Sealing the dream deal. The merger is now on track. And associates on bond yields continue to creep higher. As finance minister arrives in london as part of the tour across europe to drum up the full support for a new debt agreement. And chinas official pmi unexpectedly contracts for other two years in january. Weighing on asian markets and the price of oil. And we begin pmi data over the past couple of hours. We got out of the eurozone pmi data for the month of december. 50. 6. January manufacturing forecasted at 51. 0. January pmi at 51. A look at Economic Growth. A good gauge, of course, of Economic Growth across the eurozone. German pmi which accounts for fifth of the economy come at 50. 9. The number out of december did disappoint according to surveys for purchasing managers. The eurozone economy picking up in january. As you can see the euro strengthening against the u. S. Dollar at 113. 28. Final manufacturing pmi coming in at a sixmonth high. Well have that has been predicated on the Lower Oil Prices. Many manufacturers are hiring more. Which is signal. Were starting to see the effect. On that note were keeping a close eye on earnings. Julius baer shares are trieding higher. The swiss bank introduced a Cost Cutting Program. Caroline is inzurich. Good morning. Shares are outperforming on the sm,000 morning. There are high advisement. 7. 7 this morning. On a couple of factors. Let me kick off with earnings. It wasnt so surprising. It wasnt the big surprise coming from julius baer this morning. The big surprise it was the dividend number. We got a one franc dividend and its much higher than many people expected. Its an increased 67 percent. We have the Cost Cutting Program 100 million swiss francs. As a district result of the shocked move by the smb. Theyre cutting 200 jobs and half will be affected through 2015. Is it going to be enough to counter the strength of the swiss franc . I put that to the ceo of julius baer. Take a listen. Decided to react swiftly. This is the package we believe is necessary for the time being. We would like to get the organization back to business entirely. So yes. You wouldnt rule out further cost cut and job cuts . I think its part of the daytoday discipline. We can never rule out more adjustments on both sides. For the time being thats what we think is necessary. Tell me how difficult 2015 is going to be for you given the shocked move by. We have not only got the transactional effect but the effect of the lower Interest Rates hitting margins. The knock on confidence. How much visibility do you have . I think the navigating site but thats the environment, francly, we like and thrive in at julius baer. I think we see it as a challenging environment for everyone and relative terms it should be beneficial for us. I see plenty of opportunities later on this year for clients. Increased volatility should allow them to make money. You speak about volatility. Im looking at the second half of last year. We saw there was a slow down in client confidence. A little bit of a dip in margins. I dont buy that from you that heightened volatility will lead to more confidence and trading. I think if you look at the second half, youll see the Third Quarter your observation is true but on the First Quarter volatility picked up. Margins and volumes picked up and the momentum carried on into 2015. I think were on the uptrend. You said now that you see plenty of opportunities for 2015. Is that opportunities in the m a because the shocked move theres a lot of pressure on the industry. Are you looking to snap up other player that are looking to snap up more than you. Or do you think theyre too pricey . I think if you look at the cost of the industry here, youll have several Smaller Banks in excess of 80 even 90 that dont have to that a bigger group like ours would have. Probably theyre looking at this year in excess of 100 . There will be plenty of opportunities this year, im sure. Are you looking at no. Were not. Were on the outside of the fence for once. That was the ceo of julius baer talking about opportunity maybe on the m a front to diversify the cost and revenue base. The shares at julius baer are among the top performers. 6. 5 . Its only a little bit of a bounce back compared to the losses weve seen since the smb move they have fallen a whopping 18 . Theyre among the worst performers here definitely on the banking side. Many analysts believe that julius baer is one of the worst affected when it comes to the mismatch between swiss franc revenues and swiss franc costs. The share price move as a result of the smp was overdone. Up better than 6 . Lets talk about the swis franc. It has fallen to the weakest level since january 15th amid speculation that the Swiss National bank could be adopting a new currency peg. The central bank is unofficially targeting a rate of 105 to 110 citing sources close to the bank the bank would lose up to 10 million francs. The bank has yet to confirm or deny the story. Were seeing the move in the chart as you see there in the currency. Joining us now to discuss more head of strategy at ing. What could it mean for markets . Well, if it is any credible if it is credible it might create somewhat more stability in markets. That is the key question. After making a announcement. Will they be able to have an increase in credibility and able to hold on to the new supposed peg of 105, 110 i think is highly doubtful. If really committed they could, of course. Weakening your currency is they are showing theyre committed. I have big doubts. Okay. If there is not a new peg. What does it mean for markets Going Forward . You seem to be skeptical . I dont think we have to exaggerate. All the news is out now. The Swiss Central Bank isnt the biggest or most Important Bank in the world. There are doubts about their future direction but the markets are mainly concerned about what the fed will be doing later this year. And whether or not indeed whatever it takes from the ecb which will signalled so loudly last week will continue to be in the marketplace. Thats more important than what the Swiss National bank will be doing Going Forward. Switch to cousin to the eurozone pmi data which indicated a modest growth in the month of january. Eurozone Unemployment Rate remains near record highs 11. 5 with a quarter of people out of work in some European Countries map is your reaction . I think you have to distinguish the state of the problem which are significant and the state of the imbalances in the eurozone economy and the direction of change. The level of the Unemployment Rate, all though it is coming down modestly, is still way too high. The direction of change if you look at the pmi even the broader indicator of jones consumer confidence. If you look at the latest numbers in germany. All are pointing to an improvement. All in all, i think were seeing a clear improvement in the europe. And remember, of course were getting additional head tail winds from the Falling Oil Prices and the weakening of the currency. I think the direction of change is positive here. But the problems are still significant. Valentine head of strategy at in ing. Stick with us. Were going to discuss more. But first, lets get a market update. And here we go. Take a look at the map behind me. As you can see on the first trading day of the new month, were higher but just ever so slightly. Take a look at the 600 Index Trading higher by a fraction of a point. Keep in mind the european stock index has been moving higher over the past one month. It is strading at sevenyear high. In fact interestingly enough if you take a look at european stocks versus u. S. Stocks. European stocks are outperforming about 7 over the past one month. Lets dive into todays trade. How are the european markets trading . Were looking at stocks off the high. Eurozone posting modest growth in january. A lot of focus on the german pmi data which came in at 50. 9. Cac 40 up 26 points. The ftse holding up in the green by 63 points. Well be getting that pmi data in an hour. Trading higher by around 24 points. Les take a look at points. The risk move can be seen across the bond market. Youre seeing investors gravitating as investors try to take a better gauge what has been happening around the world in terms of renegotiation with european policy makers. The disappointing gdp print out of the u. S. And the weaker than expected data out of china well be discussing in a second. Take a look at the bond markets and 10year german yield now yielding yielding. 3 . The 10 year has been trading at 1. 6 . Thats the yield on the u. S. 10 year. The risk averse move weighed on the u. S. Dollar on friday dropping to a twoweek low. Weve seen a move in the which has been selling off this morning given the weaker than expected pmi data out of china. Oil continues to be a point for investors. Oil spiked on friday. Some traders debating about whether or not the bottom is finally in. It doesnt seem to be the case given weak global data. The lackluster gdp print of 6. 2 . And the china data and that is weighing on the oil trade. The wti crude down about 2. 5 . Brent crude trading at 51. 75 down about 2. 3 s. Asia has been one of the reasons weve seen Lower Oil Prices. Lets get out live to singapore. Thank you so much. As you can see behind me were looking at youre talking about the china pmi. Official are showing manufacturing pmi at 48. 8. Both of these twin reports telling us the same story. Chinas factory sies jobs being shared for 15 straight months. Now index coming through at 30month low. Youre looking at shanghai comp. You also had a weaker dollar factor those had to contend with. Despite, of course corporate results which look pretty good from the outset. Just keep in mind when it comes to china we have citi adding their voice. Penaling ing pencilling in a rate cut. A High Frequency data could be delayed for january, february to around march. And that could mean some aggressive policy action could be delayed to around march. The next risk event in asia. The Australian Central Bank decision. You can see the outperformance coming through on equity on that trend. Economists largely degree with the rate cut. We could see a surprise coming through from yet another central bank if stephens decides to cut Interest Rates to a record low tomorrow. Thats on the cards in terms what were watching. Back to you guys in london. Thank you so much. Coming up on worldwide exchange. Number four for brady and belichick. Were live in glendale arizona to analyze the big super bowl game. And to see how katy perry and the commercials went down with the fans. And earnings exxonmobil becomes the latest to report earnings. What to watch out for in the report. Plus Fashion Designer tom ford talks to us exclusively about how the ukraine prices is impacting his russian business and why hes bullish on emerging markets. Thats coming up. Welcome back. Greece continuing to be a big story in europe. Take a look at the greek bond market. We have been seeing a massive move as investors seek some safety but recently been moving out of the greek bond market following the syrizas party win. The focus has been on the bailout negotiations. Bond market as weve been talking about has been reacting. Record yields on the fiveyear german yield. The 10year 11. 2 . This is weighing on investors sentiment. You can see it playing out in the bond and the equity market. Greeks finance minister said the nation will not accept any new loans from the international partner. Speaking on a trip to paris the minister said athens must wean itself off the debt. Translator as we take another batch of loans no. Its not that we dont need the money. Were desperate because of certain commitments and liabilities that we have. But my message to our European Partners is for the last five years, greece has been has beening has been living for the next. We have resembled drug addicts craving the next dose. What this government is all about is ending the addiction. In an early boost for the greek government are likely to be tough negotiations on his desk. France is open to using greek debt but not cancelling it. Translator we will have dialogue with greece but in institutions that is the only Legal Framework with which we can work regarding the debt. Ive said so in so many words and my greek counter part says better than anything else. Anything in greeks debt will be welcome because 175 of gdp. But there is no question of its a busy week for greeces finance minister. It continues today. Joining us from there. Any sign of him . The meeting is not happening until 11 00 a. M. They will chat accordingly. Essentially hes in london to meet investors. Theres a series of Bank Meetings going on with institutional investors. Hes on a tour not just with policy makers but people investing in greece trying to calm the nerves. Since syriza took control, you saw the flight of capital from greece. 7 percent. You saw greek banking stocks plummet 30 . Theres a recovery this morning. It will be music to his ears this afternoon. Hell be wanting to apiece people. Now as you heard from the comments before. Hes a hugely controversial character. Very very kind of left wing ideal. Academic. Someone who described the Bailout Program as essentially water boarding. What hes saying is this plan doesnt work. And they want to reverse in austerity. They want to write down in the greek debt. They want the third thing, a reversal in the structure reforms. A lot of that is obviously opposed by germany. But the comments from the french finance minister will go a long way to reassuring the market that this plan to suddenly renegotiate the terms of the bailout will be achievable in the next couple of weeks. Thats what the greek finance minister will be trying to persuade markets today. It will be interesting to watch. It might seem like an uncomfortable meeting over the weekend between the two. Well be watching closely. Thank you for that. As the negotiations continue lets get more market perspective on how to position yourself ahead of a potential solution coming together. Valentine head of strategy at ing is still with us. Valentine, greeces bailout of 172 billion euros with, s witheuro that expires at the end of the month. The risk of a default should be a big concern, right . Obviously. But then we have been left with the greek defaults for some years now. We have gone through summits and intense negotiations procedures. Again, were heading into one. Clearly, this one is different in nature in terms of the language that is used. But at the same time we know people are positions themselves for a certain negotiation opening of the negotiations. And were starting to see sort of something of shape of a possible deal. Its early days. After the first knee jerk reactions last week maybe this week can be a little bit better. We need to realize this is human business, and the outcome which were assuming to be the best case, might fail if emotions take the upper hand. Right. I was speaking to another analyst earlier this morning at ufj he was saying the risk for a situation we saw a year ago in cyprus was possible and growing all the more likely for greece. What do you think. Are the chances becoming higher . Are we moving away from that possibility. I think it is too early to be telling. The risk is there. It is clear that greece is coming in more aggressively in tone and direction they want to move than in recent years. At the same time we need to realize this is part of the negotiation game. And they are taking a bit of a different approach than what weve seen so far from them. In the end, has been expressed clearly over the weekend by the greeks themselves they are committed to staying in the eurozone. They are committed to paying back the loans to the ecb and the imf, and clearly, also acknowledged even earlier today by the greek finance minister they are looking for the ecb to provide additional equities to the next weeks. All in all, i think there is an underlying tone that is seeking some kind of a more pragmatic deal. In the meantime theres talk about greece forming up to russia especially it leaves the eurozone. What will the political consequences be if greece in fact, does wampl up to russia. Given it would be in the e. U. Which means greece does support the western sanctions in place well you know, this is allic very speculative. First of all you have to wonder whether or not russia has a lot to offer in terms of finances to greece. Of course, that situation is very different from even a year ago in terms of russia being able to offer, you know, substantial Financial Support to other countries. Secondly, this is really your risk scenario. For now i think were a long way off the set. Greece will try to stay within the eurozone. If it happens well have a significant problem. There is no doubt. And it will create a lot of volatility in the markets. I have absolutely no doubt about it. But i think as i said it is the risk. It is not a base case at this point. In the meantime do you think greece will weigh on the bullish sent around the european equities. So far outperforming the u. S. Markets. Do you think it will move higher despite the uncertainty around greece . Obviously thats one of the other interesting things so far is that the disagree of contagion into other markets would certainly into european equities as a whole has been far less than during previous periods of tense negotiations between greece. Maybe here it could be the ecb is playing an important role. Of course the announcement of the ecb protects to some extent the degree which contagion can take place. I think europe will continue to do well and will continue to outperform the u. S. Equity market. Because it has a lot of tail winds related to the currency oil prices and earnings momentum in europe being significantly better. It also has qe. Well see if that kicks in. Thank you very much for your time. Well moving on in spain we are going to go a greg and ill tell you up what is after as beijing. Are there down sides to deappreciation . Well discuss after the break. And welcome back. Lets get you your headlines. Share