mark: asian bonds slide in u.s. and european. the 10 year yields states the biggest surge since march. manus: greece persuades german led creditors that it is serious about delivering policies needed to avoid a default. the order goes in for 750 million euro with the payment due today. caroline: u.s. secretary of state john kerry heads to sochi to meet president putin for the first time in two years with ukraine, sanctions and syria high on the agenda. ♪

mark: welcome to countdown. anna: i'm anna edwards. mark: coming up today optimism about greece but britain is better off in the eu. mario draghi is his era. -- hero. >> i just assumed people would figure out how to keep greece part of the euro. that is not the problem to me. the problem is fundamental structural flaws in europe. i'm more concerned about what is going on admittedly, france, spain -- in italy, france, spain. mario draghi is a hero as far as i'm concerned. mark: stay with us for more on that interview. manus: first, let's get

into the breaking numbers. caroline has the numbers. caroline: 13.5 billion danish krone. creeping higher than before. organic and operating profit up 46% because the russian ruble is doing much better. compared to this time last year, the russian ruble was down 15% but on quarter terms, it has been increasing and up some 13%. it is western europe and asia that is doing the heavy lifting at the moment. it is offsetting the weakness and russia. we are seeing a bit of an upturn in terms of the ruble but it is a country that is trying to restrict sales of beer by limiting sales in kiosks. manus: the actual market share in russia has gained --

caroline: if you're looking for a glass half-full comment, that would be it. this is their biggest market. they are the number one player and russia is the number one market. unfortunately, this is a market still in decline. the russian beer market declined 90%. that is the main play but it is a bit of a concern. this is the third biggest brewer. 150 markets. this is the swansong of the chief executive. he. leaves june 15 -- he leaves june 15. the first ever non-danish person to take over the company since its 1847 debut. these are the challenges they face -- how to get russia back on track and continue the volume growth in europe and asia. so far, so good. manus: thank you for breaking

those down. stay with us because we will be talking about the figures with the outgoing ceo of carlsberg. mark: breaking numbers from aliante. the prophet has come at 2.8 6 billion euro. the company released preliminary numbers last week. it said first quarter net income went higher than expected to 1.8 billion euros. even with investors withdrawing money from pimco. it is one of its divisions with an asset management as well as allianz global investors. investors continuing to pull money from pimco. thit was formerly the world's biggest bond for mutual fund but not anymore. pimco is suffering since bill gross left in september.

total assets of pimco fell 5.4% in the first quarter to $1.59 trillion. when will the redemption -- this is a company along with many other insurers that is seen investment margins narrow up along with the movement and european bond markets. the ecb program pushing yields on bonds into negatives. lots of factors for the insurer to deal with. we will debate that with the cfo later. that is coming up just over an hour from now. stay tuned for that. anna: bonds are tracking a selloff in asia. it is a continuation of the same story. david is in hong kong for us. it is good to see you. david: good morning to all of you. what we basically woke up to in asia was the big jump in terms of 10 year yields.

what i have for you here -- it is quite a dramatic scene. australia, south korea and japan. now japanese 10 year jgb's at 45 bits. that is the biggest single day jump in more than two months. australia -- 3% right now for the 10 year yields. we have not been at these levels as far as australia is concerned so for this year. that is the biggest one-day jump in australia going all the way back to december of 2014. a few notes -- it was goldman sachs -- the thinking is the expectation is what the ecb could do, should do. it really propped up valuations across global bond markets. what we are seeing now according to goldman is an ambitious sell. we are basically feeling the effect in asia including on

this red and relative valuation. it is not just today. let me give you a line chart of this 10 year and show you how dramatic the move has been. what this chart shows you basically measures everything over the past months. things like commodity prices, equity. this is the standout --jg jgb. yields are up 30%. we were below 30 about two weeks ago. anna: fascinating. that goldman sachs you referred to. david, tell us about the stocks you are following. that is toshiba. another day of gloom for that business. david: this will be a continuing developing story over the next few weeks. yeah, it is the second day we are seeing pressure on the

stock. it is not as bad as monday. stocks fell 17%. they were down by about 2% right now. it is off the lows. the problem with toshiba -- it started last friday when the company said we did an investigation and there were problems in accounting. several over units understated costs across some of our projects so what the banks did they stopped coverage. we are talking at least seven banks -- goldman sachs mitsubishi -- but have come out and said we are going to stop reading the stock until we get more clarity. the stock is down 2%. it is hard to imagine just use two days ago, the stock was at 480. it is not feeling a lot of love. back to you. anna: thank you. manus: greek officials bought

themselves more time to have economic reforms by assuring german led creditors that they have made progress on policy. the finance minister referred to his country's previous hartline's honest very and told bloomberg reporter tom mckenzie that the two sides saw some common ground. >> it is by necessity to be flexible. we reached common ground. manus: let's get straight to tom who is in brussels. it is a very tight timeline. we understand the payment of the imf -- that money has already been released. what do we know so far in terms of the tone that came through? tom: the tone was so crucial to the statement at the end of the eurogroup meeting. the greeks appeared to have what they have done which is a bit of breathing space and an intelligent that they're not --

acknowledgment that there was some achievements to an approach of reforms and that is giving the greeks and bit of wiggle room because that means the ecb will be less likely to restrict emergency liquidity to the greek banking system. the 750 million euro payment to the imf was put through last night, we hear. it should be paid off by the end of today where at least the end of this week. the european commissioner of economics and financial affairs says things like reforms -- there has been progress by the greeks. pensions, labor reform is still on the table. the acceesss to revenue, there was some positivity as well. the sentiment has certainly improved, but as the eurogroup leader told me, there is still a lot of work to be done and very little time to do it in. >> i only know one timeline which is the program runs out at

the end of june. basically between now and the end of june we have to find an agreement, find approval from parliament, the implementation has to be done and then there can be disbursements. all of this in only six weeks left to go. very tight timelines. tom: there has been more details on the policies that have been discussed as an clarity. can you put more detail? >> i cannot. there is not a deal until it is all done. tom: liquidity -- was that discussed? >> we have been reassured by the minister that greece will send all its payment to the international creditors. it was a great concern, but liquidity is getting more difficult as time goes by. another reason to work harder. tom: it is also taking a skeptical view of the development out of brussels. the index was down 2.5% and the

10 year yield up 30 points guys. manus: such a piece of phrase coming from the french. was there any dissent? tom: the finance minister said there was a question of moral hazard. what i think he was talking about was spain, italy, portugal -- countries that had to take aid from creditors. if it will look unfair to them will he give more spine to the protest parties like some of those countries. moral hazard is a question. just to put this into clarity -- the greeks have until the end of june to get this deal so time is of the essence. manus: thanks for the roundup. great work on speaking to those people in brussels. mark: john kerry heads the

rusted today to meet president vladimir putin. is the first time in two years as fighting continues in eastern ukraine. russia has been isolated by western sanctions and there is one company that felt the brunt. the country's largest oil company. they now have a trump card that could save it from the cash crunch. ryan is here with more. tell us about the company that could step in to stephelp out. ryan: the description of the company should begin with how you pronounce it. it is a siberian city that just means oil and gas. it is an oil and gas company. it is russia's fourth-largest. $25 billion market cap. what is truly extraordinary about this company is it has $34 billion in cash. other words, it has more cash on its books than its market cap which is a little bit like -- a

house is worth like 100,000 pounds but it has 150,000 pounds sitting in a chest inside. why not just buy the house? people have never been quite sure what they do with the money and the extent they will have access to that cash. that is why you get that discrepancy in the market cap and the amount of money they have. that is a lot of money. anna: what does the company plan to do with $34 billion in cash? is of the company or somebody else? ryan: it is a public company in the sense that it is listed but it is not a state-controlled company but yet it is run by a putin confidant. is not the first russian oil tycoon you would've heard of but he is a very important guy. very loyal to the russian president. have known each other for many years. they do pay a dividend. 7% of net income.

this has been a great play if you look at share price for investors. this year, the shares were up about 70% because you get a double bonus. on the one hand, they are doing well at the back of the depreciation, but they are selling and dollars. in addition to that, they are sitting on this cash in dollars which is getting reacts press in rubles. you get a fat dividend. the yield was as much as 30%. they will continue to do that because that is part of their charter, but they might help the russians by helping. we are coming. circle in this complicated story which is russia's largest oil producer. the company has a 70% stake in it. it has $23 billion of debt. it is sanctioned to the hilt. how will it do that? it has this deal with the

chinese where he gets the debt payments for oil -- advanced payments for oil. one way to do that would be to sell a 20% stake in the company reducing the state to just over 50% and thereby the government would get some money. this is a bit convoluted -- the government could kick that money down to help rosneft out with its sanctions problem. will this happen? we have a very good piece of of journalism. this is a scoop. nobody pays attention to the fact that this company is sitting on $34 billion of cash which is less than apple's 97 billion but a lot more than those oil companies have. it is quite rare to have more in cash than your worth in terms of market cap. it is fun to watch and a result of our reporting. manus: john kerry is on his way to visit russia.

will be sit down with putin? >> he said he will. we heard some comments that first he would meet with him. i think he will. you should think about this about ukraine but about much more and yemen and especially about iran. wendy sherman is traveling with kerry. the need the russians on board. the saudis are skipping the u.s. summit of gulf countries -- now on board. russia is key. we are a month and a half away from that june 30 deadline for getting some kind of deal that could lead to the end of sanctions against iran. one of the things the united states wants to do is they want to make sure the russians are prepared to play ball with any sanctions regime and the removal of the sanctions regime that the

united states envisions because it would be terrible for u.s. oil companies losing out on this. in addition to the bp's of the world. anna: thank you. top stories on bloomberg at this hour -- u.s. approval to resume oil expiration on alaskan arctic coast after there was safety regulations. shell must obtain permits from other agents, including a drilling permit as well as state r regular clearance. the royal bank of scotland may face $500 million in damages for what a judge called an enormous deception in its sale of a bank. they misled fannie mae and freddie mac and damages that might result in the government winning about half its original

claim of $1 billion. a senior currency trader at bp has been placed on leave after conversation merged linking employees to an online chat room used by the world's biggest banks to rig the foreign exchange markets. he was suspended after we reported in december that traders receive tipoffs from firms including j.p. morgan, citigroup. mark: how do you pick a stock that avoids drastic risk? we will talk about that with our guest after the break. ♪

mark: our next guest says his top picks will not be affected. let's bring in tim. onewhy not? why will we not be affected? tim: it is wrong to say we won't be affected. i think all stocks and other assets will be affected. but i think what we try to do is take the longer term view on the market and try to step back and understand what is going on out there. i think if you look at what is happening stocks like demesa an other names are mentioned in the past the turnover will not be affected. anna: in terms of strategies you

invest around, it is more around internally structuring and the longer-term things. you have a horizon of investors for three years or so. tim: we take a longer-term view. what we have seen recently that has been a big rally, but this last month it increased some of our positions in the names we do like. for us, if you take a longer-term view and step back from the noise, you can see the markets in volatility reaching what is happening in europe right now which is providing good opportunities to get back into the market for those that might prefer other options. mark: you mentioned some of the farmer stocks and biotech. it is interesting, you have it this morning and a lot of the froth in the former market -- they are not based on that,

their based on valuation. tim: they are also based on growth. looking at what we've seen in the past, innovation is really happening in the biology space. in history, we have seen innovation happen in physics and chemistry. what we're seeing now is a lot of innovation happening in the biology space. i think companies like rush who are at the forefront of that biological revolution, right now on the market most of the jobs we see our chemical drugs. if you look at the pipeline -- we expect them to be a leader in that space. another company you mentioned they will benefit from this trend to biological drugs but they provide the equivalent to manufacture them. you have to get the rest of the absolutely right to make chemical drugs. mark: the markets have turned in recent weeks.

you have a warning for those bond property stocks. tim: over the last two years, you have definitely seen a rally which is being fueled by this reduction of equity. i think if you are a company whose valuation has only risen on the back of that, it is kind of worrying. we would be very cautious about just buying into europe. we recommend picking the right names. companies who have reformed and reduced their debt reduced their cost space and diversified the revenues. when you see this pickup in turnover, you are seeing this demand recovery that is increasingly led by the european space. i think those are the ones that will be the most bang for your buck and the safest in terms of valuations because they will be higher peak margins at this time. anna: when you are picking, it

is not about manage reform, it is about what those companies are doing. tim: absolutely. having said that, these are great companies in their own right. having just been to spain, seeing spanish companies, when you speak to these guys and management, there is a lot more positivity. i think a lot of the valleys so far have been predicated on the euro, at least -- i think actually when you go into europe and speak to the european companies, you see the demand is strengthening from within europe . it is not much of a euro story, but a demand recovery story. mark: thank you for coming in tim from hermes investment. it is about 6:26 a.m. here in london. we will talk about the earnings

next before the interview with the chief executive. ♪

. . .

mark: welcome back to caroline: countdown." it the dollar and sterling looking as though they are making their mind whether to reverse lowered. how does that translate? we had some news flow overnight on the dollar. john williams saying any meeting is in play. that was -- the dollar at the end of the day, 00 more or less.

we are on yields are up at 2.3%. the dollar is struggling at the moment to reassert itself. it need something much more substantive to come from the fed rather than just a voice here and there. the chicago fed, they are coming after -- they are saying the natural rate of full employment in the united states is below 5%. the fed deliberates where the real rate is. just trending that a little bit lower at the moment. and all hail solution for greece. europe is up .2 of 1%. the greek talks are positive. and the dutch finance minister saying that disbursement may be made in part and reforms may be enacted in part. everything building up toward a

slightly a little bit of a [inaudible] in the euro-dollar trade. of course and the u.k., you will get industrial production and manufacturing. paulsen will -- stay in the eu [inaudible] the market has pulled it back from the second half of 2016 to the middle of the year. mark: air berlin has reported a loss in the third quarter. companies posted a 210 million euro loss missing estimates of 209.8 million due to higher financing costs. the most indebted telecom company has closed [inaudible]

the sale of the call centers which has 19,000 employees should close in the next three months. citigroup has said the justice department decided to prosecute the bank after a probe into rigging of the london [inaudible] authorities are also investigating. anna: we have earnings from [inaudible] carlsberg. caroline: you are -- the ka rlsberg bottle sales up 4%. managing to raise prices. this is what half -- helped the strong performance.

easter came a little bit earlier. in asia, india particularly good and in china, they return to growth. they are making acquisitions in china being the stakes. a strong performance overall in the stand by their full-year target of growth on an organic operating basis. deutsche bank said that looked optimistic. meanwhile russia is the area to keep it close eye on for carlsberg. it is the number one market. it is the biggest grower -- brewer in russia. the market is in decline. we see from these numbers that the russian beer market is still falling, down but -- by 9%. ukraine down by 9%. you have the rubble in decline versus this time last year. regulation, they are trying to

curb drinking a beer and russia to a large extent. that will hit numbers. organic sales -- the fall has been limited. they are in self preservation mode and managing to boost prices. that has helped revenue and they have been closing some of their breweries. this is why they are managing to limit some of the damage in russia. interestingly, we're saying -- seeing these numbers. and in the long term, even muddies agrees with them. this is a market that will grow in the medium to long term in the short term. it is volatile. the challenges going forward and the opportunities -- this is the last time [inaudible] at the helm. jun 15, there is a newe chief executive.

-- june 15, there is a new chief executive. this is the -- we have a dutchm an taking over the company. and he has to turn around four y of stagnant growth. e-- four years of stagnant growth. they are talking a lot about the new brands they are bringing out. they're going into craft beer in a big way. going into cider as well. perhaps this is where the future opportunity lies. russia is still a growth story short-term not so much. back to you. anna: thank you. mark: easyjet reported earnings at 7 a.m. just under 25 minutes we w get the numbers. ill -- we will get the numbers.

this is something of a unique moment for all airlines but them especially. reporter: a very big moment for them, if they do report profit. this reflects currency tailwinds as well as fuel tailwinds. both of those favor this half. they have narrowed the loss over the last four years in now turning a profit. very much reflects what she has done in terms of pinning down their strategy, focusing on key airports and making easyjet a family-friendly and corporate friendly brand. anna: we can look back at those numbers. any clues as to where this airline is heading? kari: they dealt with some air

traffic control strikes in france. the currency is expected to earn negative for them. in the full-year fuel is expected to be a positive story. generally, the focus will be on the outlook. that is often the case. there will be a lot of interest in, definitely shares will be reacting on their rhetoric. are they saying wrong -- strong demands are they expecting good load factors from the second half? mark: how well positioned his easyjet to send those markets? kari: it will be an interesting story. caroline has very much championed the corporate, positioned herself in gatwick amsterdam. this week, ran air is holding

an event in hamburg. easyjet did the same thing. it is going to be interesting seeing that going forward and saying where customers and up who customers end up choosing. at this point they are still operating in fairly distinctive markets. that is likely what carolyn will say in response to this. they do not compete head-to-head. we are a little ways from a price war. michael o'lear is not afraid of filling up the seats and making sure prices are low enough to fill up his planes. that is how ryan air operates and easyjet tends to be more focused. mark: creditors continue to negotiate over a bailout. henry paulson remains optimistic about the deal. he spoke to bloomberg's guy johnson. mr. paulson: i assume i am

looking at it naively from the other side of the atlantic and i assume that somewhere other, people will figure out how to keep greece is part of the euro. to me, that is not the problem. to me, the problem is fundamental structures in the euro. i'm concerned of -- about what is going on in europe -- italy or france, in spain. i worry about it. mario draghi is a hero as far as i'm concerned. monetary policy will only do so much and again, the key to europe is to step up on some of the structural issues and deal with the labor reforms. some of the more fundamental things that need to be done. reporter: i want to ask you there are people in berlin i am increasingly hear this -- hearing this in conversation. that you could simply let a country like that go. you have experience of

unintended consequences. do you worry that doing such a thing will be a lehman-like moment? mr. paulson: we are dealing in a world today where there is no playbook and there is unintended consequences of monetary policies which we have needed for a long time, but maybe we do not need -- i'm not saying europe does not need voluntary policy. in terms of the unintended consequences, of course i worry about unintended consequences but to me what i worry about much more, you talked about the lehman moment. the underlying problem have been the fundamental flaws we have had in structural flaws in the economies for some time. mark:anus: join us on twitter.

i have a bit of our going on on twitter. anna: starting the conversation about reforming britain's relationship with the eu. we discussed the risk of a grexit up next. ♪

mark: last week's elections saw david cameron's party win. first things first. you 100% said it off air on air. the conservatives that was a brave call. let's move it on. enough cutting on the back. we will talk about the eu roger. how smooth or un-smith will the process be? roger: cameron is in a very strong position. it is not fair to see this as him or britain pitted against all the rest. there are lots of people in other eu countries who want to see reform. having said that, i think the fundamental issue is the degree of reform that is so radical

it would require a treaty change and i do not think europeans are out for a treaty change. anna: it sounds less radical in places. roger: will it actually work and i do not think it will. they will be very vocal. different from the position we have been in in years gone by. it is not likely to work. manus: greece will be top of the agenda but this is on the twitter account this morning. who does cameron and osborne need on-site vocally to invoke substantial change? roger: i suppose mrs. merkel.

in europe. she is playing a clever game. she is fantastically able. she [inaudible] her domestic audience as well. this line of britain pushing for concessions is not the right way to go about things. i think the people are fed up with britain asking, we are different, we want something special. cameron should be saying we are reforming the eu. not just for britain but for all of us. mark: there is appetite for that. we do know, don't we? maybe in sweden. how much appetite, how many people are going to put their neck on the block and admit they need change? roger: it is difficult. you have elections coming up and germany, other countries. i do not think they are going to come up with anything radical

enough. you have to hope cameron is wonderful at presenting this to the british people. anna: remember that. and they are dealing with greece and the migration crisis. and the mediterranean as well. what about the broader implications of the conservative majority? in terms of infrastructure investment, getting things done because you do not have this mixture of leadership. you just have one party in charge. roger: we will have to see. my guess is where -- we're going to see tougher cuts and public spending. whereas before there was a bit of tax increases and some cuts in public spending and the liberal democrats were worried about what sort of spending cuts, welfare cuts in particular concern them. now we will see george osborne go for welfare cuts in a fairly big and explicit way. he might actually bring the cuts further towards us in time.

they were supposed to be spread out across the whole of the parliament. politically and to some extent economically, there is a lot said for getting the pain out of the way soon. talk about a budget of course in the not too distant future. i doubt if they will announce measures to be enacted now but it will lay out the groundwork. by next are we could find we are in the midst of it ready intense squeeze. manus: do think he will bring forward the referendum on europe into next year because of the selections? we anticipate a great deal of sterling volatility, market volatility as we run up to this. roger: i do not think it is that big a deal. on bringing it forward, i suspect he will think better and the safer thing to do this is all because you have been arguing we want the referendum sooner. i think they are having -- making mistake.

-- making a mistake. the grexit will be a big thing in all of this. if we get a grexit, that will be huge in this debate. and directly it will be a massive blow to the eu. anna: the could be -- it could be volatile around the elections. roger: we think -- the market is driven around dollars and pounds and cents. it will be much more mundane. the bigger question is what will happen to sterling interest rates. is the u.k. going to recover, is the deficit going to come down? mark: the bank of england unveils its report tomorrow. roger: that is the logic of it.

the pound is strong again in my view, much too strong. austerity coming along, the bank will be in no hurry raising interest rates. mark: give it a month. roger: it will be well into next year. possibly the year after. it would not surprise me. anna: what do you make of the movement in the bond markets? the real record lows and starting to jump back up again. roger: the oil markets have been of 50% since the lows. once you get yields as low as they were, in germany there were one of them. you are heading for fall. manus: all the rhetoric overnight, they are rallying around the greeks and partial disbursements, partial enactment of reform.

does it sound as if there is a little bit of retrenchment from europe's original position? roger: this is a slowed death. fundamentally, greece cannot pay its debts. at the same time, it massively needs and injection -- needs an injection optimistic demand. mark: are we encouraged by the likes of spain? manus: portugal and spain are rocking along with ireland. it is under reform. roger: those countries have done well but their debt ratios are strict -- are extremely high. greece is at 25%. the country they are to be looking to is iceland, outside the euro area which has staged

an extraordinary recovery from a very difficult position. they had a much weaker currency it fell about 40%. manus: we caught up with hank paulson and he warned the current monetary policy environment [inaudible] let's listen in. mr. paulson: the definition of a bubble it is not understood by the market until it pops. so i would just simply say i am a fan of janet yellen. i really been a fan of -- clearly have been a fan of the bernanke monetary policy because we delivered in the u.s. while growing from 2009 on, but there is a time which you cannot rely on monetary policy.

it covers of other issues. there is a big ugly, messy problem. you're never going to sell it with some simple, elegant solution. if all you had to do is have zero interest rates to serve -- to fix economic problems [inaudible] there is going to be there are going to be asset bubbles. i'm simply saying, i have always felt there will be some volatility getting out of something like our monetary policy. i am assuming there is going to be volatility and clearly, there are bubbles so the question is whether are they manageable and how big are they? and politicians are trading off stability in the financial system against economic growth and the fact that there is no

sign of inflation yet. mark: time to look at the picks from the bloomberg digital world. you are fired. anna: thanks. mark: alan sugar has fired the labour party. the british businessman who is known for his program. he found himself losing confidence in the party due to their negative business policies and their concepts. i expressed this to senior figures in the party. i decided as a relatively high profile individual to keep my intentions quiet for the duration. they are all coming out, criticizing miliband. anna: the lessons for greece's economy. this is whether grexit would

hurt the greek economy. the catastrophe is not inevitable. they looked at 70 countries. they say in the one year around the breakup, they found growth was positive. there were positive growth figures in two thirds of those countries. mark: the currency needs to plunge? manus: and toward iceland which obviously, price controls [indiscernible] it would not be my favorite. it is 170 $9.4 million. it is a record. there you go. $180 million. and he did do another 14 of those. have a look.

you never know what you get. mark: "countdown" continues. ♪

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mark: asian bonds track the [inaudible] triggering the first one day search since march. manus: the order goes in for a 750 million euro imf payment due today. anna: john kerry heads to sochi to meet president vladimir putin for the first time in two years. ukraine, sanctions, and syria high on the agenda.

mark: hello and welcome. hank paulson weighs in. he tells bloomberg's guy johnson he is optimistic about greece and britain is better off in the eu and the ecb president mario draghi is his hero. mr. paulson: i assume that people will figure out to keep greece is part of the euro but to me that is not the problem. the problem is the fundamental structural flaws in europe. i am concerned in what is going on in italy, what is going on in france, what is going on in spain. i worry about it because mario draghi is a hero as far as i am concerned. monetary policy can only do so much. mark: stay with us for more from that interview throughout the morning. anna: we are getting breaking

numbers got -- coming through from easyjet. they have managed to do something they have not done since the first half of 2002 in that is to report a pretax profit in the first half of the year. easyjet structured its eta which means it puts all its tough quarters together. and the second half where they make their money. 7 million pounds is that pretax profit. the weakness in the euro was one factor that was helping them until this period ended in march. fuel costs were something that was helping the business as well. as far as the other numbers were concerned+++

45.4 pence. and the first half revenue has come in in line with expectations. 1.7 7 billion pounds against 1.8. they are talking about forward bookings being in line with last year. and of course in terms of airport growth. that is the key question given the politics of late. we will be talking to carolyn -- the ceo of easyjet. part way through the hour. mark: we had earnings from all events. the company's ceo is here. thank you for joining us today on "countdown." guest: good morning. mark: you have announced a rise in quarterly operating profit. you said ned income rose by 11%. what was the driving force behind that increase?

guest: it was driven by our strong organic quotes in the pnc business. and the business which benefited also from the boost in the stock market. mark: others factors the reasons why you maintain your target for operating profit between 10 billion and 10.8 billion euros versus last year's 10.4 billion? guest: i think we are well prepared to hit 10.4 billion, midpoint of our outlook, i think we started the year with close to 2.9 billion and also our asset management, we will be backend loaded because that is what we announced the end of

last year that we will see a lot of performance fees in the first quarter mainly generated by pimco. mark: the new is this margin continues to fall because of the health -- because of the challenges, it has fallen to 1.5% from 2.5%. has it bottomed or will that trend continue? dieter: i think we are working on it check -- a change of our product mix and -- already a very good number but we are optimistic that we will get it up again. mark: the low yield environment is posing all sorts of challenges. and let -- the imf said last week that european life insurers business models are becoming unsustainable after interest

rates slumped across the continent. what are you doing to mitigate this? how are you dealing with this? dieter: first of all, you deal with it with a very strong balance sheet, high capital base, and a very active investment management of our large balance sheet and i think our capabilities to attract and invest in real assets and gain a few base points more than the average that is what we do to fight it. we are changing the new business mix to offer attractive opportunities for the customers without risking our balance sheet for the future. mark: what have you put out the turnaround in bond markets in recent weeks? we have seen this big movement up in bond yields across the

globe from record lows. some have put it down to the idea of reflation, the outlook for less on buying by the ecb oil prices, what do you put it down to, is this a sea change in the bond market? dieter: i think we not sure yet. we're certainly not counting on the big revival of interest rate. it seems there was some market forces who try to preempt the qa activities of the european central bank and therefore we have seen market distortion between qe and other acting forces. mark: i would like to talk about greece because you by your pimco unit predominantly are the most exposed to greece than any other company required to disclose

debt holdings. you actually have the most debt exposure to greece after the ecb. it leads to an obvious question as discussions between greece and its creditors continue. do you think greece will ultimately default on its debt have to restructure its debt once again? dieter: allianz has on its own talent sheet close to zero greec e bonds, and what is being held in individual pimco funds for third-party customers, i am never commenting on. mark: and on debt, we should talk about pimco and the outflows continue in the first quarter, net outflows, 68.3 billion euros. i asked you this last quarter as well when will redemptions end

at pimco? dieter: that is a question which is very high on our agenda and when you look at the trends, in total it is half of the outflows of the fourth quarter and the monthly trend is showing in the right direction and actually equal outflows confirm very much the trend we have seen from january through march. we see it that it is going as we have put it actually to our 2015 outlook. mark: how are the outflows, how is the change in product mix at pimco? how is that affecting profitability there? dieter: the margin at pimco was very stable in the first quarter very much the same as in the last quarter, 2014.

the last quarter has a few days left and you just for it, it is a very stable margin. the outflows as you can read it everywhere, [indiscernible] the other products are holding up and we had also seen net days of inflows, so him co-is on the right track to try to. it keeps the performance of the fund high. we keep it at 80% of performance so our customers can be very happy about investments produced in all the funds, including the total [indiscernible] great six months since the end of september and performance for the customers and i think that is the core strength of pimco and that is what we are

demonstrating to the people who invest with us. mark: you have a new chief executive. oliver bates is the new managed at the top. a comprehensive strategy review for the coming years is planned. what can we expect under the new chief executive? what big changes can we expect? dieter: i think i leave this to oliver to talk about it and we should also give him a few months to work it out, and as we said last week in our shareholder meeting, that we will -- it will be something for the quarter to talk about. mark: good to chat to you. the cfo of allianz. manus: a bit of breaking news confirmation to our viewers. this is the belgian retailer they are holding talks with a

dutch retailer. they may not result in a future transaction. dthe stock rose 14.5 percent. the biggest move since november 20 -- 2013. at one juncture, the stock was under 10%. adding 850 million euros to the market cap. it will be a defensive move by delhaize. ironic two huge retailers defending their u.s. market share. let's see if they can get a deal over the line. anna: greek officials by themselves more time to finalize economic reforms by assuring creditors they made progress on

policy. the finance minister referred to his country's previous hard lines on austerity and told tom mckenzie at the two sides now have commonalities. guest: there is common ground. anna: tom, there is still a tight timeline, a slightly more positive tone. any of these redlines turning into blurred lines? tom: absolutely. there is a very tight deadline. what they have got from the eurogroup was a statement of positivity. they eurogroup is saying well done. it is the right attitude and you are on the right track. not a great deal of details about the policies the greeks have firmed up on. some movement on vat and some revenue -- movement on revenue

management. it is the statement that is important for greece particularly in the action from the ecb. they have threatened to tighten the screws further on greek banks and their access to emergency liquidity funding that they absolutely rely on. we will get more details when the governing board meets tomorrow. as the leader of the eurogroup said to me, there is still a lot of work to do and very little time in which to do it for greece. guest: i only know one timeline wishes the program runs out at the end of june. so between now and the end of june, we have to find agreement, we have to get approval from parliament, implementation has to be done, and there can be disbursements and all this in only six weeks left to go. very tight timelines. reporter: there -- are you ever -- able to proffer some detail? liquidit iny and grace, was that a

concern? guest: greece will stand for all its payments for the international creditors. that was of great concern. liquidity here is getting more difficult obviously, as time goes by. another reason to work hard. harder. reporter: markets taking a skeptical look at what they are hearing. the athens mean index down. the yield on the greek 10 year around 30 points. anna: dissenting voices. are there any? tom: we did hear from the finance minister of malta who told us he was concerned about moral hazard. he said that any easing of the deals, any easing of the reforms

could send the wrong message and could be unfair to countries like spain, portugal, and ireland, other creditor nations who in his view have sucked it up and taken the deal and in what they have to do. moral hazard concerns being expressed by the maltese minister. june is the deadline to clinch the steel and -- this deal. if they have to go back on these concrete redlines on reforms and pensions, they may have to put the deal to a referendum, a vote to the great people. a vote on whether or not greece should stay in the euro. that is something that [inaudible] has said he might even support. manus: that's get you up to speed on some of the top stories. royal dutch shell has won u.s. approval to explore the alaskan coast after regulators imposed safety conditions after mishaps

that have plagued the company for three years. she'll must still obtain permits from other federal agencies including a drilling permit from the bureau of safety and environmental enforcement as well as state regulatory clearance. and placed on leave after conversations [inaudible] used by the world's against banks to rank the foreign exchange market. he was suspended after the -- berg reported in december that tipoffs or received -- were received. and rubbs may face half billion dollars in damages for what a judge calls an enormous defection. the district judge said they misled fannie mae and freddie

mac. the government may win half of its original claim of $1 billion. citigroup has said the justice department declined to prosecute the bank after a probe into rigging into the rate. other authorities are still investigating. you can find out everything on those stories at bloomberg.com. mark: join the conversation on twitter. just tweeted out ryan's the story. if you want to know all about ryan's story, putin's takeover. anna is back after her six-week holiday. and @markbartontv and

@manuscranny. anna: what paulson thinks about janet yellen. we will be right back. ♪

mark: john kerry heads to russia to meet president god mayor put in. -- vladimir putin. what does his visit mean for relations between the u.s. and russia? guest: the us is giving putin a chance. there is no talk about rolling back sanctions. they believe that it is vladimir

putin who is personally calling all the shot so they might as well go to him. we understand this from not to be quoted sources within the u.s. administration that there will be another attack another offensive from the russian backed rebels in eastern ukraine. they want to give him pause on that front and explore the possibility of developing relations in the future. manus: what else do you expect them to discuss? there is a whole host of issues over which they have bilateral interest. ryan: those are more important even than ukraine. ukraine has gotten in the way and a lot of senses and what is a complex multilateral relationship between the u.s. and russia. you have disarmament, you have them in right now in particular, you have iran. they're very keen, the u.s. to

have the russians on board to try and get some kind of iran deal by the end of june, before the deadline comes. it is essential to have the russians, we saw vladimir putin saying that russia can go ahead and sell s-300 systems to iran after immediately we had that preliminary tentative deal with switzerland about a month ago. they want to make sure there are no more surprises like that and importantly, they called stat ba ck from sanctions. they want to get rush on board with that timing because the last thing they want is resident -- other oil companies getting in their forehead of the u.s. majors one iran does open its -- when i ran does open its oil markets to the world. anna: the love triangle between

two companies gets mark obligated. let's get to elliott gotkine. where do we stand on this complex relationship? elliott: the tale of lust and unrequited love in some cases. we understand from the financial newspaper that perrigo approached tether -- tva. -- teva. they are trying to convince them of the deal. mylan buying perrigo would the

attractive for pfizer. mylan is domiciled in them -- in the netherlands. mylan could go in by -- and buy sandoz. these -- this is not coming from the other companies. the one thing they are adamant about is they will not sell themselves to teva. anna: complicated stuff. thank you. manus: coming up, we speak to the ceo of easyjet. a profit for the first half. anna: >> the first time since 2002 they have turned a profit. we will talk to carolyn record about that and their forecast for the euro.

that is still working in their favor. manus: stay tuned. that conversation coming up straight after this break. ♪

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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. manus: welcome back to "countdown." we had an interview with roger bootle. the market has already begun to pull back from saying it was the second half of 2016 to the halfway point of 2016. can the political rally that sterling has had continue as a tour de force? that is what the market wants to know. 155.78 is it. it is almost car before the

horse. and where we are with the overall program. manufacturing is expected to expand by .3%. paulson's interview with guy johnson. the eu should stay with the euro to remain relevant. and stop acting for -- asking for treaty changes. ask how europe can improve itself. go to bloomberg.com and pick up that interview. that is sterling. the dollar is down by 18. -- 1/8. bond markets, bond yields are up in america. the highest since december.

the dollar is very unsure of its overall momentum. even with fed speak the dollar still finding it hard to galvanize itself. have a look. the chicago fed have come up with their statement. they say unemployment is below 5%. that is important in terms of what the fed considers. should we have a look at the euro? everyone is very excited by the progress that greece is made. negotiations have advanced. great talks are positive. disbursements could be [inaudible] this is invoking that minute of desperation to get some kind of good report card for greece and maybe even a partial disbursement. the rising euro might not be exactly what mario draghi wants. mark: the top stories on bloomberg this hour.

the company has posted a 210 million euro loss, misting -- missing estimates. toshiba following as the number of analysts suspending coverage reached six. the stock dropped to 3.2% earlier in tokyo, extending the decline to 19%. and selling the core centers which employ 11% of the workforce. the sale of the corps centers which have 19,000 employees across brazil should close in the next three months. as greece and its creditors continue to negotiate over bailout former u.s. treasury secretary paulson spoke to guy johnson. mr. paulson: i assume, maybe i

am looking at it naively, i just assumed that somewhere or other people will figure out how to keep greece as part of the euro. the problem are fundamental structural flaws in the euro. i am more concerned about what is going on in portugal or spain. monetary policy will only do so much and again, the key to europe is to step up on some of the structural issues in dealing with labor reforms. some of the more fundamental things that need to be done. reporter: there are people in berlin and i am increasingly hearing this as a conversation. that you can let a country like that go.

you have experience of unintended consequences. do you worry that doing such a thing will be a lehman-like moment? mr. paulson: we are dealing in a world where there is no playbook and there is unintended consequences of monetary policies which we have needed for a long time but maybe we do not need it. i am not saying europe does not need an expensive monetary policy. in terms of unintended consequences, of course i worry about unintended consequences, but to me what i worry about much more which is you talked about the lehman moment. the underlying problem have been the fundamental flaws we had in structural flaws in our economies for some time. anna: hank paulson there.

we had earnings from easyjet earlier this morning. joining us now is the ceo of easyjet, carolyn mccall:.. congratulations on managing concerns, a pretax profit which is no small achievement given where it has been historically. i do not want to -- can you sustain that, can you continue to either reduce losses or i guess we should talk about drive profits in the first half of your year. carolyn mccall: we have reduced our losses in the first half every year of the last five years by being very disciplined and by doing the right thing for customers. i think you are right to highlight this is an unusual thing because low fuel has certainly helped us. of course, 58% of our passengers rebooking, 60% of our business passengers rebooking, very good loyalty statistics but fuel has helped enormously in the first half.

anna: the weakness in the euro helped you. it turned around a little bit. and go through all prices helped you. that turned around a little bit. what is your expection -- what is your expectation in the year? carolyn mccall: we will still see if you'll benefit in the full year. as we see the fuel benefit, we are passing the benefit to passengers. we have had a strong revenue half our fares are lower year on year. where making money, our revenue is coming from ticket price but not ticket price going up and from business passengers, from allocated seating, annexed her bag, etc. fuel will be of benefit. not as a good benefit as you may imagine. we have to keep doing the right thing for our customers. our customers like what we're doing and i think we continue to hold our network put on some

new destinations just to give you an example, our ski season this year has also helped our profitability. it was a bumper ski season. we flew 100,000 passengers at peak. we had 50 flights a day from -- to geneva from london. amazing, really. a strong ski season as well. anna: i was on one of your inaugural flights recently. you mentioned about how growth at the business has been you're saying you're introducing capacity but in a disciplined way. are you worried that others might not be so disciplined? are you worried that ryan air might not be so disciplined? carolyn mccall: they are taking a huge delivery of aircraft because they did not do that for three years but you are right. i think that low fuel allows

much more capacity in the market. so if you are a weaker airline if you are an airline having problems in restructuring, you are more likely to keep [inaudible] you have a it of breathing space. when oil rises, it is a good disciplined environment for the aviation industry, we would welcome that because rationality is good in a market. >> they seem to be taking a leaf out of your playbook. copying the strategies that you have adopted. very flattering perhaps but if it does end up being more direct competition between you two, how do you fend off a changing ryanair? a ryanair that is trying to look after its passengers more? carolyn mccall: customer service is a good thing.

we are used to competition. we compete with airlines all the time. overlap is very small. our primary obligation is legacy carriers. so that is where our competition is we are used to competition. we are good at competing. we focus on our customers and low fares and good service, strong network, that is what we are good at. >> what applications does the election have for your business? i am thinking about air passenger duty. are we going to get into some kind of competitive environment for taxation from that front? carolyn mccall: the first thing is it rings stability and that is good news for british business so that is a very good start. we would encourage the government and we have been talking to them in the past about reducing apd.

we are delighted to see that children under 12 do not pay. you are right about scotland. it would be beneficial to scotland not to have apd so we would welcome moves in that direction. all the airlines, all the airports in this country believe that apd is the wrong tax because it suppresses demand and no other country in europe has it. germany has a very small tax and have reduced it already. we are an anomaly in europe so we would encourage the government [indiscernible] anna: what other signals are you getting from the government? your sector crucially waiting to hear from the davis report about airport expansion. do you think the tory majority makes another runway come quicker, does it have an application on which runway is built? who -- what is your sense? carolyn mccall: i hope the recommendation comes out that we

have a decision so we know whether we agree with it or not. a decision has to be taken. we have been talking about extra capacity at heathrow since 1964. it needs to be depoliticized. it needs to be about what is the right thing for britain, what is the right economic answer and where is the demand at the moment. i hope the government will focus on how that can be made possible. taking into account air quality and noise. new aircraft now, the noise reduction is really very palpable. there are a lot of things that have changed since the debate started. that is an important thing and the eu were from them -- referendum will be important for british business area and we want to reform and we want to stay in europe as it brings a lot of aviation benefits to the country. anna: the mayor of london is

going to sit on david cameron's political cabinet. that means expansion is less likely. you are back in heathrow, is that right? it looks as if we have had a problem with the line. if you can still hear me, thank you for your time. carolyn mccall: the ceo of easyjet. mark: it is that question that did it. i still backing gatwick? well the pounds rally against the dollar last? that is next. ♪

mark: the pound climbed to its highest level this year against the dollar when it reached one dollar 55 -- 1.5586.

the conservative party on it -- unexpectedly swept to power. since hitting an almost five year low of 1.4632. the pound has jumped by 6.5% but let's put that rise in perspective because it comes after a nine-month decline in the pound. a nine-month rise in the dollar from last july. july 2 was that red circle up there. the pound film by 15 -- fell by 15%. all the way to that almost five year low last month. what is lifting the pound right now? it has been lifted by this outcome. investors can focus on monetary policy and close on that should

be revealed when the bank of england reveals or and sits -- unveils its inflation report. inc. of america, merrill lynch has pushed back the timing of its first hike into for of next year from november this year. that is on the view that monetary policy is going to have to respond to a probably more austere pace of fiscal tightening been the conservatives have pledged. the currency strategist recommends betting the pound will increase against the euro and other currencies with central banks easing monetary policy rather than appreciating against the dollar. that view seems to be the consensus among the analysts we have surveyed. the median and of the year forecast for the pound is one dollar 48 cents. the low is 1.55.

national australia bank is the most bearish with a one dollar -- 1.33 call. it is the most bullish with a 1.59. contracts find rates are not being priced in until the middle of next year. traders are decked 65 basis points of policy tightening by the federal reserve over the next 12 months, according to a credit suisse group index. the big call today from roger bootle. the bank of england will not raise rates until 2017. a call from -- big call from roger. will the pound rally against the dollar? manus: join us on twitter. it looksthe bond right globally

continues. german bunds dropped nearly 100 points since the open. you're looking at yields in germany now it .68%. that is nearly 12 times what they were three weeks ago. anna: you're looking at a live shot of the city of london. equity markets are due to open up in 11 minutes' time. a little sluggish at the start of equity trade. down by .4 of 1%. more on what is driving the markets when we come back. ♪

anna: welcome back. equities set to start trading in a few minutes time.

caroline is here. through-line: it could be down but overall it was a beat when you look at profitability. in more than 150 markets. the fourth biggest brewer. they are still feeling the pressure in russia. there up -- they have a new chief executive taking the reins. it is official. a dutch-belgian combination. they confirmed they are in preliminary talks. there is -- there may not be a result but they are exploring

the opportunity to combine together and have more than 6000 stores. it would be having one he 5 billion euros worth of company value if you add the two together. this is a company that could start building presents particularly in the united states where there are some stores. manus: keep your eye on the bond markets. german government bond yields are -- you're looking at .66%. the yields were a smidge abundant -- above zero. and the bond markets are the laggards. bonds are selling off again.

mark: a big factor when it comes to a company like elian's -- all ianz. outflows continuing at pimco. it is slowing. when will it be inflows? he says we are probably seeing waves of market distortion. anna: we had a increase in german bond yields. and good numbers in the sense they have turned more for profit. right to say that fuel helped quite a lot. who knows where that new runway is going to be built? she welcomed the new government

and downplayed competition. mark: when anna said do you support gatwick, the line dropped. manus: we are taking you through those airline stocks. easyjet, air berlin. ♪

jonathan: jonathan: welcome to on the move. let's get straight to your morning brief. japanese and australian bonds slump after u.s. treasuries plunge. the yield on third-year -- third yielear bonds rose. creditors -- greece is on course to pay the imf 750 million euros later today. john kerry intends to meet with president vladimir putin for

their first direct talks in two years. a sign of progress the man is actually going to russia. futures lower. ftse 100 futures down by 200 points. deked futures lower by 100 points. bonds falling out of bed. manus: what you have got is german government bond yields rising again. they are 12 times higher than they were when you and i talked about it. the question is when does the bond market rise turn into something much more systemic and much more of a challenge for markets? when will the self-fulfilling prophecy in germany, spain, and italy all begin to feed into a self-fulfilling selloff? the question is how long does it have to