Potentially going for folks and raise thecould indeed risk, Andrew Bosworth here in the studio. Q e . The ecb was almost ordering in the ways, they have divisions in the same way, let the monitory Monetary Policy has divisions, and assembly have divisions in the Federal Reserve so to your divisions in the ecb. Ultimately the market is expecting qe and that to that end baltimore said you wanted a little bit of a periphery, im doing a slight gesture there. If and when qe comes this is where you will see it. Cramer am a her. Says spain cannot borrow mr. Says spain cannot borrow more cheaply than the United States. ,hat would mario draghi say china factory orders at a sixmonth low, a little bit of reprieve coming through in todays trade. Michael in france saying it would be tough for them to hit a the complexion of the bond markets and the equity markets and the euro coming a little bit lower. Eyes the yen that caught my as the finance minister basically said that the yen had moved too far too fast that is the yen rising and the dollar down. The sharpest rise in the yen pairing a fiveweek drop, the biggest drop since 1995. The currency is according to statistics oversold. It has gone too far, too fast. That is the finance minister in saying it is too quick to bear with. Market opener, that is how things are shaping, one of the top stories of course is that today is the u. K. Independence Party Victory right here. Mark reckless took the second parliamentary seat after defecting to ukip in september, he said this when is just the beginning. I would try had words to express how grateful i am, this is your victory. Ourk of it, rochester was 271st most winnable seat, if we can win here we can win across the country. Getou vote ukip, you ukip. Took 42 of the vote beating conservatives by less than 3000 ballots but all of the mainstream parties took a beating losing large portions of their popularity. The share of the vote dropped by over 10 Percentage Points each. For more lets bring in our guests for the next 30 minutes or so. Great to have you here. The mainstream take a beating. This sets the tone for next years general elections, doesnt it . It is a little premature because it is only the second vote but it is a concern. Germany is the biggest trading partner and the problem is that cameron in trying to appease the Independence Party of the voters is alienating europe. When you look at the markets reaction to this, going into next years general election if it looks like a referendum is on the cards is that negative . For the conservatives this will be a nice picture with a certain lead in the polls will he take a hit . I think the starting assets are probably fairly valued and the investors we talked to are not taking this as concern. As we get closer to the may elections, the conservative led party or coalition would be unsettling investors but we know willingp are not really to compromise into coalition. You spent a lot of time traveling europe and ukip is happening to the popular dissent but in areas like paris or elsewhere you have seen the rise of antiestablishment parties, are they a knowledge and that Political Risk abroad . Yes, totally. Weve seen it with what happened with yunkirk. They called for a vote of confidence and the fact that the movement with the left and the right have not agreed on the next step has been creating the necessary opportunity for investors. How do i invest around this . I now have to trade the u. K. If the risk of the u. K. Leaving the eu hums about you could punish sterling assets, what do you do in europe . I think it is more of a u. K. Problem as opposed to a european problem. A spiral ofacerbate discussions around is this the beginning . That is a problem. U. K. An stop trading to the and investors are not really paying attention, they dont think it is a serious enough issue to merit taking a position but i think the next step they are thinking is that it is the beginning of a broader discussion. I want to look at europe when i look at france, the closer we she leads7 the longer in polls, what does that mean for french assets . French debt has been completely insulated but surely at some point the penny drops. Boones and french bonds, i think it is at a stage were they have been artificially standard very tight regardless of their credit worthiness and the fact they have not enacted structural , rms we will talk about the ecb and what asian policy means, up next, the yen backtracks, the year of massive devaluations, the yen recovers slightly after the nations finance minister says it moved too fast. Be careful what you wish for. Welcome back i am Jonathan Ferro life in the city of london, streaming everything online. Lets talk japan, the yen is gaining for the first time in a week after the japanese finance minister said the recent decline was too fast. The comet sent the currency down slightly after it approached 1. 19 against the dollar but the currency is still trading just up from a sevenyear low. Over the last month the moves have been stunning, whether against the euro, the dollar or the chinese currency, while europe fights the prospect of deflation asia is fighting their own battle. Of deutsche Asset Management is still with us. This is what you sent me, what is it telling you . Everyoneer of things, is focusing on europe and quantitative easing when and rather what. The devaluation of the yen and the fiveweek devaluation which is the longest and fastest since 1995 and i was in japan last week and it was funny because i asked a japanese investor, what do you make of this . Of course you are serious and i said yes we are, and of course this will mean a reevaluation of japanese assets and i said yes, but the bank of japan seems quite unhappy with it. In the sales tax will put additional strain on the wet and the response was, have the biggest problem and the world with demographics and a 50 tax rate on inheritance tax so it will solve itself. Do they really believe that can help boost confidence in the treasury . There is 15 trillion in private wealth in japan and we know they have an aging inheritancend 50 tax is ¥300 million which is not so high for international standards. Backup andthe chart a look at the move in the chinese currency versus the japanese, how important is that cross . That is very important, the question is the japanese economy, china the moment that asia in general and east asia specifically and korea and taiwan and the fujis and singapore and china itself has had declining Producer Prices for some time and china has had 32 consecutive months, so if you go back to china in the top three priorities when i talked to chinese investors say it is deleveraging, addressing the massive capacity and creating Household Wealth in order to create a consumption led economy not only credit lead. Those are the top three priorities but then you have a situation like 1998 we had devaluation of the yen and 50 since 2012 so this is very meaningful. You know that this is creating a problem in this is filtering in to the consumer and this is delaying a potential deleverage of your debt. 25 ins been leveraging the last six years so this is a big problem and nominal gdp cannot keep up with falling prices which sounds very familiar and is happening in europe today. In that situation they may add a fourth element which is that it is time to add in a monetary devaluation. If they do that is that more inflation to europe . I think the odd man out is europe because the u. S. Has its own growth during i was there a month ago and it is obvious. The country is moving booming and now with gas prices adding 1 billion the u. S. Consumer is spending 1 billion a day on gasoline so youre adding 400 to every household in the u. S. Going into consumer spending. The u. S. Is fine and the stimulus on the oil has been a tremendous opportunity. Europe and asia now have to address this problem. We are still talking to qe in europe and we have a situation. You could take a decision on cannot fight the decline in Commodity Prices . The answer is it is probably not, i think it is unnecessary but you need to have on top of monetary stimulus Structural Reforms. That areof reforms straining relationships in paris, london and rome. France is delaying some of the Structural Reforms and until they address that that is really what will make a difference. Believego ahead and we there will be a discussion into q1 but probably the effectiveness is to be debated. If they ecb and the eurozone is a victim of deflation and lets say the bank of japan wins that currency war, what happens in other asset classes. Talk to me about the concern around the government japanese bond market. They are buying at an aggressive pace. That is a question i asked a number of japanese investors because i said is quite obvious that double their change in who is going to buy it and the answer is it is still a domestic problem. The bond yields will not move massively but i do think it is concerning to see the movement in the european bond market, and in the event of deflation its an asset by. We are continuing to talk to investors about unconstrained fixed income. To wrap it up what are they saying about debt here in europe with a yields in spain approaching 2 and the yields in germany on the 10 year around 0. 8 , is anyone investing in that . That is a funny question, to take a short isish and it seems every nobrainer, yet investor i talked to said it seemed like a nobrainer at one and a half. I dont want to play that game. Joining us this morning, thank you very much. Coming up, getting crushed. Can digital prove they are not just a one hit wonder with a followup to candy crushed. Back in two. Welcome back to on the move. I am Jonathan Ferro in a very gray london this morning. 1 , lets 4 10 of bring you up to speed with some companies on the move this morning. Ish Mont Richemont considering opening an online retailer they are and talk with banks to discuss options for the company and may consider a sale. Porter iser net a not profitable. But the owner is set to consider ipo for 2015. Carlo saysxecutive the company would reach its goal of a 10 up rise in march at this time it may change. The chipmaker set at deadline for the middle of 2015. The chief executive is stepping down after 14 years at the helm after there was a bit of property battle with daniel lope. The ceo has been under pressure to cut costs and increase shareholder values. Doing a research for the replacement. The Car Sharing Service struggles with legal challenges that have forced its love of crisis and eliminated profits for uber drivers and turned it into one of the many share write services that have existed in germany for decades. King digital, the maker of the candy crushed saga has released a followup to the hugely successful franchise but can the new game prove it is more than a one trick pony. Caroline, the new game and the same old question, better than the last one . They are actually taking a different tactic they are employing the cult of the brand candy crushed, usually they would add saga but now they are dining out on candy crushed. And why wouldnt you . From thison a pulled game in the first half, one of the Top Grossing Games ever since it was launched. The amount of times it is an played is according to 71 times the world population, 71 times 7 billion. You add soda soda, and it turns gravity up and down and there are new ways to get involved in the game and they are marketing this hard. Are you a fan . Kind of. River into ad the Soda Fountain display and had a seven meter high candy bear. This is what happens to productivity in this country across the western world. We are all suddenly commuting, this is about general easy to play games but what is interesting is the company having to admit that this is incredibly hard to get anywhere to try to recreate the je ne se quoi that gets candy crushed happen. It is hard for anyone to beat it with a massive success it had , the players love it and the early indication is that they do. They have tried but as i said before they have employed the saga tactic, farm heroes saga, pet rescue saga and have done pretty well and have at one point and in the top 10 worldwide and this is why king digital has managed to rack up 500 million active users, that is more than the entire population of the United States but the worry is they are not diversified enough in the worry is more than half of the revenues are coming from candy crushed saga and that we are starting to see revenues fall off. Profit down 38 in many to show off that they are not just a one trick pony that they have a diverse pool of games. I talked about productivity losses, talk to me about the breakdown, is this 15yearold kid sitting there in the u. S. In the u. K. , where is the growth . If you get on the tube in london it is not 15yearold kids, it is 40yearolds. Play general trivia as you are commuting but what is interesting the amount they Pay Lip Service to asia. It seems to be about capturing that flow of growth they talk about japan, korea and china but they also say look we have to keep global in our perspective. There is big potential in countries like india where the market comes at the right price point so i think all of those territories are interesting for us and currently with a big Market Growth is proven is in china but the other territories are also in the future. It is all about asia for them 84interestingly i think million in singapore. It is also not going to be an average easy to play game, not casual games anymore. They really start to broaden their typology. I asked them about the reality and they said when i goes mainstream, they might be in . More productivity loss. Andng up a win for Ukip Rochester and what it could mean for may general election. Up, the dax 62 points higher, you what to talk markets anyone a talk ukip you know where i am on twitter. Welcome back to on the move. This is what the market looks like right now, the dax up by 1 10 of 1 , 73 points higher. Everyone isman watching right now, mario draghi speaking at the Banking Congress in frankfurt. Hes talking about declining Inflation Expectations, Monetary Policy and the single supervisory mechanisms. Now these are the three stocks to watch this morning. M a back on the table as if it were ever off. We are talking about the Holding Company for the Cable Companies owned by patrick draw he, they are saying week telecom is a natural fit. Massive synergies. Meanwhile stmicroelectronics the chipmaker down. The ceo has been talking in a conference in barcelona and says look, we are going to take longer potentially to reach our key profit target because we have problems with demand shift and market trends. If that persists it will take longer than 2015 to get our margins. Energy talking emanate author and ophir energy talking mergers. Thank you caroline hyde, mario draghi speaking at the european banking croson this conference in frankfurt. Inflation is 0. 4 . Downward movement of inflation was primarily driven by the kleins and energy of food prices and inflation which are two components that tend to be atile by food Prices Energy andeclines in food prices and inflation which are two components that tend to be volatile. They give valuable support to Economic Activity by raising disposable income. That inflation is low and the inflation rate that strips out these temporary components. The rate of change in core inflation has been consistently low 1 with the latest reading for october at 0. 7 . A low reading for core inflation for such a. Of time indicates for such a period of time indicates that it is not only temporary factors that are affected but underlying demand weakness is also playing a role. Indeed we have clear signs from data that week demand is contributing to low Pricing Power among firms. We also know that with high unemployment and many countries, workers have less power to negotiate higher wages which reduces inflation pressures. Compensation per employee increased by 1. 1 year on year in the Second Quarter and the lowest increase in three years. We had no headline inflation in the past driven high energy prices, it was even negative in 2009 but at that time core inflation was already moving upward and said the economy was rebounding which provided us with comfort that inflation would pick up over the medium term. This time around the picture is different. Complacent, have the very watchful that low inflation does not start economy is in the outlook. There are several channels which low inflation can have this effect, including a complicated price adjustments between countries and worsening the effects of it overhang. That debt overhang. Two prolonged periods of inflation become embedded in Inflation Expectations. The current manual for Inflation Expectations is critical under any circumstances as it ensures that temporary movements to not feed into wages and prices and become permanent. It is more critical in the circumstances we face today, this is because if Inflation Expectations fall the real which is the rises Interest Rate that matters most for investment decisions. Because nominal shortterm rates have already reached the affective lower bound they cannot be adjusted downward further to compensate for this. Any da great deanchoring of expectations would cause the opposite of what we want to see. We are currently seeing volatility in expectations and indicators are on the whole in a range with what we consider consistent with price stability. Over shorter horizons, indicators have been declining to levels i would deem excessively low. Surveybased measures of Inflation Expectations have gene