aboutmens new ceo speaks his new vision for the future for the first time after losing the bid for alstom. ukraine and russia move closer to a comprehensive cease-fire. investors are waiting -- are awaiting the u.s. jobs report. good morning and welcome to "the pulse."

we will look at laser-based technology that can fight terrorism. haul, low cost long wilner we generic succeed where others have failed -- will norwegian air succeed where others have failed? i will speak to that siemens ceo in frankfurt. i asked him about the failed bid. serious were you about wanting to buy alstom? were you trying to throw ge off? >> from the very beginning, i was very serious. >> does that mean you seriously wanted to acquire alstom? >> we were considering all of our options.

we took one step at a time. outcome as ae the victory or were you disappointed? looked very hard at it and we came back with a proposal. deal with the train business still in play? >> no, i do not think so. it takes a lot of time to make a meaningful outcome. it takes a great partnership. the party is not willing to partner. >> a train deal is off the table for now. he thinks the bid was well worth his time. make moreced ge to concessions.

ge is doing with the french government as a 20% stakeholder. i also spoke with him about europe. he thinks it is still too soon to call it a recovery. >> we see some areas which are encouraging. seen thes a whole, has bottom. is it too early to call it a recovery? many jobs that we created? how many young people have we hired? investors will be interested to hear what ecb president mario draghi has to say about the state of the eurozone economy. hear?o investors want to >> details, clarity. they want to understand what the

rates are going to be. some clarity. purposes, thecal extension of unlimited cash is a signal of the duration of rates. they've cut the rates, they're offering 400 billion euros to the system to the banks. why would you take for your money?- four year when he details about what this -- weive lending program need details about this extensive lending program.

the market wants to that we are progressing towards that. there is a movement in syntax and language towards a much bigger game at play. >> what is the market take on this? i like a chart. europe.nth money in the market is resuming. presuming we will have low, low rates. we did a bloomberg survey. 30% say 2015 will hike. these people are hawkish. be up intos it will 1.5 by the end of 2016. disconnectbig between what the market is trading and what the bloomberg

survey actually says. fourth quarter, 2016, inflation said to be 1.5%. >> one of the big stories is his diversions between what is going .n in europe in the u.s., we are talking about when we will see the rake hike -- rate hike. reaffirming that interest rates are not her number one choice. data,ou look at the jobs are you coming to work tomorrow? >> of course. some sour grapes about july 4 in the office. 215 jobs.

above 200,000, it will be the first time since 2000. the momentum will be there. better to hire 100 new people at 100 new companies than 100 at one company. manus will be bringing you full coverage of mario draghi's news conference. time now for another bloomberg exclusive. we spoke with the italian defense minister about the crisis in you crane.

>> even though in the ukraine situation, some unacceptable things happened. russia.ed the door with to shut that door irreversibly would be a mistake. >> ukraine and russia are moving closer to a truce. newsroom withis a the details. >> there are two things. the intensity of the fighting on the ground in the east of ukraine is picking up. it is looking in all -- it is looking like all-out warfare in east ukraine. we are hearing quite a few stern warnings from the kremlin that if the ukrainian central government does not stand down and implement a cease-fire,

russia may act. the russian president saying russia reserves the right to protect ethnic russians wherever they are. we heard the russian prime minister talking about how the ukrainian president is personally responsible. and then we got this morning from the foreign ministry saying if the ukrainians do not implement a cease-fire, there will be consequences. we may be sense that about to reach a point of no return in the fighting. that is something the german foreign minister communicating. that is why germany, in berlin, try to broker a cease-fire between the russians and ukrainians they did not get their just yet. they agreed to keep working at it.

the markets like the fact that they were sitting down. globally we have seen the markets ignoring the situation. the? it still moves up and down. the russian stock market yesterday was up for the first time in six days. it is not over yet. it is not guaranteed that they will come to some sort of truce by saturday. the european union says if that does not happen, they might have to move to the proverbial stick. >> one thing that would move the market. there seems to be a lot of bluster about that last week. >> bluster, nothing. this is something we have learned exclusively. the european union is looking at trying to stop the flow of

funding for russian products. eib belongs wholly to the european union. last year, it lent russia $1.5 billion. it was set up in 1991 by the ee you. .- eu to try to fund the project in the former soviet union. it might be a little bit more difficult because there are more stakeholders than trying to shut down the bunny. they think they have the votes to be toe further funding. this issue of unanimity is a big problem. agree countries have to to the sanctions for them to

happen. not everybody is ready to go there just yet. >> norwegian air is going where other airlines and tried to go before, but have failed. we will ask the seo what he plans to do differently. -- the ceo what he plans to do differently.

>> welcome back to "the pulse." one of the fastest-growing low-cost airlines in europe is announcing its transatlantic route. work for the low -- for the long haul flights. good morning, thank you for coming in. a lot of companies have tried to do this. what makes you think you can do this differently? completelya very low-cost in operation. there was a shut down --nly because of a fire

different offices were unable to settle tickets. >> is it all about the dreamliner? work.onomics do not >> he would do it if he had the right tool to do it. >> what are we talking here question mark 6, 7 -- what are we talking about? you should remember that we were voted as the best local airline last year and we need to bring not in.

up.s a really good set bar.ave your own you purchase everything you want to drink or eat. >> you have in-flight personal entertainment and you order directly. it starts at 150 pounds. feesall of those extra make it comparable? you can bring your own food. we don't care about that. you should always be able to fly on the lowest price.

you can choose extras if you want to drink. >> you have been facing some pushback because you do not have your irish license approved. what is the latest with that? >> they hate competition. some airlines don't like it. they favor competition. >> you think the approval will come through? this is a political issue. sooner or later, they have to comply with your geisha and.

what about gatwick? why do you think you can make it work? i think it is ideal. we utilize --everybody can connect at gatwick. it is ideal. >> what will be your first asia destination? to a lot of fly places in asia.

a lot of -- >> is there going to be a business component? how competitively will that be priced? >> way cheaper than everybody else. >> give me a price range. some people are looking at this and given that you are trying to areate out of ireland, you following in the footsteps of the big deals we have seen. we have to comply with all of the tax regulations.

we do not have anything in ireland. >> and there you are. alex like a trolley. >> -- that looks like a trolley. >> do you think everyone in the u.k. is obsessed with this competition for the third runway? do you think this will tip the scales in the battle for the third runway? >> gatwick needs more space. traffic flying into gatwick. thank you so much for joining

us. stay with us. we will have another big airline interview. we'll be speaking with michael o'leary. we will try to do low-cost long-haul. stay with this, we are back in two minutes with more. ♪

>> welcome back. let's see how the markets are trading this morning. >> let's have a look at what is going on. rising equity markets, waiting for mario draghi to deliver the level of clarity. i want to focus the attention further north. this is called the u.k., goldman sachs raises the rate target. 2015, they have raised their view to three % as well. -- i willhi is in bring you that interview live. has he got the ability to tell the market? what is my view? in terms of why the banks want money.ow long-term

euro-dollar coming off of it slows of the day. by the year-end end, care reducing the targets for the year and. barclays said time for the dollar to shine. that is the key issue for these markets. >> a supersonic jet, a super sensor, and a super scanner. is this the golden age of british is nearing?

>> you can follow me on twitter. ♪ . .

>> welcome back to "the pulse" live from bloomberg's european headquarters in london. i am olivia sterns. the ecb is expected to keep interest rates unchanged today. this after the central bank cut its benchmark rates to a record low last month and introduced a negative deposit rate. the decision will be announced today at 12:45 london time. we will bring you maggie -- bring you maggio draghi's news conference. we sat down for an exclusive interview in frankfurt.

>> the ecb has been so determined. [indiscernible] germany is voting on whether to introduce a nationwide minimum wage today. the pay will be set at eight euros $.50 per hour. it was introduced by angela merkel's third term coalition. critics say it risks killing jobs. the u.k. has what some might say is a long and glorious past when it comes to engineering. firmware ways to radar, britain has pioneered some of the most important technologies in the world. a celebration of british engineering took late and three finalists all look likely to fly the flag for many years to come era get --. >> a supersonic jet, a super sensor, and a super scanner. three super technologies

fighting for a prestigious award. what makes these british innovations stand out? this fighter jet has a special advantage. a system designed by rolls-royce means it can take off vertically. while this isn't the first get to do it, it is the first to hit a supersonic speeds. the thrust is so powerful it can off the ground. next up is, a technology that ferns fiber-optic cabling into a microphone. this allows better and cheaper security monitoring and improve safety along pipelines and roadways. it is already being used to aid the safety of high gel at fracturing -- hydraulic fracturing. it is not a jazzy microwave. it is an airport scanner. the device can identify liquids or solids in a sealed container.

initially designed for pharmaceutical companies, its new form insecurity detection could speed up airport queues, saving millions of dollars. while already deployed in 65 airports in europe, its developers say it could also be used for cancer screening and food analysis. tom gibson, bloomberg. is the winnernow of the prestigious nick robert award. ofo with us, philip, the ceo the royal academy of engineering. welcome to "the pulse." paul, let's start with you. how did an airport scanner be out technologies from supersonic jets? >> very stiff competition. we are a small company. i think it is because we have a

can novel technology that identify the chemical composition of materials inside sealed containers and that has a very clear opportunity to be used for airport security. i think it is a very novel thing. >> i have a vested interest in it. i was thrilled to sneak a yogurt past airport security. thatyour technology mean we are going to see the end of the ban on liquids? >> our technology may be part of that picture. it is part of a framework that is coming in. there is a phased implementation over a few years where the aim is to lift the restrictions on carrying liquids. that is not at that point yet. airports deployed this technology and are starting to screen certain types of liquids and containers. over the next few years, we hope that would be the case and you would be able to take wine and

so forth. >> can you imagine? i can't. it seems like those days are long and done with. how confident are you in this security? obviously, security scanners always have to be one step ahead of the threat. it seems like somebody could come up with some sort of way of deceiving the scanner and putting in noxious chemicals that don't turn up. the technologies approved for airports are rigorously tested by a body in europe, the european civil aviation conference. they are put through independent tests to verify they meet the highest detection standards with very few false alarms. it is really tested to try to -- that.hat area >> >> tell us about the competition. finalists,d of the

with an amazing technology using fiber-optic cables to do tech audio sounds over great distances. what this award shows is the scale and breadth of innovation that is happening. brilliant companies large and small across the u.k. what we saw last night were the three finalists. there were actually many more who submitted proposals to all of them. the three we saw last night, any one of them could have won array easily. they were so brilliant. the fact that paul's company has come through shows firstly how brilliant the technology is. great engineers were behind it. also, the market potential of this company and this business is huge. it is not just in airport security. it is in other areas where the technology can be used. >> of course. interesting to see that

competitors here are a range of startups such as yourself. cobalt all the way to rolls-royce. speaking of the market potential, what is the impact of winning this award for your business? >> we are a small company still but it is really huge. really is the biggest award in engineering in the u.k. thinkalso a great story i for british industry in the sense that we are a story where academic research has gone through various stages of innovation to a product with commercial success. it is really a nice story. also for the future of engineering in britain. >> do you think the cobalt scanner will become the global norm? >> we are talking to -- these regulators have started in europe but we are talking to other parts of the world as well. there is a movement to try to

lift these restrictions in various countries around the world. it would be nice to think that it would be the global norm. >> since you are a great perspective on different sorts of emerging technologies, where do you think the biggest investment opportunities right now are? goodness, that is an enormous question. because engineering covers such a huge breadth of technologies and activity and people involved, from the very highest level of intellectual skill through people who are making the world work for us, anyone one of these opportunities is just enormous. it is one of the reasons we have a campaign running at the moment about promoting what engineering is doing for society in all sorts of ways, including for the economy. i think one reason why the u.k. economy -- i keep my fingers crossed here -- is doing relatively well, is if you look

at some of the engineering companies in the u.k. that are developing, there is fantastic stuff being done. , if you give an example look at the u.k. car industry, companies like jaguar, land rover, they are growing at a fantastic rate selling brilliantly engineered cars engineered in the u.k. that is just one opportunity of a very great many. >> what do we need to be doing to attract and keep engineering talent? >> we need to be talking about the great stuff that engineers are doing. that is one of the reasons the royal academy of engineering held its annual awards, to promote the great stuff that people are doing. we had 400 or so people at the royal opera house. from across the political spectrum, across business and industry.

they can go out and talk about it as well. >> immigration reform? >> we just need talent in the u.k. we need our own homegrown talent and we need talent from across the world. we are very keen that people who do have the talent that we want come to the u.k. to work for great companies and help us grow. >> thank you so much, mr. paul greenish. and you, paul, thank you so much and congratulations. we certainly wish you luck. it is time for today's hotshots. let's take a look at these mountain bikers. they took their skills cross country try out one of america's most challenging courses. they pulled off some incredible flips and jumps along the woodland trail. paris isn't known for its concrete terrain, but behind the breathtaking sights there is a skateboard paradise to be had. here are some parisian pros

taking a skate tour of the city. surfs up for the spanish team. competitors got in some practice and soaked up the sunshine on their home surf. this is just before warming up for the next major tournament. earnings, the u.k.'s reports. ♪

"> welcome back to "the pulse live from bloomberg's european headquarters in london. pound land has issued its first earnings report since going public. it is set to benefit as the economy in england improves. is our european business correspondent, caroline hyde. why is pound land doing so well are we all becoming bargain hunters? >> we are. that is what is the most fascinating thing about penland. i go quite crazy in it. flashing santa hats which last for like 48 hours. over christmas, they sold 3 million meters of tinsel. they sell 3 million light bulbs, 4 million bags of sugar. 18 billion cans of coke. quarter of a million garden

gnomes. they are across the board. they sell everything from cleaning products to novelty items. one in five of their shoppers is from what they call the a-b earnings category. that is the most affluent, the biggest earners. they are the people going to pound land. sales are currently up 30% last year. profit up 23%. they are expanding. 500 stores. the u.k. alone can house 1000 stores. they are looking into spain as well. we are becoming savvy across-the-board. >> i don't know if savvy is the right word. if we are all buying garden gnomes. >> why would you want that many? >> it doesn't matter if it is actually useful stuff, people are just thrilled that it is cheap. what about as the u.k. economy

recovers? think that people will stop shopping at pound land or are they still going to be buying up these bargain garden gnomes? >> have we as a nation changed? aldi is doing better. we are becoming more astute about where we want to buy our brands. we spoke to the chief executive of town land and i said, what if austerity is easing? what will happen? he seemed pretty optimistic. aligned inery much terms of results to footfall. a more confident consumer is good for us. landtter times, pound actually does better. i am optimistic about the future. >> analysts are pretty optimistic too. three analysts say, by the stock. one says hold.

credit suisse says it could grow to 400 pence, currently about 350. this is basically the only initial share sale this year that is above its initial selling price in the u.k. pets at home is currently trading lower. this is a company that managed to continue to perform area >> interesting. doesn't matter how much money you have. everybody wants a bargain. thank you. it is time now for today's world cup news. the u.s. team may be out of the world cup but it made history against belgium by scoring record online and tv viewership. the match was the most streamed sporting event ever in the u.s. finished customizing the official foot all to be used at this year's world cup quarterfinals.

the balls are marked with the two teams, the location and date of the matches. the balls are now being sent to the stadiums that will be hosting the matches. and columbia has given government workers half a day off to watch the team play its quarterfinal match against brazil on friday. workers have been permission to stop work at lunchtime. james rodriguez is currently the tournament's top scorer. coming up, it is looking like a rosy future for european renewables. as generating capacity rises, we take a look at the most competitive investment areas. details next on "the pulse." ♪

>> welcome back to "the pulse." u.s. markets are closing early today because tomorrow is a national holiday. july 4, america celebrating independence day. one time-honored tradition is the hot dog eating contest. one and even out takes on a competitive eater. >> this lease has been here since 1916. on the fourth of july, 15 people, and try to eat as many hot dogs as they can. today i am also going to try to do that.

>> people watch it on tv. 40,000 people are here. it is a big deal. >> we have 15 hotdogs, 10 for you and five for me. we are going to race for one minute. i will eat as much as i can. >> 5, 4, 3, 2, 1. start eating. >> have you won any money from this? >> i won third place in the hamburg festival. changedas your life before and after? >> the fourth is a big deal. kind of a little bit of a crash afterward. >> how big of a business is this? >> in the world of business, this is a small business. it is an opportunity for significant growth. it has grown significantly. when we first did this contest,

it would be three journalists. now it is a massive event. the return on investment is enormous. >> 5, 4, 3, 2, 1. put your hot dogs down. six, minus what i had in terms of bread. you ate almost two. that is not bad. over a course of 10 minutes, that would put you around some of the best. you might want to consider trying to qualify next week. >> my parents will be so proud. was dipping them in some sort of water or soda, diluting the effect of the bread. it didn't look like a fair match but claire is very brave. it is time for today's new energy. renewable energy is predicted to supply 50% of europe's power by 2030. this comes as the cost of green

energy production continues to fall. it looks like a rosy future. joining us now is the head of emea research. good morning. very rosyt ain't a picture for renewables. what is the story? -- your report paints a very rosy picture for renewables. what is the story? >> windfarms will be the cheapest way to produce electricity. the cost of that technology has been coming down very steadily. at the end of the day, when you compare it to: gas, it is a good bet. gas, it is a good bet. solar pv is destined to grow strongly. when we look at solar energy, it is one of those technologies that behaves differently from big centralized power stations. people can put these things on their roofs.

we see very strong uptake in that area. >> why is that? for so long, it has looks like source,ctive renewable but the efficiency hasn't been there. why do you think we are at a tipping point where solar will finally catch on? these things on your rooftop, you are offsetting the cost of retail power prices, which are much higher than the wholesale power prices. the cost of technology has come down rapidly. we see it coming down continuously. day, thed of the economics of doing it is really attractive. that is going to continue to improve. the really important thing about is that as a technology it has the potential for exponential growth. look at the economics

and say, that looks pretty attractive. but like mobile phones, like laptops, there is a penetration affect which says, if my neighbor, my friend, my colleague has this, maybe i will get it too. you get this rapid uptake which can really be disruptive. >> so maybe we are at a tipping point if everybody is starting to use it. it will accelerate. but the cost doesn't always come down to subsidies. in renewables, such a rapidly changing landscape, how confident can we be that solar will stay cheap? >> and the modeling that we do, we assume no subsidies. this is competing in a subsidy-free environment. comparing to other technologies to fulfill the demand. right now, there is lots of subsidies around the world. we see them coming off and renault will balls being the cheapest option -- renewables being the cheapest option.

>> thanks so much. a big change here. thank you so much. we are going to be back with more on "the pulse" in two. stay with us. ♪

a ceo speaks to me about his vision for the future. why he is setting his sights on the u.s. market. moves closerussia to a comprehensive cease-fire. details from draghi. more clues about how long rates will stay near zero. we are waiting the u.s. jobs report, due out early because of independence day tomorrow.

good morning to our viewers in europe. a warm welcome to those waking up in the united states. i am olivia sterns. this is "the pulse." coming up, taking low cost, long haul. will norwegian air succeed where other airlines have gone before and failed? we have another big airline interview for you this hour. we're going to be speaking with ryanair ceo michael o'leary. we begin with a bloomberg exclusive. i have been speaking with the ceo of siemens. they lost out in their battle with g. -- with ge. how serious worry about wanting to buy alstom? was it a serious bindle retrying to throw ge off or get a peek at their books? >> i was very serious.

todid you seriously wanted acquire alstom? time took one step at a and we got what we wanted. outcome is ae the victory or were you disappointed? >> we just move on. we looked hard at it. we came up with a great proposal. >> is the deal with alstom with the train business still in play? >> i do not think so. it takes a lot of time. it takes a great partnership. if they are not willing to -- for the sake of it. >> a-train deal with alstom is off the table.

overall, he seemed pretty please. atdid get a bit of a peek their books. ultimately, ge is dealing with the french government as a 20% shareholder who will be making life more difficult. spoke about europe's economy. here is what he had to say. >> we see some areas that are encouraging. europe has seen the bottom. it is too early to call it a recovery. bleedingve stopped the , how many young people have you employed and given them a future going forward? euro, as a whole, has a lot to do. >> investors will be interested to hear what mario draghi has to say about the state of the euro

zone economy. i did ask what he thought about mario draghi and what he thought mario draghi should be doing and about taking rates into negative territory. draghi he is confident will take all the right steps. for more, i want to bring in manus cranny. tell us about what we are expecting from draghi. >> i think the market wants a little bit more clarity. hopefully a little more detail. whether they have had enough time to put in place, how are you going to dish out 400 billion euros. i think by telling the market we are making big steps towards nirvana, that is a form of quantitive easing expected by , are you making progress towards that? where are we on that agenda? communication is an incredibly

difficult subject. he is muddying the waters as far as i am concerned. more or less,es, where done. that is the message take away from that. june 21, the expansion of unlimited cash is a signal of the ration of how long the rates are going to stay low for. we in the zero bind corridor? that is the important thing. >> what does the market thing? and --man's to tom keene keene, wheretom the market is trading short interest rates, the market says it will not push much above. andid a bloomberg survey that this blows my mind.

30% of our survey say a rate hike in 2015. 28% say 2017. you have cheap money to lend to the economy for four years and you have unlimited funds for a long period of time and that the ecb does not see inflation , there is a lot of different messages going on. if you are a bank, why would you take for your money -- four year money and a presumably cheaper rate? there is an expectation on clarity. i will bring that news conference live and i will wrap it up afterwards. you had the adp yesterday. that is the higher -- private

payroll number. if you can storm in above 200,000, it will be the first time since the year 2000 you have had the stretch. every economist and every american jobs watcher that we have talked to, once you get above 200,000, we're almost to the home run stretch. ant is what we have to keep eye on. still lower than inflation. pocket does not buy you much at the store, recovery is hard to come by. >> looking forward to the news conference. stay with bloomberg because manus will be bringing you mario draghi's news conference live. time for another exclusive. we spoke with the italian defense minister about the crisis in ukraine. she talks about how she sees italy's relationship with russia.

>> even though, in the ukraine situation, some unacceptable things happen, to slam the door on russia, after working hard to build a dialogue for 25 years, to shut that door irreversibly, would be a mistake. >> they appear to be moving closer to a truce. ryan chilcote has more. what appears to be motivating them? >> you have two things going on. the fighting on the ground in eastern ukraine is definitely intensifying. a couple of weeks ago we were sooking at one or two incident and now we are looking at a couple dozen. we are hearing a pretty stern warnings that if the ukrainian central government does not embrace a cease-fire, they may take more action. in other words, perhaps more of

a role in the conflict than they already are. they did not say that at face value. there is a sense that this , as the german foreign minister put it, is coming to a head. it would be impossible to return to peace. that is why they hosted peace yesterday, with the russian and ukrainian foreign ministers, to try to get them to agree to a comprehensive , bilateral truce. the markets like that. global markets have been ignoring this conflict. the russian move -- market moves up and down with how things are going in the ukraine. they agreed yesterday to try to get the truce agreed by saturday. that does not mean they will. western europeans are saying if

the russians do not agree to some kind of deal in that room, call out the g proverbial stick, sanctions, to do that. what is the latest on the sanctions? is accurate.at there do not appear to be any really serious sanctions in place for russia just yet. is that therstand eu is looking at possibly brd,ing funding to the e which lent about $4 billion to russia last year. if they do that, that would be

petty. in some ways, counterproductive. it will not affect the economy at all. it would stop encouraging russia to move away from a petrol based , resourced-based economy. those sanctions do not appear to be the unanimity within the european union just yet. >> speaking with joe kaser, he is optimistic there will not be a third round. they have not been biting his business and russia yet. ryan chilcote, thank you. forng up, decision day mario draghi. it is job stay in the u.s.. we will get insight on both from at first economist

trust advisor. stay with us. we are back in two. ♪

clicks let's take a kwik check in on the markets. the aussie dollar against the u.s. dollar. it is tumbling. a comes after glenn stevens said it is overvalued. investors are underestimating the chance of a significant fall in the currency.

the drop in retail sales is also weighing on the aussie dollar. on inre on what is going the economies, jobs in america. the labor report is coming out early today, getting a lot of attention. investors will be digesting the ecb decision starting today. ate press conference is t 1:30. let's start with europe. what do you want to hear from mario draghi? goingould believe he is to try to say not much, except try to figure out another way to do forward guidance. i will promise to hold interest rates down until the u.s. wins the world cup. by doing that, he is trying to get banks to lend. around the world, when you look at the bank of japan, the fed,

they have all done this quantitative easing, but thanks for not lending the money. they're sitting on access reserves. how do you get tanks to lend -- banks to lend? you promised to hold interest rates down for a long time, you charge them to hold reserves. ecb did lastthe month. >> what do you think draghi should be doing? he has a long way to go is he cup to be wonrld by the united states. >> i believe quantitative easing will not be effective as it is currently structured. raising interest rates today can encourage more lending. the reason banks are not lending is because rewards are not there. if i have superlow interest

, why would a bank make a 30 year long at 3.5%? they do not do it because they're worried about inflation. here's a different way to say that. if i charge banks, the ecb is charging banks to hold reserves. those banks will charge customers to hold deposits. customers will now choose to deposits,instead of which can cause the inflation. i think the negative interest rate gambit can backfire on the ecb. >> interesting. what is your take on the help of the european economy? said it issiemens too early to call it a recovery. you think you agree with that? >> i do not agree with that. i think the worst has passed.

we have called the u.s. economy the plow lowers economy -- plow horse economy. that is what europe is going to enter. there is great new technology. you talk about renewable energy, fracking around the world, 3-d printing, the cloud, all of these things are going to lift productivity and profitability and they're going against all of the headwind of banks having a different time -- a difficult time lending. thernment spending is on rise. when you put those two opposing other, younst each can end up with a plow horse. i expect europe to end up with the 2% growth. be that plow horse, that is what i expect. would like to see it back

up to 2%. the jobs numbers expected to come out at 215,000. what is your forecast? >> we are at 240. stronger than the consensus. i also expect the unemployment rate to take down. don't remember -- a year ago, the unemployment rate was 7.5%. one of the key reasons for this is we ended on extend -- we ended extended unemployment benefits. that means more people are looking for work or they are dropping out of the labor force. what that does is drop the unemployment rate. >> how was that long term unemployed if they are dropping out the labor race question -- labor race? .

>> the actual number of people looking for work or working is higher. one of the misnomers about wages -- wages have been growing about 2.5%. we have been increasing jobs 200,000 a month. the hours of work have gone up about 2.5%. when you add those two things together, the increase in the wages, plus the more hours and more jobs that we have, incomes are growing in america. that is going to keep the economy growing more strongly than a lot of the pessimist think. >> you are clearly bullish on the economy. gdp contracting almost 3%. durable goods orders came in soft. sluggish indicators. why are you confident? >> i live in chicago. feett buried under seven of snow. houses were not started. cars were not bought.

a lot of retail activity did not happen because of that. part of it was winter. another thing is going on. because obamacare came in, we have had a difficult time measuring health-care spending. original estimate of health-care spending was up 9% in the first quarter. the final estimate was down 1.4. it took a lot out of gdp. data forve all of the most of the second quarter. it looks like 3% growth in the second quarter. we are going to fully rebound from that decline. >> the bond market is not pricing in what the fed forecast are. why is that?

>> it is all about forward guidance. yellen holds rates down, bond yields will stay down for four years. with the u.s. economy strengthening, the first six months of this year, job growth in the u.s. will be the strongest job growth we have seen since 1998. fed is closer to tightening than people think. that will start to weigh on the bond market. i do not think they're going to wait until the middle of 2015. >> inks. good to see you. bloombergome, another exclusive. we're going to speak with the ceo of ryanair, michael o'leary. that is coming up next on "the pulse." ♪

>> welcome back. it is time for today's new energy top headlines. a triumph for tesla. legislation has been passed to allow them to expand retail operations in pennsylvania. it will let tesla increased the number of stores and add additional centers -- service centers. prime minister is

struggling to implement his new green energy plan. he is depending on renewables to enduce oil imports and india posco frequent power cuts. frequenta's power cuts. next, a bloomberg exclusive. we're going to be live with the ceo of ryanair. michael o'leary. we will get his thoughts on the region announcement. as we head into the break, it is time for today's pulse number. 1980 euros. that is how much a man has been 0ered to pay lafond's a --0 lufthansa.

stay with "the pulse." we will be back with more in two minutes. ♪

>> welcome back to "the pulse." we are live from bloomberg's european headquarters. the ecb is expected to keep interest rates unchanged today after the central bank cut its rates to a record low and introduced a negative to positive -- and negative deposit rate last month. draghi'seview mario news conference. ceo, joe kaiser, weight in when he sat down with me for

an exclusive interview. >> the ecb has been determined about helping europe out that i trust this is the right thing. nikolai sarkozy says the charges against him are aimed at humiliating and defaming him. since his first interview his defeat in the presidential election. he denies any wrongdoing. want to tell those listening to us or those who are watching that i never betrayed their confidence. i never did anything contrary to the republican principles or the rule of law. let's take a look at how european markets are trading. manus cranny is standing by with more. >> day three for european equities markets in terms of the third quarter. cyclical stocks on the up. up over about 1% on the past

three trading sessions. spain a little bit lower. government stocks, they have uplifted their view. 3.4% for this year. in gdp nextt growth year and they have lowered guidance on consumer prices. andy is about who says what what does the data tell you. plus .2% number. equity markets in the u.s. are flat. s&p 500 index trading at 1959 1959.50. janet yellen essentially saying rates are going to be the last thing i want to use. very much guiding the market into a lower sense of dovishnes s.

if it is a nonevent, in terms of mario draghi's language, sell into those rallies in the euro, if and when they come. there is a bigger currency at play. the dollar. look at this. of this two-month low. what is the reason? rates are being cut. they are quietly to pitch a lading -- it is your time to shine. they are talking about the dollar. i leave you with that thought. dropped,oyment rates who is behind the curve then? back to you. ahead of july 4 celebrations

taking place, celebrating independence day in the u.s., let's talk fireworks. workman has curated some of the most spectacular fireworks displays in the country. we caught up with him in the arizona desert. >> my name is mike workman. the oracle corporation. when i am not there, people can find me out here making fireworks, blowing things up area and -- blowing things up. you're 12, you cannot be serious about making fireworks because no one will let you. as i got older, i could afford better equipment and chemicals. hole.n the there is a lot of parallel in developing a product and developing something people like to see in the sky. audiences expect particular

things. they like loud noises, different textures of colors and sometimes different intensities. they like a lot of things going on at one time. make fireworks, they immediately assume i am nuts. makekes a lot of work to fireworks. they are dangerous. is fascinating is that it is a blend of art, chemistry, engineering, physics. it is the energy that you are able to control long enough for a short period of time to make something pretty out of something very powerful. like watching a fireworks. some people get emotional. i get very emotional. if you take good music and an artful display, with timing and colors, it does something. i like to see what i built and what i do in the sky have the

same effect on others. 250 grand for a show. it will not come cheap. let's take a look at the airlines. i spoke with the ceo of norwegian air shuttle. they are trying to make low-cost work for the long haul flights. no one has yet succeeded. he weighed in on rather -- on whether ryanair ceo would follow suit. thoughtel o'leary has about it several times, but the economics do not work. >> he will do it. if you have the right tool to do it, he will do it. >> we are joined by michael o'leary. phone from on the dublin. good morning. thank you for joining us. >> good morning. newst's start with the

that norwegian air is doing a low-cost, long-haul transatlantic. is this making you reconsider your business plans? >> not particularly. we have a plan to do a transatlantic low fares airline, but the difficulty is aircraft availability. has a valiant effort this morning, but with a fleet aircraft.r four it is suboptimal. about sixrating from to eight european countries initially and growing to a 40, 50 aircraft fleet. if you do not have that scale, you have a very thin schedules. i wish them well, but i do not think it will make a difference in transatlantic flying. >> he says the dreamliner is what makes the economics

different. if you got your hands on a dreamliner, would you get back in? >> if i could get my hands on 40 or 50 dreamliners, i would. difficulty is that the economics in the long-haul market have been inverted by the gulf carriers in recent years. there is no short, no kind of low-cost opportunity and there has not been for about a decade due to the orders laced by the gulf carriers. we are focusing our efforts on continuing to grow rapidly in the short-haul market in europe. we announced three new routes from scotland to glascow and london. scotland-london link so important?

>> it is not that important to ryanair. it is a gap in the market that has not been served. it is not a business airport. was a time, glasgow monopoly. we are -- they were charging very high fees. there is a new ownership at glasgow now. it is appropriate to go back into those markets. fares have risen in those markets in recent years. they have been shared by easyjet and ba. we will and that with flights 1999 each way. one things that has been misunderstood about ryanair is

about 23% of our passengers are traveling on business. we have never made an effort to provide them with services they want, such as fast track through security, reserved seating and those kind of benefits. developyou will see us those services over the next number of months. it is to improve the schedules, add more european capital city airports. and the announcement of the new flights is part of that effort. to provide a wonderful product for business people. we think a significant proportion of the 23% of our passenger base is traveling on business and would pay us a small premium. >> where do you way and for the data --?

the runway will be about 10 or 15 years delayed by the time he gets through all of the planning inquiries. it is nuts. we have had the view that we should remove the clinical interference from runway x spansion -- runway expansion. you would have a third one in heathrow, a second one in gatwick. stanton is the only airport that -- they can build a run would -- they can build a runway. the government will stop blocking this development and say, if you like a plague on all of your houses, you can all build another runway.

problem with airfares in the southeast, they have been held up by the ba over the last 20 years, constraining runway capacity development. idioticting time on ideas like boris island. are airfares looking like the summer? you are no longer just competing against easyjet. you have lufthansa. easyjet has never been able to compete with us on price. they have done a good job of going after some of lufthansa and ba's business passengers. ryanair is copying that trend. they are doing so with a huge cost in price advantage. our principal competitors across the european space are ag -- r i

.g 00 are iag and lufthansa the business continues to involve. >> thank you for your time. that was michael o'leary, speaking to us on the phone from dublin. by spring.strike what effect it could have on food production. ♪

>> welcome back. they report was just released earlier this morning. lower prices may not be here for long. el nino is expected to strike this year and it could royal agricultural markets around the world. good morning. thank you for coming in. let's look at the price and the commodities market. how are commodities markets pricing and the threat of el nino? >> we are comfortable. we have not seen too much of an impact. risktle bit of a weather

into the tropical commodities. see -- fromere you el nino. at this point in time, prices are fairly comfortable because the markets are fairly comfortable. >> if prices do go up, that would be a silver lining for some countries, like result. thehat happens is that southern parts of brazil tended to get more rain. this depends on the strength of the el nino. if you get a strong one, you could see huge influx of reign of -- of reign and precipitation -- rain and precipitation. you have parts of the coffee region, which have been so dry, they would welcome some of the rain.

seems to be the bogeyman of the weather system. it does not seem to be well understood. how accurately can you forecast for it? >> it is difficult. if you look at 1997, 1 of the memory, itn recent caused so much drought and crippled the rice and various tropical commodities in asia. you had one in 2006, some people argue it could not be considered an el nino because it had a mild impact. aperture inn the the pacific ocean, it has a big bearing. it will cause alarm. it does not matter. when it comes to food, there is a lot of emotion involved and crops and uncertainty. >> the u.s. is experiencing

terrible drought in the u.s.. a lot of people are rationing water. beef prices have gone up. what is your outlook for the american market? isin the u.s., the wheat, it dried. -- capitalrkets markets -- will be enough to move some of the drought? it is too early to say. there are big? questionre are big marks about that market overall. concerned should we be about scarcity? you hear numbers that the population on the planet is set to be 9 billion by 2050. have the one hand, you

climate change alarms. it will have extreme weather event. that tends to have huge impacts on crop yields. what i would say is that parts is -- per capita. if prices rise, you will see investment in yields and technology. i think mother being the necessity of invention, we think we will see productivity pick up and the scarcity should -- nobody wants scarcity. they will do something to invest in that. >> does that mean long-term price stability? >> eu will see prices rise to a level that will encourage enough investors to get the right productivity level. coming up next, job stay in america. the latest labor report arrives.

will we see fireworks? we will be live in new york for a preview. ♪

>> welcome back to "the pulse." gainer on the

stocks. the french payments company is in talks to acquire a dutch online service provider for 820 million euros. -- shares are down after issuing a trading statement. it has seen a further seen in trading in profit shortfall. it is the biggest -- it is the biggest construction country -- company. uber has been deemed compliant. london when on strike in -- have this -- cabs went on strike in london. chart of thee aussie dollar against the u.s. dollar. the currency is tumbling after glenn stevens said it is overvalued.

he said that investors are underestimating the chance of a significant fall in the currency at some point. a drop in retail sales is weighing on the u.s. dollar. later on today, it is going to be jobs thursday. for more on what to expect, let's head to new york, where we are joined by mike mckee. -- what shouldwe we be watching for. have somet interesting light shed on the u.s. labor situation. -- 200 15,000 jobs created during the month of june in the united states. that would be the fifth .onsecutive month of over 200k the unemployment rate expected to stay the same. 6.3%. there is some meaning to the downside. for different reasons, some

people get more jobs and some people stopped looking for work. or not look for whether the labor market is tightening. the big number is wages. did americans get a raise in june? labor market gets tighter, it should bid up the price of labor. we have not seen that happen. americans are making 2.1% more on an average hourly basis than a year ago. inflation is running 2.1%, so no one is getting additional pay. we are expected to see a slight rise during the month. we are not expected to end up with a raise. it is going to be interesting to see if the numbers can exceed expectations. the case, everyone goes off for the holiday in a good mood. >> more people back in the workforce. are they making more money?

thank you for joining us. that doesn't for "the pulse." bloomberg.e on tom keene is coming up with his team alive from new york. ♪

>> follow the money.

at pimco, the marginal money is moving out the door. this year.fford it adam johnson and tom keene. it is a hot dog fourth of july. good morning, everyone. as is bloomberg "surveillance." live from our headquarters in new york. it is thursday, july 3. joining me, adam johnson. alix steel is with us today because scarlet fu has demanded the day off. >> amazing how she put that together. >> i am off next week for a conference. >> 13 days off. that is shrewd. >> let's get to the brief. it is a busy one. >> euro area manufacturing services area doubles in the second quarter. u.k. services rise at a record pace, jumping. we will get the unemployment rate in the u.s. the unemployment rate expected to hold steady