mark: stress test -- banks given a clean bill of health in the latest round of u.s. stress tests, but still face for the scrutiny next week. we will bring you all the details. anna: ukraine's cease-fire under review. leaders meet with further russian sanctions on the table. mark: the world's biggest piece of economic data. did the u.s. economy create more than 200,000 jobs for the 12th consecutive month? anna: lufthansa's ceo is batting

off competition from gulf carriers by booking premium customers. we bring you that interview. mark: hello. welcome to "countdown." anna: a warm welcome to the first hour of the program this friday morning. overworked and underpaid. bank of america merrill lynch is sued by former trainees for failing to pay them over time. we will bring you the latest on that. mark: the fed says all 31 big banks subjected to a stress test at the capital requirements necessary to absorb losses during a sharp economic downturn. anna: banks were tested on their ability to survive nine quarters of adverse economic conditions including a decline in the stock market and gdp, and the price of oil rising to $110 a barrel. it is the first sign since the

fed started stress tests that no firm fell below the main capital thresholds. here with more is caroline hyde. good morning. champagne corks popping all over the place. jonathan: 31 -- caroline: 31 thanks all past this minimum requirement. you were talking us through it. when gdp falls by 4.5%, when stocks plummet by 60%, house prices drop by a quarter and unemployment spikes 10%. really adverse scenarios. all 31 banks that were tested deutsche bank was added to the collection, all of them passed with eight percent in the buffer. you add up all the potential losses that the banks suffer and that too fell in total. we saw $490 billion of losses in their assumption. that's down from last year, $501

billion. interestingly, it is the consumer lending area that was hurt the most. that's where they would see the worst hit overall in terms of individuals who wouldn't be able to repay loans, etc. trading would also be hit in that case. jpmorgan would suffer the most. mark: there's more stress testing.com, isn't there? caroline: potentially next week will be bigger. i will be back to say whether the federal reserve has given the thumbs up for the payment plans that these banks have. if you are suddenly quite close to the minimum requirement, say you are not miles above that a person capital letter, that financial strength, the federal reserve might say, i don't want you to pay out the shareholders as much as you plan. they could fail in that scenario. there's another area of concern,

the qualitative issues. quality of the internal stress test. last year, citigroup failed, not because its financial requirements weren't there. it had enough of a capital letter, but the fed wasn't convinced that they won the stress test thoroughly enough. they hadn't participated in a sufficient thoroughness. thanks already have been -- banks already have been given the nod. anna: which of the banks need to be worried about this next hurdle? caroline: once again, goldman sachs is going to be in the firing line. last year, they paid out quite a significant amount. in 2014, 6 $.5 billion in dividends and share repurchases. at the moment, it just managed to pass by the skin of its teeth. 8.1% capital letter in the

worst-case scenario. they got about $1 billion to give back to investors. might be a bit of a hit to the investor base. those that are also slightly worried, morgan stanley, its ratio fell within 1%. it is about 9% capital buffer. we want to see minimum 8%. who passed with flying colors? bank of america merrill lynch. well above all minimum requirements. it was the only real bank that improved in every scenario. wells fargo also did very well. at least 2% off. anna: and none of these are forecasts, are they? just extreme scenarios. caroline: the point is, we do not want to see in a sudden terrible scenario, our economy dwindling, we do not want to see that level of concern again.

we don't want any bank failing. from a european perspective, rbs, santander, deutsche bank these are the banks that were included in the stress test. anna: caroline, thank you very much. mark: the top stories on bloomberg this hour. this weekend marks one year since the loss of malaysia airlines flight 370. no trace has been found of the airline since it disappeared. 239 people were on board. government ministers from china malaysia, and australia will discuss whether to fund further searches for the plane. the president of emirates airlines told bloomberg the disappearance of flight 370 is unprecedented in modern aviation. >> the disappearance of an airplane remains a complete mystery. where it is, i cannot say. i wish i could.

if it is north or south, i do not know. i just know that it has disappeared without a trace. that is unprecedented in modern aviation. we do not lose airplanes. mark: harrison ford is recovering in hospital after his plane crash landed on a golf course in california. 72-year-old ford is said to the in a stable condition. he was flying solo in the plane when it came down near santa monica airport. anna: as global air carriers compete across regions lufthansa has said its market share is protected by its performance in the premium sector. the ceo spoke to bloombergs rishaad salamat in an exclusive interview and kicked off the conversation with where he sees the asian market heading. >> in general, if you are the

number one aviation group of the world as lufthansa is, asia is key for us. on the one hand, we operate 240 flights here every week. at the same time, -- >> this is star lines you are talking about overall. >> this is 240 flights with just left on the group. >> [indiscernible] >> it is very tough on the lower end of the market. when it comes to quality, our nonstop offer in business class, we are doing quite well there. >> in your opinion of course. >> in my opinion which is what counts. >> what happens next? do you think you play on a level field with those characters? >> obviously, we don't.

we have discussed this for many years. basically, the relationship between how open trade can be and how fair -- >> are you saying it is unfair? >> it is to open for the level of fairness. usually, the wto would take care of that relationship. aviation is outside the wto. >> why is it asymmetric? >> the markets have very different sides and very different laws and rules to play by. >> is the competition from them tougher this year than last year? >> with their rate of growth, it is getting tougher every year. we are regaining market share from other players, but it is no doubt -- >> the big boom this year has

been the fall in the oil price. jet fuel prices have folded on that. it must be getting easy for you getting back towards the black at least. >> lufthansa has been in the black for the last years. we made a billion euro profit last year. it is about getting more black. therefore, oil prices helped. nevertheless, we are hedged for a long time out. and of course the weak euro is giving us some headwinds on this. >> the euro does give you -- you can give with one hand and take with the other. >> overall, the weak euro hurts us. it creates higher euro expenditure for the same oil price in dollars. mark: you can join the conversation on twitter. let us know what you think of the show.

tell us the stories you want to hear more about. one of the subjects trending on twitter #harrisonford. the big news today, his plane crash landed on a golf course in california. his son said he is made of stern stuff. anna: just about to tweet america's oil paradox explained. all you need to know coming up on "countdown." >> the greek government made some pledges to its electorate before the last elections. that's understandable, but i don't think the european people can be expected to foot the bill for someone else's promises. anna: the prime minister of malta takes a tough line on greece. more of that exclusive interview when we come back. stay with "countdown." ♪

mark: it is 6:14 here in london. let's chat about the ecb. yesterday, big day for mario draghi, outlining the details of his qe program. here to discuss is the managing director and chief economist at sea plus economics.

he had a bullish tone, didn't he, as he explained the details the intricacies of the qe program. i suppose he had some data to back that up. guest: we had some important messages indeed. they are more optimistic because the downward momentum has been arrested. of course, inflation expectations are still at low levels. the key after august 2014 is that euro inflation expectations are firmly anchored is still missing. while the eurozone is more optimistic, he is not confident enough. they given us two clear signals. they are fully committed to continuing asset purchases even as cpi inflation and growth are said to improve in the next year. the second thing is they have left the door to continue as it purchases wide open. one of the key things th

ere was the medium-term inflation getting close to the mandate, still undershooting and more importantly, the eurozone gdp growth forecast. mario draghi mentioned that risks are still there. with deflation risks contained they are still present. it is not about whether asset purchases will continue beyond september 2016. it is about when they will end. when we will get the confidence of the governing council. anna: what about the details about how quantitative easing eurozone style will work? did we get enough detail? there seems to be a lot of flexibility as to who is going to buy what and when. some people say that's a great thing and others say that doesn't give the market certainty.

what did you want to see? guest: we are getting quite a bit of certainty on the important details. the ecb has become a major new source of demand for government debt. when you compare the demand which is the ecb p's -- capital keys versus government supply issuance for 2015, how much supply there will be in the market, there are three things. the first thing is that we will continue to see sharp impressions in growth against germany, which is a great story for eurozone credit particularly for gdp and inflation growth projections. anna: is the ecb going to be buying more than is issued? guest: there is confidence that the ecb qe injects with tighter spreads.

that's good for eurozone credit markets. the second thing is that so far we are seeing euro five-year forward braking market expectations pushing higher. that prevented german bond yields from falling to negative territory. the third thing is that the euro will probably stay week for some time. it is clear that even as portfolio managers return -- [indiscernible] we are probably looking at hedging that exposure. mark: on the euro, if we see continued weakness low oil prices could boost spending as well. the measures announced pre-qe

all those factors seem to be getting a lift to the economy. has draghi caught a lucky break? some suggest qe is beginning at a time where maybe it is still needed but maybe the economy is doing better than it could be doing. is there a risk? guest: yes, absolutely. this is a great question. i was privileged enough to the in a meeting recently where we were talking about momentum the signaling indicators growth, business cycle inflation inflation expectations, they are all pointing upwards. there is momentum giving us a more positive signal on the eurozone but there is also a level of slack in the eurozone. private sector debt is far too high. we are far away from levels of eurozone unemployment that are

going to be consistent with sustainable 2% inflation. i think we are just not at a point where the stopgap can be close enough to forget about sustainability or disinflation. mark: we will be back after a short break. ♪

anna: welcome back. you are still watching "countdown" and we are still talking to lena. let's talk a little bit about greece. you are still preoccupied with greece, are you not? guest: absolutely. a week ago, when this preliminary agreement was reached on the four-month extension, everybody thought greece had been kicked into the long grass again. although grexit has been averted for now, it doesn't look likely. yesterday, the ecb voted to extend the lifeline for greek banks, but what has become clear is that greece's membership of the eurozone is hanging on a thread. it will be extremely difficult for the government to avoid some form of default in the next few weeks. of course, the response extended by the ecb through the greek

banking system will help the government to meet its imf payments for the next week at least but we got a huge amount of t-bills that are used to finance funds for government day-to-day running and it is not clear that the greek banks can fund themselves. anna: how quickly does that come to a head? guest: that's exactly the question. i think the greek government can extend until the end of april just about, but that will probably come at the cost of delaying social payments public-sector wages. it will be difficult for the government to avoid a political crisis at home. with greece running out of cash on a weekly basis now, it looks unlikely that we can avoid a default scenario. mark: let's focus on the u.s.

jobs report. one question i ask you at the break which i'm going to ask you on air, it is aloften called the world's most important piece of economic data. is it still? guest: in terms of market moving potential, it is one of the most important indicators out there. i think it is the inflation component of the u.s. nonfarm payrolls report that will carry the mostly for fed policymakers ahead of this month/fomc meeting. the most important thing here is that even though we may see disruptive headlines, we will have to look anything headlines. what we are seeing this week is a combination of serious factors. strength some weakness. we saw weakness in the

productivity report. that means that labor costs are rising. we also saw some volatility in jobless claims. we may get a figure close to 200 k. we may get below 200 k today. what is happening here is this extraordinary run of strong u.s. nonfarm payrolls figures is coming to an end. we are probably getting to a point where nonfarm payrolls will him closer to 200. anna: but it is not going to lower. guest: it is important to distinguish between u.s. economic weakness and the recovery maturing. mark: cut to the chase, give me the months. guest: i think there's a strong chance they will raise in june. i think the choice is between june and september. by the time the fed starts raising interest rates, the youth unemployment rate will

have fallen below the long-term trend. anna: thank you so much. mark: stay with us. up next here on bloomberg european leaders meet in latvia to talk russia and ukraine. we will bring you more of that after the break. ♪

anna: welcome back to "countdown ." time for a look at the foreign exchange market. the dollar set for its best week in six. before we get that u.s. jobs report they are on. the contrast between the ecb's quantitative easing stimulus program which will start on monday, contrast that with what the fed is doing. lena telling us that she thinks the fed will start tightening in

june or september. 235,000 is the number that is estimated by economists as having been created. that's the number of jobs created by the u.s. economy in february. a high bar was set in january. we saw 336,000, that was the three-month average through the january. what will february bring? as bad weather at a negative impact on the amount of jobs created? strike action in some of the ports on the west coast, has that had a negative impact? a lot of focus on the wage elements of this report. average earnings remain subdued since the start of the expansion phase in 2009. we've had some encouraging finds from the likes of walmart about increasing wages. will we see a number of of 200,000? if we do, it will be the 12 consecutive payrolls number

above 200,000. mark: the top stories on bloomberg this hour. the uk's chancellor exchequer says he made a mistake not restructuring the state-controlled royal bank of scotland after 2010. that's according to a report in the financial times. the report says osborne would likely -- would like to move quickly to get rid of it. the u.s. stress tests aren't good news for goldman sachs. it isn't enough for the firm to match last year's dividend. share purchases will be less than $1 billion in excess capital to pay out the shareholders. that is much lower than the $5.4 billion it returned in 2014. bank of america merrill lynch have been sued by two former financial advisors who claim they weren't paid overtime for 10-hour days long nights, and

weekend work. the former trainees accuse the companies of violating the fair labor standards act. damages exceed $5 million according to papers filed with manhattan federal court. ecb president mario draghi is claiming victory for his stimulus program before it has even started. draghi's 1.1 trillion euro program of qe will begin on monday. he says it will start the fastest growth in the eurozone since 2007. anna: russia and ukraine are on the agenda when european union ministers meet today in latvia. the kiev government began to withdraw heavy weaponry from its easternmost regions in february, with withdrawal continuing as the peace accord takes hold. mark: ukraine's government has

been talking about the economic cost of the conflict. if foreign reserves fell for a ninth consecutive month in february. output is expected to shrink this year. kiev is receiving $17.5 billion in international aid. anna: let's bring in tony. good morning to you. what signs are there that the cease-fire will hold? >> good morning. as you said, ukraine's military is withdrawing more of its heavy weaponry from the frontline and it says it will continue to do so as long as the situation remains calm. rebel forces say they will also pull back their material. generally, the impression is from those on the ground that the cease-fire is taking hold. it remains fragile. there's a great deal of mistrust on both sides. the number of those killed and injured has declined significantly. anna: what are the process -- the prospects of the u.s. sending arms to ukraine?

it has been talked about for a while. opinion seems divided. >> there's a very active debate taking place in the u.s. among administration officials about whether it is a good idea to send lethal weaponry to ukraine to help ukraine defend itself from what the u.s. and the u.k. say is russian military support. martin dempsey said he thought it would be a good idea to send weaponry to ukraine. the number two in the state department said the opposite. he thought it would be a bad idea. the argument being that however much equipment the u.s. and others might send to ukraine russia will be in a position to send far more, and this may lead to a fresh escalation of the fighting, a renewed cycle of violence that would cause the truth to collapse. -- the truce to collapse.

anna: tony, thank you very much for joining us. mark: 6:35 in london. this month, we could see another global bank find for violating sanctions. this time it is germany's second-biggest lender. with more, caroline hyde is here. is commerzbank in the firing line? caroline: it could be up to $1.4 billion, at least $1.4 billion that it will have to pay. the justice department, the u.s. attorneys, the federal reserve, the manhattan district attorney's office, all these regulators and institutions want their pound of flesh from commerzbank. they feel they violated the united states sanctions laws. they feel they've done deals help to move money around for people based in iran, people based in sudan.

these are blacklisted countries in the united states. it is the latest settlement from a global bank. it was only last year in june bnp paribas pleaded guilty to violating sanctions laws. it had to pay $8.9 billion on the back of that. i feel there's been a lot of these sanctions fines but at least 22 cases have been brought by the u.s. against financial institutions since 2009. anna: and this isn't the first time that commerzbank has been mentioned along these lines. caroline: exactly. clearly there are claims against them once again. they ran afoul of u.s. sanctions back in 2011. it was about deals done in 2005. they agreed to pay just

$175000, a much smaller fine than the $1.4 billion that could be coming its direction this time. there were claims in violated cuban asset control regulations. this time, it is broader. what it is going to do gay hit for is the german federal government. germany still holds a stake in commerzbank, 17% after it bounce it out in 2009. -- after it bai9leled it out in 2009. it is trying to repay the government, trying to bolster its capital. anna: caroline, thank you very much. mark: join us on twitter. join the conversation. people have tv following their name. extra special. not as special as those with news following their name. anna: where is this going?

mark: nowhere. i'm just killing time. anna: coming up, we are going to talk about eyewear that you can get on the high street perhaps at a lower price than you expected. it is friday. you are watching "countdown." ♪

anna: welcome back to "countdown

." in the u.k. asian revenue and customs brought in more than one billion pounds. that is according to a report in the financial times. the hmrc began scrutinizing prices charged on transactions. the eu is not a priority for u.k. voters in the upcoming election in may according to a recent bloomberg poll. respondents were asked to take up to three of the most important issues. most said the economy and health care. u.k. opposition leader ed miliband is announcing plans to cap charges on how products designed for people drawing down pension savings, according to a report. it is one of a series of market interventions that miliband has

promised if he is elected prime minister in may. and amazon.com has opened a store on the alibaba group's website. amazon is trying to reach, or expand its reach in the world's second-biggest economy in an effort to strengthen its international sales number. mark: 6:43 in london. the eyeglass industry has been controlled by a few large players. that empire is slowly crumbling. enter our next guest, two of the guys behind toy shades. they've gone from online to selling at top shop. welcome to the two jameses. to my right, the founder and creative director. you've got news to an us. it is getting bigger, isn't it?

>> it is. we are rolling out to at least 10 more. that will be four within london and six throughout the u.k. from there hopefully, take on the u.s. and some overseas top shop as well. and then looking at other retailers as well, we've got another big u.s. retailer that's interested in the products and services. obviously, with the one we started with, we are doing prescription. for 40 or 50 pounds, it is a complete game changer for high street eyewear especially with the stylish products we provide. anna: you talked about the u.s. tell us who that is in the u.s. >> we would rather keep that one quiet at the moment. we are in negotiations with top shop as well as overseas, but it

is a very well-known brand. anna: that could be a competitive market. we were looking into the industry. warby parker is a player in the u.s. could be the next one million-dollar company to list. there are players in this space, aren't there? >> there are. warby parker is a fantastic company. they started out small in eyewear, two guys who looked at the same type of industry, how consumers were paying a lot of money for glasses,'s prescriptions etc. they have lowered the price on. that's what we are trying to do here. the in-house prescription we are doing is a similar concept. we are trying to change it and get into the u.s. market. mark: what is your vision? how do you differ yourself from those goliaths that dominate the

industry? >> the key is fashion forward. it is a similar model to what has been used before online and at a lower price point, but ensuring that it is retro relevant product. they appeal to people across all ages. we initially thought by starting at the price point we had, it would be 16-25 euros. -- 16 to 25-year-olds. it is actually 15 to 40-year-olds. as we grow, i think that it is not a huge percentage, as how warby parker would probably be 90% prescription. people are buying them just because they are so fashionable. we have 15% or 20% of customers who would be buying prescription glasses. 80% are buying them just for how

would they look. anna: you are not wearing any and you have a glasses company. tell me about the relationship with top shop. i'm fascinated to find out how that works. when you are a small business you are given this opportunity to grow, you want to grab it with both hands but you must be aware of your size in relation to the business you are going into. >> you are right. we have to be very careful. we were very careful going into top shop. it is a wonderful opportunity for a business the size of toy shades to get into. they worked incredibly hard helping us to get the design right. we had control over that, which is incredible. and they have been helping us. yes, it is slightly daunting especially our first weekend trading, but we did very well.

we have done very well and i think they realized that we are something of indifferent. mark: is it a fertile ground, the u.k., for entrepreneurs right now? i say this with the election looming in a matter of months. what helped you, what hindered you, what do you need? >> initially, one of the major issues we had, trading off paper. we had to form small acorns. it was very much starting on a shoe screen -- a shoestring. from there, it was easy to grow. with companies like top shop they are always very much on the pulse and looking for what is new. the exposure that we gain from that is massive. i think the other thing that does help is the entrepreneur

and investment rulings that allow for investors to invest from a tax-free perspective. things like that are massively helpful. anna: your backgrounds are not in eyewear, are they? property, banking? >> mine was banking and then i started the clothing company. james is property. how it came about, i came home from running a clothing company and watched a tv show about the eyewear industry. the huge margins that these guys were charging. to me, it struck me that there was no one doing it better at a relevant price point. mark: are we allowed to say when you are going to make money? are their ambitions for sales targets and profitability? >> we run a pretty tight ship.

we have been making money, but now the infrastructure costs growing into top shop and expanding from there, buying 25,000 lenses, but hopefully within the next year, year after, we should be going ok. >> we are well-positioned. we are a well-funded business. we've got some good backers behind us. the company is making money. anna: ok jameses thank you for joining us. mark: still to come -- anna: we will show you a couple of gadgets you may have missed at this year's mobile world congress. mark: and, we are looking at our favorite stories from bloombergs digital output, including harrison ford's plane crash.

stay tuned. ♪

mark: -- anna: welcome back to "countdown ." as the buzz in barcelona dies down, tom mackenzie looks at some of the weird and wonderful gadgets you probably didn't hear about at this year's event. >> mobile world congress is coming to an end. we have seen the smart watches

and smartphones. what we haven't seen is this johnny walker blue label. it has some pretty smart tech built into its label. it allows the buyer to find out all sorts of things about whether or not this is a genuine bottle of johnny walker blue. it will also give you a list of recipes. that's what you get. this is an iris scanner. i'm registered on this phone. when i look at it, it scans my irises and within a few seconds it opens the phone. this is just a prototype. from the security obsessed to the self obsessed, you can get a 3-d printed image of yourself the thanks to this -- of your selfie thanks to this. this is how it works. i hope this out, press start

move it around like so. this is what is captured from the scan. then it moves on to the next screen. this is the image of lucas' face. we upload that to the printer where it is printed out. it takes about five hours. the end result is this lucas' 3-d selfie. anna: wow. five hours. i'll get you one for your next birthday. mark: time for our picks from the world of the world wide web. harrison ford, big news today. not financial, but drove in this morning at 2:35 a.m. harrison ford, a big movie star.

he is stable, that is the good news. his plane crash landed yesterday on a golf course near santa monica airport. it is a single engine plane. just him inside. he was taken to a local hospital. his son tweeted out, that is ok. battered, but ok. he's every bit the man you think he is. with the new "star wars" film coming out, disney are very happy, as we all are, being massive han solo. fans. anna: we wish him a speedy recovery. this is the home of the new lego created world. the toy company is appealing to girls. hasbro is ramping up spending. $1 billion on their girls business. this is the one that came out. could lego now pass mattel as

the world number one toymaker by revenue? that could happen. "countdown" continues in the next hour. we will bring you more from our interview with the lufthansa ceo. stay with us. ♪

>> stress test relief. all 31 big banks given a clean boyle health. they still face further scrutiny next week. we'll bring you all the details. >> ukraine's cease-fire under review 3678 further sanctions on the table. we're live in moscow with the reaction. >> did the u.s. economy create more than 200,000 jobs for the 12th consecutive month? >> and commerzbank said to be near paying $1.4 billion over claims it violated u.s. sanctions. we'll tell you what the fine would mean for germany's second

biggest bank. >> welcome to "countdown." i'm mark barton. >> i'm ann aedwards. >> we have an exclusive interview with luff lufthanz's chief executive. >> banks were tested on their ability to survive nine quarters of adverse economic conditions including a decline in the stock market and g.d.p. and the price of oil rising to $110 a barrel. it is the first time since the fed started stress tests in 2009 that no firm fell below any over the main capital thresholds. here with more is caroline hyde. good morning again, caroline.

so are people celebrating? >> maybe. but i do think the champagne is on ice for the time being. i'll get to that in a moment. it is the first time six rounds of stress tests all of them passed. ufrle them have sufficient capital. an 8% buffer, that protective layer. even with unemployment soaring to 10%. even with house prices plummeting by a quarter. even with wall street crashing by 60%. these banks are strong enough they have enough capital reserve they would be able to lend to companies, to individuals. basically the federal reserve added up all the losses and said if you put this to the test, actually there would still be significant losses. that is less than was the case last year overall. interestingly, trading would hit jpmorgan chase the most in the united states.

the biggest damage would be to consumer lending. 39% in this scenario would be felt in consumer lending. i think it is a positive in this nightmare scenario these banks are strong enough. thursday i'll probably be back here again discussing it. this is when the federal reserve says yea or nay. if you a bit close, a bit too much of a fine line i'm afraid we're not going to let you stop paying out dividends as you might wish. you're going to have to reign in your payment plans to your shareholders if you're too close to the edge. also what is so interesting is not only might you have your share buybacks scaled back, the federal reserve might also say on a quality basis we're saving

you. citigroup was told overall they had not participated in a sufficient matter in a stress test. they were then failed afterwards. so still keep that champagne on ice. >> with that in mind then which of the banks need to worry about the second round. we're going to look ahead to next week and think is the fed going to tell us? >> this is a bank that is on the line. it has 8.1% capital buffer. just .1% above that minimum requirement. it only has a billion to be able to give back to investors. last year it gave out $6.5 billion. they are going to have to scale back in terms of the amount it gives back to shareholders. that is one of the key losers i think. by the way, all banks would have been informed as to whether their payment would have been accepted by the federal reserve

yesterday. morgan stanley. it is an adverse nerio. they have a 1% excessive -- about 9% over. that wasn't exactly leaps and bounds. the winning side, bank of america, merrill lynch, they have a significant amount of a buffer overall. also wells fargo surpassed every minimum requirement by 2%. >> thank you very much. caroline hyde with the latest on the bank stress tests. >> russia and ukraine. just to remind you what's happening on the ground in ukraine. the kiev government began to withdraw heavy weaponry from the eastern most regions in february. that withdrawal continues as a peace accord with pro russian forces takes hold. >> ukraine's government has been talking about the economic cost s of the conflict. its foreign reserves fell for a ninth consecutive month in february. economic output is set to shrink 12% this year.

>> tony, what signs are there in this cease-fire will hold? >> good morning. well they have said that the situation remains fluid and unpredictable which i think is an indication how fragile the situation is on the ground. both sides continue to say they are withdrawing heavy weaponry and judging by the declines in cash numbers, the truth is gradually taking hold. it remains very fragile however, the situation and you train's president said that it will be a mistake for europe to view the situation with rose-tinted glasses. there are still many problems to resolve. >> what are the prospects sending arms to ukraine?

>> there is an active debate taking place in washington about sending aid to ukraine to combat what the u.s. and e.u. says. the army's joint chief s of staff dempsey said it would be absolutely a good idea to send the aid but the number two figure in the state department said he thought it would be a mistake because whatever what aid was sent to ukraine could be matched three, four times by russia and this could lead to anesque lathelation of the situation, a break -- escalation of situation. the jury is out whether the u.s. is going to send any lethal weaponry to the ukraine. >> many commentators saying putin's attention could turn to

that region after ukraine. >> yes. it is an informal meeting of e.u. foreign ministers. clearly the situation is at the top of the agenda. security concerns for other member states over the european union and nato, which is good for baltic republics are also very high on the list. the region itself has a large number of russian minority people in both -- latvia as well. there are concerns that similar activities could take place on their territory that began the conflict in ukraine. so there is nervousness, russia so far as dismissed all of these concerns but nevertheless nato and the e.u. are taking it quite seriously. >> thank you. tony hall pin in moscow today. >> in the u.k., rever knew and customs tpwhrouth more than 1 billion pounds from challenging

the pricing of internal deals conducted last year at multinational companies at amazon, starbucks and google. the price charged on transaxes within different parts of the same company. people were asked to pick up to three of the most important issues they and their families face. most listeds the economy and health care as their top concerns. u.k. opposition leader ed miliband is announcing plans today to cap charges on new products designed for people drawing down their pension savings. it is onor a series of market interventions miliband has promised if he is elected prime minister in the general election in may. amazon.com has opened a store on the alibaba website.

it is to market good directly to web shoppers in china. amazon is trying to expand its reach in the world's second biggest economy to strengthen its international sales numbers. >> you can join the conversation on twitter. big trending topic. the u.s. jobs report. is it the world's biggest piece of economic data? we have already asked that question. the inflation component to have report is her biggest piece of economic data. there is anna at annaedwardsnews. i'm at markbarton tv. >> coming up on the program should we be worried about u.k. focused equities? our next guest thinks that we should be. that is after the break. stay with bloomberg. ♪

>> welcome back. europe stocks at their highest since twen. for more, let's bring in matthew beazley. hi. i did a chart yesterday, the bart chart. was it the day before? memory fails me. it showed the euro stoxx 50 going that way and estimates since 2012 to be fair going that way. and the question posed by me was putting -- aside, do earnings

need to pick up to warrant the 15% rise we have seen in european stocks this year. >> 5%. it has been a big driver of that. we are expecting upgrades to come through with it. what we're all looking for is key to a sustainable rally. some recovery in the underlying economy. it would drive demand higher. with markets having done what they have done even if you exclude the exports, the economic data that we're seeing the e.c.b.'s -- about raised expectations for growth in 2015 and 2016 is suggestive growth may be starting to come through. >> interesting for you as a

stock picker you work at the detail and you are having to think a lot about currency movements now. management tells us they focus on things, excluding things they can't control. you're having to focus in on that. >> it is so significant. every company is different. there is no one size fits all policy here. as an investors. everyone has a different translation, transaction exposures. so yes, it can be very meaningful. trying to get that earnings estimate number right. currency is a big driver of that. >> banks. do banks trouble you having read your report earlier, i looked at banks over three month over year to date. they are lagging, aren't they? out of the 18 industry groups they are near the bottom. what is going on? >> they led markets in 2013 when

we had the very strong european equity markets. 13 pbt%. i don't see how performing in the markets -- as well. the banks have been left out of that market movement. this is an interesting thing. the market looks more more value in europe, banks should come into focus. they are cyclically exposed stocks. yet q.e. is bad for most banks. it is pushing costs of funding down putting pressure on their margin spread ultimately. the top line demand that we just talked about it is difficult to see how they can grow their income. so it is kind of rational that banks have -- i would suggest that markets move sustainbly higher from here. that is dilemma. >> is q.e. the solution? >> it is interesting from a lowering cost and funding

perspective le we're not seeing that translate yet into growth. it is what the e.c.b. wants. is it is it going to stimulate demand? is it going to drive loan growth? right now we just don't know. >> you talked about japan which we'll come to but i want to draw comparison to q.e. and japan and what it did to the equity market. one year, the nikkei, thetopics up 1%. -- topix up 1%. could we see q.e. stocks induced further? >> it has tended to draw asset inflation. the c.p.i. growth as well. that didn't rp really happen in the u.s. you didn't see it pick up. you see a lot of asset inflation. it caused stock markets going up.

absolutely q.e. is going to drive equity markets substantially higher. >> if it does result in asset inflation does it have forgets in the euroo zone? >> it is more broad than people believe. it is multifaceted. it can be about confidence. >> back to you in a second. he will be back. ♪

>> welcome back to "countdown." we're back with matthew beazley. let's talk about the a little bit. what are you investing in this the u.k. at the moment? a 5% stake in thomas cook. the international business hong kong based diversified business. they are buying 10% of thomas cook a travel company. do you like travel stocks at the moment? are you interested in that business? >> it is a very chief stock. it has been rescued by howard green. it is very exposed to the u.k. economy as well as northern european economies. scandinavia, big markets for it. it pries to bring in more

specialized content. it is going to be the best -- underlying economy in the u.k. >> it is holding at 6961.14. a new high yesterday. it is funny in its composition. >> somebody called it irrelevant. >> it is a bit of a strange beast. >> a composition money stocks, pharmaceutical stocks on top of very large banks. most people would suggest it is not the most -- index of the u.k. economy. >> or the global economy. >> u.k. moved towards election in may because clearly there is lots of uncertainty. lots of the potential outcomes are probably quite negative. not positive for the u.k. economy. i think it is important here, the scottish re-referendum back in sovept last year.

markets started to worry about the outcome of that referendum as the range of outcomes narrowed. markets were consistent. there was never going to be a yes vote by the people who offered independence in scotland. look at the betting markets ahead of the u.k. election. they are very clear as well. they will get the most likely outcome. >> that raises a number of questions. you really think we should disregard polls and all of the science and money that goes into creating polling and just look at what people are betting on. >> i wouldn't say -- i'm observing. the weight of money was unwaivering in the runup to the scottish referendum. look at the online betting. they are very consistent. where i would worry as an investor is it going to be

perceived as being fiscally irresponsible. it will be asuled there will be some forced breakup of the u.k. why it may be good in sense of believing fiscal responsibility investors i think will start worrying aggressively about the u.k. leaving the eurozone. i guess what i'm suggesting is there is a range of outcomes. >> how do we position ourselves then? >> you have to be very careful making sure that the businesses you own are stock specific. some of these stocks are going to be exposed to u.k. we own lloyds bank. driven by the u.k. economy. the economy starts to plateau a little bit after two strong years. there are still things we think

lloyds bank management team can do to drive the share price higher. >> i don't think i understood the elements of the -- the nonconsumer businesses. take further costs out. i think it has obscured the growth. one is growing the underlying book. it is being damaged by the -- conduct charges. damage that growth of the book value. they start to move away. this bank is growing. its equity value a lot stronger. >> do you think international investors are -- u.k. action? will they be put off u.k. assets in the runup to the election? >> lots of corporate management teams are cautious about investing significant amounts of capital in the u.k. now. >> u.k. companies are cautious? >> about putting fixed asset investments in u.k. if i'm an exporter out of the

u.k. outside the eurozone the prospect s of paris. i would like to choose the nonu.k. option. >> that might not fix itself within two years. >> that could -- structural pressure on sterling for that two to three-year period. >> that is probably -- >> i think japan is a very interesting equity market. i think it is fascinating that the market is going to perform without the yen weakening. it is a crucial time. we have the wage negotiation period. you start seize wages going up that starts giving people confidence. >> thank you. >> coming up, we're going to talk frontier markets. we'll speak to an author.

our guide to the wild frontiers of investments after the break. ♪

>> welcome back. you're watching "countdown." time for a look at the foreign exchange markets. let's hone in on what's happening with the dollar. we're waiting for that all important jobs data. we're talking about whether the jobs data or the inflation data is the most important. we get the jobs data and all of its components later on today. this is where the dollar is now. set for its best week in six. it doesn't take a great deal of imagination to contrast what the e.c.b. is doing in interpretors quantitative easing and stimulus what happened the fed is doing. might we see the fed tightening

interest rates later on? one guest said her thoukt requesters -- thoughts were in june or july. the consensus estimate is 235 jobs created in february. that is what we're expecting the payroll report to reveal. how much of a chunk will bad weather have take out of the numbers? how much will strike action on the west coast take out of this number. a bit of a focus on the wage situation of course. average earnings have remained subdued since 2009. but since then very recently we have heard retailers like wal-mart talking about pay raises. we're seeing better data coming through in january. will the number be over 200,000? will wisdom the 129 consecutive payroll increase over 200,000. the last time that was achieved

was in march 2005. >> george osbourne said he made a mistake not to restructure the r.b.s. the report said he would like to move quickly to get rid of it if he can return to power in may. goldman's cushion of extra capital is not enough for the firm to match last year's dividends and share repurchases. less than a billion dollars in excess capital to pay out to shareholders. much lower than $5.4 billion in return for buy backs in 2014. bank of america and its marlinge merrill -- merrill lynch unit being sued by two former employees. they claim they were not paid overtime for overtime. they acudecuse the company of

violating the fair labor standards act. investment groups frozen brought a stake in thomas cook. it is worth 92 million pounds. the deal will allow them to -- with other travel business including club med. and in an exclusive interview with bloomberg a prime minister wants greece to stay in the eurozone. he said greece should avoid defaulting on its debt. >> we are the biggest contributors to the greek bailout. we would not accept any sort of haircut. but we -- so we want our money back. but to get our money back, we need greece not to default and

stay in the eurozone and we need greece to grow. >> 7:33 here in london. let's ask this question. how much risk will you take to make money? frontier markets, perhaps they are riskier and more difficult to navigate than some of the emerging markets. our next guest travels the world to find out to facts. this is his new book which is as a result of this world tour. welcome to the program gavin. >> thank you. >> so how did this book come about? you basically approached a lot of frontier investors and said can i come with you on your road trip? >> it started with a question where is basically the best place in the world to invest. i started looking into the data. it turned up some surprises. the best country this decade is the country where u.s. drones were bombing.

where osama bin laden was hiding. the index is up more than 1,000%. this century. that got me thinking about the fund managers that make the right calls. i went to a spread sheet and sproached them and asked which is the best market for you in five to 10 years and can i come along with you? >> frontier, you mentioned the word and all sorts of words spring to mind. risky, vulnerable, dangerous, economically unstable. all of these words, images spring to mind. is there a real appetite for investing in these types of economies at a time when there is so much uncertainty and instability in the world already? >> the main point is about functioning markets. the risks are very obvious. they are staring you in the face. i was in egypt during the revolution over the anniversary of the -- mubbarak. that week i was walking around

and there was a guy that was lying on the ground wasn't quite sure whether testifies unconscious or dead -- whether he was unconscious or dead. i tried to document it taking a picture. it wasn't the sort of environment where i could call for help. that landed me in place detention for a day. i was face to face with a beheading these are countries where you can't escape the risks sometimes but there are seismic changes going on. in egypt as an example, the administration is slowly trying to address some of the foreign concerns. you saw that with the release over the al-jazeera journalists last month. you're seeing that with the economic concerns that foreign investors have. the huge budget deficit weighed on by energy subsidies being addressed. in saudi arabia you have the opening of that stock exchange coming later this year. that is massive.

that is going to create one of the biggest emerging markets. >> let's talk about the five frontier markets. how did they come out? nigeria is top of the list. how does it deserve the top spot? >> ok. so each country was picked by one of the top performing investors and when i was traveling i asked each of the 10 to stack the countries and companies and securities that we looked at on a scale of 1-10. this is the next decade or so. they picked nigeria as number one. vietnam as number two. saudi arabia as number four. and argentina as the number three. so it is kind ofing particularly in the context of today's markets. nigeria is the worst performing bond market, one of the worst markets. you are have all of the problems of the election-related violence and the collapse of oil which is wrecking the economy right now.

these investors are looking beyond that. they are looking to a point when nigeria will overtake america as the biggest -- the third biggest nation on the flan planet by 20 -- planet by 2050. >> it does make you think of that. what makes them frontier opposed to emerging markets? i would have put some of those in a broader emerging market box. >> it is a mix of factors. saudi arabia you wouldn't think of as a frontier market. it is certainly not poor. it is a middle income country. but it is in that box because it is very, very difficult to invest there. there are foreign investor restrictions. it is a matter of liquidity in the market and also a matter of risk and also the level that the industry is at.

in some countries, the -- there is lots of developments expected still. particularly on the consumer side. so vietnam is an example. most of the con sungs is just starting to -- consumption, shopping malls popping out for the first time. >> what is it like traveling there? i have spoken to mark moabias mostly by remote either in hong kong or asia. what is it like on the road with these people? >> they have very different styles. of how they go about investing. mobias is 78 years old. he has a gentlemanly approach with companies. we went to one country company in vietnam that was seriously underperforming its peers. the stock was up 3%. its rival was up 25%. mobia owns almost 1/5 of this

company. we expected the sparks to fly. it was quite the opposite. it was a gentlemanly discussion over lunch. he goes around the factory and kicks the tires and sees what the quality is like. it is all about getting information out of the company that will give him an advantage that the rest of the market is not seeing. so he came out wanting to buy more of it. others are more combative. in sri lanka, when we were there, the central bank was assessing the non-banking institutions that were building up with lots of nonperforming loans. the solution to that is to get the banks to buy out their rivals. the investor i was there with thought that was a terrible idea. he owned the banks. he told the central banks that. >> what was their response? >> we're going to do it neafment >> gavin thank you so much for joining us. fascinating conversation. >> join the conversation on twitter.

let us know what you think about that conversation. fascinating chat. gaveb's book "frontier." bart chart is next. why gold investors should be wary of march. stay tuned. ♪

>> welcome back. time for today's bart chart. why gold investors should be

wary of the month of march. after february's 5% drop in gold, the biggest monthly decline since sent, you might be forgiven for thinking the worst is over. here is a warning. you might just be wrong. today's chart looks at the average drop in gold futures on a monthly basis over the last four decades going back to 1975. guess what? march has a history of being the worst month for gold. check out the bottom left of your screen. on average, bullion futures have fallen 1% in march over the last 40 years. not only that, prices have dropped 65% of the time, more than any other month. if you're looking for a reason chinese consumers usually buy the metal to celebrate the lunar new year that takes place in january and february leaving

less demand at once holiday sover. the other declines are june and october. those are the three to register declines. september, interestingly, that month there. that is the best month on average followed by august and december. gold bought before the indian year-end festival and the wedding season. so it is a fascinating look back at what happens to the price of gold futures on average on a monthly basis over the last 40 years. if you're contemplating buying gold this month, be aware of history. it might just not be on your side. why gold investors should be wary of march. >> we have breaking news from sap. getting more clarity on what head count of reduction will look like. they are going to eliminate over

2,000 jobs in a second cut under the leadership of mcdermott. that is the c.e.o. of the software company. this is all coming from a personnel chief. who is suggesting that the number of jobs affected in this second cut could be about 3% of sap's worldwide workforce. it is 74,000. 2,000-2200 positions that could go. it is not clear how many of those will go in germany. the company is saying that they are going to be seeking new placements for some of the effective work. they will offer voluntary severance and early retirement programs to try and attract some of the numberes they require. the downsizing is the second under the c.e.o. bill mcdermott that they have done in just a couple of years. they are trying to pivot their business away from the more traditional software side of things. that requires new employees with new skills.

that has been taking a chunk of profit out of the business. so this is all part of trying to redress that. those newing skills putting a dent in the profit margins over at sap. of course the company is the biggest maker of applications for supply chains for human resource management. >> when you're putting products in the cloud, it is booked over a long period of time whereas traditional software is for months. it is going to take while to see through, isn't it? >> let's talk about what else is in the mix. these are our top stories. this weekend marks one year since the loss of malaysia airlines flight 370. no trace has been found of the airliner since it disappeared. 239 people were onboard. government ministers from china australia and malaysia will discuss whether to fund further searches for the plane at a

meeting planned for next month. the president of emirates airline said the disappearance over the flight is unprecedented in modern aviation. >> the disappearance of that airplane remains a complete mystery. where it is, i cannot say. i wish i could. i wish everybody else could. whether it is the north or the south, i do not know. i just know it disappeared without a trace and that is without precedent in modern aviation. we do not lose airplanes. they do not disappear off the face of the planet. i'm sorry. >> the actor harrison ford is recovering in the hospital after his plane crash landed on a golf course in california. the 72-year-old is said to be in stable condition with what the fire department spokesman described as moderate injuries. he was flying solo in the plane when it came down near santa monica airport. you can find out more on that story at bloomberg.com 3789 >> now as global carriers

compete, they said the market share is protected by the performance in the premium sector. i kicked the conversation off where with where he sees the asian markets heading. >> well, in general, if you have the number one aviation group of the world, as lufthansa is, it is key for us. on one hand, we're operating 240 flights here every week. at the same time, our m.r.o. the -- >> this is the airlines you're talking about? >> 240 flights a week which includes swiss, austrian and europe. >> how is the competition -- the emirates to have world? >> it is very tough. it is all about price. when it comes to quality, premium passengers, our nonstop

offer, the business class. we're doing quite well there. >> in your opinion of course. >> in my opinion which is what counts. >> all right. what happens next? do you think that you play on a level field with those carriers? >> obviously we don't. coming out of europe now the americans are pitching in as well with their arguments. basically there needs to be a relationship between how open trade can be and how fair trade can be. >> are you saying they are unfair? why? >> i'm not saying unfair. it is too open for the level of fairness. not fair enough for the level of openness. you shouldly the w.t.o. will take care of that relationship. aviation is outside of that. >> why is it asymmetric then? >> the markets are very different sizes and very different laws and rules to work and play by. >> is the competition them

tougher this year than last year? >> well, with their rate of growth it is getting tougher every year. no doubt. the market is growing, fortunately. we are regaining market shares from other players. no doubt, the big market share growth -- >> the big boon this year, the last six months has been this fall in oil prices. jet fuel prices have fallen. it must be getting easy for you getting back in towards the black at least. when do you anticipate that oil price also remain -- for you to be in the black? >> we made a billion euro profit last year. it is not about getting back into the black. it is about getting in more wlack black and therefore of course oil prices helped. we are hedged for a long time out. it is a balancing effect. the weak euro is giving us some headwinds on this. >> it does give you -- give with

one hand and take with the other, doesn't it? >> especially on oil prices. of course it chris higher euro expenditure for -- creates higher euro expenditure for the same oil price in dollars. >> this is what london looks like at 7:51. a little bit gloomy perhaps. a little bit chilly no doubt. this is what the futures are telling us where we're going to hope. a little bit weaker for the ftse 100 futures now. we'll take a short break here on "countdown." we'll be back. eight minutes until european equity markets open up for the last trading day of the week. ♪

>> just to recap today's day. big day. u.s. jobs report. i'm looking at wages growth. january average hourly earnings. .5%. biggest monthly gain since 2008. people we spoke to suggest it could rise .2%. >> 235,000 is the consensus. the key question is whether l the number be over 200,000? if it is it will be the 12th consecutive month question have seen payroll growth of 200,000. >> i'm going to let you know a little secret. march 1995, i walked into

bloomberg for the first time. >> and didn't. that's it from the "countdown" team. we'll leave you with "on the move." keep an eye out for thomas cook. news surrounding that company. ♪

>> that momentum is hard to maintain. caroline hyde. >> let us see how equities is opening up. dax record high. in fact, the global benchmark is 1% of -- of an all-time high. why the euphoria? it was mario draghi. two tents of a percent. yesterday, all about the fact that monday we start that 60 billion euro per month asset.