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 unravel.

the governor saying the fed could be at play. you have a host of people. they cut profit by 14%. the cfo talked about some of the bond markets. pick up that interview. caroline will take you through the numbers. the russian market is declining by 9%. 690. that is the market down in russia by 9%. i saw 1% lower. caroline talks about loyalty.

62% of customers tend to reboot with easyjet. they are having preliminary talks. the end of the day up nearly five and a half percent. we understand the government is taking their holdings low 20%.

equities lower. the euro on the upside. sterling i want to leave you with this thought. rate hikes could be pushed out. he said focus on grexit as big the benchmark for renegotiating reform in europe. >> it makes you worry if that is overdone. the bond market selloff continues.

this morning japanese 10 year yields across to the highest point. we are joined by the bond expert. i talked you through my morning. for some reason these bonds start to turn back again. what is the story? >> there is a lot of conflicting things going on. no one really believes european rates are going to go higher anytime soon but they also know the deflationary threats everyone perceived a couple months ago is unreal. if you get inflation and modest growth, you are going to see

bond yields rise because people are no longer persuaded to pay negative rates. you have also got fear of illiquidity. people are terrified. at the same time they are not convinced by the economic global argument. we can see that in last friday's bond numbers. it sounds complex. itself like we are doomed in the bond markets. i think there is a realization it is hitting bond investors and we need to because she is. i don't think we have seen the end. at the same time, i think there are bargain hunters waiting to come in when they see sovereign bond market yields make sense but they are also going to play corporate bond markets as well which i think look far more interesting. >> three points. inflation, liquidity, and what it means to credit. what has changed in the last month?

maybe the only thing i can pinpoint is a turnaround in oil. has anything else changed? >> i think a lot of people think china could be in shock. the fact china is easing and also pumping cash into the system and will protect itself adds to this picture of a global economy that is fundamentally terribly weak. i think this is a factor that is good to put people into the bond market at some volume. when you have still got this weakness in the global economy and you have got stock market as high as they are you have to say, where do i want to be invested? the great rotation trade we have talked about, it happens, and it is just being convincing. the foundations look made of sand. there are banana skins to trip up on. manus: i want to talk about

liquidity. you look at a picture and see one color dress as a but he says it is another color. when you look at the bottom market, lack of liquidity, does that make some people think it is the end of the bull market when it could just be a lack of liquidity and higher bond yields and there could be a turnaround? bill: the critical thing with what we call the liquidity trap is the perception if you are taking a view on markets and playing them, you could end up trapped. the liquidity even in the u.s. treasury markets means it is very difficult to exit large positions. that means people are going to try and get out of the crowd early rather than wait and see. that is why we are seeing some of them exacerbated. that does not change the fundamental flow. the reason these moves are

happening is due to the situation we have in terms of economics, and terms of the fact bonds are so unattractive. it is the reaction that exacerbated by lack of liquidity. that terrifies people. jonathan: let's talk about the cascade through the fixed income space. high-grade sovereign. on the scenario, it was just yields lower and lower. credit gets pulled off. you are buying them as

commodities, hoping yields would go even more negative. it looks like that is not going to happen because the deflationary threat has gone weaker. even if we do see global central banks start to hike, it has been pushed further down than we expected. you are talking about 2017 for the u.k. we are not going to see a massive increase. what we are going to see is global growth reestablished. we are going to see inflation come back in. that means rates will rise. >> stay with us. maybe it is a reminder that fixed income is not all sunshine and rainbows. maybe that will leave some agreement. that is coming up, optimism from brussels.

greece crosses its fingers. has anything really changed? we will get the bond king. a little later, the u.s. secretary of state john kerry heads to russia. he will meet vladimir putin for the first time in two years. stocks in london down by 1%. join us in two minutes. ♪

jonathan: welcome back. it's time to talk about greece. the greek finance minister insists his nation is serious about delivering reforms. the dutch minister says progress is accelerating. it sounds like good news. i think that picture says a lot. cross fingers. i think that is how a lot of people feel about this. tom, you have been speaking to policymakers. is 30 thing concrete that came out of this meeting and the last 24 hours? or is it crossed fingers? >> we did catch up with the finance ministers. it is definitely cross your fingers and hope. there was a mood change following the acrimonious

meeting just three weeks ago. the statement came out yesterday , which simply acknowledge the change in attitude and said, well done. no concrete proposals, but a change in mood. now the ecb, which has been threatening to reduce emergency liquidity are less likely to do that. the eurogroup leader saying there is a lot more hard work to be done and very little time in which to do it. the markets in athens not taking too much positivity. the main index down to an a half percent. the yields on the greek tenure up 29 points. there are reports that they do

not want to partake, turning -- pointing to risk between the imf and the euro. >> thanks for joining us. let's get some analysis. has anything changed? >> the greek side is edging towards european, but on issues that really count not going back to trade union power, and there has to be a sense which means cutting on some thorny issues that don't seem to have a lot of progress. basically they are saying, here is the money. you can have it, but you have to

return the policies first. >> is it any wonder when we come out of them, and our benchmark is the fiasco two weeks ago? >> it is part of financial diplomacy. it is trying to make us here kick the can down the road is. and warning the next discussion which is going to be no further interest just deepens the problem. it's not a true picture at all. jonathan: what is the true picture to you? >> the greeks are in a difficult position. for them to deliver the promises they made and stay within the euro and meet the requirements what we are trying to do is a

square in a circle. we have got to do it in such a way that the game of financial diplomacy makes it look like everything has been tried. jonathan: a lot of people have talked about lack of data, ability to access the data in greece. if you take that argument, is there an argument that they could be underestimating or overestimating how much cash they have got left? >> they may not have a full grasp of the situation yet. they are probably better at actually knowing how much they have. i wouldn't bet on them having a full picture. it remains an open issue whether at the end of may they will have enough coming into actually pay the public sector and welfare payments at the end of may and over the course of june.

it is a very serious business if they run out of money. time is on the side of you need to hurry up. it's so difficult to make compromises with europe. there is almost nothing they can realistically deliver. >> they can deliver everything. parks it puts them in an and difficult position. it's about kicking the can down the road until we find some kind of way. it is this greek government is promising impossible things. they have to get honest with the population saying this is a possibility. >> they can't be honest with europe and their own people.

jonathan: you could solve the financial aspect in the short-term, but almost immediately after you have a situation that is going to lead to a crisis in the long-term. >> not necessarily. the greek population wants this government to strike. jonathan: they also don't want austerity. it is a bit of a mess. holger: this government if it wants to, if this government is ready to strike, i am pretty sure there will be a majority of the greek parliament -- a majority of the greek population . what it takes his political courage to admit what promised to be impossible. >> i think we will see along the

lines of what you are suggesting, where we will get some sort of compromise from europe which will be accepted by the greek population, but it will be a compromise. it will not be everything demanded. it will be something like they deliver a small reform or the promise of a small reform. and they need time. >> this time after the experience when greece signed the piece of paper and didn't do anything for months, this time the money will only come, europe will only do anything once stuff has been passed by the greek parliament. they want implementation this time. jonathan: yes or no? a deal by june? >> unconvinced. jonathan: the chief economist

just to bring you some news right now. a magnitude 7.0 earthquake striking nepal. also no news this is causing damage. i will bring you updates throughout the morning. the bond market not advocating any time soon. we will bring you a special interview after the break.

generally through march. but it pimco reaching $68 billion year on year.

bloomberg has been speaking with the bond king and asking why he is still active. >> one of the reasons i am still doing this is to prove i still have got it. like a quarterback who still has an arm. it feels great. that is my problem. i understand intellectually not many people care. she has to put up with me at night. it is an obsessive thing that has informed me. even though you can figure it out intellectually you don't necessarily lose it. >> you must get there are people who wonder why after building a

track record as the most successful bond manager ever doing this. >> i didn't like how i left pimco. i didn't care for the aspersions i might have lost my touch. i am in this seven days a week. it speaks to confidence. >> let's deal with the equity markets. the ftse 100 trading lower by 1%. we are looking out.

we will deal with easyjet after the break. ♪

jon: good morning and welcome back. i am jonathan ferro in the european headquarters right here. j etsy capital -- j etsy capital -- jat capital, closing up shop. the investor firm plans to return investor cash by the end of june. another hedge fund manager, john paulson his hedge fund gained after great that paid off. he is said to have gained 1.5% last month and 6% this year.

a painting by public also has set an all-time record. the painting breaks the record formally housed by a work of francis bacon. looking at equities trading lower across the board. the dax off by 139 points, down by over 1%. the bonds open and then they fall out of bed. it was bund yields up higher. the 10 year in australia, here is a route, the 10 year australian bond yields up 19 basis points. the most since 2013.

the lid on the equity indexes. let's go to caroline hyde. caroline: i will start on a green note. this french company is all about cable and sfr as well. the mobile phone company that it acquired up 7% to this as our earnings really do be analyst estimate. it is not ending in the first quarter they say it will keep growing profitability and they see earnings growth in excess of 20%. they say look, you know that french price work, it is over. they say they expect it to continue growing. the owner of numeric, -- numeric able also driving higher. many felt that the analyst

estimates, looking for numbers more detailed in manner later, but sales up 4% and profit up 46%. if you look at a reported basis, no profit. we see a reported loss of 90 million danish krone. russia is still a weak point. jon: thank you very much, let's keep it on the earnings. shares trading sharply lower this morning. the ceo told anna edwards that the company is spending its cash on reducing passenger fares. >> we will still see a benefit in full year. as we see the fuel benefit we are passing through the fuel benefit the passengers. even though we had a very strong revenue half hour fares are

lower year on year. jon: looking at the bright side of life the biggest drop since march 2012. 560 million pounds shaking up the market company just like that. the bamberg news reporter carry joins us now for the return -- bloomberg news reporter carry joins us now. >> that is the trek with an airline like this, they give a detailed announcement in march for the pre-close. so there q3 revenue is down 3%. a lot of analysts and market looking at that. the two main factors, a bunch of strikes in april so over 600 flights had to be canceled. right at the start of the six-month second half. the other thing feeding into this is the timing of easter.

always very important in europe. easter was a bit earlier this year and some of that revenue on to the first half rather than the second. they would probably be putting the guidance out to saint the third quarter will be great. it was the flipside of that story this time around, what is it all about? >> they had a really good first half. some of that has to do with skiing. a lot of it had to do with fuel and currency headwinds. we should give credit to carolyn mccall. since she arrived she has narrowed the first half loss and now they are returning to profit. no guarantee on next year that this is very much on her strategy on focusing on airports and targeting the business passenger and making the brand friendlier.

some low-cost discount brand and more something everybody would use and choose over ba. jon: they are out front on that. they beat ryanair to the punch. the commodity story. lowell fuel prices helping them a big rebound in fuel since then, how hedged is this company? >> the usually try to hedge out in advance. everyone was saying before that the fuel benefit is coming in and isn't immediately beneficial but they definitely will see a benefit for the full year. they will be passing that on to customers. the other interesting point you made this morning and what to keep in mind is that she lowell -- lowered fuel prices for companies of art heads. they will be taking advantage of this to expand and having more competition in the marketplace isn't always good for yields, it

drives down air prices and generally doesn't help margins. jon: our resident airline expert. easyjet stock getting punished. as i say, the biggest drop since march 2012. forget yesterday, it is what happens tomorrow. the outlook not as great as some hope for. looking at the broader index, it is a saddle for europe. the dax off by 166 points. sterling? 1.5588 clinging along. going into the quarterly inflation report. that pair will be one to watch. some gyrations in the bond market. still to come, we will switch things up and talk beer. carlsberg looking flat for investors.

details after the break. ♪

jon: welcome back to "on the move." let's contender -- continue the earning stories. despite a first quarter beat, european business correspondent caroline hyde with the details at the touch screen. caroline: i'm sure you are every

now and then -- russia is thinking baltica. this is why. that is -- this is so important number one brewer in russia. it is falling today and if we look at numbers profit up 26%. if you look at it on a net reported acis, they reported a loss and that might be why you see some of the enthusiasm coming out of the share price. the reason they managed to drive -- if you look at western europe beer volume grew some 5%. this is a company that is upping the price point for a pike of beer. asia are doing well in india and china and making acquisitions there. they are confirming their full-year growth target.

many thought that was over ambitious. deutsche bank called it unrealistic. nevertheless, they stand by them. this is such an important market for carlsberg. it accounts for a quarter of all of its earnings. the beer market not doing very well there. the macro economy is doing badly him a political uncertainty and the ruvell is falling. and we do actually have regulation getting there as well. so many headwinds facing in terms of russia. nevertheless, they are managing to slightly fight back and cutting their dependence on russia. there also closing two drew brees. they managed -- breweries.

they managed to up their market share by half a percentage. overall their organic sales if you strip out the effect of foreign currency, that was found 29% compared to this time last year. they did feel the effect of the foreign currency. there are still some challenges. this is the swansong for these particular numbers. a new chief executive june 15. these number's come from a dairy company is the first non-getting to be taking over the company since it was founded. he has to turn things around. four years of stagnant growth and clearly he needs to find new areas of innovation. they're trying to be innovative when it comes to craft beer and we notice that they open a craft beer in norway. one thing -- one the interest will be russia. to this hand via or keep raining

back. moody's says we believe in the long-term and even the medium term this is a good that core beer. in the short-term, you will have problems. jon: we will focus on little bit more on carlsberg later in the hour. "also" will be speaking to the carlsberg president and ceo this morning. to meet with president clinton for the first -- our russia expert ryan chilcote joins us now for more. i'm not expecting champagne or these guys to smoke cigars, but at least he is going. brian: it is important for a couple of reasons. there are officials inside the administration who still think there could be a big push by russian backed rebels and the worst is not behind us. secondly because there are a lot of other bilateral issues in

this area that need to be discussed. one of them is yemen, another is syria and and his biggest partner or biggest ally is russia and finally, iran. if the united states and its allies along with russia want to get a deal with iran by the end of june bring a run back into the oil market than they need the russians on board. after we had that tentative deal in switzerland about a month ago, putin cannot exit now we will sell antiaircraft. that cut the u.s. off guard. they want putin on their side particularly when it comes to the process of removing sanctions. lasting united states once is for the u.s. to go rogue and to go into the market before western european companies start to do that. >> talking of european companies, under terrific pressure as are many companies

under the last 12 months, how are they getting around this? >> we have some excellent reporting today that a company that no one has ever heard of. you should say that no one that isn't already investing in russia. the fourth largest oil producer in russia. $25 billion. the cash they have on their books is $34 billion. it is like buying a house for $34,000 knowing there is a covered with a hundred $50,000. why are people willing to pay to hundred $50,000, they are not sure they can access to cash. maybe they can. flatten their newton is good friends with the ceo and they are thinking that perhaps some of that money can be put to work to help them raise money. the government has said they want to sell a 20% stake so the country and the kremlin could effectively sell that 20% stake they have the cash and the 34 billion, it would cost much less

at above market rates at the same share price that for example was at the ipo. in other words a third more than where the share price is right now. they could take that money and ticket down in an act of goodwill. i know that is, located. jon: i'm still with you. fantastic story. as we head to the break here is a picture of the markets. stocks over the last 15 minutes opening lower and staying lower. moves in the bond markets that all started with the treasury move yesterday. yields spiking higher. a lot of supply coming from the treasury this week. today, we get $24 billion worth of three years and $16 billion worth of 30 year. due on thursday. some big options happening in the bond market. sterling holding on against the

dollar. more markets after the break. ♪

jon: 50 minutes into the session and equities trading lower. monetary policy is the dominant story. could they reach a limit? that is the message from the former u.s. treasury secretary. a possible asset bubble as a

result of the regular monetary policy. >> the definition of a bubble. by definition it is not understood by the market until it pops. so i would say, i am a fan of janet yellen. i have clearly been a fan of the bernanke monetary policy. we gave her leverage -- deleverage in the u.s. but there is a time where you cannot rely on monetary policy. there is a big, ugly and messy problem. will not solve it with some elegant solution. if all you need to zero interest rates, we would have done that a long time ago. until we get back to a world where interest rates are determined by real economic forces that reflect economic reality, there is going to be asset bubbles.

the question is -- i'm simply saying, i have always felt that there will be some volatility getting out something like our monetary policy. i have assumed there will be volatility and clearly there are bubbles, so the question is whether they are manageable and how big are they? clearly politicians are trading off stability in the financial system against economic growth. and the fact that there is no sign of inflation yet. jon: guy johnson joins us now. you talk to them about greece and everything under the sun. guy: it is upsetting what he sees at the moment with monetary policy but that draghi has to do what he has to do. underneath that you need a structural of reform in place.

you could point the finger at the eurozone for not doing enough, and that is his point but monetary policy blowing bubbles? we can talk about that. jon: 7 a.m., i start looking at bubbles and they go type again. we talk about the liquidity story. anything to say on that? guy: in terms of what is happening over recent days, he didn't want to be drawn too much on that. it is interesting that he does see the fact that we are in a weird world and that world is still with us. he probably puts down what we are seeing at the moment as part of the strangeness. we live in a very peculiar place. hard to price assets. jon: i'm not sure that kind of world is going anywhere anytime soon.

as we reported earlier, another earthquake has hit nepal near the chinese border and tremors have been felt as far away as india. bloomberg's uni is on the ground. give us the details of what we know so far. what do you know? >> the tremor was pretty strong. the epicenter is near the nepalese capital. it was 3.4 on the richter scale. right now, what we have gotten from officials in the paul, a report of damage. given the earthquake last month, and i was down there reporting, you could expect some kind of damage to come in. they're closer to the places

that were badly hit. jon: just to confirm, no reports of any damage in kathmandu city? >> right now, the official city has not received any reports yet. tremors were felt and lasted more than a minute. according to the official i spoke to. office complexes were hit, even the building we operate from offices on higher floors could feel it. you could possibly expect reports of casualties or damage. jon: thanks for joining us. no doubt you will bring us updates through the morning. another earthquake hitting nepal. just to get a feel on what is coming up. we will deal with the hank paulson stuff, carlsberg

intriguing as well. guy: intriguing because the ruble has depreciated so much but russia remains a significant problem. been volumes pick up a little bit. the other interesting story is catherine coxe. she runs a business under a lot of pressure. what will her shareholders make of her winning this award? jon: business woman of the year. guy: here is a business very much under pressure. you can look at this two ways. what is she doing winning this award? or here is a woman who has navigated through some difficult phases in business and as a result needs to be applauded for that. fascinating that she has won this award at a time when the business has been under so much pressure. jon: another woman who'd

navigated difficult times, carolyn mccall. easyjet stock getting punished. equity across the board is lower. i am on twitter. good luck for the rest of your day. ♪

guy: greece sends its latest imf payments. francine: sit down in sochi. john kerry is in russia for his first meeting with putin. guy: a muted outlook sends shares sharply lower. good morning. welcome to "the pulse" live in london. i'm guy johnson. francine: i'm francine lacqua.