Action. It is encouraging. It shows that the program is credible but its obviously too early to tell. And what mattered for us was inflation. Saudi Arabias King Abdullah dies at age 90 following weeks of hospitalization for pneumonia. Hes immediately replaced by his brother sending oil shares higher. Telefonica is in talks with hutchison for 15 billion. Telefonica confirms its in talk with hutchison to sell its business for more than 15 billion and its payday for lloyd blankfein. He will join the crew on squawk box later this morning. You wont want to miss it. Manufacturing and purchasing managing index for major European Countries have been coming out today. We heard from germany. January pmi falling below 51. 7. Composite pui 52. 2. They cut it at the fastest rate in years. Not as bright as initially expected. The euro zone economy began in better shape than expected but firms were forced to slash prices. Thats a day after they announced the massive Bond Buying Program. The euro is dipping lower breaking 113 now trading at 112. 1. 1281. Thats the trade. How much lower will the euro go against the u. S. Dollar given the response from the ecb . Mario draghis massive Bond Buying Program. Some currency experts were saying the euro could trade in pairdy with the u. S. Dollar. A level its not traded at since november of 2002. Well continue to keep an eye on the euro dollar trade. Plus the story out of saudi arabia, they call for unity and solidarity for countries as he vows to maintain the same approach as his predecessor. This news coming in after the saudi King Abdullah did die and the new ruler coming in is salman. To keeping a look at that story and what to expect Going Forward. This morning has been the implications of that Bond Buying Program. The European CentralBank Launched a landmark Quantitative Easing Program. Out to you, you have been speaking on their response of whether it will be enough to revive the euro zone economy. What have they been telling you . Well its interesting. It is bigger than many expected. Markets of course rallying on the back of it too while the euro took a leg down now. Mario draghi revealed the ecb would buy 60 billion euros worth of public and private sector bonds starting in march. It will run through end of 2016 until inflation is picking up pace. Key element there. The president said the bulk of the risk would be shouldered by National Central banks. So on one hand we wanted to keep we want to keep the principle of the risk sharing in place and thats why we want the 20 and on the other we want a decision that would mitigate the concern that many participating countries in your area have about the unintended physical consequences of potential developments in the future. Now weve stolen jeff from squawk box for a few moments. He has been speaking to him from the ecb. What did you get the sense of if were looking at a weaker euro here then job well done. I think the market is listening to this interview and whats interesting is i address addressed the euro question with them. The ecb doesnt like talking about the euro but i said there are those economists saying we go sub parody. He didnt say it shouldnt go down that quickly. He basically said we dont pick a target which to my mind says to the market help yourself guys. Off you go. Weve sent you the message that were very comfortable. Lets also talk about what he said on the Market Reaction as well. This was fascinating. The ecb is always a little careful about how it talks about different markets. It doesnt want to be seen as an active Market Participant although inevitably it is but hes telling me that the markets response was pretty much what they would have liked to have seen. That to me suggests he believes the market has validated the ecbs announcement. Lets listen to what he said. It is encouraging. It shows that the program is credible but its obviously too early to tell. Were only one day after and what matters at the end for us is inflation and not Market Reaction. O so we have to see it feeding through to the european economy. Lifting inflation eckxpectations and creating for growth. He was very gracious with his time. We covered quite a lot of topics. Inchud including the german position and the oil price. Theres a lot in here that will come out through the fullness of the day as we continue to find out where the market feels comfortable with European Assets in the light of this big move but we also talked about greece because this is a big headline event over the weekend and i suggest you may be heading off there very shortly. Flight on sunday. Flight on sunday so buried within that announcement as you know as our audience knows was this message to greeks if you stay with the package, if you continue to stay with the euro block, well continue to stand by you because at the moment theres a question as to whether greek debt will be part of this purchasing program. I asked him about that. Lets hear what he had to say. Greece will remain part of the single currency. I have no doubt about that. The message to greece is not a new message or a message to greece only. Its to all euro zone countries. If you want the ecb to take your bonds as collateral and be in a position to buy your bonds, you need that program and this is because we need to see the dynamics of reform and this has nothing to do with the election. The election is a political discussion. Reforms will be different. So there you go. And obviously we will spend the weekend waiting to find out which way the greeks are going to go. What i find interesting about this is the bond purchases begin in march so the talk we were having yesterday is whether or not we can see an agreement between the government in greece in order to be able to qualify in march but that issue of cap is a problem. So until greeces bonds roll off in the s p program theyre above that cap. So well still have a gap i think between marchand july of this year for the ecbs bonds can buy. If we have some shenanigans over trying to form a government here watch greek bonds. Programming will be compelling after the sunday election process. Absolutely. Which you will be there and covering it for us. Well look forward to that. One more thing i want to do is tease up the fact that i have a big panel coming up. 1300 cbt. Well do this live. Fantastic guests on the panel. George osborne will be there. The bank of italy. Luis from the spanish finances ministry and the german finance minister and he hasnt been a huge fan with many other germans to it will be interesting to get his take on this platform. It was fascinating with the policy makers i was speaking to yesterday the number of times independence was used. Yes thats critical. A lot of people were saying the germans were dragged kicking and screaming but the underlying issue is is this Bank Independent or not . And the germans i think have to go with the program if theyre going to maintain for the markets view the idea that this is an independent central bank for europe. Ecb will be buying bonds with negative yields and the germans hated that. It aint a great time to be a saver anywhere in europe at the moment. Particularly in germany. Lets send it back to seema. Thank you so much. We have been watching equities move higher. Second day of gains after ecb announced the massive Bond Buying Program thats expected to kick start growth and relieve europe of the deflationary concerns. Right now the ftse 100 around 22 points. Xetra dax to the upside. Cac 40 with a gain of 63 points and the smi up about 1 in todays trade. Its been very notable to watch this rotation out of bonds and into equities. Take a look at where bonds are trading because of the rotation. We have been seeing some of the trading coming off the lows across the euro zone. U. S. Tenure up about 1. 8 . The 10 year yield on the italian bond at 1. 5 . But i skipped german yield for a reason. The yield at. 37 . Lets take a look at the currency market and see what were seeing in the euro. Of course we got that euro zone pmi flash composite which is slightly better than expectations but that didnt help the euro move higher. The euro is trading below 113. Its at 1. 1275. Down about. 8 in todays trade. Interestingly enough Central Bank Policy is ultimately good for stocks but critics say it may not be enough to stimulate the euro zone economy and he said to get europe out of this funk you need a wholistic policy response that involves the politicians and also said the people that should worry are the currency traders because we could see further volatility in the euro. That could upset something we saw last week with the Swiss National bank. The question is how low can it really go . As i was pointing out the top of the show. Last time was in november of 2002 and of course the ultimate strategy in all of this is whether we actually will see a boost to european exports. Well absolutely. So the euro one element here. The other crucial question is whether we see qe feed through to the real economy. For that we need to rely on the banks. Mario draghi needs to rely on the banks. So i put it to you hugh what are your thoughts on what is effectively an unlimited qe program if it needs to be and will the banks lend . I think the banks want to lend. Wanting and will is not the same thing. What we learned from the ultra cheap loans is the southern european banks took them to help reduce their funding costs and we have three months of lending Small Businesses in the euro zone. Theres progress. But its slow. We need a lot more demand stimulus. Its a technicality but the deposit rate not shifted yesterday. Will banks sell their bonds to the ecb because then they get the cash they lended out or do they put it in the with the central bank and get charged a tax for doing so. 30 of the bonds are held by the banks. They need to see a pick up in loan growth and at the moment its muted. Its much more likely other people will be selling their bonds first. The other banks were trying to restore their Balance Sheets and trying to lend. The structure of the Banking System in europe is changing. Were so bank economy dependent but you have been talking about the Debt Securities up 60 since 2009. Bank lend down 12 . Capital markets a quarter of what we see as far as the euro zone markets are concerned. So were working out ourselves how to go about this arent we . Thats right. I have been very excited. Weve seen 400 billion more borrowing than from the banks. I think its positive but you can do a lot more here to stimulate this. How . Theres three legs to this. Mid sized Companies Come directly to investors. I think the second is to unleash the power investors to put money work in infrastructure. Theres so many aspects holding that back and try to change the way you deal with bad debts. One of the biggest issues is how you allocate resources from the bad to the good. If it takes ten years it will be a slow process. Theres a lot we can do. Obviously we saw the bank changes as far as Corporate Governance is concerned from italy. I tackled the Prime Minister on the fact that were still saddled with nonperforming loans. Another avenue. Disruptive technology in the Financial Markets. Weve seen a huge growth. What are ceos saying about this . Have they caught on to the importance of this . And how are they adapting. To me 2015 is the year. Im on the Technology Panel and last year 80 of the ceos in a straw poll thought Financial Regulation would disincentivize them to come in. Theres been a radical shift this year. People are very exposed. They see the success and disrumps in payments and are now scared. They have huge cost spaces. Disruptive technology is one of the keys to 2015. Thank you so much for talking to us. Managing director at morgan stanley. Back to you. Were just getting some headlines. Saudi king salman appointed an interior minister as deputy crown prince according to state television. This after saudi Arabias King Abdullah died on friday. King salman called for unity and solidarity following the death of his half brother and former King Abdullah overnight. Saudi arabia is the largest world exporter and he is expected to stick to the policy of keeping oil output steady. However oil prices jumped initially on the news of the death amid speculations there could be changes ahead. Light crude at 46. 56 up about. 5 . Brent crude trading at just below 50 barrel at 49. 03. Julia, i know you have our middle east correspondent and the question is could this change the leadership julia and hadley fuel a policy change around oil. Well thats one of the crucial questions seema as far as the oil market is concerned. You just introduced hadley. Shes here with me of course. Before we get to the oil question just give us a sense of what King Abdullah meant for saudi arabia. He was in power for two decades now and was a significant reformer. Well get to oil and Foreign Policy as well. When you talk about a country in mourning theyre truly in mourning for King Abdullah. Whether youre really conservative or a very liberal saudi King Abdullah was loved and the way that he would address things whether it be the fire at the girl School Several Years ago, religious authorities wouldnt let the little girls out and they ended up dying in that fire and King Abdullah stepped up immediately and said this is not the way were going to go forward. Were going to make changes so these things can never be allowed to happen again and the saudi people understood he was on their side. You see that in the immense amount of reforms he tried to enact in such a short period of time. 20 years is nothing when you talk about a society thats gone from riding camels. Were not talking about a long period of time to be thrown into the 21st century. That does bring me back to the oil question. We did see a bit of a pick up in oil prices overnight. A bit of speculation of whether or not we see some kind of shift as far as oil policy is concerned. Give me your thoughts on that because we did hear the new king talking about it. Exactly i think what we saw in the oil price earlier today might be a little bit optimistic because certainly when youre talking about saudi arabia this is the unspoken question of the region. Theres problems in syria, iraq iran afghanistan. We understand that but when we talk about the saudi royal family and their Decision Making process and the council and their Decision Making process theres nothing you can compare it to. Its incredibly secretive process. Theres a lot of trading behind the scenes and this is something incredibly sensitive. They dont even talk about it among temshemselves but if you look at the next five years well see major changes in saudi arabia. Well come back to Foreign Policy and talk more about this but for now hadley thank you for that. Seema, back to you. Thank you so much. I also want to point your attention to the moves in asia. Mario draghis big qe announcement is making headlines in davos and Chinas DeputyCentral Bank Governor told cnbc he supports the European Central banks decision. Eunice we are looking at chinese shares trading at a fiveyear high. Well, absolutely. Thats one of the reasons why we saw a lot of liquidity in the markets and expectations for liquidity and because of that we saw investors pretty excited about the announcement for the ecb. Its a major topic of conversation over here in asia and including at the central bank here in china. The central bank had a press briefing today along with other officials about financial reform and at that briefing the Deputy Governor said that he understands the motivations of the ecb. When we were there i specifically asked him about the impact that he thought it would have on china and he said that it would potentially be an indirect impact in the sense that any move such as this could be a lift for your eeseuropes economy and chinas exports would benefit and there would be an impact on the currency. He expected more downward pressure on the euro and upward pressure on the u. S. Dollar versus the rnb exchange rate. The main point was all the liquidity in the markets. This is what he had to say about it specifically. The ecbs qe will provide a lot of liquidity spill overs while strengthening the u. S. Dollar. It will also drive capital return back into the u. S. The future of cross border capital flows will see increase in certainty and china will be effected although the impact will be limited. And we did see asian stocks rally today. Julia. Thanks so much there eunice. Im now joined by chairman and ceo of citic capital. I want to come back to this idea of the impact in particular. What struck me this week was the comments made at the keynote speech and thats that theres not going to be a hard landing in china and i wonder if that even resinates with investors anymore. Arent we forgetting the fact that china is an extremely managed, controlled economy . It is. Thats why he said its not going to be a hard landing. Hes trying to ensure the investment community. We obviously are very conscious as far as whats going on as far as their efforts to reform raising the Interest Rates and trying to restrain credit growth. Its also about calibrating policy to allow a gradual slow down and not tip the balanc