>> taking on the dollar. in an exclusive interview, france's finance minister says europe needs to bolster the use of the euro in global trade. -- charging rival to consolidate the market. >> and merkel in china. the german chancellor and top executives push for more trade between the two countries. ♪ >> welcome to "countdown." i am ryan chilcote. >> and i am an edwards. it is just after 7:00 here in

london. >> stay with bloomberg. we will hear from the owner of -- home to alberto can't adore and one of the most innovative voices in professional cycling. >> and we will be talking to novak djokovic the day after he beat roger federer to reclaim the number one ranking. that is coming up later on in the program. france's finance minister has occurred euro area governments to bolster the euro in international transactions to counteract the dominance of the dollar. this comes after the bank was fined nearly $9 billion in sections violations. we spoke to him and an exclusive interview. >> we sell ourselves aircraft in dollars. is that really necessary?

i do not think so. airbus can sell in euros. it would create stability for airbus and air france so that we can avoid this exchange rate. >> can the euro be an alternative to the dollar considering that 60% of the central banks are in dollars? can diminish financing costs in our economy by laboring -- by labeling more and other currencies. this is not a fight against dollar imperialism. ,he goal is to find stability to reflect the financial and economic reality of the world so that the world can be more stable. >> do you think we are going to see more european banks get a f ?ne, just like bnp did >> yes, other european banks are concerned i the same western street but the past is the past. the u.s. justice system is independent. but we are looking at a future. it is in the interest of

everyone to create a better balance between our currencies. >> is the french government going to take the lead in this battle? >> france is in europe, so it is up to europe and the eurozone, in particular, to lead this argument. >> jonathan ferro joins us for more. should we be surprised that the finance minister of a eurozone country is saying this? >> i am not surprised at all. this is just a hangover from the issue.np paribas obviously, one of their babies took a big fine and they are not happy about it. been fined foras conducting transactions in dollars with countries that have been sanctioned by the u.s. clearly, they think that is a problem and causes concern. they are looking at ways to address that. to me, you have a bigger issue. you have a bank that committed a crime. it is a very serious allegation and there was a serious lack of oversight. for me, that is the big issue.

what is interesting going forward is that i see an economy led by these officials that are beating a drum similar to the one the u.s. beaded with china. >> how realistic is it that they could decrease the use of the dollar? oil is traded in dollars. planes are bought in dollars. we heard from the ceo of total thingsthat we can quote in dollars, but by them in euros. market, 90 percent of that has the dollar on the side of it. the dollar is absolutely massive. yes, you can extend the use of the euro. french officials are, on one side, talking up the use of the euro while talking down the value of their own currency. the other issue for me is that french politicians are at a french economic conference and the biggest issue for the finance minister of france is the use of the euro and not the

french economy? they are calling for the french economy and the guys who oversee it to do something about it. when the french finance minister shows up and his big agenda is the use of the euro, that is a problem. socgen was with us earlier. he said it would add to their abilities to make the euro a day player in global trade if the french were to go out and buy more stuff. he was talking about the eurozone generally. and be a bigger player, you have got to consume more, import more if you want to have that. >> one of the things we have seen over the last few years is the current account surplus where you see europe and the ledpean union, particularly by germany, exporting way more than they import. i am not sure how much they can argue this. >> what i find most interesting is that the french sound like the russians. >> yes, they do.

a lot of people are talking about the exact same thing. the u.s. has been so hostile towards the russians, they are encouraging russia and china to look for an alternative to the dollar anyway. >> it is angela merkel seventh trip to china while in office. earlier today, she met premier li. top of the agenda is to boost trade ties. for more, stephen engle, a man who knows more than almost anyone on china, joins us. some big deals signed between the chinese and german companies today, yes? say about what jonathan was saying is that the chinese have been saying this about the dollar for a long time as well. andyes, chancellor merkel premier li talking about a whole host of issues today. she was in switzerland yesterday. the talks included cyber security and merkel committed about the latest u.s. spying allegations saying that if the reports are correct, it would be a serious case.

but you are right. trade is the real focus of her seventh trip to china since 2005. merkel was given a full military welcome in beijing this morning and will meet later tonight with president jean tang -- xi jin peng. premier li said he will head to germany in october. china-german ties were described as being an important strategic partnership that has developed on a very broad sound -- a very broad foundation. a lot of deals being signed. are many is china's largest trading partner in europe and china is a key market for goods like audi, siemens. she brought leaders from many companies, including deutsche bank, lufthansa, airbus, vookswagen. vw today announcing a big expansion of production. euros worth of vehicle

plant. signed a deal with fellow star lines member, air china. no details, but i am sure it has to do with more cochairing. and airbus will sell helicopters to china. no specifics, but we are hearing that the deal is possibly for as many as 100 helicopters being told -- being sold to china from airbus. premier has also been talking about the economy. what has he been saying? >> he is a knowledge and -- dging the downward pressure that we are feeling in china and saying that they will keep their composure and not adopt strong stimulus. has been the fear, that they would go back to what they did in 2008 and pump the economy. , they will increase the strength of targeted measures and open up. that is something that chancellor merkel was pushing

for, including reform of the government approval process and lower market access thresholds. >> thank you very much. >> obviously, angela merkel in china, as he was saying. she would be looking for anything that can boost the industrial output for germany, disappointing compared to forecasts just in the last few minutes. month infor a third may. another sign that europe's largest economy is perhaps taking a little bit of a breather. fromction fell by 1.8% april. the economy ministry in berlin and out these tickets this morning. economists forecast output that was unchanged. this certainly coming of a negative surprise. as stephen just mentioned, while angela merkel was traveling in onea, they learned that agent might have been a double

agent working for the united states. hans nichols brings us up to speed with this story. how did they catch this man who has been allegedly on both sides of the line? ring us the latest. >> they caught him because he allegedly offered the same spying services to the russians and that prompted an internal investigation. then they find out that he works for a german spy agency and he was double dipping and doing work as a double agent for the u.s. realutrage here has been and palpable. merkel learned about it in china, talked about it with business leaders. yes, there is a salacious aspect to this story, but there is also a policy impact and that is what does this do to trade talks? it will be increasingly difficult for angela merkel to bring germans along with the idea of a free-trade agreement if there are allegations of spying. here is what the interior minister had to say about this. remember, we spoke with him a couple of weeks ago on the same

issue. the is what he told newspaper. "i expect everyone to cooperate promptly to clear up these allegations with quick and clear comments from the united states as well." the u.s. ambassador was summoned on friday. here is what did -- here is how the alleged blatant transfer material. he had an app on his computer that was a dummy application and allowed him to transmit data. a dummy weather app. this is spying for the 21st century. it is a great touring. we cannot get enough of it, but it does have serious implications. >> thank you very much. iraq, army generals have destroyed vehicles used by militants in the north of the country. that news comes from the iraqi military. the consulate has yet to cash the conflict has yet to impact oil prices. marjorie spoke

exclusively to us at the economic form. -- forum. >> it moved a little bit from after what4 happened. but it is back to $110. for everything in the market, there is a risk ring him. what the market is well-balanced. >> we will take a short break on the program. of strength sign for britain's economy. how will governor carney sustain it? we have that story and the macro theme driving european markets right now. stay tuned. ♪

>> time for today's company news. i is said to be planning an ipo for its telecom business. the sale may value the company at one billion euros. the company has 8500 employees. bmw has halted production at south african plants because of a strike leading to violence. the strike by more than 2000 --

200,000 workers began on july 1 and threatened south africa's any festering entering output. wage talks broke down after the union rejected an improved offer. leisure will buy video gaming technology for about $1.3 billion. makescrat leisure gambling machines and is looking for an increased presence in the u.s. market. >> welcome to "countdown." 7:16. time in london is >> the pound reached a 21-month high against the dollar. here to discuss that and more stories driving markets for the global 2014 is barclays head of asset allocation. let's start with the pound. i showed up in this country and it was 2.10 to the dollar. every time we went back to the states, we got an extra suitcase. it went down to the 1.30's. where do you see the pound going

from here? >> i think it will do generally well against most things eco-the bank of england will be the first major central bank to be raising rates. against the dollar, i would imagine we are probably about as far as we are going to go because the risk is that the fed is going to start needing to move rates as well. >> what could trick the uk's economy up heading out to the rest of this year and into next? is it going to be something around the eurozone and the fight over deflation? is it the housing market in the you quake a -- in the u.k.? risk?political >> there are still a lot of questions about exactly what happened in the u.k. , fundamentally, does this economy has a lot -- have a lot of momentum behind it? is the need to recognize that the u.k. is a very interest-rate-sensitive

economy. if the rates go up, the impact could be quite significant. >> talk to us a little bit about the u.s. and where you see the market, in general, going be we , topast 17,000 on the dow be exact. do you see that continuing? do you think that can be sustained? >> i think the u.s. equity market is the market that we probably worry about most. there are two reasons for it. one is the valuations are beginning to get stretched. i would not say it is exceptionally stretched, but we are getting there. our biggest concern for the second half of the year is that u.s. inflation is starting to go up. u.s. rates probably need to go up and the market is not paying any attention. could we still have a positive return in the u.s. equity market the second half of the year? maybe, sure, but it is not going to be a particularly big one. >> do you think that the fed is behind the data, behind the

reality of what is going on in the u.s. economy? should we be hearing some more hawkish thoughts from the fed? .> it is a tricky word the truth is, inflation in the u.s. is picking up. it seems to be a trend that will be sustained. the fed is telling us we should not worry about it. i think the worry is that the market seems to be of a view that the fed has already decided .hat is >> even though they say it is dependent on the data. >> they could easily say something more hawkish anytime in the next few months. suddenly, the entire sentiment started -- starts to change. >> you mentioned that the market is punchy right now. i'm -- i noticed that forward forecasts for earnings and p/e ratios go down a bit. the valuations are only getting

more -- i expected the valuations to only get more expensive. that is not necessarily the case. does that mean we could have further to run? >> i always worry about forward p/e because part of that is forecasts where earnings are going to be. you look at adjusted p/e, 10 years of earnings that we already know, we are sitting at the highest level we have been at quite some time. p/e is a tricky thing. notainly, forward p/e is that bad, but that requires the forecast to be correct. >> so a correction in the last 12 months -- in the next 12 months? what if we are going to get a correction, we think it will most likely happen in u.s. equities. we think equities are ok, but the u.s. is where we see those risks. >> jim mccormick stays with us. we will get more from him on emerging markets when we come back. ♪

>> welcome back to "countdown." >> time in london is 7:23. >> we are back with jim mccormick, discussing macro stories for the second half of the year. >> let's pick up on the emerging markets theme. you mentioned that the fed could turn course at any moment. what would that -- would that do to emerging markets what he did when they first talked about

tapering? >> the method we have on emerging markets is that they are in a much better position than they were 12 months ago. one is that the macro picture has improved. from an investor point of view, the more important point to make is that risk premiums are much higher than they were a year ago. better places than they were the last time we had a pick up in rates. >> which emerging markets do you like? i have got to ask you about russia because i talk about russia all the time and we were discussing price-to-earnings ratios, which are very expensive in the united states. they are very cheap in russia right now. where does that fit in with the emerging markets that you like? >> firstly, the asset class that we prefer is equity. it looks like a good asset class when growth is improving and rates are going up. we like japan, mexico, poland, india. i think there are a lot of

different places in the emerging market equities that look attractive. >> you like india. they have a budget later on this week. indonesian elections coming up. are you looking for this week to deliver anything in particular on your emerging markets agenda? >> i think the india budget is going to be very important. this is a story that is a very structural story that people need to be part of. in thepositive on across-the-board. indonesia, we need to see what happens with the election. it might be too early. and russia, it is super cheap as a long-term investment. you know what the risks are. they seem to have gone down a little bit in recent months. and the sox are very cheap. russia,u are talking you need to talk oil and commodity prices. what is your expectation? >> we have been increasingly bullish on commodities this year. we have been bullish on base metals. we are now bullish on oil as well. oil has all of the stars

aligned. you have supply going down, overcapacity, spare capacity is going down, geopolitical risks are picking up. >> you could have said that last week or the week before last week and you would have sounded very smart. $114il kind of went up to and now it has come off to $110. looks like it is headed towards being range bound again, no? >> you had the geopolitical spike around iraq. if you look at the bottoms up on oil, it has been pointing to upside for a very long time. curve is not pricing that in. >> do you buy around the m&a? do you target companies you think are going to be bought up? >> we do not, but as a trend, we are definitely in the part of the business cycle where m&a should be a driver and we are seeing that. >> thank you for joining us today. jim mccormick, global head of

asset allocation at barclays. coming up, egypt faces an uphill battle with their budget. higheriving fuel prices salt or exacerbate the crisis? we will discuss that next. ♪

♪ >> welcome him. i am anna edwards. check.o now to our fx ds.thank you, anna edwar a lot of potential for the euro to weaken. one dollar 30 cents, a slight drop from where we are, and the ecb is starting to do their bit gradually, and the federal reserve, led by janet yellen, are they going to do anything?

will they go the other way? just noise. minutes out from the federal last meeting. you add in a stellar jobs report, and that maybe one of the triggers to send the dollar higher. >> thank you very much. let's get you some details on the top headlines this hour. theykraine government says have taken two cities from pro-russian rebels one day after government forces regained and thein one area, contract in iraq has yet to impact oil prices according to the ceo of a large oil company who spoke exclusively to bloomberg television at the aix-en-provence economic forum. >> after what happened, one hundred 14, but it is back to and as for any market,

, but thea risk premium market is well balanced. >> and know that djokovic defeated roger federer for the wimbledon title, eating the grand slam recordholder in five set to reclaim the gentlemen's singles trophy, and we will be talking to the champion, know that djokovic, later on today, and that is coming up on bloomberg. welcome back to "countdown." anna edwards. >> and i am ryan chilcote. >> they are saying european car market is going to rise three percent to four percent this year, and they had been rising between two percent to three percent in 2014, so they are looking for something more bullish than what they had given us. volume this year, also saying second-half markets will develop in line.

theome weakness in asia-pacific region, down. mostly good news there though from renault. forthen a company has filed insolvency, and the ceo has resigned after admitting he submitted false accounts for at least the past four years, and for more, we are joined by manus cranny. let's admit it. it.everybody knows i had never heard of it, but it is an interesting raking headline. to be fair, i was thinking, wow, this is interesting. this is a company that basically allows you to hop on to your wi-fi. it is like hot spots. wi-fi around the world. there are 70 cities, buenos aires, hong kong, new york, so no matter where you go, you can

hop on. manger, into a pret a but they listed in 2010, and it is all a fabrication, a charade, delusion, a live, whatever words you would like to use, hard and heavy, because they filed for bankruptcy. twitter,umped on to garcia basically saying i am making a voluntary confession in , that everything he is lodged over the past of for your years would seem to be somewhat spurious. x could get better. >> a caped crusader. >> the story of the day. gotham city. companyy, they go after takingtion, and they are

aggressive short positions on and,nies, and to that gotham city, which does have a telephone number, they basically say, look. are barely 10% of what they are stating. , andhave been written up one dropped by 50 odd percent a day after the report from coffin came out, and they are challenging them on a legal basis, so they do have form, so to speak, but this is quite a dramatic one. >> have just got 10 seconds. tell us more about this ceo. >> this just shows you. he comes from a background of brokerage and wealth management, etc., and to me, he is a real risk taper. tosold his high school team finance this. he turned it into 300 44

million, albeit lies, and then he sold it twice, the second time to reinvest in the company. he has obviously got a very patient wife who may not be so patient now. >> the need to be patient. coming home soon. >> manus cranny, thank you very much. bracing themselves for further price rises after the government increased the cost of fuel where asisi said it is the only way to stop them from drowning in debt. not a move that is exactly popular. >> that is right. look. prices or removing fuel subsidies is not usually good for one's political health. hosni mubarek, you can imagine ofwould have been taken out office sooner had he done so, but, yes, rising, and the

president banking on a couple of things and reasons why this will not be a massive problem for him. ifst of all, egypt and snow there were massive protests, and there were isolated ones over the weekend, then there could be some kind of a crackdown. second of all, he is hoping egyptians will heed his call to make sacrifices for the greater good of the egyptian economy. of course, as fuel prices rise, that is going to filter into rising prices of many other products, and the poultry division of the egypt chamber of commerce, for example, say chicken prices will raise by one quarter in the coming days. as fuel costs more, people will consume less or at least be less wasteful, and then you would not have blackouts and the stifling andtian shimmer -- summer fighting with the air conditioner at the same time.

>> had damaging hasn't been to the egyptian economy? >> numbers are just mind-boggling. over the last decade, egypt has spent almost $100 billion on fuel subsidies, together for foods,es of staples like and one quarter of egypt's budget contribute into a budget deficit that has exceeded 10% of national income, so something has to be done. otherwise, egypt economy is not sustainable without the largesse of the gulf monarchies, who happened channeling billions of dollars to egypt. egypt used to be an energy exporter is now an importer because they had to end up using all of their gas externally as opposed to exporting it, and that is perhaps a positive consequence is more energy cooperation with israel. over the weekend, a minister was quoted as saying that one group that has egypt operations, it would be no problem for them to

egyptianraeli dass for use because egypt needs all of the help it can right now. >> thank you very much, elliott gotkine reporting from tel aviv. let's bring in steve whitmore on some m&a. according to people familiar with the matter, but now we have had confirmation that one company has said they are acquiring a swiss business of flavorings for all kinds of foods and beverage items. and they are saying this will allow them to enhance and improve their products. despite the amount of money changing hands this year, the transaction is expected to and they are year, measuring the enterprise value of the business. expanding their food

ingredients offering. >> coming up, the top macro story that you need to drive your trading day. stay with us. keep it right here on "countdown " on bloomberg television. ♪

♪

." welcome back to "countdown anna edwards. >> and i am ryan chilcote. >> we have manus cranny and others. we have got german industrial output in the last hour coming in below estimates, 1.8%, and -- it iss had expected one thing to talk about weakness in any periphery of the eurozone and what pressure that puts on the ecb, and it is another thing when you talk about the heartland of the eurozone. orders were down, confidence was softer, unemployment rising. you are right. this goes to the heart of europe. things are uncertain. the imf, christine lagarde over the weekend talking about emerging markets of winning the heartland but get ready for

perhaps some adjustment in the perspective, so futures are a little bit lower at the moment, and this goes to the heart of europe, but the other thing would be this, and i think this probably ties in -- john has just come back from the states. but we are going to talk about rates. goldman sachs, how quickly will the fed raise. >> you have been called worse. >> indeed. they are bringing forward their real-time. this is very, very important. so they are going to move their view on rate. they say the u.s. will hike in the third quarter of 2015 as opposed to the first quarter of 2016, and the reason why i am focused on that, that has got a big impact in terms of 10-year government bond yields, and

treasuries are rising, and they are wider than they have been against the rest of the g-7's. you have got the dollar up. you have got a challenge for the mortgage market, and, of course, -- ties in with the >> federal reserve minutes that are due. janet yellen not giving anything away. she talked in the imf's speech last week about using map for potential policies for defense, and when you look at some of the forecast for where interest lookinge going to be, at 2015, 2016, and you see a wide dispersion. some are predicting rates below one percent, other looking north of four percent. and the big issue there is inflation. is inflation going to start to move higher, and what is the fed going to do about it? on thursday,eport

wages carried on an 0.2%, but wages are a lagging indicator. on, bit of a debate going thinking that maybe they should move ahead to try to preempt it. >> and that was the argument of the central bank of central banks, that this is something the u.s. needs to pay more attention to. >> not necessarily on that side. we have got a financial stability issue, and central banks need to have a look at this, it and one of the big issues right now is in the fixed income market, where you see the spread between investment-grade bonds, investment grade credit, and high-yield junk bonds. it is central banks that have pushed people out to riskier assets.

portfolio.sed on his >> this makes for great reading. a really well-known fund manager in the u.k., so when he invests, people watch, any of come out with this portfolio of where he is putting his money. bank. astrazeneca is his top number one pick. over eight percent of his portfolio. and he was in the middle of setting up the funds, and he did not have the holdings, said to be fair, he declared these positions. i think it just ties up nicely. and others.oh, and i went to go back to the imf getting ready to downgrade. portfolioreating a which is looking at the global

economy. altitude. at full i like it. i will leave you with this other one stock. i find it interesting. and have a look at next. has not owned this stock since 1999. any says he has invested in the retailer as a stocky is not owned since 1999. at first class, it does not fit with our overall cautiousness, but there is a perspective on capital allocation. about the next directory, and now it is about the next in line. coming up on the break, it is 7:48, before the first trading day of the week, and we will look at thoughts before we get started in trading for this week.

stay with us. ♪

>> welcome to "countdown." i am ryan chilcote. >> and i am anna edwards. david, so early on a monday. >> i am sorry.

good morning to you. we have had records in new york, the s&p and the dow, triggered onthe nonfarm payroll friday, coming down to 6.1%, and john said in the previous section that janet yellen is very, very uncommitted, but we have got to a point now where we have got the s&p 500 at about 17 times earnings. we have got the dax at 14.1 times, and we have got the cac , and afterfootsie that dreadful 2.9% minus growth in the first quarter, you have some reason to be relatively optimistic, and we will know what a whole lot more next week. >> even if we say we will catch

up in the second quarter. that they are just punchy. >> much too punchy. industrial production figure, totally understandable. angela merkel, deeply and you are vocally in love with newton -- putin. to beijing,tled off has and she, and there she is, doing great big deals, one with air china. >> every political leader. >> but who is on the top of the pile? germany, so if you strip germany out of the european union, thanks very much, you can have it. >> so you think those markets -- >> i am not interested. 30 or 40 stocks are

international, and it is very unfair to say that they are barometers of france or germany, but my point is because sentiment is so negative, that cumin columbusk -- dark clouds. >> there was a suggestion over the weekend that there might be a revision to the global ,orecast from francine lagarde even after the u.s. rebounds. >> i would not read too much into it. itrt from her relationship, around the world, they know exactly what is going on, and this recovery in the united states is pretty dramatic, and i am pretty upbeat about the united kingdom. away fromare one year the election, and and david and isn't gung ho,

life grand, and i would do exactly the same thing. but, you know what, i actually believe it. one of the figures i love, in the second largest manufacturer, we relied on europe for 60% of those sales two years ago. 35%. it has come down. big, beautifult, world out there. >> a cynic of you, david. >> well, i will take that. >> we don't have much more time. two stocks you like. >> two insurance companies, one for recovery and credential because we think they are gung we havewe have had one watched very closely, a software space inand watch this the next six months. >> ok, david, as always, good to see you, a market commentator.

is next, andve that is coming up in just a couple of minutes. >> we will take a short break here on bloomberg. we will see you on the other side. ♪ .

>> welcome to "on the move." i am anna edwards. we are moments away from the start of european trading. here with me now is manus cranny and hans nichols will join us shortly from abroad land. let's start with you. >> a little bit of a drop in industrial production. the eighth straight month. through all of that and goldman sachs has a change of view in terms of where they are going with rates. a lot to get us through. back to you.

>> thank the yield. those are some of the scenes we are watching. individual stocks could be on the move. m&a speculation and a number of deals announced. thes get more details on european market and how they are opening up this trading we go with a manus cranny. >> let's see how they are performing. industrial production in germany dropped for the third straight month on the back of orders being lower. 0.25%. it is on the dime side. the imf talking about growth on this map. view wait for the updated of growth. that will play into a lot of industries who say it is an adequate. emerging markets will avoid a hard landing. could it be the next move would be global growth?

rates. goldman sachs have moved their view of where rates will ago and the speed and trajectory. as far as the u.s. is concerned, they are bringing yield a high year to the third quarter of 2015. set are pulling forward from the first quarter of 2016. mitsubishi and a load of others. i want to bring your attention to this. 10 year bonds. and the widest of the u.s. has been relative to their g7 peers in almost four years. that begins to change perspective of what might happen with the differential in terms of the dollar and the euro. there are companies that are also very much in the spot. . a strongting for snl performance in terms of actual physical posting. pharmaceuticals never far from a

m&a story. we have in "the telegraph that an additional bid for shire. a global basis for this year and in terms of the movement, the direction you see in the dollar is to the upside this morning. we have the minutes from the fomc, the federal reserve meeting. we have one the most accurate forecasters who have been monitoring at a bloomberg. they said we are misjudging. the first quarter of 2015, that is the dollar perspective. on the euro, the most, traders are the most -- they are taking though most net short on the euro. the most accurate forecaster on a euro by the end

of the year. back to you. >> thank you very much with the details we are opening up on the market. let's get another outlook for the second half of this year. we are joined by a chief investment officer. the warm weather dissents in london, the summer, in full summing -- in full swing. when we had in the markets. head into the markets. where are we for you in the market? >> good morning to you. we take the view that this year will be pretty good for equities. it will not be issued out year like last year and we had a starts with a roller coaster changes from growth to value and

plunging back again. now, we see that you as earnings coming up -- u.s. earnings coming up. and soft in terms of economic growth and that is coming through accelerating revenue. >> the second-quarter earnings season fast approaching. do u.s. companies need to justify the multiples they are trading on? numbers of that impress? >> yes, we have had a bit of downgrading. so they can beat. season is quite crucial that we want to see both the revenue line and earnings line coming through strongly. there will be, i suspect, a slow turn. as long as people do not slight too much, it's third and forth will be the ones where we pick up momentum and to justify somebody rates we are seeing in

the u.s. currency. like you are looking for correction? i am sure other commentators you have interviewed have talked about the volatility which has been low. and we have not had a major setback for a number of months. i would say it would be healthy to have a 5% setback across the world in equities markets so with the move. focus on the imf and growth forecasts and talk over the weekend of whether it will be brought to down. risk to thedownside growth forecast for you but mark -- you? >> yes. these agencies are catching up. they have not recognize how soft the first quarter was. ad perhaps we do not see second quarter as they might have been expecting.

yes, growth that forecast but it is more about how the second half of the year people atthis then adjusting numbers. >> the fed seems to be focus on wages and seeing wage growth in the u.s. should they wait to see evidence of wage growth? signalld the fed gives a around interest rates regardless of what is going on in wages which cannot lag behind? lag behind.not there has been a degree of wage inflation in a private sectors to date. that is a warning the bell for the fed. our anticipation is the fed is more likely to be behind the of thehan ahead because debt crisis. >> some banks are bringing forward when they think that

interest rates will go up in the u.s., you are not joining that? is a dangerous game to try to double gas. our view is we expect to see a half of 2014.rst timing more exactly than that. >> a tricky one. julian chillingworth stays with us. a look of what is coming off. taking on the dollar. why the french prime minister said they need to boost the euro. and another exclusive. the ceo of orange. , inside of pro cycling. we take a spin with an owner of a top tour de france team as it heads to london. we will take a break. you can follow me on twitter. see you on the other side of the

commercial break. ♪

>> welcome back to the program. you are watching "on the move." i am anna edwards. we are looking at one of the stocks on the move.

maleng the outlook on is business. they see the underlying cash of $260 million. -- raising the outlook on its mail business. you can see the impact. they're second-quarter results will be released on august and there will be more details. a bloomberg exclusive. after the record fine, the eurogroup is debating the use of euro in international transactions. the group as a lead up by france. we spoke to the french finance minister at the economic conference. group is a lead up by france. >> -- the group is led by france. -- >> airbus could sell to air france and could lead to more stability.

we can all voided the exchange rate. be equal to the dollar? >> we can diminish financing costs by labeling more and other currencies. thee is not a fight against dollar imperialism. the goal is to find stability and impact the reality of the world, the world can be more stable. >> do you think we'll see more european banks get fined like the bnp did? >> yes, there are other european banks concerned about the question. the past is the past. the u.s. justice system is independent. we are looking at the future and in the interest of everyone to trade a better balance between our currencies.

>> is the french government going to take the lead? isfrance is any europe so it up to europe to lead this argument. >> michael sapin, the french prime -- foreign minister. let's get back to julian shillings worth. julian, if you are a french this is selling to another french abysses, why would you use anything besides the euro? >> it has nothing to do with the bnp. argumentat there is an -- i think there is an argument around a banks overreacting. it will be very hard in the dollarerm to shift the off the currency and is the currency that continues to be recognized around the world. sapin will mention again.

in mywould be surprised working lifetime to see the dollar deposed. ,> litigation of larger banks sanctions and between countries, all of the cross-border activity , no surprise that we are hearing european leaders talking about it the same way that chinese leaders have talked about it. there seems to be an appetite for creating something as an alternative to the dollar. on the other hand, the realities of what they are, is it a pipe dream? >> in the short term it is. probably one of the most important curses in the world but they need to establish their bond market. for the euro, we would have to see more transactions done by u.s. banks and likely short-term. and, yes, it is a concern in the

way the u.s. wishes to reach out to not only legislating jurisdictions but taxing as well. >> it goes through new york. talking currency awards. is it something you are mindful of? >> yes. one should reflect, we are in a period of deflation. this is the first time that global growth is moving and harmony for a number of years. the u.s. at u.k. raising the rates. ker economiesea across asia. and more competitive. that could force others into devaluing the currency as well. >> julian stay with us. u.k. prime minister david

cameron vehemently opposed the election. we caught up with the commissioner who weighed in on younger -- juncker. we need to get past the situation and consider our interests. interests is to stay together. financial center. it is the entry point into a single market. we need this gateway. >> adjusting comments about the role in europe. talked to me that we a guest earlier this morning and they did a survey of ceos and asked them about the biggest risks. the biggest is political. they are talking about the

election in the u.k., next year and the possibility it might lead to a referendum on the eu. it seems to be something that is making you pay nervous. does a make investors nervous? >> we see the effect of politics on volatility. yes, we arequently, nervous about what is happening in the election in 2015. it will be a very close race. it is unclear of which party today.in as we stand as the city, a breakaway from europe is not a positive action particularly from a commercial standpoint. yes, there are a number of concerns. >> meanwhile, the eurozone fights deflation. do you see any big changes on the horizon from the ecb in the second half of the year?

>> i suspect you would have to see further softening in the eurozone economy. hopefulmario draghi is there will be a slow pickup across some economies. for aian, let's pause moment and talk about the telecom sector. we have seen a number of takeovers. orange is taking on smaller rivals to take on the lead off consolidating the french market to exit the price wars and we caught up with the ceo. >> i do believe in the french market is a critical size to support 4 operators. am -- i definitely believe that one day we will probably 3, which will to be the case in germany.

happen breaking back the french market to three. it would be a positive move for us. clearly, orange is not the best place to play this. not just -- [indiscernible] that moves the most competition. ad and -- we have room to see maneuvers. i hope we are still ready to tackle france and give competition. once again, it is necessary for the consumer and the investor and for the country. e richard of orange. sector.f m&a in that

you have wireless companies are getting to fixed line brought band -- broadband, is it a theme around europe? m&a will continue. what we are saying and they u.k. is what bt is doing. there are too many players. consolidation of the next few years is highly likely and more to come across eastern europe as well. watch this space. disruptor,ology a which are you buying into? view that taken the you probably do not want to invest directly in of those companies that are close to the cloud the ones that do back it up. businesses that are backing sensors.

we spoke to a company that talked about they are developing sensors. that is across western europe. it will save 10% in electricity. >> julian, thank you very much. a chief investment officer. underway. the spanish company will file for bankruptcy. more on that story. ♪

>> welcome to "on the move." i am anna edwards. company,ity listed has filed for bankruptcy after the ceo admitting he filed false claims for four years. what do they do and what did did they do? the buildingut of and we disconnect from bloomberg wi-fi at you do not have wi-fi on your iphone. [laughter] in hot pick up wi-fi spots. hong kong, new york. they have diversified. gowex have a diversified from europe and the target was 300 cities on wi-fi. the problem was for a company.

the exchange they recorded on what's mab and it was a cracker. in 2010, a came to the market and doubled in value. -- it came to the market and doubled in value. >> people are spending more money on their tablets and smart phones and they will be using more hotspots and a good business. >> it was based outside of spain. but it is staggering, isn't it? , the ceo filed false claims. that is the shocking part. and said --ter face theto consequences. what you have for me is a much one,r question at plate,

who signed off? and, does a throw a big question mark to the exchange? companies.re punchy big questions. >> indeed. what about other red flags about this company? nobody is sure who is behind it and somebody suggested there was something entirely wrong about the stock. >> of batman and robin. a fair trader. they came out with a note of the stock. by 60%.opped they said the revenue numbers 90%10% of what you said and and they have written up before. i will leave you with this. house twice. >> thank you. coming up, details of the

and whatr's china trip it could mean for german business. that is after the break. stay with us. ♪

>> welcome to "on the move." i am anna edwards. into the firstes trading day of the week. let's see how things are shaping up. a little sluggish. let's get a broader picture on the market. lesson get to manus cranny with the touch screen. quiteting out of bed nicely. stock of raised their 15%. they originally said they would produce $180 million. and that is up. t, they comes to renaul

have delivered nice numbers. deliveries are up nearly 5%. it has to do with a specific brands. they are saying it will raise by 18% so far. in the first half. ofi, when it comes to drug makers, there's a big conference. friday, theyof came out with a headline and that hurts he will hurt our numbers. what does it mean? the value of currency and that is what the french have been talking about all weekend. the second quarter there, vaccine sales are flat. and it is rising in france, 25%. anna, back to you. >> thank you very much. the bloomberg top headlines. the ukraine government said

forces have we taken two more eastern cities from russian rebels. regainedfter forces control over a strong cold. goldman sachs has opened a private lending unit in europe according to "financial times." aey are looking to build up $5 billion loan within three years. goldman sachs has not confirmed the accuracy. .ngela merkel is in china the second day of her trip in the seventh the trip. trade issues are at the top of the agenda. earlier, she met with premier league and she will meet the president later. for more on that story, let's go to haunt sunoco's who was in berlin. nichols whoto hans

was in berlin. >> when you talk about the second largest export market, you have to think about it in the contents of cars. volkswagen is talk about building. here are interesting numbers. china has about 250 million a licensed drivers and it is inected to go to one billion just 10-15 years. let's hope some of the cars have a safety precaution because it will be a lot of new drivers on crowded roads. you look at volkswagen. million this year and it expected to get to 3.5 million by the end of the year. remarkable numbers. volkswagen is challenging toyota. germany needs strong growth outside of the eurozone especially will will look at the

output number that came out today, third straight month it has the client. the economy is cooling a little bit. -- the third straight month it has declined. >> angela merkel has been weighing in on the latest spy allegations. what does she have to say? >> she has been measured so far. was she sat in a press conference, if true, there would be serious allegations and somebody has an obvious point. merkel learned that one of her own agents may have been a double agent also working for the u.s. national security agency. a remarkable story here and outrage in the german press and politics. a free-trade agreement between the eu a u.s. is less likely. merkel continues to push for more eastern expansion. >> hans nichols.

"the pulse" is coming up at the top of the hour. was a lot of talk about the fx. -- and we five mr. have a lot of lk about the avenue asked. -- the french finance minister was talking. -- we have a lot of talk about the fx. >> merkel is some all of these deals and she is pushing for frankfort to be a hub. we'll be talking to a guest compete.nkfort to >> would've heard from china and russia and a europe. thet of appetite for dollar.

sports. a lot of it. you could barely choose. i was born for the british grand prix in formula one. -- i was going for the british grand pre-in a formula -- grand ub formula one. withe crowd seemed to be roger federer. nova djokovic won. will it turn into attic celebration in his earning power? -- will in turn into earning power? he is back in the number one spot. federer and what it means in terms of business. >> and his earning power. the women'final was over in record time. the winner of the match, 30,000

pounds a minute. not entirely accurate because a lot of times she is not playing. and she has to pay her bills -- pay her bills. companies on the move. gaming technology for $1.3 billion. a gambling machine. it will expand its presence in the u.s. market. the company has agreed to buy nationale suisee. a newill merge to form group. they recommend their shareholders take it up. the conflict in iraq is yet to impact oil prices according to a company inrgest gas france. we caught up with him at a lease economic -- at a leading economic forum. >> what happened?

back to 107. a battle. and there is -- [indiscernible] thee is a risk premium in markets and it wants a balance. >> putting a price on gold. aswill speak to evy hambro though world's gold council meets to talk about their prices. we will be back. ♪

>> welcome back. i am anna edwards. putting a price on gold is what the world gold council will talk about. back evy let's welcome hambro. for comingery much on. do we needed to see a change in the way gold is fixed or does it need to be fixed at all? good question. the process started in 1919. very old. we are not involved in the trade. not exactly the best people to ask about it. however, a reference price that is sent each day allows commodities, gold as a commodity and currency to have their

reference to work from. if you agree to the contract linked to certain prices and having that fixed price as a reference is very useful. >> we do not have an oil fix, why do we need a gold fix? probably a historical think we are looking at. >> of foreign exchange commodity. a 24-hour trading culture. we need a good time to look at how it is done and whether we need to trade back. >> it will be fascinating to see what the world gold council is doing. it will probably evolve. it has been going on for nearly 100 years. >> evolution, not revolution. what about the price of gold at the moment? what you see the drivers? has been veryrket

difficult for the past couple of years. low.ve had the price at a bubbling away toward the top of the trading range. the fiscal market has been fascinating. very strong and supportive uprising of central banks. more than they have done in the past few years. we a competitive elections. china was incredibly strong last year. 100 tons a month. into 2014. production has fallen from the gold mining companies. the uncertainty around the monetary side of gold and what is happening with economic policy that is capping the market. the big liquidation on gold stocks in the first half of last year. year to date, you're not seen any gold going out of etf a you are seeing money coming into etf. we are picking up, i guess a

high level of concern. in our area where it is some kind of inflation and the uncertainty in the middle east. >> it starts to turn into inflation. a reason to buy gold and geopolitical whispers. a store of wealth and it is a store in times of uncertainty. it can be deflation driven, all of those things. forgold it had a role thousands of years. >> should we be worried? does. economy and what that mean of what we will seen and what does that mean for the price of gold? >> it is a big debate. nobody has a crystal ball of what will happen. the rhetoric coming out of europe and we recognize more stimulus might be needed.

and in the u.k. going in opposite directions. whaty over to the u.s. and will happen with tapering. what will you janet yellen end up saying? central elections coming up. all of that and it is difficult to forecast. >> in terms of global outlook, the chinese economy faces downward pressure. how much is a big player is the chinese and the physical gold market? >> sure. china became the largest. as you know, one of the biggest consumers of commodities across the spectrum. when china overtook india for the first time, it was a transformation for the gold market. that has continued in 2014. broader comments from a commodities and i guess, it is still going on in china going toward 7.5% gdp.

stimulus package. you hear about some kind of change every week in support of the economy. the comments out of the leadership, they are having a few difficulties. featuresave these coming through. >> thank you a very much. .vy hambro at blackrock an ipoaid to be planning of its networks. the seller may value the company at one billion euros. for more, we will talk to matt campbell in a few moments. the time is 8:46. he is here with us. apologies, i did not see you. why did they want to sell? >> it is part of a trend we are private owners, if

you want something you want to equity of doors, private firms are tending to think now is the time. we have, as you know, very buoyant markets in the u.s. and europe and lots of potential buyers. on the corporate side and private equity. lots of firms have raised large funds they need to put to work and strategic buyers, companies that are doing things. there's a lot of interest in m&a and shareholders seem to be rewarding it. if you have an asset to unload, right now is a good time. >> let's talk about other acquisitions. midland. we talked about this one last week. what is behind this move? >> abm is one of the biggest and most important american companies are most people have not heard of, a huge agricultural player. it is about diversifying from

under market like processing corn. this is a european business that makes flavoring for food and drink which is an interesting space. wayis trying to diversify a from north america and into a new sector. deals in going to see chemicals? >> this is an interesting space and intends to put people to sleep a but we all would eat. there were reports from bloomberg data there was a merger considered between syngenta and another major company, two of the biggest players. this tends to be a conservative one. it in turn to big m&a. >> matt, thank you. matt campbell joining us on the m&a story. behind the scenes of pro cycling. with an ownerde

of a big tour de france team. ♪

>> welcome back. the tour de france, the most famous race kicks off this week but not where you would expect -- northern england. we catch up with one of the top team. ryan chilcote reports. ♪

siberiahampion of before he met hundreds of millions selling russian beer and credit cards. he is pumping his money and energy into his very own a team. >> a professional business. >> and he wants to talk to me while he does a little riding on his own. to what extent is it for you making money and eu are a rich guy and you can afford it. >> [indiscernible] >> we are a week into the tour of switzerland with the one the best teams and in the business and we have full access. for the riders, just another day on the road. a chance to put in their weary feet up and rest their legs. an average approach will cover

30,000 villa meters per year. only a couple of hours before the race to the top of a swiss mountain. race and it is time to talk strategy. take it. [indiscernible] ♪ >> 200 kilometers ahead, high in the alps. he rides a part of every race. this is or cycling. -- business of cycling. checks ine bus, oleg with the team. they are in second place. the riders are on the final

stretch and not the only ones suffering. tinkov rushes to find a tv for the finish. a real good job. you can do it. it was second. >> the team finishes three seconds behind the winner. are you happy? >> no. >> not at all? >> it was second place. [indiscernible] i wanted to win not to be second. of the most one competitive, driven people i've ever come across. >> i make money. passion of my life. >> rising from humble beginnings

most --one of russia's entrepreneurs. >> i would never be so successful if -- [indiscernible] win and beeach me to the winner and fight. he is number one. >> ryan chilcote, bloomberg. end.st to the you have been doing pretty well. >> i am more than a weekend warrior. >> second-best. guy is a different. he is in a league of his own. a professional rider.

>> he is a businessman and does not want to lose a ton of money. >> from the business perspective, nobody has really one a lot of money. they do not share the advertising revenue with the team and that is what he would like to do. narrow hiske to losses. as a lot of people are saying he is one the most angela witchel people -- influential people in riding. if you could change the business aspect of the entire sport, he is about one. >> the richard branson off russia? interesting. he has been a serial entrepreneur is why he is compared to richard branson, who his friends away. becomes the owner of chelsea, can he change professional writing?

>> thank you. stay with us. olivia sterns is up with "the p ulse." you can follow me on twitter. see you tomorrow. ♪ . .

>> taking on the dollar. france's finance minister tells us exclusively that europe needs to bolster the use of the euro on the global stage. more m&a? the ceo of orange urges rivals to consolidate the raw -- the wireless market in another exclusive interview. and merkel in china. germany's chancellor and top executives push for more trade between the two countries. welcome to "the pulse." i am olivia sterns.