For misconduct while the Retail Banking arm disappoints. Oil stocks cling on to the green. Surprising analysts with some positive earnings. Welcome to the show. We have been getting unemployment data. We just got the number out of italy. The march Unemployment Rate rising to 13. 0 from 12. 7 in the month of february. At least march youth unemployment which has been a big concern for investors rising to 43. 1 . To give you context on italys labor market the seasonally adjusted Unemployment Rate rose to 12. 7 in the month of february up from 12. 6 in january. As i said youth unemployment has been particularly a challenge for the country of italy measuring job seekers between 15 and 24 years. Also increased to 22. 6 in the month of february. This is a set back to the labor market reforms which aim to make it easier for countries to hire and fire employees. You can see the euro dollar which has been moving to the upside over the past couple of days. Right now at session highs at 112. The adjusted jobless rate came in at 6. 4 . Adjusted unemployment falling by 8,000 in the month of april. Better than expected numbers out of germany and thats why youre seeing it sending the euro higher at session highs at 112. Theres recent data on jobs from germany. Lets bring in henry. Welcome to Worldwide Exchange. Good morning. Thank you for joining us. A big topic for investors today has been the striking move in the euro. What do you make of it . So far this year the winning trade has been going long european equities and short the euro. That trade is getting unwound here. Definitely. We have something new to think about now, i think we have had better employment figures. Thats definitely raising the speck to of Inflation Expectations and something new has been entered into the debate within the Financial Markets and this very definitely has the side effect of challenging the most consensus and the most crowded trades and thats clearly been long dollar short euro. Were starting to see that reverse and with regards to improving fundamentals this is very important when you look at the Government Bond market with regards to what thats telling us about risk assets as well and right valuations for bonds and also into equities. But because the weakness in the euro has been one of the main catalysts and reasons investors have been buying european equities, are investors going to question if they should go long european stocks this year . Absolutely theyre slightly over 20 . The big driver has been the fx and perceived positive risk that presents to European Companies and their earnings. The moment you get a change in trend like this its completely threatened. With european markets anl yulizing over 100 its appropriate that we see it. And the euro at a two month high against the dollar. You can see the chart right there. It continues to be the export sectors like autos primarily because they benefit from the weaker euro. Would you be cautious of these exporters if we continue to see the euro rise. Absolutely. I would be cautious on many grounds and cautious on the crowding and the valuation of these names as well. Well leave it there and get everyone a look at european markets at this moment. You can take a look at the heat map and more red on the screen and then green if you rear to the right. The stoxx europe 600 index down about three points or. 75 . This follows the sell off we saw in european equities yesterday given the strong rise in the euro. The euro in fact tracking for its first positive month against the dollar in ten months. The last negative month was in june 2014. Now the resurgence in the euro is what traders are talk about today. Euro back at 112. The first time in 8 weeks. When you take a look at european markets trading in negative territory. Unemployment figures in focus plus the move were seeing in the currency market. Also want to draw your attention to the move in asia particularly in japanese stocks. Interestingly enough we were talking about the nikkei trading at a new 15 year high. Some traders perhaps though taking the recent rise as a reason to book profits. Also investors in japan and asia reacting to that disappointing u. S. Gdp number that came in yesterday. We heard from the fed, still no indication as to whether rates will rise in the near term although given the disappointing data coming out of the u. S. Many say that tempers the expectation for a rate rise in the near future but lets talk about that. That was one of the big focuses yesterday but more importantly that gdp number of 0. 1 . Much lower than what the market was expecting. We talk about a slow down in china and emerging markets and how that will temper Global GrowthGoing Forward but maybe the bigger concern should be about the slow down in the u. S. Economic recovery. It was so telling i always thought it was an incredibly telling mechanism and that was probably all the ingredients you would have felt to take comfort and rally but i sold off aggressively. Thats interesting. What does that tell us . The key reason is what were starting to look at is five year break even rate which is the best forecast we can find for inflation in the short and medium term is starting to pick up and also what we have is the mathematical inflation and that will start to hit the data by november and december and we should start to brace ourselves. And thats going to challenge Government Bond yields at 1. 7 and with regards to Government Bond yields that has been the asset thats kept every other asset higher because of the relative attractions of equities and we must not underestimate the moves to be seen in Government Bond yields. I think its clearly fascinating. I have no doubt its had a lot of air time on this show historical factors that always feed through positive wealth effect. China is on the top of everyones list but we can see the stock market almost doubling as being positive. But your point on the bond market because of the record low yields we have been seeing relatively many investors say thats one of the reasons theyre bullish on european equities because theres no other place to put money and get income. Given the spike in yields and we continue to see that in todays trade, what does that mean Going Forward . They cannot be unskaifed. Too much of equity land looks like a bond. Consumer staples, utilitities, these will come under pressure and thats very important and what probably the moment i think is the best recent historical example was the taper tantrum of 2013 and i encourage investors to look at the trends after that. Its the staples that trade on 25 or 30 times earnings that would come under pressure so its going to be a fascinating rotation in the next six months. Were seeing a rise in yields now but at the end of the day quantitative easing fully in effect. Thats expected to drive yields lower but maybe its a shortterm blip. It is. Its about another 1. 2 trillion with regards to buying. The only problem for Bond Investors is the amount of money is now yielding negative. Its approaching 10 trillion. So the people praying that someone will come along and pay a higher even more lower valued price is called into question because there isnt enough chairs to sit on at the end of the day. So from that perspective we can start to see a realization that fundamentals are improving because of employment feeding through into inflation and just the grim reality that 10 trillion of negative yielding assets there isnt enough money. And maybe this was being seen as a crowded trade. We were pointing out the german ten year at its highest. You can see the ten year bund at 0. 63 . Many calling for it to perhaps dip into negative territory. Henry dixon sticks with us. And why the chinese tech apology yanlt is hoping it will be on the ears for their investor. And the swedish app maker is setting up in the big apple. More on that story. Were back in two minutes. New york state is reinventing how we do business by leading the way on tax cuts. We cut the rates on personal income taxes. We enacted the lowest Corporate Tax rate since 1968. We eliminated the income tax on manufacturers altogether. With startupny, qualified businesses that start, expand or relocate to new york state pay no taxes for 10 years. All to grow our economy and create jobs. See how new york can give your business the opportunity to grow at ny. Gov business we have been getting flashes from commerce bank. The ceo making some statements. Commerce bank ceo saying that it aims to pay a dividend in 2015. The ceo also says that 2016 targets are getting ambitious and that a first dividend since 2007 in sight. More on this story, annetta perhaps good news for investors down the road for commerzbank. Yes, its actually good news for those investors because obviously commerzbank hasnt paid a dividend since 2007 and just remember it just had a Capital Increase again of 1. 4 billion further eluding the shares. Normally those are quite entertaining. You have an awful lot of angry shareholders screaming at the board. Yeah calling for the dismissal of other Board Members but perhaps thats a little teaser that they might like the Board Members a little bit more and makes them also believe in the turn around of the company but there is also sentence they have to wait until the end of the year but theyre saying their target is becoming more challenging looking at the low Interest Rate environment so my good guess is better wait and see what happens until the end of the year before believing theyre really paying a dividend. Thats actually really positive story bucking the market trend which is a generally negative territory. Of course here in germany. We have them lifting their 2015 earnings and revenue forecast talking about revenues the new target is 2. 4 billion euros and adjusted target is lifted to 975 million to 1. 175 euros and theyre benefitting from the high volatility. Explicitly theyre saying the weak Euro Dollar Exchange rate. The European Central bank Bond Buying Program and also the Swiss National banks decision to discontinue the cap on the swiss frank is helping their business. So theyre also expecting kind of the volatility here to stay and are quite bullish on the new year. By the way it was the last quarter for the long serving ceo. It will be a new one from may. Back to you. Its one of the outperformers up 1. 6 in todays trade. Thank you so much. Speaking with the banks, First Quarter net profit beat expectations thanks to a Strong Performance from its Investment Banking business and weaker euro. Lets get more on this story with stefen live in paris with more. Good morning. Net profit was higher than expected. The forecast was close to 1. 5 billion euros. The two main drivers, the weaker euro and the very Strong Performance of the Investment Banking division. I caught up with the cfo of the bank to discuss the different businesses. Up 18 versus last year and this is despite the first time contribution to the single resolution fund. It stems from good performance in the businesses and specialized businesses as well. Operating costs had positive choice so basically saying they increased a lot slower than what we had in the revenues. Cost of risk is low and basically all of this leads to an roe of 9. 6 excluding exceptionals but including the new contribution. Its up 24 in the First Quarter. Is it only because of the Strong Performance of the Financial Markets . No, actually if you look at it the 24 , if you look through the effect of the revaluation of the currencies its basically a 13 increase which stems from 15 in Global Markets, 50 in Security Services and 7 in corporate bairnging so a well balanced growth. In Global Markets good growth demand from nking so a well balanced growth. In Global Markets good growth demand from clients. And in europe and asia and topped off in u. S. You reported almost 15 increase in operating expenses. Whats the reason for this . If you look at the main thing you have to look at operating leverage so our cost basically are growing a lot slower than our revenues. The total amount lets not forget this quarter there are effects of the acquisitions that we have done last year. Out paced by the growth and the revenues. After a small gain at the start of trading, shares are now losing 1. 7 . Two reasons for this the main one being the operating expenses which increase by 15 on the quarter despite the cost production. The second reason is the french Retail Banking activities still weaker in the First Quarter. That was really the case at the end of last year and that explains why we are in the red. Back to you. Stefen, thank you so much. Lets stick with the banks. Banco popular trading lower. This despite First Quarter net profit coming ahead of forecasts boosted by a strengthening spanish economy. Rbs in negative territory after reporting a loss of 446 Million Pounds in the First Quarter. They set aside 856 Million Pounds to cover legal and restructuring costs. Henry dixon is still with us. Are you a buying of bank of scotland despite the wave of restructuring charges . Absolutely. The hope is that the restructuring charges and fines cannot continue indefinitely. Its a combination of a very interesting starting point. Were starting to see the problem loans in the crisis which i think is a very, very valuable source of cash and while were not saying they can go back to the three times tangible book value they traded at precrisis we think its a very very sensible aspiration on one year views. You transfer to slight premium. I think a very attractive return at 20 to 30 is definitely achievable and we welcome the strategy of rbs returning to its retail roots and the slight disappointment today with the shares is the performance from the Investment Bank maybe slightly underwellhel munderwhelmed people. But we havent seen a meaningful rise in loan growth. Lending money is at the end of the day a comoditized business. Wouldnt you want more exposure to banks that have exposure to emerging markets versus just lending. Yeah, what i would say is very cyclical and yes margins have undoubtedly come down in classic Retail Banking and they should. What it is a much more utilitarian type return. We can look at a safer type of business Going Forward. Yes lower valued than precrisis but from the starting point theres still an attractive return to be made. Do you have a top pick . I think it probably would be royal bank of scotland. Stick with us. Its one week to go until the u. K. General election and the uncertainty generated by the campaign is being blamed for a slow down in the housing market. Perspective home buyers are helping drive down the First Quarter revenue more than 3 . Conservatives are campaigning on a ticket to allow tenants of Housing Associations to buy their homes. Labor wants to bring in a mansion task and rent controls. A key member of the u. K. Treasury attack made an outspoken attack on his partners. He is a liberal democrat and conserved the conservatives of having secret pounds for 8 billion pounds in welfare cuts. Wilf is in birmingham where labour will be campaigning on the economy today. Over to you. Thank you very much. Im here in birmingham which is the u. K. s second largest city and the heart of the very important Industrial Hub for the uk. Why am i here . Right here in birminghams airport, the shadow chance that ed will be campaigning later today. The National Polls are incredibly close still. Very hard to decide a winner but it is the key marginal seats that will decide the election and not the National Polls overall and thats why hes coming to birmingham today. I want to touch a little bit on the National Polls being so close because it lead to very odd tactics from both the major parties pouring out new policies which have been criticized for being too shortterm in nature. It highlights the desperation for the lack of traction their campaigns have gotten so far. Not just the policy is odd but the way he said it. Its like hes trying to convince people with extra commitments that he will do what he promises and he currently feels that people arent believing him. On the slip side we saw desperation from labour by ed miliband deciding to do the interview with russell brand. It hasnt done him a lot of faye vors favors and highlights that level of uncertainty. You know seven days left to go. Nationals polls still incredibly close and a few key marginal seats will decide this election. I wanted to ask you, a recent poll shows that the Scottish National party is on course for a clean sweep of scotland. What do you make of that . That poll came out yesterday and suggested the s p have 54 of the vote in scotland and that will be enough for them to potentially win every single seat. Thats very bad for labour who won more seats than the conservatives in scotland but overall it will be a party similar to labour will be against the conservative