next week. only after euro zone finance ministers meet to discuss refinancing. the u.k. goes to the ballot box to vote in the general election. i am looking at futures markets. ftse 100 futures down by 27 points. back futures up by 54 points. i am looking at the bond market. bond yields higher. i will bring you the numbers. over the last 44 hours it has been one voice dominated. fed chair janet yellin. >> equity rates are generally quite high. they are not so high when you compare returns on equities to the returns on safe assets like bonds, which are also very low,

but there are potential dangers. mark: let's discuss these numbers. our reporter is in hong kong with how asian markets are moving. not pretty in china. i want to start with the europe open. manus: nine months ago when janet yellin spoke it caused a market reaction. she was talking about concern in equity and other markets. the 2 trillion you referred to is global equity markets along with bond markets. european equity markets are lower. we wait to see what the reaction is in the dollar. the dollar is virtually unchanged at the moment. going straight to the bond markets. that in some ways is the heart of what we have got. in germany bond yields are rising. the entire rally of 2015 has been wiped out.

the average is around 1.78%. there is a wipeout in government bonds. are we at fair value now? you see people by 1.9%. that is one of the lead stories today. they are hedging nowhere near the scale they are worth. three point 5 billion went into hedging. it was half a billion dollars. yields are rising. bond prices are falling. u.s. government bond yields just moderately tempering overall rallies. you look at japan, australia japanese government bond yields. the biggest drop in almost three months. look at u.s. equity futures. they are a little bit lower. that is what drives our european open.

the dow jones indicators down half of 1%. taking it to some of the individual names. we have alcatel reporting. stocks down 8/10 of 1%. they are up 4.08%. the euro adjusted earnings doubled last year. customers are almost unanimous in terms of the deal. positive free cash flow for the rest of the year. let's see if the dax is open. we have continental up 9/10 of 1%. they have raised the sales target. there is money in those tires. expectation is 39 billion euros. margins will be good. lower prices in crude.

profit falls 15%. car prices are down about 10%. a sea of red, except for ireland. let's have a look. good old ireland. mark: thank you very much. red is the color across europe. in asia, a similar color. what is going on? another ugly day for the chinese equity market. >> it's definitely not pretty. asian stocks hitting a one-month low. they are coming back after a holiday and catching up with those losses. china the slide is the big story. we are seeing an incredible selloff the last three days. the worst slump in nearly two years.

we are starting to see the slump the sound of the alarm for china. morgan stanley downgraded for the first time in seven years. an overweight call in china. the equity prices are too expensive and profitability at the weakest level since the global recession in 2009. you can take a look at what it has done in the last few months. they are surging 70% since back in november when they cut the interest rates. saying the stock frenzy is starting to look similar to what we saw during the peak in 2007. we know what happened then. it was a boom and then a bust. i want to talk about what he wrote, saying when a market goes crazy like this, no other topic becomes interesting. that is a big negative signal.

that is what gets me paranoid. >> thank you very much. what a move. look at this chart. a move of over 100%. a little bit of a drop. we are joined by the investment director where he helps oversee more than $4 billion in assets. we will talk about the monster move in general in a moment. i want to talk about the layer underneath it. credits wiest talking about the borrowing at the stock market. can you talk to me about the leverage? >> i think what's happening is there is a lot of money on the margin. it basically means people tend to double up. they increase the exposure.

and away the market has become speculative. there is a lot of new money coming in and leveraged money coming in. what we have seen in the last month was a sign that a lot of the overseas money all of that has been coming out in large quantities. they were already winding down their exposure. but we have seen was a huge surge. that is joined by a number of reasons. one is historically they have punted the real estate market. that has shifted into the equity market. manus: the huge tailwind has been the bank of china.

we can say this move is ridiculous, but if it keeps being ridiculous, we can carry on going higher. are you in this market? >> we are basically staying away from it. the reason there have been disappointing earnings, the ratings have gone up quite high. it is a very expensive market. it is all about anticipation. there is going to be more pressure to cut bank reserve requirements further. there are a lot of experts saying we are going to see another three or four in the next 12 months. they continue to dip further. they are still very high. five or 6%.

interest rates are fairly low. the market is basically anticipating a lot of listening to come and to make sure the economy stabilizes the trajectory. manus: janet yellin speaking yesterday. not the first time she made that kind of warning. she did it last year. her opinion matters, but when you think about it, what could she do about stock valuations? she can ring the alarm, but she is not going to raise rates. >> i think it is to indicate there is concern. the whole underlying thing was the dollar over the last year has risen quite a lot, which was tantamount to tightening of the economy. it was equal to almost a 100% interest rate.

there is a lot of noise but there are underlying trends. manus: what did you make about the comments? one thing was to raise asset prices. they cannot complain after the fact, can they? >> they are at an inflated rate compared to long-term valuation. the added concern is since the beginning of the other corporate earnings estimates started the year around 9%. we are down 21% growth rate because the stronger dollar. there is a huge translation impact. in a way the corporate earnings are telling you the market is going to be flatlining. until the corporate earnings

expectations change. we are seeing the negative impact of commodity prices and the financials. the positive benefits of loyal -- of low oil prices indicates an expansion of margins. all of those have yet to be factored into the markets. i would expect growth expectations to be slightly battered. manus: stay with us. we have a busy morning. the ftse 100 is lower. the german tenure of move higher in the early session. then we have got a little bit of a reversal. we are of a seven basis points. -- up by seven basis points. we saw in epic rally for the first three months of the year. the last of the week completely wiped out that rally. there we are at 0.66%. a stronger yen again.

coming up, turning the screws on greece. will the ecb restrict access to emergency cash next week, and the race against yellin. this year could be the biggest ever bond issuance in the u.s. we will bring around up of all the earnings across europe this morning. join us in two minutes. ♪

>> the ecb will decide whether to tighten access to emergency liquidity. this according to people familiar with the matter. live from athens. it seems like it would be an advancement in negotiation. should we wait for a deal after monday's euro group meeting? can we expect one? >> a deal is not likely. some serious signs. i think that is what we should be focusing on. the ecb yesterday says we will give you the benefit of the doubt. we will wait for your reform package next week. the government seems to be backing down. this time around we have some serious reform packages from greece. >> the hotspot has been the banking sector.

the greek banks are increasingly being hampered from fx trading. run us through the details. how serious is this? >> it's getting serious. it is all over again regarding the available credit lines. it is only natural for our greek bank to face issues in trading but not being able to do the transaction is another thing. it does show how careful the system is getting towards greek default. the system is functioning. the greeks are able to do their needs on a day-to-day basis. if we don't get any serious progress next week i'm afraid

some of the large corporations won't be able to deal with our needs in the greek banking system. >> thank you very much for joining us. still with us, the investment director at london capital. there was a trade. it was a simple decision. you buy greek banks. that is a real back of the envelope trade. you look at the bigger picture. there is potential the greek banks could really get in trouble. >> i think the core really is basically the deposit is going down. they have to go to the ecb sooner or later to get the system going. that i think is what the issue is all about for the banking

sector. i think longer-term, if you start with the assumption greases is not going to leave the eurozone because it is a political system and at the moment it is not ready for the politicians so in other words a fight will be done to kick the can down the road until it is more palatable. that basically means there is a long recovery in the pipeline. remember there has been big changes taking place in greece. ultimately we did a political solution upfront before we can get a lot more positive in greek assets. manus: have you been looking at greek assets at all, or do you look at these and say, that's not me? what do you do with that?

>> i think the equity side of the equation is for the speculators. it is interesting. it is a high probability of default built into the structure. in the way what we are saying is it might be the official sector and the private sector that owns the greek debt. it is a very interesting opportunity. manus: are you close to buying greek debt? >> not for us. if you were able to stomach the volatility, it is a good trade. manus: talk to me about the ecb trade. the decision over whether to tighten a emergency liquidity for greek banks. the fact the decision even needs to be made tells you about the situation. do you think the ecb could move to do that? they can be the ones that push

the issue? >> i think that is unlikely. they do not want to destabilize the political process. they play the role of anchoring the political discussions. i think it is unlikely they would want to destabilize the situation right now. i think the ecb will be reluctant to keep the party going on as much as necessary. next month is the key because there is so much that needs to be done. manus: we have been talking about this for a while. greece is running out of money. and your mind how far can they go without a deal? is it a matter of weeks, months? where is it? >> the rollover is very large. the window is getting narrower and narrower. they need to throw something out

during the month of may. june is going to be too late. manus: stay with us. we will do more during the show. what is shaping up to be the biggest year for corporate bond issuance in the united states ever. in about five minutes time. join us after this short break. ♪

manus: let's bring you up to date with some of the top

jonathan: -- let's bring you up-to-date with some of the top stories. sales beat estimates. operating profit more than doubled. nokia agreed to by alcatel. the takeover is expected to be complete the first half of next year. australian mining investment boom unwinds. the number of people employed fell by 2900 from a month earlier. the swiss national bank made a bet on u.s. equities. the increased the stake in apple, exxon, and johnson and johnson, taking the u.s. holdings to $37.5 billion. here in the u k, going to vote in the general election. 600 50 mps will be elected. it gives a chance to decide the

makeup of the next parliament. polling stations will be open. from 6:00 a.m. tomorrow we will bring you 12 hours of breaking news and analysis from westminster. the city and europe tracking the outcome. more details little bit later. now we are 25 minutes into the session. we are higher by about a 10th of 1%. a little bit of a turnaround. i am going to look at the touchscreen to see if it is. there is the ftse 100. done by 8/10 of 1%. it is just a sea of red. three days of losses. we could go lower. losses across the board. across from germany to italy to spain.

the euro is lower. the fx market keeps going stronger. in the bond market that has been where the headlines have been. german bond yields, where are they now? on the periphery as well. yields go higher. yields go up to 1.9%. i am talking about the u.s. 30 year. the u.s. tenure, yields pretty much dead flat at 2.24 percent. it has been a theme. you have the rally the euro zone debt. then the turnaround completely wiping out the massive move we saw at the start of the year. is it a technical correction? are they facing a little bit of

indigestion? we look at what could be the biggest year for corporate bond issuance ever. ♪

just because i'm away from my desk doesn't mean i'm not working. comcast business understands that. their wifi isn't just fast near the router. it's fast in the break room. fast in the conference room. fast in tom's office. fast in other tom's office. fast in the foyer [pronounced foy-yer] or is it foyer [pronounced foy-yay]?

fast in the hallway. i feel like i've been here before. switch now and get the fastest wifi everywhere. comcast business. built for business. jon: good morning and welcome back. 30 minutes into the trading day. i showed you the markets for the break and i will show you them once more. down on the week by 1.5% as well. the ftse 100 also up by 51 points. a big day -- three-day selloff in asia. let's lift the lid on the indexes and get to the top stock movers with caroline hyde. caroline: have a whiz of m&a moving some of the stocks. .

this is a u.k. data center operator. it agreed to merge with a dutch rival but now a u.s. company comes swooping in saying it will offer .3 billion pounds. it is aqua next -- equinex making this offer so up it goes in excess of 1000 pence per share overall. we think many a u.k. -- u.s. company liking the sound of the u.s. companies. first-quarter sales up 11% and first quarter profits up 14% and first quarter passengers growing as well. on the downside, there is another german company that is a

retail giant all to do with supply. shares down some 6%. it is got real food stores. owning a plethora of brands in germany. there effectively reducing their stake in selling more than 16 million shares and have been placed in an accelerated book building which is seeing some supply-side pressure. jon: those are the stock moves. let's check in on the bond market. we have seen an fx selloff. the recent moves came and got a last 24 hours. yellen warns that in interest-rate hike may send it -- >> when the fed decides it is time to begin raising rates

these term premiums could move up and we could see a sharp jump. we are trying, communicate as clearly about our monetary policy so we do not take markets by surprise. jon: as she rings the alarm corporate trying to lock in borrowing costs. the world's biggest company trying to take advantage of the rates and putting 2015 be the biggest year ever for bond issuance. clearly, on a comparative basis we are ahead. i want to bring in the investment director at london and capital. credit markets and corporate rush to issue debt. as an investor should you be wary? >> a lot of them are continuing

and a lot of them have resilient cash flow generation and they are on the right side of the credit cycles but more importantly we're still embedded in low interest where investors are looking for yield. the demand side is still large and will diminish anytime soon. if anything, it will continue to increase the need for more income generating assets. jon: went to confession and the debt market and credit as well. in last couple weeks you seen a tremendous move on the eurozone sovereign debt if you zoom out it still looks like phenomenally low yields that we should not exhort -- ignore the last couple weeks. >> we need to understand why the market is behaving as it is to we had a situation where the liquidity is searching for yields and it is going in one

direction which is a risk on kind of trade and all of the large funds and large participants have been pretty much engaged. the system is getting underwritten by the qe around the world. that means everything is one way. the markets making a proprietary trading houses they have been reducing in size the amount of positions they can take significantly. so that means the market goes through short and illiquid phases. we saw that some months ago and we have seen three or four times when they have been through illiquid phases. knee-jerk reactions in the marketplace because of the flow of money coming in. jon: give me some more detail. i have had several discussions on this move in the bond market. some call it the beginning of

inflationary trade. is this just a volatility move? a lack of liquidity areata clean? -- periodically? what is the story? guest: basically you had very large hedge funds that were long on the european sovereigns and in essence they are trying to reduce rates. this is what you get. the volatility is coming out of the wound is bunk -- bundesbank. and it is certain getting into the rest of europe rid the rest of the story, that volatility is migrating into the equity market. all we are seeing is the re-equal blake -- the equal liberation. remember that the ecb is to go

beyond 2016 if inflation does not get to 2%. that ecb will be engaged on a running basis. any rise in the yield structure will be temporary. then they will make sure that the yield comes down the gate. more importantly, there has been a big change and co expectations in europe and around the world. and the change in inflation expectations has to do again with a byproduct of european qe. sales are turning around and the cost of growing -- borrowing is coming down. lending is slowly beginning to rise and banks are happier to lend and so on. we have pmi numbers turning round. there is a lot of good news coming out after a series of long, negative news flow from europe and jon: plenty of good

news and the pendulum has swung from right over here, the right over there and now everyone is bullish on european data. is there a risk that in the back half of this year, that we just face a replay of last year and these bond yields are going to go lower once again. is this a fundamental move that is lasting or a temporary move that lasts a couple months? >> there are a lot of temporary moves that go down after the fall in oil price and the boost that gets part of that. i think there are some fundamental changes taking place. i think the duration is beginning to have good discovery taking place in countries like spain. it is half and half broadly speaking. half of them are shorter in nature.

jon: what our london and capital doing. how are you playing it? >> i think they continue to look at it, but not necessarily very excited because we continue to find much better evaluations much more liquidity driven and much more qe driven and driven by for the central bank. jon: what a privilege to have you on for 40 minutes. the investment director at london and capital. let's check in on the bond market. the german 10 year is still higher but if you look at the periphery of the italian and the spanish, we have this big turnaround. we talk about volatility and it is the same with the periphery as well. higher in the morning and dead flat on the day. still to come, we will move it from bond to equities.

the bp and siemens out with earnings this morning and we will rake down the numbers after the break.

jon: 42 minutes into the session. another day of losses. the ftse 100 down and the dax lower as well. the stoxx 600 heading for a third day of losses.

a similar story in cap -- in asia. the biggest three-day loss since june. i want to lift the lid on these indexes. we have numbers from the telecom giant. earnings rising and the company sounding upbeat and here is caroline hyde. caroline: we're looking at what was the former phone monopoly. the biggest provider of the internet. numbers looking pretty good. the strength of the british pound, particularly in their british services. they flop that often managed to drive up services.

clearly this is an area of growth. this is where they had previously said growth will come from. they have 40% of all of their customers upgraded. they are going to 5 million homes. and expansion in the global services business overseas. there also focusing on cost cutting. let's dig into these opportunities. it has all been about quad play. you don't want tv from one provider and your mobile from another person and telephone from someone else. your landline all from one provider. they snapped up for a cool 12.5 billion pounds. that is to drive the mobile side

of the business and they're also saying that will add to their profits. to the tune of some 25%. there also all about content. of course, they have been begging up the premier league. this is clearly where the focus is now. i spoke to judy, the chief financial officer area he was extolling the virtues of quad play and the fact this will become a major trend. >> we know from market research that 80% of people are interested in code this area. hence the acquisition. i will not give an absolute forecast. >> the issue is, not a lot of people have tweaked onto this quad play, we have many more competitive entrances into the

market. a wave of quad plate is going on and a wave of consolidation. they want to bring together the three and the 02 players. you also have some other key players offering quad play. that will be a competitive instinct. so too is talk talk offering mobile land lines and your television and rod bent. these are the areas that are really starting to feel the pain and the competition is ramping up. so too is regulation. competitors are trying to get at bp by finding out they own something called open reach. this is a way to access the internet for other players and they feel they have too much control of the market. it is currently a separate managed business.

many feel they want that spun off. interestingly, the et saying, if you want us to spin off open reach we will not expand rock band any further. the regulation is want to look into since at the beginning earlier this year we saw that the u.k. regulator was starting a strategic review into bp and the rest of the mobile and broadband players. they are chipping away and the cfo could not give me any clarity. jon: the stock is just up. just short of a 15 year high. the conversation on earnings coming through thick and fast this morning. siemens announced another 145 job cuts. let's go to our siemens expert. alex webb in munich.

what is dominating? alex: clearly the big story are the job cuts. it is pushed the total to 13,100. a big number as they try to reach $1 billion in savings. if you look at the numbers themselves, nine divisions and every single one made a lot. i'm sorry profit decreased in all but to bump divisions. -- two divisions. have money to spread on infrastructure and trains and so forth, that hasn't really laid out to it might do in coming months but in the short term, while declining, that is not the case. jon: you and i have gone back-and-forth between joe and his strategy and i go to the day he was announced as the new ceo.

you and i talked about the fact that internally, this was the man that everyone wanted and then came the job cuts. what are the implications? alex: is a different gig being the head of a company in germany, the labor representatives are two an extent your boss. they sit on the supervisory board, so you are accountable. when he goes to london or europe, he is a different guy. he comes back to munich and bavaria he is like i come from this deep bavarian countryside and i am your guy. he has sort of been salami slicing the job cuts. 700 in december, and 4.5 thousand today. in the ideal world, they don't want that to figure out.

luckily we have something between our ears. jon: big thank you for joining us this morning. big bloomberg news reporter and siemens expert. let's get caught up on equities. the ftse 100 still lower. the dax up by one third of 1%. the shanghai comp another day of losses. down by 2.7% this morning. the biggest three-day loss since june 2013. we had a monster rally, here is the correction. morgan stanley downgrading their call on chinese equities for the first time in eight years. analysts ringing the alarm. back in two. ♪

jon: welcome back, let's bring you up to speed. we reported an increase in first quarter drop its as sales eat analyst estimates. the takeover is expected to be completed in the first half of next year. australian reporters cut jobs in april.

the number of people employed fell from 2900 compared to the month earlier. the swiss national bank made a first quarter bet on u.s. stocks. the bank increased its stake in apple, exxon and johnson & johnson taking u.s. holdings to $37.5 billion. that is a most it for us. "the pulse" is coming up at the top of the hour. guy johnson is coming up, what have you got? guy: automated driving. big auto-parts manufacturers. doing well because of the low euro and doing well because of low input prices. we will be talking to this company trying to figure out what happens next. jon: china is a big story this morning.

guy: it has been for a few days. jon: this monster rally and then losses pop up out of thin air. guy: when you start to see things going parabolic, you can usually assume they unwind. i cannot figure out if it is just a stolen teacup, a tantrum or whether or not this is the start of something bigger. >> you and i sit across from each other and wait for that market open. the bonds for the last two days and go the first hour of trading , fall out of bed. it is certainly a big shakeup in the bond market. not the one-way bet we saw. guy: i think it is good and healthy and that is what we want to see. people may pick apart some of those ideas but necessarily, you are going to see ebbs and flows

in this process. i think it is interesting that you do have two way price action again and i think it will make the ecb's life interesting. >> in some ways it is a good thing. >> you push a market around that much and you get prices that seem to be so out of whack with other asset classes. jon: trying to get investors to appreciate asset prices once again. the ballot box today to vote in the general election. 650 mps will be elected as the registered voters get the chance to decide who makes up the next parliament. open until 10:00 p.m. u.k. time. 12 hours of breaking news numbers right here from london in a special show at 4:00 p.m.. for the market close i will be,

don't miss that show till 5:00. as we had to the break, here is a picture of the markets for you. you want to talk about the markets, i am on twitter. good luck with the rest of your day.

guy: janet yellen's warning. stocks drop around the globe as they say equity the uh and's are quite high. anna: german company siemens cut jobs. guy: u.k. voters go to the polls today. good morning and welcome. you are watching the pulse. we are right here in london. anna: we begin with the global selloff.