>> sprint is said to be ready to ofe a mobile -- formal bid four t-mobile u.s. after arranging financing. >> weaker than estimated numbers in china as a growth concerns continued to rise in the second-biggest economy. forcing the strong depreciation of the euro. we have an interview with pa doan. hello. welcome to "countdown." the program.

6:00 a.m. in london this thursday and bloomberg reporters are standing by across the world to deliver the story to drive your day. hans nichols has more on the sprint-t-mobile tie-in. we will get the latest from mia saini and hong kong. >> tracking bond purchases. in danger? of losing itsdominance in the market dominance?g it's francine lacqua had an exclusive interview with padoan. >> i do hope we can do better than that. although we cannot say that more exclusively, i think there are good reasons to think that we will have an upside surprise.

>> more of that exclusive interview coming later in the program. >> let's get more from our international correspondent hans nichols. talk to us about the timing. how far along are they? when my day dob actually announced? actuallyight a deal be announced? thet really depends on regulators. what we have seen according to people familiar with the matter -- what we are reporting -- they want to make sure that softbank and sprint have all of the financing lined up. once they get approval they can make a formal offer. to answer your question, june or july when the ceo of softbank may be making a former bid.

witht executives have met six banks to make sure their financing is in order. they think you need to do a in appeasing least regulators which is a double hurdle with the communications commission and the department of justice. when you look at what happened with the deal went south, there is a termination fee. billion in cash. they are a bigger competitor to at&t. this would still combine the third and fourth largest carriers in the state so you need regulatory approval. you want to be a lobbyist mdc for one of these companies because they have a lot of work cut out for them --you want to be a lobbyist in d.c. >> who might run the company? >> softbank owns 80% of sprint.

looks to be the leading candidate. we want to put screens up with him because he always wears a pink shirt. the question really is if he can own tomacklemore on his not crash the at&t party in las vegas. everything was trading up after hours when bloomberg broke it. nothing will be trading because everything is closed due to the holiday making me the least important person in germany because i'm working. >> i do feel sorry for him. >> you are definitely important to us. thanks for showing up. >> don't miss a conversation with t-mobile president, john legere on "bloomberg west." >> underscoring weakness.

we are bringing in mia saini from hong kong. china has passed the biggest changes in pollution regulation and now we see this manufacturing member coming in lower than estimated. those are to some extent linked. >> that's a very good point. like hans, i'm working on my holiday and the chinese markets are closed for labor day, including hong kong. we have the april pmi figures coming in at 50.4, lower than the median estimate. march is 50.3. this is still expansion territory, anything above 50. really feeling the brunt of this because of the breakdown of the type of enterprises is that they are still in expansion mode while the smaller ones are contracting. that's 10% of the overall 50.4

number. the pmi reports from today and last week in terms of that consistently shows a decline in export orders this fight the pollution you were just talking about. that could mean that the latest round of this moderate progrowth measure is perhaps starting to show up in the domestic demand front. they have not passed a turning point and they expect to see slow growth and loosening fiscal policy in the coming months. overall, the economist we have been speaking to -- because there are not many because of the holiday, they say this is least inabilizing at the near term. that's the pace ever cover he, expected to be modest for the rest of the second quarter. markets will be opening here tomorrow morning.

you very mia saini and hong kong. >> the central bank voted to continue trimming the pace of asset purchases. jonathan ferro has the details. have momentum.s no change. no dissent. no forecast. us tapering was not on a preset course. would've begged to differ. no big changes to the statement despite the gdp number that came out. i think this corridor is really pivotal. a pickup bandng we have had one recently and it will need to continue. this is about the rebound and it needs to play out. >> are you looking forward to

the next one? >> we get a press conference and forecasts. what a lot are talking about right now is the staffing issue at the federal reserve. we are set to go down to three governors and we are supposed to have seven. huge backlog in the senate to get these guys appointed. there are something like 270 five appointments waiting to go through the senate. yellen, jerome powell, and onlyl tarullo will be the three left on the board. the palestinian list are two things. the fedify the views of president. the end ofps down at this month, his forecast will .ump out of the medium

this could alter the views even though the fed may not look to be doing so themselves. jeremy stein, the one stepping down, is more hawkish anyway. maybe they do not get elected on time. >> the hr processes standing in the way of the federal reserve. >> it's a very political. i reached out to hans about this. he said this is what republicans do, holding up the process. he said the democrats did this to bush. it's politics. >> they passed the committee level. like they passed the senate banking committee. the full council needs to get them on but they still have not even scheduled a vote. >> ryan chilcote is watching paid tv in the form of b-sky-b. is if big question

b-sky-b is in danger of losing its market position in traditional pay-tv. that is what analysts are asking. some expect that today, we may see in the third-quarter b-sky-b actually saw a drop in traditional television subscribers. that's what we're looking for. been nipping at their heels. b-sky-b is opening their books 51 minutes from now and we will have complete coverage. likes just ahead, a closer look at the fed's decision to keep cutting its bond purchases. stay with us. ♪

today's company news. u.s. media company viacom plans to acquire u.k. broadcaster channel five. viacom owns mtv and nickelodeon. they will announce the deal with earnings before the u.s. market opens today.

channel five would further their expansionnternational with an english speaking outlet for the u.s. programming. step closer after they stepped away from the deal because it became too expensive. a heated contest means merck and meme more than $14 million on a sale off of the unit. gabbana have been sentenced to a year-and-a-half in jail. the italian designers have been convicted of failing to pay 40 million euros in taxes between 2003-2004. welcome back to "countdown." >> i'm mark barton. it 6:14 a.m. in london. they are anticipating a pickup in the economy. the central bank says they have

continued to trim the base of bond -- pace of bond purchases. patrick, good morning. it seems as if market participants have gotten used to the idea that tapering will probably cease come the end of this year. is there a consensus around when the first interest rate hike will actually happen? they have been very careful in terms of tapering. it is likely that at the end of 2015 we will have the first hike in interest rates and that's likely. >> the gdp number from yesterday, disappointing to some, and this meeting from the thecomes just days before payroll number were some are suggesting could be pretty strong compared to last few years. what are you expect in? out a bitterruled

disappointment. it's possible. the u.s. economy has been frozen the last few months. let's keep in mind that most european corporate that are acting in the u.s. remain extremely positive on the u.s. economy and it's very likely this summer will have some very good figures coming from the u.s.. clicked talk to me about china, patrick. not asve 50 but it was big a level many had projected. is china managing to stabilize the economy without compromising the risks that come from luring debt? >> they wish they could manage the slowdown down but it is a big question. this was absolutely attributable and it really has to slow down because of it. on the other side, you also have

banking where it even if they wanted to have a push to the economy, it is extremely complicated. there next few quarters, will be different figures coming from china. >> will we see them trying to stimulate the economy with fiscal measures, something on the monetary side? what would they do to stimulate gettingomy without consumers and businesses to go back to borrowing what they thought was too much? frank, we think it has already started. some injection into the economy, but it is extremely limited. as we discussed before, no more credit bubble. the shadow banking system area isn't raising a lot of questions. that is bringing into account that it's a very tricky situation. >> japan making the headlines that they kept the bank of japan

inflation forecast and even gave us the forecast for 2016. it is confident it can reach its inflation objectives. the you share that confidence or not? >> we are more careful. real demandmes from from consumers which is relatively good inflation. stemming fromtion financial assets and that is exactly where we are in japan. the next two years might as well become located. >> what does that mean in terms of more stimulus? some have been raining back their expectations of whether we will see stimulus. >> on the other side -- >> how many do they have so far? >> three or four. i'm not so sure it would be so easy. beside, how could this sustain for the next few years, the

situation with a very high level of debt, low interest rates. they will have to adjust. maybe some pension funds but in japan right now, i would be on behalf ofeful the management. >> patrick, thank you. we will talk to patrick in the sociétesion from general. ♪

>> welcome back to "countdown." >> 21 minutes past 6:00 a.m. are markets in europe closed for labor day. let's have a look at what's happening over in asia. lots of the markets are closed there as well but this is the picture in the markets that are open. japanese market up by more than one percent. here.rick legland is havel bonds of all variety had their best start to the year in the first four months ever. equities.ing how did so many analyst to get it so wrong? >> no one was expecting this but at the end of the day, the economic recovery worldwide is

extremely slow. we have had the culmination of whatever happened the u.s. with a tough winter. china's slowdown is on the way. europe we have fears of deflation. if you take all of this into account, any real steepening of the curve is not in the cards right now. you are right and it is surprising. >> does it change of the rest of the year, the relationship between bonds and equities we have seen in the first quarter? >> i would be very careful with equities. don't get me wrong. we are positive on equities. we clearly overallocated liquidity but on the other side, in europe, paris, u.s. markets we do not forecast. on this, maybe we will be cautious. it might continue.

>> you mentioned the fear of deflation and the eurozone, patrick. yesterday, we have the cpi data and it was a mixed bag of number. came in in line with estimates, 1%. what is that mean when it comes to the ecb and what it will do next with regards to policy? >> roughly one week ago, we had this beach where they were explaining very clearly under which conditions they would act. frankly, if we take the list, , whether theyn are ready to act if needed, frankly, we would be very surprised if they do anything next week. frankly, we need to take things into consideration. not have the type of japanese control of inflation. deflation into a

certain extent, i would say it is not as bad. that's it. overall, other countries have a weak inflation but it is not deflation. let's not expect too much from that. from a market standpoint, that is where it is. easy to be confused. we seem to get different views depending on which economist we talked to. some say to look through the week inflation in the short term do something different longer-term and others say we really should worry about the level inflation we are seeing at the moment. >> there is also a bit of confusion. one indicator that was worrying, banks have been bringing liquidity to the ecb. it is starting to dry up a little bit. . this has changed slightly that

the ecb would have to act on the liquidity side. to avoid or go up, but it is not acting against inflation. we will have to meet different objectives. >> final point on ukraine. does it have the possibility am of the potential to rattle investors further, patrick? >> on one side, we have all underestimated the impact of ukraine on financial markets. as we speak, the market has already discontinued a lot of the news from ukraine. >> patrick, thank you very much for joining us. sociételegland from general. >> she asked him how realistic the country's growth target is. ♪ >

>> welcome back. let's get to jonathan ferro for the fx check. >> chinese currency getting weaker. yuan down. disappointing many economist expectations. when mother starts beating in to support the exporters in china? we are just not starting to see that yet. the weakness in this, many are saying it is engineered as they lower the reference point.

people are saying no. remember, china has a growth issue. they don't just need to deliver for growth's sake but they say needs to comment 7.2% just to create 10 million jobs per year and maintain the urban registered jobless rate at 4%. >> y? -- why? they need to maintain social stimulus. >> the international monetary fund has approved a $17 billion loan for ukraine that will help ukraine's short-term budget needs and help shore up further aid from other countries. imf chair christine lagarde says now is the time to act to keep ukraine from sinking further. >> we believe that ukraine has an opportunity to seize the moment, break away from previous practices both from the fiscal, the monetary, and the governance point of view?

>> manufacturing pmi coming in 50.4, less than the estimates of 50.5. premier lee is trying to avoid a deeper slowdown. will continue to wind back stimulus as they pick up pace. that puts them on track to bring qe2 an end by the end of the year. the fed also reiterated that it will be near zero for a considerable time in the fed's comments just hours after an official report that u.s. gdp barely grew in the first quarter. >> let's take a look at some of the big interviews bloomberg will bring you today. surveillance will be at 12 p.m. u.k. time and at 1:00 p.m., an interview with pepsico.

>> italy targeting growth of 0.8% this year. is that realistic? francine lacqua asked the country's finance minister in an exclusive interview. we can dope that better than that. although i cannot say that more explicitly, i think that there are good reasons to think that we will have an upside surprise. > led by what? >> a combination of support measures to low income families, companies, and a boost in confidence to boost investment and jobs. >> what is your take on the deficit? does the european union just need to be more relaxed? >> the fiscal position in italy is extremely stable and in line with targets. our nominal deficit is expected to be 2.6% and declining next

year. next year, in practice we will achieve structural budget balance. the debt will start declining and will continue to do so. i am perfectly in -- i would like to state that the italian fiscal position is absolutely under control. if i may add, figures look better in italy than other countries. >> when you say it needs to be taken more seriously, markets have gone up quite a lot and there is not that check from the markets on european politicians. >> certainly markets are now benign vis-à-vis investment opportunities in the eurozone including and especially the periphery and also in italy. there is a risk of complacency. i would describe the situation a bit differently. there is a very favorable window financialnity with

conditions easing and market opportunities increasing. policy must strengthen this window of opportunity by making europe more stable, resilient, job rich. this means the policy must do its part by introducing structure reforms, implementing them, finding ways to make a budget balance which is more euro friendly. the description model, is it wax hiring for b-sky-b? ryan chilcote joined us for a look ahead at the company earnings. as competition starting to bite? >> are you watching paid tv all by yourself in the dark? >> he's ignoring us. >> whose idea was it to send me down to the tv studio? does a lot of good stuff on right now. you cannot talk about b-sky-b bt.out talking about

they made a huge investment in rights for football games and they have been nipping at the heels of b-sky-b ever sense. some analysts think when b-sky-b reports results in -- i'm looking at the tv again, 25 minutes from now, they will be revealing a drop, a decline in the number of traditional pay tv for the first time since they got into the paid tv in 1999. that is obviously what we're watching for. you will not see that in the earnings themselves. we will have to wait for the analysts to break it down. the way that they do their reporting, they just give you how many new subscribers they have added in the quarter that they do not just have those traditional pay-tv subscribers. they have their streaming service, now tv.

a kind of models the number. even there, they say we will see a drop in the growth of new subscribers. last year they had more than 700,000 added in the quarter. this year, they're expecting 730,000. bt yesterday probably cognizant of the fact that b-sky-b would be reporting its results today and talking to investors said they were going to give existing broadband customers and new broadband customers free access to bt support for a second here, really raising the ante in the challenge to b-sky-b. >> ryan, by your right here, there seems to be a question, something about football rights in the winter. i'm going to ask you the question that is right behind you. [laughter] >> is it there?

so is my answer. [laughter] it is all spontaneous. nothing is smoke and mirrors. they just hate 900 million pounds for rights to champions league football games. that's a staggering amount of money. as you both know, that follows the staggering amount of money they offered to pay for premier games back in 2012 for this season and next taking those rights off of disney espn. everybody then said they were shocked, including the premier league. we have more options coming up and everyone is fully expecting b-sky-b and bt to go head-to-head in a bidding war again. a lot of analysts say it is not sustainable and that would not be the first time we have not heard that expression into

european football in the amount of money that goes into it. they are saying the two company should come to some kind of agreement, some kind of truce. i would not count on that. >> thanks, ryan. go back to watching "countdown." >> you will have viewers thinking that we cannot think for ourselves. lloyd is expected to deliver numbers within half an hour. manus cranny joins us now for more. what can we expect? >> just looking at under 2 billion pounds for the corridor up from just over one billion, this time last year. .hings are getting better we know that the market is improving, cost are dropping and bad loans are falling. i was thinking about this last night. should i dare to use the term that it is a punter -- poster bank.

what you are seeing is something that is getting better. call is the net interest margin, one of the boring, if any key metrics that we have to look up and i think it's getting better. what's interesting when we see the lloyds number is how they are doing on that metric because they warned in december that the net interest margin. >> the difference between what you charge and what you pay for funds. for those who don't know. >> i dread of that moment. can you define -- [laughter] >> don't worry. he's done it for you. talk about the difference between lloyds and rbs. >> to that end, when i use the terms poster child in terms of getting away, it is all relative. i have got to say that the u.k. government has managed to trim back its holding in lloyds is

very much along the journey of changing the shape of who we are, what we are, the assets that they don't want the hold. you have a government that has sold over 7 billion pounds. lloyds are prepared to pay bonuses at twice salary because the government has been able to take themselves out of the situation and they are getting ready to sell off one of the brands, and tsb. we will get an idea but the value of that is later this month. >> that could be in the next couple of months. are structurally much more down the road of recovery. also, they have had more continuity. the ceo there went off with stress related illnesses shortly after his arrival but think of our bse, the political wrangling that went on. my sources say both in america and here in london, the people i --k to within rbs that it is

the atmosphere is pretty tough. >> on stress tests. the scenarios were unveiled by the european banking authority in the bank of england. the bank of england metric scenarios are quite armageddon-like, some are calling it. >> 35% drop in house prices is what the stress test will be built upon. ofbeing built on a drop around 19%. the bank of england will look at unemployment rising to 12% and interest rates -- this is the most telling line in a stress test. the interest rate level they're --ng to simulate things on 4%. that tells me something is very important about the long-term average. >> but with the highest mortgage rate in your day you ever paid? >> 15%. >> we're going to go inside the

innovation lab to see how the biggest spirits maker mixes up new drinks. that is next. ♪

>> welcome back to "countdown." >> the time is 6:45 a.m. posted to winning merck's business after the meet rival walked away. international correspondent hans nichols has the latest from berlin. why did they walk away from this into a biddingot war. the asset simply became too expensive and as the ceo explained, they have very strict metrics. this quote was sent out. we are a very highly disciplined acquirer with strict return metrics that we will not break. it is the ceo. what they have offered is to do cash swap assets for animal health pharmaceuticals and oncology businesses. initially when they put it up they were talking about it being worth $12 billion and it has creeped up to $14 billion. this is the consumer-led

business. coppertone sunscreen, i know in england it is not used very much but it is a big business and we a,ve seen lots of m and lots of swaps in part because they are so cash-rich. the challenge, how and where did they spend and invest in the future, and just what they do to have a unified business that does not get to extraneous and is more focused. it looks that it seems to be going through between bayer and merck. this just gives us a little more clarity. >> i know some ladies in this country are a big fan of the fake tan. kites have you ever worn fake tan? -- >> yahave you ever worn it? >> badly. >> now the company is looking to make a name for itself in rome. de nest along paid a visit to

lab to seeovation how they create a new product. >> in this high-security lab, a team of experts is tasting a lot of booze. mixologists meets scientist. diageo in there looking for the next hit alcohol flavor. vodka, rum. we can be working on 50 ideas in the lab. >> consumers are constantly interested in new ideas. you need to put something out there that really does not look like anything else out there. >> the latest idea to make it from the lab to the shelf, captain morgan 1671, a limited-edition premium finished in spanish oak. bringing a project like this to

nineion can be a six to month project. >> they has spent a lot of time at bars to identify the trend, what consumers are responding to. we are seeing a movement into savory flavors, dried note, spices, woods. >> it is up to the team to come up with a new flavored alcohol that plays into those trends starting with the base alcohols spicing the drink from a flavor library of thousands of extract. smoke,ke applewood chocolate, vanilla. that will be really ginger read. cheers. think that's delicious. >> not half bad. >> with the gold standard recipe in place, the product goes into mass production. some are planned as limited releases to take advantage of hot flavor trends and keep customers engaged with the brand.

>> in the end, the consumer decides whether it will be successful or not. there's a difference between a flavor of the month and one they will want to enjoy for years and years. >> what is your perfect cocktail? what does it have to have? >> orange. >> what is the spirit? vodka, tequila? >> vodka. >> mind is anything but tequila. inventing booze sounds pretty amazing. coming up, unfortunate loss in the acting immunity. bob hoskins has passed away. some of his memorable movies. "countdown" newspapers is next. ♪

>> welcome back to "countdown." >> just over an hour away from the start of most newspaper trading. hans nichols is in berlin. as a big fan of the cinema, i was sad to hear about the death of bob hoskins who made his name playing tough guys and gangsters. his breakthrough role was "the the good friday" back in early 1990's. mona lisa another of his good favorite films. we all saw "who framed roger

rabbit?" >> i was going to say that. it's a little lowbrow. [laughter] >> he died of pneumonia at the age of 71. his youngest daughter, rosa, a fashion writer, released a tribute disclosing his final words of advice. apparently he liked to give words of advice and he said, love, laugh, and be kind. he wrote a blog -- she wrote a blog called 11 lessons from my dad. laugh long and loud. be yourself. never give up. he is also noted for his ads in the 1980's. you remember he promoted british telecom and he was famous for the words. apparently that phrase haunted him for the rest of his life. he was by a bus stop once and .veryone on the bus was miming

bob hoskins passing away. >> what have you got in berlin, hans? onthere were not any riots the eve of mayday. to carsoking to report on fire. things were generally peaceful. when i biked in at 6:00 a.m., the streets were not full but revelers were still going out. it went peacefully. had mark barton been here, it would have gone differently. >> he is known for his behavior. >> with my cocktail without tequila. times reporting on the production of titus andronicus, the shakespeare play. it is so bloodthirsty apparently , it features scenes of mutilation, cannibalism. a lot of that is written in but the adaptation is apparently so

bloodthirsty that a number of the members of the audience were fainting. there were a few droppers, apparently they are known in the theater trade. some are being brought in to help them. >> what is it with you and hans. he was accusing european union public. anyway. , they3 of the guardian picked up on a story from a scientific journal you may not .ave read neanderthals are not stupid. get it out of your head. scientists have sought to understand why neanderthals died out. most of us believe they died out except there seem to be a couple still on the planet roaming around. it was not because they were stupid. this very smart group of scientists from the netherlands came out with another batch of research saying not to believe the hype.

forget the stereotype. neanderthals were actually quite bright. >> ryan, thank you. "countdown" continues. b-sky-b reports earnings. we will see you on the other side of the break. ♪

>> a sprint for more mobile. the u.s. carriers preparing bids for t-mobile. manufacturing numbers weaker than estimated in china. >> italy's finance minister does not see a strong depreciation of the euro. d> in breaking results -- an bricking results from two british icons.

>> welcome to "countdown." >> i am anna edwards. boomer reporters are -- bloomberg reporters are standing by to deliver the stories that rive your to deliv day. >> more on the sprint-t mobile tie up. and more on the manufacturing data from hong kong. >> with talk about some of the coming up on bloomberg today. the surveillance team will be joined -- that is that 12:00. and then in interview with pepsico's ceo. cochair -- stay with bloomberg for those big interviews throughout the day.

>> some breaking numbers from the biggest pay-tv provider in the u.k. >> going through the numbers right now. we don't have the metrics we want to give you. we will get those any moment now. what we are looking for terms of the tax profit. pounds.ion they like to keep it confusing. sales just under 2 billion. the big issue is bt is successful and attracted people from watching television? >waiting on those numbers. >> nine monde numbers. -- month numbers. >> some analyst expecting a drop in the number of traditional pay-tv subscribers. >> it hasn't happened for how long? >> since 1999 cents they started

giving out skyboxes for free. this could be the first to drop. they will not break the number out itself to read they lump in the number of people that sign up for the streaming service. >> worth noting people are spending more. average revenue is up. we don't know what the breakdown is on the tv subscribers. >> as we have that, we will commit to you. >> getting breaking numbers from the u.k. ranking group -- banking group. manus has the details. underlying,profits, 1.8 billion pounds. fromg 1.48 billion pounds last year. nice uplift their. -- there. a rise of 22% from last year. they are funding themselves.

a better source of funding from the deposits. growth rising by some five percent just under 2.3 billion pounds in the last four months. they are executing a strategy which allows them to differentiate themselves quite well. costs are dropping inside the business. down by about five percent. that is quite important. the cost story getting better >> looking for anything there to say about the dividends? this was a stock that was held as the dividends it paid out. they were going to the regulators and were asking if they're worried -- were going to be able to pay a dividend. >> us is what set them rbs.tically apart from still very much in a state of flux.

i will go to ask permission to restart the dividend later. to recap on the numbers. costs are down. loan growth is rising. risk weighted assets is what they are saying comes at 2.71%. let's go to ryan. >> we have the pretax number. one good number from these ties. -- guys. the number of paid for subscription products in the third quarter. analysts were looking for 637,000. they thought there would be a drop in 715,000. the total number of subscribers. guess what they beat last year. a huge beat on the number of new subscribers. >> tv as well. >> that suggests now tv is popular. >> the streaming service. >> not the kind of week this is

-- or not the kind of weakness analyst thought. that is more subscribers than they added this time last year. that is not what the analyst thought would happen. they were spiking a slowdown in growth. just initial numbers, but looking very good for sky. quick thank you ryan. u.s..obile let's get more from our international correspondent. hands. how far along are they? when might a bid be announced by sprint? theune or july would be thinking. it depends on whether they get regulatory approval. whether sprint, which is 80% owned by softbank, gets regulatory approval to go after and have a deal agreed -- have a deal. that is 67% owned by deutsche

telekom. after all the throat during, it comes down to do they have the financing. what we know according to people familiar with the matter is sprint executives met with at least expects to line up the financing. met with atnks -- least six banks to line up the financing. they were the ones that scuttled the deal in 2011. t-mobile u.s. buy assets. what we have is a combination of the third and fourth largest carriers in the u.s.. the story broke late in the evening. no sense of what it is going to do. we well one markets open. we will have to wait for the u.s. to see what the pop is.

>> who might run this new company? >> john leger. yes he is the leading candidate. softbank and deutsche telekom are talking about was going to run it. we want to show him because he wears the think that's where is the peak t-shirts -- we where is the pink -- wears the pink t-shirts. >> they liken him to the ryanair executive >> not shy. thank you very much. don't miss the conversation with t-mobile president john lege r. that is 6:00 at the evening. >> i am resting. >> china's latest manufacturing data it is underscoring weakness in the second largest economy. let's take a look at the numbers.

bring in mia saini. she has the numbers from hong kong. >> the morning, guys. it is labor day in hong kong. markets are closed. as well as chinese markets. chinese economists were busy waiting for the numbers. coming in at 54. that is below the estimate of economists's. they were expecting 50.5. the chart -- that are compared to the previous two months. are ing above 50 says we expansion mode as opposed to contraction mode. pmi.reak down for the no surprise here. larger and more said -- more medium-sized companies doing better than smaller ones. worth noting that the number -- it shows that there is a lot of new orders.

a defining export orders. how do you interpret that? china's latest round of moderate growth measures is beginning to show some pickup. at least on the domestic side. we were speaking with the chief economist. he is pessimistic. he expects to see slower growth. the government will have to loosen on the fiscal and monetary side. overall, i have been's week into a couple of guys who have been working. the data shows the economy is stabilizing, at least in the near-term. is goingof the economy to be modest. the most important piece of data. you have to take it into conditioner desk consideration. -- you have to take it into consideration. a very important number. react, no doubt,

tomorrow. >> thank you. >> back to europe. let's hear from friendly will law's interview -- francine lacqua la's interview. >> i would welcome an lower interview. -- euro. >> coming up on the program, can pay-tv continue to pay off? we will have more on the company's inscription model. and the earnings we just reported. that is coming up >. ♪

>> time for company news. com plans toia acquire channel five. nickelodeon will announce the deal before the u.s. market opens today. moving a step closer to winning the merck consumer business.

it became too expensive. contest between the bidders contests between the bidders means merck may catch more than $4 billion. they have been sentenced to 1.5 years in jail. the designers, who have designed -- denied wrongdoing, will appeal the ruling in italy's top or. welcome back, i am mark arden. >> time is a quarter past 7:00. analysts have been watching for surround television. let's get more insight. he joins us now. thank you for coming to talk to us. try to work through the numbers. they are saying in the first more paid00,000 subscription products.

but we're not sure what that means. >> they did make it easy for anybody to work out reed in the past, it used to be satellite -- fromds taking the the rooftop. now it includes people getting it over the internet. different margins. the different everything. different acquisition cost. the classic satellite businesses the core one in terms of all those metrics. we think it has probably gone down substantially this quarter. as was indicated by two of the -- in the news today. perhaps more on the basis of other trends we see and satellite television. explainjust can't tell eight --ght be seeing

a decline in the traditional tv offering. what is going on? will we see rises again? is this the beginning of a long-term downward trend? >> the last year or two will be eight. period of pressure. things like netflix becoming more popular. what we are starting to see at the last two years are changes youngeriewing among adults. the whole smartphone tablet revolution is but going -- beginning to change the way people approach subscribing to things. a big change in any way people consume audiovisual media. >> yellen per -- are people

choosing to watch what is available online. >> may be doing other things. so when things you can do with your smart apps. >> they have been trying to take advantage of that. get people -- >> they are getting a reasonable balance. they are one of the most progressive of all the pay-tv operators. is a challenge for them. a challenge for everybody. haveve a cap out the -- they tapped out the available households? what peopleselling being expensive packages? sense, it has a ceiling. even before this started. they reached -- if you look at the total today, it will be

about 10.7. that now includes -- now tv. the last two or three years have seen a slackening off. but it -- been users inare free view the u.k.. are there resistant? people like me? >> they won't pay. >> i love free view. am i resistant to pay-tv? >> you love sports. >> i love sports. >> all people are different. you may be a free view lover. you don't have to be a satellite hater. excellent thing you can -- there are excellent things you can get on free view. that makes the competition less good. more scope for people taking a pay subscriptions.

market.large over 10 million. the changes we are seeing any media, theconsume last year or 2 -- all the figure showing tablet and other uptake. the younger people, business of when people are not able to buy houses so easily. we hear about ice is going up. they may stay at home with her errant -- with their parents more. >> you discount the competition from bt to some extent. >> completely. >> is the industry wrong in making an assumption that if you provide good sport's content, that is what persuades people to pay for television? then they decide to get everything else through leila t -- loyalty or laziness. >> a good half of the base does

not take sky sports. in order to keep it subscribers happy -- >> they are into dramas. sky. >> one of the exciting bits of the development which will come over the next few quarters is they change to the user interface. people with connected boxes, all the things that are slightly depressing the moment. in the future, it may give them good returns. people are more aware of what they offer. instead of just going to a for screen where you see this is your channel guide. you suddenly have all the offers there. side-by-side. at can increase demand. >> some are saying me overhang on the shares is being caused by the next round of bidding for

premier league football rights. is that not the case? >> obviously, it is and everybody's mind. we keep riding the elephant in the room. >> how much of an elephant is it? what is the fear they've paid each other to ludicrous levels what isbeatty each -- the fear they bade each other to ludicrous levels? >> they will make a decision about what is the best for them to do. -- some said it was terrific. money is't do it, the released for other things. i don't think those things -- it is going to be a tough battle. a tough option. from what we have seen so far,

with european champion league rights, it is worrying. >> toby thank you very much. joining us from anders analysis. >> and earnings update. we'll dig into those numbers. stay with us. ♪

>> mayday, may the first.

live pictures from red square in moscow. that means mayday parades. about 100,000 people from trade grecian -- trade unions agreed -- trade unions. the london market is open. welcome back to countdown. >> lovely colorful pictures, i am mark harden. -- barton. back.e we -- we will come >> 25%. >> earning more money on the money they are lending. >> details to follow. more on that. when we come back.

>> welcome back, i'm an old na edwards.an >> let's check in with the euro. up by 0.1%. data comes in wake of than expected. -- weaker than expected. only a matter of time, according to some people. italiant up with the financier met -- finance

minister. he does not see strong euro depreciation. this becoming a headache for italy and spain. >> these are the top headlines. the international monetary fund has approved a $17 billion loan for ukraine that will extend over two years. that will help you rain's short-term budget needs. openly country up to further need -- eight from other countries. christine lagarde says it is the ukraine fromo help sinking further. >> ukraine has an opportunity to seize the moment. to break away from previous practices. monetary,the fiscal, and governor -- government point of view. >> the latest manufacturing data from china is underscoring weakness in the second world economy.

premier lee is trying to avoid a deeper slowdown. a pretty construction plunged in the first quarter. the fed says it will continue to wind back stimulus. it puts them on track to bring halt. helped -- qe to a the fed's comments, i'm -- comments came hours after an official said gdp barely grew in the first quarter. >> numbers from lloyds banking group. manus cranny. the flavor with the number said. give us the details. >> good news for the market. up 22% in the first quarter. it 1.7.s have he is saying this is a beautiful line. government must be falling over themselves and 11 downing

street. simple, low risk business. as exec he what the british government -- >> what they ordered. >> is what they ordered. lloyds continues to expect to go ask permission to pay dividends. they have it down to 25%. cost of:. this is like nirvana. >> nirvana relative to rbs. >> you can say that. part of the statement is a lot of the restructuring -- about two ipo. they are very much on the road to having delivered change. rbs is yet to start that road.

the market will look at one number. boring baking my new shop. next entrenched margin. that has moved up a little bit. crazily important. the simple, low risk business. to's hope there is nothing change that opinion in 2014. >> thank you. let's carry on talking about this. >> jonathan is here. hi, jonathan. how dare you speak against anything manus said he regrets he covered it perfectly. -- nextentrenched interest margin, has been the driver of the stock. the key. if you look at the last set of results, when they put out a confusing message. the fourth quarter margin. down five cents.

that led to 2.4. ahead of expectations. capital ahead of expectations. the numbers in line -- from here, little to get overly excited about. the story is on track. as manus said, risk is being managed well. costs are being managed well. it is revenue that is more difficult to redirect some of this improvement in the margin is being attributed to the metrics of good old-fashioned the banking. the improvement of the economy factors in their. >> one third of the business is the u.k. the margin of recovery is very strong.

so was underlying growth. that is the issue there. project marlon. erlin/ . margins improving, but that has to slow. >> how will they fare under stress test? we had the criteria released by the bank of england. the scenarios are quite aggressive. analysts are saying the 35% drop in housing. book houses 63% -- is housing, 63%. does that mean the risk under the stress test -- >> they are pretty healthy across the books. give them another capsule position. not be particularly worried. the pra is harsher. in switzerland and sweden. every time i bank gets to the

level they are acquired -- that is the story. says the group as confident going into negotiations about dividends. the government still has a viable stake. >> the third quarter is the one that needs to be tested. if you look at the highest p/e ratios, 50 is about right. 50%.ded is about that would be a positive story. >> when our taxpayers going to be able to buy a stake in lloyds banking group? down ae government sells bit more of its 25% stake? >> they will be keen to continue the process. it has been that much more

difficult amends the exit. the tsp. >> will they bring that to market? all the good slogans we remember from the 80's? is actually the driver of growth for that story. the paddington bear i used to have -- the money books. >> think you for joining us. jonathan joining us from bloomberg industry. let's get more insight with sam.am -- with bloomberg industry has a team of 140 analyst's. good to have you back. >> they took themselves out of the race yesterday. the phrase they used was they

are highly focused on making sure they get -- what a good return on investments they make three they are still interested in consumer. we were talking earlier, three days ago. the number they would have had to pay. $14 billion. the amount of financing they would have had to put in place would have been a lot of money for them. they are is in a different position. they can reduce the potential upfront cost by doing a deal like novartis. it could away the -- be quite interesting to mark. -- merck. both divisions are being looked at. >> why would merck be interested in a by offer? >> -- buy offer? >> it would help them deal with two problems in one go. it is easier to do it this way. there are a lot of

assets around. but both companies get what they want. the biggest animal health company in terms of sales. yer'sombination of batye animal health business and mark's. -- merck's. >> he was saying you have to be 12 or three in the field. it is that a driver behind all of this? >> is one of the issues. flagship hard, they have lots of great products. it one is a big driver of growth. they lost a contract with the u.s. payer. there has been a lot of pressure on pricing. you need to have a big bag of products to be able to negotiate good positions. that is one of the drivers. >> thanks, sam. sam, thank you very much.

we will hear from francine lacqua. the exclusive interview with the italian finance manager -- minister. >> plus flying can be stressful for people. what about helping your pet coping with that? hot shots is next. ♪

>> first. bloomberg. >> time for hotshots, a look at some of the most compelling images of the day. airports can be stressful enough for humans, let alone dogs. our help is at hand in los angeles. big to a fear of flying course for jet setting dogs. dogs are exposed to the sights and sounds of flying. even turbulence is stimulated -- simulated. he kissed pig in front of his pupils. he made the promise in march to persuade students to abandon their habits. they had stopped dropping letter. he got the idea from a teacher in the u.s.. let's hope that one does not catch on.

peruvian fans of the british boy band one direction got a chance to meet their idols during a visit to the archaeological ruins of machu picchu. teenage girls yelled as the group arrived at the airport in tesco. -- cuzco. mark, try to keep you away. become a nation of machu picchu and one direction you will find your resistible. x i was to get that pic idea. i will say to my cake, if they don't stop being so messy, they will have to kiss a pick. -- pig. newly appointed italian finance loquatr told france lane in an exclusive interview he

would welcome depreciation of the euro. he talked about the challenges that remain. draghi has taken off the table a risk of the breakup of the eurozone rignet benefits -- that benefits members including italy. again,e growing extending recession. the task and challenge is to make that growth much more consolidated over the medium-term. that's where italian policy comes in. broad and launching a ambitious structure. including labor market reform. tax reform. as well as measures to boost the economy in the short term. so we strengthen the recovery and make it more sustainable over the medium-term. especially more job rich. >> any concerns about the italian banks?

theave the results of tests. will they be credible? >> the comprehensive assessment needs to be credible. this is the need that all european banks face. we need to be convinced that the italian and european financial systems have been prepared or are about to be repaired. as far as italian banks are concerned, let me note that italy has gone through two years of deep recession. in spite of that, italian banks have proved to be highly resilient. banks areeed -- rebuilding their capital. and preparedrmal to lend to the economy. support growth. >> there seems be a lot more open talk from france we need -- >> a lower euro would help european economies.

it would be in line with fundamentals. it would take off some of the pressure toward deflation. thing is to think -- a lower euro is useful. another is to target the euro. this is that the nic is feasible. >> do you think about currencies? how do you explain the fact that the euro has been so high? if the fed starts this program is it a consequence, a direct consequence, that the dollar should go up? >> we tend to forget one fundamental moment. the eurozone has turned into a large current account surplus situation. that adds to the quote unquote strength of the euro. the fundamental variables driving currencies have to do with rove and in this case

higher growth in the u.s. which is just a higher dollar rather than the euro. why is that not happening? that is a bit of a puzzle. there are no obvious reasons to see a strong depreciation of the euro coming up. as i said earlier, i would welcome a softer euro. a lower euro. this is different than the exchange dynamics in the short term. >> francine is here. good morning. he has not been on the job long. >> two months now. politicalabout reform. the guy that for a long time was working at the imf during -- the imf. he is a numbers man. he talked about gdp. he thinks in italy we could be above forecast. this is the time to act. he is confident that the prime guy that ise blowing everything up because of his energy and youth, will be

able to push it through. he talked about the political stability. this is probably the biggest problem in the last 30 years and italy. it seems the troops have rallied. he is quite excited about this. the new don. -- dawn. >> he talks about complacency on the markets. worries that when the italians get the presidency in june, there is going to be too much complacency because mario draghi is saying to take the tail risk off. he says it is great mario draghi is giving us more time. there is a danger that amongst all the elite, they say he is taking care of it. they don't -- will be pushing the tough reforms. >> what did he say about italian bond yield is mark -- yields? >> he said a lot of it has to do with the italian economy.

he is less political than the previous italian finance the star. because of his previous role at the imf, he says -- but of course it still has to do with mario draghi. the window of opportunity. we need to act. >> no complacency. thank you. francie will be back later on. >> nine minutes, up. the sales tax. what it means for the automakers. the newest data out of japan, next. ♪

>> was -- we just had a earnings report from sony. the loss was $1.3 billion in the 12 months and even march. in the preliminary earnings, the costsy charged additional on its personal computer and disk making businesses. quit the macro themes of the day. we better start with the fed. >> you like the fed. what was refreshing about yesterday was how unloved the fed needing less. after all the volatility, the vest the -- best thing they could have done was a statement of the one they put out months before. if you do a side-by-side analysis, there are subtle differences. but relatively unchanged. no change across the board

agreed no press conference. if you want a press conference, -- thehe next fed meeting is one you are watching closely. >> they have the forecast attached to ask the press conference that could be like to obsess over. the changing forecast we could get. >> pmi's? it is made a. day.dy from 55.3. >> japan auto sales down. >> seven straight months. the tax hike, and the consequences of that on car sales. big issue for japan. still maintaining a 30% rally this year. even though it is down nine percent. >> interesting. thank you very much. on the move is up next.

companiesowe's reported earnings earlier this morning. as john was saying, the london market is open. a number of european markets are closed as of may day. >> enjoy your holiday. >> will be back tomorrow. >> see you tomorrow. ♪ . .

>> welcome to "on the move." i'm francine lacqua in london. coming up this hour, we will bring you my exquisite newersation with the ecb's finance minister. first, our markets came. jonathan ferro, ryan chilcote, and manus cranny in hans nichols joins us from berlin. a lot of the european markets are closed for may day or labor day but the ftse is open. >> we will get some purchasing

managing index later in the united kingdom. we are having this debate. their movements in the euro -dollar. guy was walking around. people are trying to take levels out in terms of euro and the dollar. you might see less liquidity could you have china and ukraine and data in the state. just because everyone is on mayday, protesting in europe, the biggest economy in the world does not stop. >> the fed keeps on reducing stimulus. >> they tell us if they are not on a preset course. but if it walks like a duck and sets like a duck -- and quacks like a duck. what did not surprise me about yesterday is the lack of enthusiasm over yesterday's meeting. nobody really cared about it. we are expecting no change to this a bit, no forecast, no press conference. the attention the fed has had over the last 12 months, the volatility, was not there yesterday and that is refreshing. >> it is refreshing. there are