Multinational response. He wants europe to come shoulder to shoulder with the United States of america. A real Business Impact and whether europe is prepared to take the next step. The u. S. Is ready to put into place the possibility of mining sanctions, financial sanctions. Cadre ofcdre sanctions could be considered today. The question is whether that pushes russia back into recession. Outave the latest pmi data of france that is just crossing. Lets get straight to david tweed in berlin. It looks like quite a surprise. Of theted strengthening French Economy with the Manufacturing Index above 50, indicating an expansion in the economy. Certainly good news for president francois hollande. German numbers coming out in about 30 minutes. I will be back with more analysis. Thank you very much. David tweed with the latest european pmi figures. According to a preliminary march, the nation will miss its target for growth. We have europe, ukraine, and china. And we have socgen this morning saying to expect some form of monetary loosening. There is no way they will get to 7. 5 growth in china unless they take some action. They shrugged off the market and chinese data. Uptrading began to pick momentum in the hour before the markets opened, we saw europe take a little bit more pressure. The french number, we will check in in terms of what the euro is doing. China is underwhelming. Complex, we saw some additional moves, but they seem to have come undone. Hedge Fund Managers have reduced their bullish bets by the most in nine months on wti. Copper has turned up. In 2013. Own 13 this was the worstperforming base metal. It had been a little bit lower, but look at gold. Positions dropped for the fifth week in a war in a row. 1000 could be in the cards. In terms of the companies on the move, we are waiting for credit. Uisse to cross theyre going to pay 885 million for mortgages that they sold wrapped up and packed up. They have done a deal and restated their fourthquarter earnings. They will take a charge retrospectively. Banco montekes paschi. Stockholder biggest the second biggest stockholder in that stock. Lets check in on the currencies and see how the french pmi actually translated. You know what . Lets just pull up the euro. A little bit of a spike. I can hardly call that dramatic. If you are in fx, every pip counts. That is very true. Manus cranny with the latest on the euro. Joining us to discuss how the ongoing russian standoff may impact your portfolio is the chief Investment Officer at cigna wealth. Thank you for joining us today. We have china, ukraine, the standoff with russia. We also had pmi figures. The french number looks strong this morning. What is something you are focusing on . Is there one thing that you believe the markets are getting wrong . At the moment, i think markets are just too complacent on the emerging markets. Growthential slowdown in related to fed tapering, related to the china slowdown. And now this russian contingent scenario. Likelihood of a sudden stop event. It has increased given what is going on. No one is backing down. I think the market is a little bit too complacent on this story. What countries are you most worried about . Are you expecting a big correction and should investors pull out now . We have been underweight emergingmarket, local currency , and the problem areas of current account deficit countries for a while. This is not a new story. The problem is that it still has legs. The fed has been flagged down. We have been talking about fed tapering for the last seven months. Why is it not priced in . Because of portfolio flow impact. 55 billion a month still being purchased. As we have seen in past. Nstances, when the q. E actually stops is when you see the impact. When you get close to the edge of the cliff and there is no more liquidity, that is when markets price it in. This is par for the course. What we have his pockets of weakness in the u. S. Economy, pockets of weakness in the chinese economy, and this contagion story, which may cause us to correct sooner than that. Very quickly, we will get back to the ukraine story next. Are you saying that growth in the u. S. Is going to undershoot . I think there is a material possibility that this sort of bounceback that we are going to see maybe a little bit below par compared to what we are expecting. Nonetheless, i think we are expecting a bounce back. We have to see just how strong that bounceback is going to be. Thank you very much. Be talking about ukraine, russia, and china next. Here is a look at what else is coming up on on the move. President obama seeks a united as russia the g7 tightens its grip on crimea. And Virtual Reality worthy of the matrix. Talk about tech and entrepreneurs. So president obama has just arrived in amsterdam. We saw him get into the helicopter and he is there to talk about the crisis in ukraine. He is then heading to the g7. We will keep those pictures live and bring you any updates on that. For the moment, our white house correspondent, former white nicholsrrespondent hans , what does president obama hope to achieve . He wants to preserve the unity between the United States and canada and the European Union on the sanctions response. He also wants to preserve the option to incrementally ratchet up sanctions. We are going to see a stepbystep approach. Here is what he told a dutch newspaper. It went live a few hours ago. If russia continues on this path, the sanctions we have begun to oppose to impose will only increase. Fore is a danger here western leaders. You saw the canadian Prime Ministers and at this. That is that the Russian Troops on the ground in crimea become the status quo. They want to roll that back. The challenge for obama is that you cannot have economic sanctions that are so strong that they will devastate a fragile global economy. It is a difficult balancing line thealk, especially given economic dependence that some of the European Countries have on russia. No russian delegation. What should we read into that . Reason is thel security summit. This is the third one. The russians have always attended that. On top of that, the president also tacked on a g7 meeting. It is without russia because otherwise it would be called the g8. That is this evening. I had of that, we will hear from obama and ahead of that, we will hear from obama and get a sense of what his next moves are. How strong are the new sanctions that he is considering to impose . Justthey be beyond individuals . Will he start targeting industries . Thank you very much. We will go live to hans throughout the morning and get updates on president obama. Still with us is the chief Investment Officer at cigna wealth. Great to have you on the program. Thank you for sticking around. Talk to me about the fact that you are expecting emerging markets to go through a strong correction. You think that not everything is priced in because of the fed. Talk to me about russia. Is now the perfect time for investors to get out of russia . We do not know the impact of the sanctions and a possible recession. I think you are right. We do not know exactly what the sanctions are going to be or the retaliatory measures that we could see from russia. What are they going to do with the western money that is already in russia . Will that be subject to a potential freeze . At very lowe valuations anyway, but there is no mileage in being the first one out. I think you stay and wait and see how it plays out. I speak to Money Managers every day and it is interesting. Psychologically, half of the people tell me that if you are in russia, wait and see. Others would say, why would you take the risk . If you do not know what is happening, get out. You are probably already underway, but there is no reason why you could not continue to reassess your positions. Lets talk about china. This morning, we saw a surprise decline in the hsbc pmi. March is the fifth straight month of weakening. Concerns that they may not meet their 7. 5 growth target this year. ,f you were to rank risks china, for me, would probably be number one on my list. Would it be on yours . It would, actually, because of the incremental growth in china the last few years. It is really sizable. If we do not touch 7. 5 in terms of growth this year, it is significant for the global economy. And currentket account deficit countries. This is the major risk now. I think you are spot on. How do you protect yourself . China is so big that it has impact on commodities, western equities. I think you have to reassess your portfolio. We way we are doing it is are looking to benefit from volatility within the markets. That involves trading a little , using relative value strategies and dispersion strategies. We are employing those in the equity field as well as the fixedincome world. Alternative investments, hedge funds. We kind of saw it coming. Deliver betterto returns than what we might get him pure equity strategies. Since the start of the year, we have seen safe haven assets perform better. Re ready to reassess talking about what, yen . Looking at the yen, fixed income in general, the bestperforming asset class this year. As well as gold. We have seen some good returns. Why is this happening . We all thought that growth was coming up. There is a new risk that we have seen in q1. Safe haven assets do allow us to protect a little bit. Very carefully. That might be a good way to go, providing portfolio protection in the second half of this year as we approach that. What is your take on europe and what is your favorite play . I know i am asking a lot, but i need the answer in 30 seconds. Our favorite play is a producer of aggregates and cement exposed to the cyclical recovery. Very solid u. S. Operations. On the european side, if there is a recovery, which we are seeing good traction in, then i think we continue to improve. We had some great pmi figures in france. Do you like the Construction Business overall or just this company . I think this company has a strong global footprint for us. A lot of earnings are being hit by foreign exchange, which is out of their control. Peripherals are solid in terms of the Risk Reduction we have seen related to europe. Peripheral bond markets perform very well. Insurancesuch as axa, sectors are benefiting from the cyclical recovery in europe. Spreads are coming down and there are benefits for those types of companies. We are sitting here in london. It looks rosy. Growth is gaining momentum. Yet they have a problem with the strong pound. Our investors cautious enough on the u. K. . I would not say we have a real problem with the strong pound. The bank of england has said that the strong pound is doing their job for them. Europe is in recovery. It is one of the worlds biggest export markets. Construction is improving. Domestic demand and recovery. It is rosy. For the pound to strengthen on the back of that, it seems appropriate. U. K. Doese domestic look in better shape than we have seen for a number of months and years. Thank you for that analysis. , sanctions could sink the russian economy. Will the west feel the side effects as well . We talk sanction spillover next. Welcome back to on the move. I am Francine Lacqua in london. Lets bring you up this bead with some companies on the move. Will orderys says it 37 airbus planes. At 3. 8r is valued billion. As part of the deal, they in favorers for of more fuelefficient models. Responded to reports that the nsa infiltrated its computer network. That from information Edward Snowden provided. And hutchison went over w fell after selling its watsons unit for more than 5 billion. Hutchison is controlled by asias richest man. President obama heads to the leaders. Meet g7 they will be asking how sanctions can affect their interests in china. What exactly does president obama hope to achieve at the g7 in terms of business . , he wants to get the u. K. Germany, the others on board and say look, we are prepared to take fairly big steps. Are you prepared to come shoulder to shoulder with me . Going beyond the people around putin. If we go the next step, are you prepared to join me and take the pain that will come back from russia . So far have been outlined. Obama has authorized potential genitals potential penalties. They are ready. The question is, is europe ready . Give us some perspective. Put it in terms of real business. Banking and finance. Socgen, the bank of international settlements. Foreign direct investment. It is one of the big players. Europe is a major player into russia. That could come under risk. We are trying to look at the data. Every week, we sit and look at the data. Is it improving . Exports could drop by over 2 . If you want a personification of what is going on, finland depends on 100 of their natural gas from russia. If you want an account of what is happening on the ground, they were going to build military we are aton and here the end of march and it is not happening. The German Government stepping in and putting a blockage on that. That is the personification of what is happening without real sanctions. Exactly. Yet we could have much more repercussions. First bank is exposed. What about or print america . Corporate america . Exxon is in the black sea. They have done a deal. Boeing are concerned that this year, global gdp to be impacted the same way it was last year with iran. This year, it is coming from russia. There is big american vested interest in terms of participation in russia. America is one of the biggest foreign direct investors in russia. Them joining the World Trade Organization and wall street. I was going to talk about wall street. ,f you ratchet up sanctions wall street might also feel the pain. I think the most beautiful line that sums up the risk for wall street comes from a guy that used to run bank of americas interests in russia. It is this. Reputational risk is perhaps a little bit more damaging than sanctions. Official sanctions are not as important as the sanctions of the marketplace. Why dont you go to russia and if obamawith putin will not . Has 1 billion worth of investment. They have a threeyear contract to help putin build his reputation. Big business and big vested interest. Thank you. Still to come, matrixstyle Virtual Reality could be a game changer for the gaming industry. We spoke to an entrepreneur racing to be the first to bring it to the market. Welcome back. Obama seeing president arriving at the hague. He got on a helicopter and into a car. He is making his way for the start of his day. We expect them to talk later on to leaders of the u. S. , japan, and china. There is more concern growing that the ukraine hes entering the car and on his way to meet with the Prime Minister of the netherlands. It has been 30 minutes since the start of the trading day. But see how things are shaping up. Last time we checked, they were under pressure and we see nervousness. Leaders are gathering in the hague to discuss tension over the ukraine. Andad weakening disappointing manufacturing figures coming out of china. This is a fifth straight month. Measure. Preliminary investors are in this year. We had a stellar figure from french pmi. He said we are getting a little bit of the french pmi figures. 55. 5 and it isg that 54. That live in impact on the euro dollar. These of the Bloomberg Top headlines. Western nations have growing concern over the troop buildup. Leaders gathered in the hague today to discuss this. Frances far right made historic gains in the elections on sunday. The National Party won their first male role seat since 1995. The results were by the left and right. Chinese manufacturing data weekend for the fifth straight month after a preliminary reading in march. The reading fell and missed estimates. Estimates above 50 signal expansion. There is a taste of how manufacturing is this morning. Is better than expected. Germany is worse than expected. That is right. I think the standout is the french numbers. They were good when you compare them to what is going on. They are showing the manufacturing and services for more than five months. When the numbers shoot up words, that is really something. That is a 31 month high. The services are 51. 4. It is quite extraordinary. The market puts the numbers out and the expansion is broadbased. It has been underpinned in the french sector. The gain is for 34 months. Name. Ennedy has a great he is the chief economist and he says that if activity growth can gain traction in the coming months, we could see improvement in the employment front that would deliver a timely boost to confidence. It would deliver a timely boost to confidence and help the french president in his elections. You saw what happened in the municipal elections. He was trounced. Economy turns around, we will see some slowdown. And it is slightly lower is above 50. The German Economy continues to. Xpand, francine thank you david tweed. Lets get some data. He is the european economist at deutsche bank. Talk to me about the french number. It seems unexpected. You have always put into question the pmi figures and how they will look at gdp. Talk me through that. I think that the pmi in the french case has been poor over the last years and they should use the pmi to relate to gdp. It is surprisingly bad in the french case. It has been good for the rest of the euro zone. The voteweeks, happened that criticized the inability of the pmi to accurately describe what is going on in the French Economy. ,hen you look at the distance what is interesting is that the pmi is close to what they call general economic expectations. People think about the French Economy and there is a big discrepancy between pmi and personal output expectations. Companies actually do. The possibility is that the market is overly skewed towards big companies. There are some who are answering on what investors are doing and what the general sense of the economy is moving. It creates a moment of discrepancy between gdp. We have a good figure today. Pmiollows a quarters when repeatedly understated the french growth. Relativet catching up strange for two years. You are saying that the numbers are faulty and it does not point to strengthening the economy at all. The pmi was low before and today, it is too high. They try to look at a wide array