That is higher than the last time they did this, which everybody almost passed. A few banks went bust after that. This will bring credibility and the benchmark at six percent is something that has not been finalized that will be argued on lobbying for credibility. Content. Sugar content is next. That will be a next story. A real diversifying company. 16 week sales up 14 . Sugar, revenue down 28 . A 42 month low. Couldhe next decade, you see a structural demand issue, just as the politicians are trying to declare a war on sugar. Something you and i can talk about. We could see the stock fall anywhere up to 4 . In johannesburg trading. China, china, china. Sales decline. They are not sending as much jewelry. Cartier, the demand is not there. We have quite a lot of news today. We have Corporate News and richemont, and we have the car sector as well. What else . Wereose car numbers stunning. As we go onto the morning, we are going to keep an eye on initial jobless claims. The fed reports later on in the day. There is no doubt. For the moment, we have a higher opening. This richemont maple the numbers a little lower on the map. The uk, you have threemonth housing prices expectations at the highest level since 1999. Equities, a little bit of a mixed picture at the moment. We have started with higher futures. London, paris now. A tone set into these markets, just coming off the initial sweep higher for teachers. There are a country a couple of interesting themes. Cars and luxury and miners. The cars are beating the market. Bmw unchanged. Fiat the highest that car sales, a 13 rise. 2013 for the year was the worst since 1995. We have bottomed out. Chad thomas will take us through those numbers from berlin shortly. Rio tinto. They beat their costcutting program. They are ahead of schedule. In iron ore output for the Fourth Quarter, and they are cutting costs. That is the story. 33 pounds on the nod, up 1. 4 . Missed on the headline sales. Tough times in asia. Caroline will run you through the individual pieces of that. Less than the market wanted. Dutch the big retailers. Fourthquarter numbers missed. Earnings may fall, according to analysts. Dollar was higher since i came in at 3 30. The dollar was higher. Through the latter part of the asian session. Were drifting off those higher levels in eurodollar. 1. 3610. Off a nod. Back to you. Thank you so much. A look at the markets and currencies. Christine lagarde urged policy makers in advance to fight deflation. She spoke at the National Press club in yesterday in washington yesterday. Now that the Global Economy looks more stable, the big priority for policymakers from 14 isoint of view in 20 going to be to fortify the feeble Global Recovery and make it sustainable. Lets get to our next guest. Hes a Portfolio Manager at janus europe fund. We hear from Christine Lagarde. Deflation is something that is less worse much worse than inflation. Is there a danger the European Central bank is taking it too lightly . I think what theyre doing is prudent. They are establishing a lot of monetary ease, but they are focused on monetary transmission. 10 trillion in the last five years across all central banks, and all of that money is being parked in bank reserves. It is not productive. It is not reaching the smes, and the businesses that do employment. What draghi is fixated on is really trying to accelerate monetary transmission. It is also a mandate. He can go a little bit beyond what people thought he wouldve done on the basis of that. When you look at deflation, if euro,ok at the high certain days, we look like we are in danger of becoming the next japan. Absolutely. But i think there is a big difference between europe and japan. This is what i want to accentuate today. Once you migrate away from the economy, which has fits and starts, although lets be frank it has really improved from the bottom in europe. Draghi has done a great job of taking out the tail lift. But once you get to companies and you realize that the largest sci europe only produces 45 of its revenues from the european economy and is declining, you realize that when it comes to investing inequities, the Value Creation is not about inflation or deflation. It is much more of a global story. What is value creating . It seems likees the equities go up by so much because there is cheap money around. The era of quantitative easing has lifted a lot of assets. I am not a fan of that. I want more realism. But when you actually do the research and you go down into the companies, you can play any theme on your mind. The biggest revolution in energy is shale. People say that is american. If you look at the component rackanies, be it the pump f manufacturers are those who make utilityl piping or companies that will play a big role in exporting that back from the american shores to europe and elsewhere, you find that europe is very much, very attractive. Same thing with tablets. There is technology. We will touch on that. Thank you so much for now. We will be back with the Portfolio Manager. Here is what is coming up on on the move. Microsoft eyes erics ands ceo. Ceo. Icssonos more on that next. Im Francine Lacqua. From ouron the move european headquarters. The microsoft ceo search continues. Vesberg is said to be under consideration for the top job. Our European Business correspondent Caroline Hyde has the latest on the tech giants ceo, hans. The clock is ticking. We are meant to have Steve Ballmer to part in august, 2014. Added to thebeing mix today is the ericsson chief executive hans vestberg. He is hungry, driven and young. Hes p. R. Savvy. He gave the keynote address at the Consumer Electronics event in 2012. He is also a notable sportsmen. Handball. He is the chairman of the sweetest Handball Association the swedish Handball Association. But also, he is going to need that body contact to push and pull this juggernaut of microsoft into the ranks of growth, get it back on target and also to come up against some very strong personalities who will remain on the board. Steve ballmer and bill gates. Caroline, whoever takes the job will be a tough one as the company is in the midst of a big overhaul. You are right. All about the organization. This is a company that is trying to reinvigorate itself. We are not buying pcs. We go for our tablets now and smartphones. They use android. How are they trying to get back on top . Whether it is producing their own hardware. The surface tablet. They are making their own nokia phones, but that has not paid off. The areas of growth seem to be cloud computing, productivity software, the likes of database products, exchange to email. And vestberg knows how to make tough decisions. He knows how to offset competition. Remember, hes head of ericsson wireless. They have had plenty of competition coming from asia here they had to dismantle some unprofitable joint ventures. He knows how to make tough decisions. He is also going to win against inside competitors, too. Thank you so much. We are back with the Portfolio Manager at janus europe fund. You were telling me that actually this environment can pick which Industry Group to like. You mentioned tablets. Are you big on tech . Is there concern that there is so much hype surrounding it . Honestly, first of all, we do not take bets. If you try taking sector bets, youre bringing in influence of politics and the economy. In every single sector, we are looking for global competitors and ones that are winning the game. In tech, what is interesting as people think about n apple. The secret sauce of these companies you find them in europe in terms of the microchip companies and the euv company that is manifested in the netherlands. When you think about everyday use of a device, you would not think that actually there is a chemical in your ipad that keeps all of the semicomponents together. So European Companies play a role there and for dissipating the growth. Are you trying to identify the companies we have not heard about . These are smaller companies, that supply components that are essential to what we do daytoday, which is used tablets . 9 small and big. The most important point i am trying to make is that the war asml versus ericsson. Emi versus arm. M they are not saying what is happening with french gdp . I cannot tell you how companies today, especially in the large cap universe are competing against one another globally. Except to say that they pay more taxes in france. Which is why they may look at the election. Although, companies are becoming quite efficient in terms of how they move around. Companies today are in switzerland, ireland, and the netherlands. If youre i know they are competing globally, but his currency still not the biggest concern . This is something they have no control over. In terms of currency. The last time i checked, Value Creation is not predicated on a quarter or two years. It is a longrun gambit. My office is focused on currencies. The company the economy is missing the boat. A lot of things are happening in europe. Of10 years, less than 1 3 revenues will emanate from the continent. Myopically whirring about this is missing a great opportunity. What are the global drivers of value . Longerterm. Monts jewelry riche thirdquarter sales missed estimates. Rules thators would require Bank Capitalization to never fall below six percent of assets. Manus cranny joins us now with more. This 6 , lets be clear about it. 6 of assets in the event of the stress test. Erse economic scenario. That is what the ecb may ask bsanksanks to have. Currently, the request that banks live with 8 . Thisll be tougher than the level set in 2011. We are in this zone. It is called the comprehensive assessment zone. We have a Risk Assessment going on. We will test the asset quality on the balance sheet. Then the stress test. Three components that will come through. It is all about Mario Draghis sentiment. Banks need to fail to give credibility. You spoke to him on this very issue. Indeed it is, if they have to fail, they have to fail. It is about credibility. What are analysts saying . Bankers say it is manageable. It is less ambitious than anticipated. But when you look at what this scenario by the ecb versus the u. S. , their most recent stress tests, they had a minimum requirement of 5 . But you know what i would say to that . The u. S. Banking system is tremendously further along in terms of rehabilitation than their european counterparts. That is something critically important to understand. What are the issues still left . When we talk about the issues, think about it this way it is about the bad debts, you know, how do you establish nonperforming loans . How do you treat government bonds . Mario draghi says they will be zero risk rated. And stress tested. What are the assumptions . It was that the economy would contract by half a percent and real estate would fall by 10 . That was all rather fantastical, wasnt it . Think you so much. Lets go back to our guest. We were talking about Industry Groups varied you do not look at Industry Groups. U. S. Saying that investors are missing opportunities because they are not focusing on Value Creation. Talk about banks because this is one sector that is linked to fundamentals. Actually, what we just heard his music to my ears. Bravo, mario draghi. I think you should have strict rules. We should cleanse the system of weeak banks. We need a economy that is robust, not just monetary easing. I love the fact that companies and countries are becoming a lot more competitive. When it comes to banks, why are we forgetting about posting a normal roi . If you think about the lakers versus the out performers the laggards versus the out performers, and all of the banks the direct that do create an roe . Based on the fact that banks are going up. This is european bonds saying investors are not worried and they hope hold so many of them, so they are going up. I agree. It is something that i worry about it is risk on, risk off. People are not focusing on ok, what is longterm competitive . There are many banks in europe that are growing hand over fist, plus, and are forgotten in the last few months. Thanks so much for all of that. Coming up, european car sales speed ahead in december. We will look at what is behind the biggest gain in four year. Stay with us. Welcome back to on the move. Im Francine Lacqua in london. European auto sales surged 13 in december. For more on the story, lets get to berlin where the head of bloomberg newss european auto team chad thomas has more on the story. How much of a surprise was this . After six years of declines, automakers have something to cheer about. Was a big surprise and it was across all markets. More than half the markets in rurope posted a gain of 10 o r more. The gain in the u. K. Was 25 . Always aand there is however what we talk about auto sales in the current market, the spanish market being up 18 , that was propelled by a cash for Clunkers Program that the government is paying for. And sales in the netherlands more than doubled, but that was because of a new tax increase coming into effect in january. A lot of people in the netherlands went out and bought cars in december before the tax increase came into effect. Chad, sales are up, but how are they pricing . A lot of these got boosted by cash for clunkers. And there are a lot of incentives in the market. We did see incentives creep up in december and january and in g ermany. Germany being the biggest market in the region that those incentives help automakers clear out inventory before the start of the new year. However, automakers are saying that cars are seven to eight years old in europe here at people are coming into showrooms to buy new vehicles. E, what is also important is that used car sales are starting to increase. As sales go up, that is an incentive for people to buy new cars as the prices get closer to one another. Raiseelps auto makers prices on used cars. Increases iss usually the first sign of a Market Recovery in the automotive industry. It bodes pretty well for 2014. Yeah, certainly, we are not expecting an increase of 13 , but analysts and automakers who are speaking at the detroit auot say they do expect sales to be up in europe, somewhere around 5 . Thank you so much. Here are some companies on the move. Dicksons has posted thirdquarter sales that beat estimates, but the Company Expected performance to. Be more modest in the Fourth Quarter stock down 2. 6 . Staying with u. K. Retail. Ocado sales climbed 21 . That beat analysts estimate. Ums man behind dyson vacu says that the process of invention is unpredictable. He shared his insights on innovation with charlie rose. Inventing something could not be devised by one skilled in the arts. So it is the process of discovery of accident, happen chance. It is the most wonderful journey. It is agony. You can watch the full interview by charlie rose later on today. Welcome back to on the move. Im Francine Lacqua in london. We are 30 minutes into the trading day. Lets see how things are shaping up. You can see a lot of focus on banks. It is the Industry Groups were looking at for european new car sales. Surging 13 . The luxury sector having a tougher time with richemont missing estimate. Lets have eurodollar. 1. 3610. The dollar is rising versus the yen. Dollaryen. For these are top headlines. Imf managing director Christine Lagarde urged policy makers and advanced economies to fight deflation that would threaten what she called a feeble Global Recovery. If inflation is the genie, then certainly deflation is the ogre that must be fought. Well, the European Central bank is set to have said to a six percented capital buffer during stress tests for banks. It is tougher than the five percent requirement set by londonbased European Banking Association in 2011. And italys Democratic Party leader will unveil his reform plan to the party today. The 39 year old newly elected leader was hoping to make the labor market more dynamic. Italy faces a youth Unemployment Rate of 40 . Now for more on italy and the renzi performs. Lets get to our bureau chief. Dan, thanks for joining us. Does renzi have support within his party . Buon giorno. Yes, he does. However, you have to remember that what renzi has totally wiped out the former leadership of this party in the last six months. So there are remnants of those who he defeated that arent terribly enthusiastic about his methods, which is this gung ho approach, setting goals and targets, and trying to set the agenda for this government led by mr. Letta. So yes, he has support, but there are still people within his party who i think are trying to curb him a little bit. What is interesting, as mario monti said, talking about the labor reform is this is all interesting because this is being proposed by the head of italys lefist party. The centerleft. It is not coming from conservatives on the centerright. While these performs reforms have been proposed before, it has never come from that side of the political spectrum. Ergo, i think perhaps there is more of a chance now these could be adopted. The problem is at the moment, renzis young. He has great ideas. He wants to shake things up. But there is a danger that if he shakes things up too much, the government falls, and that at the end of the day means less stability for italy. Sure. Well, i think his game plan is this he obviously wants to get these reforms to the labor market rolling, but above all, he wants to change the way italian politicians, and lawmakers are elected. I do not think he wants to have elections