>> bnp pays the price. to 9will fork out up billion dollars to settle allegations that it violated u.s. sanctions. ge wins the battle for alstom. the final hurdle and clinches its biggest acquisition ever. and john kerry touches down. the u.s. secretary of state jets into iraq as the insurgents seize more cities. welcome to "the pulse," live from bloomberg's european

headquarters in london. i am olivia sterns. also coming up, will andy murray keep his crown? we will be live on day one of wimbledon. and can the peninsula win over paris? pmire now getting european data breaking. for more, let's bring in manus cranny. looks like a little bit of a drop here. hasn the surface, it dropped. 52.8 is down from 53.3 on the manufacturing side. of 52.2. a forecast missing analysts on manufacturing and services. what we have here is what we already know, france contracting for a second month in a ropey germany, a little bit of slippage in the services data as well. overall, a little bit of slippage. this goes back to what mario draghi said over the weekend. talking about and uneven

recovery, different stage in the cycle compared to the rest of the world, the u.s. and japan. this is very much a confirmation of that. it is interesting that -- i mean, you are looking at overall. the composition comes in -- the composite comes in below 52.8. anything above 50 is an expansion. so there is a recovery, just the pace, the momentum of that recovery could be beginning to run out of steam. the service data sets up the stage for gross domestic product and ifo. you will get that data tomorrow from germany and it will give you a little more. the projection on what the forward view is going into the summer months. disappointing. let's have a look at the euro.

this morning, it reacted against the dollar. it dropped. 1.3590, breaking that 1.3600 level. >> it is a little bit soft, the data that mario draghi was looking at. that is why he signaled in the interview that rates would stay at low levels for at least the next 2.5 years. >> exactly. >> and he is just getting going. you are also watching the bnp story. it looks like the fine could be $8 billion to $9 billion. rex the regulator in the states justice department wants to extract some revenge, some would say financial retribution. it looks like it is a guilty

plea for having broken sanctions with iran going back to 2000. i think the new piece of the jigsaw is this -- they will do a guilty plea but they will be banned from handling transactions in u.s. dollars for a number of months. i think that is a critically important part. many people feared it would be a lot worse than that. we do not know the results yet in terms of the settlement. service,very lucrative but it is seen as an essential service. manus cranny, thank you so much. that's turn our attention to another one of our top stories three ge has sealed its biggest acquisition ever, overcoming the last hurdle for the $17 million purchase of alstom's energy assets. bouygues agreed to sell a stake to france. >> it has been a very long

weekend of discussions here in france between alstom, the thech state, and bouygues, main shareholder of alstom with 29%. board deciding's that they would approve ge's revised offer. that came after the french state said that they would also back ge on the condition that they take a 20% stake in alstom. that is when it became complicated. s and the french state could not agree on a price. they tried to come to a compromise. stake in 20king the months. this morning, the economy that no priceying has been fixed yet and bouygues still wants 35 euros per share when the government offered 28 euros per share.

minister is also saying that the state determination was in the interest of france. reaction.ve some on a conference call this morning, he said that thanks to the cash injection from ge, could's transport unit see some acquisition. he is also saying that the deal with ge is positive for the company and tomorrow, the ceo of alstom and the ceo of ge are both going to the east of france together. that is an important part of alstom's business in france. it is an historical factory and it is also where ge makes gas turbines. >> thank you so much. clearly a big victory for

jeffrey immelt. much more control over the combined companies for the french government. clearly a concession over the price of that state. -- stake. eu summit said to be a tense one. david cameron is standing firm in his opposition. hans nichols has been following the showdown and joins us with more from berlin. what does the centerleft get in return for its support? >> they at least got the head of the eu parliament, martin scholz. this is person for person. the question is, did the european left, as a payment for their support for juncker, did they get any loosening on the rules? is there policy attachment here as well? there is a lot of speculation that they did have looser

austerity rules as a result of supporting john claude -- jean claude juncker. the leftist center parties are firmly behind juncker. this makes it likely that he will be the next eu commission president. here are the countries of support. he has merkel in his camp. she is backing him more publicly now. we still have david cameron and the hungarians opposed. less so, the swedes as well as the dutch. the question coming into this meeting is, will it be a coronation and is this going to be a humiliating defeat for david cameron? >> thank you so much, hans nichols. joining us live from berlin. the u.s. secretary of state, john kerry, has just landed in iraq.

he will hold talks with political leaders after a weekend which saw gunmen take control of all border crossings and jordan. elliott gotkine has more. he is live in tel aviv. terrifying things coming out of iraq. things seem to be going from bad to worse. and a sentiment of urgency among u.s. policymakers now. we have seen the further developments after the iraqi insurgents took the second-biggest city just the other week. john kerry is meeting with the iraqi prime minister and other clinical leaders -- political leaders to try to set aside their differences and form some kind of government that would govern in the interest of all iraqis. that is the point he made this weekend in cairo. >> this is a critical moment where, together, we must urge

iraq's leaders to rise above sectarian motivations and form a government that is united in its determination to meet the needs and speak to the demands of all of their people. and the u.s. administration hoped that by forming some kind of more inclusive government, that would stop marginalizing the minority sunnis and perhaps lead to a falling away of any support for the insurgents. over the weekend, more gains by the insurgents, taking over for more towns. they now control a swathe of territory. barack obama warning a spillover into neighboring countries, particularly jordan and saudi arabia. >> for the markets, the concern is what is going to happen to iraq's oil assets. last week, we reported that

their largest oil refinery was on fire and the target of attacks by isis. what is the latest you are hearing? are oil assets safe? >> the iraqis are saying they have fought off attempts by the insurgents, who have been trying to take the largest oil refinery. it is in the north of the country in the kurdish region. haver, exports from iraq not been disrupted. it is opec's second-largest exporter. investors are getting twitchy. hedge funds are betting on rising oil prices like never before. we have seen the main benchmark for oil prices covered by brent rising to a five-year high. nymex in the states is close to a one-year high. the kurdish region has been exporting oil without the blessing of the central government in baghdad. to make matters worse, the destination of the latest batch

of oil from the northern kurdish region is none other than israel. >> thank you. still to come, the peninsula heads to paris. we will be live with the ceo to find out why the hotel chain has decided to open up in europe. that is coming up this -- later this hour on "the pulse." ♪

>> welcome back to bloomberg tv. we just got the latest snapshot on the state of the european economy. eurozone services and manufacturing data came out a few minutes ago. the region's recovery is still very fragile. let's get reaction to the numbers from the head of european macro credit research at rbs. what is your take here? both weakening, france still in contraction, germany rowing but weaker. -- growing but weaker. >> there is a european recovery, but the numbers are slightly below consensus. there is the political and he monetary reaction. the political reaction is to focus more on growth. the eu leaders are deciding on a new president with juncker being one of the candidates. he is a federalist, so there is discussion around this. the eu needs to decide whether to have more eu or less eu.

i think what we need is more eu with a push towards growth measures and reforms. europe,united states of we are at a bit of a crossroads. on the mend -- on the monetary side, the ecb can help. they are preparing more qe, but it is private assets, asset-backed securities, loans. so the ecb can help, but to a certain extent, at some point, it will become a political decision. i am still positive on european bonds, the european recovery. this political action is key going forward. juncker?e case for >> it is hard to say whether he but clearly,an, you have to reflect the vote. there is more consensus. even merkel is supporting him

now. gushingare still is potential goals, but most countries are reaching a consensus, i think. >> let's turn to the rest of the world. you think that markets in england and the fed could turn more hawkish this year. you say the markets should be bracing for carnage. why is that? >> we have got through five assets. buying riskier it is now time for a turn. i do not think the bond market is prepared for it. so far, yellen is keeping a green light for risk, as you have seen. >> it is true. the bond market in the u.s. is not pricing in where the fed funds forecast is. is like the fed are becoming a bit like traders. they are worrying about the selloff tomorrow.

they are saying, if i turn hawkish, there will be a reaction like last summer, so i am not turning hawkish and i will delay the time of the recognition. bond investors will realize that a treasury is not a great investment if you place it at 2 %. the thing to do would be to show a yellow light and tell investors that lower rates are not here forever, i am going to raise at some point. the fed is not doing that and that is worrying. that is the major risk we see for bond markets. >> you you think we are headed we another taper tantrum, as saw last may? >> i think the fed will remain dovish in the next few months. after that, bond investors should open up their eyes. why am i buying a two point 5%? there would be some volatility. >> what would be the impact? >> the most affected areas of the market are u.s. high yield,

markets.erging in all of these environments, europe, which is the slow turtle in the growth environment, is a good place to be for bond holders. dovish is going to keep while the fed and the bank of england have to change their stance. monthadline earlier this was the spanish yields were trading below u.s. yields. >> i am not worried about it. you think that accurately reflects the price premium? europe, fundamentals today are worse but they are getting slowly better. the ecb is doing more. in the u.s. and the u.k., you have threats of asset levels which have been created by qe. market. high yield

>> there is an incredible amount of money flowing into high yields. >> the threat of asset bubbles has been highlighted by the imf in their last review from the u.s. economy. financialut stability. policy makers are relying on macro regulations to curb this overheating of the markets. i do not think it will work. if it does, it only works on housing markets. like jeremy stein said before leaving the fed, the only tool which gets in all the cracks of the economy is interest rates. to have got to give a signal investors that the punch bowl is not there forever. >> carney said that is the last line of defense. >> but he did change forward guidance. he said they would raise interest rates earlier. so i think yellen, at some point, needs to do the same. that will be the moment of recognition for investors. >> but it is still a few months

off. >> it is still a few months off. but i am more worried about treasuries and guilds then i -- -- aboutn i am of out spanish and italian bonds. >> let's get some company news now. highest in to the more than four years today after a report that it is hiring 100,000 people in china to prepare for the launch of the iphone 6. recalled 200san million vehicle to repair flaws airbags.bags -- in the fit whilees nissan includes the cube. debuted itsr has latest collection at milan fashion week. >> the first quarter was very good.

the second will continue to be good. we have to wait for the winter season. for us, winter is 70% of the business. come, put your tennis whites on. it is day 1 at wimbledon. caroline hyde a quick look at what is coming up. >> i am live outside wimbledon. in less than four hours, reigning champion andy murray will be taking centre court. builds, stilln people are driving into catch a bit of the action. i will tell you after the break how wimbledon is managing to ramp up the prices of their tickets to cash in on all of their success. ♪

>> welcome back to "the pulse." let's see how the markets are trading this morning. manus cranny has your asset check. >> nine out of the past 10 weeks, equity markets have managed to rise. the are seeing a little bit more of a tempered, measured tone. the purchasing managers index for the whole of europe still continues to expand for the 12th straight month, but it missed estimates. to that end, it disappoints markets. seehe u.k., we are going to whether the fpc takes measures

to caps on -- to cap lending. a little bit of a drawdown in the united kingdom. thatet had a good run and is coming up. you had the chinese data coming in at a seven-month high. you are just seeing that come through on the likes of the miners. some other companies which are finalably waiting for the stamp are these three companies. alstom down as we understand that ge is close to the final deal. ouygues giving up their stake. siemens missing out on the deal. >> thank you so much, manus. as we had to the break, it is time for today's pulse number. that is how many kilograms of

strawberries are said to be consumed that molded -- consumed at wimbledon. we are going to be live there after we come back after the break. stay tuned to "the pulse." ♪ .

>> welcome back "the pulse." i am olivia sterns. let's get to the top headlines. close to a deal to pay $9 billion to settle allegations it violated u.s. sanctions. that is according to a person familiar with the negotiations and that will probably plead guilty to a charge of violating u.s. law. it is fashion week. we spoke with the ceo by the catwalk. he said he is trying to attract

asian customers to europe. combinesotential that growth. investment and development. it is not this type of growth in the economy. take moreve to do is and putting it into europe. it is a reasonable goal. --a fire at the wire house warehouse forced the company to halt orders. police said it is arson. for more on the impact, let's .ring in charles allen the website is back but this highlights some of the challenges of a being an online distributor and not having brick and mortar stores. >> you just have your one

outlet. you try to concentrate everything into one place as opposed to a normal retailer that has hundreds of stores. if it burns out, it is serious but not a disaster where it is luckily it was not. it could've been more serious. >> what we know about the stock? >> them not been explicit. we do not know if it was the new stock that was beginning to arrive were the tail end of summer. realistically would've been less serious. >> it has been a difficult year for asos. and the stock was on the care. they had their first profit earlier and now the fire. talk to us about what else is going on in the business model. >> would've seen online only retailers and the german competitor, a real race for new

customers to keep sales growth moving. perhaps, that are looking at just the sales and not to the profit line and whether they are acquiring new customers or new profitable customers. amazon, theo biggest e-commerce and the u.s.. >> that has begun to change a little bit as well. the stock is not been the best performer this year. people are beginning to look at the mattress and profitability and how much shipping cost? and how mature given away their? >> certainly, one to watch. us fromallen joining bloomberg industries. get your tennis whites a white ready. wimbledon has to be done. fans dissenting. it is the oldest tournament. player,re a low ranking there is more reason to show up. >> centre court has seen some

tennis' biggest battles. and one particular homegrown player, stephen amore on the battle over tickets. >> he loves it here. he does not get bothered by our members. >> the reigning champion, andy murray, makes twice as much now. the wilmington promises a reserved seat for every day of the tournament for a five-year keynote -- period. $47,000. now it will set you back $80,000. the money is used to revamp the old england club. roof.illion for a new and playersbe happy have a reason, too. that will be paid $45,000 for the privilege of losing end of

the very first round of a willful done. pay rise since 2011. >> it is a lot of money. we have been trying to emphasize an increase of our prize of money. hard our players we believe need it most. -- target our players we believe it most. >> the bills had up. the annual cost all playing pro 3,000, is as much as $14 according to one study. how does wimbledon afford it? despite broadcasting rights before flagship said the chairman. >> we could make more money in the short term but we would ruin the brand. not planning. chris brando wilmington has a

much. wimbledon has much. caroline hyde, bloomberg. liveroline hyde joins us from a wimbledon. high hopes for indie murray, the reigning champion. he has a new coach. you'd think he still has a chance? -- you think he still has a chance? >> that is what has the british is so excited. he won for the first time in more than 70 years we had a british male winning. hundreds of thousands of people queuing up to try to get a chance to get a ticket for today. many from australia and germany and america even. many have camped out for a chance to get a ticket even though prices have been rising up 80% if you want to the privilege of coming for five years running.

a guaranteed seat. it is amazing how much they are selling on the market. if you go online or a website where you can buy a ticket from those who cannot make a certain final you want men's tickets, you can be charged up to 5000 pounds for a one ticket for a one day. why wimbledon is upping the ticket prices and because last year, even though people gorge themselves on times of and 25,000 bottles of champagne, despite the gorging, they saw profited drop because they were putting out so much for prize money. wow, 5000 pounds, i hope you can get it with a press pass. you have been digging into the

technology behind the tournament. it is a very old sport will stop they have cutting-edge new devices. oldest is the world's tennis tournament. pretty digital. those who cannot fly over from austria and cap out want to get online. wimblelion visits on don.com. and have worked with ibm have been partners since 1990. that the social command center. that is been launched this year to analyze in real time what every body saying on twitter or instagram or facebook about the tournament. also the slam a tracker. it is a digital device being able to digitally represent the game. how much is being paid and predict what player will need a things to go their way.

how andy murray will best when -- win. they have updated their android apps.hone >> slam tracker. i love it. i will have to check it out. thank you. redefiningext, luxury in the city of lights. we will be with a ceo of a hotel. ♪

>> welcome back to "the pulse." the peninsula is heading to paris. their firstning european outpost. more than eight decades since their flagship opened a hong kong. why are they making the move now? let's ask their ceo, clement kwok. why paris? it is crowded for four-star hotels. why do you think it is an opportunity? >> it is part of her long-term strategy. as a company, we believe of being an owner and operator of our hotels. we focus on a small numbers we build and what we believe to be the leading cities. the moment, we only have nine hotels.

we are in a north america, asia. up until now, we have not had a hotel in europe. of our long-term network hotels and the major cities in the world, it is important for us to be in europe. some extraordinary things about the renovation. 2000 feet of gilding. 430 millionag of $ euros and what have you done. magnificentall, a building. to respect the heritage of the building. it looks fantastic. into a moderne it hotel. in the guest rooms, we put in the latest technology with the terraces. a wonderful terrorist -- -- ace --

.> wonderful >> is being shown right in there and we respected the heritage. we restored the walls and the selling and so that is a product we have come up with. >> you had respected the heritage a you had to work with the government. we have talked about doing business in french because of in theirhase of alstom dealings with the french government. how difficult was it doing business with the french? >> they were supportive. the polenta love -- and the peninsula is not to build and leave the next day. want to plan with the local community and that is why we have such a big lobby in want of to the locals to, and have their local teas.

we work with the french government and historical preservation people were supportive. you sadder you want the local people to eat in the restaurant. when we think of france, the pmi data, it shows the economy, the recovery is quite weak. what do you think of demand from the french consumer right now? is it there? do you expect it to pick up? the case for a good service, high-end and we are looking long term. to be able to invest in an asset like this, you have to take a long term of you. otherwise, you will not pay back the investment. what we are looking for is the relationship with the locals, the french people, also from all over -- >> you think the french have the money and appetite --

>> if you look at high-end establishments in france, they are doing well. providingestion if the product and services they will appreciate. >> you open in august. what is the starting rate and what does the presidential suite ago for? yet butve not published there will be special offers in august and the rates will gradually go up after that. >> it makes sense. >> you are probably aware the top hotels among the average rate is in excess of 1000 euros per night. >> talk to me about your plans for london. >> it is on high court corner. it is a large office building which we will demolish and build into the hotel. we are very excited about this. harris will be our first into europe. -- harrison will be our first in europe. we have been looking for 20

years. to goe this opportunity into this project and i think it will be very exciting. it will take a little while because we have the planning and demolition of the existing building and build the hotel. it is very -- -- >>it is a wonderful into that wonderful, iconic part. it seems like a great place. any timeline? >> the main thing will getting planning. after we get the permission, we will have a more precise schedule of when we can open the hotel. >> moving on from europe. you are planning to open in myanmar. tell me about that project. >> is one the most exciting developing markets in the world. all of our hotels are in will establish cities like places

like tokyo and hong kong. we wanted to do something different. we thought it was time we were a little bit more pioneering. our company was more pioneering 100 years ago will we build in hong kong. we felt myanmar has great verytial because it is a exciting, developing markets. we are able to find an opportunity we thought would be suitable. a magnificent colonial building that used to be the headquarters of the railway company. you can imagine 100 years ago the roadway hoppity was important and he built this -- andcolonial building they build this a grand, colonial building. >> i am sure it will be beautiful. among travelers. i did not realize so many people were going to myanmar who can off five-star.

>> from a business point of view, they need everything from telecom to power to infrastructure to education. people going into those fields and discover the myanmar as a tourist destination. it is the entry point. europe andopening in markets like the myanmar. your biggest is still in asia. where are your strongest markets right now? is strongmoment, asia especially hong kong and china. would've the very important hotel in japan which is suffered because of economic downturn and that was accelerated by the tsunami and earthquake but that is coming back. we are seeing the good recovery in parts of the u.s. as a wall. as i said before, we are sinking of 30 or 40 years because of that it -- we are sinking of 30

or 40 years because that is the only way you can build up. >> thank you. bid for alstom. how they were able to clinch. that is later in the "the pulse. " ♪

>> welcome back to "the pulse."

start of sustainable energy week. we traveled to one of the largest companies that manage to pay 28 million pounds. joining me now to discuss is the travel director, jane. welcome. are responsible for sustainable development. what have been the key steps in reducing your carbon footprint? >> to reduce our carbon footprint for the last two years now, we have focused on reducing the fuel and carbon impact and also looking at the the entire journey. and hotels and destinations. >> what is driving this a move? is it all about concerns about the environment? you have to be watching the bottom line. is there a business case? , thes, it in the long term

future of our industry. in the short or to medium term, we realized a host of benefits through more sustainable. >> some people might be listening and thinking taking short flights is going to be bad for the environment. bitconversation and little that maybe you should not be taking on flights and getting into a car if you are concerned about the environment. what do you say about that? many is responsible for of gdp.ldwide and 9% a critical industry. can be madert sustainable by focusing on reducing the environmental economic improving the impact. >> i read statistics.

how much have you been able to reduce your carbon footprint? >> we have reduce or improved efficiency of 9%, over 9%. some of the greatest or more sustainable operator. and in destinations, the hotel portion, we aim to take about 10 million people over the holiday.ility plan on last year, that was 50% of all iniday customers who stayed accommodations. >> what are the goals going forward? >> we are setting our target at the moment. increasing we want to see all our customers staying in hotels that are independently certified as green. supporting the local community

and really minimizing the energy and water consumption. >> jane, thank you so much. for those listening on bloomberg radio, our first word is coming off. a second hour of "the pulse is coming up. bid.ns the we will be talked about the managing director and you will join us. the french government intervention in international business, is that going to be the norm? what does it do for their reputation? and we will talk about the bnp fine. londontal a guest from -- we will talk to a guest from london. to be pleading guilty. be suspended for

making payments. one that many said it is essential. fall out from the settlement deal. it is a wimbledon day. will be joining us. we'll be live with caroline hyde. ♪

>> bnp pays the price in years a deal to plead guilty for some that is to settle allegations in violating u.s. sanctions. ge wins the battle for alstom and clinches its biggest acquisition ever. plus, john kerry sets down. he is in iraq as insurgents seize more cities. good morning. and a very warm welcome to those ju