>> janet yellen paves the way for the federal reserve to raise interest rates the central banks patients may have its limits. eurozone creditors approve of greek economic reforms to expand its bailout. the ecb and imf warned that the accord is merely a starting point. >> china is said to be preparing policy to counter a housing market slump. the latest statement on factor activity rebounds. to go fly to hong kong. >> we will speak to the chief executive in an exclusive interview.

>> welcome to "countdown. >> coming up you will look ahead to the market open. >> lets give you some of these breaking headlines. from europe's second largest insurance company, net income rises 12% on the year. they were looking for 5.1 billion, so just a little bit low on that. operating profit of 7%. the ceo says they are on track to meet their target. that is about delivering a double-digit emerging-market operating profit for 2015. he will see whether he stands by

that. they have had a positive currency effect in 2015. a positive impact from the u.s. dollar, from the hong kong dollar, and from this -- the swiss franc. that is something we will be investigating when we speak. the dividend is where it gets a little interesting. bloomberg had a view on where the dividend would be, $.91 was our consensus estimate. the dividend comes in at $.95 so operating profit rises. dividend is up, and of the ceo says they are on track to meet their strict target by the end of 2015. more on axa later. olivia malley was us in just under an hour's time. >> the eurozone finance minister approved a list of reforms

necessary to extend greek bailout agreements for four months. >> creditors from brussels to washington warned that the deal was a starting point, and greece must deliver on one promises. >> joining us is hans nichols. so a deal, but a number of voices suggesting this is just a starting point. >> it is a starting point, which means it is a starting point for bracing ourselves or in cash for additional turmoil. more doubt over how greece will fund itself in the next four months because two of three credit institutions were quite critical of the lack of specifics that greece put forward. imf managing director was perhaps a little bit harsher than mario draghi. she wanted to see more specifics, clear assurances from greece. here is what she wrote in a letter to eurozone finance ministers. it is a essentially a letter to

the greeks. we know there are neither clear commitments to design that implement the comprehensive pension and vat policy reforms nor unequivocal undertakings for already agreed policies for opening up close sectors. mario draghi warned he wanted to see more commitment before they extended additional funding to greece. about 7.2 billion euros in the balance would be dispersed at the end of april. the imf has about 3.6 billion euros of that. this whole reform needs to be approved by the member states in the eu that would mean parliamentary votes in some countries. most of the leaders we have heard from have been generally positive about it. there is what francois hollande had to say. he said it shows a good sign

that greece is moving forward. have a listen. >> i think a good compromise has been found which respects what the greek people have expressed but also respects the rules of the european union and particularly the eurozone as charged with safeguarding. >> there is still the question of how greece is going to fund itself before it gets the 7.2 billion, if it gets that. one option under discussion is to raise the limit of the amount of t-bills. that would be funding for next month. no one is how certain how acute greece's cash crunch will be. the greek prime minister will house to sell this to his party. he will be addressing embers of his party later today. >> thank you very much. hans nichols in berlin. >> just a quick correction for you. the deputy ceo that i will be interviewing from the axa group

will be later in the show. slight misdirection. >> china manufacturing expanded inside your he for the first time since november. the recovery in the u.s. and looser monetary policy in beijing giving it a boost. good morning. >> we are looking at this preliminary number coming out from hsbc. the number at 50.1. as you mentioned beating analyst estimates. they thought it would be under 50 and mark another contraction. this is also up from january's 49.7. this is the first reading of momentum in quite some time. this could mark a deeper downturn in the chinese economy. this seems to have sent more capital into domestic investment.

still, analysts are warning not to read too much into the numbers. hsbc hong kong saying that today's data points to a marginal improvement just because of that chinese new year in february and that domestic economic activity is likely to remain sluggish. analysts are expecting more policy easing to come anytime now. >> we are hearing that china is preparing policies to ease curbs on home sales. what should we expect? >> sources telling us that china could be rolling out measures if the economic slump continues or we continue to see this slump in the property sector. they are saying the policies could include reducing the percentage of down payments needed to buy a second home. also, it could include allowing homeowners to sell their property without a sales tax after only two years. that would be down from the current threshold of five years.

some saying this will say -- this will depend on how the economy does. today, we had gdp figures out of hong kong showing that the economy here slow down. the growth down to 2.3% from 2.9%. fourth quarter growth also slowed and missed analyst estimates, coming in at .4% from the preceding three months. >> thank you for -- thank you. >> janet yellen signaled that the central bank's patients has its limits and paved the way for a potential increase in u.s. borrowing costs later this year. bloomberg's chief washington correspondent has the story. >> in 2.5 hours of testimony tuesday in front of the senate banking committee, janet yellen tried to buy the fed some flex

ability when it comes to raising interest rates. she made it clear the fed is not planning to raise rates at least the next couple of meetings. after that, it will be determined by the data. it will be a meeting-by-meeting assessment. >> if economic conditions continue to improve, as the committee anticipates, the committee will, at some point, the increasing an increase in the target range for the federal funds range -- great on a meeting-by-meeting basis. before then, the committee will change its forward guidance. >> that is likely a telegraph that it plans to drop its patient language in march. that does not necessarily indicate that a rate rise is on the way immediately. again, it will depend on the data and they will assess it meeting by meeting. yellen told the committee she is still not yet convinced the economy is firing on all cylinders. >> there has been important progress towards the fomc's

objective of maximum employment. however, despite this improvement, too many americans remain unemployed or underemployed wage growth is still sluggish, and inflation remains well below our long run objective. >> she was asked about a whole host of other issues, including the proposal to audit the federal reserve to propose greater oversight over the central bank. she made clear it was a proposal she does not support. yellen will be back on capitol hill on wednesday to testify in front of the house capital services committee. >> the top stories on bloomberg is our -- the ftse 100 index closed at a record high yesterday. the new peak was 6949.63. there will be a special chart on the footsie -- on the ftse a little layer -- later.

which side broke the cease-fire between ukrainian forces and russian separatists? meanwhile u.s. secretary of state john kerry told the american congress that russia repeatedly lied to him about its activity in eastern ukraine. >> russia is engaged in a rather remarkable period of the most overt and extensive propaganda exercise that i have seen since the very height of the cold war. >> u.k. prime minister david cameron getting calls for further sanctions against russia should the situation in ukraine worsen. >> they should deepen if further steps of destabilization are taken. the next potential flashpoint if that were to happen, i think the argument for further action

would be wealthy. >> the european central bank issued new 20-euro notes which include new security features and a new design. it is intended to defeat counterfeiters. >> you can join in the conversation on twitter. tell us what you think about the new 20-euro notes. tell us whatever is on your mind this morning. no doubt, we will continue to talk about greece this morning. so much excitement about a conference call. never have i known a conference call to generate so many new headlines. >> still to come, we -- we speak exclusively to the cfo of one company taking a one billion euro write-down after the slump in oil prices.

he joins us in about half an hour. stay tuned for that. ♪

>> welcome back to "countdown." let's -- greece has sidestepped a minute -- imminent insolvency. let's talk to fill up shortly good morning to you. a conference call saves greece

for now, it seems. what is the next deadline for you? there are four months on the clock. >> that is right. it is a four-month bailout extension. a number of details remain unclear. is the financing coming from the european union? which probably has to come before april. you have a couple of back payments from the european union. we do not know -- what we also do not know is how the rest of the imf bailout package is panning out, either. greece is owed money by the imf, but the imf rule is that the country has to be solvent 12 months. so there are a number of things to be worked out before april before you even get to the end of the four-month bailout extension.

>> mario draghi's letter said this is a good starting point. does this give us a little bit more relief in that the ecb could reinstate the access to funding, emergency lending? moody's says an increase in deposit might flow from greek banks. it is a real tussle at the moment between liquidity, what the ecb will do, and contagion. >> absolutely. whether the government remains solvent and secondly, you have similar arguments for the banks. there seems to be no reason why, given that the bailout extension has been agreed, why the ecb cannot begin to accept greek assets in regular operations, which would make the greek banks less dependent on emergency

liquidity assistance which is supposed to be a short-term measure provided banks are solvent. we should be able to go back to greek banks partaking in the normal operations at least until the bailout extension in june. >> yellen testified before congress yesterday and will do so again today. is she losing patience with the word "patience?" >> i think the fomc is generally. the labor market has tightened. we are beginning to see wage growth picking up. of course, the economy is doing relatively well. the last couple of months, a bit of uncertainty. if you take a longer period the economy, is growing above trend. i was surprised to hear -- i was

not surprised to hear what the fed chair was saying yesterday. then what we're looking at is an end to that section of guidance. we are looking at the data. >> you think the fed is navigating successfully away from a period of strong forward guidance to one where watching the data is the mantra. >> absolutely. normality is beginning -- that means the fed has to divide less direct guidance and be more swayed with what is going on with the data. not just the jobs report, but also gdp, wage data and the science of price pressure as well. >> i know that anna is our politics lady, but i think this

article is great on bloomberg.com which is that we are in for a state of chaos, according to the latest opinion poll in the u.k. they will be devilish deals done. what do you make of this? >> with respect to the u.k. election in may, i think the one thing that we can state is that no party is going to get an overall majority. that is the case at the moment. the u.k. has had a period of five years with the coalition. the conservative seats will probably fall. who can tell from opinion polls if there are dynamics going on in the electoral's face -- in the electoral space? one likely scenario is that the

scottish national party will increase their seats from 6 possibly to about 40 or 50 which possibly makes them kingmakers. which leadership will they support? their leadership has said they will work with conservatives. can we believe that 100%? possibly not. it is not just the 10 tatian of power, but also the electoral numbers might not work with the labor partnership. we just do not know. other parties may have to get involved. this is looking very uncertain. we may see the government being formed after the election. but is that going to be stable for a period of five years or five months? >> can the economy withstand such chaos? >> in the longer term what the economy needs is sound government. it is not good in the longer

term if that happens, but over a year or two, we have said in our research that we would be tempted to change our gdp forecast. with markets, it is a different matter. you are seeing that uncertainty reflected in volatility. >> thank you for joining us. >> hsbc's chief taking a stand today against the u.k. parliament. we will to you what the bank is up against when we return. ♪

>> another tough day ahead for hsbc after they reported worse than expected results. the coo and the chairman are in front of u.k. lawmakers. the grilling on recent tax evasion accusations. this is the ceo, who says he has cleaned up the bank. >> and fascinating it is the chief executive. stewart is being pulled in front of the select committee as well as the chairman. it is now going to be a two-hour-long political drama that will be unveiled in front of our very eyes. stuart gulliver and the chairman are going to be in front of u.k. lawmakers for two hours. all sparked by the revolutions -- the revelations that there was a private swiss banking unit

that was helping drug cartels, arms dealers, blood diamond traffickers and this was all unveiled by the international consortium of investigative journalists at the beginning of the month. now on monday, stuart gulliver having to say profits are down at hsbc. he also unveiled that he himself had, in a previous life, back in hong kong held a swiss private bank account himself that was a shell company, a panamanian shell company. he said it was a complex structure. many are going to want to see why the non-transparency? could he be involved in tax dodging as well? he claims not. this is something that will be torn apart in front of our very eyes. stuart gulliver and douglas find in front of the mps.

>> coming up, the french telecoms industry will report earnings. we will bring you those numbers next. ♪

>> you are watching "countdown." 6:30 in london. we may run out of patience with patients. that seems to be the message the dollar is down. on the month this would be the first monthly the client since june of last year. no doubt about it, dropping the word patience does not lock the fed into rate hike mode. >> this is not a proponent of the fic being pushed into a corner. recovery is just taking hold.

recovery is just taking hold from janet yellen. and the market is nowhere near overbought, so the momentum in the dollar still remains firm here in there is an open and or and ed which it is -- open ed or an op-ed as it is called. the swedish central bankers are saying that they do not see a problematic issue with deflation. they will use the tools available to get inflation. problematic inflation is below trend. really is a question of whether the swedes are stepping out of the currency war at the moment. that is the swedish krona gaining a little bit -- swedish krona gaining a little bit at the moment.

the point is that china is ready to hump the housing market and the purchasing managers index. both rising for the fourth month in a row. pimco called the bottom of the arm yesterday. bloomberg first heard that .7910 is where you will see the next big resistance on this aussie dollar rising. >> just getting news from the construction telecoms and media conglomerate, france's bouygues. they are saying it hundred 70 million euros. also seeing sales ahead of analyst estimates. they say they will improve their 2013 -- 2014 outlook. they have we telecom -- bouygues

telecom. and some sales are going to decline in 2015, not painting a rosy picture. they're taking a charge related to numeric cobbler -- numericable. they're saying the cash flow will be positive as well. they will say france is going to remain tough for us we had the third biggest telecoms provider in france. overall, bouygues telecom will remain flat.

this is where we want to see this story unfolding, as to whether or not the owner of numericable, whether they will make a bid for bouygues telecom. there also eyeing up -- another company is also eyeing up please telecom -- buoy gaze telecom. -- bouygues telecom. president obama vetoed a republican backed bill to approve the keystone pipeline. it is a latest sign that he is poised to reject the project

that he says wilma create many more jobs or reduce oil prices. -- will not create many more jobs or reduce oil prices. authorities ruled out terrorism saying the shooter was more likely to be a local resident with health problems. you can find out more on all of those problems on bloomberg.com. manus boy join us on the conversation, mark barton is at mark barton tv. everybody is trying to do deals. mark: everything you need to know about the u.k. election but were afraid to ask. the crude front with a billion-dollar write-down. and we will be speaking with

them and a couple minutes, you will not what to miss the interview. ♪

>> these>> are the bloomberg top stories. germany investigating a company for tax evasion. the lender says it is cooperating and will conduct an inquiry. commerzbank says they are -- the

investigation is about old cases and they're interested in rapid comprehensive clarification. american interest -- american express is raising interest rates on cards for the first time in five years. more than one million customers have been told their annual rates will climb an average of 12.9 percentage points. a firm is a making the firm is making adjustments after finding its rates were below rival cards. hewlett-packard has forecast quarterly and full-year profits that will miss analyst estimates. profits for 2015 will be $3.35 to $3.73 a share. missing the $3.95 estimate. the computer maker says the impact of the rising u.s. dollar is greater than anticipated.

petrobras has been cut to junk by moody's. the resilient energy company was cut to ba2 from baa3. moody says it reflects the concern from increasing corruption investigation. anna: the french maker of pipes that service the oil and gas industry, valerie x has reported -- valorex has reported earnings. joining us now is the company's cfo. olivier malley. your company has taken a big write-down with the fall in oil prices, how confident are you that we won't see further write-downs? guest: good morning, first we

did based on the market yesterday take a right off on some of our efforts which are exposed to the evolution of the oil price. we are previewing future creation by adapting ourselves to the creation activity in 2015 and by prepping as well. any girl -- anna: are you saying there will be no more write-downs how can you have that visibility echo -- visibility? >> it is the first time we are facing a downturn which is cyclical and we know we can adapt. we are taking real-time measures to reduce our working errors.

this gives us a good level of consideration and our ability to whether downtime. >> i was just going to say, tell me more about the oil price because nobody knows where the oil price is going to go. you must be making assumptions in your model. what kind of assumptions do you make for the rest of the year. >> we take the assumption as of today of oil prices staying at a low level for most of the year and we are taking all the measures to adapt to the situation. >> what does a lower level mean for valor act -- vallourec? >> the current levels with wti up to about $52 this is the

level we based our estimates for the year which will lead to a drop in the u.s.. and in some parts of the world as well. >> let's talk about your resilient business is one of the customers that you supply oil pipes to is petrobras. a business mired in a corruption scandal. i think it accounts for a percent of your revenue. -- 48% -- for 8 percent of your revenue. how does it feel when moody's downgrades one of your customers? guest: it is true that petrobras is facing a number of uncertainties. there has been new management will release in a few weeks or months, but on the long-term it is definitely a part of the

world where there are huge reserves of oil and gas. so for vallourec since we are the main customer it is one of the key assets for 20 years to come. anna: so that is a growing part of the business still? guest: it is a good part of the business and unlike many other countries petrobras is immune to the drop in oil price. don't forget that as of today there the net importer of oil products. anna: how much evidence do you see a slowdown in production on the horizon in the u.s..

how much do you see of shale oil and gas slowing down and what impact does that have on your business? >> the u.s. market has always been a very reactive market. it moves up or down very quickly. we're seeing that it's beginning of this year or the number of recount has are ready declined. it will be cut by 40 to 50% this year. this market can react very quickly as well and 10 after the last crisis and that shade -- shale on the rise in the u.k.. anna: what forecast can you make for two dozen 15, 1 of your rivals is forecasting a 14%

drop, are you expecting something similar? it will depend on the demand in the u.s. to be as much as that. in the middle east there will be some dropped as well it may be much more moderate. our focus for 2015, we have been evasive in 2014 and we want to force again positive free cash flow into 2015 and we are launching a very ambitious plan to be stronger in the future after this difficult, 2015 year. anna: thank you for joining us today. the co of vallourec joining us from paris. mark: a look at the bloomberg's digital output including the u.k. election.

♪

manus: here is enter investment you may not have considered. these birds can change hands for hundreds of thousands of dollars. raging demand in china, we visited a racing pigeon in belgium to find out more.

[pigeons cooing] >> they sold them a while ago for 240,000 euros. the owner of this one is one of the richest men in town. we try to be the most exclusive auction house of pigeons in the world. now we are selling 5000 to 10,000 agents per year -- pigeons per year for over 20 million per year. in 2013 we had enter auction where one sold for 310,000 euros. that is still our most expensive pigeon. the chinese market for us as

enter auction house is the biggest in the world by far. we are 15% china. the way you keep breeding pigeons is important because if they have a lot of fight and are healthy they can breed good babies. once they are bred, than the racing careers can start. when you have a champion pigeon and there is a famous pedigree, then it is much more valuable than the same pigeon with the same performance but with an unknown pedigree behind. a lot of people have different theories about how pigeons should look to be a champion. there is not one theory that everyone agrees on.

many people say you have champions in all sizes. some like big pigeons, some like small pigeons. in countries like taiwan, it is a profession for people to do pigeon netting. there on the mountains with nets to catch pigeons from the race and ask for a net -- ransom. my goal is not to grow with the company but to keep offering the best and most exclusive pigeons for people all over the world. anna: some people like big pigeons and some people like small pigeons. we all know more. mark: i will steal your pigeon and ransom it. [laughter] mark: we have been trolling the bloomberg did little output and

let's start with the u.k. because you referenced the story a few times. the coming chaos in the u.k. election is the title of the story. it is a great piece that takes you and sets you up for that u.k. election which is may 7. it might not be all over on may the seventh but it is all unpredictable. two pulls out this morning illustrate the unpredictability. some put labor six point ahead and you got puts the conservative six point ahead. but of course what will happen after the election coalitions and supply arrangements which is a bit like a coalition but less formal -- all of that is set out here. because of the parliaments now there is the only looming deadline after the election might need 2020 which could mean we see five years of something like chaos.

mark: you could have the current prime minister and the administration continue in theory, for five years. anna: because we don't have a constitution that tells him when he needs to step aside. manus: that is the argument that we just had earlier on which is that the tories will get into bed with the scottish national party and they could indeed hold the keys to the kingdom. the go to twitter there's a picture of david cameron and boris johnson, the mayor of london. make boris the heart of the campaign seems to be the theme on twitter. it is a great article. i love the use of the word coming chaos. mark: back to 1974 they are comparing it. where the second elections were eight months after the first one. mark: things have changed since

that has we have the fixed parliament act. manus: a lot of casinos have seen a tank in their share prices this morning. they're saying the tables were empty, gross gaming down by 53.5%. this is a real tragedy because the eighth month in a row where gaming revenues are down. mgm galaxy, they are all under pressure. no more free champagne. mark: a winter world cup. anna: who saw that coming? mark: a bit hot in qatar in june and july. how hot is it? anna: high 40's.

manus: illegal. mark: of course it is a health risk and that's why this committee was put together and they recommend that the tournament be short and and held in november and december two and sure footballers didn't play in temperatures which you say or equal to 50 degrees celsius which is 122 degrees there in height. of course the europe top soccer league is up in arms because what happens in november and december a key portion of the european football season. christmas and new year deal sponsored by sky or whoever european football than with so many permutations but europe is up in arms and the u.k. is up in arms and they want conversation. i have the check my average temperatures. >> it didn't go down well and most of the players and the

world cup actually originate from europe or play in europe. anna: we will take a break here on the program, join the conversation on twitter. ♪

mark: janet yellen paves the way for the federal reserve to raise interest rates. manus: a deal for greece. they approve of greek economic reforms to extend it a lot. -- extend its bailout. mark: china is said to be preparing policies. we've come to a housing market slump but the latest data, will it rebound? life to hong kong. -- live to hong kong.

welcome to countdown. anna: also coming up on the program, the ftse 100 closed at a record yesterday surviving the previous all-time high in 1999. all parties will look ahead to the open european equity market, a set of bar charts on the subject. mark: a major hurdle was cleared yesterday when the eurozone financed a list of reforms necessary to extend the bailout agreement. manus: creditors in brussels warned that it was just a starting point and greece now must deliver its promises. anna: joining us now is hans nichols. hans boy -- hans: it was a

starting point and was approved. there are so many other triggers in here and what we saw yesterday was clear disappointment from the ecb and imf in particular. the fact that it wasn't very specific what the list opposed to to do and that there were not clear assurances. here is what the madame wrote to the group, she says we note in particular that there are neither clear commitment to the design and implementation of design and policy reforms nor undertakings to continue things already agreed upon. mario draghi hinted that unless there was additional commitments, more money would not be forthcoming. there is still an additional 7.2 billion euros that could be dispensed from the bailout program. 3.6 of that is from the imf.

the next step does have be approved by regional parliaments. most of the leaders have been pretty positive. here's how francois hollande put it. he says we did get clear amendments. >> i think a good compromise has been found which respects what the great people have expressed but which also respects the rules of the european union and particularly the eurozone is charged with safeguarding. hans: there are still concerns about how greece will fund itself next month. we don't know whether or not they are going to have a shortfall. raising the amount of t-bills they can issue, they would potentially need ecb approval for that. now the parliament also has to

back this and he will address his party later today. on a girl -- hannah -- mark: an another tough day ahead for hsbc executives. today both the ceo and the chairman informed u.k. lawmakers -- here is caroline hyde. what did you say earlier, 45 minutes passing through drop off with a limo and get back in. >> it all kicks off political theater at 2:15 london time. as you say, he will be grilled by the treasury select committee. all of this ring started by revelations that unfolded at the beginning of this month that there were tax evasion's going on at the swiss private banking unit of hsbc, dating back to

2007. they help criminals and arms dealers and blood diamond traffickers and all of this unveiled by the international consortium of investigative journalists. now being investigated by the u.s., france and belgium and switzerland. as you mentioned, what was so fascinating was we just met the chairman coming up for 45 minutes. then monday happened and they announced the results and the chief executive unveiled that he too, had his very own swiss bank accounts. it was not only just a private act account but it was a shell company, a panamanian shell company. he wanted privacy, he didn't want the rest of his colleagues to know how big a bonus he was getting because he was known to be one of the highest aid. -- paid. this is all unfortunately

sparking suspicion for stuart gulliver who was sparkly clean when he came into thousand 11 and seems to come out of the financial crisis gleaming. and politically speaking he also said he expects to die a broad. these are very politically palatable flavors. they have to show how they have overhauled hsbc. they already apologized profusely in public and they put out adverts and full-page spreads in the newspapers saying how sorry they were and how they completely overhauled hsbc. the fact that the swiss units wealth management assets have now dropped by 40%, a fact that some of these key drug cartels will mention to diamond traffickers that the clients are

no longer their clients. 2011 is when the claims worked but 106 of the 140 clients are no longer hsbc clients. also look at what he is done they say i sold off all these businesses and i'm streamlining. i personally think this would be far harder for the chairman. because he has been at the bank longer. he was the cfo since 1995. it was him who went on the acquisition spree and brought in parts of the now tried it bank. when they took over republic new york and other holdings in 1999. those units, what about due diligence? he could be the head and unfortunately it will roll in all of this because people want to see a change from the past. manus: they certainly do and

thinking of mark's favorite function on the old bloomberg how has stewart gulliver done in his tenure. he delivered a return of 2.1% where is his peers are flat to -0.1%. caroline girl, previous earnings saying people felt that hsbc is too bloated. manus: that what is driving all of these stories. they were fine by the united states to deal with latin american drug cartels and a $1.9 billion fine. but interestingly we have to revert not just hsbc but just now we are learning news reported by other press that at the moment germany is investigating commerzbank

because of suspicion of tax evasion. the banking scandals keep coming. mark: very quickly getting some news from merk. anna: more banking is. mark: they own oil operations in shipping operations and tens and tens of divisions of which dansk a was one of them. i think we will speak to the ceo of it later on the pulse. manus: interesting to see who buys the 20% stake. stay with bloomberg for all of those stories and we will bring you more coverage. both of them appearance -- appearing in front of the committee. we will be appearing live at 2:15.

anna: looser monetary policy in beijing and the recovery in the u.s. gave the pmi reading a boost. life from hong kong with the latest. >> this is a preliminary reading, the number is at 50.1, beating analyst estimates. as you said they expected that to come below 50 and that would mark another contraction. this is also up from the january number of 49 17. this first reading of some momentum could ease concerns of a deeper downturn there. the central bank has interest rates and they were slashed earlier this month. still, analysts are warning not to take this too seriously. hsbc hong kong saying these data

points report a marginal improvement because of the new year in february and a scale of domestic economic activity it is likely to stay sluggish and analysts are expecting more policy evening -- easing to come soon. anna: we understand that china is preparing policies to ease some of the curves it but on the housing market. to your point about more easing could help. shery: we are hearing from sources that the measures could be rolled out but that would depend on how long the slowdown on economic activity continues especially in the property sector. apologists could include reducing this percentage of down payment needed to buy a second home and is also allowing homeowners to sell property without paying sales tax. in two years the threshold is that five years of owning the

property. all of this comes with the economic growth and today we had gdp numbers out of hong kong that were not too great. growth slowed to 2.8% in 2014 from 2.9% the previous year. for the fourth quarter growth is slowing and dissing estimates and 0.4% from the preceding month. we are expecting policymakers to take all of this into account when considering more easing. anna: thank you very much, shery ahn with the latest on china. manus: janet yellen signal that the central bank's patients has limits. paving the way for a potential increase in u.s. borrowing. peter has the story. >> in 2.5 hours of testimony on tuesday, janet yellen tried to buy the fed some flexibility

when it comes to when they will raise interest rate. she made clear they are not planning to raise rates at least for the next ratings and after that it will be determined by the data. >> if economic conditions continue to improve as the committee anticipates, the committee will at some point begin considering an increase in the target range for the federal funds rate on a meeting by meeting basis. before then the committee will change its forward guidance. >> that change and forward guidance is likely a telegraph that they plan to drop their language at the next meeting in mark but yellen stresses that doesn't necessarily indicate that rate rises are on the way immediately. it will depend on the data and they will assess it meeting i meeting. why the hesitation, yellen told the community she is not yet convinced that the economy is firing on all cylinders. there's been important progress

toward the objective of maximum employment however, despite this improvement, too many americans remain unemployed or underemployed and wage growth is still sluggish. and inflation remains well below our longer run objective. >> she was asked about a host of other issues including a proposal on chapel hill to audit the federal reserve and improves -- impose greater oversight over the federal bank. she made clear she does not support it in she will be back on capitol hill wednesday to testify in front of the house national services committee. mark: top stories on bloomberg this hour, the uk's ftse 100 index closed at a record monday surpassing its previous all-time high. we will have a special bar chart on the flip today. and which side broke a cease-fire between ukraine and

russian backed separatists, that is a meeting in paris. ukrainian and russian foreign directors left without an agreement. john kerry told the american congress that russia repeatedly lied to him about his activities in eastern ukraine. >> russia has engaged in a rather remarkable. of the most overt and extensive propaganda exercise that i have seen since the height of the cold war. >> and david cameron called for further sanctions against russia said the situation in eastern ukraine worsen. >> they should be deepened if further steps of destabilization are taken, people will be looking at the next potential flashpoint and if that were to happen, but think the argument

would be overwhelming. anna: the european central bank release a new pound note with a fresh design. transparent hologram is intended to defeat counterfeiters. the image of a hologram depicts a process in greek mythology. there was a europa league as well. anna: this is all about architecture, this is the gothic one and they're becoming progressively up-to-date. manus: yet to note the irony of europa on a euro note. once it's printed you can't look back. anna: coming back, earnings from the insurance business in france. after the break manus will be speaking to the company deputy for an exclusive conversation.

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manus: we had earnings from acts. joining us is the deputy chief executive officer of axa. a nice set of numbers for the shareholders, a dividend that beats $.95. you're probably one of the few

evil who can say you had a lovely time with the dollar but the return on equity is slipping, down 14.5%, should be worried about your earnings-per-share at the lower end of the register? top line looks good but take us to the details. guest: so basically the return on equity was still quite strong at 14.5%. we have a range of 13 to 15%. but as we continue to reclaim a certain part of our earnings the equity tends to go slightly lower. we are well within the range of five to 7% earnings-per-share growth per annum. we were 6% compound since 2007 we are quite happy with those earnings. manus: you're sticking to your

targets, i want to know what targets you will stick to. is it the double-digit emerging profit in the market or the dividends? to be some detail on the target you're sticking to and the timeline. guest: the targets we're sticking to is enter underlying earnings share growth. and that 6% we are well on track for that. the second earnings i mentioned earlier is the hourly target of 30 to 50, we have also said that we would have a community clashed -- cash flow of 24 billion and we have reached 20 million after or true years so we are also online for the target. so those targets are clearly within that range. we are happy again with the outcome. manus: let's talk about the

markets, record low interest rates and negative yield around europe, where is that pushing you as an insurance company to gain yield. where are you being pushed? guest: with a running yield for you of 3.7% which is going to decline as we continue to invest in the slow yield environment. in 2014, we invested on average at 2.7% and it for 2015 we expect to invest roughly 2%. we are necessarily influenced by the environment, but because we are operating with the new framework we have a limited budget for investment risk so we are not taking more investment risk as we speak.

this yield is the same type of risk as we had last year and with our total for the year which is running at 3.7% yield. >> tough world out there, treasuries are the worth -- worst month in five years. you listen to janet yellen and read the tea leaves for me as that is your job. you have to go to the investment commodity -- committee and make decisions. will she or won't she raise rates? >> so i was interested in reading the newspaper and some people tend to say that it is assigned she is delaying. my reading was it is more a sign that she would take action before the end of the year. in any event we are not planning for a big increase in long-term rates. what is driving long-term rates

is how the economy is shaping up in the u.s. economy is shaping up nicely. manus: are you cutting your treasury bond positions at the moment? the reducing your exposure? -- are you reducing your exposure? guest: yet the think of your company as a long-term holder of asset. we are not taking bets on the interest rates. our business is the customers with long-term assets. the main decisions are not on the portfolio as a whole but on the amount of investment left to invest in that euro. because of the new business where writing in a given year. we are not getting any particular edging positions. manus: i would like to get your opinion, we had a couple of articles written, goldman sachs

talking about stretch valuations. a new record in the past 24 hours, are equity markets special. we haven't even begun qe and europe is storming ahead. how do you look at the equity markets? guest: in the u.s. you could say the equity markets have had a good run that they are also in good shape. in europe when you compare them we are still reasonably fairly valued in europe. and with qe my instinct would be that a still have somewhere to go. manus: talk to me about the business of writing premiums. europe still has a lot to go on unemployment rates france's

flat on its back and that is perhaps being generous. how hard is it to write new business give me a flavor and how hard the premiums are to achieve? guest: on the light side we had a positive and of the year. new business up 6% and obviously there is a significant pushing back to emerging markets because our growth on that side was 14%. even in europe and the u.s. we had a good year. in casualty a revenues were only up 1%, declined to the previous years with good evolution in the u.k. in france and slightly more difficult in -- yes? manus: we have to draw a line

under it there, great to get your opinion. the deputy chief executive at axa. mark: today most -- marks the most the party in greece has surged in the polls. ♪

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make no mistake about it. they're out there. i guarantee it. welcome to the nascar xfinity series. >> you're watching "countdown," 730 this wednesday morning. let's see how the market is reacting to janet yellen. she is making the point that the patience is wearing thin. the dollar is down one third of 1% of the market is long and not overbought. it is set for its first monthly decline since june of last year. that is certainly worth reflecting on.

you are still overall considerably higher but it is back to the first moderate movement backwards by the end of february. as you can see london is just taking it a little bit lower at the moment. she is not a proponent of changing the policy at the moment are in dovish would be the overall tome and future traders still think there is a rate hike to come. keep an i on the swedish krona. we have an open editorial piece written by the central bankers themselves who think they have turned the corner. they think it is not problematic deflation and they are prepared to use many tools to achieve inflation. the question to ask yourself is are they stepping back from the currency wars? are they saying they have done enough, keep an i

on the aussie dollar. one with of china not being in the dog house and suddenly the aussie dollar is on a bit of a tear basically yet the chinese purchasing managers index at a four month high nursing the aussie dollar bounce quite nicely up from the level. bloomberg is saying that you could have a little bit of resistance on that, back to you. anna: these are the top stories at this hour russia pays for natural gas to be shipped to the rebel held areas or risk a total stop in supply. the company gasp from threatens to cut off supply. president obama the total a republican backed will to approve the keystone type line. the latest sign is prepared to reject the project which he says will not create many more jogs or reduce oil prices. the president hasn't yet decided whether to approve a permit for the pipeline.

a gunman killed eight people before committing suicide in a restaurant in the east of the czech republic. authorities ruled out terrorism saying he was more likely a local resident with mental health issues. you can find out more of the stories at bloomberg.com. mark: the election of cerise a in greece saying -- for more on the political and economic landscape we are joined by the professor of economics and strategy in london and current advisor to the new centrist party in space. thank you for joining us. it brings to mind to show the changing political landscape in europe that a party that wasn't

in existence a year ago is the most popular party in spain. there are two large parties that were going to take charge and because of the frustration with the way the crisis developed it is not there and came out of nowhere and is leading, so it is a new world and we think that a lot can change. anna: you are writing economic policy for the new party that has been a force in catalonia now has natural ambitions. you have written a book contrasting various futures or spain. single-a want to look more like venezuela or denmark a what is

your vision for spain? guest: there are a lot of people in spain that believe that we can stop the train of modernity and get out and say it is the free movement of people and we don't like that so let's get out. that future looks like venezuela and that is a future that ignores the reality of the world we are in. it ignores china and the promising technologies. and what is happening right now to syriza it shows you have to make all its he in the world you're in. i think syriza has been living in wonderland. and my book says there is a

future that exists, a future of being a normal country. it means that institutions and economic and political institutions, we have to change substantially a lot of things to have a company that is both flexible but also has a social network that protects people from the excesses of the market. >> with that in mind for spain look a different it has been to affect structural change, to eight -- affect neighbor relations change. it has taken him years and the accusation will be that he is underperforming. how much more would you be able to proffer? what makes you think that your party would have the ability to overcome what has taken years to affect very little. >> i would not concede a couple premises. i don't think he is trying to do

real in-depth reform. what his done, based on my understanding of the troika, when spain was rescued in 2012, one of the minimum things that they had to do was the financial system in the labor market reforms. i would also dispute that we want to do more radical change, i would say more in depth change. it's not a question of making the market more flexible, now you have the largest share of temporary employment anywhere and basically the labor market in spain works in a weird way. you don't adjust salaries or hours the only thing that gets adjusted is everyone with a contract gets fired and millions go through unemployment. we reached three times over 20% of unemployment. so we think you need a new system of labor

relations. it is true politician say you cannot extend this to people and they won't like it but the truth of the matter is we explained last week how it would work and both of the main newspapers said our proposals were reasonable. i don't think we are being crazy. our main idea is called insensible change. some people don't want change and we say, you can do change or you can be sensible. mark: how do you gain this course of the youth who are unemployed i imagine the anti-austerity message appeals to them, how do you try to win over that portion of the vote? guest: i think our job has to be to explain to the world we are in and to tell them we can

weaken those constraints and do better. there are many good things over the world and we can do better. anti-austerity is great if you have the money to spend but you don't have the money to spend at this point. there is a lot you can do and the european union is willing to relax some of those constraints and already the government has abandoned much of austerity. i think the youth are the people reacting best. they have been destroyed by the crisis and basically we're offering the combination -- is to give you one figure 45% of the labor force in spain are unemployed or temporary contracts or have stopped searching. there are a lot of people who are hanging from the labor market by the nails. we are telling them we will attack this problem with a set of messages.

we have an earned income tax credit so people who are earning below him him wage, the more they work in the more they get income from the tax system. and we will have this single contract a form of the labor contracting framework that will eliminate these temporary things because the rigid contracts are so rigid. mark: when we come back, so much to shout about whether the u.k. greece or spain election. the professor of economics at the school of economics. manus: join the conversation on twitter with all three of us. tell us what you enjoyed this morning. mark: up next it is bar charts

time, what is next after the ftse 100 hit a record yesterday? ♪

mark: welcome back and welcome to the bar chart, what is next after the ftse 100 record? it was 15 years in the making and after teasing us with an intraday record on monday the footsie finally closed above its

99 high of 6930 point two on tuesday to finish the day at 6949.63, finally the u.k. benchmark share index has joined the likes of spain and japan and germany and the u.s. and they'll recoup their losses from the bubble before the financial crisis, much of that is down to the unique eric to wrist six of the footsie energy and commodity stocks account. let's get technical. what is next for the footsie this is a 12 month chart, the upper part of this chart shows the 50 at 200 day moving averages. the average price of the index over those periods. 50 is the pink line in the green line is over 200 day. the 200 day moving average is above the 50 day moving average that signifies a downtrend, traditionally in an upward

moving market the 50 day would be above the 200 moving average. when shorter history is higher than longer history that is a positive but what could occur soon as you could see both moving averages are converging. if they were to converge and cross that is called a golden cross that happened in october when the 50 day moving average went low. if that crosses it is called a golden cross and that is a positive and that would signify an uptrend for the footsie. the bottom chart of the index, rfi, -- r s i, relative strength index. anything above 70 shows it is above board and anything below 30 shows it is oversold. get in here, it is that 67.

it is either sold or overboard but it is closing in on overboard territory. one last point. how is the footsie looking on a valuation basis? it is trading on 21.22 current earnings and trading 16.2 times estimated earnings which is the most since part of 2005, average over the last decade is 11.67. lesson over, footsie and a record 15 years in the making, what is next? manus: the bloomberg top stories at the hour, germany is investigating commerzbank. the lender says it is cooperating and will carry out an internal inquiry. commerzbank says the investigation is based on old cases.

it is interested in rapid and comprehensive clarification. american express is raising rates on interest -- credit cards for the first time in five years. we are told the annual rates will climb by and show average of 2.5 percentage points. the firm says it is making adjustments after finding its rates were below those of rival cards held by borrowers with similar credit profiles. hewlett-packard has projected quarterly and annual profits which have missed analysts estimates. they're missing out on the estimate of $3.95 per share. petrobras has been cut to junk

by moody's. their senior debt was cut from ba2 to baa3. moody says it reflects the increasing concern about corruption and liquidity prices that may result. over to the supermarket, morrison's names davis pops as the new ceo. there the smallest of the four main grocers. morrison's has been without a ceo since phillips was ousted in january. mark: we had earnings from petra fact earlier this morning. joining us now. thank you for joining us on "town down." coming it -- "countdown."

coming in, tell us what you are most concerned about in 2015? guest: obviously the oil price has an indirect business on our business because it determines the spending patterns of clients. fortunately with the position that we have in places like the middle east and north africa and with us relying largely on national oil companies we have seen these clients continue to spend through the down cycle. we're much less impacted than any of our peers. mark: you're implementing what you're doing with capital expenditure, and what could occur on those metrics if the oil price stays low or goes lower? guest: let me talk about this. we have taken measures to reduce

the contract rates on two different occasions down by 20%. we have frozen salaries for staff. we looking to work with suppliers and vendors. in the north sea in particular, -- i think we all want fiscal relief from the government but my big concern is the stability of the industry and having a cost structure that allows it to be competitive going forward. i believe the cost structure in the u.k. is not sustainable and we will see a rapid decline in production. we've already seen a big decline in capital spending. if we look at the international locations, what we have been doing is operating better, our engineering offices in india are

busier than ever, we 3000 engineers and technical staff in india. as a business we have to continue to do everything possible. we have done a lot in the last few years and i think the message with said in our souls we've taken the money from our operating costs into 2014 alone. we're doing something similar in continuing to drive costs down in 2015. i think one of our objectives is to maintain a position where we are the most efficient and cost-effective operator. manus: you think that osborne has got the gravity of what you just outlined in terms of what is to come? what exactly do you see? guest: this industry has a lot

to do as operators produce suppliers, so do companies everywhere to work together and with the labor unions. to work together to make the industry more efficient. you want fiscal relief when you make money at the problem is you cannot have it with this cost structure. manus: it's a good thing we are seeing the crush, -- crush come . guest: this is not sustainable and the long-term because at the end of the day we are producing a commodity which sells at the same price as a commodity produced in africa. if your underlying cost is very high, we are going back now and there is a lot of soul-searching and discussion on industry. what can we do to bring the cost down to levels that are more sustainable. i think there is a bigger

responsibility for today for the industry as a whole to work collectively or reduce the cost structure. anna: if the industry does that what kind of relief would you like to see? guest: we would like to see a relief of reducing the tax, particularly for new investment. the question at the end of the day is -- this is a very mature basin. there is a cost for producing. at $60 or $70 with the right structure you can produce 6 million barrels. if you reduce the cost structure and get fiscal relief you can produce more barrels. the question is how do we manage the decline and how do we maximize the extraction of all the hydrocarbons? mark: we have a pet peeve on the show.

we talked to a lot of oil related ceos and they are reluctant to discuss the oil price. but you are going to break the trend. you will be the new type of a ceo who talks about the oil price. as oil bottomed -- has oil bottomed? guest: i have been going to davos for the last seven or eight years. in 2015, everyone was saying $100 is the new norm and the cost of production is $80, you cannot make money below $80. this year it's a new shake recovery but with all due respect to everyone they didn't do anything and it will probably be wrong now. i am probably cynical while

everyone else is bearish i am more bullish. the fundamentals are where an additional 1.5 million barrels being produced today. the oil price decline is declining rapidly we're seeing a very rapid decline -- manus: give us the bandwidth break the trend. [laughter] guest: i think we will see $70 or $80 sooner than everyone expects. this is my own view but at the end of the day i think the only thing i can do is manage the balance sheet and recognize this is a cyclical industry and manage our cost structure in order to compete in any environment. anna: thank you for joining us today. mark: we will see $70 or $80 oil sooner than later. we have done it.

you can join the conversation on twitter. thank you for joining us today. we'll see you tomorrow. ♪

>> will record how is with global equities climbing. after 15 years, finally uncharted territory. a chinese manufacturing snaps back and it is a sign that the

latest in millis may be working its way through to the economy. they have their limits. laying the groundwork. we look ahead to the semi-annual testimony. executive grilling. the chief executive and chairman appears before lawmakers helping citizens evade taxes. if that was not enough, we would speak with the ceo of the shipping company ahead of the open. the futures are up and the dax futures are down six points. let's get back to the market open with manus cranny. >> a paz for breath. the u.k. made it through to three weeks of grinding gains toge