tv On the Move Bloomberg September 18, 2015 3:00am-4:01am EDT
lower --. -- lower. a big rally in the european bond market. let's wrap up all of that with caroline hyde. caroline: happy friday. but maybe if you are on these markets, not so happy. we are expecting a down day following u.s. equities lower. is it risk aversion? is it the fact that they are delaying the inevitable? will we see a rate rise this year? not be as there may reason to left rates in december, either. the cax was off by 7/10 of 1%. there does seem to be a general risky than search, and risk aversion in the market, but for what reason? you are seeing the bond market move on the back of the u.s.. we saw yields come screaming down. they are still falling on u.s. we saw the yesterday moves -- we saw to your borrowing costs move the most
since march, 2009. we are seeing movements similar, as we see no sudden need to reassess and recalibrate what bonds are worth as the federal reserve holds on raising rates. yields are down some nine basis points. the german tenure debt is seeing similar. as wetlier is greece await yet another weekend of voting and political instability. will we see an overall consensus? will we see a coalition built, either by syriza or by the new democracy party? let's have a look at what the reaction was. flat this morning, but the big move was yesterday. you saw the dollar really move in reaction to what was happening out of the federal reserve, falling 9/10 of 1%. i want to show you the two-year moves in gold. gold was really starting to rally. level,s at about that
gold suddenly in demand as we see the federal reserve hold off on raising rates. meanwhile, risk aversion is creeping into the issue of oil and commodities. theu.s. is focusing in on fact that global growth is not where it should be. suddenly the u.s. is not just dictating policy for its own economy, the world rests on its shoulders. oil selloff by more than a percentage point over the last couple days and copper falling lower. i want to show you how it is affecting some stocks in europe. how well cold is doing, up 2.4%. gold is getting a push higher. many people are feeling the miners are coming off the back of copper in the concerns about the global growth outlook being raised. 1%, oilf by more than trades lower. in terms of a few individual stocks to keep an eye on, power
land is up 2.5% because the cma is the competition here in the u.k. the thumbs-up formally cleared the merger. that lloyd's may be investigated by the office, but they push companies into the deal for their own financial gain. 1%,is off by 9/10 of benefiting from millions of euros in the commodities and effects market, but things are falling lower on the risk aversion. jonathan: caroline hyde, thank you. 3.5 minutes into the session, down t this morning. let's get the latest in hong kong. enda, over to you. enda: good morning. quite mixed messages from asia -- shanghai slung between losses
and gains through the day. stocks out of japan went on to rally, and that was in tandem with a rally in emerging market currency. that was significant because of what happened in china, giving a bit of breathing space for emerging market currencies. it would have been to downward pressure on the currency and maybe capital outflow out of asia as pressure mounts to borrow u.s. dollars. rallied around the region and that is why emerging market currencies got a bit of the left. that is why shanghai was adding back and forth -- ebbing back-and-forth. whereg picture is still we were yesterday, waiting and watching to see what the fed will do. a rate hike is not off the table even though economist say it is being pushed into next year. as long as the threat remains, the threat of volatility for asian emerging-market currencies, like in indonesia,
malaysia, which have had a tough time, that pressure is always going to be there because of the fear of those higher borrowing costs. u.s.r yield in the yo e could reverse the trend. there is if you that the temper tantrum is taking the volatility out of the market, but i can't be ruled out that if the fed does hike there will be more turmoil in asia. in 1997, the government and economies were in better condition. now we know that the biggest economy in asia is in good order to withstand any kind of said rate hike. at the same time, it's not to say there will be some turmoil in asian markets, especially the and thele currencies impact of the stock markets if and when the federal reserve does raise interest rates either this year or heading into next year. i guess we will have to wait for the signal from thims.
yellen. they mentioned china in the press conference -- there was a focus on emerging markets and china is a big part of that. jonathan: great to have you with us. that is the market reaction in asia. here in europe, stocks open lower. coming up, janet yellen holds fire. everything you need to know from her news conference, next. then druggie and kuroda waiting for reprieve. what the fed decision means for the ecb in the boj. later, greece -- the second election this year. we are live in athens as political parties wrap up their campaigns. ♪ the federal reserve sidestepped the opportunity to raise rates for the first time since 2006. here is fed chair's janet
yellen's news conference in 90 seconds. >> the central open market committee reaffirms the current target range for the federal funds. july,the committee met in the pace of dropped gains has been solid. the unemployment rate has declined. an overall labor market condition has continued to improve. islation, however, continuing to run below are a longer run objective, partly reflecting declines in energy and import prices. we still expect that the downward pressure on inflation from these factors will fade over time. recent global economic and financial developments are likely to put further downward pressure on inflation in the near term. the outlook abroad appears to have become more uncertain as of late. heightened concerns to back
growth in china and other emerging market economies have led to notable volatility in financial markets. developments since our july meeting, including the drop in equity prices, the further appreciation of the dollar, and a widening in risk spreads, have tightened overall financial conditions to some extent. the committee anticipates that inflation will remain quite low in the coming months. as these temporary effects and a portly, as the labor market improves further, we expect inflation to move gradually back to our 2% objective. jonathan: there was no consensus among traders are economist heading into the fed decision. coming out of it, we waved goodbye to september. the market starts pricing a shift toward the end of the year -- what is it a case of good by 2015, hello 2016? we are joined by the portfolio
manager, mike amy. great to have you with us. they, full disclosure, questioned this morning if it is still december. are you certain to shift toward 2016? mike: it is a close call. i'm surprised out of yesterday's statement -- i thought the buzz word was global rather than unchanged. the fed is clearly worried about the inflation situation, and whether they have traction. i think the jury is out for december. jonathan: the global economy gets a vote on the fomc -- and i bring up the dot plots. three straight quarters that they have shifted lower. someone clearly wanted didn't have the votes and went negative -- what is going on with the federal reserve and their forecast for rates? mike: i think the key problem they have is that they don't really know whether there is any
traction in the relationship between the unemployment rate and wages. if he went back six months ago, july, when they made the comment about the need to raise rates, there was an expectation that falling unemployment rate when get wage inflation and there has been no wage inflation. i think that is the key concern may have. mix,ut china into the the downturn in commodities, the inflation thing is worrying them. jonathan: let's talk about inflation. i want to rebalance the us bring up a quote from jpmorgan. on inflation specifically, basically saying, "if it is not lower and this is just a transitory period, these conditions of falling energy prices are marking what could be an overheating economy." is that an argument that in 3, 4 months, when this starts dropping out of calculations, they will find themselves behind the curve? mike: is possible. -- it is possible.
i think it is relatively unlikely. headline inflation will push up to core, and core is running. you are going to pick up in headlines. courthey look at is the pc deflator and that has been stable. it shows little sign of any obvious momentum. to get that you need to domestically generate inflation. that is the basic challenge. jonathan: goldman sachs was saying september won't happen. they were looking at the tightening. i could bring up the chart is that for our viewers right now. when you look at that chart in the federal reserve's reaction, it reminds you of a parent looking after a toddler. it is not easy money -- these things get difficult. they don't want a temper tantrum over tesco, the embarrassment of the market doing silly things. when will the fed to stop being led by the market? mike: i think -- that is the ultimate question.
a lot of the comments from yesterday from the fed would indicate that the markets in the global economy -- goldman sachs is a little bit overstating things, because they are waiting for the low oil price. i wouldn't use that index is the indication of financial conditions. i think they will be led by the market to some degree until they get some confidence that there is domestic inflation. at the bowman that is the great unknown. the employment cost index the last quarter was the one that really turned it for them. -- ihan: you guys at pimco look at the one-day move -- before the decision, after the decision, a flat curve. does that lead to reprice? doesit reprice -- that need to come much, much later? mike: if you looked at, say, the very front end, there is an much
price at all. intermediate rate rises on the long end, you have a flat curve, and you can see that. don't have a lot of late hike expectations after this cycle. if there is a change in risk premium, i expect we should see a bit of a more risk premium on the back end because the fed has made it clear that they want to see the whites of the eyes of inflation. case, it is a long and that should see that volatility. jonathan: mike amey will stay with us. emerging markets may have a friend in janet yellen, but will the fed versus the european central bank and bank of japan do more? we had to japan after the break. ♪
>> i think there was a plausible case that the fed would look past some of the volatility created by china and weakness in economies around the world, but i think that ultimately led them to delay liftoff. >> i thought the most surprising thing about the announcement was it almost came with a soundtrack beep, because they were backing up from what they said -- they wanted to get off the zero, but the conditions
don't warned that. >> as we get closer we will start to see some pickup in nominal wage growth and compensation that will be very positive. she mentioned that in the press conference. that will in turn help create upward movement toward the 2% target. with austini agree that there is no need coming yet to start the hiking cycle. jonathan: 17 minutes past the hour -- your today's top stories. the federal rates keeps rates near zero, and janet yellen said they expect to raise rates this year. she highlighted the strength of refreshingonomy, delays about outlook abroad. greases election remains too close to call. political parties are wrapping up weeks of campaigning. the syriza party and the conservative new democracy party are running neck and neck.
china's home prices rose in august. is being helped by interest rate cuts and easing restrictions. prices dropped in 25 cities, fewer than july. let's get back to the main story. the f's decision not to raise interest rates may make mario draghi and mr. kuroda's jobs more challenging. let's get out to hans nichols, and in japan, brian fowler. first to you, hans. mario draghi -- are they on the same page? i asked earlier whether draghi would have to send it for a hike. what is your idea? hans: i wouldn't presume to think how mr. draghi would vote. i think they are on the same page in terms of china. they both think that china, even though they danced around it, they are saying that china has
forced them to rethink what they are doing. morer. draghi, that means quantitive easing, sending it further down, beyond that september deadline. for janet yellen, delaying this ultimate hike, whether it comes in october or december. if you look at the euro-dollar play, and this is just part of yellen didwhat ms. put a little more pressure on the european economy. upr-over-year, exports were to the united states, in large part because he has seen the big moves and the big weakening in the euro. if you look at the export story, which is one way to look at the european economy, because there is not a whole lot of growth internally, china looks slow. if you shifted more to the borrowing costs story, whether or not you see borrowing costs in your states, you may be
slightly more positive. either way, it looks like this could make mario draghi's task more challenging, but a little easier. he has to expand quantitive easing and add a few more zeros to whatever they are thinking of buying. jonathan: brian, i shifted back to the effect argument. the challenges that kuroda faces, does this increase the likelihood they move next month? brian: yes. i think it does a couple things. i would start with the 2% inflation target that mr. kuroda has been talking about for the past couple years. that is supposed to have it by september of next year, but no one think that will happen. when at the big questions we'd have been asking is how on earth is mr. kuroda going to walk us back from that impossible target without looking too silly? i think it gives him the excuse he needs.
on october 30, when they announced the new cpi forecast, he will say -- the long-term is intact trend and we have slowing growth in china, therefore we will have to push back that target to another 12 months, 24 months. that is the first thing we will see, and i can say that with some confidence. jonathan: great to have you with us. hans, gentlemen, thank you very much. we are back with mike amey, managing director at pimco. mike, for draghi, does he wake up this morning and look at the euro-dollar and get a sweat? or does he have a smile? mike: i think he would be happier that they didn't move. the argument goes on the following logic. globally, monetary policy is easier today on the back of the head unchanged than the hike.
in the short-term, you have the dollar move, some weakness in european stocks, which i think is directly related to the currency moves. in the grander scheme, global monetary policy is easier today than it would have been. if i were draghi, and i wanted to keep monetary policy as easy as possible, i would be happy. jonathan: is it a different story for kuroda, someone we know is targeting the effects channel? 20 is still a nice number for the boj -- they don't want it lower, do they? mike: i think it is a trickier story for them. their policies are fewer and far between. they have run out of fiscal room. kuroda, i i were mr. would be lessened enthusiastic about the action than druggie. -- than draghi. our best guess is that they will have to ease policy further, whether in it is october or not.
jonathan: let's boil this down to the fact that so many of these bombs are on the central balance sheet. if they honestly come out on october 30 and build their positions again in the market more aggressively, what does that mean for pimco's view on japanese his government bonds? -- japanese government bonds? mike: we were talking about the u.s. curve a minute ago, the backend being vulnerable to a dovish fed. you have the opposite in japan, where the long end is vulnerable to further rally clearly on the basis -- rally purely on the basis of central banks. jonathan: europe. the bond market has full enough the radar for a lot of people. here we are, back in focus. i would be asking -- can we retest back in spring? are we going back to that point? mike: if we look at the periphery now as part of an attractive basket of products
rather than the most attractive of the lot -- when you look at the periphery, one has to recognize that the greek negotiations and the fact that it would be relatively tough to go all the way back to where we started because you have a different set of circumstances. jonathan: i know this is difficult, but can you put a number of basis points on that risk premium? mike: we would have said, in pre-greece negotiations, there was an argument to trade close to where investment rates were. now the chance of that going all the way there is relatively slim. how big the premium is, not a bigger number. jonathan: to the city of london. a lot of people haven't spoke about this -- governor carney spent the last couple months getting us to think about early
2016. did yesterday make his life a little more difficult? mike: yes, i think it did. governor carney is his own view, the focus on the turn of the year. iw as the fed is on hold, personally think it is much harder for the bank of england to hike rates. i think he personally -- if i were him, i would push back my own views. the market would be middle of next year seeming like a reasonable expectation. it seems like a reasonable expectation today. we don't like the long end -- we don't like the u.k. rate market, mostly because you have quite a flat curve and little protection in the event that you get some better growth we think the long and looks a bit rich. intermediates look ok because it will be a pretty low cycle. jonathan: final question --
things are starting to begin to roll into 2016. to shiftke amey view from one and done to none and done? -- one think one is done and done would be an unlikely outcome. why do one? i think they have to expected to get futures. jonathan: 2016? 2015? mike: i would say that -- gun to my head -- jonathan: it is there. mike: that i would say probably 2016. jonathan: great to have you with us. always a privilege. still to come, the effects market. another guest to correctly predict, the fomc holding fire. stay tuned for that. ♪
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i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. jonathan: 30 minutes into the trading session -- let's get you up to speed. 1%, theown by 6/10 of stoxx 600 also lower, likewise on the equity benchmark in frankfurt, germany. we spoke to pimco -- there is a suggestion that this is just a reaction to the effects mood. a stronger euro overnight, breaking through 1.1416. yesterday was where the big move was. likewise in dollar-yen, a drop. some movement in the front and. i am looking at yields lower in germany, down by eight basis points.
a lot of stock movers to get through so let's get straight to caroline hyde. caroline: thanks very much. let's focus in on the market reaction to what the federal reserve has pulled out of the bag. what they haven't pulled out is no rate change. we are seeing the gold miners across the board rising today, up 3.5%. precious metals are being bid higher. gold gets a push higher and so too do the minors. -- th eminers. very dovish tones coming from janet yellen, concerns about global growth, pushing oil lower. that means you are seeing the most exposed -- this is a deepwater drilling company on the downward trajectory, udown by 2.7%. geneco, thee in jenn
french payments company. the u.k. payments company had its eye on it fo to the tune of $6 billion. they are selling shares but have riseed to let ingenico higher since they won't be slashing the price. jonathan: caroline, thank you. that's the story the stock market. let's get back to the main story -- the effect market. hsbc is nailing the fed. it doesn't expect the rate hike now until the end of the year. our next guest is a senior affects strategist. he thinks there could be some relief in the short-term. burning, and i am very pleased to say he joins us from the training floor. great to have you with us. likewiseoke to pimco, with hsbc, the call was in september, but december.
there is a suggestion we will roll up to 2016 -- have you changed your mind? dominic: no, and we are still going for a december rate hike. but clearly they are rethinking when we are looking at this. the whole process -- october is not out of the picture but certainly the market is becoming a little more dovish in the way it is affecting the fed. i think there is certainly a risk, given the soft inflation numbers we have coming out of the u.s. in the week global trend. is anything, we could see these rate hikes pushed even further back. december is still our main call but there are certainly risks around that. dominic, there's an argument that this is a repeat of 2013, that these situations are strategies over tapering. we were all set up by the end of 2014 and they went to autopilot. december, two we
get the autopilot like strategies from the federal reserve? dominic: no, i don't think that will be the case. the fed will have to be wary of the data, so they can't just sit there and say we will hike 24 basis points every quarter. we see a lot of fluctuations in the data and it is still very soft. even if we get the hike as expected, we are looking at two 25 basis point hikes. it will be data dependent and they can't just sit there and say we will hike at a gradual rate through the course of the next few years. they need to be constantly aware of what is happening, both domestically and further a field. where a lot ofis the worries lie, not just for the fed, but for us as well. jonathan: let's talk about that. i look at the fx market, a lot of people talking about em getting some relief but it is not all about the fed. it is about china and what is happening domestically. that relief rally we might get -- would you take that?
dominic: look, we would be buying for the dollar against most em currencies. as you mentioned, we have been concerned about three things -- is the fed going to hike, what is happening in china, and the growth story, and obviously a lot of the domestic stories in emerging markets. what has changed? maybe the fed won't hike for the next month or two, that you are still worried about domestic growth inflation profiles. you haven't seen a bottoming out in china. is this a good time to be going long em? not in our view. bywould be looking to dollars against emerging-market currencies after this move. jonathan: dominic, if you were going to stay strategically sure, which countries are the most vulnerable going forward? dominic: in asia, we are currently seeing short dollar versus long yen. they have some similar
characteristics, but in turerms of the deflationary trend and shifting monetary policy toward a more dovish outlook, that could weigh on the singapore dollar and the japanese yen. moving into this region, we don't like the turkish lira or the south african rand . you have domestic political issues in turkey and high inflation, low negative growth in both economies. turkey looks at risk, and in brazil, domestic political concerns over the budget, and the negative growth and high inflation profile. we would say a lot of those currencies still do look very much at risk. jonathan: that if the situation there, but let's talk about g 10 in the euro. i had a question for pimco -- mario draghi wakes up and sees yields lower across european bond market, but he looks at euro-dollar. which one, in balance, is the
concern versus on a net basis -- a good thing or bad thing? dominic: well, we haven't seen so far any reason to get that concern about euro-dollar around this level. if we do start to shoot higher and faster from here, than the argument might be that the ecb could act, do more to bring down the currency. ultimately, they have done a lot already. we have artie seen the big move in euro, going from 140 2105. -- 140 to 105. tois very hard for the ecb have the same impact, to weaken the currency 20% like they did when they first announced qe. it is hard to do that again and they don't want to waste all their bullets. they may start to get concerned about these 115 levels, but they may not be able to react as much as they want to. jonathan: i just want to get your view in the final question
-- we talked about euro-dollar not being a problem for the ecb, but as the situation in japan a little bit different in some ways? dominic: yeah. i mean, the doj has historically been a lot more interventionist, a little more explicit in terms of highlighting how a week yanis part of their strategy, the whole macro plan. again, a lot of the time it is the pace of the move. boj has done a lot of easing, jumping from 30 trillion of asset personages to 80 trillion. are they going to do more? maybe, but it takes an increasing amount of qe to have that impact on the currency. for us, it is hard to see dollar-yen moving significantly higher outside of a really big policy shift in japan. we are looking for dollar-yen to move toward that 125, but we aren't looking for a major move. jonathan: dominic, great to have you with us. thank you very much.
jonathan: welcome back. 42 minutes into the trading day -- here are your top stories. the federal reserve kept rates painted near zero janet yellen said that those policymakers still expect to raise rate this year. she highlighted the strength of the u.s. economy and the decision to delay, fresh uncertainty about the outlook abroad and market volatility. greases election remains too close to call. political parties are wrapping up three weeks of campaigning ahead of sunday's vote. polls show the series a party and new democracy party neck in neck. the recovery is being helped by interest rate cuts and easing purchase restrictions. prices dropped fewer than the 29 in july. unchanged -- the word that echoed across trading floors around the world after the
federal reserve sidesteps the opportunity to raise interest rate for the first time since 2006. mark gilbert joins us now. mark, first of all, the first elements i will bring up on the screen are the dot plots. the attention is not on the shift lowered in the median forecast, but this little dot in 2015 and 2016, south of zero. when mr. gilbert saw that, what were your thoughts? mark: thought it was a bit odd. but don't forget, we have negative interest rates in several countries worried about deflation. it may also be part of the currency laws. the dollar strength on a trade basis, weighing upon someone's mind that the fed, and a probably should be. jonathan: there is an argument that whenever things deteriorate, loosen, lucent, lucent, cut rates, cut rates -- where thea position
mainstream starts to think about low rates being the problem and not the solution? mark: i have read maybe 10 e-mails in the past week from people in the markets on exactly this topic. there was a great analogy -- quantum physics. when you start to look smaller and smaller, things get really weird, what einstein called spooky. when you are zero bound, the economy stops doing all the things the model tells you. you expand your balance sheets to $4.5 trillion from $1 trillion, and yet there is no sign of inflation. that is what the textbooks say you should happen. you look at dropping money into the economy -- that is effectively what the fed has done, yet we are not seeing any signs of companies willing to raise prices. we are still seeing anemic wage growth. jonathan: are they boxed in with the process, when you look at financial conditions tightening, a stronger dollar?
did they boxed themselves into a position they can't even think about, the idea that lower rates of the problem? mark: we've have a lot of unorthodox monetary policy. banks arentral grappling. it doesn't follow the textbooks, the models. they have shown incredible flexibility, but none of them, none of the arguments about quantity of easing say, how do you think about the unwind? this is uncharted territory, and i think they are going to look a bit on no matter whether they raise or left unchanged. jonathan: mark gilbert will stay with us. one story that may not have been on your radar screen -- greece. -- greece. bloomberg looks at how the election could unfold and what it means for the country.
greeks count down to their third vote in just eight months, on to tebow 20. -- on september 20. syriza antidemocracy are both in the running to win, but if you believe the polls, neither party is close to getting a majority. that is why many are betting on a coalition. new democracy says it is ready to team up with syriza, or any pro-european parties. that could include the socialists or centrists. but syriza has so far ruled out working with all three. it wants another coalition with the right-wing independent greeks. they might not even get back in the parliament. this is important because a greece needs a stable government to enact its latest bailout deal. syriza backs the deal, but says it negotiates on supplementation. new democracy also backs the deal, but wants debt restructuring. allies on the fringe rejects the bailout, and want to
return to the drachma. the most likely outcome of the election is yet another coalition and more austerity, but after the big parties failed to reach an agreement, the election on september 20 may justly to another. let's get to bloomberg's tom mackenzie, live in athens. tom, are voters tires of heading to the ballot box three times in 12 months? some in the audience are sick of hearing about it. are they exhausted? tom: absolutely. drivers here,xi people in cafes and bars and restaurants, usually the first reaction when you ask about the election is a rolling of the eyes. people here are generally set up with this merry-go-round is the. this is the fifth general election in six years for the greek people, and they feel like many of them have less of a choice, less of a clear option. in january, they could have
voted for syriza, and then they backtracked. undecided voters are crucial. a newspaperan idea, had the front page saying that "650,000 voters still undecided." 10% of the population, according to polls. parties are trying to get those votes out, that whoever wins on sunday is going to have to form a coalition that looks like how long it will take for those coalitions to go through -- it will be crucial, particularly if you look ahead to bailout and of limitation of reforms that go hand-in-hand. the troika and creditors will be here in october to do their first review of the 86 billion euro deal. it is crucial that there is momentum, crucial that there is a strong government for the creditors to push through and implement those measures with an economic cloud hanging over the country.
jonathan: tom mckenzie, a busy weekend for you. thank you for joining us. let's get some final thoughts on the greek election with our columnist. we spoke to pimco earlier. they put a risk premium on the periphery post-greece. what really surprises me is coming into 2016, we talk about democracy being the biggest risk in europe. do we need to think about it more carefully? mark: we have the spanish elections coming up later this year. we have a renewed surge of catalonian independence interest. as leadereremy corbyn of the labour party in the u.k.. the idea that the mess that greece found itself and would deter voters from radical parties doesn't seem to follow through. even though we didn't see contagion in recent months, i
jonathan: good morning and welcome back to bloomberg tv. we are live in london. here's a look back at some of the charts that defined the week. sab miller and the endgame of the beer industry. we learned this week that its larger rival intends to make an offer for the company. if the two teamed up they would have a combined annual sales of about $81 billion. heading into the fed decision,
there was zero consensus. economists were divided and traders took the probability of a hike around 30%. it looks like they got it right. many are saying goodbye september and hello december, or perhaps a low 2016. -- or perhaps hello 2016. the 120 day correlation between wti and the u.s. dollar index moved near zero in the past week . in measure has mostly negative in the past 10 months. that was your week in charts. that's it for this hour of bloomberg tv. we are joined now by francine lacqua. francine, the fed, greece, what takes your fancy? francine: i love those charts. we will go on the fed, talking about emerging markets in china. then we talk about greece -- do want to start with the fed? we have an richardson. she is a heavyweight chief investment officer.
something moved on the back of treasuries -- what does that mean? our markets meeting fed policy? this is a concern that we had yesterday -- it turned the world upside down because we are so used to monetary policy being there, that drip feed, that they are now leading the way. jonathan: the other question i would ask is greece. this falls off everyone's radar because we have seen the political crisis, a tragedy for the great people, and people go who cares. but the third election and 12 months? francine: you know what i love? the fact that alexis tsipras was being called a criminal, was for repayment, what is now the favorite by angela merkel to win the election. again, a possible basketcase. i love the fact that he was
considered evil six months ago and is now the top guy. jonathan: francine, thank you. 56 minutes into the session, equities right across europe. the ftse is down by a quarter of 1%. ismainland europe, the dax down over one full percentage point. look for the fx market for drivers to move. the euro-dollar has shifted holler yesterday. -- shifted higher yesterday. the dollar-yen moved as well. -- the ecbn we ask and the boj, will they have to do more? that is coming up after the break. in the meantime, i'm on twitter. best of luck for the rest of your day and have a great weekend. ♪
francine: the hike is on hold. janet yellen points to global risk, and softer inflation forces as the reason why the fed it didn't move. markets react -- the dollar drops -- emerging markets breathe a sigh of relief. on a veryides again close vote in the likelihood of yet another coalition as greeks prepare to cast their ballots on sunday. welcome to "the pulse," live from london. time francine lacqua. coming up,