japan expands less than estimated. with bank of france the former head of another bank, axel weber. malaysia airlines vanishes with hundreds onboard. good morning.

we are live from bloomberg's european headquarters. >> let's get to our top story. it is china. are rattled by two disappointing economic reports out of china and japan. withnathan ferro joins us more. let's start with the unexpected decline in chinese exports. there are all kinds of reasons to explain this. >> it is a muddied number. lunar new year. selling january 2013. it was in february this year. false invoices last year. how much did they plan to the export numbers? >> china is clamping down on that. >> you can compare this to blaming the weather. you know it matters, you just don't know how much. this was a huge mess. lunarow that one unit --

new year happened in a different month. we have only seen three banks out of 45 surveyed forecast a negative number. this was a massive mess. that is why you're seeing a playing out in markets clearly. question -- you are seeing the central bank of china guiding the reference rate lower. that is the bottom line. the central bank in china has been guiding the chinese currency lower. the question is -- why? they were trying to introduce volunteer living -- volatility. a lot of people talking about something different. making the chinese currency weaker to boost competitiveness and help exports?

is the concern about a slowing economy? it is not clear why the central bank is guiding the reference rate lower. >> you wonder whether this becomes part of the same story. talk to me about what is happening in japan. we had a gdp rate that was downgraded. more bad news? >> more bad news. what you would want right now with the stronger economy, that is what you would want ahead of this consumption tax hike. they do not have that. that is a concern for a lot of people. manus is going to deliver a speech on this subject. he is your expert at the moment. thank you so much. we are getting breaking news. fcc isrstand that the

probing whether the foreign igging has distorted options. geisha andc implications -- the litigation applications are enormous. it is into the tens of billions in terms of the cost this will have. this is another piece of the puzzle that will make it more expensive. the sec is at the beginning of the investigation. the first time that we understand that the sec is looking into this. asked to not be named because this is sensitive information. ray reporting taking place. some of the news that came out over the weekend. shares in malaysian air have been sliding today.

totallyafter a flight vanished two days ago. stepped up has efforts to locate the plane, following the discovery of oil slicks and stolen passports. >> you have been following this closely. update us with the latest. there have been very little that has been uncovered. aviation a she -- chief says nothing has been found from the aircraft. the oil slicks are being analyzed to see if they were from the missing plane. 48 hours later, nothing. . lot of frustration no sign on the plane.

the search has been expanded 15 nautical miles versus 20. we have also learned has been expanded in mal asia's -- malaysia's west coast. as of now, we know experts from boeing, faa, ntsb, they are in cool while a lump or -- kuala lumpur. after 2.5ts were lost hours after takeoff, but the latest report indicates it was just an hour after. this is crucial because it helps pinpoint exactly when contact was lost. hours, it would be vietnam. if it were an hour, it would be malaysia. a lot of questions being asked. >> when you talk about vietnam and the search and rescue

effort, a few indications over the last hour or so that a yellow object may have been seen in the sea in vietnamese waters and that is being investigated. any sense of an update on when we're going to get an update on that? >> a yellow object has been identified, presumably it could be a life raft. a chopper has been dispatched. there has been no update. i want to highlight what was discovered earlier on. debris, parto be of an aircraft window, which turned out to be nothing related to the flight. too eagerearchers are to find some form of clue to this missing plane. be going live

throughout the day we will bring you updates on the story. >> let's get you up to speed on what is going on in the ukraine. pro-russian forces have advanced in crimea. ryan chilcote has just returned from keiev. we still have unrest in the eastern part of the country. >> that is right. chaoswas quite a bit of over the weekend. pro-russian demonstrators gathered and seized a government building and forcing me governor -- the governor of the region to resign. he had been in power for all of seven days. many demonstrators clashed with

pro-ukrainian supporters in the city. wet wasn't the only place shall trouble. in another city, we saw large pro-russian demonstrations. in the last hour, the russian foreign ministry has said gunmen opened fire on some of those demonstrators. absolutely no evidence to verify or corroborate that information. the russian foreign ministry is complaining about general lawlessness in the east of the country. goinga'sse for into crimea was to protect the russian speaking people there. 's comment was that he would do whatever is necessary in the future if he fell russian speaking people's danger. will this be the pretext for

further intervention in ukraine? it is something to keep your eye on. gasother big concern is disruption -- how likely is that now? >> it's possible. it is why some people think the next front will not involve troops at all. they effectively may find the tap turned off and the ceo of the gas company that there could be a repeat of what happened in 2009. we saw supply disruptions in western europe. it prompted a western government to accuse russia of using gas as a weapon. we have the threat. up, and there is a &g floating around.

it could be pumped east into ukraine to help ukraine out. thank you for that. almost morning, manus cranny has been speaking to economic leaders from around the world. manus, you rejoin the debate. we had some great conversations. what else do we have coming up? we talked on a lot of subjects this morning. michael jury talking about china. is talking about the power of -- coming away from the middle strata. we cover the china will political story to a certain

extent. plosser, making the point to not get whipped about the numbers. can go to bloomberg.com later and hear the whole interview. when i asked him if he was prepared to use phrases like limited and gradual, his response to me about where rates -- he said, they will be a tad lower than where they were historically. we are in a-- beautiful new building, christian noyer will join me in a few minutes. a little bit later, francine

usually has the privilege of talking to axel weber, the chair of ubs. i will have a word or two about japan. quite knowledgeable about japan now. >> you prepared. manus cranny, the latest on the conference. we have two great interviews and are back in just a couple of minutes. ♪

>> welcome back. you are watching "the pulse." interviewsging you from the gip conference. christian noyer joins us this hour. >> we will be live with axa weber later. >> you can make a case, had we pursued -- started at a faster pace. given that we embarked on this measure reduction, it is important to give some certainty or clarity to markets about what we are doing. that is why a it is ok to continue. the hurdle rate for changing is pretty high. >> we saw wages rose. in terms raise flags of inflation? are you happy with that data? >> the data is encouraging.

we had a low wage growth over the years. people have to remember that wage growth is not a precursor to inflation. wage growth is a lagging indicator. usually it is through inflation and then the wages catch up. >> interest-rate hikes -- we have to go through this taper first. then, the federal reserve will look at the playing field again. if we see aase that significant uplift in growth that we could go for higher rates more quickly than we presume? circumstances can change. we need to react to the state of the economy. we need to be more articulate

about how we're going to react to the economy. before to stop tapering we will consider rate hikes. it would look silly for us to ease policy with one hand on the buying and try to -- policy with interest rates. we need to talk about what we will react to and the circumstances under which we will see rates go up. >> more coming out of that event later. >> we also have breaking news this hour. the sec is said to be investigating whether forex has rigged distorted options. is -- we have investigations in europe. this is a step further. >> you hear the words sec and it -- the interesting

thing is that we are talking the same allegations -- manipulation of foreign exchange markets, but .he sec is slightly different they're looking at whether this affected for exchange derivatives, things like options and etf's. to -- markete were you are talking about. every company out there will have a degree of exposure to the fx options. it is a sign of how serious regulators are taking this and how serious they are about cracking down and making sure that the banks involved are called to account. >> thank you. we will be following this closely.

up next, behind the wheel. we will take you inside cate rham. ♪

>> welcome back. -- grandalian grantee prix kicks off on sunday.

this team is finding innovative ways to keep speed up in the cost down. >> formula one is about being quick. f-1 is accelerating from nothing in 2012 to 18 month over 350 people. designers, mechanics, drivers. all based here. the man in charge of this start cyril. he has been creative to get the team to the starting line. >> there is no way we can do that. like any business, we need to find the right suppliers and partnerships.

one,erships and formula where we tried to do is change the technology for value. [indiscernible] there is a value to that. that is what we are doing. there's a huge burst of 3-d printing. [indiscernible] we are pretty much a start up that is willing to operate at the pinnacle of motorsports which is formula one. .we asked why f-1

through the door one day, a couple of guys from caterham said forget lotus and by us. ien i look at what they had, thought we had the potential taking a nice brand, some talented people, and building a car company that could excite many people in my part of the world. if i started tony fernandez cars, i would not have gotten anywhere. you mama money have to spend in building a brand, you are talking about big noise out there that have big votes. -- big bucks.

ham headstart. the amount of mileage we get from doing formula one is huge. the caterham sales have gone through the roof. tony fernandez. .et's move from f-1 >> more talk of consolidation in the telecom sector. looking for some pessimism, the only industry group falling is basic resources. miss.e data, massive copper hitting an eight-month low. have ang up, we

conversation with christian noyer. that is coming up next. .ou can follow us on twitter ♪

>> welcome back the "the pulse." . these are the top headlines. moreinese exports fell than 18% from the year earlier. that is the biggest drop since 2009. analysts were expecting a 7.5% increase. >> the search continues for the

missing malaysian airlines jet that disappeared two days ago. australia and the u.s. are among the u.s. -- those helping in the search. >> pro russian forces advanced in the crimean peninsula. the ukrainian prime minister will travel to washington this week. defends the ax -- the actions of the crimean government. >> let's go to paris. the gic conference is underway. with cranny is standing by an interview with christian noyer. >> thank you. our host for today is christian

noyer. great to have you with us. the ecb has just met and decided to do nothing for now. -- is it toomuch controversial to go for another using right now? what is your take? >> i think the issue is not at all that it is too controversial to make additional easing. the basic issue is that when we have looked at the economic data , money market data, inflation data, etc.. everything looks to be in-line with our scenario. the conditions and the short to money markets, yield curve, things like that, it is extremely, native as the

accommodative as the lowest. it seems to be aligning with the needs of the economy. it is not that we refuse to do something more, but with the accommodation we have at the juncture now, it seems to work so far. risks and we stand ready to react if we see risks. >> where are the biggest risks -- biggest risks coming from? could be changing conditions in the emerging .arkets

the events have not had very serious or material impact. things may change. the policyt to toolkit. this is what everybody wants to know what is on the agenda most. what is seriously on policy agenda? is need to take action, what in it? to all kinds of tools, depending on the kind of short and the problem we would identify and need to counter. it is mostly the question of transmission to the real economy. for the time being, it seems to be ok. if we see that lending does not restart when there is demand for lending, that is not that big at the moment.

globally, lending is developing. if we see there is more need, we may need to develop a different type of tools. -- it wase by some necessary to prepare some dysfunction the market. >> let's talk about the potential to buy more assets. there have been a lot of people talking about funding for

lending, etc.. does the ecb need to change the collateral route? >> the biggest range of -- ateral heated byt has been the lehman brothers and we need to have the market develop simple, clear transparent things.

-- enabling investors to look at the loan by loan composition of --. i think the framework exists. we need to develop that. with majorn working banks. we are trying to set up a new --e of >> talk to me about that. you have been at the vanguard of trying to push securitize a ation. how close are we to that? >> the technical work has been finished. we set up the framework. it is largely based on the

characteristic that we are more developed in france and other countries, that is the rating of loans by the central bank. there is the basis to know what quality.erage asset everything is technically prepared. we need a few banks to start up the market and they are planning that of the coming weeks. we hope to see that develop at the end of this month. >> you have done a great deal of work on this model. >> it could become a major type of asset developing in the area.

system stepelp the into the market. >> the benchmark that you use is 136 in terms of guidance. do you want to see a lower euro? exports.to drive what is your view? >> it is not a policy goal. we are thinking the same as the federal reserve. input, so wertant have to take that into account. when the euro tends to strengthen, it creates additional downward pressure on

the economy and creates additional downward pressure on inflation. in both cases, that is not wanted at the moment. we are clearly not happy at the moment. mr.drawdy mentioned that -- ghi mentioned that the euro has somewhat decreased the inflation figure by .4%, roughly. something -- it is one of the factors that we take into account, to judge whether the development is closed or not closed. it is incorporated in our global analysis to decide whether the degree of acclamation is

sufficient or not sufficient. >> thank you for the interview and for hosting us at the bank of france today. guy, francine, that is it from the bank of france. i see you guys a little bit later. >> thank you so much. interesting to get his comments on those asset-backed purchases. >> let's stay in france. -- it is said to sell to ely added. for more on the telco wars, we are joined by matt campbell. looks like it is stalking

-- stocking up very nicely. a game of three-dimensional chess going on. sfr was looking unloved for a long time and now it has two fairly punchy offers. iliad comes out of it with having potentially more network capacity. bouygues to make the case that this will not reduce the composition. thank you for that.

this is like old school bidding war. matt is half deals reporter half telco reporter. it is amazing the amount of business being done in the space. meant -- alsothe met fighting -- ultimate fighting championship. the rise and knock out of ufc. ♪

>> ultimate fighting is the fastest-growing major sport in the world. two fighters compete using mixed martial arts in the modern equivalent of the gladiators running. they go flying like he has magic in his hands. >> ultimate fighting is not for the faint hearted. punching -- kneeing, punching, kicking. fastestne of the growing and lucrative withdrawals in entertainment. is hostingas company 49 events this year. fights are broadcast in around 150 countries and territories to nearly one billion homes.

north america is the biggest market. brazil is where the growth is. this football mad country, ufc is the number two sport. it draws in as many as 40 million tv viewers per event. foundersfighting's hope it will challenge football's position as the world's global sports. we spoke with the ceo of ufc. we started by asking him if he was surprised by how quickly it has grown. our sport found that is transportable. it is the only global sport. landscape inut the the different markets. in the u.s. it is all about the nfl. aboutia, it is all

cricket. a lot of those sports have a hard time transferring popularity into different cultures and popularity's -- populations. this works everywhere. every country, every culture gets it everywhere. it is a simple spore. -- do you see the most growth? >> we started small. we are a global media company now. when you think about our ability to scale the business. a lot of sports are defined by the fact that they have a season and a certain number of games erie it we have expanded from 1-wood bought the company to doing 2014 where we will do 49 events. our biggest markets are north america.

we are based in las vegas. we have seen tremendous success in brazil. we have become the number two sport in brazil to soccer or football, as you would say. of 40e the upwards per fights.wers ofhave a tremendous base talent from brazil. these athletes have become bigger than run although in the in the market.do that is driving our business. we are seeing a lot of traction here. we are going to do an event in london, berlin, stockholm, dublin.

>> give me a sense of -- it is your business is worth a billion. how much is a going to be worth in five or 10 years? are we talking 10 times bigger? how do investors take advantage? >> we are the league. it is not just one specific team. we are the league. think about the value of the premier league. that is what we are striving for. the ability to scale international growth, international media rights, we are at the beginning of being able to exploit and generate revenue for this product. we have a tremendous amount of room for growth. we are a privately held company. it is owned by me and my brother. ready to launch a

game with electronic arts. it will launch at the beginning of the summer. there are other companies that --e associated with wet wh >> why not ipo? >> we do not need capital to run it. where this position generates a lot of free cash flow and we do not have a lot of capital investment that we need. we like staying private for now. ultimateas the ceo of fighting championship. >> we are back in a couple of minutes. ♪

>> the u.n. is facing an uphill struggle to get people to commit to carbon cutting. toions are gathered to try thrash out an agreement. we have been talking about the fact that we are trying to get an agreement, but it never comes to fruition. belief is there. it is a hopeful situation that we find ourselves in. be signed.y should protocols the

performed? >> all of the data has not come through. that is a two or three-year process. we should be coming up this time next year to find out how we did. are we sure it cut them but do not know how much? >> we are sure there have been reductions in several countries, we just don't know if it has been performing the way it was supposed to. >> we have had a long, drawnout struggle in europe to make some improvements to the trading system, to take away the surplus . that has been approved. it was about carbon trading? >> correct? -- correct. other countries are forging ahead. they're cutting emissions and

trading emissions. we have new system starting around the world. >> thank you. we will find out on friday how it is going. >> we will have to keep an update on that. thank you. guy come over to you. bloomberg the first word is up next. for our viewers, it is the second hour of "the pulse." fasting -- we will have a fascinating conversation with alex -- axel weber. this is the sec getting involved in the fx rigging. what you well. regulators are taking this story very seriously. the sec is talking about the impact on the etf market. that will make lawyers happy and

the banks very unhappy. we will follow-up on that story to make sure you know the implications of what it will mean going forward from here. you can follow us on twitter. ♪

>> this is "bloomberg surveillance." >> investigators from nine nations search for malaysia air flight 370 in the south china sea. an act of terrorism not ruled

out. the prime minister of ukraine will meet with president obama wednesday. on this monday, russia consolidate its hold on crimea. after the better than good jobs report will june be busting out all over after a glorious spring in new york city? good morning. it is "bloomberg surveillance." we are live from world headquarters in new york here at monday, march 10. i'm tom keene. joining me, scarlet fu and adam johnson. at a great weekend. finally decent weather. >> i only had to wear one cult instead -- one coat instead of two. in overnight news, asian stocks and global metals fell as china posted its biggest drop in japan, since 2009 and the economy expanding less than forecast in the fourth quarter. about 0.7%. economic news in the u.s., admittedly, nothing.