keeps on coming. payment protection and insurance. verytment banking is the division they are trying to wean the bank off of. it is over and the fees are up. >> thank you. we look at argentina and the prospects for default. the argentinian officials and joe fulcher funds. that is what they are calling them. is a is progress and there meeting with no resolution. over to you. >> thank you. we are looking at futures down marginally. what will the market impact be? does it stay isolated. i will bring you that. let's go to the touchscreen. >> what are they focusing on? is it about economic growth or

russian sanctions? there is not much of a selling. movement conference currency was flat, in terms of the u.k.. it is trading up .4%. spain is trading higher and we expect second-quarter gdp to come in higher. and there trading flat periphery is trading higher, if you are looking at equities. let us have a look at current cities. a basis is set to rise 3% and that is coming out out 1:30, london time. we will get the numbers out of the federal reserve. a raining and stimulus? lay, that's currently, it is flat. the dollar is down and keep a close eye on those particular

markets. we are going to see reactions to russiantions and the access to banking finance. widest ranging sanctions we have seen so far. let's have a look at the up threeand it slides basis points. we are seeing money moving into germany and we may see a little bit of a search for safety. let's have a look at some of the stocks that are on the move today. on individualcus stocks amid the earnings. and morganrading up stanley says the investing bank unit looks better than expected. some andeing it fall

investmentprofit in banking is down and the equity and debt is trading lower. there may be relief because it is trading up. the amount of cushion that they have against the crisis because capital is up. asideave set more money to the missed souls. andre seeing sales up 7% the biggest broadcasting company in the u.k.. will it meet the target? many feel that it will. there is an increased chance of it in the medium term because liberty global is up. at the close, the chief executive said we are not in any contact with liberty global so

far and the profit is up. -- is down 2.6% over the oil company production and there is a record low with production down and profit down. is awith us and there three-year cost-cutting lime on the way. >> disappointing. let me bring you the breaking news. spanish second-quarter gdp is 0.6% and it is better than the previous quarter and the estimates. that is enough of the happy talk. look at the inflation. it is worse than many expected and that is the one that the ecb looks closely at, particularly tomorrow and it is expected to come all stop spain is underperforming. there are sanctions. and the u.s.union announced tougher sanctions than any since the cold war.

and wee moving markets have been anticipating the move. what is the take? >> the eu moves against the russian financial sector and ban russian state-controlled banks from issuing a new stock and on in european capital markets. it is that simple. the idea is to raise the cost of andey -- borrowing funds make it more painful and make them less profitable to pass the pain onto the russian economy. that is a big one to watch and the second largest bank was sanctioned by the united states will stop we will talk about that later. we talked about transfers and the more unconventional sophisticated drilling will stop the arctic drilling and the shale deposits. companiestch energy

as a result of that and russia needs to develop that technology. finally, there is a weapons embargo and the french can still sell warships to the russians. in andf this is priced the russian stock market is up today. vinci d is down a bit. the las vegas bank is up about 2%. we got what people were expecting. >> for more perspective on the markets and sanctions, we are joined by the deputy head of asset allocation and we welcome you to the show. you can make a lot of noise there is nond sanction on the gas sector. europe gets one third of the gas from russia. is equity capital,

bonds, and debt capital issuance in europe. i do not have exposure to russia and i just have exposure to europe, do i care? we saw deflation and the spanish numbers be good. i would not worry about countries that are not exposed directly. howor russian banks, difficult will it be to stop the funding from europe and elsewhere? >> one of the worries has to be capital flight. if you are based in russia, you do not want to keep your money --ed in rubles will stop rubles. it may be a concern. the curveball how russia reacts? >> i think so. american companies, like john deere, have to worry.

so, i think there will be an impact on specific companies. >> thank you. more aboutk sanctions and the u.k. housing market. stay with us for that.

>> welcome back. this is on the move. we are streaming on amazon. stay with us. we will have more stories.

thank you for staying with us. the big question is the fed decision day that nobody is talking about. we have two decisions left and the qe ends in october. what is next? a numbere expect is for the payrolls and unemployment to come down. the main language that we are looking for is anything about inflation and it is just a focus on volatility and the numbers. pressureing to see the and the markets are pricing in inflation. we think it would be a good play for 2013. >> look at treasuries and you saw the yield come down significantly. what is the bond market telling me? >> it is completely unrealistic

and i think we are expecting a growth of more than 3%. we expect the bond yields to move up and by the end of the year. a loss on treasuries. >> somebody asked if we are watching that this morning. it will be the ceo and homebuilder. with the first half sales. the imf warned about the tightening of the housing market and we are joined live. the show. i see operating profits higher and profits for shares higher stop you must be a happy man this morning. >> it has been a good half of a year for us. so, it is not just six months. >> give me color on this. the housing supply is a big

issue and most people tell me we should be building double that. is that your problem or the problem of the government? everybody's problem and we can see that. it has been a problem through all of that time and more people recognize that. is it a political problem, yes. it is something the industry is trying to move for -- towards. there is athat sustainable and steady level of growth that is healthy and we are trying to get the problem solved in the long, rather than the short term. it is something the industry is involved in the stop >> receded prices rise and does that make you confident to build question mark -- involved in.

>> we see prices rise and that does make you confident to build? it is about the conditions that do not tend to last. price one year after stagnation and a big fall before that is not, in and of itself, a concern. slow andeen the rate it is growing at a more normal level than we have seen in the last 12 months. andave seen it balance out not quite such a big level of growth. so, i think it is a healthier level of growth that we have seen them we have seen. if that becomes established because of the actions of the new mortgage market review, that is a healthy place to be and we

would like to see a more healthy and steady market will stop >> perhaps we are seeing signs. the growth is not being underpinned by a rise in wages. we have not had the wage growth and for many, it has been underpinned all stop they are looking to raise rates. how resilient do think the market will be to a rate hike? the rate rises that are currently forecasted that are stable and significance , but low. the housing market can absorb that and it will impact growth. the growth isay, limited and not negative stop we have seen a big part of our customer growth and first time buyers pay half a percent more. people think that it is about the bank of england's. the banks have increased the

level of interest rates that most pay on fixed rate deals. that is what homeowners look at. impact on then market and it does slow a little, in terms of growth. that is healthy and not something we should be too concerned about. thing, we are going to see prices going up and down about what to do with the price issue. about thering homebuilders. what initiatives would you like to see? >> we would like to see consistent and steady policies. we have seen improvements over the last two or three years. that is the single longest constraint and we would like to see progressive improvements and not a big all out change. wherereates a hiatus

everybody adapts and adjusts. we want to see consistency and we want to continue with the level of steady growth that we have been able to deliver. >> thank you for joining us. solid numbers this morning and you must be a happy man stop we will speak to you again soon will stop >> from the united kingdom to argentina. the company made it. deal.y cannot reach a have great views to negotiate with vulture funds. we are joined by hans nichols. blinks a case of who first. neither party wants to default. >> neither party has an interest in default and if they do, the bondholders and the vulture funds could be wiped out.

>> important developments happened and the two sides are talking. they sat down for 12 hours in new york. whether there was any progress, that is the question. and a frankmediator exchange of views and concerns. the issues that divide remain unresolved. it is not determined if they will meet today. the deadline is tonight. here is the development. inroup of banks are discussions with bondholders of the old debt and they are talking about potentially assuming the debt and winding it down. a group of local banks could end up being the mediator in this and brokering the deal. we have a philosophical question that i will throw to you. if a country pays their debt and what they are supposed to pay,

and they have done that, to the , is thatew york default? this is an "tree falls in the woods" question. >> they would argue that it is not a default and that it is something different. you see the economy struggling and you see the foreign reserves all stop why not just -- reserves. why not just pay the guy? >> they do not want the clauses to be triggered. number, you could trigger up to 120 billion or more in back payments. they want to avoid that and the question is if that is a loss. time is running out and we will find out how this will be resolved.

>> stay with us for a few final shots. the clause expires at the end of the year. is there a chance to get this pushed back to the end of the year? >> they will try and fail. that 8.3%. pricings points is not in default. >> is an interesting story of the hedge fund and going after the treatment. is ithere in europe and just interesting for me? >> it is interesting and argentina engineered it to relevance. have 2% of the emerging-market bond index and they essentially ignored argentina. move isore fascinating in the bond market and it has to

be germany. youaw those yields and might say that the european crisis is back. spain and italy have record low bond yields. >> there is something wrong with the yields. at the spread and that is unrealistic. it makes no sense at all. the yields are down and the tightening on spain is much more problematic. -- credit risk aside, we're talking about inflation coming in at 0.5% and many saying that this will go further south. will there be deflation in the bond market? optimism pricing in and spain is improving. the spread is a little too optimistic and not a good value at the moment. >> i am going to lock you out of twitter and bloomberg terminals.

yourre not allowed to wash television and i know that is difficult. which one do you want? >> cgi. it will be higher than people expect and that is why we overweighted. >> there we go. thank you very much. on the move is back. you have the sanctions and you have not had the market moves on the back of it was stop by question is about big sanctions that have not been calculated. we will talk about it and be back.

>> welcome back. here are companies on the move this morning. the commercial unit delivered more aircraft and the company reunited expectorate -- were you firsting to see the airline by the end of the year. the first profit in three years after cost cuts and new models help them return to the lab. they beat estimates and the carmaker expands to outside of europe was stop the demand is recovering from a low. the buyer earnings beat analysts estimates for the second quarter

oh stop the prophet has been leaning on growth and they agreed to buy over-the-counter products. we'll hear more from the buyer and ceo's morning. on thenson will be pulse. we are watching this morning and we will have more in the hour with manus cranny in a couple of minutes time. looki --he stock at the stock and i can answer. profit is lower. the man at the top has cut jobs by 7000. isy people think the number better than expected and the stock goes higher. another company we will be watching is itv. they beat estimates and it is

all about creating content at home. i will talk to caroline hyde and a couple of moments. in the meantime, you can follow me on twitter.

>> welcome back. on the jonathan ferro. ferro. jonathan they are lower and marginally lower. expect decision day. that should tell you something. it is about sanctions. have they got a bite? the market reaction is miserable -- minimal. >> let's have a look at some of the big news. i want to focus on the upside after three years. back --impact in the

back in the black and this is a major boost to the credibility of the turnaround. the leaderboard and the stoxx 600 is operating. have positive cash flows and have taken so many steps to rein in europe. they are closing factories near paris. about airbus? the shares are higher by almost 4% and you see an uptick of 10% that delivers more aircraft. they saw significant increases and they saw net new contracts. still, not much love out there.

there are civil aircraft. let's have a look at the worst performers this morning and the oil companies have significant exposure to run out. the key one as ben productions at a record low and they see it. do? are they going to there is going to be a turnaround. >> thank you very much. it is time for the bloomberg top headlines. let's talk about the sanctions that increase the pressure to get vladimir putin to back down. energyking sector and experience sleeping sanctions today. confrontation is not a new cold war. the military chief has ruled out

a truce and plans to win on the embargo. the dozens of targets were struck in the last 24 hours. latestrs await the policy decision. leastprobably the anticipated decision in month old up it reduced monthly purchases to 35 billion last month. lawmakers were told that rate increases may go more rapidly and they said it may not come as soon at all. it is all data dependent. second-largest bank reported that profits were down. what is the take away.

>> i think we are going to see this through the day. there wasn't in session about how the investment banks did. there are ways through. the market seems to be turning driverention towards the last week and that is the driver behind this morning and the move. you see a drop nearly 24%. and you look into the investment bank. the equity is down and the one thing that caught my eye was the debt and capital market underwriting fees.

what investment banks actually do for people who work on her hours is having income rise. this is a characteristic that is coming through. and youcredit suisse try it with what is happening at barclays. the question is, where are we in the cyclical trade. businessthe commodity and this funneling affect that is what happens when you have less and less participants who are able to incrementally charge more fees. maybe not at the moment. over time. there is credit revenue that is in the top half of the performance and the capital position is improving. materiallysay it is strengthening will stop i would say to take a look at some of

the cohorts. -- strengthening. i would say to take a look at some of the cohorts. there is quite a ways to go. we can get bought down in the my new show and investment pretax profit. i think you have to look behind thenumbers and the moment stock is up, you are pretty sure that there will be a more negative note. litigation, as well. >> they say they are not in a position to give an estimate for foreign exchange. andy other studio litigation. they said the litigation could be anywhere between 4 billion pounds this year and nobody ever tells you how much the foreign-exchange must costs that must costs and how they are

calculating foreign-exchange penalties. if it islls you collusion or profitability. nobody tells you a great deal and anybody who releases a figure, i would love to hear from them on how you mathematically come out with 4 billion pounds. that is the barricades. , are interestis rates rising. lending and the macro credentials on top are followed by impairment. they remained down within the prospect of interest rates. top, there isthe a lot of attention on him and stocks are still down. what is the take away from the man at the top? >> i do not think that anybody

can tell. are filled with good intent and ambition. it is a man who wants to reshape the core philosophy within barclays. this is a ceo who wants to pay and wants to be balancing is -- the investment. he was in charge. institutions go to trade equities. market literature and, under anthony jenkins, there was the demise. whether we like it or not for a ceo likes it or not, they have a corporate responsibility and they have a responsibility to choose people to be fully

informed and briefed will stop the is a ceo and why the lieutenant should be briefing him. that is the charge and the investigation. the stock is down and it is the worst-performing bank stock. with that in line and a bit of a early to looktoo at him as the ceo and the history that he has to manage. what you those he built. >> what a man to follow. we will leave it there. we will begin to the first half results and discuss whether investors should worry about that next.

>> welcome back. a 12% drop in profit. that is one of the stories. are profits and it was a miss.

the show is down. and the big issue is rusher. it is the fourth against market for them. the have exposure of russian companies and what they will do to it. the have a stake in a company that is the largest independent gas producer. it is a great place for them to be and a great partnership. the problem is that there is a gentleman who is a major who hasder at the bank been sanctioned by the united states. the second problem is that they came back with their first blacklist of sanctions and restricted the access of companies to markets. they're going to have more difficulty raising that money and in general, it is getting

more difficult for companies to access the funding. that is bad because they have this big project to develop the assets in the arctic and we have been talking over the last couple of months of the single biggest issue. not just for me. all of the companies working in russia. it is difficult to raise the it making itsee more difficult and it is getting more complicated. what, itsaid, you know was bad and we stopped increasing our state. 17% ton was to go from a closer to 20% of the end of the year and they stopped at 18%. they are reviewing the options. they are going to figure out

what they are going to do about the field. generally, this is the first sign of a western company with a massive partnership in russia. >> they are talking about pulling back and no sanctions on the gas sector. depreciation that the eu has gone further and they stopped short of shooting themselves in the foot. >> the issue is, and the cfos said this, that when they were down, that was the game changer and a created uncertainty. >> the sanctions introduced today, as big as they sound and the biggest since the cold war, there have not been many yet. if they continue, it is the trajectory and no one knows where this is going. if the guest industry has not been hit, maybe that will change

down the road. who knows what will happen. you surely want to know and something like oil and gas that is a huge amount of money over many years. russia intoto turn the biggest supplier of oil and gas and all the markets and the fourth biggest now. if you are looking at russia -- t now you are thinking >> use between a lot of people on the ground in russia and are they worried about a where the russian government and -- russian government -- about the way that the russian government retaliates? >> they have not been sanctioned and he said that what is so bad about this is that it is not clear how russia can pull back from the rank. they're concerned and he said that if anybody in the west thinks this kind of will stare down

vladimir pruden, forget it. ready to go for the press. is the west ready to go for the press. there is no sign yet and he thinks it will not be any time soon that they change the policy on the ukraine. he is going to ratchet up the sanctions. >> this could go on for months. more than a decade. >> thank you very much. let's stay with earnings. airbus posted a boost. join us now for more on the house of airbus. it is benedict. let's give the earnings a breakdown. >> good morning. down prettyngs went well with investors in the stock was up. we have seen positive things and the costs are coming down. they are saving money in the program that is coming towards

the end of the year. control andbe under they have been on track with that. the single programs are doing well and a small plane goes across europe, the short route. there were pleased and were no skeletons in the closet there. people seen that and were quite happy with that. >> we look across the industry and we see a muted outlook. as you see it, is the aviation industry heading towards a contraction or can they overcome the contractions? >> would have had an airline's report and we have had negative earnings. we have air france reducing targets and it will be interesting to see what they say. the ceo of airbus says there are

pockets of weakness and that is an area that they are monitoring closely. that ended a couple of weeks ago and they had the biggest intake in history. they are heading for a downturn, they are doing well. they have just announced that the show did very well and the big question for the company is how they did on the large planes and the superjumbo. >> thank you very much for joining us and it is always up leisure. thank you very much. up -- pulse isng coming up. >> the big talk is why the market has done what it has done

this morning. the equity market is starting to recover. you get through the trade and you are in a better place. this is simply that a bunch of guys are sure of the market going into this and there is with abiguity remaining little time of a rally and we are trying to figure that. their take on that and we have the news story again and again. we keep coming back to this and we will talk later on to invest heavily in the markets. over-the-counter drugs are a business that is more effective and it will be interesting to get his take on how he sees it. it will be a problem for the down the road.

and i am intrigued. it is very speculated and the french as deliver the warship. let's not touch that. escalate?it really >> i don't know and i do not know if the ceos know the answer to that question. to manage they business and start positioning themselves to be very clear that they abide by the rules. one of the things that we have learned is that if you do not abide by the rules, the penalty can be quite severe. the billions of dollars. a good point. a stock on the move as persia. tellu don't know, i will you why after the break.

>> welcome back. carolina hide has the story and it is all happy. it is a company that has had some bad times. >> back in the black. we have seen no profit and they finally get a major boost to credibility in the story. income and the

positive cash flow. i think they have done so many the hatchback delivery rose. us -- theng deliver delivery and they are being rigorous about the inventory. they have too many cars sitting in car dealerships for too long and they have managed to cut that. can you imagine. >> you go past the factories and they are lined up. quite a sight. they are bringing it in. they had to shut a lot of the plants and closed a factory in inis because of a situation europe and people were not buying. we have seen stagnant markets

and they are also scaling back the amount of models. fewer models done better. make it 26 and make them more upscale and profitable. they are really listening -- pushing out the brand and making it more premium and luxuriant. they are getting more cranium and getting fewer of them for delivery. models side of things and the wage cost is down , as well as the number of people. the emerging markets are not all good, are they. >> they say, worry about russia and the russian sales are going to fall 10%, they say. latin america, as well. foreign currency concerns. >> thank you very much. worry about russia. are you worrying about russia?

we will talk about that on the pulse. . .

>> russia rising. the west has hit moscow with the strongest penalties since the cold war but russian stocks are rising on the news. european fall -- european firms vote, sound the alarm about sanctions. billions in russian energy projects could be at risk. and barclays shares rally as the bank returned to profited the investment banking arm is down by 50%. good morning, everybody. you are watching "the pulse."