I want to talk about bond markets, for me this is where things get frisky. Japanese government bonds they are defying me, but what you are seeing the government bonds have been negative in germany, the japanese went in tandem. Is it fear inflation or what is it . Is it deflation or fear of a bigger route of the equity markets. John williams says june is reasonable everybody is pushing and hedging and migrating their view on where the euro will go. Will the rate cycle happen this year . Can it happen this year . Global bonds are at their lowest yield since 1996. 1. 21 on a global basis. Does it create asset bubbles elsewhere . Not my job to know. 44 points for seven is where we are on west texas intermediate 44. 47 is where we are on west texas intermediate. There you go, oil is on lower. Three stocks which are in focus today. A little bit of retail. W m morrison looking for a new ceo, a stock up Dalton Phillips steps down or is stepping down. His performance is underwhelming. He delivered 5 negative value. The Online Shopping company waiting for that to open. Sixmonth retail sales up, a 5 zonal pricing. They have fullyear margins at the lower end. Forecast lower than forecast and sales came in at 2 10 of 1 in the market was looking for 1. 6 . That is the market open, equity markets just a little bit lower. Greece of course remains a big focus, in exclusive interview with bloomberg, the greek finance minister told us that an exit from the euro area is possible. Leaving the euro area is not necessarily a bluff. An accident could happen and the whole idea is to avoid it. Lets get to the man sitting in front of that man, elliott in athens. You spoke to the finance minister for about an our, what else did he have to say . As you can imagine, we discussed everything we could get into that interview particularly focused on the elections on january 25. The polls still pointing to a victory. We asked him, what happens, how concerned is he and he said there is a lot writing riding on the outcome of the election and he says it would give a huge boost to the greek economy. We talked about the debt the Opposition Party wants to effectively tear up the bailout agreement and get writeoffs on some greek debt. The current government policy is not hugely different. They want to extend the maturities of greek debt and fix the interest rates. In order to effectively say we are no worse off overall but get money back at a later stage. They can spread out the payment of the debt. It is interesting to know how tough a life it is for a finance minister of greece. I asked him what keeps them awake at night and he says, nothing keys be awake because we work hard in the daytime so you can still get a good nights kip. If something were to keep them up, might it either polls and how his party is still behind . I should pick you up on that because he is not actually a politician, he is not a member of the democracy, he is a finance minister for the government that he is an economist by trade. He doesnt want to go on about being fearful of the victory but he does imply that at the least it will delay greeces recovery. The longer this uncertainty pervades, the worse it will be for the greek economy. That said, once parties do get into power, they do become affected by the responsibility they have and tend to take more responsible decisions compared to the promises they are making in the run up to the elections. Fantastic work. Joined by andrew wilson, ceo of Goldman SachsAsset Management where he oversees nearly 1 trillion in assets. Great to have you with us. When you hear things like that do you pay much attention . They have been looking at that event for some time now so it is a great surprise right at the moment. There is them risk that greece is going that way. Political events with uncertainty are troubling for markets and they have struggled with that along with the qe announcement and the continued fall in the oil price. All of those things bring a high level of uncertainty to the start of 2015. Ira member in the debt ceiling debate, president obama said the market should be worried and they work really at all. We have seen some big moves in greek assets but things seem to have stabilized at the moment. Is that it for now . They are stabilized because the probability is very low oven and set. We have that ucb saying they are ready to and significant amounts of liquidity. The markets are reassured and think they will start quantitative easing on the 22nd of january and it provide some stability. The biggest risk a lot of people said was, democracy. The election cycle. Is at seven you believe . Is that something you believe . Geopolitics are always there and sometimes they get louder and then go down again. You can elections in early may here and then further on the track the spanish elections they hang over the market but typically it is back down to the underlying economic fundamentals and how much Profit Companies are making, those things will drive the market. You mentioned to the ecb, the big meeting that comes days before the election, what is priced in right now in your mind . The number of around 500 billion euros has been floated in the press and we think that is pretty much priced in mario draghi has talked repeatedly about the need to get the Balance Sheet back up closer to 2012 and those things are priced into the market. In order to surprise the market he has to do more. It will be a challenge we think but somewhere around the price of one billion euros. If you want to get to the one trillion in the Balance Sheet bubbly not because we have been undertaking the purchase probably not because we have been undertaking the purchase scheme. The one buzzword for this year, divergence. That the ecb would do more and the Federal Reserve would do less. The you think the ecb can disappoint this year . I think there is a risk because of Market Expectations it will be hard to surpass those expectations. Certainly that is a risk in our view and you have to look at Inflation Numbers as well. Very low numbers in germany last week and we are getting those deflationary pressures even after the fall in the euro and it is likely they will have to do more. We will talk about that after the break. We talk commodities, they are getting crushed. Wti drops below 45. Morrison, the ceo will step down. A little bit of a slap in the face for him. Wmo morrison climbs on the back of that news. Up next, inflation and commodities. Stay with us. It is time to talk about commodities getting crushed. Look at wti over the last couple days. Wti hitting 45 a barrel for the First Time Since april 2 dozen nine. 2009. Andrew, everybody talks about oil but all those things are trading lower as well. When you look at this on a net basis, is this still a positive . We looked at the oil price move and said it is really a supply story as it gives consumers more disposable income. If you look more broadly, it is wrong to discount that it is only a supply story on oil. There were certainly something going on to suggest the prices will be softer. China is going to slow down from last year up a little bit softer. The euro, we think, will be stronger from a growth point of view. It is still a very big positive to see the oil price fall. You can see that disposable income right across the world but it would be wrong to rule it out and say it is just an oil story. Commodity prices are down. We could look at the oil price move as a black swan event, hardly anyone saw it coming and it happened quickly. Could there be a negative impact for markets . To some extent there has been a negative impact. The bond yields have settled off pretty quickly. In certain sectors it is not great for oil producers. They make up a small portion of world economy. The big global economies, make up around 65 of global gdp good for them but not great if you are a oil exporter. Those countries it puts pressure on their budget. I will bring up treasuries, the euro u. S. 10 year. We are at 1. 87 on the u. S. 10 year. 2014 like tony 15 and the yields must go higher and dont, are you predicting it to go higher from here . We are expecting it to go higher eventually. It is interesting the way the Central Banks are looking. It is on the verge of a fall that the ecb will be under enormous pressure because of deflation. In the u. S. , Janet Yellens talking about looking through the treasury effect of low oil prices. We still think the fed will raise rates am a in june maybe september, it is hard to see it is either tracking a low growth, low inflation story or money pouring into dollars in denominated assets, which one . It may be a bit of both because you have that low inflation story and bond yields dont need to go up but also the ecb didnt seem to do qe and the bank of japan has doing it aggressively for more than 12 months. Some of that liquidity is undoubtedly finding its way into the u. S. Treasure market and that is bringing yields down. Do you think they will go higher . It wont happen gradually . It could happen just like that. There is always a risk that markets get carried away and people are focusing on the deflationary impact of lower oil and people talking more about the positive growth story. Lowinflation on the back of lower commodities, there is a debate going on right now, the one set of people saying we are flirting with deflation and this is bad in the other side saying i like lower prices. I guess you stand on the other side. Lower oil prices are certainly good but we have to know where those inflationary rushers can come from. In europe it is hard to say but in the u. S. , unemployment in the u. S. Down to 5. 6 . It has fallen dramatically and will result in some wage pressure. If i was operating the federal i would look at that closely. Thats why they are talking about the transition very impact of lower oil. That could be the labor market. Supply is running out. Before we go i will give you the opportunity to make the one big call for 2015. I think it is a stronger dollar. The clearest trade out is the u. S. Dollar continues to appreciate and it is convenient for japanese and the europeans to see the currency retail. The big trend will be in the appreciating u. S. Dollar. Andrew wilson of Goldman Sachs. Lets check in on how morrison is doing. Trading higher after the grocer announced the ceo is departing. More on that story over the break. Welcome back. Another management overhaul at a u. K. Supermarket. This time it is the morrison ceo, Elton Phillips to leave after declining sales are you a new chapter by the company they seem to like the fact that the chief executive is being replaced. It has been speculated that after five years at the helm Dalton Phillips is being shown the door. It helps with that easing of handing over. But not only a new chief executive but a new chairman as well because Andrew Higginson the former tesco finance director, he is taking over as chairman on january 22. A totally new team will be at the top by the time they find this new chief executive is the company is saying this is the next chapter of morrisons development and we need to attend to growth. That is best under new leadership. And dalton has been blasted by previous owners of the company, the previous founding family sir can morrison said sir ken morrison, said he is akin to maunure produced by his own cattle. He thought the company was making too excuses too much. He had to give up his own bonus because this is a man who tried to modernize the company and tried to bring it on line and try to open convenience stores. He says when he took up the helm, some of the Company Still used pen and paper methods to check the stock. People counted the cash manually he said. Looking at the numbers this morning, not great if you compare them to tesco but not as bad as they could have been. They fell 3. 1 but not nearly as bad as the market expected. They thought it would fall about 4 . Many felt that tesco did significantly better than expected. So morrison has a bit of a pickup their as we went out to feed ourselves over christmas. But more things to come. Tesco said they would be Closing Stores more than 40 unprofitable stores. Morrison will be doing the same saying they are closing 10 stores in 2015. Drastic steps to come. Perhaps some of those tough calls that morrison re made the fact they were bringing out a loyalty card transcended the discounters that seems to slowly be working. Not enough time. They want new people at the helm. The new chairman has are even named as Andrew Higginson. Morrison stock up 5. 2 right now. 2014 was the worst year in you kate retail since 2008 according to the latest data from the british retail consortium. U. K. Retail since 2008 according to the latest data from the british retail consortium. I want to talk about whether this is a leadership problem or whether they are victims of a rapidly changing market. I think there is a degree to which few people doubt that Dalton Phillips is doing many of the right things over the last 18 months. The bigger question is whether he started soon enough and i think caroline was right, their systems were awful and that did need addressing but they did not go to the market position. The threat to the discounters was perhaps dismissed for two coup long too long. Perhaps they feel both internally and externally that they need someone new to continue the same things and to give it a new face. Along with the themes from last year the winners and losers, is it the obvious . To a degree it is, one of the things that perhaps we are seeing is the idea that internet only companies would be absolute winners is not necessarily their. We are beginning to see stockbased change fight back. It may not grow as fast in food as the internet but in absolute terms it will take more market share. People want smaller shops and smaller baskets. Thank you very much, up next we speak with 2014s most accurate forecaster about his big calls for 2015. Chris turner the head of fx strategy at ing. Welcome to on the move. I am jonathan ferro. 30 minutes and your trading day. This is how things are shooting up. The ftse 100 is up by 25 point. Every data point. The inflation data. That is one to watch. It is climbing higher by 17, 18 points. Caroline hyde. Quote retail is getting the christmas results from the top players and big change manage overhaul at w m morrison. We like the fact that it is waving goodbye to the company. He will be leaving in march when the fullyear earnings are released. Will they speed up the pace of movement into convenience, online . And Overall Company they said its the next chapter in our development and we need new leadership. Thereve already got a new chairman. He will be joined january 22. Andrew of tesco will be taking over. Sales slightly better than expected. Morrison [indiscernible] meanwhile, german retailer metro doing well this morning, up more than 3 . People liking what they see when it comes to the trading results. The biggest publicly traded retailer in german. Sales are up more than 2 . All divisions, over christmas electrical retailers and they have one that set a record for road. Good news for the german retailer and National Exposure as well. Asos up 6 . It is on the alternative listing and a u. K. And trading higher. They posted 15 growth in sales. Remember, the competitor saw much disappointment when it provided its cell update after christmas. Not nearly as much as the company had advised. Asos said we are in line with our expectations. Green across the board for retailers. Thank you. Good news. Headlines coming in. The italian prelate the italian president will reside in the next few hours. A lot of suspicion he would step down early. Reports in the last couple days in the untied media that it would be imminent and night now conference. Matteo renzi said the italian president will reside in the next few hours. We will review more news as it develops. They euro is not really moving. Lets talk about s x. Our next guest would be top ranked fx by bloomberg in 20. He has a big cause of the euro. Lets welcome chris. Congratulations. I am looking at it euro on your call and its important. Parity by the end of 2015. I guess i could guess why but i will ask you. Very much a cyclical story. Well not seen the dollar rallied for the right reasons since the late 1990s. When we look back, we have strong u. S. Growth the cyclical story and structure story is a lot better. The current deficit is inside of 3 . They have made it pretty clear they are going to raise rates this year. When they start to push the short term and start to move higher particularly later this year, itll be a positive environment for the dollar. When i was reading through your research and notes, the bulk of the move in that euro dollar not around january 22 with qe but the back half. Is it all about the fed . With qe, one of the important things with qe that many analysts say it is price. What we have learned and president ial rocky president draghi it weakens when they qe happening and the fx of qe and on the dollar and yen. And the expectations, as itd bills through the year, it will weigh on the euro. Ecb, i want to talk about the European Central bank and policy. What does the disappointment look like on january 22 . What will it be for you . I think the markets prepared and they want to hear some firm details about sovereign bonds bought. The market does not really expect to hear numbers. Obviously greece, the grid issue to address as well. Disappointment for the ecb would be if the euro really kind of turns around. I think that euro is key. And so far, draghi got his wishes. We are going to tell by european politics after the break. I want to give to your thoughts on sterling. And Political Risk around sterling. What is more nor what is the more negative outcome for struggling in this campaign . There are three possible. You can get some form of coalition. What would make Strong Negative . Each of those three scenarios, a split vote. Not too much focusing on the referendum on either end. The deficit, referendum conservatives have promised by 2017, or potentially the s p does well with the legs coalition and the skies referendum will be back. Maybe oneparty doing well. With the latest coalition and the Scottish Referendum will be back. The broader the coalition, the probably worth it is. Lets start with the referendum. On your call of the euro, you reference the Political Risk saw the euro trading below financial estimates. We know it is reasonable risk. But for sterling, could you say the same thing for sterling . Slightly extreme and we look at the Scottish Referendum and a little preview of what Political Risk, like. Maybe 2 , 3 when it fell hard in september. Probably the start of this year, sterling has really underperformed and has not done anything with a weaker euro a you can probably save 1 , 2 of the political price is in the price. The rate story, the bank of england pushed almost too far back into the Market Expectations. Sterling, over the nearer term might find support. Inflation data is going to come out and everybody will jump up and down about how it is below 1 . You said what the bank of england might do is push too far. How does the inflation story play into it . It is obviously the world dealing with Lower Oil Prices and one thing to remember back in the states, they will looking at inflation and maybe 1 in march. Even though it is big news in the u. K. And focused on, a letter has to be written to the chancellor and the u. K. Is not unique. It does sell off on this and a marker perhaps i might find better levels to buy sterling versus the euro. I would imagine. Chris turner stays with us after the break and well talk more about politics a greek politics and the bloomberg exclusive with the greece finance minister about the possibility of a grexit. We will be back in two. Greg. Welcome back. I am jonathan ferro. This is on the move. We are less than two weeks away from snap general elections in greece. We spoke to the finance minister and he warned a grexit good happened. Elliott gotkine joins us. Wasnt that the top line . That was one of the highlights. It was a wide ranging interview. We talked to him for about an hour yesterday. He was relaxed. We were told not to ask him anything overtly political. But with elections coming up, its hard to avoid politics. The Opposition Party is leading in the opinion polls. He said if it forms a government, it is imperative that it sticks to greeces promises and does not renege with the creditors. Has to obey by the commitments that greece has signed up. Greece has received huge amounts of money just from the europeans, 195 billion euros and made certain commitments. When we make those commitments we were greeks. Were not a particular party. This has to be understood. Have greeks stop paying taxes, social contributions, or even mortgages ever since they knew a snap election was coming up . It is very natural before elections to observe some kind of a freeze. Some people hold a new government would come and absolving them from their debt payments. And others entrepreneurs, postponed contracts. The economy has stalled a bit. Once the elections are over then i think there is demand and the country recovers. Can you quantify the drop in the tax take . And is it likely to derail the greek budget . No, the budget for 2014 has a big cushion. The target was for 1. 5 of the primary surplus. Up until early december, we were forecasting a primary surplus of 1. 8 . There are these three decimals enough cushion for whatever miss we have will not affect the eventual target. Is it possible to other parties in terms of their economic outlooks, it changes once they get into office. One was to write down debt it may not demand that if he gets into power. Well, the responsibility to transform whoever runs the country. I also that will eventually prevail. The question is, how quickly . And greece does not have much time. Theres a deadline of february 28 for finishing the review with the imf and European Partners and ecb. And that, whoever runs the government has to have in mind. Many greeks believe talk of potential as it from the euro is a bluff, a way for the government to perhaps persuade them to vote for the incumbent rather than the Opposition Party. Do you believe the direct of a greek at the israel . Greek exit is real . Greeks want to stay with and a euro area. More than three quarters whenever surveys they yes, i want to stick with the area. They understand the euro area brings a lot of benefits. They shape of the country and give future to the economy, to his politics. Leaving the euro area is not as thoroughly a bluff. An accident could happen and the whole idea is to avoid it. It would be some accident for greece to stumble out of the euro in that way. It was interesting the way the finance minister saying if the government is reelected, it would be a boost to the greek economy. He paired up some of the fears that has been played out in greece in the event a victory a samaras victory takes place. The rationale is it will prevail with whoever comes into power. He said they should extend the current bailout agreement to give more time if it were to form a government after the elections. Any concerns about the banks, he said, they are will catalyze a run institutions and that their withdrawal would be taken not accelerated any worrying degree. Even though theres been more withdrawals this month. Elliott gotkine, thank you. I will bring in our guest, chris turner. Chris, the finance minister touched on it there. The majority of greeks want to stay the eurozone. The conversation is if they win it looks like they will win and eight grexit and if it will be allowed. Does it suit samaras . You would think the worstcase scenario and i do not think reading the germans, they are not encouraging the grexit. We did great work look at the impact of the eurozone breakup. And badly hit during that. The environment for this investment with if greece were to move the president would be set there and spain and italy to move that way and with that. It is talking about the worstcase an oreo scenario and we wake up and see if it really wants to stick to those. When i wake up and the audience wakes up with possibly a new government, you are looking at the euro, where is it going to go . Initially, the event risk, the fx mark markets are forward thinking and assessing a chance of that happening. It is probably another 1 , 2 . Would get into the finer details. Lets look at the plans. I think negotiations as well in particular because in terms of q2 the focus is going to turn to funding issues and the funding they need. Unfortunately, 2012 story and wouldve moved on and now it is that of the agenda. For the euro, that in 2012 a risk premium and at the moment we think sort of 1 Political Risk premium. You can add 2 , 3 , 4 . Chris turner head of fx and the most accurate forecaster in a bloomberg in 2014. Greece is still in the spotlight in recent months. Italy getting a bit of a political reshuffle. Matteo renzi said the president will resign in the next few hours. We will ahead down to the bureau chief for the country. How important is this resignation . Theres been a lot of talk about it. Mr. Napolitano has said he was going to step down early and did not want to serve full a full two terms. He is 89 years old. He has admitted that he is basically had enough in this pristine just role of a guarantor, if you will for italy and displayed an active role and sought political crisis we have seen in the last five years. He appointed mr. Renzi to his position. While it will be ceremonial, it is a very important figure in providing stability to a country which is had it evolving door government since after world war ii. The big name that a lot of people floated around i had of this was a mario draghi possibly taking over from a napolitano. What are the other names mentioned . Mario, a former italian Prime Minister himself, had a very influential role in europe Regional School for him as a candidate in the last election but do not get enough votes. Is a complicated process. The candidate has to have a two thirds majority and get a drop down to a simple majority. His name is out there and has been mentioned. And theres also the possibility we will have someone who is a bit perhaps more lowprofile and will be the get enough votes on both sides of the political spectrum, not just for mr. Renzis on party but the opposition as well. Thank you. Thats a bit of politics story coming out of italy. Can dan liefgreen. A picture of the markets for you. The supermarket with a big mover up 4 at the ceo goes to the exit door. Crude oil. Wti trading at 4465. We will talk u. K. Inflation and that is next. Welcome back. I am jonathan ferro. That is on was it for on the move. And we are waiting for inflation data. The forecast is for under 1 the lowest since 2002. The pulse will be all over that. Mario draghi might have to write a letter. They looked through the oil price and probably lower hurry it is likely that sterling increasingly the rate hike is price out. Luke johnson will join us and talking about the uks economy and his perspective. I wonder if they economic story is what worries him are coming up in the form of the general election. There appears to be no good outcome. We would and up within Eu Referendum or a labor government which could attack this is or probably the worstcase scenario which is a minority government which is unstable. No particularly good outcome and we would talk about that. Then, we will talk about greece for you have been talking about all morning. We have the interview with the Greek Foreign minister and will continue that conversation with possibly his successor. He is an economic adviser and naming and named to be the next economic adviser. And wide renzi may have to pull. And outside we will be talking to and the big number is crude wti below 45. I think everybody went through the numbers carefully. Good or bad . The word economist use is true inflation. Thats what we should call it. Guy johnson will be on the pulse of in about 3 minutes time. A little bit lower across much of the eurozone. The ftse 100 up 0. 2 . The commodity market, what did you think the story is . Oil. Brent down. 44. 59 is the price on wti. Lows we have not seen since 2009. If you want to continue the conversation, you know where to join me. I am on twitter. Good luck for the rest of your day. Athens on edge the finance minister says they risk an accidental eurozone exit. Later well speak with a key economic advisor. Oil prices hover around 45. Opecs strategy will not change. It is up to shale producers to make the first move. U. K. Inflation set to drop. The rates may fall to a 12year low. Well have that data in half aen hour