leaving the door open for a possibility? where is tha tt line? inderik: last meeting march, it was all about action and no limits to monetary policy. this message has been well received. there could be more in terms of rate cuts. there could be one potential surprise with the margin at least. draghi could make rate cuts to the ecb. it couldimportantly, go even further in terms of the duration of the program, in terms of how and what pace they will chase those assets. and lastly, how they will implement the corporate bonds, which is a big part. in terms of signal, one
essential part of the package as well. guy: if i was asking him about how berlin feels about what he is up to, and particularly, how the finance minister feels, do you think in any way, draghi is feeling constrained? you think this concern coming out of the german politic is going to worry him? frederik: german criticism surely creates a lot of noise, i don't think it is that big a problem for the ecb and for draghi. it is in the news, actually. germans are concerned about what the ecb is doing. but differently, if the germans were happy, it would be bad news b would have their sights not met.
explicitly hend defended the ecb policy, even though he might disagree with many of them actually. strongest.nd is the what he could do however, is try and make clear to the ecb that they are off-limits to what the ecb is doing. that is something the ecb has been repeating over the last few years. monetary policy has stalled. guy: do you think he could fight back? do you should turn around to berlin and go, "you know what, we are doing this because you are forcing us to." " you should be going out there and pushing fiscal policy for us." "if you did more, we could do less." frederik: i don't think draghi needs or wants to do
this. he is in a comfortable position. again, the ecb is looking at the eurozone aw a war. it is doing well. the economy is fairly resilient. the challenges are fairly big. he knows he might have to do more to reach of the inflation target. right now, don't forget that the ecb is expecting inflation to reach 1.6% by 2018. we have seen the mandate and it is working for them. takesd to do whatever it to reach this number. that is something the bundesbank understands. hans: who is in the driver seat? monetaryghi or the
policy? frederik: it depends on the markets. the fx, i don't think the ecb is the driver today? but that is not the case. with credit markets in general, i think the ecb is having a very big influence. what they will say about potential extensions, about the that hasf the program, quite the impact on some market signals today. guy: our last against on this program talked about one of the critical factors for u.s. investors were the european banks and their health. you think he will give the thumbs up to what has been done in italy? how close do you think he was consulted on it? you think it was big enough? my them assuming he will face plenty of questions on that subject? thatrik: absolutely and
remains the core of the eascb's strategy, if you ask me. credit easing, that is. this week, the ecb will highlight that today. veryank lending survey was encouraging for the first and second quarters of the year, especially when you consider the circumstances. the banks have been under a lot of stress recently. the pressure on bank margins is quite high for negative rates. but despite that, the bank lending survey is showing improvement in the credit cycle. and i think what draghi will repeat today. the ecb is paying banks for them the real economy and borrow from the ecb. that is the future of the policy package that should support the banks. they are trying to mitigate the
negative impacts of negative rates. hans: let's send you t frankfurt and pretend you are mario draghi's advisor. you are prepping him. what is the most dangerous hazard you would want him to avoid in a press conference? rederik: it is difficult to say. i think you should stay calm, confident, and consistent with the message he has been sending over the last few months 10 quarters. -- few months and quarters. i think you should stick with his message. so, no stress and be very proud indeed, draghi. guy: we believe that there. thank you for taking the time to speak with us today.
frederik joining us out of geneva. we are going to talk oil next. it is nearing a five-month high and u.s. production is falling. we are still dealing with the details of what did and did not happen in doha. let's get the director to say the bloomberg. this is the vw stock. is rallying very sharply once again. 11%-13% move, which is 10 billion euros. if it's nicely with what we have heard from the united states. more on oil and vw when we come back. ♪
guy: welcome back. you are watching "on the move." we are 24 minutes into the session. . -- let's talk about what is happening with crude. oil is now trading at a five-month high. the u.s. crude production fell to its lowest levels since october, 2014. ryan chilcote joins us with details. ryan: people want oil to go up, so it is going up. guy: i think the "i don't know" bit is really quite important. all the guys in the market have different ideas about what is going on here. ryan: the other thing that is interesting is, we see this drop
in u.s. production. you thought yesterday when we got the production numbers out of the department of -- we saw it yesterday when we got the numbers out of the department of production. the white line is u.s. production. on your terminal you have the crud. you can see on the bottom of that graph, u.s. production is just below 9 million barrels. it fell all of 24,000 barrels, which is nothing, but it is about the direction of travel. guy: what is the give a line? -- what is the yellow line. ryan: the yellow line is our brent price. the head of the iaea was in tokyo yesterday and he was asked, "with will going from $28 to $46, what about u.s. crude coming back online and
increasing?" he said, even at $45 a barrel, shale production in the u.s. is not profitable. so, the iaea still believes that if we go back to the graph, the u.s. production number, the white line, 8.9, that number will continue to fall. and at the end of this year, this market will start to bounce, according to the iaea. that is the message here. a lot of people are watching the oil market. the iaea prominently think that this glut problem is solving itself than s two that saudi strategy. guy: the geopolitics feed ack int back into this story. ryan, thanks. we are minutes away from a rate decision out of sweden. we will get an update on the
guy: welcome back. european equity markets, a bunch of things going around this morning. first, vw is only front foot this morning. that is an interesting stock story. we've also got some central bank action. it is draghi day and ecb day. the riksbank unsurprisingly, according to many economists, have much of the key interest rates unchanged at -50 basis points. we are seeing a little bit of a reaction to that, wheneve but nevertheless, the key rate has remained unchanged. if you want to follow the news
on this, i urge our bloomberg customers to go to top live. we will be blogging this story live. the market is pricing this one directly in. not much market reaction. now plans toank buy an additional 45,000 swedish krona of government bonds. we will watch to see if there is a reaction from that. key interest rates are left on hold, but there will be additional qe coming from their. -- from there. ther eyou e you go. there is the reaction from the swedish krona. the riksbank is planning to purchase an additional 45 billion swedish krona of government bonds. we are seeing fresh stimulus coming through. this is a first 2016 low.
on the move for the swedish krona as we see the decision from the riksbank to buy an additional 45 billion swedish krona of government bonds. you want to stay tuned to bloomberg television. we will have a conversation with the governor, it will be joining us at 11:00 a.m. london time. a fascinating conversation. what is behind that additional qe? week will find out later on. let's find out what stock stories we are watching with caroline hyde. caroline: as we go toward the deadline today, it looks like an a court has been reached. could they be pumping out $10 billion to satisfy civil claims in the united states? this is all surrounding what was known as dieselgate. vw is up 5.3%. could this money satisfy the
overall u.s. regulators and indeed, the courts. and therefore, could we see a deal done to try and move on from this scandal. volkswagen pushing higher, the best performer on the stocks of xx 600. the worst performer is ericsson. why? are notructuring plans managing the growth they were hoping for. they are not satisfied with the overall growth and profitability development.sa 2.4%.es are down we are seeing the telecom network not investing in equipment as quickly as they had hoped. and lastly, on the down side. another key lagger. even when we saw him do so well, it looks as though asia is not picking up their anticipation in terms of buying swatch just
yet. swatch is down 10% in terms of sales. china is where it is hurting. guy? guy: as you say, caroline, a busy day in sweden. let me take you back to what is happening with the riksbank. would have had an additional slug of qe coming in and really hurting the euro stocky. prepared to is intervene on the behalf of the form exchange market. asset buys will cut the risk of kuroda. still goingciation to cut the bank. still incredibly dovish compared to what was expected. preparedness will be more expansionary. this is a fascinating. this is ahead of the ecb meeting later on.
we have seen plenty of volatility following recent ecb meetings. euro stocky is trading at a 13 month low right now. amazing to see some of this volatility that follows some of these moves coming through, in terms of what has been happening. the market was not expecting any rate decision today, but we have seen a decision by this central bank to put more in place. the language, much more dovish. much more on this decision and the one coming from the ecb. let's bring in david cole from ofnkfurt, the head research. give us your sense of what the riksbank has done and what that tells us about the wider story with the central bank. david: well, the riksbank is famous for being very sensitive
to changes in the exchange rate. this is the factor which can work against any dovish, and you loose monetary policy. ose monetary policy. there are limits on interest rates. all that remains is for them to catch the market at the right moment. achieve they can something, but frankly, it is more talk than action. the options are very limited. ins: daivid, hans her eine berlin. they don't watch the exchange rate. you think they can live with the band?n the 1.12-1.13 ecb is not as the
directed when it comes to the exchange rate. they watch it. i think the a pretty happy it is moving not very volatile. appreciation. i think they can live with that. forward, they will very soon lift inflation rates pass to the zero line and then the e can claimio draghi a small victories with the unconventional monetary policy which was put in place in march and the year before. this will be very helpful. so we think yes, they can lift with the exchange rate. and it will be quite a relaxed meeting today. guy: david, the riksbank has come out and set it is still repaired to cut the repo rate further. this is an area of ambiguity for the ecb. you think they are prepared to cut rates further, despite what has been said the far?
hand: i think they will that they are prepared -- they will hint that they are prepared, though they have seen the negative affect on the banking industry itself. if they see good developments in credit activity, highlighted in the bank surveys a loosening of credit conditions, they will abstain from that. it is the last possibility to kickstart the economy, to channel money out of savings into investments. that is the logic behind this negative deposit rate. it is not so much to weaken the euro. th e euro is already consideraby weak. you can see that actually in the high trading services the eurozone has with the rest of the world. hans: david, we are talking about the importance of oil and how that might make draghi's job easier. in some ways, is this the
easiest time he will have all year? forhis basically a "gimmee" mario draghi? david: well, for mario draghi, what is important now is to explain his position. and to convince the market that some patients is needed until this action really works. it is less a time for action today. it is more a time of explaining what is going forward. think it will be more dovish than some would toect, justice the to say schaeuble, "this is my job." is there a communication strategy that will be unveiled? david: yes, this could be very well. but in terms of communication strategies, the intention should be to calm the upcoming or
possible conflict between politicians, german politicians in particular, but also the german banking atmosphere. we think mario draghi is actually quite good in that. i would not be that worried that this conflict, which has appeared in the past few weeks in the press, will be accelerated. today is an opportunity to calm this confrontation. hans: behind you is deutsche bank. they are having a difficult time turning a profit in this low interest rate environment. schaeublehis for th line of attack work in? and where does the average consumer come into this? well, for the consumer environment, it is actually not bad. for on e, there is somebody who
is profiting from the current environment, from low interest rates, from low inflation. and it is the consumer. in terms of wage growth, it is not stellar, that when you look at real wage growth it is actually ok. and we have consumption in the u.s. and eurozone. it is one of the main pillars when we talk about an economic recovery or economic growth. it is not so much on the export side. demand is actually onot stellar. the consumer is profiting from the and keep in mind, consumer is profiting much more from a stable labor market than from wage growth. andthis is true for germany in the rest of the eurozone. it is improving. hans: wage growth might not be stellar, but your performance was. we thank david cole for joining us this morning. hopefully we will talk to you again soon. we will bring you that ecb
today it is about what happened with the riksbank, what happened with the ecb, and the stocks you see in front of you as well. . and is up 6% -- volkswagen is up 6% this morning. hans: we have been watching this scandal. sometimes, the market reads the news wrong. this bloomberg exclusive is a great scoop. they said $10 million is the number they will set aside, but that does not seem final yet. we will have to see if there is more news for clarification. they have a board meeting later this week. i believe that it's friday. the is going to be an incredible story. we are joined by automotive editor, tom about. -- tom levell. tom, what is the impact of this? what are we to make of all of this? tom: hans, as you mentioned,
tomorrow is the supervisory board's meeting. volkswagen has not released its 2015 earnings because it was not able to calculate anything. this $10 billion settlement, if the figure stands, will add to about $7 billion in six costs. the cost of repairing the defective vehicles. those two figures are little bit less than half of what they made in total on this entire scandal, including fines, which have yet to be announced. hans: tom, it has been an incredible story. we will get back to you throughout the morning. berlin, i am joined by michael. we are going to come back to volkswagen in a second, but let's do the pan european view
right now. where do you see the economy in europe? speed or eight twa two three speed economy? , youel: on the one hand can see the stronger german weaker and the economies. as at a picture of europe whole. problem. since 2008, gdp capita is on different lengths. and in germany, we are very strong due to the industrial
sector. but if you look at france, italy, and spain -- and as you know, in greece, we have to do a lot of things. hans: we have this split in germany. we have the defense of sector. but if you look at france, italy, and the ecb and negative interest rates. schaeuble is pretty critical. who represents the german side? how much anger is there about negative interest rates? the public and media, there is widespread criticism against the ecb andy negative interest rate policy because we have a special term of hyperinflation. onlyublic scene, not but it is also the minister of economics. he started to be against schaeuble. i think we have a very diverse public debate. is overall.m nobody really wants to understand what the sense of the monetary policy idea is from mario draghi because he has a reputational risk.
last year, he never met the inflation target. on the other hand, we have to realize that the easing started last year. it had some affects, but on the other hand, there is no more impact on the real scene. we had a problem of transmission of monetary policy. an investor is not looking at the interest rate defined by the ecb. they are looking on the growth surrounding and the international conditions. and as we discussed in europe and the world economy is looking to china. huether, what if the british decide to leave the eu?
aether: it will have tremendous impact on the german debate if the u.k. leaves. because the u.k. is always a partner, in focusing on competitiveness in the european discussion. it is very important to have and together, we will be able to have a european union virtually more competitive. the ecbcounter to policy debate. hans: dr. huether, we thank you for your time. up next, what will draghi do? happen to play out? w-- how will it play out? we get another look at the ecb's policy decision. that is up next. ♪
guy: welcome back. girl watching on the move. i want to show you what is happening with the vw stock. this is what it looks like. ofrply higher on the back the bloomberg story surrounding the amount of money that vw we have to fork out. that stock settling at the elevated level. the other story is what is happening with ecb. here -- wea team have an 18.
jon ferro is here. hans is in berlin. i want to start with what the riksbank is doing. you got gdp numbers flying. you have a housing story -- you want to go what is happening with sweden? jonathan: i guess it is about the currency. them it is about the mandate and the only way to achieve the inflation getting over the forecast. -- forecast period. come on, these guys are educated. whether euro is a grants the kuroda -- is against the kuroda. guy: they have the perfect story that you would hope germany would deliver. you've got massively stimulative -- stimulant monetary story.
>> what is happening in the nordic region is fantastic case study for other central banks. what are the unintended consequences that go we are seeing with that is. housing getting very hot indeed. hans: richard, i'm going to go to you with fx questions. we see more quantitative easing than expected from the swedish central banks, then we see the krone strengthening. .elp me reconcile that risk oh i think everybody is having a hard time reconciling that. -- richard: i think everybody is having a hard time reconciling that. it is about global growth. what is interesting yesterday is the german economy ministry says keeping growth for 2016 at 1.7%
but seeing it drop to 1.5% next year. global economic growth to remain hesitant this year. i think that is the overhang for every single decision made by central bankers. they are concerned about the growth, perhaps taking and starting to tail off. they are trying to get out in front of it. we can argue if they are having the correct result. there are concerns. guy: draghi needs to sound dovish, right? richard: it would not surprise me if they tee up further easing if necessary. market is pricing the lion share of rates. it is well within their toolbox. jonathan: that is the hangover from the last meeting. they did the q&a session. does he change that? will it make a difference?
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