>> the ecb governing council member tells bloomberg the central bank does not need to take additional stimulus steps now. mandate see that our personal feeling is we are not there at the moment. i do not see an immediate need. stock selling off and equities slide over concerns over missed debt payments by a company link to do portugal's second-largest lender. infosys leading estimates. india's second-largest company

has one more orders. welcome to "countdown." i am and not edwards. i'm joined by ryan chilcote dan manus cranny. -- i am anna edwards. >> five straight days of declines and this all goes back to the horrible reminder in portugal. one of the main shareholders in one of the portuguese banks has temporarily missed some of the interest payments. this brings into question the five years they have gone through. banks have problems. likes a reminder of risk. what are you looking at, ryan? >> ukraine has not been in the headlines but maybe very soon. the rebels have concentrated themselves in the city of

donetsk. it's bigger than frankfurt. we will look at israel, iraq, geopolitically lots of things to get confused about. >> i'm looking ahead to the aviation gathering taking place in the u.k. starting on monday that runs for a whole week. we will be there monday and tuesday. we have a manufacturing backlog. they have seven years worth of work even if they take no more orders. we will talk about that and overcapacity fears in the sector. ferro satjonathan down for an exclusive interview with ecb governing council member ewald nowotny. we asked him whether investors in europe were too complacent about market risks. >> what we have now under the national scale is a discussion where there is one group where

we have seen at the last meeting that see the bubbles may be emerging and therefore it's ok to increase rates. we see on the other hand the position, for instance, of the urging especially europe to on this path and in this context, i see the ecb a bit of a something like a middle ground. we do an extension, but we do it in a cautious way and we are quite aware that in addition to monetary policy, of course we have the instruments of macro prudential policy. if there is a situation of the specific bubble that could emerge, for instance the housing markets, this is something where

macro credential instruments have to be applied in we have this discussion of course in the u.k.. we have examples of it already and switzerland and the netherlands. one has to see this in a broader context. >> many talk about me housing area, that's a separate area. when we see yield below 3% in spain and italy, surely that is just as unsustainable as it was when it was north of 6%. >> one should not ignore that there has been a substantial .rogress in these countries obviously markets are not honoring this process. thatas to be quite clear it is not the goal to have a uniform level of interest rates

all over europe. clearly, there are different general, ins but in think we have made quite a lot of progress of lowering the contributedit has to the stability of the eurozone. >> let's bring in jonathan ferro who was speaking to ewald nowotny. good morning to you. making some progress and structural reform. >> given the excitement over the significant lack of appreciation , so many people talking about complacency and you asked whether the yield below three percent are sustainable. i have heard so many talk about quantitative easing as well from the ecb. are there not still philosophical hurdles? he said to me and his personal view we are just not there yet.

on the euro, one dollar 36 -- $ 1.36. we have not come down at all. are you concerned? [laughter] >> his responses they define success as stopping appreciation of the euro. it's a far-reaching conversation where we talked about almost everything. on thisto get him versus every other government under the sign and he did not want to take that conversation with me. if you have followed him since the crisis, typically very outspoken. he toed the party line and he did quite well. >> the big issue for markets is whether we have deflation and that in a sense will dictate where policy goes next in europe.

>> they've announced these new measures of months ago. i will show you a bit later. he's basically saying they are starting to work. of course there will be a policy lag. already ang it's success. starting to bite at the moment. the question is always what's next? that's why i asked him about qe3. that has been exacerbated by your president. mario draghi says, we are not finished. the logical response to that is, what's next? his response is it is the asset purchase program, something they carry on over the next few months. is there a plan, a risk of something you're not willing to execute on? takes us nicely onto

markets and the preoccupation with portugal. is a slightly long and winding story. the two bank in portugal are 25% owned by his spirit so financial international.to short termissed some debt payment and this literally was like taking a firecracker and slamming it into the middle of a group of people in a pub. literally, yesterday the markets reacted. markets, peripheral bond yields rising. there is how portugal finished, down on the day. the banks around europe, the lows of 2014 and it is contagion going back to what i said to you. bank equals potential trouble. i should just actually say the santo has put a

barrier around the company about $1.18 billion. to need anygoing assistance. it's permeating as far as brazil. the bonds of this bank and brazil are actually falling. .ou're seeing a manifestation >> we started the week with everyone talking about how there was practically no volatility. complacency. all of a sudden -- >> a very ugly reminder that the sovereign bank government is alive and kicking. >> that's the point. the big discussion in the market is if it is a minor issue, related. is there any systemic risk?

they were looking at risk and the under appreciation for the last five years where everyone started looking everywhere else. maybe we have been very complacent. story and the headline was in case you have been missing the eurozone, this one's for you. >> let's move to asia. largest software terminus company, infosys, ahead of market expectations. here with more is business correspondent carline -- caroline hyde. not everyone was anticipating these numbers. >> sales up 13% as well. this company was really hurt by its exposure to the united states. the second biggest software services company, they design software programs and offer the maintenance, the service. when you are so exposed to the u.s. that they not only impose

visa restrictions that have the downturn in terms of investment, profitability and sales ebb away . 65% of sales come from the united states and the rest largely in europe. they seem to be turning things around. they brought back their previous chairman and he seems to have a hold on costs in particular. they have one contracts with orange, boston-based easton bank. these are really sizable chunks of business. >> they already have the likes of toyota under their belt but the show they can start luring companies back in. the desire, what we want from a software services company is changing and that's the challenge going forward. that they beat expectations does not mean the new ceo has any less work ahead

of him. >> you could not be more right. he has experience. he comes from term and software company sap. a californian guy. he has to stick to the aims laid out to boost the business, existing clients, but also new clients. a changing world. companies want apps to be developed and they don't let your just to have their own servers. i.t.want to be able to get remotely. they want to use the cloud. they want to have a computing services going forward. how did they stay relevant in this changing world? they have to implement these new fight aand they have to slowing market. i.t. spending is slowing off. previous estimates were for a

4.6% increase. a slowing market and also a on talent.in they've lost not one, not two, but basically a dozen senior executives and the attrition rate is at a record high, 19.5%. how did they stop that? >> you have to be a ceo the people will like. >> caroline, thank you. we will hear more from our exclusive interview with ewald nowotny. we get the reaction from ehrenberg bank senior economist live in the studio with us in a couple of minutes. ♪

>> welcome back to "countdown." >> let's focus our attention on what's going on in germany. they have expelled the top american intelligence officer in berlin over spying allegations. hans nichols is still there and he's bringing us more. >> good morning. this is a reflection of angela merkel's frustration with american eavesdropping, spying,

however you want to put it. they have asked for thisagreement. they have not gotten it. clearly upset about this. really the only one of public recourses left, check out the top american spy. some have him listed as a cia station chief. he is the top intelligence official in berlin and he can no longer be on german soil. timeave to go back a long in european history to get something similar like this. 1995 with the french, they expelled the station chief but that's a little different. french u.s. relations have always been a little more acrimonious. chauble says you can only shake your head at the stupidity. >> hans nichols reporting there

from berlin. bloomberg has been speaking exclusively to ecb council governing member ewald nowotny. we asked him what the main obstacles were to europe's recovery. risks arely, the main in the field of the economy. our main challenge is that we have to have more economic growth in europe. investor's behavior, everything has to be seen in this context. ecb thatare that the what we can do from monetary not a is unnecessary but sufficient condition for the upswing. >> let's bring in senior -- omist from ehrenberg

berenberg, christian scholz. schulz.tian >> spain and greece had slightly better figures which highlights that it is the core of the eurozone that seems to be slowing at the moment while the periphery is doing quite well. it seems to be a shift within the eurozone recovery towards the periphery and the problems are shifting away from the periphery towards the core. >> looking at the big value of euro. draghi said it is a huge problem. ny says he's comfortable

with it. this debate? in >> i think the euro is a lot lower than it was before the crisis peaked. it is not overvalued in that sense. the account is hugely positive and you could even argue -- >> distribution? >> the big swing has been the periphery. they have adjusted their external balances within this account regime. the euro was not the big problem. even countries like france, if the euro were the valued, it would not solve the problem. lack oflem is the competitiveness in the eurozone. in the short-term term for the ecb, there is the effect on inflation which is what i think draghi is worried about. >> when it comes to real lending , we've been talking about this for a while now, the ecb has not

passed on the companies. ratesou adjust the real for inflation, even though the ecb has been bringing them down, no one has the lower rates. actually seen significantly higher rates over time. now.ve the tl tro's how big of an issue is that economically speaking? flexible take a while for them to come through. the data we get on the interest rates is really behind the cursor we don't know what these things are doing. supply andn is demand. of course there are some demand issues. the recovery still in its early stages. they are using the cash for their first investments and many of them do not need loans. there should not be any problems or banks are fine largely. in the periphery, we still do see some problems with credit supply, banks rationing credit. that is where they're trying to

work. things will improve over time. hopefully these instruments will make a difference there. >> we will be back with berenberg's senior economist after the break. we will look at the reaction yesterday to the problems and portugal. markets very jittery yesterday. ♪

>> welcome back to "countdown."

still with us is senior economist at berenberg, christian schulz. we were talking about yesterday's market moving espirito santo. have we overreacted? were you looking for an excuse for these markets to come down? like you are reminded of problems we had previously in the eurozone and you look around for where other weak spots could be. that's a natural and good reaction. days, people will find out that we do not have the same problems everywhere. this is probably an isolated case. this is not the first time we've had a banking crisis certainly.

>> we have learned a bit. >> we have the asset quality review going on. this is something they can deal >> more worrying for you is the economy. why are german numbers getting worse? is that a russia affect? >> and actual production had 1.8%.own it's the uncertainty we see in some of the leading indicators and current indicators in germany. russia is a big export partner for germany. exports are certainly going down at the moment. it. would have explained >> if it's not the russians, who is to blame? >> people took off more days in may than they usually do. easter was late so many people

had holidays. >> it's a complicated business. atnk you, senior economist berenberg, christian schulz. calling for a cease-fire. we are live in tel aviv next. ♪

>> welcome back to "countdown." time for a quick foreign exchange check. dollar-yemen, yan rising over ,he space of a week about 0.75% the biggest weekly gain since april. -- the dollar yen, yen rising. there is no clear timing on a ate hike from the u.s. the minutes were quite dovish.

if you're hoping janet yellen will provide a clear sense of direction next week, you can pretty much bank against it. a cell note on euro yen. let's look at dollar rupee. on this a lot of time yesterday. but we are seeing there is the rupee is going through the biggest weekly loss in almost a month. this is more so to do with a little bit of reflection on the budget. probably more importantly is the fact that there is a line here that budget your for you had been washed away with concerns that.nding keep in night on the rupee. >> here are the bloomberg top headlines. in an exclusive interview, ewald nowotny tells bloomberg he sees no need for further action in the future but the governing body members did not rule out quantitative easing. aspects ishe main

the general economic development. what we see in europe is that we recovery but it is not a very strong recovery. >> diplomatic relations between germany and the u.s. have reached a new low since by allegations began. angela merkel's government has removed the top spy following cases of risk -- reported u.s. buying. ukraine has hit separatist donetsk killing more than 50 people as the european union gears up in response to the pro-russian insurrection that has rocked the country since march. welcome back to "countdown." >> i'm manus cranny. i'm ryan chilcote. >> bring us up to speed. we have seen some violence overnight. >> we have ukrainian military

surrounding the city of doughnuts, the biggest city in the east of the country and they look like they are moving closer to an offensive on a big urban center. that is where the separatists are holed up, if you will. ukrainian president, petro poroshenko, says the actions the russians are making these pro-russian separatists, they are ready for peace talks and the cease-fire which they are pushing for is not true. he has basically said we will move in and remove them. that is what might happen there. the water are we with the international debate -- where are we? they have verbally move toward sanctions. where are we? collect this is the conflict that everyone wants to ignore but it just keeps on ticking. the u.s. in the beginning was

really at the forefront but they pulled back. look at the eu. they have sanctioned 61 individuals, two companies. rees is tier one of th possible sanctions. they may expand that list later today and these are individuals, mostly insurgents, but maybe someone in president putin's inner circle that would not be allowed to travel abroad and would have their assets frozen. >> they're accused of fermenting the violence. >> at the same time it's a way to get at hooton. when you talk about a ground offensive in a city of one million people, this could get huge. we've had a few hundred fatalities and to this point. if you think about one million people, that's much bigger than frankford which is around 700,000. if that happens, we will get much more attention to this story. >> that is something we will be watching. world leaders try to persuade

israel to stop short of a grand offensive in gaza, mahmoud abbas has called on hamas to stop it rocket attacks on the middle east. elliott gotkine is live in the middle east. how likely is it that we see a grand invasion? ban ki-moon saying that they are on a knife's edge. >> there are still a possibility that it's happening. most people in israel and certainly the international community are hoping that benjamin netanyahu is bluffing. on theere are tanks border. yes, 20,000 reservists have been called up to duty and so far half of those have been called up and netanyahu is being egged on by the right of him to take a tougher stand against hamas. let's not forget that netanyahu has never been here before. groundme there was a invasion into gaza in 2008-2000

nine, he was not the prime minister and more than 1000 palestinians were killed that time around. on theill be fatalities israeli side and there has just been one serious injury where rocket fire hit the petrol station. this would clearly change if a ground invasion takes place. there would clearly be many more civilian casualties and right now we are right around the 100 mark overall including a number of militants among them. netanyahu is aware of the seriousness of a ground invasion if he decides to take that path. gotkine in tel aviv, thank you for that report. unilever is shedding more assets, this time slim fast. here with more is european business correspondent caroline hyde. times could go on and on. they are slimming down,

tightening their belts. slim a funny thing because fast was huge in the 1990's. >> 14 days of protein only. >> don't we know it? [laughter] >> slim fast as the brand where you get replacement drinks and you get the snack bars. it was worth a phenomenal amount of money and now we are seeing sales just continue to decline. the annual sales are now less million dollars. remember, unilever bought them for $2.4 billion in today's money. they are selling the asset. it's been a tough process. they have not got the money they

initially wanted. it was sort of speculated that they would be looking for a price tag of about one billion pounds for selling slim fast. my dad used to use it. >> my mother used it, a huge brand. that was before the atkins diet. it, this is just an asset disposal plan. >> trying to really get away from some of the food rands and focus in on beauty and the soaps they do so well in, tresemme shampoo. they recently sold ragu and bertolli in may for $2.15

billion to a japanese company. they recently sold skippy peanut butter and wish bone. massive in was also the 1980's. >> this is a trip down memory lane. companyhe inherited the , food was 35% of sales and it is now 27%. focus more on health and beauty. there is more margin and profitability in the get rid of the less important food brands. slim fast is one of them. toooving from slim fast much more exotic areas. the say bringing a slice of big apple to london is the ultimate culinary challenge. the mastermind behind the chain is attempting to do just that. on the me on a tour

floor 32 in europe's tallest building. ♪ >> coming through the open kitchen is very important. if something goes wrong, it easier to direct. >> they say this is a new york-inspired restaurant. >> new york is a multicultural city, like london. here to take bits and pieces from all of these different areas and take the dishes that i like to eat. after 10 years of eating four times a day, it's nice to have something different every once in a while. i do like seafood. >> do you think this is a good

city in terms of availability of food? >> all of our coffees. >> they come out like this every morning? >> can you make this a quick hack tale. >> it's about the water actually collects it's below freezing. you have the ice cubes and they melt very quickly. because there is oxygen in the ice. [laughter] it's very important to me as well that we use the best for our car sales. >> do you play?

collects you have your whiskey sour, overlooked london. this is a little bit of an insight into how i'll leavive my life, purified water ice. >> if there's going to be something dodgy, it's going to be in the water. [laughter] you was going to ask if have bought one of those. >> i've never seen a saw that big. i'm blown away. like them is a beautiful restaurant. it's about the theater of food. this guy is so into detail. bottom of af the chair that had a slight rip in a leather. he's a fascinating guy and wine is a big part of his restaurant. >> he's famous for his japanese food. london, bangkok.

this is a different look and feel, big cupboards, meat racks, beautiful food. i met a few recently and you will see a lot more food coming along from me. >> and more food from ryan coming up. [laughter] crosswinds, crashes, and a sprint finish, the latest from stage six of the tour de france. they will not be eating any of that. the food you need to stay in the yellow jersey. ♪

>> time for today's world cup news. the final between argentina and theany putting together sporting allegiances of the two living hope. they said they would probably -- two living popes. argentinian pope francis is a football fan and the vatican says he "might" watch the game. germany has the support and confidence of chancellor angela merkel. shaft willled mann need to focus but she is optimistic. help.y will win, i it will take a lot of concentration. i think it will be done.

my prediction is it is doable. >> injured brazilian striker neymar will be cheering for argentina despite the traditional football rivalry between argentina and the host region. he threw his support behind marceline a teammate messi. he said, he is my friend. he is my teammate. i wish him luck. >> i manus cranny. >> i'm ryan chilcote. , twormany versus argentina vastly different economies. we are looking at the data that .ould make a difference >> when we initially thought of how we could compare the economy and the football styles, our first start was the number of defaults. the problem was we could not tabulate them all.

germany has had about three since the history of the world cup. toentina has too many tabulate. first thing, gdp overall level of productivity in the number of average goals in this world cup. take a look at the numbers. 14,000 argentina scoring an average of 1.3 three goals. germany blows them out of the water. and 2.83er capita gdp goals per game. the productivity question is so crucial to an economy and a football team. routine .84.at the shock versus shots on goal and how many had to be defended by the keeper, they are down at 46%. not a very efficient team. germany, one of the most efficient which correlates to the river all activities. fifth the 7.6 productivity and

productivity and 62% shots on goal. debt to gdp ratio and team fouls. argentina lower than germany. germany fouls more and, lo and behold, germany does have a higher debt to gdp ratio. they are almost 80% and argentina down at 45%. that number is a little skewed because argentina has had so many defaults and brought down their debt. [laughter] do it.'s one way to massively insightful, hans nichols, and berlin. i was reading up and the other the long-termh investment strategy. they spent 14 years finding players on a really young age to really invest in and maybe germany takes that into their businesses. >> we look at all business angles, all money angles to all

sports which i have been tasked with. we look at how much the players are worth. germany, the players on the pitch in the final are worth $609 million. nobody thought they were worth that much because my children still have the match cards. find germany. it's not hard. argentina, 410 million but messi is 130 million if you want to get him. funnily enough, my seven-year-old daughter traded messi last week. we also look at how much, thanks to ing, bankers have too much time on their hands. >> it's summer. >>, the respective people of the countries are willing to pay to see their teams.

germans are prepared to spend 149 euro. this was done before they knew they would be in the final, to be fair. the argentinians are ready to really shell out the money, 328. -- or hundred 29 euro. 429illing to shell out euro. later on we will talk about branding. three weeks and thousands of kilometers of the shang and sprint finishes. what do tour de france cyclists need to eat to get them to the finish line? find out after the break. ♪

>> welcome back. yesterday's stage winner in tour de france road close to 200 commoners in just under four hours and 12 minutes and finished in grand style. it's no wonder pro cyclists need to fuel up. i met albert oconto door -- alb chef to seer's what key ingredients they like to see in their dinner. >> the average person burns 1000 calories per day. to 9,000.8,000

we have ratatouille, grilled sa lmon with basil and terragon, cole slaw, bread, and always pasta. the pasta is on its way. a normal guy would eat around 450, 500 grams of food. these guys eat a kilo. >> their little but they put it away. to eat a to get them lot of vegetables as well. >> they will go through all of that pasta. >> what is different about this food than the way i would serve it up? >> we do not deep-fried. everything is organic. everything is the best vegetables you can get, fresh stuff. know?ou

like serving wine with inner? >> if they win. [laughter] >> he actually prefers chicken which made me think of manus cranny. dry leftover chicken every morning. [laughter] a specific diet. >> it's not exactly left over. another insight into how i live my everyday life, wine only if i win. >> is that the only rule of desk around this desk? >> and purified ice blocks in your car tail. >> maybe even in your red wine -- and purified ice blocks in your cocktail. like 656 a.m. in london. more on the exclusive interview with the ecb governing body member ewald nowotny. touching on fiscal discipline,

strength of the euro. plenty more coming up with jon ferro's exclusive interview and may come back. ♪ . .

exclusive.owotny he tells bloomberg the central bank does not need to take additional stimulus steps now. >> if we see that our mandate demands it. areersonal feeling is we not there at the moment. i do not see an immediate need. >> stocks sell off. slide amidst concerns over a company linked to portugal's second-largest lender. israel says profit the estimates. morecust costs and won

orders. welcome to the second hour of "countdown." let's go to our top stories. bloomberg sat down yesterday with the ecb central-bank governor edwald nowotny. we estimate if the euro is too strong and whether the ecb could do more. >> i think the markets understood the message. and at least for the appreciation of the euro has stopped. in that sense, this program has proved to be successful. new policy, we have of directly influence -- no policy of directly influencing the exchange rate. there is no perspective of intervening like the swiss

central-bank. on the other hand, i think that a number of economic arguments and perspectives that stand in the devaluation of the euro versus the dollar. >> let's bring in jonathan ferro. jon, it depends how you define success in terms of what the ecb was trying to do to the single currency. >> it has not got down much. yes, it is away from 1.40. .ut it has not gone below 1.36 it breaks that level and comes back up again. it is around 1.36. he define success as cap in the appreciation of the euro. i think that is interesting. there was a subtle suggestion that were it go lower, it is out of their hands.

chris's shoulder talking about the same thing. schultz talking about the same thing. you have a trade surplus. because of the likes of germany. within europe, there is a competitiveness problem because germany is exporting to france and italy way more than it imports. ries have to reform. that is a lot of pressure from the eu and from mario draghi. >> he is not worried about deflation. >> no. he mentionedf ecb, it twice in his news conference. there is a disconnect there for me. he does not see a problem of deflection. >> the gap between the likes of edwald nowotny and every investor that comes on the show and talks about quantitative easing because for him, we're

not there yet. mario draghi can throw out a bunch of words and mention q.e., and everybody gets happy. when you talk to his policymakers, q.e. imminent? >> we got those comments from one german board member. howas talking about patience is a virtue and it would be a last resort to bring in quantitative easing. it is interesting how you define it. >> what investors are betting is that the ecb's outlook is wrong and they have to do more because they will be in this position where it is an emergency resort. these are measures they unveiled a month ago. the question they hate is what is next? mr. draghi said, we are not finished. i have to tread this thin line where they try to do enough. the more they do in the less pressure on the governments.

they are asking for flexibility. >> they don't want inflation to go any lower. speaking of which -- >> speaking of which we will look at portugal back in focus. if somebody was as took a firecracker and threw it in the middle of a playground and everyone ran for the exits, which were stocks. stocks dropping yesterday. futures higher this morning. this wrapped around this espirito santo. few investors,a i want to be careful with this. espirito santo international which has an ownership structure which leads down to espirito santo, the bank, they missed on some debt payments. this set the market into a frenzy. this is a bank in portugal that has an exposure which they defined as just as 1.2 billion euros.

ss, principle is bank, stre government bonds. governments could be called upon. christian schultz was on here earlier. he said in a couple of days, it will all pass by, because we will realize that -- sovereigns. >> the point his colleague is making that portugal has saved its clean exit for support program. to deal with the banking issue, it's reform record, which he praisese would probably allow it to draws, on esm funds. in terms of that issue around the portugal bnanking scene. >> yesterday was a reminder. it is something that everyone is talking about every central-bank under the sun -- it is investor complacency.

pricing in the risk. we talked about fixed income markets. look at credit. the risk between junk bonds and investment grade. there cannot be any premium left. >> have a look at the v stocks. 10% yesterday. that is an indication that we have been, market participants have been laissez-faire. >> yesterday down to 1.17%, the lowest in two years. >> those low rates on the periphery are sustainable. >> most investors would say, yes there is complacency but there is nowhere else to go and central banks keep telling me that rates will stay low. if you listen to them, you would've made a lot of money. stay long, stay strong. . >> thank you. you'd write that one down. >> i am not saying this is a buying opportunity. this is not my line. was thefive years, that best strategy. at some point, this market will

correct. >> moving our focus to asia. india's second-largest software services company infosys has released results ahead of market expectations. after we got the budget from the government yesterday. caroline is going to break it down for us. what is helping the bottom line? not many people expected this. >> new orders are helping, new clients. a very much a focus on cost. infosys is the second-biggest software company in india. big exposure to the united states. 60% of their business comes from the u.s. hurt in the downturn. you had u.s. companies pulling back from spending. they cut down on visas. that was going to hurt the employees. this did start to hit infosys where it hurts.

finally we are getting breathing room -- what he two percent in profit up 22%. they have big companies that they supply i.t. to. they design their software programs. they offer to maintain their i.t. they help with outsourcing. this is a company that needs to add more clients. .hey are adding orange >> you mentioned that i.t. spending has been slowing in terms of big companies. we have a new ceo coming in. just because they beat on earnings today or expectations, does not mean that he's going to have an easy time. >> you're right. it is a hard line to walk. a e new ceo comes from sas, california-based but indian born man. >> and an outsider. >> the first ever non-founder to

leave this company. had four of those original four rotate the chief executive role. now they have the first ever outsider. they want him to stick to the aims they have. boost business, make the existing clients more important but add more clients. softwaretackle what companies are facing -- disruption within their own industry group. companies do not want their own servers anymore. they do not want to outsource their i.t. they do not want someone coming in and fixing the computer. they want cloud computing. they want to access all their documents at home on the mobile. >> when it breaks, it is somebody else's problem. >> a whole new way of doing business. this is what investors -- infosys has to catch up with.

they have to provide this new modus operandi. but in a slowing market. i.t., a 4.1% increase in growth. >> thank you. >> indeed. before we cross out to our correspondent in berlin, i want to bring you some breaking data from germany. month on month cpi rose by .3%. that is 1% after the date yesterday. it is important to check that. about politics. germany expelled its top american intelligence officer in berlin over spying allegations. hanson nichols is standing by in the capital with more. hans, this made quite a new story. >> that is exactly the reaction angela merkel wanted. she wanted a public right. she wanted some way to signal to the united states, to convey to them just how upset she has, not

only on the nsa phone tapping, but the idea that there are two cases of potential double agents working for both german spy agencies and the cia. he mayance minister, have captured merkel's feelings when he said "with so much stupidity, you can only weep." that is why the chancellor is not amused. it is an understatement here she is outraged. this is the top u.s. intelligence official. he has been asked to leave german soil. it is a remarkable story. we are just at the beginning of it. how can the u.s. mend fences and put this relationship back on track? because there are a host of issues from security to economic cooperation to ukraine to iran, let alone the free trade deal that angela merkel and barack obama perhaps would like to have more productive conversations on. guys? >> thanks for the roundup.

politics never a dull thing. >> do not miss our in the no discussion. how resultant boost its brand after its devastating loss in the world cup. >> 3-3. london times list as the destination of choice for international travelers for the third time in four years. that's next on "countdown." ♪

to "countdown." more m&a news coming through from the tobacco sector. let's bring in caroline who joins us as we talk about imperial tobacco. they are responding to speculation. >> it is an international story. imperial tobacco is selling its own assets. 'ing selling shares and a distribution unit. it is earning 417 million pounds from doing that. what would it do with his cash? will they reinvest in the business? looks like it could do because there is an m&a frenzy going on in united states. this is between two juggernauts -- reynolds and

lorillard. if they want to put a team up and become the second-biggest player in the u.s., they would have to dispose of some of their brands. so many people think that imperial tobacco has 3% of the market in the u.s.. they made an acquisition a few years ago. they have names like fortuna. they could add to these. they could add, get their hands on the likes of winston and 5% more of the market. getting their presence felt. they are responding to speculation. they have in talks with reynolds and lorillard. debating,have been pushing forward on m&a between the two of them. they say there is no certainty of the terms but they are in talks to purchase -- >> it is amazing that we are talking about the trading of traditional tobacco brand when all the friend -- frenzy

seems to be of the ec threats -- e-cigarettes. >> they need to cut costs and invest in e-cigarettes. be more health conscious. >> rain has not deterred the 18.7 visitors that came to london this year. they topped paris and hong kong as the top destination for international travel according to a mastercard index. for more, we are joined by an advisor and senior vice president. us.k you for joining what is so surprising is the numbers keep going up. the pound strengthening. when i came here it was 2.10 to the dollar. no one wanted to visit. now all of a sudden when it was 1.35 6to the dollar. everyone wanted to come and shop in london which i found

shocking. we are getting heady again with the pound. yet people are still coming. >> absolutely. one of the things postrecession we see in splinting globally is spending globally is that people want experiences. there is a change from goods to traveling and looking at art. we see this change and how the spending pattern is. that would lead to people coming to a great place like london. >> how is any slowing in any emerging markets, tensions showing in any of your data? absolutely. they are just spending differently. one of the things, the two strongest spending economies we see are the united states and united kingdom. the rest of the world is slowing dramatically. some of that would be travel spend, but that is a higher end elite group. what we are seeing is that real

challenge in some of the other markets of spending. >> two big things that stood out. one is the uk consumer is roaring back to life. remains negative. 17 months in a row. will one bolster the other in this economy? >> no, not at all. one of the things that is isteresting is luxury negative in the united states as well. it has a d corliss asian -- deco rrelation effect, that would people spend with -- that people would spend on luxury. we have seen the crackdown in china. we have seen spending and hong kong go negative year-over-year and that was based upon jewelry going negative. >> there is a nightclub in town. >> i have never heard of it. >> the young lads. >> of course it is. crystal goes for more than $700. it is always packed with russia

ns. we have been noticing that there are not there. i say "we." >> matt campbell deserves the credit. >> anecdotally, they are not there. they are not on the clientele anymore. is that a trend? >> that is the trend. that is the interesting thing. when everyone is looking for the chinese to replace the russians or people from the middle east -- that is not happening. so that is why luxury remains negative. we see the strength and other things, apparel, jewelry, department stores, grocery. whole thing.ng the petrol prices dropped a bit, so additional got income they can spend. >> always great to have you with us. >> 21 minutes past 7:00. coming up, jets, drones and billions of dollars -- it is the air show. it kicks off next week. we will take a look at the wide body wars.

♪

>> welcome back. 24 minutes past 7:00. let's turn our attention to airlines. dealsow typically sees worth billions. airbus and boeing will be there as they are ever year.

the backlogs they are facing is staggering. took any more orders, as an industry they have seven years worth of work. >> that is a good problem to have. "taking stock > >> it is. 11, 500 planes. we ares of new flow, possibly going to see some big orders. it will struggle to live up to paris. >> when you see. those numbers you quote it in terms of the backlog, it takes you back to your starting days because she were an aviation analyst. when you see the overcapacity from air france and lufthansa, does that impact in terms of how these guys plan? >> what happened in those particular airlines, they have competition from middle eastern carriers. that has been a trend. qatar and emirates.

offering better products from the middle east. the flag carriers in europe have been trying to keep up. they face competition's short-haul from low-cost airlines. all airlines have been trying to get more energy efficient. orders so massive they can get more energy efficient. they are trying to drive profit out of these routes. >> the planes are getting bigger. >> big is beautiful? >> not too big, but there are a lot more big planes. there are regulations that limit the number of passengers per flight, but they can stretch it -- so you can never find a flight. it is good for the profit margin. moving on. coming up, celebrities in the

front of the plane. rebrand themselves. how does the nation reinvent itself? we are joined for in the know next. ♪

." welcome back to "countdown time for an fx check. take a look at dollar-yen. equities had a tough day yesterday. overall, this week, you have head for itsar biggest weekly decline since april. equities are down yesterday. no indication on the timing of when interest rates might move coming from the minutes. if you're looking to next week's testimony with janet yellen, do not put your eggs in that

basket. target. we spent a lot of time on india yesterday. let's check in on the rupee. there is concern that we may see a few more rate cuts coming from india later in the year. keep an eye on the indian rupee. that's fx. >> these are the bloomberg top headlines. edwald nowotny tells bloomberg he's sees no need for further ecb action. outhe did not rule quantitative easing. the main aspect is economic development. what we see in europe is that we do have the recovery but not very strong. >> diplomatic relations between germany and the u.s. have reached a new low since spying allegations began.

government has expelled the top representative of america's secret services in berlin. the move comes following two reported cases of u.s. spying. separatenessit with as strikes killing 50 people. this comes as the european union sanctions. has invested more than $13 billion per. for the world cup for all the right reasons, to oldster patriotism, tourism, and the economy. what happens after the defeat? reinvention is key. for more on the country and how to bounce back and what happens when things go wrong like this, we are joined by an international branding expert. thank you for joining us. i mean, it seemed like we were seeing that it was all going to go well for brazil.

better forve been them not to have the world cup federal? >> you have to be careful what you wish for a big sporting events. this has been a disaster for brand brazil on a number of fronts. the reason why you do these kinds of events, to get profile and build recognition for your r country. the problem with brazil, what keople thought brazil was li was different from what they found out. >> this was to be their moment in the sun. moment of glory. this is a developed country, rich country, a sexy country. >> a footballing country. if thekly, even preparations were not great, people thought at least brazil can play football. a nightmare. >> a disaster. >> a brand can live quite a long

time. >> you are damaging your assets. that will generate future revenues. the brand is the thing that lives on. brand brazil has been damaged. you got to work hard. we might talk about some of the players in the world cup. that ruined their reputation. >> a number of international business brands have decided to theirrazil's misery to advantage. visa saying that's german engineering. a candy business jumping on the bandwagon. media businesses have a funny ad. this is cruel. do brands benefit? >> this is cruel. it is interesting for brand g ermany. it says the german efficiency

sheen and ruthless as well. -- efficiency machine and ruthless as well. germany has got the most or the strongest, most valuable brand in europe. germany's got 11 brands in the top 100. france has got 7. >> from a branding perspective, we have got russia next holy world cup. they had sochi, which started out advertising all the wrong things -- human rights issues, infrastructure problems. se, if you are advising them would you say, maybe the world cup is not where you want to go right now? >> if you got something to say, go for it. the problem is that no great brand -- is going to make a confused product any better. the problem is if we do not have a great product, like with sochi stuffssia, losts of

came out about russia that people were not aware of. don't do it. >> it did get better as the games went on. >> the sport was good. and also the participants. but not necessarily russia. >> the one thing we have not touched on. is about the individuals, the sporting icons. are these the moments in their career that define their earning reynaldos.ike the >> hey. i got some of those. >> my children trade them. >> it is people's moment in the spotlight. take david beckham. the world off in cup and he cried. people hated him. he cut his hair.

and he renewed his brand. >> he had a great product to start with. >> a fit guy. a great footballer and the gold en triangle. a great family man as well. what david beckham did was great. the surround was great. is interestingat is how we can repair his brand because it is not great. but if you apologize and say, you're working on your anger or something like that, you can repair it. you've got to work on the rehabilitation angle. >> he sort of apologized. >> how are we managing -- it has been about social media. >> there has been a relatively successful world cup. suarez andthe brazil, those have not been

great examples of sporting prowess. there have been some dark moments that have made this an extremely high-profile world cup. also surrounded by the fact that it was not really well organized. i would not say this was the best example. you can look at some early examples like sydney. told a great story about australia. london was fantastic and it told a great story. and a new story about london. in terms ofar tourism and investment and global perception. that's how to do it. but they can repair, just like suarez. >> maybe he will get in touch with you. >> maybe he will. i will wait for the call. >> thank you very much. >> coming up, forget splashy gadgets, tech is changing

finance and it could impact investors in the eurozone. stay tuned for that discussion next. [inaudible] ♪

>> welcome to "countdown."

joining us to discuss tech and online wealth management is schroders executive vice president. a website thatl, allows people to invest online with your investors. pretty novel thing. it has been around for a year and a half now. maybe you could start by explaining to people how it works. >> sure. eg is a traditional business. we look after people's personal assets but we do it in a novel way. able to facilitate that by being online. instead of the eight week sign up process that usually takes for a proposal it happens in eight minutes. >> you invest your money and you

deal with you through the website. one of the things that annoys me about my bank is that it's difficult to get someone on the phone. this is a trend we are seeing. know if i would be so excited to manage my wealth -- that is a bit of a nonexistent thing -- but are people really going for this? >> y eah. it is not just on the telephone . it could be tricky to get hold of someone. what you have got to do is open up the service options. there is face-to-face and there is the telephone. availy few people themselves. >> it is about having other channels as well. we use instant chat which is popular with our citi customers. they can type away. making sure there are lots of different options available.

>> you like this enough to make an investment in it. youhis a sort of if can't beat them, join them? >> if you take the big picture, the digital revolution is transforming and will continue to transport and the wealth management industry's. in which wehe way manage money, the way in which we interact with customers and the way in which our services are being distributed to the public. set is part of a braoader of initiatives to compete in the world of tomorrow. >> how much of an impact on traditional business can these types of businesses create? are they creating new demand or cannibalizing the markets to operate in? >> it is called a completely different space. nutmeg is in the small customer, up to $250,000.

it's offering them a high quality, cheap cost opportunity in that space, a space that our customers do not traditionally operate in. so it is an extension and a way to engage with the digital revolution. >> talk to me about this relationship, the last bastion of wrought street-ish rotors in london.hroder's in how is this working out? >> we have also seen the potential for this to be should in partnership as well -- a potential for distribution in partnership as well. they bring expertise across the globe. we are very uk-centric. there is all of that experience that can help us gain new customers and become a trusted brand and start moving up that chain. >> are you playing the generation game?

wealth management in upper and products, it is face-to-face, very high and. are you going after a younger generation. is that part of the appeal for your investment? ofit's a different type person. there are a lot of people who want the face-to-face relationship and there are a lot of people who want to get it done. >> what else -- >> we actually made some reserves recently and the -- they utilized online services. they are polarized between the younger generation, the x-generation and on the other side, the retiring baby boomer -- means and time availability. >> i spoke to one wealth manager who was saying it was -- online services and wealth management has to be about way more than here's your statement.

it has to be about modeling strategies. that's where your investment in technology must be taking you. >> absolutely. for example, when the risk -- the availability of information is eroding our competitive advantage. ather process and store information is becoming a major factor in our decision making. >> give us another example, this does not have to be a company you are pursuing for investment, of a company in the financial technology space that excites you. also talk to us about the risks. you are very excited about this. you joint a bunch of other lender's in this investment. where else do you see in the financial technology space exciting opportunities? are opportunities in companies that filter and process information from social media. there is a huge availability of information every second.

toch one are relevant is how filter them. there are companies on a similar orh in the united states businesses in germany. there are initiatives around the globe that are experimenting with the digital revolution in multiple spaces. we cannot forget the big data factor. the capability that you have to develop to understand customer behavior and be able to predict better services to your customers. >> can i get your thoughts on what is happening in markets? i wonder if you're more concerned about lack of volatility. the fed has talked a lot about that. or whether we should be more concerned about the volatility we saw an markets yesterday concerns around portugal? are you nervous as we head into the summer? >> no. i think there are episodes in the market. like the one we saw yesterday.

but we do not see at this point in time any major source of concern. >> just to bring it back to you. this business is about competition. fees are critical. the people watching this program have an interest in investing. you are going to challenge the status quo in fees? >> we are. we charge someone with half a million pounds .3%. the industry averages 1.3%> every year we have a 1% had start on performance. fees are an essential part of performance. you have to speak with your performance. we are the first company in the country to disclose our performance on our website. that seems to be getting customers. it's growing by hundreds of people a day. hopefully, that is a good thing. >> thank you very much for joining us.

you. you to both of >> there. the last trading day of what has been a fairly tough week in equities. we will take with you through how the markets are shipping up. data from portugal. stay with us. ♪

>> welcome back to "countdown."

we have got just under eight minutes to go for equity markets. the last trading of the day. jonny ferro is here. higher start. is this a reprieve? will at last? portugal. >> the next day, futures higher. we are headed for the worst week since june last yera. yesterday was a wake-up call about an under appreciation of risk. >> i think that is possibly data that is off. london up 14%. dax up 8 points. volatility is rising. >> today was the wake-up call, yesterday was a wake-up call that we need to appreciate risk. europe talking about portugal. u.s. talking about a stock, a social network with no users or no revenue that has a market cap of $4 billion. shall we take note of that.

you should scratch your head and have a look around. >> there are two issues. the individual issues around iringpayments and par companies and the feedback into the sovereign -- and whether there is a backstop available. case portugaly their reformlp, record would allow them to draw on funds. that's specific surround portugal. >> i sthere concern that we are talking about backstops again? everyone was talking about recovery. now we are talking about backstops again. >> i was going to say the chief aliens,ent officer from says, the problems of europe are far from o ver. banks are on the year low.

interesting for me is that the euro, the currency did not really tumble. >> wasn't listening. the currency is not listening. >> christian scholz was telling us he is worried about the real economy. the inability to explain what is going on in germany. there is something weaker going on. >> last month we talked about iraq. maybe next 20 will not talk about portugal, but people are thinking about -- maybe next month we will not be talking about portugal, but people are thinking about risk. commentingy, the imf on this saying that the portuguese banking system is able to endure the crisis. >> let's not wish ourselves back to those heady days. jon, thank you very much. that is it. "on the move" up next. we will bring you more on the markets. ccla investment management james

program.l be on the plenty of experience to throw at the current market situation. we hope you have a happy friday. we will leave you in the capable hands of the "on the move" team. ♪ . .

>> good morning, everybody. you are watching "on the move." i am guy johnson. we are at bloomberg european headquarters in london and we are moments away from the start of european trading. here with me now, jonathan ferro, caroline hyde à la hans nichols in berlin, elliott gotkine in tel aviv. jon, let's start with you. >> i had an exclusive in view with novotny from the ecb. if you are expecting qe, his response, we are just not there yet. he mentioned the success of the ecb's recent measures. on investor complacency, a yield below 3% in spain and italy

sustainable? in a word, yes. from there.ck it up &aa is swirling around -- m is swirling with imperial tobacco laming they have been eyeing. i will be delving into smoking and slimming. more on those deals a little bit later. back to germany. >> thank you so much. we will be looking at how angela merkel is trying to seize control of this spy scandal by expelling the top u.s. intelligence officials here in berlin. it is a remarkable story. we will have more on that later on. for now, i will hand it over to elliott. >> day 4 of israel's operation to stop rockets being fired from gaza into israel. it has called up more