>> first credit suisse and now bnp seeking more than $5 million from the french bank best time for a sanctions probe. more stimulus on and saying they are weathering the sales tax hike. >> germany central-bank sending a warning. is seeing risks despite the market. >> remove your from the company's ceo in an exclusive interview. it's an innovative country

and we are an innovative company. it makes a lot of sense. >> welcome to "countdown." u.s. regulators are said to be seeking $5 billion from the becauseank bnp paribas of the deals with sanctioned countries. european editor david tweed has the details. we knew there was a probe going on on the subject of the number previously was a lot smaller. plaxico were looking at something like $3.5 billion for me also spoke to people familiar with these investigations and they have not even come out with the final figure.

it could be bigger. we are expecting the actual ruling to come down probably next month. morellion is certainly than bnp had to set aside. they only set aside $1.5 billion . this is certainly a lot more money than it was expecting. the reason is because the u.s. attorney in new york is taking a very dim view of the sanction violators and the attorney dealing with the case said in the past that the fines have not been tough enough. these violators are talking about sanctions on countries sponsoring state-supported terrorism. that's why they're taking such a dim view of what has been going on here. like they are keen to point out

and others have been saying whether this will hurt them in the future. hal and scaled by this type of headline do you think bnp will be? > so far, credit suisse seems to have come through all right. we heard jonathan ferro talking about all of that in zürich. for bnp paribas, it could be even more severe. the superintendent in charge of the department of financial to seek is said to want as well as a guilty plea from bnp but also banning them from actually carrying out transactions like money transfers in and out of the united states for its clients. if you cannot reform these, they will go elsewhere. what are the chances of them

coming back? it could be very costly in terms of compliance. these are further fines or further penalties which might come down on bnp paribas. we have to wait and see what decide in theo to end. >> david tweed reporting there from berlin. >> refrain from further easing at its most recent two-day meeting as the economy showed signs of weathering the tax increase. mia saini in hong kong has the details. it's interesting that this time around, the bank of japan not doing any action, but they have asserting itsen intended effects. the way that we've been summarizing up this morning is that it is pretty much steady as she goes.

they will continue to expand the monetary base at ¥60 trillion, roughly about 691 billion dollars per year. that is in line with forecasts economists we surveyed bloomberg. the central bank is saying they will continue easing until 2% inflation is stable and they currently see a moderate recovery. even with the april sales tax to we saw from 5 are sent -- from 5% to 8%. according to one of our polls, 75% of economists are forecasting that they will boost stimulus by the end of the year with some 38% seeing a move sometime in july. analysts at the ie chief -- dai chi said they will not be nervous until the yen goes above

100. >> let's talk about the trade figures. what are they saying in terms of the overall position for japan? >> looking at the yen, it's right there at the three-month high for this week. now, we talk about trade. the trade deficit shrank in 808.9 billionn at yen, roughly about eight alien dollars. this again can be pointed to the slower consumer spending after the first sales tax we saw in april. it really dragged on imports. if you take a look at the inbound shipments rising from a year earlier, that is the least in 16 months. if you take a look at the exports under the equation, they increased modestly. the shortfall was wider than forecast. the yen still trading above on that news. >> mia saini there for us in hong kong.

>> international correspondent hans nichols joins us now from berlin. interesting they should be making the comments about volatility. they have been talking about the risks associated with a low volatility environment. >> you listen to all these comments in the aggregate and there's a hearing to be some queasiness about what's happening out there. there is a great unknown. instead of speaking central bank which is a different language, let's listen to how he put it in his own words. >> real estate markets in some european countries have very high corporate bond valuations. leads tome time, this

market participants thinking they do not need to hedge because they think local activity means low risk. this may all change, so we do see risks despite the fact that are there. >> he will take over a supervisory role at the bundesbank putting him in the supervisory position at the ecb which will later be in charge of some 130 banks. tot brings us to too big fail. on that very point, he said more work needs to be done. ever since the lehman brothers crisis, a lot of work has to be done. we have been thinking things through as much as we can, but could we exclude a failure of a bank if it's really too big to without making taxpayers paid? we are not quite there yet.

this issue of harmonizing models, risk models on this ret says youomb should have a variety of models you want to avoid. interesting comments from him yesterday and that interview with our colleague jeff black. news, the bankb may move to having its interest meetings every six weeks instead of every four. what's behind that? >> this raises the tantalizing possibility that we will have fewer meetings but that they will actually release the minutes. you look them up the federal reserve bank does and they do interest rate decisions every six weeks but then three weeks after they released the minutes. four times per year appears to be the low watermark for the swiss central bank but every four week there's an idea at least within the ecb and no decision has been made but you go towards a six week schedule

and it gives you more time to release the minutes, greater transparency, greater communication. we will see if it happens. we get a report on interest-rate rate decisions and the minutes. is a minutes man. >> he is shaking with excitement next to me. fewer meetings but more minutes could be the way forward. >> i'm a devil for the details. alcatel lucent plans to open a branch of a research center just outside tel aviv. elliott gotkine has more. >> alcatel lucent really looking to go back to basics, back to the things that made alcatel and lucent and its forerunners great. they want to become more innovative. i suppose they want to get a little bit of a sparkle from the startups that proliferate here in israel and act more like a startup as well.

down with the ceo of alcatel lucent for an exclusive interview and i will bring them all the details of that later in the program. >> bank of japan keeping stimulus of the same level. we look at signs by growth in the country is due for a comeback. stay with us. ♪

today's company news. lenovo is reporting fourth-quarter profits missing analyst estimates. in largest maker of personal boosting says smartphone sales increased out of china. million.imbed to $158 google is keeping a large portion of its cash outside the u.s. of a can use as much as $30 million for possible acquisitions. google generates about half of its revenue outside of the u.s. and avoids paying taxes by keeping foreign earnings abroad. a longtimeoost from shareholder and one of the biggest institutional stockholders, others have criticized the drugmaker pours pfizer takeover

offer. astrazeneca will earn a better repair -- better returns for shareholders by staying independent. welcome back to "countdown." i'm anna edwards. cranny.'m manus the economy is showing signs of weathering the effect. joins us now to discuss the issues. on the face of it, no change from the bank of japan, but there is one line in the excerpt they released. keptof japan policy unchanged saying quantitative easing has been exerting its intended effect. would you tend to agree with that? is that more sort of rhetoric to try to help the japanese get on board? >> i agree to an extent. that was a big part of the package. you can say it's been the main on thewith better news economy and inflation. what's been missing in terms of

structural reforms has always been the case in japan in terms the change of at prime minister and then reverting back later on. pre-match of throwing everything at it in the early part of last year. >> are you expecting more meetings this summer? lpl financial, for example, saying there is a god could be in qe oculd be in the cards. dzilla-sized qe last year already. i think what we will have to do is to put downward pressure on the headline inflation from the base effect of last year. this is pushing away the

intended 2% target in backing down. july, august, and might come through. >> we've had a bucket full of stimulus, markets dropped, pulled back a little bit now. this is about trying to change the mindset of a country. you cannot do that in six months, can you? >> it's a huge, huge challenge. the aging population and population dynamics are something that you cannot change. politicians are good of skirting around issues. fundsanges to the pension , buying less japanese government bonds, there are huge challenges of which generally japan has been very bad at

facing up to. that's a huge issue. like you said at the beginning, loads of them talk big and then revert. >> talking about more women in the work for us, emigration, we will wait to see if the arrows of the targets. >> on the fpc, lloyd's coming out today saying we have mortgage lending, but when i say that limiting to four time salary load. some move. anyway, still allowing four time salary on the mortgages. fact that lloyd's has come out and already made that, i would say token measure, is a sign that the responsibility falls with the fpc because they don't

want to use that as a tool to temper mortgage lenders and they want to have a gradual release in rake. that is what the fpc is therefore. they made that point as well yesterday, quite pointedly. >> kerney said it is the instrument of last resort. >> interest rates. >> it's a very blunt instrument. cameron him yesterday, everyone is making stuff out of the scheme here in the u.k. where the banks will get you to deposit and they basically bolster your deposit. 85% or 80% of the mortgages that are right side london in there for a price tag of about 160,000 pounds and it's a bit of a red herring to say that accountable help you buy. >> i don't think it's the whole story. london is a very international market. i think it's very minimal there. it's more in the regions that it's helping but it all trickles through.

you are supporting other areas of the market into trickles through to the higher cost. to stop the whole story. we must not get fixated. smith staying with us. more from him on a comeback and then in the u.k., we will discuss that when we return. ♪

>> welcome back to "countdown."

>> the time in london is 6:22 a.m. we are back with simon smith. s talk to eachnk other. they've talked about low volatility levels and markets and decided to worry about it collectively? low volatility from the ecb, bank of england, parts of the fed as well. are you worried about that? >> there are some echoes of the pre-crisis era when volatility was a multi-year lows. markets were complacent. they were not doing much in terms of mitigating risk. the central banks abroad it upon themselves and they have been very clear in the forward guidance wanting to hold the markets hand in cases of the fed and the end of last year. we're worried about tapering and what did they do? they tapered at a very steady

pace and they cap the taste. they were very keen. it is actually moving away from the pace of tapering their that they brought in. we have seen 10-year bonds .alling 50 basis points volatility, equities, fx, multi-year lows. markets are sort of so dependent on central banks leading them that central banks have brought it upon themselves that they need to be the authors steadily bringing back some volatility. >> how do you bring back volatility without volatility? >> in there, they could begin to talk about an exit strategy. they could begin to raise for the market in terms of what they're going to do going

forward. >> people jumped on comments about it. >> it's just not time. >> maybe it was not such a bad thing. i think it was done in the wrong way. raised the point about the housing market in the u.s.. by chronically re-think was saying that the u.s. housing market was in a worse state than precrisis. he is talking about reliance on those institutions in the u.s. market. are you worried about the housing market? the fed is clearly watching it closely. >> we naturally saw the sort of post crisis improvement.

thee was more stability in last 12-18 months. the u.s. is so different from the u.k.. in the crisis in the u.k. was virtually the opposite. yes, again, it's the exit strategy in terms of the reliance in the u.s. having a multi-decade reliance in terms of government and other substantive mortgages. how do we exit ourselves from here? at the moment it supporting it so well. >> simon, always great to get your opinion. simon smith from fx pro. coming up, google gobbles up out. top 100 most valuable brands. we take a look at how the tech titan forged its image. stay with us for that discussion shortly after the break. ♪

>> welcome back. i manus cranny. almoste biggest drop in two months. we must 9/10 of the value. iron ore heading levels we have not seen since 2012. consumer confidence back to levels of 2011. aussie dollar coming back. cuts are going to be what is delivered from the reserve bank of australia on the back of the data. we have a slightly risk-off mentality up the moment. going out of the dollar and into the end. bank of japan, no more stimulus.

they say they have less intention to really go forward with easing. bank of japan is optimistic that qe has worked. the magic level will be 100 in terms of the conclusions. 101.32 at the moment. the bloomberg top headlines. u.s. authorities are seeking more than $5 billion from bnp paribas to settle investigations in dealings with sanctioned countries according to people familiar with the story. oficials suggest the ban money in and out of the u.s. might be part of a settlement. the former chief executive of jpmorgan's chinese investment bank has been arrested in hong kong. arrest maye said his be linked to probes into the bank hiring practices in asia. a bundesbank board member says he sees new risk to financial stability.

dombret spoke with bloomberg m.d. said generous bank currencies and the search for yield and a low-interest it.ronment are adding to >> the real estate market in some european countries are pretty high. corporate bond valuations seem stretched and high. at the same time, the low volatility leads to market participants thinking they don't need to hedge because they think a low volatility means low risk. this may all change. we do see risk despite the fact that the markets are calm. >> google has overtaken apple to become the world's most valuable topd according to the 2014 100 most valuable global brand rankings. for more on the secrets behind thele's success and more on winners and losers, we are walsh in anter

exclusive interview. great to have you with us this morning. i was reading the notes. the perception is apple is no longer redefining our lives and technology. is there star waning? -- is their star waning? apple isk the death of highly over exaggerated. it is a brand that just signs differentiation which is based on new products. what we have had from apple's point of view is a pretty poor terms, in terms of new product launches. 20% in value. >> what are you looking for an brand rankings? what puts google at the top? >> google is powering on with massive innovation. it is a kind of spider's web of a brand. it's all around us. it sticks to us and it takes us

everywhere. google has been innovating tremendously. it has been investing in paying android spectrum. all sorts of things from the point of view of consumers. in there.k is not >> that's what we discussed during the break earlier. you have to go to number 21 to find a social media stock. a share of the successful brands. of the are part consciousness. they are all on my tablet, all of them. there's a mix. >> there's the actual operating profit. how much does the brand make? these are very new brands. i'm only at 21, what a shame. >> it's 10 years old. >> it was the fastest riser last year, the second this year.

the top asian brand last year.double of there was some phenomenal growth. >> very well-established even older companies in here. ibm is on the list, microsoft, , visa, at&t, even marlborough. it's not all about the internet then. >> it's certainly true if you look at the technology brands. they make stuff or our product-oriented, they have only grown by about 10% versus 12% for the whole of the top 100. the internet-only, brands of the ether, they have grown more than 40%. these traditional, very well-established, very

meaningful brands as far as consumers are concerned are ones that are delivering, at a great premium often, products that really means something, if you're cheating from their competitors. they are the brands of choice as far as the consumer's needs are concerned. >> you talk about brand of choice yet you look at a brand like burberry. you say the brand value has increased by some 60%. it's combining traditional heritage with the digital innovation. paradigm. perfect >> of the world goes ,lectronically in a connected you're going to lose out. it's absolutely essential you keep up with where the consumers are.

it is use technology on a global scale. >> do you get huge regional variations? it's probably true of many western brands. >> if you look at regional banks for example, their strong in certain regions. and it's a growing market as well. >> pulling this back to an investor, if you look at your index and the s&p 500 index over time, you did pretty well. >> indeed. zero, investing in the s and p from 2006 until

now, you would the at about 44% to the good. however, if you invested in the strongest brands in the portfolio, you would be 81% to the good. they are twice as good. if you look at the cagr of the s&p 500, it's about 4.6%, the brands are 8.9%. they are a fabulous investment. the way. all who needs the s&p 500? >> peter walshe. >> netflix plans to expand deeper in the europe this year. international correspondent hans nichols has more on reed hastings ambitious plans. i don't know where she is at on the tally. >> i was working out how to say "house of cards" in a number of

languages. all i got was [speaking french]. >> they're going into belgium. look. at this point of the program, i get to admit or maybe kind of admit that i can stop my questionable legal behavior in trying to trick netflix that i am back in the states. for those of you that use virtual private networks, no longer. netflix may be coming to france, germany, switzerland, australia -- austria, and luxembourg. you can watch streaming online. what reed hastings says is he expects 70%-80% of revenue to come from overseas. that's remarkable. the total subscribers are around 48 million. in the states, it's 35-36 million. at least three fourths of the customers are in the states yet

long-term they see revenue coming from outside of north america. the other interesting thing about this story, we talk about consolidation in the telecom area. time warner and comcast. this makes the case that everyone is competing with everyone. time warner is competing with .t&t are you amazon, netflix, or both? >> i have used netflix. >> i have amazon. >> a mix. >> at this point we get to make fun of anna for watching every single back episode of "sex and the city." amazon and hbo are going to have a bit of a tie as well. a lot more content. >> you think you know me, hans,

and really you don't know me at all. what was house of cards and german? card haus. along with a push into fragrances and cosmetics. uses israel as the site to launch its bid to improve cloud computing vision. we have an exclusive interview with the ceo. ♪

>> time for some company news. calling on the french government to back a $17 billion offer by general electric for energy networks. uncertainty is making it difficult to win orders. france pass legislation extending the government's ability to block foreign takeovers in energy, transport, and health care. torosoft backing off plans

introduce a smaller version of the surface tablet. executives decided in product development that it was not different enough from its rivals and said one of the engineers had been working on the device and planned to unveil it as early as yesterday. instead, they unveiled surface pro 3, an upgraded version of the pricier windows-based tablet. twitter is an early-stage talks musicuire or partner with startups. one company they were considering buying is sound cloud that lets people share music. they're working on ways to user growth.ew if struggling to woo new users as quickly as it once did. back to "countdown." >> the time in london is six 40 5 a.m. alcatel lucent is bringing the iconic bell labs research center -- the time in london is 6:45

a.m. elliott gotkine joins us now. this is part of combes turnaround for the french equipment maker. >> what is really trying to do here is go back to basics, go back to the roots of what made alcatel, lucent, and it's forerunners including bell labs great. is concerned,es israel is the place to do that. >> israel is the innovation country. we are the innovative company. a marriage between the two makes a lot of sense. of thing just the kind the israeli government loves to hear. taking encouragement from that will be the talent they're looking to tap into here with dell labs and a fair number of startups. -- will bell labes. organicallyo grow

but also screen the potential of companies that we might acquire. i'm very proud to announce today the opening of bell labs in israel. have seven nobel prizes. i hope the next will come from israel. >> is looking at potentially buying israeli startups but he wants to act more like them as well. standard. to be the what i'm trying to achieve right regenerate is the innovative spirit of the country. everyone needs to innovate. we need to be able to do incremental innovation as well as disruptive innovation. that's always what's been suchcult and big companies as alcatel lucent.

it is an innovative fabric. where -- we are anyone to in the vectoring. invent we are running that in israel right now. >> if you can tell me what vectoring is, i will eat my smartphone. [laughter] >> on air, live, on television? >> it's the way that they are making copper wire cables to allow speeds of up to 100 megabits for your internet connection. >> that's what he was about to say. >> i know. like i could not have summed it up better myself. >> thank you, elliott gotkine, from tel aviv.

>> luxury label burberry reporting earnings later today. our european business correspondent caroline hyde joins us now. ?hat can we expect from the ceo >> increasing sales and profit. pretax profit of less than 5% and we will look at how the stronger pound will have effected overall bottom line. march theths march to pound gaining against the dollar some 9.5%. when you sell a lot and abroad -- abroad, less for the pound when you turn it back. looking forward to 2015 and how much it will hurt going forward. they aremore new space adding on will help the bottom

line as well. he was talking about the value of the brand going up in the luxury space. burberry is the outperform heer. it is the eighth most powerful luxury brand but it is up 42% in the last year. really cleverng in social media and dominating the digital space. >> we expect to see christopher bailey to continue with this. a littleis online push further and indeed doing it with makeup and perfume now as well. >> with her departure, it is the love of digital. if social media does attract a new audience, actually building. we look at how others have done this, dull chanda bono, armani armani, and gabbana,

they look to distribute. they're taking on tactics that much older lines have been doing, like chanel. they're taking the bull by the horns. ,hey have ended the contracts making their fragrances and selling themselves. they're going to amazon directly. alibaba as well. why are they going to these websites? to stop cheaper items from coming up on the internet. they have a dedicated boutique. now polish onur virtually. you can access the catwalk online while you looking at it and most of all, when you're paying for this, the ipads are coming around with an attendant in they will take your payment

that way. a digital company and going it alone with the aspirational purchase. afford lipstick more than a trench coat. >> coming up, led zeppelin could be facing a lawsuit over one of their most ocular songs. we will have that and more in the newspaper segment next. ♪

>> welcome back. i'm an edwards. -- anna edwrads. >> china for the newspapers. >> fonz, let's go to you first. -- hans. hold withwords taking american youth. it's not a complicated german verbs. this is one word that basically means motor liability insurance. rubbish. it's going to be-off to you. >> that's not very complementary. >> it's a great story in the telegraph picking up on a bloomberg businessweek story written on may 16 all and how led zeppelin may face a

challenge on their most iconic song "stairway to heaven." a group called spirit toured with them in the 1960's and a guitarist should be given written credit, so says his family, on the 1971 track. it has a very strong resemblance to the 1968 song "tourist." >> kinder, call maine, smiling again. -- calmer. the recovery in the economy is making us all feel better. is how we are feeling now. we are not rushing out to pop the champagne.

better aboutg getting your finances in order. "countdown" continues in the next hour. when we come back, how christopher bailey is doing. stay with us on "countdown." 6:56 a.m. in london. ♪

>> first credit suisse, now the np. -- bnp. reporty's first earnings on the christopher bailey, the luxury labels latest numbers are breaking now. germany's central bank sends a warning. the bank sees risks. alcatel lucent looking for tel aviv for its latest research center. >> israel because it is the innovation country and we are the innovative company.

it makes a lot of sense. >> welcome to "countdown" everybody. it has just gone 7:00 in london. a number of companies in london today. burberry, the first numbers coming through. this is under the leadership of christopher bailey for the first time. .e are getting those numbers caroline hyde is here with us to take us through the details. >> beat across the board, sales up 17%. half it is up eight percent -- profit is up eight percent. this is for their last fiscal year. overall, it is looking like a .retty stellar for burberry

this is the biggest luxury brand in the u.k., record sales and profits. christopher bailey remains creative director as well. seen isare going to be the focus on beauty. they will be energized by the opportunities ahead from unlocking japan and they will be ending -- to accelerate beauty to deliver distinctive experiences. this has been interesting tactic. unlike will jacob anna, armani and gabana, they're going to do it themselves. they aim to grow sales 25% for beauty this year.

the top 10 beauty brands and they have gotten to grow fivefold. via amazon,ng this via alibaba. >> if you cannot beat them, join them approach. dominatehey will do is that space and lure in the younger generations. ,s they become more wealthy they have to lock them into the brand. beating across the board. the transformation to beauty is well underway.

>> we will have more analysis later on the program. let's tell you what is happening -- reporting numbers. details.resting their q1 sales came in at 11.1 billion. for your net see profit coming in above the 2013 results. linesaid it would be in with 2013, so they are upgrading their estimates. it will be doing better than they thought. perhaps that will be taken as something of a positive. thatinds of deal of details about how they have been performing. container volumes rose by 7.3%. freight rates did fall. that has been a continuing theme for the market.

interesting to have the conversation with the chief executive about these numbers. we will be getting to that conversation a little bit later during "on the move." numbers.he breaking u.s. regulators are said to be seeking $5 billion from the np para bob -- bnp, david tweed has the details. this fine is much bigger than previous reporting. only last week we were reporting, talking to people familiar with the situation that it was going to be 3.5 billion dollars, which is more than bnp

was considering. it said it had set aside 1.1 billion dollars and it might need more. $5 billion is considerably more. one of the reasons for this is because the u.s. attorney of manhattan, who is dealing with this case, has been taking a very dim view on sanctions violators. previous fines for banks have not been tough enough because these companies are also helping regimes which have been sanctioned. they have been supporting state sponsored terrorism so it is really serious stuff. >> some have suggested that credit suisse has emerged from its guilty plea relatively unscathed. bnp?can we say about could be quite damaging.

it depends what penalties come out. the authorities in the u.s. are to enter aet bnp guilty plea, but they are banning bnp from transacting money transfers in and out of the united states for its clients. that will not really hurt their bottom line very much. if the client cannot do these very basic banking services, they will have to go somewhere else. if they go somewhere else, what is the chances of them coming back. they're looking at sanctioning individuals who have been complicit with this sanctions violations and that could cost

them their jobs. stairs are looking to open down this morning. -- shares are looking to open down this morning. the fine represents six percent of bnp paribas's total market capitalization. >> we will watch that at the open. the bank of japan refrain from further quantitative easing. the economy shows signs of weathering the impacts. the first sales tax increase since 1997. >> good morning. they say confidence is everything and that is what we're are seeing from the bank of japan. all 32 of those economists we surveyed got it right that the bank of japan is going to continue to expand their monetary base at a pace of between ¥60 billion to y70 billion.

the central bank says they will continue easing until the magic number, two percent inflation is achieved. they seem moderate recovery as corporate profits have improved. price gains will pick up, most doubt that the bank of japan will reach such a lofty goal. 75% of economists forecast the bank of japan will boost stimulus by the end of the year. 38% seeing a move in july. he will hold a press conference pretty soon, in less than 30 minutes. >> another story i know you are reports that the former ceo for jpmorgan chase china investment bank has been arrested. >> yes. a very big story that happened right before your programming start.

arrested by hong kong authorities, possibly as part of this rotter probe into the banks hiring practices. banks hiring the practices. he resigned in march amid the u.s. and vacation -- investigation and whether the firm engaged in nepotism. he is on bail, but was arrested earlier. >> thank you very much. markets appear to be calm, but new risks could emerge. in interview with bloomberg, he also noted that low volatility has led some investors to not hedge their bets. hans nichols joins us now from berlin.

it is almost as if the central banks are not talking to each other. they are talking about the low volatility environment. they talk directly to each other instead of through the media because that is almost like a game of telephone. at the end of the line, the message is always garbled. the dax as it an all-time high, low inflation is a concern. in terms of what is happening with volatility >> real estate markets in some european countries are pretty high. corporate bond valuations seem stretched. at the same time, the local activity leads to market participants thinking they do not need to hedge because i think it means low risk. we do see risks despite the markets are calm. >> would've this month, he will

take over the financial supervision role -- later this month, he will take over the financial supervision role. that puts us into what the group will be monitoring some 130 banks and that will happen later this year. on this question of too big to fail, he thinks we did not quite solve that yet. understand the central bank is thinking about the regularity with which it holds meetings and might extend changes. >> another scoop. here is what they are thinking. instead of meeting every four weeks, every six weeks, they would potentially publish the minutes of their meetings, more transparency and communication and more things for us to report on. >> fewer meetings, more minutes. coming up, europe, the ecb.

we will see if the disappointing growth figures have changed the forecast of our next guest for it gradual recovery. ♪

>> welcome back. disappointing gdp figures for europe recently posted challenge the forecast of our next guest for a gradual recovery. let's discuss with the chief european economist from barclays. a challenge for your forecast and the fact that these numbers were disappointing. what kind of recovery do you see for the eurozone? >> a very gradual and subdued recovery. we knew from the beginning that this recovery would be different from previous ones. we still have some significant hurdles. we have a pile of debt which needs to be eliminated. fiscal policy, it will remain pretty tight. it was not a surprise.

it was more like a wake-up call. we had lots of enthusiasm about the recovery. >> let's pick up on the peripheral countries. keeping a night on yields in bond markets and it is interesting to see that we have seen a bit of volatility coming back. it seems to be on the rise over recent days. a number of central bankers have been talking about how low volatility environment does pose risks. warning people not to get complacent. how do you marry those two things together? >> i think they are a wake-up call. everybody was very enthusiastic and everybody thought, this is over, back to business as usual. growth is back.

i think we are in a situation where people need to reprise the risk and to think about the sustainability. we are not out of the woods. there are still some adjustments to come. we have the upcoming european election which will be a second wake-up call. >> is that going to be something that is evidenced in markets? the impact of the elections or is it the ecb stress test? is that going to be a point of attention? -- point of tension for markets? >> there will be lots of things on the table. this election is not going to change completely the political landscape in europe, but it will show there is growing support for anti-europe parties. it might have some indication in some countries at the national

level, especially in some peripheral country. people might be willing to show their their pain and the fact they do not understand what europe is all about. you mentioned the upcoming stress test, i think the market has become a bit complacent. we can to be a bit more selective. there is a repricing of the risk and it is probably for the better because markets have become a bit more complacent. >> what is the biggest threat to growth in the eurozone? is it something around the periphery? is it germany? if we see a slowdown in the

chinese market, does that hurt the german economy? >> you have some international risks. china is one of these. the impact on germany and other countries. there is also the geopolitical risks coming from ukraine, have anwhich could impact on europe as well. even though we should not exaggerate this risk. the miskick -- domestic risks as well, reform fatigue and political risk. we will look at it over the weekend will see the result of the election. the second risk is coming from the financing of the economy. we will need some sort of credit growth to have the engine to work. banks are too focused on the

quality of their balance sheet. >> thank you very much, great to hear from you this morning. chose israel as the site to launch its bid to advance its cloud computing ambitions. we will see why in an exclusive interview with the ceo. that is coming up next.

>> let's talk about alcatel. alcatel lucent is bringing its research center to israel. the ceo spoke exclusively to our middle east editor elliott gotkine. this is all part of the turnaround plan. forget they brought us the telephone, the laser, the transistor. to go back to those roots, back to the origins of the company, the forerunner to alcatel lucent and to try to be great once more . he thinks israel is the perfect base to achieve that. country and weon are the innovative company. it makes a lot of sense.

>> that is just the kind of thing the israeli government loves to year. -- loves to hear. >> we are interested in in innovating organically. and also to screen potential of companies we might acquire. i am very proud to announce the opening of bell labs in israel. hosted seven nobel prizes . >> alcatel lucent and bell labs looking to collaborate with israeli startups can't not just looking at acquiring them, but looking at -- not just looking -t acquiring them - >> what i am trying to achieve

is to reignite this innovation spirit within the company. that is what it is about. everyone has to innovate. we need to be able to do incremental innovation. it is always a little bit difficult in big companies such as alcatel lucent. -- we were the one to invent dsl. we are now which have innovated vectoring. the vectoring helps to boost the speeds over copper wires. >> do not confuse the two, thank you very much. we will dig into burberry's

latest earnings. more on that story will make him back. 7:26 a.m. in london. ♪

>> let's get to manus cranny. with dollark it off yen. the bank of japan, they leave stimulus levels unchanged. jpmorgan says they have no intention of anymore easing. the bank of japan with a rather optimistic tone. you had a fairly reasonable move yesterday. dollar, lost one

percent of its value yesterday. i on our prices -- iron ore prices are the lowest. they still believe that rates will go lower on the back of the current. >> thank you very much. u.s. authorities are seeking more than $5 billion from bnp paribas to settle investigations into the banks dealings with sanctions countries. a temporary ban on transferring money into an out of the u.s. might also be part of the settlement. the former chief executive of jpmorgan's china investment bank has been arrested in hong kong. the magazine says his arrest may be linked to probes into the banks hiring practices in asia.

a board member says he sees new risks to financial stability. he talked exclusively with bloomberg and says the combination of generous central bank policies and the search for yields are adding to the risks. >> the real estate market in and highpean countries valuations seem stretched. the global activity leads to market participants thinking they do not need to hedge because it means low risk. this may change, so we do see risks despite that the market [inaudible] burberry.alk about the luxury house released its earnings at 7:00 this morning. let's take a closer look at the brands push into fragrances and cosmetics. the profits topping estimates at burberry this morning.

what is your take away? do you like the results? >> i think so. these are very strong results. the company has beaten estimates, at the top of its game in a luxury space. it has been showing up relatively mixed results. >> what about any sort of fly in the ointment? given some guidance on foreign exchange, looking ahead. what are they giving you that you are latching onto this morning? >> just about a month ago, they told us their foreign exchange hit to the operations would be 30 million. a month later, they have upgraded that to say we lose as much is 40 million. which is abusiness, new push for burberry.

they are quite unique in terms of the brands taking control of cosmetics and makeup and fragrance business. they seem to be shying away from margin targets. his a little disconcerting to see them not mention margin targets for their business. it is quite challenging for brand to compete with other companies on the scale of an estee lauder, l'oreal, to go it on their own. >> they have some top -- tough growth targets for the business. they were saying they were aiming to be top 10 in beauty brands. it would necessitate a fivefold increase in sales. do you think it is a mistake? should they be going in with a big manufacturer? >> life would be easier if they went with someone else.

you tend to reach out to a much wider base of retailers. airports,old in department stores, independent retailers. people like l'oreal and estee lauder have the distributions to reach these markets. burberry has not gone to these channels. because of the scale of those lots of prestige, the amount of scale you get behind innovation that you can put to use, which is quite challenging when you are a brand of burberry scale trying to do the same thing. >> this is the first report under christopher bailey. it might be too soon for him to

leave a mark. he has been with the business so long, are you expecting any big change? >> this has been a very long transition. her imprint was still here in many ways. they were a team. you will see the impact coming in the months and years to come. every is finally taking over its japanese license. they've announced formal plans for that. elevate they to brand to the same extent as it is in the rest of the world, something they have done in spain before. >> how accessible should be such rebrand be? -- should these luxury brands be? they have prided themselves on their digital strategy. they are trying to sell directly to consumers through amazon. we are seeing some of the more accessible luxury brand doing quite nicely.

kate spade, that kind of thing. >> what they have done very well in terms of their imprint in terms of the digital arena, really transformed their appeal to a much younger consumer. it will not work in the same way for louis vuitton, which is much more traditional. how it reaches consumers. it does not work for everyone. but the main challenge for this space is the fact that a lot of companies have taken significant prices. they do not have the brand equity. as a result, people like michael kors, it takes spade, much more affordable price points. it makes them cool with younger people. they're capitalizing on these price increases.

>> thank you for joining us. netflix plans to expand deeper into europe fisher. hans nichols has more on reading a stink -- read hasting's ambitious plan. >> six new countries on the continent. germany, luxembourg, switzerland, austria. i no longer have to try to hide my location so i can download netflix. subscription not available in your country, standby. they may be changing that. anticipates 70% of revenue coming from outside the united states. when you look at their current subscription model met those are remarkable numbers. they're about 35 or 36.

most of the subscribers want to go further. >> to buy very much. -- thank you very much. the global razor blades market is dominant i names like gillette. one startup is trying to dethrone these companies and the strategy involves buying a former east berlin factory. david tweed has the story. >> in a small town in the former east germany, a new york-based startup is making waves. ♪ >> i am the cofounder and co-ceo. it is a grooming brand. we sell around shaving products through her website. a couple of companies have control the industry for a really long time and they charge crisis that are pretty disconnected.

january, they bought fine technique. total cost, $100 million. >> when we started, we searched all over the world to try to find the best manufacturer and it turns out they are here in germany. productble to deliver a efficiently to our customers and we also sell directly to them. by doing that, we are able to deliver exceptional value. you get down here and you walk this factory and you have an appreciation for how hard it is to manufacture razor blades and how skilled the workers are. the folks here have been doing this for a long time and they are craftsmen. that is -- the people and the process and the know-how abelson

to create quality blades. >> maersk has raised its outlook. we will have more on what is behind the good news. stay with us. it is 7:41 a.m. in london. ♪

maersk has raised its 20 14th outlook by $400 million. they now say the figure will be closer to $4 billion. the ceo will join us on on the move in the next hour. the french government to back it $17 billion offer by general electric for its energy units. he has uncertainty about his company's future is making it difficult to win orders. microsoft has backed off plans to introduce a smaller version of its surface tablet.

the productecided in development was not different enough from rivals. engineers have been working on the device and had plans to unveil it as early as yesterday. welcome back. we are 15 minutes away from the start of the european equity trading this morning. caroline hyde joins me on set to discuss burberry. >> all things luxury. of about one percent this morning on the back of future growth. already optimistic under christopher bailey. he is still creative director. profit beat analyst estimates. the future powerhouses of growth for burberry is going to be japan.

beauty, they are going it alone. makeup.ng of their in the aspirational buyer. perhaps by the fragrance. and and you get locked in the whole brand and you become far more -- that is the idea. rhythm for men, the fragrance has attracted sales to the clothing line. they already see the ramifications. they have lost one very powerful inspirational female figure, going to apple. she led guardian media group before and she has knowledge of travel, media, global brands. juxtaposition.

>> obviously, a very talented woman. he was a bit worried about this plan to go it alone. they do have some big growth targets for that business. it is a tough ask to go against some of the giants in the beauty world. >> summary different rounds and the research -- so many different brands. they're sticking by those bands.us sales will be up 25% in beauty. it is largely due to beauty being brought into the fold and licensing being removed. >> qa very much. -- thank you verysales will be . it is largely due to beauty being brought into the fold and licensing being removed. >> qa very much. -- thank you very much. let's find out what is coming up. >> we are going to have a

conversation with chief executive from maersk. he ship a great deal of the world's goods and services, how was the deal coming along? what is their view on this recovery? >> what is their view of over catastrophe -- of overcapacity in the market? interesting to see how they are working their way through that. >> you broke the headlines at 7:00. the rates the shippers are paying are still falling and volumes are rising. how does he see the world? he is a great ceo guest to have.

a fairly nondescript opening to the equity markets. it will come down to language and the minutes from the bank of england. we have retail sales from the bank of england. we will have a conversation about trying to put global equity markets in context. , i read this story on the way in. what could happen if, because we have two big shareholders commenting in the financial could thereorning, be a little flickr left in the pfizer bid? >> mike not be in limbo after

all -- might it not be in limbo after all? we will take a short break. we will set you up for your trading day ahead. we will talk about burberry ahead. ♪

>> welcome back.

it is 7:52 a.m. in london. the problem with cosmetics is be have -- l'oreal may a solution to that problem. >> i am not the l'oreal show room. the new products that you can try on before you buy them. out. check it >> i can scan the product. let's choose this one. go. we eyeshadow. some green. now let's choose a lipstick. a bit more blush. what do you think of this look?

out -- 100 euros. atit seems you are very good applying this stuff. for look at today's trading day ahead, that spring in our pre-market guest. joshua raymond, qa for joining us. -- t thank you for joining us. >> i am glad you did not ask me about makeup. burberry results are pretty good, that the one negative part , they have to take into consideration hedging when they sell outside of the home markets. what they have said is the rates stay as they burberry byd impact about 40 million pounds.

things to plenty of focus on later in the morning in terms of macro data. the bank of england minutes could be interesting. >> we have heard a lot from mark carney already. we had the inflation report. interesting to see if they will try to send the signal out that rates will stay low. we sell housing prices in the u.k. rise eight percent two months ago. in february were pretty bad, but in march, they came back slightly above flat. >> joshua, thank you very much. have a very good day. that will do it for "countdown."

"on the move" is next. we will be speaking to the seo of maersk -- ceo of maersk. i will see you tomorrow. ♪

>> you are very welcome. moments to go. we will be speaking to a chief executive. anderson joins us with his comments on the results. companies, currencies, whenever you need to know.

our europe editor is standing by in berlin. futures are inching a little bit lower. >> i think it will reflect on yesterday as well. everybody is talking about the exit. not assumed we are going to get any division, but we are waiting to see what these comments are. understand they could face a fine of up to $5 billion in the united states. >> i am glad you said could, because it hasn't been said yet. the final number will come in next month, but this just seems