guy:the euro continues to trade softer after investors digest the ecb's buying plan. the u.s. released payroll data. a strong number may push the feds towards a rate hike. sap plans to cut more than 2000 jobs in it's ceo's second big round of playoffs. guy: good morning, everybody. 9:00 in london.

you are watching "the pulse" in london. i am guy johnson. france being not here today. -- francine not here today. let's talk about the day after draghi. the president of the central bank outlined the timeline for his 1 trillion euro q.e. program. the central bank will stop eyeing bonds on march 9. -- buying bonds on march 9. draghi: at this point in time, we see absolutely no reason to think or plan or act in any different way from what we planned, namely purchasing of 60 billion euros a month of securities on till september 2016. or beyond if needed. guy: mario draghi also announced that the ecb had extended

emergency funding to greek banks by 500 million euros. and stood ready to resume by greek debt by july if greece repays bonds due by then. the political pressure from the euro group members shows no sign of easing. yesterday i spoke to the maltese prime minister. he is insisted the country won't take a haircut on the first greek bailout. prime minister of malta: we are the biggest contributor to the bailout so we had some red lines. one is definitely that we would not accept any sort of hair c ut. so, we want our money back, but to get our money back we need greece not to default. we need greece to stay in the eurozone. we need it to grow. guy: the maltese prime minister speaking yesterday.

let's take a look at how euro -dollar is trading. the euro on offer. a 1.09 handle. trading softer. 1.0997. down by 1/3 ofn on the session. let's get some analysis. ebs'chief economist joins us. good morning. what was the read from draghi? guest: we were such -- we were relief to such a confident display. we felt the new ecb economic forecast painted a confident picture of the economic recovery in the eurozone going forward. those holds for both the gdp and inflation numbers. guy: the inflation numbers are getting back to target. if they can do that, does that mean that a 2016 close of q.e.

is the most likely outcome? mr. chursese: the 2107 inflation forecast is 1.8% slightly below the target of close to below 2%. at first sight it might seem the ecb would like to keep the door open to extend q.e. beyond 2016. however, in the forecast the ecb argued that expects the output to be close over the course of the forecast horizon. by 2017 they expect the output gap to be closed, and that was a just we cannot conclude that q.e. will run the on september 2016. guy: i saw this. i was thinking -- we have mass unemployment across europe. youth unemployment, headline unemployment. we are closing the output gap by that date. that requires an awful love people to find jobs. mr. cluse: the unappointed

numbers according to new ecb forecast have been brought lower. there is some improvement expected. however, you should keep in mind that europe has not invested for a number of years. so the productive capacity of the capital stocks is not rising very sharply. so that has to be taken into consideration when it comes to an evaluation of the likely development of the output gap. guy: he has given greece a lifelike. how do you see it working? is it enough to stave off immediate default? a few humps coming up in terms of repayment. what does the 500 lend? mr. cluse: we did not expect the ecb the reinstate -- sovereign greek debt calendrical. -- collateral. there want to have a better idea

that the negotiations between greece and international institutions are in a good way. banks remain dependent on the emergency liquidity assistance. the ecb in the meantime will have to be ready to raise the limit further. guy: do you think that happens? mr. cluse: that could well happen as long as mr. draghi stressed yesterday there is a perception that greek banks are solvent which they are. but we need a construction environment -- a destructive environment for negotiations. guy: when you put this in aggregate, is the euro trading at the right place below 1.10. we are at 1.09 at the moment. mr. cluse: at ubs, we do not see further downside. we have a forecast of 1.10 by the end of next year. we think most of the depreciation of the euro has run its course but the economic impact will come, of course.

guy: yeah. talking to big firms. i was talking to airbus this time last week. he told me they will not feel the effects of this until next year. are we going to get a bigger feedthrough from the lower euro towards the back end of this year? mr. cluse: it tends to take for ur to six quarters pretty economic headwind is still to come. sorry. guy: so do you agree with it gdp revisions they were posting? mr. cluse: the risk to the forecast is to the upside. that has to do with the weaker euro, lower oil prices. we see that bank lending in europe is -- is improving. we have had the asset quality stress tests late last year. as a result, the recapitalization of banks in

europe is now proceeding. that means the ability of ranks to give credit again is improving. guy: do you think that is going to continue, that will be a story we can watch and respect to improve on an ongoing basis? mr. cluse: it will be a slow process. we come from a low base but gradually over time, i think as the ability of banks to give credit improves and the demand for credit gradually improves as a, the should imply the credit growth in europe is gradually coming back as well. guy: how will that story fit together with the bond purchasing program? because i am a bank. i do not want to lend out more money. i have got a balance sheet balancing act i need to perform with that. and that means i probably need to hold more bonds. yet, those bonds are in demand by the ecb. i was talking to one of the biggest reinsurers. i do not want to give my bonds to the ecb. how is that going to work?

themr cluse: the e released how they wanted tocbs proceed with the qe program. they need flexibility. all the banks might want to sell the bonds. the ecb is aware. overall, i think it does fit together. if banks and asset managers, severn wealth funds, sell their bonds, this opens up more liquidity to be graduate offered to the real economy to households so that it should help the economic recovery. but i would assume the exchange rate impact is the most important. guy: that is the biggest channel. but you have got a target of 1.10. the lag effect is still to be felt. a great pleasure speaking with you this morning. thank you for your time. mr. cluse the chief economist at ubs. the fed tests show the biggest lender's met capital targets. we will break down the numbers predicted -- the big day comes

tuesday. another big bank reach a settlement with the u.s. government. how morgan stanley is expected to pay up . ♪

guy: good morning everybody. you are watching "the pulse." let's see was happening with the euro. post yesterday's announcement we have continued to watch it. though this morning we have taken a lead lower.

down by .4%. we are trading sub 1.10. an 11 year low you are looking up had1.0983 is where we are positioning ourselves. it looks like the pressure to the downside is continuing. it was sue it happens when the book attended over to this date. payrolls coming up later on. a strong payrolls number, life could get interesting for this pair. the other top stories we are watching. george osborne has told the financial times he has made a mistake not restructuring the state-controlled royal bank of scotland in 2010. on orton said he would like to move quickly to g-o- osborne said he would like to get rid of it if conservatives move to -- are in power. commerzbank will pay that it

violated u.s. sanchez lost. the settlement may come as soon as this month. it is the first prosecution agreement that would resolve a separate money laundering matter. the accord is is a later settlement with a bank dealing with iran and sudan. the actor harrison ford as recovering in half it'll after the single engined vintage playing he was flying crash landed. on a california golf course. ford is said to be in stable condition with moderate injuries. ford's son tweeted that his father was "battered by ok." the plane looks a little bit more battered, i have to say. europe's biggest software company, sap is cutting 2000 jobs in the second big playoff round under ists ceo bill mcdermott. let's get more on the story from aaron taylor who broke the

story. spoke to sap stephan reese. what is the rationale between the latest cut? aaron: i talked to the head of h.r. at sap. a big supper company that supplies corporate software t -- a big software company. they are doing a second round of job cuts eliminating 3% of the workforce, 3% of their 74,000 people. 2200 people this year. and it's the second round of cuts bill mcdermott has done. he did get something similar last year. sap is trying to get more competitive in this new paradigm called cloud computing. that is the rationale, anyway. guy: let's talk about cloud computing. does this also markets and the get shift in the business model in terms of the way that sap has traditionally operated? aaron: sure.

there are big see changes going on underneath sap now, all enterprise software companies. the way you did this was sap for 40 years was you sold big, complex software packages every few years. they got installed on corporation's computers. he brought in an army of consultant. sap got paid a very large modern money. kept the annual fees to make it work together. what is happening now is companies are increasingly for more functions, not everything, but more are wanted to rent software by the month or year. it also squeeze on profits. that is part of what is happening. guy: so, this is the second big round of playoffs. more to come? aaron: this is what sap has announced for this year. unlike in america where i used to work at bloomberg, it is harder to do this in germany. there is a works council of employee representatives.

this all needds s to be negotiated with. it is hard to sack employees. sap has to find new positions. so, they communicated a big restructuring last may. this is the one for this year. you are seeing an old line enterprise software and hardware companies -- microsoft, hewlett-packard, ibm cisco -- they have chopped tens of thousands of jobs in recent years. guy: this early have. thank you very much. -- they certainly have. let's move on and a marked improvement in the dark days of the financial crisis number 31 major banks objected to the federal reserve stress test have shown they have capital to whether a big financial downturn. here with more is caroline hyde. so, the first hurdle has been passed. recent decelerate? caroline: first went through. first time in six tests.

this has been going on since 2009. this is the first time all banks past initial test weathering what would be a nightmare scenario in the united states. house prices plunging by 25%, the stock market crashing by 60%. every be bank, five of which are european, all of them have passed the stress tests that they would manage to have the necessary capital buffer of 8%. so, they will be able to weather storm. they would see losses to the tune of $490 million, but still they would be able to keep on lending to the consumer. it's there they would feel the most pain, consumer lending. guy: this was the easy bit. what happens tuesday? caroline: this is why champagne should be on ice. next is to whether or not their

capital plants get the thumbs up from the federal reserve. whether they can pay dividends whether they can do the vivax. give -- do the five x. -- the buybacks. the banks already know whether their plans are getting the thumbs up. we will not find out until the 11th. then there is the quality aspect here yes, from a quantity perspective, these banks past the 8% threshold, but qualitatively last year citigroup did not seem to get through the stress tests as hard as the federal reserve wanted them to. citi group actually fail. we we see that happen again? guy: that -- they are paying a great deal of attention. caroline: keep an eye on goldman sachs. it just past by the skin of its teeth.

8.1%. guy: that is going to hurt. caroline hyde. right. the weaker euro's impact on business. we will hear why the current level is causing headwinds at the. -- at luftthansa. ♪

guy: good morning, everybody to you are watching "the pulse" live on bloomberg tv.

on the radio and streaming on your tablet, your phone, and on bloomberg.com. the all new bloomberg.com. in an exhibit of you, lufthansa '-- an exclusive interview lufthansa's ceo talked about the airline's growing presence in asia. guest: in general, if you are the number one aviation group of the world as lufthansa is, of course, the most in any part of the world's key for us. we are operating 240 flights here every week. at the same time the technique is a big fire. -- big power. this is 240 flights, which include swiss, austrian. host: how is the competition with the gulf, the emirates? mr. spohr: when it comes to

quality, are nonstop offer and are free airfares business-class -- we are going well there. in my opinion, which is what counts. host: what happens next? do you think you play on a level field with those carries? mr. sporhhr: we do not we have discussed this for many years. now the americans are pitching in with their arguments. basically, there needs to be a relationship between how open tray can be and how fair trade can be. host: i you saying there unfair? why? mr. spohr: it is not fair enough for the level of openness. usually the wto will take care of the relationship. bilateral relationship have to take -- host: why is it asymmetric? mr. spohr: the markets have different sides and rules to p

lay by. host: is the competition from them tougher this year than last year? mr. spohr: their rate of growth's getting tougher every year. the market is growing. a big market share growth operating out of the gulf. host: the big moon in the last six months have done the oil prices. -- the big boon has been the fall in oil prices. when do anticipate the oil prices will get you in the blood? mr. spohr: we made 1 billion euro profit last year. it is not about getting back in the black. it is getting more int he black. the weak euro is giving up some headwinds. -- is giving us some headwinds.

host: the euro gives with one hand and takes with the other. themr. spohr: the weak euro hurts us on oil prices. it creates higher expenditure for the same level in dollars. guy: lufthansa's ceo begin to rishaad salamat in ashad. one of the -- in asia. one of the key questions is what is happening with the euro -dollar. let's see what is happening with a single currency this morning. we have found it interim flaw but sub 1.10. down by half of 1% on the morning. fairly significant drop coming through. we're watching payrolls. you get a strong number, the weather a factor. that is going to be meaningful for the currency markets later on. after the break, we are core to

talk about what is happening with mr. putin. the whole of the kremlin taking a 10% pay cut. what does that mean? what is he saying to the russian people? ♪

he's out there. there's a guy out there whose making a name for himself in a sport where your name and maybe a number are what define you. somewhere in that pack is a driver that can intimidate the intimidator. a guy that can take the king 7 and make it 8. heck. maybe even 9.

make no mistake about it. they're out there. i guarantee it. welcome to the nascar xfinity series. guy: good morning. welcome back. you are watching "the pulse" in london. francine lacqua is off today. let me run you through the top headlines. the federal reserve has said all 31 big banks have ghe e climates necessary to absorb losses during a shop and prolonged economic downturn. it is the first time since the fed started conducting stress test in 2009 that no firm fell below any of the main capital threshold. banks were tested on their ability to survive nine quarters

, including a decline in the stock market and gdp and the price of oil rising to $110 a barrel. america is scheduled to issue its monthly employment numbers. a survey of economist reject the 12 consecutive months of job games above -- job gains above 200,000. and european union foreign ministers are gathering in latvia today to review the cease-fire in ukraine. the meeting comes as ukraine struggles to cope with the economic follow from 11 months of fighting. the country signed an international rescue to stay afloat and start to overhaul spending to satisfy its creditors. we had some moves in the markets this morning. manus cranny standing by with details. manus: equity markets seem to be trying to build on the seven year high that some say is priced into the market.

london is the only dip in the markets. citi raise their view on this. the stoxx 600 will rate -- will trade up to 450 by the end of this year. 550 in 2016. ironically in london, they have a target of 7700 for the london market. get this. citi are calling the ftse 100 40% higher going into 2016. why? because it is going to be a dividend story galore. all around the european map. that seems to be the re-rating for them. bond markets continue to see their yields decline. as i suppose the enthusiasm for marriott draghi's conviction that came through yesterday trades to the markets. u.s. treasury bonds, however, it is job state. that -- jobs days.

235,000. average hourly earnings. are we beginning to see the beginnings of wage inflation? at 12 months of job creation above 200,000. that is the kind of pace of job creation in the united states we have not for near 15 years. now, treasuries, the last time we had jobs report, they dropped by .8%. the biggest one-day move since july 5, 2013. will they lose again? we wait to see. two questions you need to ask yourself about the currency markets. a, how quickly can the euro make parity. or is quantitative easing priced in? rbs say parity is achievable by next month. other institution say you have to wait longer. but we are trading at a 10-year low, a fresh 10-year low on the

euro-dollar. the ruble has decided to rebound despite what is going on with the discussions of foreign ministers, this is the dollar down. the ruble up. you are seeing a nice move. this is the fifth consecutive week of gains forthe the ruble. people are saying you could get 2% of rate cuts this year in the ruble. so, that is the state of play on equities. and currencies. guy: thank you very much. manus cranny talking about what is happening with the russian ruble. maybe some rate cuts to go alongside mr. p utin's pay cut. let's talk to our correspondent in moscow. let's talk about the eu meeting. is anything expected from this? some noise from the brits

talking about we may have to look at the active tightening sanctions. -- we may have to look at tightening sanctions. reporter: the focus as on trying to get the peace agreement that was broken last month. there has been a cease-fire which is has more or less taken hold. and there is a process of withdrawing heavy weaponry from the conflict zone which is still underway. this is all fragile still. the americans warned there are thousands of russian troops military advisers in eastern ukraine. and the uk definitely is calling for the sanctions weapons still to be there to put pressure on russia. the hope is that they will not have to use it. guy: um, there is pain at home. that mr. putin must manage. i guess it is a domestically focused move that he is

announcing a 10% pay cut for himself and the kremlin. henry: indeed. it is just in time to show they are sharing the pain. the economic outlook for this year is very bad. the official forecast is for gdp to decline by 3%. but an independent forecast said yesterday that that would be more than 6% decline in gdp. of course people's standards of living are suffering and their wages in real terms are falling. so, yes, this is a political message that we understand and we will share in it. guy: makes you wonder with an 85% approval rating why he needs to do that. henry: well nonetheless, these things do tend to feed through. and there is always a lag in between the political rating that comes later in terms of the economic effect. he does have support, but this is an increasing impact. and people will be feeling it as

the year goes on. i think it is an is due move. guy: think you very much. henry meyer joining us from moscow. this month we could see another major global banks find with google slashes. this is commerzbank. caroline hyde has details. caroline: at least $1.4 billion. this is what has been reported. it's all to settle federal state claims that commerzbank was yet another lender that violated u.s. sanctions. i means they were dealing witht blacklisted country such as iran sudan. and of course this builds on the amount of european company said to be doing this. . bnp paris remember the record of the fine they had to take because they played guilty. they said, we violated the u.s. sentience. commerzbank with 1.4 will kill all birds with one stone.

it will pay off the justice department. the federal reserve, the manhattan district attorney and the new york department of financial services. all of them will get their pound of flesh. but also resolve on money-laundering matter that has been going on with u.s. it is adding to it. 22 cases so far of financial institutions having violated sanctions. they are coming fast. guy: now we need to make sure you're playing by the rules. this isn't the first time. caroline: decade ago they got caught for this. it was claimed that that they violated the cuban asset control regulations. it was not settled until 2011 and it was far more intense. $175,000. just. still, they had to hold their hands up then. this is not look good when it is a company that has the

government owning 17%. the german federal government had to bail it out in 2009. they have been desperate be trying to raise. capitalthey have -- they had f ive capital ratings trying to repay the government. not so good when they still have fines. guy: certainly not. the interesting to see the german response. thank you very much. caroline hyde running after the details for commerzbank. we will speak to the entrepreneur behind the baby food success story. he has got a new product out, which is named after his son. looking forward to that conversation. let me take you through the financial markets. from baby food to what is happening in the financial markets. an easy segue to make. the stock 600 as trading up by .3%. the mbig moves are in the fixed income in the foreign exchange markets. i will show you those later. ♪

guy: good morning, everybody. you are watching "the pulse" live from london. small to big, ella's kitchen has gone from being a popular organic they be food brand to an international table. it is now a division of a nasdaq listed company. but we're not done there. ella's kitchen counter pa --

founder paul lindley joins us. ella's named after your daughter. now you have lost something else named after your son. lindley: my son patrick. ella is 9 years old. a year or two in paddy said they'll do paddy's kitchen. it got me thinking there is a market there. in another place in the house, another time of the day, products that are organic and natural and do social good and paddy's bathroom, a range of shampoos, bubblebaths and show g els launch this week. guy: it is in tesco's. lindley: we have done the hard part getting it on the shelf.

we have done the marketing. guy: you sold the business for a significant amount of money. you are setting up a second business. it comes with a different financial profile. lindely: yes, but i'm keen to have those hard feelings with a small team we've have got to make sure we can make every penny work as hard as it can but i think there is so much learning in that and good can come out of that. i'm exactly trying to match how i felt at ella's. it is a risk but let's try and make every penny work. guy: it is easier going to a large company like tesco and saying, you've seen what i did before. i can now deliver something else. that reputational advantage must exist. lindley: yeah. it is an undervalued word. your reputation is good. it does count.

yeah, it took me 500 phone calls to get to see any buyer with ella's kitchen nine years ago. it took a handful of phone calls to set up meetings now. and it's an idea that should appear to retailers because i think it can grow their market with a trust that ella's kitchen has already. guy: i read somewhere that i could play golf, but i don't want to. you have a skill set you have learned. is there a way of taking your skill set and applying it to other businesses? this is a clamor coming from government from business to help small, increasingly medium-size companies scale up. lindley: people in my position, i feel i have a responsibility. i was fortunate. lucky. i am in a position where have got choices. i think have a responsibility to

use the skills and the networks and is there if i have got to help families and consumers. it is all about children's welfare. but also to share that knowledge with feature on to yours -- future onto your -- entrep reneurs. we have government policies but people like me with experience can add with mentorship and picking-- and began about our expenses. the idea of a british dream, we are not there yet like the americans. i hope we can get a culture that that can change. guy: you talk about government policies in place. we are coming up to an election. do you worry that that will is to exist? do you think the momentum is there regardless of who ends up in number 10? lindley: i do. i have not heard anything from the political parties is a change in policy. for startups, we have got loans,

eif which have, over the last 10 years. both governments. and i think a government's responsibility to deal with is this is twofold. one, stay out of it. spot where we have competitive advantages and pu policies to promote we are goodsh at. -- good at. guy: where do think the gaps exist? i hear startups are well serviced in terms of government policy but there are other fur ther up the food chain that are not doing so well. lindley: gazellese. the ones that need to scale up. i do a lot of business in the u.s. businesses in the u.s. have the benefit of, the luck to only have to focus on one market. the u.s. is such a mess of market. if we want to be global players of any business we want to think locally. we've got to go to other

markets. exporting around europe is.easy . i would encourage every small business to do that. i hear many entrepereneurs say, are we going to go to america? america is 10 markets. it is very, can. -- it is very complicated. we as s a small nation relative to american we have got to think globally. guy: you talked about how easy it is to do business in the eu. that may not be there for that much longer. does that where you? lindley: it would worry me if i believe that was true. i think the eu is here to stay in terms of trade and in terms of benefit that every country in the union has fro trading with each otherm. guy: let's deal with a hypothetical.

if it were to happen, how much damage would it do to a business environment that is easy to operate? lindley: take my business. we trade a lot in euros. we -- some of our supply chain is through europe. tariffs. without importing any of this things, we struggle. with tariffs on x running, -- on exporting that would be difficult. even if the tariffs were not there, there is a convergence of law and practice across the eut that if that disappears, it is harder to trade. it is a zero sum game. it is a disadvantage to a small country if we chose to pull out. guy: you set yourself a high benchmark with ella's. does paddy's get to that scale? lindley: my view for my own business is never been how but -- how much sales?

it is how much impact we can have. business in this next generation is going to have as much satisfaction so the owners have social benefits those as this is can bring than just the financial return. profit has to come first business -- that is the definition of. i think with the next generation of consumers employees, investors, they are going to be looking for a lot more than just a paycheck for a product. they're looking things over with values -- to overlap with their values. i am optimistic that we can grow it is business i have a businesses that do good. guy: thank you so much for your time. great to hear from you. we will look for to seeing how paddy does. paul lindely, the founder of ella's kitchen. the wonderful and weird gadgets you may have missed at the mobile world congress. like the gadget that brings yourself a to lif -- your selfie to life.

♪

guy: good morning, everybody. you are watching "the pulse".

streaming on your tablet, your phone and bloomberg.com. bloomberg top stories. sap europe's biggest software company is to eliminate 2000 jobs. the cuts will amount to 3% of their worldwide workforce. the downsizing is the company's second of art -- under film german. -- under bill mcdermott. cloud computing taking over. investment groups have a 5% stake in thomas cook. the stake is worth 92 million pounds. the deal will allow thomas cook to collaborate with other businesss, which includes club med. amazon opened a store on alibaba. the company is seeking to reach chinese shoppers amid struggling

efforts replicate it success with american consumers overseas. now, as the buzz at the mobile world congress dies down, tom mckenzie looks at some of the wonderful gadgets you did not hear about at this year's event. tom: mobile world congress is coming to an end. we have seen the smart watches. what we have not seen is this -- johnny walker blue label. it is some pretty smart tech built in. it's nfc enabled, allowing the buyer to find out all sorts of things about whether this is a january bottle of johnny walker blue label. it gives you a list of recipes. take your phone, tap it and that is what you get. at the other end of the spectrum, this is by jujitsu. it's a scanner. i'm register. it scans my iris. within a few seconds, it opens the hpones.

this is a prototype -- it opens my phone. from the security obsessed to the slightly self obsessed. you can get a 3-d printed image of your selfie thanks to this app. this is how it works. i am going to use lucas. i put it on his ear. press start. move around. his head like so. and on his other ear. so, this is what is captured from the scan. this is his face. then, moves on to the next screen before reprinted out. this is the image of his face. we upload that to the printer where it is printed out. it takes five hours. the end result, if i can get it out, is this. lucas's 3d selfie. guy: that is what i want. ok.

for those listening on bloomberg radio, the first word is up next. for the others, it is the second hour of "the pulse." what do we have coming up you? annie lenox. talk about why she is talking to fran. ♪

guy: the draghi drop. the euro weakens to an 1 year low against the u.s. dollar. as investigators -- as investors digest the buying plan. investors turn their attention to the jobs report. the u.s. releases their payroll data. and talking about plumbing, sap -- talking of employment sap plans to cut 2000 jobs in the ceo's second round of playoff. -- of layoffs.

good morning to our viewers in your. good evening in euasia. this is "the pulse." francine lacqua not here today but we may hear from her later in the program. so we are just getting the latest eta out of the eurozone. this is data for the gdp. in line with expectations for the fourth quarter. we had a flash number of .3%. that is a quarter on quarter number. that is in line with expectation. nor real surprise. that is the quarter on quarter number from the year on year number at .9%. interesting stuff given what we learned yesterday from what came out of the ecb. now the eu foreign ministers are gathering in latvia today. what they are doing is reviewing

the cease-fire in ukraine. the meeting comes as ukraine struggles to cope with the economic fall up from 11 months of fighting. ukraine signed a $17.5 billion international rescue. to start it over all of its spending and to deal with its credit situation. let's put it in context. whether or not this meeting will deliver anything significant. let's go to moscow and talk to henry meyer. any census meeting is going to deliver an escalation of the situation, or is it just a monitoring of the situation? henry: yes that is accurate. there was a meeting yesterday in moscow between president put and the italian prime minister. iand there are signs the cease-fire is starting to take hold in a more durable manner. of course, we are long from a situation where we can say we are out of the with. however ,-- out of the woods.

the germas express somes optimism. there are countries in europe that still feel you have to brand this a threat to sanctions to make sure we do not lie back. the u.k. foreign secretary said as much today -- you have to have sanctions as an option. but the hope is at the moment that putin will continue along the same path. and would allow europe eventually to consider easing sanctions and the summer. guy: can i get a heads up for you on the significance of today's announcement that president putin is going to be taking a paycut? i learned his rating is 85% in the country. henry: his ratings have stayed pretty much constant over the last few months. near record levels. but economist do say that the economic situation is very bad this year. there is an official forecast of

gdp declining by 3%. but an independent forecast has that at 6% decline. these things take time to feed into the system, but the expectation is that those very high ratings will begin to -- to fall. for putin it is important to show solidarity with the people. guy: thank you very much indeed. right. let's move back from eastern europe to the eurozone. the draghi drop. the euro has fallen to an 11 year low. we have been tracking lower throughout the morning and we have a big leg lower sub 1.10. we are trading a 1.0967. this comes the day after draghi deliver the details of the q.e. program, the trillion euro q.e. program that will start shortly. the assessment has been that

this will work through the fx channel. he laid out a timeout. the central bank will start buying bonds on march 9. and could continue doing so be on september. the out point being targeted. draghi: we see absolutely no reason to think or plan or act in any different way from what we have planned, anmenamely purchasing of 60 billion euros a month until september, 2016 or beyond. guy: mr. draghi announced that the ecb had extended emergency funding to greek banks by 500 euros. they will resume buying greek debt by july if greece carries on with its debt consolidation.

our guest is a good history of working with central banks. how do you see mario draghi delivering the recovery in europe? he talk yesterday about a moderate recovery beginning to take hold. is that your assessment? guest: it is clear there is a recovery in europe. it has been for the last few months or more. this is based on the credibility of the central bank. based on the statements of mario draghi. everything will save the euro. to recover in europe. it's working. renwe this program -- renew this program is open-ended and massive. it has to work, at least at the beginning. it has to be straight.

the recovery is very modest. we are talking about a very low rate of growth. the debt problem in europe is not been resolved. guy: is the growth strong enough to offset the problems we face? the growing debt unemployment? mr. bjejer: there is a possibility there is a dynamic here that t throughhe rate through the credibility of the central bank, through the recovery that the rate will go up. but you still have problems in certain countries, problems of credibility. in the long run. and you still have the debt problem. the debt in europe is going up. this problem will have to be resolved that some point. particularly in certain countries. not to talk about extreme countries like greece but the

burden of the debt is a burden that is some way putting a brake at the ability of europe to grow at rates that will resolve the problem. guy: this is a holding action? mr. bjeler: it is not the start of a big recovery. it is the start of a recovery which is modest and going in the right direction. but action will be needed. guy: further actions from home? i struggled to cb on where we are now where the ecb can go. guest: at a given point, some resolution to the problem of that will have to be faced. and talking about the default. some changes in th conditions of the debt in certain countries. ei do not think it is sustainable in certain countries. guy: which country? guest: greece is the obvious

one. the other case where they do not looks is a noble -- italy. -- where it does not look sustainable is italy. guy: that debt is held in the private sector. guest: this is the problem. i think it has to be faced eventually, not in the middle of the crisis it has to be faced eventually. history tells you that limits of debt otf that magnitude are not paid. they -- guy: we need some inflation. mr. blejer: yes definitely. guy: quite a lot. when you look at what the ecb has done thus far, is, have we reached the end of the road with the ecb? you're talking about major a inflation eroding the quality of the debt but also some sort

of restructuring being nexus very -- being necessary. mr. blejer: the ecb is operating in uncharted territory. the nature of the policies that have been announced by the ecb are open ended. so the definition of the maximum of what can be reached. but it's clear that some of the problems in europe are beyond the ability of the central bank to resolve. i think we are overburdening the central banks with policies that to some extent are dangerous for the independence of the central bank, for the role that the central bank has to do. we have to have other policies. and sustain this. but i think that to say that

they are reaching the end of the road -- guy: we are not there yet. can i ask you a quick question? do you think we are reaching the limits of how far the currency can go? goldman sachs things he can go down to 1.00. you sense the treasury and the fed would start to become uncomfortable? mr. bjeler: i believe not yet. of course, if you ask the americans they tell you the strong dollar is a policy of the -- country. but it is not at this point in a moment to get nervous about it. i think we could get further the evaluation of the euro not much more but i do not see any reason why parity cannot be reached. guy: a good point. stay where you are. we will come back to. mario bljejer the vice-chairman. he stays with us.

ahead, the crisis in europe is, well it comes on many fronts. we talked about russia, ukraine, we talk about greece but there is one we do not talk about -- libya. malta's prime minister tells us that libya is more important than ukraine. find out what he had to say to me yesterday. ♪

guy: you are watching "the pulse" in london.

europe has been focusing on greece and the ukraine as sources of instability. onen that the european prime minister is concerned could be a bigger threat. i spoke to the multis prime minister. -- the maltese prime minister. maltese prime minister: europe is not giving that much important to what is happening in libya are yes, ukraine is a problem. yes, what is happening on the eastern boarder of europe is a problem but europe does not have one problem. it has two. one to the east, and went to the south. we cannot imagine a situation where we have a failed state which is right at our doorstep. that is were libya is heading. guy: let's get mario blejer's

take. we have many threats in europe. we are in a situation where we are watching ukraine, a big meeting today. greece remains very much front and center in everybody's mind. is the multis prime minister right -- the maltese premise to write? -- prime minister right? copper mr. blejer: he's absolutely right. we did not pay much attention to the trade coming from the middle east. [indiscernible] it's happening the same at this point. i believe he is absolutely right. because these problems ar conditioning the ability of europee to -- because of uncertainty that has been created. ti's creating an environment in which the recovery could not be very strong if you have all of -- so the geopolitical is crucial.

guy: it is ordering the -- bordering italy greece etc. who have more close links than northern europe and probably having, will suffered disproportionately if we see failed state emerge. mr. blejer: france and spain are in the same boat. so an important part of europe is conditioned by what is happening on the other side of the mediterranean. this problem should not be ignored. guy: how should we deal with it is the question from an economic point of view or from a military point of view? is there anything we can do economically? mr. blejer: economically it is difficult to resolve. it is also a combination with the department of the price of oil. it's difficult to deal with this economically. but it is a question of putting italy on the agenda. guy: you talk about the price of

oil. can we dwell on the price of oil? you talked about the fact that maybe we will see parity euro -dollar. very cleverly did not give us a time frame. but how much of the lower euro is undermining the benefit that europe will get from loyal -- lower oil prices? mr. blejer: it is couple mentoring, right? it improves competitiveness for europe -- it is complementary, right? guy: energy costs more. mr. blejer: tyrue. but overall it costs less because the international price has gone down. the countries in europe are more competitive. you have a situation in which as a whole it's cheaper. the bill for oil is cheaper. guy: do you think that is the

bigger affect the europe will benefit from? if you were to analyze the situation we are going to have a parity level euro-dollar and oil back at $100? is the bigger benefit coming from oil rather than the single currency? mr. blejer: i do not see the trade-off. net terms, europe is benefiting from the devaluation of the euro . guy: if you look at the countries that benefit from the devaluation, it is the countries that do not need the biggest amount of help. whereas, the countries that are suffering, the lower oil price has more on meaningful impact. mr. blejer: if you look at the states in the united states, the same story. now the price of oil has affected it in different manners. the same with the appreciation of the dollar. this is when you have a

currency. the problem is that the difference within europe are more marked. you have a mechanism, an automatic transfer. which is the basic problem of the euro. as a whole the monetary policy which is aimed to some extent -- the devaluation of the euro is working in the right direction. not with the potency you can have in a single currency country, but it's working in the right direction. guy: one final question. when will the fed raise rates? mr. blejer: we had a bit. guy: i remember. mr. blejer: i still think note in her that we said before. the latest report on labor. the fed is looking at labor reports much more intensively than price report. we'll see with the reports say. as a whole, not before the end of the year. guy: i remember. very nice to see you. thank you very much for joining

us. right. coming up, sanchez -- sanctions for sanctions violations. commerzbank settles fines. we break down those numbers when we come back. ♪

guy: good morning, everybody. let's check in with bloomberg's top stories. george osborne has told the financial times he made mistakes

not restructuring the state-controlled royal bank of scotland. osborne said he would like to move quickly to "it rid of it if the conservatives returned to power in the general election in may." harrison ford is recovering after a single engine plane he was flying crash landed on a california golf course. the 72 year old is said to be in stable condition with moderate injuries. ford's son tweeted his father was "battered but ok." the plane, not so good. commerzbank will pay $1.4 billion to settle state claims it violated u.s. sanctions. the settlement may come soon. now, in a marked improvement for the dark days of the financial crisis, all 31 major banks objected to the yes federal reserve's stress test have shown

they have sufficient capital to whether a financial down tour. here with more details is caroline hyde. s we able to celebrateo? caroline: keep the champagne on ice. six time lucky. stress tests. finally all the banks put through this potential, scenario a nightmare scenario, came out on top. you have got the nightmare scenario such as 25% in house prices, 65% drop in stock prices, 10% unemployment. terrible situation, but all 31 lender's kept the necessary capital buffer. that is protection of 8%. all of them winning. all of the five european banks have also tested within this. hsbc rbs, deutsche bank was added to the list of those put through their paces. so, clearly it is looking better.

there are still losses. guy: big losses. caroline: $490 billion. that it is enough to not collapse. it would not stop government intervention. guy: you say the champagne is on ice. why? caroline: potentially thursday the 11 is a more important date. this is when the fed reserve tells us whether they are giving the thumbs-up or thumbs down to capital planning in terms of shareholder returns. this is what shareholders are desperate to hear -- will i get my dividends? if they weren't so brilliant at meeting targets, perhaps some of these plants aren't going to me the federal reserve's top calls. among them, goldman sachs managed to have 8.1% of a buffer in the worst snow. it only has $1 billion to give back to investors. it might have to rein in plants.

also, whether via qualitative issue as well? guy: we look forward to hearing about that next week at coming up, we are going to tackle the frontier market investing story. menw who have traveled the world. that story up next. ♪

guy: good morning, everybody. you are watching "the pulse." let me run you through the top headlines. the u.s. federal reserve said all 31 big banks have the capital reserves necessary to meet stress test targets. banks are tested on their ability to survive nine courses in economic conditions.

the u.s. is scheduled to issue an employment report later today. economists project a 12th consecutive month of job games beyond 200,000 -- gains beyond 200000. european foreign ministers are gathering in latvia to review the ukrainian cease-fire. the country has signed a $17.5 billion international rescue to stay afloat. to the markets. what is going on? let's ask manus cranny. manus: a little bit of nervousness, skittishness. is that a fair word? spain is coming back in little bit. london is utterly weathered to

these conditions. 40% higher in 22016. good times, let them roll. good times are going to be the driver of this map. we cannot let the day pass with having a look -- without having a look at the ruble. bank of america says, get ready for another 2% or 3% rate cut in the ruble. the big one is going to be what happens to the u.s. treasury market when it comes to the job report. we have pretty good anticipation of being above 200,000 for the 12th quarter and arrow -- 12th

month in a row. pay attention to the details. that is what it is all about. guy: we continue our buildup to that number. it is a run 25 minutes until "surveillance." tom keene joins us. tom: the jobs report is front and center. we will provide perspective for betty liu later in the morning. alan krueger will be on "bloomberg surveillance." one of america's great labor economists. ubs has absolutely nailed optimism and the trend of optimism in the american economy . drew matus will give us

perspective on the weather effects. we will see how this folds into the equity markets. you talked about the immense optimism that some are calling for in the markets. we will look at copyright in america. there have been a host of copyright lawsuits, where people who wrote a song a million years ago think somebody stole their song. guy: as a former musician yourself tom, i think you're very well-qualified to do that. tom: i have to keep my opinion out of it. i will try to stay out of the debate. guy: we will see how that goes. tom keene up shortly with "surveillance." francine lacqua is south of the river at the women of the world festival on the south bank.

what is it like? what is going on? francine: there is a real buzz at the south bank. this is the head of international women's day on sunday. we have one of the most impressive women spearheading the chance of women to get equal treatment. you have just talked about your passion for women's rights. why did you pick up this cause? annie: because i am a woman. because of my gender and my experience. women and girls are back in a state of medieval times in so many ways in developing countries. health care, access to sexual and reproductive rights. women and girls are so far away from a quality in so much of the

world and it is an issue i feel so passionately about and i think many women can identify with this. francine: until we have the men supporting that cause, it is going to be difficult. annie: i absolutely agree. i think the men can identify with it. we are trying to amplify that cause. the more that we do, the more the messaging comes through. francine: it is more difficult for the western society to say it is unfair or we don't have equal treatment? annie: we are cocooned with the tremendous resources we have. they came through because of other women's sacrifices. we inherited them freely, so we take them for granted. that is a normal thing. but we can do so much with our resources. we can do so much for change.

i am very encouraged. francine: it is an election year in the u.k. should it be one of the major points of the election? annie: i think it can be one. it is usually so far off the table. even women parliamentarians don't necessarily represent the run issues. i think there is tremendous potential. francine: sometimes they are looked upon as man haters or that it is very inward looking. is it about changing perception? annie: absolutely. it is something that has been avoided by so many women's magazines for so many years. but recently, you will see the word coming on. four women's magazines ran with

the word feminism on the front pages recently. dialogue is the first step. francine: are you worried about the u.k. and gender equality? annie: i worry about life in general. my focus of concern is developing countries, where you see such disparity. younger also having to have babies when they are young girls themselves. women don't have a voice. i try to be a little bit of a connective bridge in my way. i have been dealing with how hiv and aids affects women in developing countries and their children. it is my contribution to this collective one. everyone here is working for gender equality. francine: what can we do in the west? is it sending money? is it talking?

annie: changing mindset is the first set. you start with your own -- is the first step. you start with your own mindset. you will see that there is such a need for supporting equality around the world. start with yourself. you cannot be prescriptive as to what people should do. there are so many things that you can do. give money, participate as an activist, join with a group that are working, and collectively we become the tide of change. after the vote was taken, then i made a comment about it. i kept very quiet because i said it was about the people of scotland themselves making that decision, which they did. francine: can i ask you something about the u.k.

remaining in the eu? annie: no, you can't. i'm not here about that. [laughter] francine: fair enough. annie: usenet that in. -- you snuck that in. [laughter] francine: i did. guy, back to you. a lot of passion, a lot of women talking about women in the developing world. guy: as you have been down there this morning, the german parliament has proposed a system that would mean that big german companies have to employ 30% of women on their supervisory board. some progress is certainly being made. thank you very much indeed. francine is down on the south bank. we are going to take a break.

after that, we are going to talk about some of the areas we have been talking about with any lie next. -- annie lennox. an interesting book coming out very shortly and we will talk about these markets with a particular focus on nigeria. ♪

guy: good morning, everybody.

some people say frontier markets are the wild west of investing. they can also be hugely lucrative. here to talk about frontier investing 10 countries that could lead to economic growth in the next decade you traveled for part of this trip. good morning. talk us through the book. it sounds fascinating. >> i started off with a question. where is the best place in the world to invest? when you look at the data, it is the country that had u.s. drones bombing it because osama bin laden was hiding out there. the karachi stock exchange is up more than 1000% this century.

guy: was he an easy guy to travel with. >> yeah, he was not that bad. there was a little bit of a scuffle between two taxi drivers in lagos. guy: that sounds like standard procedure. >> it is a good insight to the country. nigeria really is the wild west in more ways than one. what you see is entrepreneurism that takes on a different dimension. a pregnant woman punched our taxi driver because she wanted us to go with her country. guy: right. this is definitely frontier market investing. you don't tend to get that in frankfurt that often, i have to say.

[laughter] nigeria has long been seen as the poster child for economic growth in africa. the story has changed over the last few months, last year or so. this highlights the risk that you run. the opportunities are huge, but the volatility is enormous. >> sure, but you have to try to look through the cycle, through the political cycle, through the ups and downs. the selection has been delayed until the end of march, uncertainty over the outcome. very noisy. it will be a contentious result which could lead to some violence that could unnerve the markets. this is put off any kind of decision by the central bank to further adjust the currency. it is nice to be sitting on the sidelines, watching this from afar. we got out of our local currency

positions in the end of q3 beginning of q4 last year well before the currency started to depreciate quite rapidly. interest rates have risen, as well. there are lots of risks, but clearly we think there is another leg to go before it makes for an attractive investment for us. guy: people talk about being patient when investing in markets like this but you also have to be nimble as well. can those sit side-by-side? >> you can definitely be more nimble in nigeria then you can be in a uganda. compared to a brazil or turkey, it is liquid. you have to put it in relative terms. when you are talking about frontier markets nigeria does present a big enough market to be nimble.

we made the decision to get out well ahead of the election noise. i like to say we were smart enough to call this big drop in oil prices but that would be disingenuous. without the currency was starting to get expensive and oil fell sharply -- we thought the currency was starting to get expensive and the oil price fell sharply. we are waiting for the central bank to further adjust the currency weaker at which point we think it will be an attractive trade opportunity. guy: how do others see this? >> what i did at the end of the traveling was go back to all 10 fund managers and say which one of those countries do you favor? nigeria did come out on the top in a long-term perspective. people are looking at the

long-term demographics of nigeria. by 2050, nigeria will overtake america as the world's third biggest nation. there is a consumption boom. when nigeria needs to get over is the violence and the turmoil we are seeing now and nobody can call that for the short-term. guy: what is the single biggest factor that represents an opportunity for these frontier market? trying to travel around africa is stunningly difficult. the infrastructure story remains a massive problem as well. when you look for investments what are the common themes that run through them. >> because it is so difficult to get around and get information

it creates a void. in the developed countries there are hundreds of thousands of analyst reports every day about what banks are going to do. in frontier markets, you'd don't have that opportunity -- you don't have that opportunity. guy: you have to go and do your research. is there a common thread that joins these guys together? were there things that they all did in common or did they all operate differently? >> it is a good contrast. we were doing about five or six meetings per day. we had lunch with clients. there was much more kicking the tires, inspecting the factory approach. also, an approach that is not

combative and the way that some fund managers will be. guy: is he talking about you? [laughter] >> i think one of the things that may have made our trip different was that i had one of my biggest clients with me. half the time, i was worried just to make sure he was ok, since he had never been to nigeria. what struck me was about the industrious nature of the nigerians, the work ethic, the aggressiveness. they want to get ahead, they want to prosper. people are there to work. they want to get jobs. this speaks to the potential that that country has. it was great to have him there with me. he had some interesting perspectives on the overall situation in nigeria. he also made a comment about corruption. corruption is an damage in

nigeria -- ebdendemic in nigeria. he thought they were so matter of fact when it comes to nigeria. it is the extra price you have to pay when it comes to doing business in nigeria. as investors, we have to look at what is our potential return for investing in this country and it is still significant. guy: thank you so much. the book is out this month "frontier exploring." we will take a break. ♪

guy: welcome back. we are watching payrolls. mark gilbert is here. this number is whether dependent. -- weather dependent. are people going to take this number seriously? mark: don't forget what happened last month. you had a jump in wages and you have the treasury market trapped. you still have fed members saying june, june, june. strong data today keeps that

very firmly on the agenda for the bond markets. in the currency market, euro through 1.10. it went through like butter and stayed there. guy: what was that move? once the europeans got hold of the book. were they looking forward or backward? mark: you have different rate outlooks in europe versus the united states. you have bond yield spreads better a quarter century wide. inflation is going to be deflationary more than the ecb admits. growth is not going to be as strong as the ecb says. lots and lots of evidence that things are much brighter in the u.s.

there are a lot of people saying that they should have already raised. guy: thank you very much indeed. have a great weekend. we will see you one monday morning. ♪

>> this is "bloomberg surveillance." tom: there is a mystery to when we will see wages rise.

will today's report shifted the view of janet yellen? the dollar shifts ever stronger. olivia wants to forget the apple watch. good morning, everyone. this is "bloomberg surveillance." olivia timex sterns joins me. olivia: and about 2.5 hours, the government releases the employment report. it may be as much about the weather, as it is about the jobs. the data may distort the report. bad weather made a lee -- may delay the release of the report. the jobless rate will probably drop 0.1% to