I am mark barton. 6 00 a. M. Ingone london. Lets get the one of our top stories this morning. Mary draghis speech in jackson hole a few weeks ago shocked markets when he said we would use all the available instruments to ensure price ability in the nearterm. Central bankean take any action today . Manus cranny joins us now. Good morning. Why do the work yourself when our colleagues at Bloomberg News have done it coming out with all of these fabulous questions. Will they do anything . Will they take action . An analyst from bnp paribas and he said he would be foolish not to take some form of action. Not the solution, and to dont, qe, but aping demonstration that they do not want to lose control. Thats what today is about. It is about signaling and posturing. Lets have a little of the look. Best Case Scenario is no change in rates. That is what most would suggest. I put together a short its board of what could happen. Assety just get some backed securities but im doubtful. In aweek we saw that number people and they said assetbacked securities is barely 5 of the overall debt market in europe. Finetuning what is called the targeted landing, getting a bit more generous with the money. They are desperate. We know that the banks are not taking more money. Making that more incentivized. That is part of whats out there. Im trying to find the equivalent for europe. It is a church hell churchillian moment. Forrnment banks are calling another 5 percent lower. Weve had conversations with economists saying they need the around get down to 1. 25. That is where they are calling the euro dollar the next year and parity at about 1. 27. The bond markets are tumbling. But else could queue we actually do . Veryche bank said be careful what you presume. 70 of credit creation is happening by the banks. By simply lowering the cost of sovereign debt, mathematically you cannot get growth beyond this point. Lies the issue from mario draghi, the ecb, and the germans because theres the point you can do all you want with sovereign bond yields but you cannot move this mountain forward. You need to stimulate demand which even brings back in the french of of fiscal latitude. And the data is pointing to some sort of a move, isnt it . We have had data on inflation, pmi data, and gdp data as well. Pmi, purchasing managers december. Lowest since the company the country that implemented structural reform. It never feels that way. It doesnt seem like a recovery but youre not in the weres of despair where we a number of years ago. The data supports a very straightforward argument. Reform and you will move forward. That is factual. That is with the data is saying. Nothing can be argued with that. To that end, the germans will hold on. Aroundeverybody saying the possibility of the japanese loss. Priced its drop by 75 . No lending, property prices dumped him and never recovered. It took six years to get their act together. The fear is the ecb does not do enough. Not dobank of japan did enough. That is the risk from mario draghi. That is the challenge for his counterpoint around the European Central bank to agree, concur, and actually act. Otherwise, you run the risk of the 75 drop in tokyo property prices. We were talking to John Manchester later on today writing a new book on how to understand money, basically. One of the thing he talks about is abenomics. If you want Financial Professionals to turn up to an event that you are running, tell them it is about abenomics because everyone is obsessed with it because of this fear about europe turning into japan. Manus, thank you very much, full coverage of whats happening at the ecb and the bank of england noon london time. 45 minutes, the ecb. Then half past 1 00 p. M. , Mario Draghis press Conference Live and in full. Smartphones two new in a berlin yesterday including one with a wraparound screen. International correspondent hans nichols discovered smartphones are just the tip of the iceberg as far as the cuttingedge technology is. Good morning to you. Take us behind the scenes then. Think of this conference for all of the gadget you will take with you. Youll be doing all of the household chores that im sure you get out of doing. Heres what we had yesterday. 4 andg had the new note we are talking about connectivity in the home, watching ash washing machines, and increasingly interconnected world but as we talked to the managing partner about it, the challenge is getting everyone and all of these devices to speak a common language. A problem that we have as an industry is there is no common industry standard. The different appliances and different competitors cannot communicate with each other. Is the other aspect of that which is security. Security in your home. We have been talking about the iphone hacking. Does anyone really care about what you are doing with your roast . Listen to how the managing partner had to respond to that question. A topic. T is as you know, all of our telephones, ipads, computers, they are to be hacked. There is always somebody who wants to look into it. Always somebody whos trying to help you to prevent that. Can get at the crucial question, how quickly, how fully do you load your washing machine . Washinghave smart machines eventually adjust the water level. If that can be hacked, i will literally know your dirty laundry. Young ageed at a very not to overload the washing machine. From washing to geopolitics, hans, is the crisis affecting the conference at all . Absolutely. Look. We live in uncertain world. These are all Consumer Products and we need Consumer Confidence for that. We asked the panasonic ceo of europe just how ukraine is affecting overall sales and have a listen. In europe, we started to see some signs. Some Industries Like automotive or equipment start to show signs that it is starting to attack industries. These are not inexpensive items. You need Consumer Confidence for that. In some ways, everyone in berlin is looking at the nato summit in wales just like they are in kiev and moscow. Correspondental hans nichols there in berlin. Nine minutes past 6 00 a. M. Talking about action from the ecb. What kind of rhetoric we will get, details from mario draghi and hes team. Stay with us for that. Time for todays company news. Samson unveiled two new Samsung Notes are funds including one with the display extending. This comes as the topselling company tries to fend off apples push into large screen devices. There is inbuilt connectivity. Apple will unveil the new iphone a new wearablely device next week. Agreeing to sell the new yorkbased unit for 1. 24 billion acquired by the kate canadian company. It will be acquired by a canadian company. Company company told bloomberg in berlin that the of the jew political process has been limited. See a big slowdown in russia. Not even in ukraine. They were not really horrible and its still going ok. People whoalways be need to buy domestic appliances and there will always be a market for that. There will always be people who want to have different product, want to purchase the best available product, willing to spend the money on that. Will the ecb introduce further easing or will it wait to see if the stimulus package introduced in june works . For more head of todays Rate Decision, we are joined by jpmorgan head of Asset International rate strategy, john norman. Good morning. Youre being quite bold in your forecast today, boulder than the consensus. Tell our viewers what you are forecasting from the ecb today. I do not think our comments were being that bold. Only six out of the 50 are forecasting that. Thesem our standpoint, are pretty easy steps, conventional measures. They will probably also announced recasting of the program to make it cheaper. We think of these is Pretty Simple measures, things that have already been telegraphed or followed. Its in a different camp from qe which we think is off the table. Earth mess with Interest Rates that are so low anyway . Is it hard of trying to make this the targeted lending scheme in getting them to lend more . Is it hard trying to make that more attractive . The broader message is that the ecb is an and easing cycle. If they reinforce the measures they discussed with additional measures today, it just reiterates the point that we are not done yet with the easing and we will get people to focus on the qe possibility. Commitment to the abs program yet . Today the day that mario draghi will actually commit to the program . I think it is. Theyve been giving increasing amounts of information over the past couple meetings. Today is probably the day to put a fine point on it. I dont think this is a huge market mover. The size of this will be pretty small. Do a get rhetoric, commentary, anything around quantitative easing, what it might look like, and if it is coming . Do you think we will learn anything more on qe . We will probably learn something in the q and a. There will probably not be anything in the statement that they are willing to do something deeper than the mandate. He will be grilled on whether or not qe could run concurrent and i think there is quite a lot of stoke scope on the rhetorical side to advance this topic much more. What is the impact of all of this . What is the impact of all of this for Asset Classes today . If all we get is standard measures and some details on the program, this is a nonissue for the markets. They probably overshot a bit in terms of the yield in currency going down if thats all we will get on the measures. Where we could see it advance further, rally in bond, depreciation and the euro, is if draghi give signals about when qe could happen. If he says a could run in line then we will not have to see how they play out for the qe to be initiated, that is a market event. Some guests sitting in that chair have talked about how a weaker euro is the best gift mario draghi could receive right now away from Monetary Policy could enact. Playid the geopolitics into that at the moment . They were led on a merry dance by poroshenko, putin and it still remains a little unclear what exactly is happening on the ground in ukraine, just how closer to a ceasefire or not we are. If there is some sort of peace in ukraine, is that threatening to lift the euro a little bit . Maybe one cents but the reason i limit that is because i do not believe that is the crux of the growth or inflation issue in europe. If russia did not exist as a influence, it will not change it in a meaningful way. The russia issue is extremely important talking about Central European countries and currencies. Weak growth in europe is weak with or without russia. Bang theario draghi drum he kept on banging recently in jackson hole when he called on governments . He called on governments to take measures to restructure their economy, the fiscal, the monetary, and the structural. Hes becoming increasingly boko haram the issue of policy. Is becausenk it theyre running out of other peoples money to spend as we have heard before from other policymakers. Hes becoming increasingly different on the issue of policy. This is about opening the german purse. We know specifically from the germans they are not interested in doing that. More with john norman in just a moment joining us from jpmorgan. 6 19 a. M. Stay with us on countdown. Welcome back. This is countdown. Norman, with us, john head of fx strategy at jpmorgan. A Rate Decision is expected here. No change in Interest Rates seems to be the general consensus. What are you expecting . Changee looking for no as well. The bank of england has no pretext for changing rates are dialing up the rhetoric. The two members of the mpc her voted for a rate increase most recently, there will not be more joining the dissenting camp . Scotlandsue of stopping others or is it just a broader appreciation of the u. K. Economy . Its a broader appreciation whats been happening in the price front. Inflation is not moving up. Wages are definitely not moving up. They dont have the broader economic justification. Market participants, they are much more focused on scotland seeing the polls tightening and they realize this economically disruptive if the yes camp wins and its a game changer for the bank of england. Volatility for the sterling dollar. Is this the beginning of volatility around stirling ahead of the vote in a couple of weeks . Came intof investors september still long sterling believing the bank of england would be a first mover in terms of rate hikes and i also thought the referendum would be a bit of a nonissue. And they also thought the referendum would be a nonissue. The undecided camp is big enough to swing this. Sterling is being liquidated. How would you play it right now . Out right short sterling versus the dollar. We are basically in a bullish dollar environment because of whats happening on the u. S. Interest rate side. I think thats a lot cleaner than trying to do sterling versus the euro when its easing. Toyou think the threat disband the pound Monetary Union within the Monetary Union is credible . Are people trying to work out whether there is bluffing going on around us . Is that key for investors . Credible. 00 what is left of the United Kingdom will have the monopoly on the printing of sterling and provisioning sterling to the lender of last resort sort of facility. To keep be impossible another country, whether it is scotland or someone else, using. Terling it is extremely easy to prevent access to the bank of england as a lender of last resort. The rest of the u. K. Will not be tempted to call markets with something that might feel easier in the short term like preserving the union, the currency union. They will not be tempted to do that because they are too worried about what it might look like longer down the road . Will bember 19, there cooler heads prevailing laying out the timeline for negotiations and what issues will be dealt with and providing assurances to Financial Market participants, consumers and savers about this. If one part of the u. K. Voted to sever the union and the other part has said they are not providing the use of sterling as a currency or lender of last resort for the bank of england, then people need to factor in that we are going for a significant regime change. What you are seeing now involves nothing compared to what had happened on a yes vote. Geopolitical risks, the ruble the best performer yesterday on the shaky assumption we will get some sort of ceasefire. Would you buy the ruble now or not . I would not. Why not . Yesterdays action suggests we had a game change. I think this has many rounds to it potentially. Buyingetty chancy to be currencies related to the russian situation when it is still a very ok situation. Thank you for joining us. John norman, head of the u. S. Fx rate strategy at jpmorgan. Samsung makes a splash with the unveiling of two new galaxy note smartphones and a smart watch. Are these devices enough to scare rival apple . We take a look at whether the devices are industry Game Changers next. Welcome back. I am mark barton. Here is her fx check. Definitely worth looking towards the eurodollar again today inching toward the oneyear low. Has spoken to think mario draghi will get some sort of commitment to this abs program which would be a step up from last month when the ecb president said a final decision would depend on the action of many other actions. Jpmorgan said in their note yesterday the ecb could by as much as 40 million of a bs or varying risks of a note in return backed by limited to the newest to market over a threeyear time focusing on securities with the highest rating, so said the bank. Out of the 57 economists, 51 say the ecb will keep the key Interest Rate unchanged. Six say it will be cut right 10 in theoints to 0. 05 0. 2 . T rate lowered to the big decision 12 45 p. M. London time. As you can see, the euro just a tad lower against the dollar. Inching down towards the oneyear low. These other Bloomberg Top headlines this morning. Russian president Vladimir Putin will continue his shadow war until he has created quasistateless in ukraines easternmost region according to some of his current and former advisers. Potent and ukrainian president poroshenko have agreed to end more than five months of fighting. Limit thembling to potential losses from the cancellation of the contract to deliver warships to russia. This comes after the delivery of one was suspended. French president francois criticizing for going through when there are sanctions. She details her lines with president Francois Hollande and his alleged affair. Just one day after russian and ukrainian president s announced the out line of a peace plan. Lets go over to Ryan Chilcote at the resort. Its going to be a busy couple of days for the leaders. Theyre going to me meeting president poroshenko flying in today and there will be some discussion about how nato can help this nonnato country. Conversation on possible military assistance to ukraine, maybe a socalled coalition of the willing, if you remember that term, from the iraq war providing weapons maybe to iraq, something, definitely to watch. In addition to that, there will be a lot of decision about the Rapid Reaction force, the 4000 strong group of troops that nato intends to put together to deploy to Eastern Europe not on a constant basis but able to go there at the drop of a hat, a moments notice. That was ready will telegraph by the secretary general when he had his press conference on the eve of this summit. Finally, they will be talking about the Islamic State and what nato can do to counter it. Were thinking of reconnaissance and surveillance. Written is expected to float the idea of a training mission, nato to train theq Iraqi Military once again. Thats one of the ideas they will be discussing here. An awful lot on their plate. Us a sense with