tv On the Move Bloomberg May 6, 2015 3:00am-4:01am EDT
it is up and bond rise -- bond prices are rising. the global bond and assets in january with a rise that was a little bit less than that. the taper tantrum was $1.5 trillion. you have not seen anything yet. london is up and we will see what is taking london a higher. gold is down and they made the slate this morning. let's take you through cars and a nice set of numbers. they confirm the margins in line
with what they wanted to see. the like for like sales have declined. the cfo is speaking earlier and making margins under pressure. that is the first drop in sales in almost 10 years. they have a barnstorming session , in terms of stock trading. russia took 100 million euros worth of a hit on the business and equity is undecided. >> equities are undecided through the morning. the commodities and fixed income
, you have seen crude go higher and it is up another 10 basis points. now ryan chilcote joins us. what is behind the move? >> we are flirting with yesterday's highs and let me give you a little perspective oil has risen from a low this year and it has risen 46%. it is up to where we are today and it is still down 40% from june 19. and it is the department of energy and we will get it at
10:30 a.m. with the data coming out of d.c.. this is what is interesting, the estimate we have is the data is going to show crude stockpile continuing to increase and close in half a billion barrels of oil in the united states. yesterday, a statement came from the petroleum institute on a voluntary basis and they showed the stockpile actually declined. it is not authoritative. one other forward indicator you want to look at is the risk of the united states, telling you about the shale revolution. that is down more than 50% is the beginning of the year, a dramatic decline in the number
in the united states and its adjust to you that we will see less coming out of the u.s. and texas in the future. we have also gotten some comments. that is the price that is not too far off from ending new rigs and a lot say that $65 a barrel is when we start ordering the new rig. how far is the rally in the oil prices going to go? maybe not too far. jonathan: bond markets have really shaken up. we were seeing lows on bond yields and sovereign bonds caring negative within 14%. we got a rebound over that and
that is how much has been erased. the italy spanish 10 year yields are up and that they question is, is this the beginning of the end for the monster bond rally? or, is it a little bit premature ? it is great to have you with us. the bond market, what is behind the move? we have been talking about it. is it the beginning of greece? probably not. is it a short correction after the move? >> you have to break it down into a number of points. you have the asset class that a lot have to own and it is very expensive to own risky assets. so, a lot of regulated funds
tend to crowd into safe assets. the guerrilla that entered the room in march was the ecb buying 60 billion euros a month and taking up the gross supply until september next year. the initial reaction was to see the excess of demand swamping supply and bringing things down to just 7.5 basis points in the 10 year. we are seeing a bit of a rebound because we are seeing stabilization, in terms of inflation outlook. our we passed a deflation scale? yes. jonathan: is this just a short-term rebound? the flip-flop has been remarkable. there is that which is premature. >> i would argue that.
yes, it is reasonable. we saw the impulse going around the globe because of oil dropping. what have we seen? a rebound. it is bigger than the top side. it does not look as if we are in a world where it will surge upward. supply is an issue. you get a number of the u.s. storage facilities and the inventory issue has not gone away. >> the oil analysts, and i will not single them out because it has been pretty much everyone -- is it the leading indicator? >> they are watching the oil price and i think it is
reasonable, because bonds are growth and expectations. we have a move with ford expectations and it will be disproportionate with the signaling effect. i would argue that that is all that is going on. among the market, the japan market has more demand because of central bank buying. >> i have had guests in over the last couple of months and they have been asked on how ridiculous the bond yield is for negative debt. we came pretty close. at what point does the 10 year german bond become the opportunity for you? when does it become a buying
opportunity? >> you look at the patterns within the primary markets and the auctions are going well with yields. so, certainly, there is a price point where they will come in and the swiss 10 year has remained in negative territory. it is not unprecedented. there are many out there who are not looking at price. they are looking at forward liability. the idea that we could see germany trade at negative yields is a fantasy. >> it is remarkable and a real debate on both sides. john sits in the chair and says it was. some debate. he will stay with us. i want to check in on the bond market this morning. i was watching yields go higher. we are up and the a tie and year
the imf and the european commission with different agendas. this is the reason it was not brought in the negotiations. they will have the ecb reviewing the program. >> that is the big one. the payment may have been made already. are we expecting anything off of the back of that? >> the system is on life support with the liquidity assistance program. the discontent is a more -- an increase in the number.
that will not unplug the life-support. it could be like running on batteries right now. it stands for emergency. >> great to have you with us joining with us. john is with us. just getting some economic data were the numbers we had from greece. the survey is up from the previous reading and better than the previous reading. look at the numbers coming out and it does not help the cause. is that a fair argument?
>> one of the things we talk about is that it is not so much germany pressuring greece. it is the other nations doing the hard grind and looking at greece. and the idea that they could be adhering to the austerity program is the flipside of the arguments. it is north of 4%. >> is it also a fair argument? >> it would be that as it would
always be. it begins with credit growth and a weaker euro. it is not surprising. the conversation really moves on. the bottom line is that the real deadline is one greece runs out of cash. when that comes tomorrow, let's pretend it is tomorrow and who has the leverage. >> let's be clear that the european deadlines are porous. they always have been.
it comes to when greece runs dry and what happens at that point. it is not necessarily greece. we talk about the german 10 year bond yields and the flight to quality premium was endemic in europe and you would expect a lower bond yields in germany. it argues that greece is being seen as a standalone. >> it is the final countdown. we will get the latest. a beautiful day in london. a rough ride for politicians.
they are creating wealth and making profit. it pays taxes that support our public services. >> do you want the liberal democrats? they will add a heart to the conservative government and a brain to a labor one. >> those of the words of the leaders before the election. you have anna edwards with the latest. it feels like this has gone on forever. the sun is shining. has it picked up at all? >> it was set up outside of
westminster and it will be picking up. the pace of the campaign has picked up and crisscrosses the country. they are trying to nail down the support in the final day of campaigning. what has not picked up is who is going to win the election in the opinion poll. you have the conservatives next and next and the ashcroft pull put the conservatives ahead. some are suggesting more with the tour and modeling done during the election pointing to the tories.
either way, it looks like there will be a lot of negotiations with the hours and days following. david cameron says he will claim victory in the election if he manages to get one more sweet -- one more seat than the labour party. jonathan: it is getting excited -- exciting. anna edwards following the election every step of the way. we will break down this and here is a picture of the markets. the equities are a little bit more and the dax is up. they stronger euro and moves in the bond market.
ratio. we are not greece and we are hopefully not going to encounter the same problems. >> five years ago, the date before the election. still with us is john of j.p. morgan asset management. no jokes about the interview. what has changed? >> there are a lot of similarities. >> they were talking about greece and this goes back to the last 60 years or so. the parties had 95% of the vote and now have 65%. this is the end of the two-party
system. they will be the largest and it comes to who will be the support. is easy to forget. is there a chance that we wake up? >> it turns out there was not much. >> you had us pegging the margin of error. you would be really factoring that are to and and what the markets are focusing on is seeing the end of a two-party system.
will we work through? obviously not. take too long and the markets won't like it. they will probably hold that. >> the gdp is much higher and the unemployment is much lower. there is the interesting story. do i see it? >> there is concern over growth and it is used to that pre-the crisis. the latest quarter was edging back towards the equilibrium
rate. that is encouraging and gdp is still not that much above the peak. it is only around 3% or 4% and it is less than what it would be after the recession and the recovery. jonathan: there has been zero market reaction and there has been a reaction, in terms of volatility. why'd you think that is? >> you have to look at a couple of things. look at sterling against the dollar and rising against the euro is more of a euro story than a sterling story. look at the equity market and the ftse has made all-time highs. it has underperformed in
sterling terms and it is not like you can't assets have not responded. >> you are an economist and not here to make comments. you have the uncertain results and guys going back and forth. do you expect a serious downside? >> certainly, they do not like uncertainty and there is a lot. if you think it is a labor government that would tighten policy it has to increase rates earlier than it would. the conservative government has a referendum. jonathan: i have a yield
climbing this year and, if we get the hunger parliament, what does it mean? isn't there an argument that, if we get the uncertainty, the bank is going to see yields cap? >> there is a safe haven argument to be made. there is a decent pick in -- against the german bond. there is some degree of quality and the u.k. is facing deficits right now and a government that is less fiscally austere and will affect requirements and be a situation where, if you look at ford borrowing, it does not look so good. >> i look at various scenarios and the coalition.
if the parties get together, do i have to start thinking about the bank hiking sooner? >> sooner, certainly. i think the bank is looking at a lot of other things and whether we get a growth rate and the global issues. i do not think a huge amount will be different. >> there are some out there saying that, if they get together, it will stimulate the economy and they will have to move much sooner. >> they are pricing for a hike
in june or july and it has been pushed a long way. arguably, if we see less fiscal markets will ultimately adjust and find a way to work with whatever. the next few day -- next few days, there are questions about volatility and suffering in the short run. markets have self-healing mechanism and look to growth in europe and a gradual improvement. >> great to have you with us. and big thanks to you guys. the bond yields are up and a similar story of across much of europe. i will bring you that through the show.
discount haircuts and emergency liquidity assistance. there will be discussion and the topic will be up for debate later today. we will have more on that. let's talk renewable energy. they raised the forecast and the stock is up 3.5%. it was called historically strong and we are joined on the phone. a solid quarter. the work is done and the question is, what was behind the quarter? >> it is great and we have it and a performance with key
parameters. it is year on year and it shows the benefit >> as for the outlook clearly, the company is performing well. is this the outlook for your company or for the industry? >> it is the rest of the year and it is the minimum guidance as we see a strong quarter yield today. we also have a large movement
which also means a translation on the revenue side. >> can you talk to us about the exchange rate you are receiving? >> we have seen the revenue side and that is an actual hit and a translation. jonathan: talk quickly about product for business this year. >> we continuously are up and upgrading the market. i see no reason why the trend shouldn't continue and we always work towards it because we are
no different. therefore, we will continue to see new products. >> do you pay much attention to the old prices? it means anything for your business. the topline discussion is the price moving lower and it is bad for your business. if it goes higher, it is good. >> it is a bigger question. if you are looking at oil for electricity it is less than 24%. that is comparing itself to renewable.
there is the investment in electricity and, so far, we have not seen any impact from the oil prices in the discussion that we discussed in. >> a great quarter. solid quarter. solid numbers. another company that can't really say they had a solid quarter were numbers is st. mary's. they posted a drop and john rogers told us he faced a difficult market in recent times. >> it has been tough with the last 12-13 months. we have announced a drop in profits and that is a beat of market consistence -- market consensu>> charles allen joins us
now. we have gone back and forth on the sector. on the margin, it was a heat. >> it was a small beat and you have to look at the small things and they definitely did that are than many of the competitors. there may be a little bit about the low-margin declining a little. >> the have spoken about how this cannibalize is this. >> can you tell, even if it hits this side of the business? >>
cautious. the greek collateral haircuts were mentioned and not discussed. now, the time is to go there. you could reduce emergency liquidity and it is one that people will easily misinterpret. there is another way of saying we are worried about it. these us and collateral requirements go back to last year.
jonathan: thank you for joining us. i want to bring guy johnson into the situation. it is he morning for economic data. guy johnson: the story is front end -- front and center. we are heading to the polls tomorrow and what happens tomorrow is critical. they are very much and that can. -- the connect -- neck and neck. they need to be five points ahead to form a majority. we will get services data. >> that is important. that is the numbers coming
together. jonathan: thank you very much. how often do we say spain beats france eats, and germany mrs.. this is the final read. a slight miss on a survey and a lot coming up later. the euro zone data is out in just a few minutes. a little later, janet yellen and the imf chief speaking. the ftse 100 is trading hard through much of the morning. the dax is higher. you can talk to me about that on