Of the drinks makers. A bit of an mende as well spirits. United it is all about a bet on india. The biggest Whiskey Market. Johnny walker has the Distribution Networks. Keep an eye on da gio. Maybe people are liking the fact that theyre getting more exposure to emerging markets. It is all about perrone and parole should. Sales are up two percent are driven by emerging markets. Sales are a bit mark a bit weaker. Sab miller down two and a half percent. Some watch the iron ore man, stock down over one percent. A huge note out on commodities. Theyre questioning that demand level over in china. That is rio, that is down one percent. Absolutely key we get u. K. Numbers later. Futures pretty flat to the morning. Worst week in a month last week. Look atail sales give a sentiment marginally. The ftse 100 and cac 40. 2 10 of oneown percent. Janet yellen fed chief, she speaks. In around about 18 hours time we will be talking about one country, that is if you are awake, china. The worlds secondlargest economy. Gdp industrial production, retail sales, that could drive sentiment going into things. Look at the currency over the last year. This is the u. S. Dollar getting stronger and the chinese currency getting weaker. It is at the weakest levels since september. Is that to support exporters . Theres one question being asked, is china at risk of a bigger slowdown . Joining me now to discuss the market debate is a chief Investment Officer at state street global advisors. Great to have you with me this morning, rick perry thanks for coming in. Spring is in the air out there. The markets themselves are finding it tough to grapple with the extent of what ukraine is. What is the Ukraine Russian situation for you . There seem to be so many reasons why intervention will be painful for europe. Would be possible to try to limit the activity in the ukraine, but the willingness to take the pain in europe in particular is very limited. I think that is the consensus that is developed. , but will be sanctions there could be a miscalculation in terms of the willingness of russia to go further. Perhaps a required response from the west heard at the moment it seems like everyone is holding back. Theyre almost like racehorses on a bridal were they just dont want to leave the gate and deal with the situation going headtohead with president putin. When youre talking to clients, where does that benchmark in those conversations . Is an optimistic sense not that they will get over it, but that the pain wont be inflicted on europe in a way that will really damage the economy or damage earnings and share prices. That is an optimistic viewpoint that i think it is one that is widespread, particularly in the u. S. Do think it is worth some preparedness . Have you seen some movements at big corporations that are exposed to russia . Ines in a bit of movement oil, but nothing radical in terms of reaction. It has some similarities to the debt default problem that we in the senseu. S. That preparation seems sensible. But the speed with which things thatop could be so rapid changing course is actually very difficult. This may be a case where again you need to take a longterm view and accept youre going to have some intermediate pains in volatility terms in the interim. These markets are finding it direction, a clear little bit of nerves. Is that all that it is . Are justdders, markets off record highs. Take some money off the table and start and stop getting overly pessimistic over these moves. I think people are waiting because markets have builtin quite a lot of High Expectations for growth. You have very loose Monetary Policy, consumers recovering in the u. S. That is a benign environment one would think. Companies still have to deliver. We are at a point where management of cutting earnings a little lower so they can outperform. The classic maneuver. You touched on china. Credit declining aggressively. A lot of speculation about many stimulus, etc. What is your take on china, obviously a slowdown expected in the First Quarter. If youre investing for the long term you have to have a broader perspective about what china is. What is your perspective of china . Innate slowing and process of transformation. You have a widening of foreign exchange. Now you have the Hong Kongshanghai tie up third those are all signs of its termination for capital account liberalization. Prices inive security onshore china to more sensible levels. Youre going to youre interested with me after the break. Heres a look at what is coming up a little bit later on the move. The drink maker offers twice as control at united spirits. We will discuss all the reasons after the break. London. Anus cranny in this is on the move. Heres one stock that is on the move could we have sab miller. Of lose that these guys are selling comes in line with the estimates. Europe is improving, latin american pricing a strong. Currency depreciation is what is hitting the sab numbers this morning in the markets. Keep an eye on that very it now, Foreign Investors are returning to the countrys bond market according to italys debt agency chief terry it the Prime Minister renzi is counting on that. Jonathan ferro has a little bit more. This is a very different message , that is what ive heard you say through the morning in terms of the bond market or the appetite for italian bonds. Yes, and the appetite is there. Imagine managing italys debt,. Ver 1. 2 trillion euros of it just under 135 . He have to look how far yields have fallen over the couple of years the last couple of years. Investors arent putting much weight on the numbers themselves , and sentiment is getting better. A man is coming from abroad as well and not just within italy. When we caught up with the debt agency chief in an exclusive interview, this is what she told us. Noticed a very strong presence of the u. S. Investors. As usual, the european component are the most important one. Well divided between the andzone countries noneurozone countries, particularly u. K. , but also scandinavia are quite important. Shes Optimistic Energy sounds a little positive for self. Demand is clearly there. Her job is to lock in those low borrowing costs, extend the maturity of italian debt which now stands at around 6. 3. That is a lot of worth. What did Prime Minister renzi have to say about his plans to pay more than arrears to companies. It has it been a big issue. It has, not just for matteo renzi, but for an ricoh letup enrico an ricoh us that number is manageable. Already they have met a third of italys financing needs. Shes optimistic. As youre not have artie talked about, if you interviewed the head of the italian debt agency two years ago, we would be having a very different conversation. It goes to show how far things really have come. Things have improved. A very long way. Jon, thanks for that. Rick, you have just heard jonny say that five years ago you couldnt give italian debt away, could you . Have we turned a corner . To look at peripheral debt . Is on the agenda, is in the funds anywhere . We look to peripheral equity and debt. We got more enthusiastic in the summer of last year about peripheral equity in particular. That is partly predicated on the fact that yields are coming down. That is helping financing and companies. This will take quite a bit of work, political work. Theres a sense of optimism that the administration can start that work. Restoring the competitiveness of italy is a longterm project. It is not help by the fact theyre locked into the euro, but being locked into the euro means there is a more urgency to fix some of these productivity issues, labor productivity, flexibility of markets. I think theres a political willingness to start, but it will take a long time. Applico willingness, that lead time, therefore, has the equity market jumped ahead of resolving those issues . Or is there more to go, not just in the italian, but in those mediterranean peripheral equities . There is less froth in the equity market in europe then the tech sector in the u. S. , would be the counter example. Theres less euphoria even now on the periphery of europe than there has been in other places. I think there is a justified belief that these individual companies can do well in the periphery because environment is changing. People are able to increase their margins and businesses. I think that is very helpful. I think the valuations are not stretched, but clearly you have the odd sign. The greek bond issues being oversubscribed to the extent it is. Even though you have 170 or when an 80 in greece. That seems like a sign of euphoria. In the nearer and periphery, we dont feel euphoric levels yet. Mario draghi, did he capitulate at the weekend or did at 1. 39ervous at 139 for the euro . What is mean for investing . A think he is right to be concerned about the level of Exchange Rate buried i think it helps to build a consensus of the European Central bank to identify concerns that could derail this very shallow cyclical recovery that we are seeing in europe. I think it is a legitimate concern. The question for consent for central bank is can it do much to adjust the rate . It does justify more vigorous Monetary Policy action. In the break we were talking how some of the countries are reporting. Im more interested perhaps in some of the luxury story could take me through your thinking on that . T. People up in very concerned about china. It affected french luxury. It seems to have dissipated. You have an affect from japan coming in because of the consumption tax hikes that is causing a lot of turbulence in the sales of Luxury Stores in japan. China seems more robust than many people thought. That is going to be incredibly important in that story. Time is running against us, rick. We will have to leave it there for now. Thank for that, and we will see you very shortly. Thank you so much. The strength of the swiss franc may have hurt the companies topline in the u. S. , japan and emerging markets. Sales fell to about 13 billion, but not analysts estimate that the current numbers are offsetting the set of medicines for Breast Cancer and leukemia. Production rose to a record in the First Quarter as it rose eight percent from a year earlier. Chief executive officer sam losses reining in spending and cutting costs while driving and. Xpansion of rios iron ore it is a big contributor to its earnings pot. Shares rose for a fourthquarter profit as indias secondlargest Software Exporter beat analyst estimates. They want more outsourcing orders from the likes of volvo cars and Health Care Companies prime therapeutics. I want you to take a look at this. It is the Lunar Eclipse heard it as amost at its peak, and canvassing from the americas, it is the first of four total Lunar Eclipses that will be happening over the next two years. That is called a blood moon. The moon is just began to glow red as a receives the light spilled over from the earths circumference. Welcome back to on the move. Im manus cranny in london. Lets talk about one of the big themes this morning. Diageo andks maker sab miller. Sab miller taking a bit of a hit. Joining me to discuss this issue is caroline hyde. Where should we start . Iageo, is all about control. It artie has 29 . They want to get what they call certainty of control and up it by another 26 . Theyre offering double the amount that they did last year. This is a failed attempt last year to increase their stake. Now theyre more than doubling offer from last year. They want exposure to the biggest Whiskey Market in the world. Also the Distribution Network they can inherit through that and pumped through more of the Johnnie Walker and other brands. That surely must beg the are people saying in terms of the valuation . Dont seem to be too surprised by it. The premium theyre paying shows that it is going to be harder to do deals and emerging markets at a sensible price. As caroline pointed out, to go from 1140 rupees two 3000 rupees rupees is amazing. From a geographical point of view that makes sense. Absolutely, and really make sense. Is a big emerging market. Diageo love whiskey and owns Johnnie Walker, the biggest global whiskey brand in the world. They have the biggest exposure to emerging markets, but today they are out area they were unperturbed. They got decent brand presence in latin america markets. View their . The general view seems to be headwinds in lots of different markets. There is no specific reason the hind sab miller today. As we know, emerging markets have been a bit of a trial since last november when you need came out and warned they were owing to have a profit warning on emerging markets. His sab miller has a largest exposure. It has some issues in various markets. It warns about proven tax increases, tough issues in development its as well. Obviously, europe is an ongoing trial and the u. S. Beer market is in decline. How much is this a longterm issue . Sab miller is saying theyre confident in their ability in the longer term to drive growth. This is a longerterm play. Absolutely if you look at the valuation, it is still Training Area trading any high premium. , a largeod management exposure to an emerging market. If we talk about what i just said, the u. S. Market is in decline. Europe is really sluggish. Yes, you currency headwinds and issues on tax increases and a less stable environment. Theyre well renowned for doing that, operating in these cases. They may make a stake sale as well. That is possibly something on the cards. They are considering selling the stake they have in the johannesburg listed hotel and leisure company. Not exactly a core business, is it . They are originally a South African company. I went to a conference a few ahead of south africa was talking about the drinks market there. He was talking about how it is still a difficult environment. Even though it is relatively developed, it still has currency that has depreciated hugely against the dollar. Actually they want to focus on their core business down there. Lets keep an eye on both of those. Clementine fletcher, great to see you as always. Coming up, it is unrest plaguing the east of ukraine. Separatists and Government Forces clash. A west ways more sanctions on russia. Twitter. N could be interesting. Stay tuned for the new picture. Welcome back to on the move. Im manus cranny at bloombergs European Headquarters here in london. A things are shaping up. Equities a little bit lower. Two big driving forces across the markets today. An escalation in the tension between russia and ukraine between russia and the west. New credit in china has since 2001. He most there is concern about metals miners. A little deeper into the markets. Caroline. Sab millerg in down 2. 5 . One of the worst followers today. Volumes are up for beer driven by emerging markets. This is the most exposed to emerging markets out of all the brewers. But, there was a falloff in sales. Asdidnt see it grows much had been anticipated. Greco rcent heard a reko is up almost four percent. Encouraging start for the year. The only area of weakness seems to be asia. Gam is swissbased. Concerns about outflows in january and february. Of course the strength of the swiss franc has been hurting them. Theyre looking more buoyant. They say the Investment Performance has been strong and there have been inflows in march. There currently trading up more than 2. 5 . Of the for some Bloomberg Top headlines. Chinas broadest measure on new credits, 19 from a year ago. The money supply grew at the slowest pace since 2001. Data underscores the risks on the deeper slowdown in china as the government tries to rein in a credit binge and prevent defaults from stirring financial turmoil. Nominatedn government new chief executives at three of the largest statecontrolled companies. Renziminister matteo chose internal candidates for the top jobs. President obama is warning president putin of further consequences over russias alleged actions in the ukraine. On the leaders spoke phone after clashes in Eastern Ukraine turned deadly. Resident putin told obama that he should use americas capabilities to prevent the use of force and bloodshed and the escalating conflicts. For little more on the latest in the ukraine crisis, lets get to our european editor david tweed hurt the eu ministers have agreed to add new names to the sanction list, but that is it for now. What is it actually going to take, david, to really move and ratchet up the sanctions . You know, the u. S. Has not ratcheted up their sanctions either. Theyre only talking about very to the european ministers are talking about this. Havent takenthey action. The problem is, russia seems to be operating in a gray area where it is providing support according to the European Union and according to the United States, providing support for these production separatists, but it is not overt support. It would take overt action to get the European Union at this stage to ramp up its sanctions. Also, one of the things that European Countries are very intent on doing is just keeping the status quo going until thursday. They want to at least get russia to the table in geneva for the four party talks which would take place on thursday. Vrov hasign minister la been speaking to russian radio saying theyre prepared to come to those talks, but they wont make any visit to geneva if there is any force used against those production separatists in Eastern Ukraine, manus. If the u. S. Decided to go it alone, just how much impact or additional impact would that have on russia from an economic point of view . You can already see there is an impact going on in terms of looking at the markets. X index and thee ruble. If the United States when it alone it would not have anywhere near the same sort of impact it would if the europeans are also going to join in with economic sanctions. Look at germany, for example. Withillion worth of trade russia only last year, whereas United States russia trade nearly 8 billion. The thing is to see if theres any action in Eastern Ukraine on the part of Ukraine Forces against those russian separatists. Of course theres the meeting coming up on thursday. Ok, david. We will certainly be watching that meeting very closely heard any developments will go straight to you. Ve for us inli berlin. Lets go back to the macro themes in the markets. We speak to managing director at Goldman Sachs assets. Katie, gray tabby with us. My pleasure. Theres a great deal of deliberation out in the markets about where we are in europe. Is it fair to say capitulation by draghi . Or just moral intervention . Europe is clearly on the mend. We think growth is going to come in about one percent for this year. We have been saying for a very long time that the ecb has to take more action to sustain that because of muted inflation and because of a strong euro. I think he came under huge amount of pressure over the weekend. He is saying the right things, although markets did not react yesterday. , im not a neighborly mood, that would be disingenuous. Verbal intervention is not correlated to big moves away we have seen before. What needs to be on that agenda in terms of movement, katie . We actually think we need to move now. Likely action is a rate cut, which we think could happen in the summer. That could be a trigger to bring the euro down. Maybe they would call for a rate cut at the last ecb meeting. To need to see something more substantial like negative rates, something more punchy. I think that is going to be a powerful catalyst if you have a weaker euro, it will be good for risk assets across europe. Peripheral will rally. From in neck we perspective this will be hugely popular for equity markets because half of revenues for europe incorporates our export oriented. Those are quite a calls that you are talking about. Youre talking about equities. Are you adding additional funds to each of those markets. We are seeing more International Investment and demand with greece back in the bond market. How much of that peripheral risk are you prepared to take . I should start by saying we are short the euro. That is a position we will continue to take. On the equity side, we are more focused on picking sectors because the market has already rallied a bit. Sectors that we like a lot from the valuation perspective would be energy, because youre coming down from 10 year highs x. We like of caf the Consumer Sector in europe because it has been beat up a lot. By the month we see good opportunities there. The fed may have to raise earlier than expected. I like the slightly draconian view that youve got. I think the u. S. Is just storming along. I think no matter what yellen says, my reading is you are right. She may have to go earlier. We have been saying for quite a long time that the first of weakof week data data was related to the harsh weather. We do see a lot of positive catalyst in the u. S. One i would point out would be construction. Starts relative to history are at only half their historical level if you adjusted for population. We expect to see that as a catalyst and see construction payrolls take off. That will continue. I would also point out that we see a lot of resilience in private sector balance sheets. Consumers are wealthier. That will help spending. On the corporate side, lots of cash. Ceo confidence has turned. We think that will spark the cafex cycle. Finally, theres been a big fiscal drag the last three years in the u. S. And that will get less worse. If we going to that rate hike mode, if we look at the jolt last time we talked about taper. One comment from her two weeks ago after her first meeting shudder to the market. This is one thing that came through. When the golden momentum is pretty fast, it seems to be the consensus that im getting. I just want to say, you have to have a combination of stronger growth. Also some signs of inflation. If you get that, i do think that rates could go up faster than investors are expecting. You have to be positioned for that. There is very serious investment applications. In the us market specifically, on the fixed income side, you and to avoid the sector that has the biggest beneficiaries of accommodative set policies. Treasuries, agencies mbs. Sectors we like the ones of the more poised to perform on the back of better growth. Credit sectors, high yield. I temper that little bit. Clearly, theres been a big rally, say need to be conscious on positions. I quite like your comments on india. Talk me through your thinking there. When you look at emerging markets, we think it is going to be very volatile going forward. Selectivity is going to matter. One country we like is india. Obviously, markets moved a lot already from august. It is up 20 very a lot of that was about the fact that the r. B. I to as additions to address macro imbalance issues. You saw numbers go from a five percent deficit to a one percent deficit heard markets like it and reacted well. Indians goingon to the polls, which is prephenomenal, and from a not to the demographics, i point out because i think it is remarkable, 150 million indians, young indians, are voting for the first time. We think theyre going to vote for change. Probusiness. It will Spark Investment cycle and we think that will give markets another leg up. I suppose we can give jim oneill a bit of an easier time about not having done anything for the last few years. Katie, great having you with us. Great conversation. Head of portfolio divisions over at Goldman Sachs asset management. Coming u is it really that good a statement for real . For rio . Im manus cranny in london. This is on the move. The First Quarter iron ore production has hit a record. It is still below what analysts were estimating. Jesse rhines burg joins me for a little bit more. Ive heard you describe him as being iron ore man based on todays reports. High is how is iron ore man doing . No real surprise that rio has been investing in their operation for some time. Well be more of a concern for investors would be that quarter on quarter some of these numbers up and down. It has to do with the weather. Quarterone is a tough weatherwise. Always a tough quarter in australia. By the big miners up there reporting tomorrow. Well see similar impact on the numbers. Was anything in this report as you look through it. This is something you want to get excited about. The stock market is off today. Down. Shares are over 1. 6 . Arket the positives is that they maintained guidance at the same levels. That is a clear positive. Upper twines transfer iron ore. On the flipside, prices for iron are looking iron ore are looking bearish. They are leading the charge. It is undisputed that this year will see a surplus and iron ore. The producers israel and australia are ramping up production. Rices will be trending lower. Is going to be a tough one. Ok, jesse. Lets see what the data is for china. World on in the corporate. The worlds biggest Food Producer nestle has reported the slowest sales since 2009. Our European Business correspondent caroline hyde. Carolyn, that is a pretty bad headline. It is. They still posted growth. 4. 2 increase in sales, in organic sales. It is emerging markets that are still supporting the growth. 8. 5 growth in emerging markets compared to the 0. 6 squeezed out of europe. Clearly, there is growth still coming, but it is a slowdown. They had warned us about where those headwinds were coming from. I merrily, the swiss franc is still very strong relative to other currencies. When you bring back your sales from the emerging markets, from the United States, you get less bang for your swiss franc. Deflationary pressure as well. That is an interesting one affecting europe heard vice is not been able to be driven higher. Rises are having to be reduced for nestle products in europe. They say that is going to remain a key theme. Notably, a late easter. Not too much gobbling up of your smarties easter x in the First Quarter because it is in the second quarter. That is putting it at a slightly different difficult advantage. Second half is going to be stronger than the first half. Caroline, tell me about the business of ireland and switzerland very at there are a lot of issues at play. What is the Business Environment like there . It could be something the chairman of nestle had been pointing out headed we have had two key votes recently, which have thrown the business community. First, that against fatcat shareholders. They get to vote on the members of your board and their pay. That is a concern for nestle. Notably is the immigration cap. River that referendum remember that referendum passed in february. Nestle employees people from 90 different countries. They say they need to recruit without restrictions. This is something theyre really worried about. They need a pragmatic response from the government on limits to immigration and switzerland. Theres one more vote coming up. That is on the overall minimum wage. 22 swiss francs. That sounds a lot. Once you factor in the overall expense of living and switzerland, the socalled purchasing parity, it is still equivalent to about 14. That makes it the highest minimum wage in the world. 10 are paid only less than the socalled minimum wage, which would be equivalent. O 25 nevertheless, could drive up unemployment. Many of the opposition feel there is a slight concern as to what the minimum wage, if passed, could do for employment and switzerland as well. The pulse is up in just under 10 minutes. Guy johnson is anchor of that program. Guy, youre going to pick up on this nestle story. You have one or two interviews. Women to talk about what this business is doing now. It is quite fascinating as well heard of a be buying hershey are a little farther down the road. Maybe they could be buying that nutella. Ew tele nestle has a relatively low exposure to russia. Probably earning around two percent. Nevertheless, one of those little factors that could continuously creep into the European Business story as his earning season develops. We going to start this game off. We will talk about the exposure. This, as european Leaders Debate further sanctions on russian companies, and some fairly highprofile russian figures as well from the Business World and close to vladimir putin. We will will be talking about girl power. Tozi named a lot of women chair positions. Why significant. We will talk about that as well. Your partner Francine Lacqua is not here today. Shes not here today to talk about italian girl power. What is she missing . Meet someone whose name you may not know, but you do know her work. Pin in farina. You may not recognize the name, but you will recognize the work. Have designed 50 successful cars and then you start project 51, to zero and start again like it was the first. A track of the clan and chairman of the company that bears his name, paolo p ininfarina has extraordinarily big shoes to fill. The secret is never take for granted what has been done. The design firm was founded batista arena, known as po his son sergio transformed it into a globally revered brand. Years the company for 40 and became known as the godfather of italian design. To change determined the perception of cars as merely functional. He wanted people to love them. Coherente been quite through the decades. Personality is not enough for us. Some of the worlds most evil cars were first imagined here in nfarinas headquarters in the northwest of italy. Maserati, bmw, rollsroyce and of course for ari. The relationship with ferrari is by far the most important relation in the history of toinfarina. It dates back 1952. It is 62 years from now. This model was named sergio after paulos father. Company. A very special it is a family business. The history of the family is the history of the company. There. Le story theohnson is up next with pulse. They will be talking about nestle and the latest from the ukraine. Stay tuned. Crux ukraine defends its economy. It is hikes threats. Girl power. Italy nominates three women to chair some of its biggest companies. On Titan Aerospace classead the internet. Goes on sale for one day only in the u. S. Sale for one on day only in the u. S. Francine lacqua is off today. Whenever he for you