>> pull back or face the consequences. barack obama warns vladimir putin his actions in crimea could be costly while the prime minister presses ahead in washington seeking financial aid from the imf. >> breaking away. new zealand comes the first zealand becomes the first develop nation to lift interest rates from record low. >> air malaysia says there has been no debris spotted on the images from the china satellite. details coming up.

>> "countdown welcome to." -- welcome to "countdown." bloomberg reporters are standing by across the world. is live from hong kong with the details on the rate hike. >> the annual parliament session closing today and what they said . day six for the missing malaysian plane. 2014ve a look at the awards and the big players behind the game. all this week up, we are taking you inside and talking to the chairman tony fernandez.

china just releasing its data for industrial production. they are below estimates. alsotments in retail sales below estimates. let's go across to stephen engle in beijing following the data. good morning. these are disappointing numbers according to the estimates from economists surveyed by bloomberg. there is a caveat here. there is seasonal distortion because of the holiday and the later part of january and early february. let's begin with fixed assets, urban investment. 17.9% and we were expecting an average of 19.4%. i have done back in the last decade plus and this is the lowest rate for fixed asset

urban investment since december 2001. 11.1% and we were expecting 13.5%. this is the lowest ace of growth are retail sales since january 2 thousand five. industrial output, cumulative 8.6% growth and we were expecting on average 9.5%. but as the lowest since 2009. spoke after the national people's congress wrapped up. what were some of the highlights of his comments? >> he touched on a lot of things. first of all, the growth targets set at 7.5% for the full year and they took a little bit of heat for that. how will you grow at this rate if you have pollution being so

horrendous and that rising. these are tied to the high-growth rates you are seeing in china. backing away a little bit by saying that the target of about to be flexible and have a level of tolerance but perhaps a lower figure, or even a higher figure, china needs growth in that area for jobs indicating the urban areas in china created about 10 million new jobs every year. they need a sustainable level of growth. china needs to pay greater attention to financial risks. he is monitoring the dangers from the likes of shadow banking and he has pledged that china must ensure that the financial risks do not threaten the entire even as some defaults are, as he said, unavoidable referring to last week's first onshore default by the solar company. quickly, i will run through some other things. china says they will keep up the

search for the malaysian airline plane. this is on the minds of most people in china. 153 chinese were on board. he says they will not give up the search as long as there is a glimmer of hope. they have 10 satellite snapping images in the gulf of thailand and south china sea. he had strong words about corruption saying china will have zero tolerance for corrupt officials and that is nothing new. he talked about pollution stating the obvious that it is a serious issue for people. they will cut coal consumption by some 22 million metric tons this year. he talked endlessly about the need for reform. so many reforms to talk about but in particular, getting markets to play a bigger role in the economy and reducing the dominant role that state-owned enterprises have over the economy. he said they need to reduce the straitjacket on business. quick stephen engle live in beijing. -- >> stephen and go live in

beijing. >> the move comes after talks interim ukrainian prime minister. ryan chilcote has more. does the pressure of for the referendum seem to be building? >> there is no doubt they are ratcheting up the rhetoric at a minimum. we have senator bob menendez from new jersey saying stuff like the russian president is lying russian roulette. what's interesting is you have between the united states and western europe and, crucially, germany on this one. angela merkel was talking to the polish prime minister pushing for tougher action on russia. she herself was talking pretty tough. she was bluffing, she was doing a pretty good job. >> we live in the 21st-century and we do not solve conflicts to

military means. we do not evade these conflict. if we costly repeat our readiness for dialogue and it has no effect, we take into account sanctions. >> meanwhile, we talk to people inside the kremlin and say they are preparing for iran-style sanctions. they're trying to calculate exactly what it would mean for russia to have the sanctions. secondly, they are already talking to state-controlled companies about how they can help should there be sanctions. the other thing going on as of this morning is more military exercises just east of ukraine. the reality, i think, come monday when you get the eu foreign minister meeting, look we could see is not salon sanctions just yet, that is what they call stage three, but stage two of the punishment process involving a widening of travel restrictions and the freezing of assets of russian officials with the notable exception of the

president and foreign minister. >> do they have support from other countries >> there are three that support them unreservedly. venezuela, and china a bit surprising, but the neutral list is huge, those that have not expressed a strong review , butding austria, belarus they are a neighbor of russia so they are also alarmed. north korea has yet to weigh in. i guess they are behind on their foreign policy. >> malaysia said they did not find any signs of debris in the satellite images that suggested where there could be some. still no search of the missing plane. we are covering the story from kuala lumpur. with the latest, haslinda amin? chinay have verified with

that there was no debris. earlier today, this morning, vietnam sent their aircraft to that particular location finding nothing and they will continue the search this afternoon, they said. to recap on what china found, they saw images from the satellite, three objects said to be medal, one measuring 28-20 four meters and the other 18 by 13 meters. images were not verified to be part of the missing plane. they have confirmed that they are seeing nothing. they say they have not seen any sign of the missing plane. we have heard the search has been extended further. expanded.been the search team is now 12 countries. the latest to join the search,

india and brunei. the world experts are here, the nst be, faa, boeing, cia -- ntsb. they need more experts to decipher the data has of now. they said that they will concentrate on the south china sea until they get more information suggesting that information is not being shared among the countries helping with this particular search. the minister says that this is unprecedented. coordinating the fed assets is really tough, really difficult. amin innder -- haslinda kuala lumpur. >> the bank of new zealand is the first central bank to raise rates. they are fighting some inflation their new zealand, david. >> good evening -- good morning.

they have a different set of circumstances. new zealand is a different planet. they are on a different sort of path and the growth cycle. gdp comes out and about a week and a half so we are seeing robust growth there and seeing things like the rebuilding from the christchurch quake kicking in and record immigration, the strongest immigration and something like 10 years if i'm not mistaken. at the same time, it was not at all surprising given the forward guidance emphasizing the need to start normalizing rates. the official rate right now is 2.75%. but i think is a big curious is he also tried to talk it down saying it's a bit too strong at

this point and it's becoming a bit of a problem for the exports, especially dairy producers. chunk oforts is a big the new zealand economy. at this point, he does have a point because the kiwi dollar ignored those comments and i think we are up something like 10% since back in september. it is one of the best are forming currencies. that's basically what we have in the moment. the first developed economy to start to tighten their belts. >> running counter to all of the other big developed a banks. david inglis from hong kong. >> the industry is worth $93 billion. we have the big players behind the games. >> i will sit here and pretend this is what i do but $93

billion, you have my attention. he could surpass $100 billion this year and $800 million came in the first 24 hours a grand theft. oh is released. movie sales do not even touch this size. in the u.k. and the u.s., the videogame industry is bigger than the movie industry. best publisher behind that was indeed rock star. they got the fellowship award last night. within the gaming industry, it has become and balanced which introduces an element of risk. you have smart phone games, cheap to make and cheap to buy .ating up a share of those and you have zybnga. but these guys have to put out like $200 million to create

grand theft auto. i could really disturb going on in the industry. >> a lot of adjustments being made. we will have a guest on the subject at 630. >> we will be looking at some of the buying opportunities coming up. ♪

>> time for today's company news. raising the cash component for the vivendi french phone unit. they are offering 11 billion euros in cash along with 46% of the merged company. this puts the cash portion add of a competing offer. mercedes-benz, the third-largest maker of luxury cars is going to made tailor-made variants of the c class to better target customers across the globe. for the first time, they will create the unit on four convents allowing them to be more flexible to local consumer demand. liberty global plans to offer mobile phone services through europe taking on carrier such as the uk's vodafone. using its european cable tv

infrastructure will allow it to keep margins high. they are controlled by john malone and they took over virgin media and 2013 and agreed to by the dutch operator in january. welcome back to "countdown." in london.. copper trading near its lowest level since 2010. us have a chat about the commodities space joined by the head of commodities research. good morning, sir. thanks for joining us. another piece of disappointing chinese data released half an hour ago. data andat with export lots of commodity investors to think about. >> it is a little worrying. the february export data, i think, caught everyone by surprise. it was certainly weaker than the market anticipated.

week.s out today, again, we focus on looking at the demand in china for oil products and that has been a week for the last four or five months. certainly the situation at the moment is quite difficult. eventslook at the recent in china, the 7.5% growth target , on the one hand, that is encouraging, but a lot of the other policies china is trying to implement at the moment, you are looking at their attempts to combat dilution, combat overcapacity in some of the heavy industries and also the effect of some of this deregulation taking place across the chinese financial markets. all of these things, we think, are going to make it harder but to achieve that 7.5% growth target. copper,in to us why which has been the focus in recent days felt eight percent in three days. make some sense of that. >> i will do my best but that's not an easy one.

the copper market has been caught in recent months the between two office it's in the near-term. you had physical scarcity and china importing large amounts of china and high physical premiums . outside china, you had a rapid decline in available stocks sitting around in warehouses and stockpiles have fallen to really quite low levels around 130,000 times. market has been looking at the physical scarcity in the near-term and comparing it with the medium-term outlook which is for a surplus in the copper market. we have a lot of new mining supply coming on and once that supply is turned into new refined output, it looks like the market will be moving into surplus the remainder of the year. >> that seems to be about the fundamentals and there is this other dimension about the use of

copper in financing markets in china. explain what that means. >> the financing trade is one of these shadow banking mechanisms, if you like to wear by there are a lot of things you would like to do in china which are quite difficult in the current environment. of use of copper as a means obtaining cheap credit is something that has happened in china. this works because china consumes so much copper. hasth and chinese demand been very strong and increased by 10% in the last two years. the financing trade would not work if there was not this underlying demand for copper in china. harshlysee in china is as a result of this, you see some quite large swings in chinese copper stockpiles. from the lows last year, about 350,000 times and bonded warehouse stocks have increased

as more metal has been coming into the country. >> we will continue this conversation. own joining us and more thoughts on his commodity market when we return. ♪

>> welcome back to "countdown." >> the time is 6:24 a.m. we are with nic brown.

we talked about the physical markets in the use of copper in the financing trade. join the dots for us. >> we're getting through that point where the market is worried about physical scarcity as chinese stockpiles have increased to where there is now about 800,000 tons and bonded warehouses. that then means there is more copper available to the rest of the world so with chinese imports, we expect them to decline so the physical scarcity that has been worrying the rest of the world should go away. >> you are forecasting copper to decline later in the year and the average forecast was for 6700 $50 per ton. we are at $6,507. time to change the forecast? >> quite possibly. we got our timing a little bit wrong on this one. we have been warning there was a risk of lower prices but timing is everything.

to less use ofad copper for financing and less >> potentially. the deregulation which is slowly being rolled out in the chinese financial markets will ultimately mean there is less need for copper within the financing trade. the only reason the financing trade is successful is because china consumes so much copper. it's important to separate the two. if you take away the financing trade, it does not remove chinese demand for copper. it still has a voracious appetite in we think of a continue to be so for years to come. >> we will leave it there. we'll talk about some of the other precious metals. nic brown, head of commodities research from natixis. >> zombies took the night at the bafta video awards.

the global gaming market. stay with us here on "countdown." ♪

>> these are the bloomberg top headlines. clashing with police in turkey and reports that two have been killed than the unrest spread following the funeral of a teenager who died from injuries sustained during the deadly raids. reports that a fourth person has died after yesterday's gas explosion in new york. the blast flattened two east harlem apartment buildings. just 15 minutes after reports that gas in the area and several people are still unaccounted for. the vietnam search team say there is no evidence that debris in an area photographed by chinese satellites.

it was said they could show images of the missing malaysian jet. the search for fight -- flight 370 is in its sixth day. hello and welcome back to "countdown." >> the time in london is 6:31 a.m. breaking numbers from lift hands up the second largest airliner. in terms of what they're telling us, we are getting quite mixed picture when you compare the numbers they are giving us against estimates. operating profit coming in at 600 97 million euros, above 2 million of 66 euros. it has come in and that was the prior year, 1.2 3 billion. net income has dropped and

operating profit has beaten estimates. 697 million was the number of operating profit against the estimate of 662 million. and 2015,ad to 2014 an operating profit of 1.3-1.5 billion euros and they are talking about the new operating profit coming through due to depreciation methods being changed. they are clearly changing the way the way to do something with regards to depreciation. let's get to david tweed, our european editor looking at this particular airline from berlin. david. >> they're really under pressure all around, aren't they? they are under pressure from the discount retailers and under pressure from the gulf airlines. emirates, qatar, these. they are trying to do something about it and we have seen they are transferring the short-haul european flights to the low cost airline which is part of them,

the german wings. they're upgrading the first class and business class seats. premium even adding economy to some routes but i think something really interesting about what deutsche lufthansa is doing is this is something where they are stretching out ahead of the pack in europe and this is a plan to stream in-flight entertainment onto smart products like this one here. i'm an android sort of guy. this is going to start with routes to middle east, north africa, some of the former soviet states and it will be used on the aircraft thomas the a3 21. this is really where they are stretching ahead because it could be very important for them especially getting advertising and doing sales on these sorts of in-flight entertainment products. >> does that mean everyone needs to have a mobile phone switched on and then? i thought that was supposed to be dangerous. >> it is supposed to and it's

getting a bit of pushback, this idea. at the time that they announced it, we had the tourism fair going on in berlin and we caught up with the ceo of qatar airlines. imagine if you had 200 passengers all turning on their tablets at the same time. what would the interference be like? a little bit of a pushback there. lufthansa saying it's been tested and there's nothing to worry about. said they could get everyone to turn off their devices if they had to. what i'm more wondering about, anna, is where do you put your device when the meals come? >> the perennial problem, david. david tweed joining us with the latest on lufthansa out of berlin. speaking of germany, the bundesbank will release its annual report later this morning. hans nichols will be speaking to the bonus bank president coming

up on bloomberg a little later on. 634 a.m. the zombie thriller the last of us won best game at the bathtub video boardgames. joining us now, chief executive of the trade organization representing the u.k. gaming industry, richard wilson from tiger is here to tell us all about what is happening in the industry right now. thank you very much for joining us today. a big night for the gaming industry. one of the us winners but good times also for the u.k. game development and digital publishing sector. what is behind the good times? >> i think the first thing is that the advent of smart phone technology has created a brand-new significant market for the gaming industry. a billion smart phones were shipped. creating games for mobile and tablet devices is very exciting creating new opportunities for revenue. >> what is the talent like

within the country. what is the knowledge economy? >> it is very skilled through europe. a typical studio has about 80% degree ortaff at a above. programmers, designers, artists, animators, all the specialists. even with expertise work at these companies. >> has there been a trend of losing that kind of talent to other parts of the world? look at where financing for comes from and a number have felt the need to go to the u.s. to raise money to list publicly. we know that candy crashes going to list in the united states. crush is going to list in the united states. >> eu km europe is very high skilled. it's true that there has been a

brain drain. the u.s. is very liquid capital markets and a very strong sense of business angels and venture capitalists. a lot of the brain drain has been towards canada. the regional government will pay the salary cost of game developers because they are so keen to attract them over to québec. is such aecause there vibrant, global hunt for the lowest tax situation to operate an >> making videogames is expensive, risky business. you cannot be sure that early you're going to have a fantastic it. we are fortunate grand theft auto five is a hit that many other game companies will not always be guaranteed that success so is that search for a friendly environment. one of the things we have been

pushing for in the u.k. and europe is more generous tax incentives. >> it is a high-cost environment in the u.k., isn't it. >> particularly compared against north american jurisdictions, if you have tax production relief of 37.5%, then you are at an advantage. dealingre u.k. studios with the decline of game retail sales? >> and many are shifting to mobile, tablet, and distributing digitally. there's been a big challenge. they have found it very hard to move her from retail to digital. >> and they are up against free games. >> there are so many being produced and because it is so easy to get games on the app store, for example, there has been a race to produce games on the free to play model. of newe are a number

consoles from microsoft, sony as well. is there room for all the various platforms to play games >> from sonyure? and microsoft, these are very highing devices and content games will be played on them so that's very good. there is market for those type of games. because the overall market has grown, there is also room for games that are available on the devices. >> you have been pushing for tax relief and part of that is because you want to see the production of culturally british games. what does that mean? shooting people politely? >> asking first. >> what it really means is enabling british companies to develop games that might be based on british history, literature, sport. it's a way of enabling us to compete with north american rivals. >> what is her favorite game of the year?

civilization is a great game, strategy game. >> richard wilson, ceo of tiga. >> protests in turkey leaving two reported dead. more on the situation on the ground from istanbul. -60 in under three seconds. a first-hand racing lesson from a formula one driver. ♪

>> time for today's company news. will have simon strahl become the vice president of communications for the electric car company. billionaire in on mosque is trying to grow tesla from a start up to a competitive global carmaker. hsbc and jpmorgan facing an eu complaint as soon as next month. the antitrust chief is racing to find them along with reddit tiger: -- credit agricole and icap.

shares plunging today. they told investors that annual sales growth may be up the lower end of projections. this is the second against software exporter. hello. welcome back to "countdown." >> the time in london is 6:43 a.m. protesters crashed with police in turkey and tito reportedly killed overnight as unrest spread following the funeral of a teenager who died from injuries sustained doing last summer's rallies. inare joined by a reporter istanbul with the details. a dreadful scene in turkey once again. >> that's right. streetsd grief on the as tens of thousands of people took to the streets. as you said, two people are reportedly dead, one demonstrator and one police officer in eastern turkey. these are reminiscent of the scenes we saw last year, last

using force,olice firing tear gas, and water cannons. put pressure on prime minister erdogan? >> it certainly does. they are calling for justice. he is under increasing heat because he is refusing to accept any responsibility for the death or what is happening on the street in turkey right now. he is under pressure because there is a government program he has been implicated in a scandal and three government ministers have resigned. we spoke to a political analyst and he says these protests have the potential to seriously damage his political ambitions

less than three weeks ahead of the critical local elections. elections on march 30 will be a key test of his popularity. reporting live there from turkey. >> buckle up, america. the u.k. car company recently announced the iconic seven will be sold by a new distributor, super performance. what can u.s. carmakers or customers expect? he brought a former formula one driver to show him. [engine revs] it is not for the faint hearted. mclaren p1.hat of a there is no traction control.

there are no driver aids. entirely true. this entire car comes with one very special optional extra. he will show you what this thing can do. [laughter] listen to that noise. fantastic. [laughter] the engine just sounds brutal. is that what it feels like in a formula one car? >> they go much faster. has a lot of emotion.

collect the emotion i am feeling -- -- >> the emotion i am feeling -- envy. caterham succeed in the united states? a million never in years would he have owned the car but he's having so much fun with him. it's a fun car. i think that's a great way of becauseg cater ham there's no car like it in the u.s. has been driving it around and we've gotten lots of tweets asking about it. it's a different. >> how big do you think it can be? >> it's not going to be a massive car. it's an illusion -- it's an evolution.

as we build more, the brand would be established. k27 defines what the rest of them will be, fun, lightweight, affordable. >> shattered dreams in the champions league last night. the newspapers are next. ♪

>> time for the newspapers. standing byine is with his newspaper pic of the day. good morning. normal day, david cameron and his speech at the israeli parliament would have been taking top billing but then there was a barrage of missiles from the islamic jihad so that is the top headline now. daily,rew language roughly translated to red alert. a mother and her child ahead of the pahrump festival -- purum festival. there is cameron and netanyahu. cameron opposes u.k. boycott. bombing gaza and talking about and here is cameron

and netanyahu, a two state solution must guarantee solution for israel. the satisfied indeed with tone of netanyahu -- cameron's speech here yesterday. >> a boost for imports after they shun organic food. research in the u.k. saying that farmers have been abandoning organic food partially as a response to u.k. consumers moving away from organic food. we saw a bit of a turnaround. perhaps the economy starts to and that little bit might be part of the explanation. a 2.8% increase in consumption of organic food but we are still seeing a drop. any organic people -- food that

people want to buy, the increase will have to be imported. whether farmers decide to go organic will rely on commitments from supermarkets. you don't want to grow organic food if you're not going to have an outlet to sell it. the decision-making about whether they go that route will depend on what commitments they get from supermarkets. recently andhem they talked with some surprise about the rise and fall of organic food in the u.k. we will see if a slight pickup in demand will be a start of a new trend. at the end of the article it says households without children spend the most per-person nonorganic food indicating that price remains the key factor. only two english teams remain in the champions league. manchester city were a victim night by barcelona.

messi shattering dreams. the guardian journalists said messi tortured them at time. it was difficult for manchester city because they lost the first leg 2-0. look. man u will probably go out next week so i will be doing the same story next week. not a good week for english teams. greece.t 2-0 in you think chelsea would go through but two english team remain. two out. not a good week. i don't know what the salary is but i think rinaldo was -- >> is messi worth it? >> yes. >> can he afford expensive teacups? two years salary and

he could have this chicken cup that will be going on sale at sotheby's next month in hong kong for $38 million. >> just one or a set? >> just one chicken cup. it's a bit scandalous. $38h million dollars -- million. don't drop it. tempest in a teacup. >> do you have any expensive teacups? >> do you have a favorite? a favorite tea object? a difference when it is made out of proper china and when it's in the right shape. you cannot drink it out of a cardboard cup. ryan has about nine cups on his desk. >> they have all yet to be washed. >> i ride my bicycle so i have to take my coffee with me.

>> stay with us. we will be back after a short break. ♪ . .

>> six days of searching and still nothing. jet whereinds no satellite images showed what could be plane debris. >> pullback or pay the consequences. -- warnsama wants vladimir putin that his actions in crimea could be costly for russia. ukraine's prime minister presses ahead in washington as he seeks financially from the imf. >> plans to triple profit as a shuffle takes effect. ." welcome to "countdown

i am mark barton. >> i am anna edwards. bloomberg reporters are standing by across the world, ready to deliver the stories that will drive your day. manus cranny is watching earnings from supermarket chain william morrison. ryan chilcote has the latest on the ukraine situation. >> the search for the missing malaysia plan, still nothing. haslinda amin has the latest from koala lump or. an airline trans -- plans to triple operating profit. david tweed is in berlin with lufthansa's most recent results. >> changes, to the formula one race. this week we are taking you to the chairman. we will see -- show you how he fits this with his other interests. earnings for the fourth biggest supermarket. manus cranny is here to bring

the numbers. >> good morning. dow 2% for the full year. let's see if we can -- that comes in at 17.7 billion pounds. morrison's has been under pressure. let's just see if we can get a little bit more detail. downrevenue comes in 17.2%. in terms of the actual news release, let's see what else we can give you. >> p.a.t. down by 2.8%. >> the final dividend, 9.2 pence. in terms ofshots what they were doing, ignoring the core customer, that was the message. that is coming through from the analysts. >> they were late to the game. to retain overwhelmingly free

hold -- we are beginning to get more detail. full-year loss before tax comes in a 176 million pounds. retaining overall freehold, there is a big argument here that they would look to actually divest some of their property portfolio. we have a little bit more news here. profit, 785retax million pounds. the estimate was 784. they had guided that it would be a fairly tough set of numbers. fuelrable sales excluding down 2.8%. the market was looking for that to drop by 2.7%. on first reading, and line. want to get more flavor with what is going on with the property divestments and portfolio. we want to see what they say in terms of price cuts. >> it is all down to the little -- of this world grabbing market share.

>> to a greater or lesser extent, yes. you think of the german discounters, they gathered about 4 billion pounds worth of actual revenue over the past number of havingrea it is about the wrong product offering at the wrong time in the stores. that is according to sure capital. they have said there is more to it than that. morrison's ostracized their core customers and went for this very fresh and easy -- fresh displays, fresh scallops, fresh salmon just at a time when the world was pulling back and one was going to tesco's and possibly others for the value propositions. whether they were real value ball your propositions or not is another case. it is a combination of aggressive competition from the germans and a combination with the fact that you have another major store called waitrose, record market share for waitrose

in the 12 weeks up until the first of march. i am clicking furiously. >> sticking with retail, eight week sales of 5.2%. home-based sales up 9.3%. better than estimates. they see pretax profits now slightly ahead at the top end of market estimates. this is a high street retailer. the chief executive saying, as a result of this recent performance, they now expect these group and mark rockets -- benchmark profits to be slightly up. >> the final word? >> one final word. part of what i said was we were looking at what property they might divest so they could engineer the business. one billionnning

pounds worth of property disposals over the next three years. that is higher than the numbers i had been reading. 300 million pounds will go into core supermarket investment. focus on thatl plan to divest one billion pounds worth of property more than the numbers. it is numbers and strategy. strategy will trump numbers. >> thank you. president barack obama pressed russia to cancel or postpone the march 16 referendum on crimean independence. the move comes after talks with the ukrainian interim prime minister, arseny yatsenyuk. is pressure on over the crimea referendum? that seems to be building. >> the u.s. is ratcheting it up. bob menendez, the senator from new jersey has been saying the

russian president is playing russian roulette and we are not going to blink. what is striking is their dose seem to be some unanimity between the u.s. and western europe. angela merkel was talking to her party in europe yesterday. she said russia can't be allowed to get away with this. if she is bluffing, she is doing a pretty good job. >> we live in the 21st-century and we do not solve complex or military means. we do not evade these conflicts. if we constantly repeat readiness for dialogue that does not have any affect, we take into account sanctions. >> we have been talking to people inside the kremlin. they are preparing for iran style sanctions. what is more likely immediately, maybe next week, would be a widening of travel restrictions on russian officials, the usher

at -- upper echelons at the kremlin. that looks almost certain for next week. inhave eu leaders gathering brussels on thursday. that is one to watch. >> does russia have the support of some of the countries you would assume? >> we looked at this. the ones that are for russia's policy in ukraine are syria, -- china ishina sort of a partner with russia as one of the bric countries. at the same time, they like territorial integrity. the u.s. has been chipping away with them. >> china buys bonds from russia, doesn't it? >> and they usually go together on the security council. >> we need to watch that

relationship as well. ryan, thank you. reliant as are very a block on one another for diplomatic maneuvering. they are usually alone on the security council. >> malaysia says it didn't find any debris at the site chinese satellite images suggested there might be some. on day six of the search, no trace of the missing plane. haslinda amin is covering this mystery from: a lump or. what is the latest? >> yet another disappointment. malaysia verified there is no debris at that particular location. the anon this morning sent out its aircraft. nothing as well. they will resume the search later this afternoon. indicaten, china did that it detected objects on its satellite. three objects. one is 24 by 28 meters. the other 18 by 13 meters.

these are huge objects. so far, nothing detected. they are using satellites. vietnam using satellites, now china. they have gone to the gulf of thailand. now, back to the south china sea. six days on, still nothing. >> what about the search? we heard it has been expanded further. >> it has been expanded. india.est to join, we have experts on the ground from all over the world. faa, ntsb, boeing, the cia. nothing has, to fruition at this point. malaysia has said it wants more help, more expertise. in which particular area, it did not indicate. it just said it needs expertise to help decipher the data they

have. as far as we know, vietnam has said it wants to pull back on it search in the south china sea. it says it hasn't got enough information. it is waiting for more information from malaysia. that indicates that information is not being shared with all 12 nations helping out in this particular search. malaysia's transport minister has said that it has been tough coordinating this particular search. >> thank you, haslinda amin inco all of them poor. is europe's second-largest airline. they maintained a target to triple operating profit within two years. david tweed joins us from berlin. let's just run through those numbers. they came in at the top end of their own expectations for the operating profit. operating profit is an important number they look at. they have increased their target

from015 to 2.5's billion 2.3 billion. they have done that because of the new way they have depreciating aircraft. what is driving this tripling of profit? it is the whole move to the low-cost carrier german wings. that is going to be one of the main drivers of profit. they are upgrading their business class, they are upgrading first class and they are introducing premium economy. they have got a new business line. streamingoing to be their in-flight entertainment on mobile devices. phones like this, tablets, those sorts of computers. they have a whole new in-flight system which they are going to try to sell to other airlines. >> thank you very much, david tweed.

>> the bundesbank will release its annual report later this morning. hans nichols will speak to bundesbank president jens weidmann. do not miss that. >> stay with us to see guy johnson get a first-hand racing lesson from a real formula one driver. ♪

>> time for today's company news. japanese unions have seen a rise. they agreed to increase rages by an average of $19 a month. the deal comes as the prime minister called on businesses to boost pay to help reverse more than 15 years of deflation. u.k. insurance faces more than one billion pounds in claims. that is according to the association of british insurers. last week, 60 million pounds of claims were reported due to extreme weather. australia's largest retailer says it is on track to create about 7000 new jobs in the year through june. it is the only australian company boosting payroll.

welcome back to "countdown." increased hisest exposure to european equities and fixed income markets over the past year. with details of his investment strategy. thanks for coming in. i would like to start with your outlook for emerging markets. we have had this disappointing data once again today. this time on industrial production out of china. disappointingd numbers on trade and chinese exports. leave you with regards to your investment strategy? >> pretty cautiously positioned. think the difference as opposed to maybe a year or two be moreo, you need to granular about which markets you like and which markets you don't. ae idea of underweighting

merging market is a little long in the tooth. we are nervous on commodity exports. we do start to see a little more value on the commodity importers. when we look at the income products that i look after, we are at the lowest levels in emerging markets at we have been in five years. we don't see any reason to change that. >> tell me about how you are playing commodities at the moment. an interesting discussion with a guest an hour ago where we were trying to get to the bottom of what is driving commodity prices. why have copper prices been so weak? how much is due to fundamental supply and demand and how much is due to the way copper is used as a financing tool in the chinese economy? >> the answer goes back to china. we have seen a retooling of their economy. much last investment-driven forth and a much lower need

commodities in their growth. that adds an additional level of weakness. copper look at iron and prices, we don't think they have found the bottom. we are stealing well clear. >> what juncture do assets like point's index -- at what do assets like that in emerging markets become attractive to you? >> you have to look at price-to-book. if you look at emerging markets as a whole, typically they are of we don't think we're there yet. as you point out, things like my six down significantly. at some point they will be valued. we are not there yet. >> does the ukraine crisis have the capability to really spook global markets? are we heading in that direction because of how russia is

behaving in the crimea? >> i think so. the place where we feel a little nervous in the short term is europe. there is some trait linkage to that region. we haven't got a sense of how the politics is going to play out. that keeps risk assets under pressure. there is not such a valuation gap in the european region. equities in europe are probably slightly cheap to fair. politicaldd in worries emanating from ukraine, it is hard to get aggressively involved. >> thank you. we will be back in just a moment after a short break. we will get further thoughts after this short commercial. ♪

>> welcome back to "countdown." i am anna edwards. >> i am mark barton. europe still cheap or not? >> fairly valued i think. we like it because we can harness the dividend yield for around five percent. we were very aggressively bullish european banks. they are up 50% index six months. it is hard to argue that there is a real value buying opportunity there. you need to look at the individual country and company levels. >> we have had a fairly up the

statement from home retailers. to a widert points recovery story in the u.k. economy. are you buying anything in relation to that? u.k. recovery has surprised most people in the markets. we have seen economic data surprising to the upside in some domestic consumption places. we have been looking at property plays. we have been looking at house builders. those are the types of investments that clients should be looking at. we missed a rally in house builders? >> know, we have been aggressively involved in that. we think there is a real tailwind. buy -- and help to the flexible funds we look after, we think that is an attractive place. >> you have been buying european periphery debt.

wethere still time or have missed that boat? >> i think it is gone to the honest. pounding thee were table that european peripheral that was really cheap. one of the benefits of those bond spreads coming in, it has meant that the economy has done better. we have rotated from being in the top end of the capital structure to buying european equities. that can go further. i think it is hard to say that those are real value in bonds anymore. >> can the ecb do anything to make a dramatic move in the spread or not? >> i think really the ecb did a brilliant job with the omt. they allowed weekends to exit that market. they allowed strong hands to come in. i think within europe, many of those bond spreads are being flattered by the upturn.

it is worth reminding ourselves that many of the structural issues are still there. gdp ratios? is still incredibly slow movement on things like banking unions. it is progress but it is pretty slow progress. with valuation where they are, it is hard to make the case that peripheral bonds are a buying opportunity here. we have been reducing our exposure into this rally. >> thank you very much for joining us this morning. reminder, the bundesbank is out with its annual report. we will speak to the president. don't miss that interview right here on bloomberg, later. ♪

>> i am anna edwards in london. these are the bloomberg top headlines. protesters clashed with police in cities throughout turkey. there are reports that three people have been killed. the unrest followed the funeral of a teenager who sustain injuries last year. that a fourthrts person has died after yesterday's gets explosion in new york. the blast flattened to east harlem apartment buildings. several people are still unaccounted for. vietamnam says there is no evidence of debris in an

area photographed by a chinese satellite. the search for flight 370 is in its sixth day. welcome back to "countdown." i am anna edwards. >> i am mark barton. china's national people's congress concluded today. among the leading topics of discussion was pollution and what the government can do about it. many city dwellers are tired of waiting. stephen engle visited rural china to see how the fresh air is prompting many to try a slower way of life. >> beijing is on the left areali jian -- on the left. lijiang is on the right. many people are leaving the

urban jungle in china. check that out. some things are more important than money. while no statistics are available on how many people province withis multiple ethnic minorities and laid-back charm is a popular choice. example this 36-year-old. a dead-end job in a shanghai glass company and a brush with death drove him to a new line. >> seven years ago, everybody had a city dream. everybody wanted to build a good life for themselves in the big city. the reality is, this is quite difficult. there is a lot of pressure. by some i was assaulted bad people and almost lost my life. after that, things became very

clear. >> seven years ago, he was a bit of a pioneer. he is starting a team is as. -- a tea business. says more people including wealthier investors are moving here. number of villas being built in the shadow of jade dragon's snow mountain. property prices are still a fraction of the tier one cities in china. he sees changes on the horizon. >> rich people can make this more prosperous very quickly. g moreould make lijian varied and have more character. if there was huge and has been flowing in, it would over develop the ancient town. >> china's booming movie industry has taken notice. they are hiring locals as crew and extras for films.

even this visiting reporter landed himself a cameo in this burgeoning land of opportunity. the female character here was often heard in america. the grass it seems is always greener, even when you are from a place as green as lijiang. >> stephen engle, superstar? >> almost like a cameo. i don't think it was him. >> i think it was. stephen engle, film star as well as many other talents. >> protesters clash with police throughout turkey. two people were reportedly killed overnight. some fairly distressing scenes in turkey once again.

>> that is right. there was rage in turkey as tens of thousands of people took to the streets once again last night. reportedly, two people have died. one demonstrator in istanbul and one police officer in eastern turkey. these demonstrators -- demonstrations are reminiscent of the scenes we saw last year, clashes that took place during the summer. ,olice once again used force firing tear gas and water cannons. are expectedotests to die down. >> mounting pressure on the prime minister? >> that is right. the protesters are angry because showing no remorse and they are demanding resignation. last night, the prime minister was live on tv 24. when asked about the death of

the teenage boy, he showed no remorse whatsoever and decided to answer a question about the economy and the financial markets. he is already in hot water as it is. year, aber last corruption probe involving him lead to three government ministers resigning. 13th of march will be a key test of his popularity when turkey has local elections. >> thank you. >> took a lot, america. the u.k. car company recently announced its iconic 7 will be sold by a new distributor. what can u.s. customers expect? guy johnson got a formula one driver to show him.

>> it is not for the faint hearted. on a power for weight ratio, it exceeds that of a p1. there is no traction control. there are no driver aids. >> actually that is not entirely true. 620-r comes with one special optional extra. kobayashi is going to show me what this thing can do. >> listen to that noise. here we go. ! fantastic!

[indiscernible] engine just sounds brutal. faster.la one is much this car has a lot of power. >> the emotion i am feeling, envy. >> can it succeed in the states? we asked the company's owner. it is a fun car and i think that is a great way of launching the brand into the u.s. they are so different. there is no car like that in the u.s. simon cowell has been driving it around. it is different.

>> how big do you think it could be? think it is an evolution of how to build a brand there. as we build more conventional road cars and crossovers, our brand will be established. it defines what the rest of the cars will be. fun, lightweight and affordable. watering up, sailing on as interesting as sailing on ice? "hot shots" is next. ♪

>> it is time for "hot shots," a look at the most compelling images of the day. imagine racing over a frozen lake on a wind powered sled. hitting speeds that top 40 miles per hour while more than a dozen boats did just that. they hit the ice on a wide stretch of the hudson river just outside new york city. they navigated across a 20 mile patch of salable ice. dreaming of living in zero temperatures? check out germany's igloo hotel.

it is situated in the shadow of germany's highest mountain. there are only 13 rooms which cost around $150 per night. , there is no jacuzzi. now you can have your own nobel prize you will have to buy it. a 1936 nobel peace prize medal discovered at the south american pawnshop is heading to the auction block. it was awarded to the argentine foreign minister. it is the second nobel medallion to come to auction. sell forected to $100,000. welcome back to "countdown." i am mark barton. >> i am anna edwards. i think that would look very nice on a chain around your neck. "on the move" starts at the top of the hour. francine lacqua joins us with a preview of what is coming up.

let's talk about what is coming up on your program. heading? weture is had disappointing data out of china. >> futures are little changed. we are watching for data from the u.s. we have some retail sales, jobless claims. as you were mentioning, the industrial output in china once again a little disappointing. we will have a look at what commodities are doing. unchanged but slightly on the higher side. the futures gaining some 0.3%. let's talk about individual stocks. interesting story. -- is confirming that it is making an improved bid. we are expecting a statement before the market opens. >> that is one of the main active stocks.

bouygues we are expecting to move. there could be repercussions for the than the. watch out for telecoms in france. watch out for a temporary jobs company to be active after large investors said it will sell about 16% in the company. , the italian insurance company may also post better-than-expected profits. >> thank you very much. we are just getting those details. that premarket statement from bouygues coming through right now. improving their offer to vivendi by one billion euros. the offer,ent in increasing the cash component of their bid for sfr currently owned by vivendi. many think the regulators might favor the other did. >> it values the offer for sfr -- billion. and

>> john is here. big macro theme of the day. >> we are on central bank watch. we get that bundesbank annual report but we don't care about that. we catch up with the man himself. this is one of the most influential people in the eurozone. when you listen to this guy, this is the guy that represent the institution that shapes policy at the ecb. the bundesbank has really shaped exactly what the ecb looks like and the policies that come out of it. we are interested to know what he has got to say on ecb policy. >> incredibly influential. >> that is one man who is influential in europe. we have a number of nominees for the federal reserve who are hugely influential testifying today. >> three people for three

positions on the fed board of governors. powell fischer, jerome and lael brainard. to, we fischer is going think, take the deputy spot. two heavyweights that some people talked about the prospect of a clash between janet yellen and stanley fischer. stanley fischer, massive heavyweight in the central banking world. former governor of the central bank of israel. was said to be a difference in opinion on what many people said was over forward guidance. we dig down a little bit. maybe things aren't so nuanced. has talked about time contingent guidance. without a crystal ball, how can you promise that? maybe he takes a qualitative approach. you might not get backlash. >> even if there were a clash,

that wouldn't necessarily be a bad thing. >> there is bound to be a difference of opinion. ,hen you are the deputy chair you want those two people on the same page. >> thanks. up next, it is a good time to be in flight? our next guest names easyjet as one of his top picks. ♪

to "countdown." i am mark barton. >> i am anna edwards. joining us now for a countdown to the european market open with some reaction to today's news, the etf capital head of trading. let's start with news on individual stocks. weaker at looks to be the start of trade on the back of their numbers. >> it is a really interesting one. huge spread. i have heard up 2% and as far as down 8%. the figures are pretty awful if you drill into them. there is a profit warning there. their worst profit for five years -- worst loss for five years. i think there is going to be a nod to the fact that they are doing restructuring with her property part leo and looking ahead. to me, morrisons is always massively behind the curve. sitting in a bit of no man's land between -- and sainsbury's.

>> better news for left anza -- lufthsansa. it retained a targeted triple operating profit within two years. what was your take away? >> they have beaten revenues this year. they have upgraded the next two years of revenue. the stock should be better. some of the upgrade on their profit forecast is a bit down to changing the way they report profits, the way they depreciate which gives them a shot in the arm. although they read incredibly well, they are not quite as good as they first claim. it has good sector and got a currency advantage with a weakening dollar at the moment. i think it is going to be a strong kick. >> you prefer easyjet within that sector? >> easyjet i think is a great company. it is really well positioned for

a european recovery. it has its price point right. to compete be able in the business market as well as the holiday market. i think it is a really good pack. >> china data, more data that missed estimates, raising the question, can china meet its new goal of 7.5% gdp for this year? i think -- >> i think china will meet its goal. whether that is real data is another matter. the data should be taken with a pinch of salt. china is the growth for the world economy. we will see fantastic growth there. we have a big party in shanghai this week. i think there is growth in china. the official beta is murky to say the least. street,on the u.k. high giving an upbeat statement about their performance.

what did you make of what they had to say? >> you can see the u.k. consumer is spending in the right sector. the diy chain is good. to have recovered from some of its problems. retail and a home longer-term situation with a little bit of caution. argos is firmly in amazon territory where it may not have the firepower to compete later on in life. i think it is going to benefit for the next couple of years. the ftseo you make of right now? it is 3% or so below its near all-time high. what is holding it back? skepticism that this rally is going to continue. i think people are not ready to

put money in at this level. they are worried about the geopolitical situation in ukraine which i don't think is going to sort itself out anytime soon. do think you will probably get people trying to short the ftse. i think that is going to cause a few short squeezes and drive up. i think we will make new highs later in the year. i don't think it will be a convicted bradley. it will be short covering and people not wanting to go into the rally at higher levels. >> thank you very much for joining us today, joe rundle. the start of european equity trade is five minutes away. investorhe largest planning to sell to help cover supply assets. that could have an impact on the share price. >> "on the move" is next.

francine and her team will be watching left anza. >> that will do it for "countdown." have a good day. ♪

>> welcome to on the move. i am printing the club. lacqua.ine off and standing by. futures on the higher side. >> yes. we have a lot of data to contend with. a slowdown in china. , house prices are cooling

off in february. there is a lot to take on. >> we will keep an eye on that. 0.2%.s are getting you are watching central bank. >> absolutely. care about the advisement ahead of the central bank. a key figure that shapes policy. hans nichols will take care of that. we are looking forward to that. euro thison the morning. big build this morning. also, stanley fischer goes in front of the senate banking committee are the second of command of the federal reserve. hewill be interesting what has to say about forward guidance and how the policy will shape up. >> you never know. we may get quizzed t.