tv On the Move Bloomberg January 7, 2015 3:00am-4:01am EST
to meet with david cameron. cameron faces rising anti-european sentiment with just four months to go until this year's general election. sainsbury beats estimates. they post a fourth consecutive quarter of declining sales. the outlook for the rest of the year is germane challenging. equity market futures pointing higher. dax futures up almost 20 points. let's get the market open with manus cranny. >> you are right. equity markets have been under pressure. they seem to have turned the corner for now. the question you have to ask yourself is if you get a negative number on cpi, is that mario draghi's fly in the ointment? if you don't act nice, it will be too late. unemployment at the eurozone will come out at 11.5%. where's the growth?
someone was here posturing that question. where is the growth? how did you deliver it? it will be pretty darn hard. ineffective is one of the views of the ecb. >> us give you a flavor of what is going on the ad indices. these are our bellwether stocks. the dax up .4%. down his volkswagen. the cars getting a little bit of a resurgence. it is undoubtedly about retailers. i take you to an image of london. the ftse is down -- i was waiting for that to update. that does not look like it is updating in the right way. we will move along. i quite like the picture. convenience stores trading up 16%. trade up and taste the difference at sainsbury's.
that rose by 5%. tesco sales up 30%. caroline hyde will take you through all those numbers in terms of how much you will -- tesco is up 1.8%. does that lay the groundwork for tesco's? marks and spencer is a trade up, depending on how you look at marks and spencer's in terms of quality and the food that people go for a christmas time. you mentioned oil at the start of the trading day, johnny. brent dipping below the $50 a barrel levels or the first time since 2009. i can tell you this. both of these contracts -- surging in the commodity oil market. 60% in the american contract. china is not going to save you. they are not going to stockpile.
opec may rustle the view that they need to deal with overcapacity, but they really haven't had the challenge brought to them enough to do so. bond markets. how should you view declining bond yields? g3 bond yields are below 1%. united states of america, japan, and what you are seeing their is a real view of disinflation or are people reversed the risk? those are 10 year government bonds. want to take you to the middle of the curve, the bubble. again, we are back at this slightly negative level. one year, two year, three-year, for your five-year, all the way out. the first five years of what the german bond market is saying is negative interest risk. why would you park your money at the ecb and be charged for the honor of it? just on a negative yield. the euro-dollar will be very
much in focus as the trading day goes on. 2006 lows, fourth day in a row that we are down. i can tell you this -- reserves and central banks are the lowest , the lowest since 2002. even the euro can't yet the boys and girls on board with the third quarter of last year. imf. back to you. >> great work. looking at the equity market, a little bit of a rebound. the ftse up .3%. brent dropping below $50 a barrel. what a year. not just a royal but what a start for equities. five days of losses for u.s. stocks. the longest losing streak in 13 months. the ftse trading lower on the first three days of 2013. will things get better from here? not according to the billionaire , the legend that is bill gross. his monthly investment outlook
took out some headlines. it was underlined and at the top of the no. when the year is done, there will be-'s in front of returns for many asset classes. according to bill gross, the good times are over. we are joined by the investment director at monday capital where he oversees $4 billion in assets. not many people like hearing that. r the good times over? >> i think that you have negative interest rates on for your german bond yields. that means we are talking about an economy prospect that is quite dire, really. i think you need to go back to what drives the returns. the devaluation story is behind us. it has to be the corporate earns growth that drives the cycle. i think the corporate earnings cycle is going to be much slower because of the economic prospects diminishing further.
what we are saying is the oil prices are telling the story which is half of it is due to the increase in supply and the other half is due to the demand side from emerging economies. >> the earnings stories of the companies have been flattered somewhat by financial engineering. let's call it ceos buying back stock, taking advantage of low rates. that is what the process talking about. they are talking about real growth in the most developed, highly-levered economies cannot be normalized even with that. we're stuck here, aren't we? >> we are stuck in a period of low interest rates for a long amount of time. the idea is to give the companies to deleverage in the next two years before growth will pick up eventually. where we are right now is we are expecting the economies to
provide the growth impulse and that has come down as we have seen recently. >> let's get a chart of the last six months up. it is brent. june, we are over $100 a barrel. look what happens. a collapse. the stunning collapse of crude. we are down over 50%. we dropped below $50 a barrel for a few moments this morning. there still seems to be some debate about what this means. there was an argument that it is good for the global economy. i look at the market and still see the same thing. >> i think the driver for the following oil prices not just the increase of supply, but also the increase in demand. most of the big increases are coming from emerging economies which are running at a slightly lower growth rate. you have a supply-demand imbalance.
more importantly, the fact that the oil price is falling as fast as it has in the last few months means that the inflationary impact is that a year from now, we are looking at the global level that the inflation rate will be half of where it will be otherwise. that means the real interest rates will be rising would imply tightening. the consequence from the bond market is to reduce bond yields which is exactly what you have seen. bond yields are coming down so at a nominal level they're coming down but the real level needs to go down further. we would expect the bond markets to continue to bring the yields down further. >> you say burdens are going to wear the japanese governments are now, when 3%? is that where we are now? >> unless a step is taken by the ecb, the outcome will be similar to the japanese
government bond yield curve, keeps going down. the inflation is not going to become deflation one or two quarters from now. >> before we go to break, the pessimism around the story is pretty immense. we are still only 4% often s&p 500 all-time record high. over the u.s., it was said that we need to pick up some the pieces. would you be brave to pick up the oil majors now or is that like catching a falling knife? >> if you had a long enough time it makes sense but in the short term there is so much uncertainty. the reason you have uncertainty is that the oil producers initially will want to defend the revenues. it means that production might actually increase because they don't want to cut the spending programs. maybe they will do it a year from now. in the short-term and falling prices, oil production might actually increase to keep revenues going. it will accelerate the price
decline, which is exactly what we are seeing. unless you have a five-year time horizon i would say that you should stand on one side and let it eventually settle down. >> what a story. you stay with us. after the break, merkel me scammer. the german chancellor is in london where she may offer a policy all of branch to a prime in his request vowed to renegotiate the u.k.'s relationship with that eu. a sales drop slows. you see the stocks of 3.5%. a brutal year 2014 was for u.k. retailers. brent below $50 a barrel briefly for the first time since 2009 this morning. you see it down 2% once again. a rough six months for oil. a lot to discuss. ♪
>> welcome back to "on the move ." i'm jonathan ferro. german chancellor angela merkel is here in london to meet with david cameron. ryan chilcote has the latest. immigration appears to be the top of the agenda. what you think the chancellor will say about a key topic? >> it is not part of the official agenda, but everyone knows it will be discussed. it is the elephant of the room. we have been talking to the german delegation before they set out for london and they say she will offer a compromise. will it go far enough?
the answer is probably "probably not." we know the german chancellor will not budge on the issue the principle of freedom of movement within the european union. she will offer what i call qualified support for the idea of curtailing migrants' access to welfare benefits. the prime minister has been calling for limitations were migrants would not be able to apply for benefits outside of their country but in a new country for four years. does the german chancellor agree with that idea? we don't know the answer to that. the british prime minister was talking about the issue of employment, saying that europe is not growing. britain has been providing jobs to migrants. there is an issue there. is this an issue where the german chancellor is prepared to negotiate? we don't know the answer to that. we do know she does not support
the idea of changing any of the eu treaties, particularly the changes that would require referendums and ratification in the 28 eu member countries. the british prime minister has said the reforms he would like to see as part of his push to renegotiate the u.k.'s relationship with the european union would require a treaty change. maybe you should think of this as a dance and the beginning of a very long dance. the germans told us that they have laid out the red lines in the negotiations. they look forward to britain doing the same. >> let's call today's dance a little bit of a technical one. we call her the chancellor of germany, angela merkel. she is not really here in the capacity today, is she? >> that is exactly correct. her delegation and the germans have been very clear that she is coming here as the chairwoman of the g7 because germany is going to host the g7 summit in the
bavarian outs in june. she wants to work on the agenda that she is setting for that meeting. that is why she is not meeting with ed miliband because she is not here to talk about german politics or german foreign policy. she is here to discuss things like ebola security the situation in ukraine. there are supposed to be big talks next week and cause extend -- in kazakhstan. those talks right now are up in the air. not clear if the agreements necessary for them have been secured for negotiations to go forward. she has been really careful on this one. we are exactly four months from the election in this country. she is very aware of that and knows that one of the key issues, if not the key issue going into that election is the u.k.'s participation going forward in the european union.
the more she can curtail her exposure to that issue, i think the happier she will be. jon? >> great work, ryan. go get yourself a hot drink. ashok shah with me. let's cut through some of the noise and talk about what is going on with merkel and prime minister cameron. he knows the free movement of labor in the eu is something that is not really up to touch. what is the game? >> i think the game is to make it more difficult for people coming in to claim benefits whether they are housing benefits or the children support benefit or so on. that means they stay a lot longer before they qualify and i think all of those things will not require any treaty changes. i think that is the kind of result they should expect. don't forget all of this is in front of the elections. there's a lot of campaigning going on right now. >> and a lot of political risk. you help manage a lot of money. talk to me about what you see the risk of a referendum how
that impacts your view on u.k. assets going forward. >> the uncertainty levels are rising. they will continue to rise all the way to the election. last year we saw the big beneficiary of the flight to safety in the last six months. we have seen some of those gains given up as uncertainty levels rise. i think we will expect another short-term weekend on the back term of the policy. i think the u.k. is in much better shape than europe. in that sense, we should have a much more stable market relative to european markets. >> do you think ed miliband will be put in a position where he will also have to offer a referendum? >> i think -- i mean, policies are very difficult. the pressure is probably rising with the u.k. putting so much pressure on both the parties. >> we have to leave it there. ashok shah, thank you very much.
allen and caroline hyde. we are feeling good about sainsbury's this morning. >> even though is the fourth quarter we have seen like for like sales decline, it was better than was feared. it only fell 1.7%, better than expected. it seems to be the taste the difference range that really outperformed. a 5% increase versus last year. people clearly trading up. the numbers are hilarious compared to what they have been sailing. 30% uptake difference between tesco. 69 million men spies. that means 60% of the population could have had one mince pie each. fourth quarter is challenging. food deflation not going anywhere. the price pressure is growing. we have to see how competitors react. sainsbury's has promised 150
million pounds in price cuts. last year was double that in one corner. sainsbury's is promising that for the whole year. many feel they are not doing enough. sainsbury's it well over christmas. >> talk to me about marketing position. we talk about this squeezed middle. you are stuck in the middle. yet discounters upmarket weight throws. >> i think sainsbury's has always been a little more upmarket. they have always tended to do better over christmas than the other supermarkets because people traded up to sainsbury's. i think they can't afford, if you are mass-market brand, you can't afford to move away from the middle. the challenge is really the other way around. how do you become more competitive on the everyday lines with potentially tesco? >> i have to pull you up on this one as well. i was going for the statement
and what stood out to me is what they do with the new stores. 25 new convenience stores. 40 new supermarkets. why are they opening new ones? >> no one has said they are going to close any yet. i think -- the main point is the planning lifetime for a new supermarket can be up to 10 years and probably has a minimum of three. the one they are opening now are once they made the decision three or four years ago. there are places where every company is underrepresented. sainsbury's, particularly in the north. >> is a quite a clever move that sainsbury's has something different compared to its other big competitors, tesco and an eye their opening a discount change. is that the right way? >> it is different. sainsbury's is going to open in the north of england where sainsbury's is much weaker.
>> caroline, you were talking about a tough quarter to come. we are up 4%. over the year, it has been brutal. is this a one-day blip? >> is the most-shorted stock on the ftse 100. people are betting against the stock. looking at the year last year down 30%. deal the one that did worse was tesco. they had the management, the prophet blackhole overstatement. they had a tour in 2014. -- torrid 2014. what everyone has to digest is how bad is the rest of the year? placed inflation will continue. they are not going to get better anytime soon. they have not yet readjusted. they have got to keep investing in cutting their prices. that will be hitting their profitability going forward. at the moment, it is not likely
to get any better. market share decreased to 16% 16.5% last year. that was down from 17%. sainsbury's is to be the golden boy. this time last year they were the only key grocer to increase market share and now they are losing it. that is what many people will see, whether they can stand up to the likes of tesco. tomorrow they come out with a new strategy and you would like to see them starting to up the ante. >> a busy day tomorrow. thanks to caroline hyde and charles allen. tesco, marks & spencer's release earnings tomorrow. we talk fx with david bloom. 2014, the year of dollar dominance. what you we expect in 2015? more of the same? here's a picture of the markets. markets experiencing a bit of a rebound. the ftse trading lower for the
>> welcome back to "on the move ." i'm jonathan ferro. 30 minutes into your trading day. the headline in the commodity markets. brent, the last time i looked 49.86. oil below $50,000 a barrel on the brent cark it -- brent contract. the ftse 100 up .5% after trading lower for three straight days. the dax is higher by 41 points. let's get your stock movers with caroline hyde. >> at the top of the leaderboard is oil and some of retail. greco up almost 3%. why? it is scoring new contracts. it won an argentinian contract.
they are also extending contracts to the same customer in argentina and one in the ivory coast is extended. stock goes higher. sainsbury's up 4%. like for like sales not as bad as we had feared is helping. this is one of the most bet-against stocks on the ftse 100 but it is getting up because it did well over christmas. 8% uptick in turkey sales. people traded higher. they went to sainsbury's. taste the different brand. stock trading up. boo-hoo. the pun was too easy, wasn't it? up almost 40%. is currently trading at $23.50. this is more than half of where the stock was listed back in 2014. it is not matching the euphoria.
this is an online retailer in the autumn was too warm. rife competition was on the high street. everyone on promotional activity and it meant that prices had to fall over it boohoo.com. that is why sales rose a measly 25%. it was good but did not live up to expectations. dragging acis down as well. >> great work, caroline hyde, as i am most bill my water. chancellor angela merkel is in london to meet with david cameron. eu immigration is likely to be the top of the agenda. the chancellor is willing to compromise on policy as long as freedom of movement rights are not called into question. the talks come is cameron renews his out to renegotiate britain's relationship with europe. s&p 500 futures higher after a five-day losing streak.
that is the worst run for u.s. equities in 13 months. investors await minutes from the u.s. federal reserve later today. looking for any sign on when the central bank will hike interest rates. inflation data in the euro zone is in focus today. we are about an hour and a half from what is is affected to be the first job in consumer prices in five years. prices in december fell .1%. as europe struggles to achieve inflation, let's turn to currencies. the big story for the fx market is dollar strength. what are we expecting in 2015? perhaps more the same. let's welcome david bloom. happy new year. >> happy new year to you. >> sterling $1.48. euro-dollar, $1.15. you are soul consensus this year. >> the dog has found the bone.
it is a dollar-world. everything else is going off its it. -- going opposite. equity is coming down. the one that is not is the dollar. the dollar makes sense. i know it is consensus, but sometimes the consensus nails it. >> it could cause some pain. talk to me about that. >> if we get extreme dollar strength, that will be terribly distracting. extreme dollar strength can come about -- bank of japan could lose control of again. it's possible. we have the eurozone. you look at bond yields and some of that. that could be problematic. em could become problematic if the dollar becomes strong. there is a sweet spot and we are at it at the moment. that is our forecast as the dollar goes and absorbs some of the deflation from the eurozone and japan and that is the strong dollar saving the world, but there is a destructive force
behind it as well. if that dollar goes too far too fast, we will have some pain out there. >> what is too far too fast? i remember 100 on dollar-yen not too long ago and then 120. >> they had specific reasons for. they had the bank of japan doubling specific policies. we have already had a 10% move in the dollar. get another 10% move over the next couple of months and it starts looking ropey. you look at dollar-brazil dollar-mexico. those currencies are under pressure. >> will the fed sit back and take dollar strength without saying anything? we got a whisper in the minutes that they would not tolerate. >> at some stage, i think they will say and do something about it and that is why we do not expect extreme dollar strength. the fed has the ability to rhetoric, believe it or not. those who don't understand currency markets will say, what can they do about it? when they say something, it
matters. he said something that held the dollar back and the minutes came and went and no comment on the dollar. there could be a comment on the dollar tonight and it could start leavening it up. we have to watch carefully. >> it is time to give you the pat on the back. at this time last year we were at $1.70 at dollar-sterling and use that we were going to $1.55. you are the crazy man in the room and you got it right. what is next? >> there are three reasons it will be lower. circular structural, and political. we see it down in the eurozone. politics in the u.s. looks ok. that is again helping the dollar. the political idea of having a referendum on the eu will create massive uncertainty. whether the u.k. stays in our goes out, that is not the point. uncertainty, what does it mean? is a contagious for the rest of europe? this is a problem that the u.k. could impact and infect your it
-- infect europe. >> what is the political risk mean for the bank of england? i go back to next year. the sentiment was extreme. one minute, we're getting a rate hike in 2014. now we are looking for what, first quarter of 2016? how can i predict this anymore? should i let it go? >> this is not last year. unlike anything we do -- [laughter] no. on the interest rates, the market keeps moving the fed as well. the markets seem secure that the fed will move freights in roughly the third quarter this year. bank of england in the first quarter next year. the rate market is all over the place. we have seen bond yields. look at german bond yields. no one is in a rush to raise rates. if you raise them as the bank of japan once did and made a mistake, you have to reverse it. it is a very difficult situation. you have to be slam-dunk sure
when you raise those rates. >> let's talk about those low yields and where the euro has gone. we have inflation chart today expected to come in negative .1%. it has come in obsession, isn't it? -- it has become an obsession, isn't it? >> it is already here. the ecb talk about whether inflation expectations become an anchor, and this is the sharp sword they use to do qe. we think march. the marker is trying to pressure. we want it now. when you have some to by your bonds it is great. it is not about the normal cyclical and structural macro fundamentals. if they are buying your bonds and you are printing half a trillion euros, obviously bond sales will go you lower. >> what happens if the ecb disappoints on the currency? >> the question is does the
currency go down, or does it go down? if it disappoints, you go, this is terrible news. this is bad for your. oh my gosh. sell the euro. if they do it, qe. sell the euro. the market has the bit between its teeth that the euro is going down. is the easiest trade. is the pure tray. people are talking flimflam and waffle. as dollar-yen went up, i resisted, i learned my lesson, i got beaten up and now it is a winner. >> surely you are saying the same thing and we all get word. surely there is an element of risk here. has to go lower or lower that it may not play now. >> the dollar-yen was on track to get higher. i went against it and got thrashed. i am not playing that game again. you have to learn lessons and here the consensus trade is
right. the dollar is the bull. it will be depending on the u.s. economy. what if the u.s. economy slows substantially? the think the dollar goes down? no, it won't. the dollar is rated against the yen. the dollar is a winner no matter which way you look at it and it is obvious that in the can and since -- in the consensus that we found the bone has meet on it and the dogs are on top. sometimes the consensus is right and this time it is right. >> what you're saying is that when the ecb meets, forget what they have got to do. the euro is going to keep going lower. >> i think it goes lower and it depends on how much. we get the good rallies. even the path of true love is not smooth. it is not going straight down. it will do things to make you uncertain. it is a difficult situation. i think the euro is headed down. what are they going to do? it is headed down to be
specifically against the dollar. the euro is struggling to fall. euro-sterling is doing nothing. the euro needs the dollar to do the work. is going to be euro-dollar lower. >> you mentioned one euro-nokia. the euro cannot fight that story, the oil story. the euro cannot fight a political risk story in the u.k. as well. what about the other crosses? >> leave them alone. if you know one is a winner, why bother with the others? come on. this is the derivative trade. let's do this because of that. no. do the thing that is the core the essence. the essence is euro-dollar lower. >> one thing before i let you go back to sbc. >> thank you very much. take your time. >> i can guess what it will be, but the tray for 2015, what
would you think it is? >> there is only one tray --buy the dollar. -- one trade. by the dollar. you can be more rational. there is dollar-brazil, which we think is a lot to go. euro-dollar. the dollar is the king. the dollar is the freight train rolling by. >> you heard the man. buy the dollar. that is the message from david bloom. always a pleasure. up next, turning japanese. we look at the japanification across the bond market. investors prepare for deflation. david bloom says we are already here. ♪
>> welcome back to "on the move ." i am jonathan ferro. the story of the day or the story of the year could be deflation in europe. prices in the euro zone are expected to fall for the first time in five years. let's go to international correspondent hans nichols. could mario draghi's qe be bolstered today? >> an hour and 15 minutes, but who is counting? the expectation is for inflation to come in at-.1%. if we have deflation, mario draghi will have another argument to start purchasing government bonds.
that is quantitative easing. on friday, we get consumer confidence in them we have that january 22 meeting at the european central bank. right after on january 25, we have the greek elections. there is reporting today in the german press that the germans don't think draghi should do quantitative easing before the greek elections. i do want to focus on consumer confidence. that gets to the core question of what is the german argument. the consumers and the economy is much richer because of the drop in the price of oil. it has that stimulus affect throughout the entire economy. what you hear from them is that you need to factor in the lower oil prices, which are driving down headline inflations. not so much for inflation, but headline inflation. it will also help stimulate the economy. that is their argument. it is unclear if they will have a data point to make their
argument before that january 22 meeting. all eyes are on inflation, but eventually deflation and how bad it is. in germany, we got the numbers yesterday. 0.1%. already negative in greece and spain. >> thanks very much. i know you will be on top of that story. deflation turning out pretty clearly in the market. record low yields everywhere you look. japan's yield talk to a record low of 0.2% yesterday. this morning, overnight, the australian 10-year bond yield dropped to a record low. mark gilbert joins us now. mark, you call this the japanification of everything. what is the bond market saying to you? >> absolutely terrifying. you have deflation and slow- flation. deflation is when you have a standing period.
consumers won't spend, because why would you do it now? it will be cheaper in six-month's;ss' time. bond holders are willing to except negative yields all the way up to five years if they don't think there will be inflation in the future. this is a bit of alice in wonderland. when you have central banks everywhere with interest rates at or close to zero, when you have the bank of england and japan did buying bonds in the market, it distorts the price mechanism and the information you get from the bond market. it is clear that what investors are looking for his deflation going forward. >> they are also looking for a little qe. if you thought it was going to generate inflation, surely you won't want to hold german yields for five years, would you? >> if you look at what is happening all around the world, consumer prices not going anywhere.
the real worry is it tells you more about growth and it does deflation possibly. what it really says is the crisis was a long time ago. the patient is still on life support. they are trying to unhook the life support in some places particularly in the u.s. with the federal reserve. maybe the patient dies. >> talk to me about the weirdness of the situation. you're paying germany to lend the money five years out? how hard is this in your career? >> think about savers. fantastic to be a borrower in the current climate. terrible to be a safer. how is anyone going to store away pension or make any return on it in anything that has that she used to go to bonds for safety and a bit of yield. you might get safety now. you are certainly not getting any yield. savers are getting decimated by this. it is a terrible environment. you think about pension providers, real things that
matter to everyone around the world. how do you price what happens in the future when you are trying to build a pension for someone when you are discounting at negative rates? it is alice and wonderland. >> let's talk about german savers. bloomberg wrote a piece this week. 17% deposit in germany. when does this become a political problem? >> it is an issue. demographics is the big thing no one wants to talk about. certainly not in politics, not even in finance. it is too scary. too many old not paying taxes and get your meeting. too many young people that will not have the lifestyles are parents are enjoying. there is a demographic shift. there are not enough youngsters going into the old system compared to old people. it becomes a political problem when the previous generation is loaded up on debt, turns to the youngsters and says we are retiring. your problems now. >> before we go, you know a lot of these guys that sit on these
bonds desks across the country. .5% on a german 10-year, .3% in japan. you talk about the japanification of everywhere. is that is where we -- is that where we are headed? >> i talked to someone yesterday who thought -10-year -- negative 10-year bonds depend is possible. lending to uncle sam for 30 years gets you 2.4%. germany was headed towards 1% last july, i wrote a story saying that was scary. that was half a point away. the same thing you are saying about currency, you are saying in bonds. it is faster than you think. yields are going lower than anyone thinks. everyone got the treasury market wrong last year. >> alice in wonderland stuff.
in about 15 seconds we will get german unemployment. i'm looking at equities. the dax up over 50 points. .5% higher. i'm looking for german unemployment to come in at 6.6%, unchanged. unemployment claims dropped by 5000. you are seeing a drop of 27,000 four unemployment claims. you are seeing a drop in the unemployment rate to 6.5%. that is a record low for german unemployment. we talk about compare and contrast. let's bring in guy johnson. compare and contrast. >> 6.5% on employment in germany? it is amazing. compare that with greece or italy or pretty much anywhere else across the eurozone. germany is going to be a big theme running to our show. angela merkel is an london to talk clinical compromise with david cameron and maybe to recruit a new museum director for the humboldt in berlin.
we're going to talk to michael fuchs. one of her key advisors. we have him on this morning and we are going to talk about greece, and the u.k.. which you think worries him more greece of the u.k. in terms of the elections? >> you listen to the noise, and it seems to be more of the you kidding greece. in the deflation story, you have a strong market in germany. >> germany is sitting there going this is great news for us. draghi said low prices are good for people. . that is true in germany. when you have everyone employed in price is not moving, that is great news. it is not great news for the rest of the eurozone. >> unemployment in germany dropping to a record low 6.5%. check out the unemployment rate in greece and you will see a different story. "the pulse" is up next. we are here in europe and we are focused on eurozone inflation data, which is released in about an hour.
>> brent below 50. oil hits a new five-year low. >> deflation dilemma. eurozone consumer prices are set to drop into negative territory. >> merkel meets cameron. the german chancellor in london. we are going to speak to one of her key advisors in an exclusive interview. good morning, welcome. you are watching "the pulse." i'm guy jo