>> bnp's record fine. france's biggest bank will unveil details of an $8.9 billion penalty from the u.s. today. this as the bank wins concession to delay the clearing ban. >> the bank of international settlements says exiting emergency policy measures will be a bumpy road. iraq's major offensive. they continue their campaign to capture a northern city from the rebels and the extremist declare a new islamic counterstatement he -- counterstate.

>> welcome to "countdown." >> a warm welcome to the second hour of the program. paribas isbank bnp said to be planning a guilty plea today to end the criminal probe into u.s. sanctions violations. caroline, what do we expect? >> good morning. as you were saying, we expect france's largest bank, bnp paribas, to plead guilty today to u.s. criminal charges. the board of bnp paribas, according to the financial times, met over the weekend and approved the deal with u.s. us -- with u.s. authorities. the department of justice should announce it in washington later today. according to the the french news channel, the ceo of bnp paribas also sent a letter to employees of bnp paribas warning them that mistakes were made and that we

will be sanctioned heavily. the final price tag of the up to $9ill be billion. that will be the biggest line ever issued by u.s. authorities on an overseas bank. notthe u.s. authorities are ruling out charging individuals in the future. bank's ability to transact in u.s. dollars and operate in u.s. dollars is also being called into question. give us the latest on that. >> of course, that is the main concern for the future of bnp paribas because that will probably mean that bnp paribas could lose some clients over these bans. but bnp paribas has a small victory this morning. negotiate with u.s.

authorities to get a six-month clearingthe ban on transactions in dollars, meaning they will have time to prepare for the ban. of course, that also means reputational damage for the bank because that means that they will have to go to other partners in order to clear transactions in dollars. >> what are the other consequences for bnp paribas from this ongoing saga? >> of course, the shareholders of the bank will probably end up bearing much of the cost and -- much of the cost. it will probably wipe out this year's earnings at bnp paribas. according to the latest bloomberg estimates, the second-quarter net adjusted income will be about 1.6 billion euros. so that would be wiped out. it can also impact capital

ratios of bnp paribas. we will have to see how much when the bank reports the next earnings at the end of july. and we will have to check capital remained strong enough to pass the next round of ecb stress tests. it could keep weighing on the share price. as you can see, the share price has been impacted, especially since february, when the bank announced that they had provisioned more than $1 billion for the case. at the time, they told me that the provisions could be much higher. since mid february, the shares of bnp paribas have already lost more than 16%. finally, investors could also have bad news on dividends, according to the wall street journal on friday. the dividend of bnp paribas could be cut or even suspended for up to two years.

share.id 1.5 euros per obviously, that would be a big hit for investors. >> thank you very much. >> a warning for the world central banks read the bank of international settlements as they should not delay exiting from emergency policy measures. in its annual report, emerging-market debt and forward guidance come up for dissection here. strong warnings here. >> when you read through a variety of takes on the bank of international settlements,it is the central bankers' banker. on, get on with it, and get things back to normal. yes, the global economy is recovering. it is showing signs of recovery. there has been a greater search for yield. everyone is looking for a return. and getend, get on

towards normalization. it is going to be complex and bumpy. it is personified best in the periphery of europe. greece, portugal, and spain, the returns, 30 percent on grease, 60% on portugal. these are so far this year. these are the actual yields. record lows in borrowing costs. the longest stretch of games in 16 years. there is a false sense of security. traders, brokers, dealers, have a false sense of security. cheap money is something we are becoming dependent on. and the cheap money is beginning to lose its impact. there is a fantastic line. "euphoric financial markets are detached from reality." >> i sit behind them. i know. >> markets are detached from reality. len,risk is this -- for yel

accuse-- you cannot carney of this, actually, being behind the curve to get back to normalcy. i think that is the great story. there is no widespread possibility of deflation. i think i read that somewhere before. around the time i began my career, something to do with japan. >> a lot of concern about what developed markets, central banks are doing. there is also concern about the emerging markets. >> the emerging markets saw their opportunity. low interest rates. let's just show that debt out the door. they are taking on this automatic currency risk. $2 trillion worth of debt risk t risk.at -- of deb the real issue is the pricing. to .5%olly good compared in the united kingdom. rise.lity, they will are we miss pricing -- are we

miss pricing -- mispricing emerging markets? there is one market -- have a look at this. this is the world's longest equity rally since 2008. this is a different stat. but i can see the flag and the title. >> did you know that? that.id not know >> right that down, everybody. something mark barton did not know. equity is the longest rally in the emerging markets and it is the worst performance so far this year. the point is, he had the bernanke taper tantrum last year. a warning about china today. they reaffirmed concern about china and the ramifications of the elephant in the room. developed market money in emerging markets. they are also warning on banks.

saying that these artificially low interest rates are not cleaning up the balance sheet weekly enough. one other entry that is not cleaning up their balance sheets is called japan. of course, we are nowhere near japan's situation, according to the head of the european central bank. >> the s&p 500 is one trading day away from the longest stretch of games in 16 years. >> that is a good one. >> that speaks to the low volatility. thank you very much. >> a standalone company combining its automotive and lighting businesses. caroline hyde is here. the company is luring investors. >> you have got to remember, it is the second most important area for phillips, lighting. they are separating the technology bit, the bit that makes components, the amount that they have to invest in.

separating that unit from the general lighting area, where they are developing lighting features and things that you and i can buy for it -- for our house. headquartered in california. this unit is being spun off. we howegic point of view can i accelerate growth in this unit without me having to funnel that much money towards it anymore? you separate it and get third parties involved. he is looking to spin this all. -- off. they are thinking about the future of the business. indeed sell it entirely. we do not exactly know. what we do know is that phillips lighting will remain a customer to this particular company. automotive lighting businesses, basically, the bits that develop

the best l.e.d. out there. they produce the first ever tv and the first-ever camera phone. it is all about new developments with l.e.d. ands in traffic signals cars. to keep this area growing, they need money from outside the business. a want to separate it. >> i suppose so that investors will treat it differently in terms of valuation. the more background part of the lighting business. >> which is selling to consumers and businesses. it is quite a large bit of their overall money. 1.4 billion euros is how much will be separated off. about 17% of the overall lighting unit. so this is only 1/5 that they are getting rid of in lighting. they are keeping the rest of it. as i say, phillips lighting will remain a customer.

but this is the ceo once again restructuring and trying to focus on efficiency. seeing an area that needs growth and also needs money, separating it off, getting other investors involved. the other areas that he think will be growing will be phillips lighting and philips medical unit in general. >> later, we will be the first treesk to the tui travel -- chief executive. the world's biggest tourism business. that interview to be done by our very own anna edwards. >> stay with us for that. he for that, before the break, how to become an ace investor. higgins.alk to alan ♪

>> time for today's company news. saab has agreed to buy thiessen hyssenkrupp's jet unit. this expands its business to making submarines.

the first city center store in hamburg today. it became the biggest home versioning retailer by getting shoppers to drive to its large, out-of-town stores. this city center store is an experiment for ikea. private equity company that has a majority in addison lee, has agreed to a sale. book him back to "countdown." time in london is 16 minutes past 7:00. now we are joined by alan higgins. great to see you this monday. thank you very much for coming in. let's start with one of my nicest stats, world equities heading for their fifth straight monthly advance, the longest three since 2007. the s&p 500 is one day away from the largest wretch of gains in

14 years. how worried should we be or excited should we be about the returns that some have made? >> there have been returns in equities, but i think in many markets, fixed income has out performed. that has been the real surprise. this thing to you earlier, i think it is right that the b.i.s. indicates that low volatility is not a bullish factor, it is a bearish factor. itit persists for some time, is different from periods of high volatility. in the last cycle, we had low volatility for four or five years before trouble hit in 2008 and 2009. >> could you compare the two periods? territory?20009 thing, bankr one lending. why is there no inflation? there is negative bank lending in the u.k. and euro land, which

is incredibly unusual. i want to show you this chart. it is just incredible to see. had negative bank lending and we do right now. so it is very unusual times. i think you are right. you cannot strictly compare and that is why we are in this low inflation regime. changing a bit in the states, maybe, but on equities, we have stayed with it broadly. we think fixed-income yields can and we have had some long-duration assets in our portfolios. i told you about the 100-year mexican bond. >> on the subject of banks you havemortgage data, the u.k. data and we are still some 25% below. what about looking more broadly at deflation in the eurozone? a topic of conversation once again today.

the threat of italy. we are expecting to get another look at euro zone inflation numbers. how low do you think inflation goes for the eurozone? >> to be honest, i do not know. in my role, i listen to economist and try to interpret. when i look at negative bank lending, which does not need to be turning the eurozone, the way we look at it is interested to have buyers in streams of income. so fixed income in the eurozone. we can getow whether any closer to that zero level, but it is very hard to have inflation when you have not. the credit creation. has done so far, do you think it will be enough to turn around the negativity that we have been seeing? >> i am not sure. perversely, the more confident in the eurozone, the more equity flows you get. equity flows typically unhedged.

when we invest, we by equity fund. when they put money into european equities, nearly always unhedged, you have this dilemma. as the euro edges higher, it puts downward pressure on inflation. it is very hard with so many different bond markets. >> it is monday morning so we like to give people a little surprised. alan is a tennis coach. you are a qualified tennis coach. >> enough to get me by. alan's tennis coaching manner differ from his asset allocation manner? both play.ou i will give you three kids. one was used when john mcenroe was playing davis cup in the states. it is so simple and mcenroe was having a tough day and the coach said, "john, i can tell you are

not looking at the ball." forou watch federer, example, he is looking at the ball right onto the strings. so keep looking at the ball. ace has been spotted giving locker room advice to andy murray. >> second one, get on your toes. a tall guy like you, i do not want to see you flat-footed. and the final one which a lot of people do not do come a they do not get their racket back early enough. in get that racket back. >> who is going to win wimbledon, the men's? >> djokovic. is going tourray win. coming up, bulgaria faces its worst run of banks in nearly two years. how are they turning it around? that is next. ♪

>> welcome back to "countdown." london. 7:24 here in >> the eu has approved free billion dollars worth of liquidity support for bulgarian banks as the country's president says the eastern european nation has resorted to violent attempts to destabilize its financial system and he worst run on its banks in 17 years. joining us now is elizabeth, live from the bulgaria capital. remind us what caused these runs

on the banks? >> basically, it is the result of a political struggle between the socialists, who are under pressure to resign for their poor performance at the european , andament elections another party. the result is a political struggle between the two. combined with a ring of people who have disseminated e-mails and messages on facebook, announcements that the banks are bankrupt and that bulgaria has no finances to support the banks. basically, this is what has disseminated. as well as statements by the opposition politicians seeking

reelection. >> what are the prospects of containing this racist -- this the prospectat is for contamination into other banking sectors? >> at this point, we do not see any danger of contagion. the european commission has also .3 billion theve quiddity support for the billionn banks -- 3.3 support for the bulgarian banks. it is not a systemic problem of the banking system. there is no danger of contagion at this point, according to the government. >> thank you very much for joining us. slim isonaire carlos buying out at&t's stake in his

own company, america movil. billion. tag is $5.6 more on the reasons behind the deal. >> also coming up, maserati is on track to grow fivefold. details when we return. ♪

>> welcome back to "countdown." let's head out to manus cranny for your asset check. >> we are going to check it out -- kick it off with the south korean won. strengthening.n this currency has gained almost 5% in the past quarter. we are just off a six-year high for this currency. what we are hearing from a variety of sources, socgen is one of them, you are seeing intervention in the market by the south koreans. dollar down, south korean won up.

intervention by the south koreans. provides outlook on the currency. they say the economics of south korea are beginning to soften a little bit. they are saying you might just get a rate cut coming through. incremental risk of that is rising. 1,070 in 12 months. so that is the south korean won. moving into the emerging market debate, that fits in. the dollar just coming off its highs of the day. you have iraq uncertainty in terms of what is being declared as a new district. ukraine closing above its 200-day moving average. theirs have increased long positions. they are the longest since october of last year. back to you. >> these are the top headlines today. the central bank chief of the bank of international settlements says they should not delay exiting even if the path

is rough. they say ultralow rates have long governments and markets into a false sense of security. an iraqi government forces saysnue, william hague britain is not planning to intervene militarily. the quickest country in the world to get humanitarian aid to the people displaced by .he activities of isis so we can help in many ways, but we are not planning on a british military intervention. >> and german chancellor angela merkel and french president have puthollande pressure on russia and ukraine to resolve the territorial dispute. they spoke to russian president vladimir putin as ukrainian president petro poroshenko in a call yesterday that lasted more than two hours. the call came just two days after the eu pressed for further

sanctions. refuses to rein in separatist rebels. >> billionaire carlos slim will buy out at&t's stake in america mobile or $5.6 billion. $5.6 billion. carlost is in it for slim and why is he doing this deal? for more, we are joined by matt. what is in it for him? pieceeady has a sizable and he is going to own more of it. >> it is more control over a company he started and essentially a monopoly over the mexican and latin telecommunications industry. he is able to control more of this company. his net worth will certainly soar because at&t is going to sell it at a premium. he will have to deal with a lot more headaches in terms of the

monopoly and the discussion with the mexican government. >> they already do not like the amount of control he has. this gives him more. >> at&t has got to get out because they have a conflict of interest with directv. carlos slim will get closer to bill gates. the use to be the richest man in the world and now he is the second richest. having a very difficult time. >> half of him -- of his fortune comes from america movil. >> the other half comes from concrete, other plastics. finance, a diversified portfolio of infrastructure stocks that allow him to basically control big parts of the mexican economy. at&t have a relationship going back many years. >> that is right. basically, able to get on the international stage. carlos slim helu leverage that relationship into being able to not only control the mexican

telecommunications industry, but all of latin america. holdings in a number of european businesses. >> that is right. there has been a netherlands company that has been trying to -- he has been getting in business with them. it has been a tough year for carlos slim. a lot of the market has not like the disagreements with the mexican regulators. i have not love the fact that he has been going international, going into europe. he has been down several billion dollars on his net worth this year. this will prop him back up and get him to even. >> he wants to be number one again. >> i do not know. it is unclear as to whether these guys care. most of these fortunes are family fortunes anyway, split amongst sons and daughters. >> five children. >> at his right. -- that is right. between them, this is a family endeavor. >> thank you for joining us, matt miller. >> maserati is turning 100. it has no intention of slowing

down. yearst, the next four might prove to be the most successful. ago, a family of italian brothers set out to build cars that were both beautiful and fast. cars designed for motor racing as well as the road. landsars later, maserati plans are even more ambitious. they are planning to lift sales 2000 15.by 2000 -- by -- by 2018. good news for their owners, who need to counter poor sales out of europe. maserati is eyeing the growing asian and u.s. markets, introducing six new models, including this one named after one of the founding brothers. is stillited states

our biggest market. i expect the united states to account, at the end of the year, for one third. and the asia-pacific region is the second strongest center of gravity for our business. if you look back a couple of years, we sold 800 cars in these markets in a year. right now, we are selling this amount of cars in a month. >> willing -- winning american and asian hearts will not be easy or cheap. the company paid top dollar for an advert during the super bowl. maserati's ceo is confident. >> we are competing with and detail products is an important value of our product in the global assuring market. >> with fiat's acquisition of complete, they see this

as a new opportunity to seduce new markets. marchionne, chief executive of fiat, will visit maker today.ar why is fiat's ceo going to this maserati factory? >> it is actually the second time he will be visiting this planet in a week. productionaserati facility are an important plank of his strategy to go upscale, to boost sales of the luxury segment. maserati, alfa romeo. what he is trying to do is put more capacity, more staff into this plant from plants which have been reducing cassidy and laying off workers. this has been getting some support from unions read -- from

unions. although they do not like the example of adding some saturday shifts to this plant. what he is trying to do is, in europe, having to reduce staff and capacity at some plants that are suffering and shift it around to adapt to this upscale strategy. does not make many cars a year. why is it so important for marchionne's strategy? >> as you mentioned, the sales are increasing. margins are higher. and he feels that if they are going to compensate for this sluggish sales market in europe, particularly for their traditional small car models, he is going to have to look for higher margins for maserati, for omeo, mail, -- for alfa r which he wants to reintroduce in the u.s. >> thank you.

>> 7:39 in london. less than 20 minutes to go until equities open up in europe. we will take a short break on "countdown." ♪

>> welcome back to "countdown." here in london. if you have ever been in an office, you are probably familiar with the cubicle working space. expert --to a cubicle >> there are sorts of things? >> the space was designed to make us happy. he told bloomberg how the cubicle is now a symbol of confining workers. >> the cubicle is one of the more ironic creations in the american office. savenventor wanted to people from the anonymous spaces that they were confined to. everyone knows the images of what offices were like in the early 20th century. if you have seen "madmen," or "the apartments," just rows of

-- just rows and rows. the inventor of the office cubicle said the office today is a wasteland. the solution that he came up with was called the action office. a three-walled space. the idea was to give workers a space of their own that they could personalize. to theld pin stuff walls, shape it the way you need it. it was meant to be autonomous. he thought this would change the way people work and it did, just not quite in the way that they intended. toolarted to become this for companies to cram in as many people as they could into as little space as possible. occupies a very strange place in contemporary culture. it is definitely one of the most reviled objects in the

workplace. the cubicle is a symbol of this uncaring, stupid company, basically. >> we have sort of a problem here. >> the fact that people have come to hate the cubicle so much that to the various designs they got rid of cubicles and this is the inspiration. i think open office plans have a lot to offer. prefer show that people to work in closed-door offices. people were thrown out of cubicle spaces are actually missing their cubicle. it is another kind of twist to the office. >> so we have gone full circle. we started out open and we gradually put some walls up and now we have taken the walls away. >> have you ever worked in a cubicle? >> apparently.

i did not know that was what they were called. let's take a look at today's top corporate stories. caroline hyde is here. she is watching phillips. monday good, for a morning as well. >> phillips is starting to think about strategy, how to make the most out of their lighting unit. today, they announced they would ledseparating out their luma and automotive lighting businesses from philips lighting. need money to do that. they want to get third parties involved. they want to get other investors putting money in. meanwhile, the chief executive can focus in on what is making money for the business. philips lighting, to grow that and start selling to consumers. the components they can be more focused on.

in --d is headquartered lumiled is headquartered in california. the sunday times has written an article that they could be raising up to $4 billion selling assets. a little bit in line with what philips is doing today. anglo-american, platinum is mined. this is after a five-month strike just finished last week in south africa. clearly, that eroded. in fact, it hit the output by someone billion dollars. $1 billion. copper mines in chile, nickel holdings, the company has come out and said this is nothing new. they have made it clear that a number of assets in their portfolio could be for sale if they do not satisfy our criteria. the chief executive is looking

to focus on return on capital. he wants to increase that, double it by 2016 to 15%. you have to get rid of some of your underperforming assets. $4 billion could be raised. >> watch out for those shares today. >> coming up, as investors are pulling out of barclays dark pools, we look at the ramifications for the banking sector. and a number of others you need to be aware of as we get started with the trading week. stay with us on "countdown." ♪

>> welcome back to "countdown." >> the time in london is 7:50. eurozone cpi released today ahead of the ecb's latest rate-setting meeting on thursday. joining us now is marshall, head of global effects strategy. -- fx strategy. euro zone inflation numbers due out later today. for the threatct of deflation in the eurozone? >> the forecast on bloomberg is on year, be .5% year unchanged from the previous month. we are normally such low inflation, we put pressure on the ecb to do more. in fact, the ecb did so many

radical things last time and they are still working to a system that will not start those long-term targeted refinancing efforts. nobody expects the ecb to make any changes in its operations this time. no matter what the inflation figure is, it really has no implications for the ecb and very little for the markets. >> what does it mean for the euro? 1%.euro is down by roughly 1.3646. where is it heading in the second half of the year? >> i think it seems to have reached an equilibrium. the real thing is not what is going to happen on the european side. it will be proven by what happens on the u.s. side. in the u.s., people are going to start moving their fed funds r i thinkctations up and that will drive euro-dollar. euro-dollar is going to be headed lower.

the fed starts moving closer to tightening. >> with that in mind, we get payrolls data out of the u.s. later on this week. a number of people talking to us about wage data most recently, saying that is where they are watching for clues as to what the fed is going to do next. >> i am sorry, watching what? >> wage data. >> oh yes. if the labor market is tightening, wages should be headed up. it is the same thing in britain. i think people are watching that. week, payrolls for this payrolls are inspected to decelerate. -- nonfarm non-payer payrolls rise as expected, it means there is not so much pressure on the labor market, though problem keeping interest rates low even longer. >> i am looking at my lovely wcrs function of the bloomberg,

which tells me who are the best- devolving currencies against the dollar and it is the brazilian real followed by the new zealand dollar, the australian dollar. on the flip side of the swedish krona that has fallen the most. followed by the norwegian krone. what is the best bet to make? it may some crosses that you think will make money in the second half of the year. >> i think you guys are lucky. the british pound is going to be one of the real winners in the second half. they have a very clear bias towards tightening. currencies in such a situation, i think they will do well. they have a good credit rating. i think those currencies are going to do well. fragilether hand, the five emerging-market currencies that are having problems with their current account deficits,

i think they have had somewhat of a recovery, but i think they are being hit now as interest rates start to move up. the turkish, the indian rupee, the indonesian rupee, i think these currencies are going to be struggling in the second half. that is going to make car entries a little difficult. >> that's just get your thoughts briefly on bnp paribas and the fact that they might be banned from clearing currency in u.s. dollars. >> over the long term, i think this is going to feed into the general movement around the told to find an alternative the dollar-based international reserve system. you have russia trying to clear in other currencies. china trying to clear in other currencies. the french have said that they are going to emphasize clearing in euros as a way to get away from this risk.

i think a lot of companies will stick with bnp paribas and decide to go with euros. >> thank you so much. " is next. move ♪ . .

>> welcome to "on the move." i am anna edwards in london. we are just moments away from the start of european equity trading. here with me now, manus county. -- manus cranny. >> the central bankers banker. it is called the bis. it has a message to the central bank of the world. get back to normal. there is a fear of bubbles and emerging markets have gorged themselves on debt. more on that in a while. caroline, you are in paris. after months of investigation, the u.s. department of justice should reveal today the details of the

penalty on bnp paribas. the french bank should plead guilty to u.s. criminal charges. one confession to delay the ban on transactions in dollars. >> thank you very much. more from carolyn in just a moment. that is what we are watching this morning. european equity markets affected -- expected to make some tentative gains. let's check in with manus cranny at the touchscreen. >> we have four straight quarters of gains on the stoxx 600. this quarter alone, we are up 2.3%. the market has given back a little bit of value. it is the longest stretch of gains since march, 2010. the question is, can that continue? the dax plays with the 10,000 levels but it has rebuffed it twice. in terms of the momentum in these markets, it is the banks

that have been the laggards so far in the second quarter. thanks around europe down 3% on the quarter. the names that make the frame, commerzbank, deutsche bank, socgen down double digits. today we wait for mortgage approvals in the u.k. we move the agenda along into the u.s. and we get pending home sales. a couple of companies to bear in mind. the last trading day of the quarter. that is going to be interesting. tui travel, that is the story. creating the biggest beast of travel in terms of revenue. phillips hanging up part of their lighting business. caroline hyde has that story in terms of the whole lighting components. anglo american, we have press reports that they are seeking to worth of billion

assets in south africa. the platinum mines have come to the end of their strikes. equity ofa return of 15%. that is driving anglo american. with the inflation data that comes out later today, it is germany -- the german inflation data probably bolstering the story. the fundamental story about lower inflation in the eurozone is intact. pretty awful german retail sales. euro-dollar and money going into yen. that is the other stories. dollar-yen.on mortgage approvals, eurozone inflation and impending how sales will be the focus of equity markets. >> thank you very much. let's pick up on the story that

manus has been following. there is a warning for central bank chiefs. it says they should not delay emergency policy measures even at the path is rough. low interest rates have lulled governments and markets into a false sense of security. here now to weigh in is andy lynch. thank you very much for coming in. do you concur with the bis? are they too complacent on the back of what has been easy money? >> i think they are spot on. if you look at the vix index, at its lows since 2007, if the world is not in such a great place we have all this happening in the middle east, we have the ukraine situation, we have problems in the far east with china and their neighbors. we still have corporate profitability a bit of the. -- a bit bumpy.

is reason the vix is so low just because of the amount of money that central banks are pushing into the economy. it was the right thing to do in 2008. now they are absolutely right, we need to start weaning ourselves off the monetary drugs and getting back to the normality. >> the messages that just because that could be difficult to communicate and it could be a bumpy ride is not a reason to not do it. >> absolutely. the business cycle hasn't been suspended. at some point, we are going to have on other economic downturn. we are going to see another recession. if interest rates are already at much elseis not the banks can do. if the world is in a better place, they are able to move interest rates back up to 2%, 3%, then they have got the ability to support the economy

when the next downturn happens. they need to start thinking about doing that now so they can support in two or three years time. >> what do you think of central banks that have tried to bring to weigh risk back into the market? i am thinking of mark carney surprised at the lack of interest rate increase speculation for 2014. we had james bullard making some comments that interest-rate hikes in the u.s. could come earlier. is that the kind of language that central bankers need to start using more? >> also, they need to start acting. we do need to start seeing rates moving up. we are not talking going up from half a percent to 5% overnight, but just simple, baby steps. then markets get used to it. rates can go up as well as down. >> they also have to balance all of this with the data. in many cases, central banks

want to see u.k. and u.s., they want to see some wage growth. >> they do. that is very important. but actually, if we start moving interest rates up a little bit, what that will do is for all the savers out there who are in precisely zero on their deposit balances, that will give them some money and that will put some money back into the economy. the balance needs to shift back the other way. then companies will have a better idea of what the cost of capital is going to be in two years time. maybe they will be happy to start investing. >> if that is the kind of shift we are going to see, how does that sit with equity strategies? world equities are heading for their fifth straight monthly advance.

sinces the longest streak 2007. is that at risk of coming to an end? >> absolutely. i can't say whether it will be july or august, but at some point. >> second half of this year you think? >> there is a cycle to equity markets. we are going to see affordability starting to come back. that is good news for the long-term. if you get a smaller correction now, that reduces the risk of a really big correction in two years time. taking some risk out of the market now is a good thing in all kinds of ways. >> andy, thank you very much. andy lynch stays with us. here is a look at what else is coming up. bnp's record fine. the french bank expected to plead guilty to end a criminal investigation into sanctions violations. a megamerger takes off. we are live with tui travel's

ceo. and happy birthday, maserati. the carmaker is turning 100 but has no plans to slow down. why the road ahead may be bumpy. stay with us. back after a short break. ♪

" remainis "on the move

online, on your phone, apple tv and amazon fire tv. here is a stock that is on the move. easy hotel being brought to the market today. that stock up by 5.6%. part of the easy group of companies that gave us the likes of easyjet. this is the latest offering, easy hotel up by 5.6%. bnp paribas is said to be planning a guilty plea today to end a criminal probe into u.s. sanctions violations. carol lane is in paris with the details. >> good morning. what we first expect is that bnp paribas will plead guilty to u.s. criminal charges. that is according to bloomberg sources. the board met over the weekend according to the financial times to approve the deal and the final penalty should be up to $9 billion. that would be the biggest fine

ever issued by your rest -- by u.s. authorities on an overseas bank. one of the biggest surprises we had this morning is that bnp paribas managed to get one concession from u.s. authorities. they will get six months delay to the ban on clearing transactions in dollars. that is a small victory for bnp paribas. that would have led to a big loss of clients. they will have time to prepare for this ban and find another partner in order to clear their transactions in dollars. the shareholders will end up bearing much of the cost. the shares have already lost more than 16% since february when the bank first announced that it would provision at least $1 billion for the case. investors could also see their

dividend cut. last year, bnp paribas paid 1.5 euros per share. according to the wall street journal, this dividend could be cut or suspended for up to two years. finally, we will have to see what impact this penalty and the ban on dollar transactions will have on capital ratios. we will know more about that when the bank reports their next earnings on july 31. >> caroline, thank you very much. bnp, regulatory risks surrounding the banking sector, andy lynch is still with us. let's get your investment thoughts and start with the banking sector. we have seen this at barclays, bnp paribas likely to be fined as a result of sanctions violations. regulatory risk, a hot topic for the banks. >> the regulators are still

combing through all the stuff that banks have been doing over the last decade. i am sure we are going to get more of these stories of wrongdoing in the past and sadly, the scale of the penalty is being levied on an upward trend. a you will see more banks paying more penalties area -- penalties. good news for us as taxpayers. the government has more money. >> one of the elements is going to be there inability to do clearing in dollars as caroline was saying. they have been given leeway on the timing of that so they can look for another option. we spoke to a currency expert who was saying that one of the implications for this could be another threat to the role of the dollar as a global reserve currency because banks are going to look for ways to get around using dollars. >> if you look at what china is trying to do, we have seen

russia trying to use more of the ruble, and i think as the u.s. tries to extraterritorial eyes its judicial system, countries will say, if we are taking a judicial risk by using dollars, let's use another currency. by pushing itself so far, there is a risk that people will look for other currencies. i think it will still be at the margins. dollarears, the u.s. will still be the de facto standard. if you are dealing with china, maybe they will want you to settle in renminbi. typically you are in european small and mid-cap equities. tell us where it is you are favoring putting your money. >> looking for more defensive sectors. you are looking for sectors where you have got defensive

stocks, high return on equity, good cash flow, solid balance sheets. things like the consumer staples area. end of each week, we all need to go to the supermarket or have the supermarket come to us and deliver food. that spending is much less volatile than spending on more discretionary things. >> we could see that spending being volatile in emerging markets. some of those companies are a play on emerging markets. are you buying small enough ones? >> you can still find more domestic plays. ,n the food service arena running supermarkets in european countries. in europe, the population pretty much flat. >> a lot of people looking at pharmaceuticals and other elements of health care because of all the m&a taking place.

you are particularly on the equipment side. >> the equipment side can save a lot of money. you have got a scanner, you can do tact -- detact things earlier. the treatment can cost a lot less than x-men's, 12 months later -- six months, 12 months later. we hope that we don't break our leg. of those you want one plates to put you back together. >> thank you very much for joining us. we will take a break here on the program. up next, the long-awaited tui travel merger finally takes off. they will create the world's largest tourism giant. we are live with the tui travel ceo after the break. ♪

>> welcome back to "on the move ." i am anna edwards in london. tui travel is merging with its german parent company. the deal was announced on friday. it will create the world's largest tourism business. peter long joins

us now for his first interview of the day. thank you for coming to talk to us. let's talk about, why is the time right for this? you have been waiting for this to happen for quite a long time. >> i think the reason why the timing is right now is that tui are much more clearly focused and they have a very clear journey in terms of how to grow the content businesses. i have developed a strong relationship with the new ceo. we have a good understanding. we have a shared vision. the timing was very appropriate. in a both boards were position to recommend this new merger. >> i have seen mentions of this strong personal relationship between you and the leadership. factor so significant a to drive the timing around something like this? why i think it is important. this is a combination of two businesses on a friendly basis.

you have to have a common shared business. >> tell me about the benefits it is going to bring. is it about cost savings, tax savings, does it do something to the top line as well? does it help you market the business a different way? >> most important is selling more holidays, offering more unique experiences. there are some synergy benefits and some tax benefits in germany where previously the tax losses were trapped in a holding company. you bring the two businesses together and we get that benefit. the overriding benefit is topline growth. a i know that you are in close period at the moment but let's talk about the types of holidays that people are booking. we have talked in the past about the move to more online reservations. how quickly is that trend picking up in the holiday industry? consistentseen a

increase and now over a third of our business is conducted online. i can only see that increasing. also in terms of the trends and types of holidays, customers are booking more all inclusive holidays which is very attractive from a budgeting perspective. whatustomer knows exactly their holiday cost is going to be. >> many people some years ago were talking about the death of the all-inclusive holiday as we saw the rise of low-cost airlines. people were putting together their own holiday bundles. now you are saying the tide has turned. as the industry learned a lot about what it is that people want? >> i think we have improved the whole experience and the whole from booking and the holiday experience itself, how we look after our customers, the value we offer.

>> what are the other trans people have talked about? people wanting to get more adventurous with their travel. are you continuing to see customers segmenting into various types of holidays? >> we are seeing growth in a number of our holiday businesses. whether it is walking or trekking or sailing. the core of our business is taking millions of customers on that summer break on the beach. >> where are the big selling destinations? >> back to the old favorites. are provinglands very popular. >> are people looking for more sustainable types of holidays? there is a lot of emphasis on your sustainability footprint. people coming to you and asking for a more sustainable holiday experience. >> this is something we focus on very much. we have one of the most modern

aircraft fleets in the world. we work with our partners in terms of improving sustainability. customers do expect us to do that. >> if you are growing the top give usat kind of -- some more insight into the ability to grow the top line. >> i think our big difference and how we differ from our competitors is the unique holidays that we offer. if you bring together hotels and cruise ship content as we call it together with our operating businesses, that enables us to expand further. it enables us to have more hotels and cruise ships and offer those unique experiences. isi understand that tui spinning off the container shipping part of the business. has that made things easier as well? >> exactly. our whole strategy is very clear.

we don't want to have any other assets that are non-travel. >> peter, thank you for joining us today. travelong, ceo of tui joining us to talk about that merger. coming up, spain's biggest ipo since 2011. we are live with the company's ceo up next. you can follow me on twitter. we will take a short break here on "on the move." here is a little look at what the markets are doing right now. we are expecting a slightly positive start to trading in europe. the ftse 100 up by 0.2%. the french and german markets up this morning. ♪

>> welcome back to "on the move ." i am anna edwards at bloomberg european headquarters in london. let's see how things are shaping up on the first trading day of the week. things looking pretty positive. up 0.2%.n market a busy week ahead of us. we have an ecb rate decision. let's get to manus cranny at the touchscreen with three stocks to watch. --let's check in on one part one of the carriers, the discount carriers. easyjet down over 3.9%.

, earnings pera share click. the upgrade cycle in this overall industry group has almost run its course. they cut easyjet to underperform from neutral. they dropped the price target down by 22%. they say, you had your rub in this industry group. today it is about tax. they are getting a tax rebate from the canadians. $248 million. another $162 million to follow. it is not a takeover story, it is about a tax rebate. anglo american up 0.6%. the market is considering selling assets inside africa for some $4 billion. return on equity is king within mining. will they make it?

back to you. >> thank you very much. these are the bloomberg top headlines this hour. bnp paribas is planning a guilty plea today to end a criminal globe into u.s. sanctions violations. the bank is said to have won a reprieve which gives it six before the ban on handling dollar transactions. this could affect oil and gas transactions. government forces are continuing their offensive to retake the northern city of tikrit. william hague says britain is not planning to intervene militarily. we have been the quickest country in the world to get humanitarian aid to people displaced by the activities of isil. but wehelp in many ways are not contemplating a british military intervention. to miss ana is poised

bond payment today. it puts the country on the brink of its second default in 13 years. a u.s. court has blocked the payment from being distributed until the government settles with creditors from a previous debt. now there is a warning for central banks around the world. is says they should not delay exiting from emergency policy measures. emerging-market debt and forward guidance, for dissection. here to decipher the code is manus cranny. some strong warnings from the central bank. is a very this healthy assessment of where we are. time ofhad unparalleled zero rates. they say the global economy is recovering, but to get back to normal is a bumpy ride. start to take action now. don't be behind the curve. it is going to take skillful

navigation. the personification of what they are talking about comes in the per referee of europe. greek government bonds returning over 30% so far this year. spain and italy in double-digit returns in terms of their performance. that is quite unprecedented. , the longest stretch of games in 16 years. the bis is saying we have a false sense of security. money begins to lose its overall impact, its effectiveness. they are saying, the risk is are behindl bankers the curve in terms of taking action or provoking a response in the market. the likes of yellen, carnet, abe , etc. the forex financial markets detached from reality. are we detached from reality? say, it is.

>> who is creating that alternative reality that we are living in? a lot of words for the central bankers in developed markets. the implication for emerging markets, certainly something at the forefront of this report. >> absolutely. , lowing markets have gone rates, let's issue debt. >> they have taken the opportunity to raise money. >> $2 trillion since 2009. you are taking on risk. that is beingrase used is, it is like an elephant. you have developing markets searching for yield. that has come down from around 8% in 2005. is that the real price of risk? is that an artificial pricing of risk? have we decimated the concept of risk?

bernanke's temper t antrum last year provoke people into thinking. it is a very big issue. the thoughtovoke that when people are so low for so long, they need to start in theory to embarq on something can do quantitative easing. they would say, what you are doing is getting suckered to that balance sheet management. their words another country that did that before in the 1990's. it was called japan. >> you mentioned that a few times this morning. thank you very much. manus, thank you very much. manus cranny with the latest. spain's marlin properties is planning to begin trading for the first time today. it will be the largest spanish ipo since 2011.

joining me now is merlin properties' ceo. the statecharacterize of the spanish property market for us right now? it had a tough time. that is putting it mildly. how recovered is it now? recovery is, that just starting. around the first half of 2013. at the beginning it was mainly a way of smart money with our fish innds trying to the very significantly down situation of the market. fyw it is starting to reliqui a little bit with better quality investors looking in the market are rated -- the market.

the cost of the recession cycle is so profound that it will take time to be able to improve. >> what are the kind of returns that investors in your type of real estate investment trust can look forward to? george soros, john paulson, bill gates, all pretty sophisticated investors, are looking at reits in the spanish market. >> precisely that kind of capital seeks to return to investors something in the region of 15% to 18%. this happens in a market where trade availability, the cost of capital, tends to be relatively high. that is ok because at least it is not pushing down the yields or up the prices as much as we , orduring the bad years good years depending on how you look at it. the market today remains much more rational.

prices are also pretty much rational. the yields have not been pushed down too far. the capital values are very down as compared to the previous pick , even if you take out the 20% as simply froth. the rest remains very down as compared to those levels. i understand you had to reduce the size of your ipo because of concerns about investor appetite. for all the positive, what do you think investors are concerned about? is it something broader about the appetite for ipos at the moment? >> i believe it has to do with the fact that the market is probably choking in paper. you choose your timing for an ipo on a broad basis but it is difficult to do the exact timing

the way you want to get out to the market. in the last four weeks, we have been seeing a progressive softening of the ipo market. stayought it was risky to for longer and continue taking market risk. previous jobs had been down with a lot of investors. we wrapped up what we thought we had in the books and decided to go public with what was already in the bag. in the future, we will have many times to go back to the market. at the time, the market was simply becoming too dangerous. >> i understand you want to become spain's largest real estate company. to do that?lan what are you investing in? >> we are going to be doing commercial real estate.

mainly offices, shopping centers, industrials. assets that were a little bit neglected in the past cycle or mixed up with big disastern the that happened in spain in 2007. ripe for such a thing. of therent market cap real estate market in spain with us is about $4.3 billion, down from $44 billion prior to the crashes. we believe there is a big vacuum in the market. >> i think we might have -- we were getting to the end of our conversation but we lost the line to madrid. thank you for joining us, ismael clemente ceo of merlin properties.

up next, the average israeli will own about four technology devices by 2018. we talked tech trends with the head of google's israel operations. stay with us. ♪

>> i am anna edwards in london. this is "on the move." british consumers apparently come out on top but no one is more enthusiastic about the

internet than israelis. these are just some of the findings of a new google survey out today. elliott gotkine has more. to say thatsed after months of trying, we finally got the head of google israel, africa and greece who joins me now. we have seen this report out today. in technical terms, the consumer surplus, the values that israelis assigned to online media is greater than any other country in this survey. what is that about? >> it is a study that we commissioned with a boston consulting group. we tried to find out how much is really users value their internet. it turns out that the israelis value their internet more than any other country in the world. twice as much as the u.s. and americans value their internet. , israelis are is in love with the internet.

they use it all the time with many different devices. only two years ago, they used to use two devices. now it is three. they use now the penetration of mobile phones twice as much as three years ago. that is one. the other side is that they see a lot of value in the content they get on the internet. there is a lack of services that are paid for content services like netflix or amazon prime. some people not paying for all the content they are getting. israelis are the most enthusiastic about the internet as well. is this part and parcel of the high level of technology penetration here? we talk a lot about startups being formed here as well. >> one of the interesting questions was, are they more excited about the opportunities and benefits or more worried about the risks of internet?

the size of the group that sees more benefit in the internet is five times as big as the ones that see more risk. >> i also found it interesting, the brits seem to feel the most secure online compared with other countries in the study. what is going on there? >> each country has their different kind of characteristics. brits feel more secure online. israelis feel very enthusiastic about keeping a free and open internet. thing isnteresting that israelis are passionate about keeping the internet free of government intervention. they don't want the government to intervene. >> i think you mentioned a while ago that google was going to help the israeli government go online more. isthe one hand, israel talked of in the same breath as silicon valley. on the other, online services are awful. >> you are right.

we have commissioned another study which was all about, how can the government embrace technology and maximize growth? youid find this gap that are talking about between the cutting edge technology of startup nation, the startup community in israel, and where the government services are. we identified that gap as well as some ways of how the government can do better by using technology. how is that acquisition going? what can we expect to come from the integration of ways into google maps? is a terrific example of the startup nation of israel, a company that brought real innovation to the world. making the life of drivers much better. we were really pleased with this acquisition. they are still growing. we are trying to take the best of both worlds.

we are taking what we have in google maps, integrating it to waze,, taking the community, the jams andtraffic pouring that into google maps. >> i know you are not going to give me specific names but are you constantly on the lookout for further acquisitions in israel? >> absolutely. israel is known to be the second silicon valley. there is a lot of innovation coming on. a lot of it coming from startups. on the lookoutly and i am sure we will hear more good stories of israeli innovation. to acquire do decide another company, hopefully it won't leak out as much. are there other places you're looking at? othercomplementing with

acquisitions that google has made worldwide? >> we are trying to be very open with everything that is going on. there is a lot going on. technology is going to become more central in our lives. it is going to influence more and parts oficals our lives, whether it is telecommunication, social behavior. we need to look at all the stuff. >> we look forward to seeing more news from you. good to have you with us. for now, since my earpiece has fallen out of my year, back to london. >> elliott, thank you very much. time in london is 10 minutes to 9:00. "the pulse" is coming up at this top of the hour. guy johnson tells us what we have to look forward to. >> good morning. the np the big story. see that settlement come out. it is going to be expensive for

the french bank. we are going to figure out what is happening. we will get the take on what this means currently, but what it mark recently means in the -- what it more crucially means in the future. five other european banks are likely to face fines. how does the banking sector as a whole get through this story? we are going to be talking about maserati. we have a guest coming up who is going to be talking about maserati turning 100. the big question is, expectation incredibly high, debt incredibly high, can it in vast enough to get maserati and alfa romeo back in gear? that is the big story. back to you. >> so guy talks to guy on the pulse. thank you very much. weing up after the break, will stick with that maserati story. it turns 100 but has no intention of slowing down.

why the road ahead may be a bumpy one. ♪

>> welcome back. maserati is turning 100 but has no plans to retire. the next four years might be the most challenging. i guess bennett reports. ago, a family of

italian brothers set out to build cars that were beautiful and fast, cars designed for motor racing as well as the road. 100 years later, maserati's plans are even more ambitious. they are aiming to lift sales nearly fivefold i-20 18, a tough task -- by 2018, a tough task. maserati doubled sales last year and is set to do the same again. good news for their owners who need to count out poor sales figures from europe. the growingeyeing asian and u.s. markets, introducing six new models including this one named after one of the founding brothers. states is still our biggest market. i expect the united states to account at the end of the year for a third of our global sales. china and the asian pacific region is the second strongest

center of gravity for our business. years, wea couple of sold 800 cars in these markets in a year. right now we are selling this amount of cars in a month. >> winning american and asian hearts won't be easy or cheap. the company paid top dollar for an advert during the super bowl. but maserati's ceo is confident. .> we have outstanding products fiat's acquisition of chrysler complete, italians see this as a perfect opportunity to seduce new markets. and guess bennett, bloomberg. >> i know a man who likes a classic italian sports car or two. he will be back. guy johnson is here after a short break with "the pulse."

you can follow me on twitter. we will leave you with "the pulse." have a very good day. ♪ . .

>> guilty as tranche. pleas set to enter that and except a record fine for violating u.s. sanctions. on the brink. agentina is expected to miss debt payment and could default later for the second time in 13 years. and as maserati turns 100, we see if they can achieve its huge ambitions. good morning, everybody. you are watching "the pulse."