Year. No more tpi for lloyds. No more payment protection insurance from lloyds. As i say, thats different to rbs and barclays. Rbs and barclays both putting aside more money for payment protection this week. Lloyds up 3 . The biggest conundrum is this. There is not going to be a huge amount of liquidity in the bond market. Domestic german figures are going to be out. In london, late breakfast, short days. We are back up here. Start of the week europe up 0. 5 . Youve got dropping prices, rising yields. In germany, all around europe you are seeing this reevaluation of risk, and still, the euro Foreign Exchange driven by Interest Rate differential. That is more or less the point. The euro rose by over 3 this week. You are seeing yields rise in europe. You are seeing the bond prices fall. Up we go. 1. 1245 is where we are on the eurodollar trade. This is one of the strongest months that weve seen. We are straight into may. April was one of the strongest months weve seen in almost 4. 5 years. They must be happy boys, because they made these big calls. We will see whether this momentum last. What were those calls, . 90 . 87 . Cant remember who they were. Consensus is, eurodollar will be down. Jonathan manus cranny, thank you. The ftse 100 doing nothing. A ray of light in the land of the rising sun. Japan ekes out a little bit of inflation, 0. 2 . Lets get to tokyo. We are joined by james. James inflation, it is a hard read. I look at the top line, then i look at the bank of japans preferred gauge. It is not very pretty, is it . James no governor kuroda said two years ago that they were going to reach 2 in two years. It is now that time and 0. 2 . They are 1 10 of where they said they were going to be. It is better than last month. We are seeing a small pickup from the recent rise in oil prices. Prices for household gas and things like that. But it is not a great picture for the bank of japan or for a wageled healthy inflation in japan. Jonathan james, youve hit the nail on the head. Governor kuroda said he would be where he thought we would be. We are nowhere near it. What is he saying about the Central Banks policy Going Forward . James he was very defensive yesterday in the press conference. There was a lot of questions about that. He came out at least three times and said, the bank does not see the need for further easing. They say prices are going to pick up. Even though theyve had to postpone the time when they expect the 2 , they still think they are going to be achieving that. The bank of japan says everything is fine. It has been delayed, but prices are going to rise, so stop worrying about it. They came out today with three separate reports saying the policy is working, inflation is rising Inflation Expectations are rising, nothing to see here. Very confident statement from the bank of japan. The question is, whether the people in the market accept that and stop expecting further easing, and whether the data start to support that. We dont see the data supporting the bank of japans decision and we dont see the market accepting that argument. Jonathan james, thanks for joining us. James mayger joining us from tokyo. Lets get the investors take. We are joined now by james bevan. James listening to james, my colleague the expectations of more easing economists expecting another move, another polling of the trigger. What is that going to do for the japanese economy . James it is very clear, the boj has been faulting asset prices by buying japanese government bonds. We will hold them until maturity. You get out early. That is what we should see more of. Japan needs a huge structural shake. It doesnt have to have a big shift in the psychology of investors and consumers. That is a very clear signal the bank of japan is being encouraged by the policy agenda. The second issue is, we need companies to come to the table to create more profitability. The return on equity is very low. Japanese Companies Hold so much cash. They recognize the importance of value. Returns will be magnified manifold. Jonathan ive heard about the changing culture in japan in terms of corporate profits. A lot of people will say that we are starting to see some signs of that. James we definitely are. I think that markets are much more discriminating. It trades on that multiple. A heavy premium to banks like barclays. It has a 15 return on equity. That justifies a high valuation. Jonathan we are going to talk about lloyds later. Back to the macro world, i look at the data coming out of japan. On one hand, it paints a decent picture of japan. You look at unemployment lower available jobs higher. We talk about this in japan every month. Wage growth isnt there, james. That chart should tell me the wage growth is coming. James there is no wage growth, no consumption growth either. It is easy to see why. Over the period since japan began the decline, it has seen a 16 improvement in productivity. People think the economy is delivering more, why is it not moving . The workforce has shrunk by an equal and opposite number. It is difficult for the economy to grow. Jonathan even more difficult for an Equity Investor to play these stock stories when it is a topdown theme at the moment. For the last month, all weve been doing is training a big fx move. James i think the premise that the yen will be taken lower by the bank of japan presents fantastic longterm opportunities for investors, who can focus on good quality Japanese Companies like shimano, the global leader, very technical company. I think about bridgestone, a company that will take on michelin. Jonathan look at the qedriven japanese equity market and eurozone market. Where does james money put the money . Where does james bevan put the money . James im very distrustful of these macro ships. I think the ecb will run out of money long before the qe program is finished. For example, domestic banks are doing much better than most people have given them credit for in the eurozone. Intesa these are companies which will be less risky. There are some fantastic components manufacturers in the automobile sector. That is another area where i will be putting money. The areas im nervous of our high Leverage Companies dependent on the maintenance of lower rates. Jonathan that is one side of the story. The other side is the politics. If i look at the banks in europe, there is going to be a problem when these governments get into power and try to protect people just wont pay their loans back. James i look at economies like spain and i see fantastic news in Economic Growth. If you said to me, how do we solve the problems of europe, it is through solid growth, productivity improvements continued expansion of output. Spain is delivering. Jonathan james bevan is going to stay with us. Coming up linkedin loses 7 million off its market cap after some ugly results. Bill gross will wrap up a huge week for european bonds. And fight night in las vegas. Ive not forgotten about it. All the staggering numbers behind the fight of the century later in the show. Jonathan good morning and welcome back. Im jonathan ferro. This is on the move. Linkedin not connecting with investors. Shares plunged yesterday after it missed analysts estimate for the first time. Ryan chilcote joins us for more. Break down the numbers for us. Not pretty across the board. Ryan this is basically a revenue issue. If you look at the rounders the numbers for revenue, the company said that it expects to make a little bit less than what analysts were estimating. The company, Going Forward pretty much brought back its forecast for the entire year. It is not really an issue of not making money, it is just not making as much as investors thought. That was enough to cost the company about 7 billion worth of its market cap. Jonathan the strength of the dollar has been the big theme for the quarter. Investors look at Companies Like apple. The dollar hit them as well, but they delivered. Ryan it was one of the issues that was pointed out by the cfo. 39 of their revenue comes from outside the united states. The dollar fell by 6. 2 percent. It is going to be a factor. Does that explain the mess in terms of not living up to analyst expectations . Im not sure. It doesnt take a brain surgeon to figure out what 6. 2 is going to cost on revenues. But it was a factor and it was one that was pointed out by the cfo yesterday. I think what weve got is a straightforward case it is businesses which are growing but it is not as quick as investors thought they are going. Jonathan thank you very much. Tesla, very different company, unveiling batteries to store electricity for homes, businesses, and utilities. Tim joins us now for a little bit more. Expecting an announcement. Was it in line with what you were expecting . Tim it was. What we wanted to know is, how big is it, how much does it cost . I think they said they will start at 3000. They havent given european pricing. 710 kilowatt hours. The average house uses 30 a day. You could move off the grid. Jonathan with tesla, it is this blue sky thinking. Others think, this is decades away. How quickly can this help this company . Tim everybody is looking for this transformative battery and the next big technology, and the breakthrough. I think what mosque is showing whta mush is showing what musk is showing is that Technology Today is the future. Jonathan now, we go from linkedin to tesla in the same paragraph. As an investor, where do you look . James i look at whos going to make the money. It does seem to me that tesla is going to make a lot of money. The second issue is who are going to be the losers. I look at the big oil makers and i would expect the oil price to oscillate between a low case of 40, uppercase of 80. Renewable Energy Changes the competitive landscape. By 2020, the oil majors are going to be punchdrunk. Jonathan tim, lets talk about that. We used to look at the oil majors and think about their future. Things changed. For the likes of tesla, are they worried about the move and the last six months . Is that a temporary thing . Tim absolutely right, they are in it for the long term. A few weeks ago, i think it was the geneva auto show, the head of design for aston martin went to his lead engineers and said show me the luxury sports car of the future. What do you think howard that . It was not petrol. Jonathan james, that is a good point. You got tesla, struggles to make a profit, but it is a longterm player. You got aston martin, bmw players, you invest in them. Why cant they do their own tesla . What will happen to tesla if that is the case . James they need to be able to move really quickly. The bmw flagship this year with about a range of 23 miles, that is inadequate. It is a concept vehicle as opposed to a Production Model that delivers clean energy. But the direction is important. I think what you really need to do is look at the bridgestones of the world the companies that are going to be in business when all is said and done. Jonathan is that the point, that when we look at tesla, if you dont know much about the company, you just see a car company . Is this just going to be a Battery Company . Tim going to be a big part of it. The Energy Storage market is going to be far larger than the automotive market. Jonathan tim coulter, thank you for joining us. James bevan will stay with us. Next, the bond revolt. Are to negative yielding bonds . Jonathan good morning and welcome back. This is on the move. The short of a lifetime. That is how bill gross describes the opportunity on sovereign debt. He tweeted the comment on april 21. Look at the chart, there you go. Not a bad call. Should we give him a new title . The blinking bund king. Lets get some thoughts with james bevan. As he got his mojo back . Quite a call. We dont know that it is going to be right at the end of the year. James ive been calling the end of the bond market for far too long. I think ive underestimated three factors. I underestimated the stent to which the reaction of governments for some much longer than was reasonable. I hadnt really anticipated how it worried investors would be about deflation. Yields were obviously very low. They are terribly fearful of deflation. The third factor, before you interrupt jonathan i would never interrupt. James the third factor is there has been a very considerable expectation that markets worry about risk. That has really changed the market. Jonathan what has changed in the last couple weeks . In terms of what you are talking about now, not much. You look at the size of this move. James weve also had some very buoyant Consumer Confidence out of euro land. I think people worry about the economy having ultra low yields. Actually, if you join the dots theres going to be [indiscernible] jonathan would you take the short that bill gross is talking about . James what we have got alternative exposures. We have senior secured debt. We have anomalies within the market price, where market liquidity has grown capacity to achieve outrageously high yields. Jonathan i want to move it onto something else. You are managing some of the church of englands money. The church of england no longer wants to be invested in these heavily polluting companies. Can you talk to me about that and how that affects what you do . James they are two rather separate travels being played out. The first is about what is reasonable and appropriate. The other issue is all about market failure. I looked at the pricing of Coal Companies and tar sands. I expect that we have to burn carbon in order to protect the Global Climate from increasing in temperature i do think we are going to have carbon pricing. I think we are going to have regulation and legislation that will stop these companies doing what they are doing. I have no call, no tar sands. Jonathan so from an ethical point of view, and a potential to make money. James the ethics today are so often the registration the regulation and legislation of tomorrow. Jonathan coming up, we talk lloyds. The british lender raised its targets for the year. We will give you details after the break. In the meantime, you can follow me on twitter. Lets check out these markets. The ftse 100 pretty much dead flat at the open, down 0. 6 . We wrap up the week what a week we have had. Eurodollar off about 3 this week. Three weeks of gains. A huge month of gains. The stoxx 600 down by 3 . The dax just had its first month of gains so far this year. The german 10year, 15 basis points last friday, climbing all the way up north by the end of the week. Jonathan good morning and welcome back to on the move. On jonathan ferro. 30 minutes into your trading day, lets look at one market open. Ftse 100, there we are, down 0. 3 . That is the ftse. Lets check in on the week. Stoxx 600, a week of losses. Down by over 3 over the week. Eurodollar up by 3 . No surprise. The german bund what a move over the week. Not skyhigh if you just look at that, but if you look at the move two weeks ago intraday, we drop below five basis points. As for brent, another week of gains for oil, the best month since may 2009. Lets dig into some of these indexes. Lift the lid on the ftse 100 and talk about bailed out lender lloyds. Firstquarter profit rising 21 . Manus cranny joins us for a little bit more. James bevan is still with us. Manus cranny, a beat. Manus as you just said, pi for profit k for capital. Impairments down nearly 60 percent. I think that is what the markets are focus on. Bloomberg is focused on the fact that they have a little more capital. If you look into ppi those insurance policies that nobody needed, never wanted, but they sold them to us anyway jonathan it has been ugly. Manus but no more ppi provision this quarter. That is after 12 billion pounds of provisioning on that. Margins, are you going to make any money out of it weston mark out of it . It is a bit boring, but it is a benchmark. It will be above 2. 5 . Rbs warns that their margins were under pressure. Jonathan james bevan, does he like what he sees . James i think the ppi scandal turned out to be the stock save for the u. K. Economy. If the u. K. Consumer does not have the 23 billion pounds handed over by the banks to the consumers so that consumers can spend, the Economic Growth [indiscernible] manus i object. The desecration of banks institutions, jobs, but decelerate or affect, the lack of lending james lets get things straight. The banks played fast and loose and were absolutely hollowed as a result of it, but the ppi issue itself has turned out to be extraordinary for the economy. Jonathan bigger stimulus than qe at the bank of england . James if one looks at what happened on the back of very low money rates, the bulk of consumer response has not been spent. Ppi money that came in was a windfall. Manus is a great student of economics. He will readily recognize that spending is much more important than saving. Back to lloyds. Jonathan hes made his point and is moving on. James hes had most of the morning. Where do i see lloyds . I see lloyds as moving up the next year. Hero it call. The background thinking is this we are looking at a company that is on 1. 4 times book. It is a fat multiple. But it is there because it has a 16 return on equity. I think the capital that manus referred to is going to pay a big dividend. For end 17, the dividend yield on the current price is well over five. Jonathan is james bevan in the stock . James absolutely. There are two interesting players ahead of the general election. People are fearful of the banks and utilities. I do think that investors should look at lloyds and bt. Jonathan manus cranny, what are your thoughts . Just digesting . Manus i dont disagree with anything that was said. Jonathan is lloyds not just a prophecy on the Housing Market in the u. K. As well . If things do start to turn, and they have, what happens to lloyds . James i think lloyds profitability is now deeply protected. I dont worry. You said where would i be positioned. I would say it is better placed in barclays because of the risk of imposing a mansion tax. Jonathan there are going to be a lot of people that look at those closing rate mortgages. If they experience the kind of hike, they havent got the money to meet those Monthly Payments lloyds like every other major lender, are going to be exposed to that. Is that not a concern for you at all . James not in the context of the current valuation. The current very depressed share price, there is a huge amount already baked in. That doesnt worry me. But if you talk about th