billion, below the $11.2 billion median estimate. looking at futures dead flat on the ftse 100. let's kick off the week and get to your market open. manus: amazing how these mergers were in the last throes with greece. the dax is down 2.2% last week and athens was down over 3% last week. to that and these equity markets have a little bit of reprieve. the cost of insuring yourself from a collapse is at the highest since 2012. the most expensive relative to the united states of america since 2006. stock investor sentiment is the worst since 2014. u.k. government bonds are the second biggest negative, looking

at a lloyd's investor. the equity market up a bit. let's see what is moving. be a little bit of -- be a little bit careful of valuation. what you have got is the assets being moved or sent off. some of the individual names we're looking at they will deliver their numbers this week. the sunday times is are you going to share a buy back? or an uplift. the first annual profit in a number of years. you will see a similar process here in the united kingdom as we saw, the assets being taken out. you take the assets out in the stock is readjusted. now this is the kind of headline

you see at thomas cook. lost two children on holiday in whole foods poisoning in a bungalow. thomas cook received 3.5 million pounds. totals on goings settlement here in the u.k.. the headlines around thomas cook are certainly not good this morning or yesterday morning. they are defending that position quite vociferously. the chicago fed governor says there is no compelling reason to hike rates. even when you get there, the average would be a component of allowing inflation overshoot.

that is definitely breaking those force overall downtrend in the dollar trend over the past training sessions. jon: let's get the week started. the default option. the rumor about greece and the 110 days of talks over that and the greek government says it will not back down on antiauthority election promises even as it targets a friday deal at the finance minister summit. they're starving the greek -- starving the greek banks of cash. the country might have to default on that 700 million euro payment that it ultimately made with imf money. honda nichols joins us with the details. the domestic angle in athens. over 110 days of talks, the same conversation back and forth over 110 times.

hans: there appears to be a consensus emerging around the finance ministers. the actual mandate that mr. tsipras believes that his syriza party wants. it is the very mandate according to edward, a multi-finance minister. once you get over the mandate you could potentially see a path forward. in more and more european capitals that is why you are hearing talk of a referendum. a referendum on whether or not greece wants to stay in the eurozone. that could be one way out. that's if you think the mandate he has from his people is the problem. there are other issues as well we heard from the vice chancellor and the german government right now. and mr. gabrielle said in an interview sunday that he sees

most of the risk for a greek exit being political and not economical and anytime politicians in germany are talking about not having economic consequences, that is a troubling sign. jon: is that the line out of berlin right now? another crucial week for greece and it is us sitting here saying ok fine? you have a mandate for your people this is where we stand if you don't want to do that go back to the people and get it done. hans: that is why this idea of the mandate is the problem. referendum could be a solution and that is why you heard mr. schaeuble hint at this last week that he was in favor of a mandate. then over the weekend you have the greek government trying to clean up which could have been a messy meeting. reporting that things got quite defeated.

the greek finance ministry is denying that saying everything is hunky-dory. see if there is an emerging consensus around that, one potential way to get tsipras off of his negotiating position. jon: let's fit the view from athens. looking at the rumor and the report over the weekend. cut to the noise. tsipras told lenders that greece would not pay the imf, what happened last week tell me about the weeks to come. reporter: essentially the greek government is making sure they will make the payments with civil servants and pensioners. they're using the holding accounts reserves in or to make the imf loan repayment.

the big obstacle in june is not the interest to be paid where have money set aside for that as well. it is for payment for the imf. more than 1.4 billion euros. a lot will depend on the inflows. we are not seeing a negotiation process at the moment. people start holding back and not paying taxes or trying to make ends meet with the payments to the public sector. the government has an inflow problem as well. it will be a very hard time. jon: a tough time for greek banks right here, right now. could it be that ecb that raises the stakes?

reporter: i will not bore you with the numbers but at the moment, the greek banks have a collateral partner with the ecb that would last them another two months, being able to top ela funding. given the current deposit outflow pace greek angst may only have a month in front of them to be able to get assistance. the problem is there could be a greater deposit outflow acceleration and you may have to impose controls. just to keep things in place. what have we said before about a referendum, mr. tsipras has said we are not opting for elections.

we're hearing many greek officials hinting on this that could be the solution. jon: thank you very much for joining us. hans nichols joining us from berlin. i want to get the investor take now. joined by the head of investment at cross bridge capital. we have to talk about it again. last week was key. if you believe some of these reports, tsipras did warn the imf that he wouldn't pay. what is that matter, i look for to a series of payments coming up areas but these guys are not bluffing. guest: it is like a slow car crash we have been seeing for some time. it's like you are drawing out working capital from the weak economy. it is not a liquidation. i think this will probably go to a referendum.

it is likely they get the take it or leave it package which they will be able to pass through parliament. jon: ultimately it has been treated as an liquidity problem. they are using imf money to pay the imf and ultimately any relief of further funds will be used to pay back the creditors. guest: if they don't get that next bunch of money they are not going to pay. it is not very clear but they are saying they might be able to get a deal this friday. my point is if they have to default than they are too late. in january they had a primary surplus and i could have defaulted and use that money to make the payment. jon: you think they would've kept the primary surplus with the default? guest: they would not. it is about reforming the economy.

you can't reform the economy -- even if you pay six months down the line you will come to the same scenario. jon: people watching this -- a series of guests have said this doesn't matter for investments across europe but you are having a great year, what are you up, 9%? what are you picking? guest: i did not hedge out the euro because i expected the eurozone economy to do well. and those who take stock in financials have done very well. amazon and apple and these talks have done well. jon: coming up, a slow start for bhp's spinoff. the minor trading day valued at just over $9 billion.

♪

jon: good morning and welcome back. i want to get to the big top story this morning. shares in php trading a little

bit lower. south 32 the ceo spoke to bloomberg about the business strategy this morning. >> the problem we had from day one is going live and from the retail model which allows us to aggregate which we think will help us grow. so taking loads of management out, driving efficiency and lowering costs. it is the best way to grow. jon: going to bring in bloomberg's resident mining expert. the top headline is the valuation of just over $9 billion. guest: they clearly would be disappointed with that. clearly the backdrop of

commodity prices falling hasn't helped them get exposure to obscure commodities like manganese, led, silver -- none of those commodities performing very well. manganese has been the worst performing mind commodity this year. jon: analysts are saying they will struggle to create any kind of volcanic growth and on the other hand it is seen as a takedown. guest: i think, this thing has a big target painted on its back. he knows some of these assets very well. next to is a big fat wad of cash ready to go and apparently they have already looked into an offer of $10 billion. it could be quite attractive for them. jon: you look at some of these

minors. the dollar off the commodities could be good but really bad data should be bad news for minors and then you say how on earth do you trade that? guest: people are now coming of the view that inflation has probably bottomed. and you should not forget that it is about certain sectors and mining is certainly one of them. it is still about cutting costs and delivering higher dividend. it is a combination of these factors. jon: you look at iron ore. it is really taking a kicking. yet the miners keep boosting supplies. what will it take them to pull back and reduce supply? guest: i don't think they will

do that at all. andrew mckenzie has been very clear in their strategy. they are so at $60 a ton. you will not pull back on your production rate. they are not going to pump anymore new capital expanding but they will continue with their current production rate. jon: if you have a product and your margins are good do you want them to boost supply or would you want them to pull back and do something about prices? guest: people fall into this trap that global growth is going to be very small and slow. i don't think that is the case. the reason of saying that i will give you one factor is that there is a shift. people are getting married later in having a family later and people need houses later.

if you take into account that china is providing stimulus there is no reason to be too negative. jon: big thanks to jesse after the break we will discuss china. home buys returning to the market in that country. is it a sign that chinese stimulus is working? we will talk about that after the break. ♪

jon: 22 minutes into the session this monday morning. ftse 100, almost a session high. the dax is also pushing higher by 6/10 of 1%. that was not the story last week. it was a stronger euro. it really gave those equities a bit of a whack. stronger for much of last week. a week dollar off the back. u.s. consumer confidence down the most in two years. that puts sterling at a 2015 high.

pulling back from those levels this morning. four weeks of losses. i'm looking at wti. $60 a barrel. we were looking for a ninth straight week of gains and did not get it. still with us for his take. we will get to china in a moment, if i want an inflation hedge in my fixed income portfolio, is crude the best place to be? guest: crude is a good player. but one things we have from the selloff is buying bond for capital gain.

to your point about crude, i do see that crude prices have put up a bottom. i do not expect that they will rally a lot. high prices are high price. that is something to bear in mind but all in all i am quite sanguine with the numbers we are seeing. you might not have a note in q1 but let's look at the numbers. jon: the property market showed green shoots of recovery in the second straight month, boosted by stimulus measures from the people's bank of china. is it a push to say these are signs of stabilization in the housing markets? reporter: certainly some signs of stability but few people are

calling the bottom of the housing economy in china right now. perhaps some easing up of rules around mortgage lending. the big problem is there is still a large inventory of stock in china. real estate is working as a big drag on chinese economy. as it grew into the first quarter, the lowest pay since 2009. sometimes green shoots not many people calling the bottom just yet. jon: we often talk about a slowdown and then we follow that up how they will respond, i'm interested in a story from the weekend without much attention. on friday, they urged banks to keep lending to local governments.

we started to see a bit of a contradiction. reporter: this is a complicated story. in essence china does want to get a handle on it but in particular they want the global government to rein in their excessive borrowing. they have arranged a really complex swap to do that. they have come along and ordered some of the -- most of the banks are state owned. on the one hand they are saying we want you guys to go sell bonds on the public market. giving banks a bit of pressure to give a green light on lending. the bottom line is china is trying to get a handle on its debt without slowing the economy too much.

jon: great to have you with us. bloomberg news reports driving -- joining us live.

jon: good morning and welcome back. i'm jonathan ferro right here in the city of london. this is how the trading morning is shaping up. up 7/10 of 1%. the backpack of last week took a little bit of heat off of the back of that euro. let's get some insight with mark barton. mark: look at that, the biggest gain in europe today. the highest level since september 24. according to the sunday times

in talks to buy aviva. it has held talks with bankers about a bid for the company. ge and emerson could also bid. it is sending shares up by 8.6%. 2% higher the highest since december 2007 ahead of sales figures this week. will the company return cash to shareholders. mns this week could announce a share buyback program or increase regular dividend payments. mighty group up 3%, they specialize in strategic outsourcing. pretax profit nearly beat and revenue never -- narrowly beat

operating margins. it is well-placed. looking ahead with confidence. three companies in the green today. jon: looking forward to those market numbers, we will bring them to you on a wednesday morning. precious metals. one beneficiary. the big question for us this morning, does gold have more room to run. joining us now is the commodities analyst in the u.s., james steele. a great day for commodities analysts. take you back to 2012. greece was on the brink economic policy was on steroids. but every time he turned the tv on was the cash for gold advert.

you would go give up your gold and they would give you a pathetic amount of money back. right now, no cash for gold efforts. guest: the uncertainty index is back down. if you look at the economic policy it is back to where it was in early 2007. just on the brink of the crisis. gold is still $600 higher than it was and it has not given up all of its gains through the crisis, but a good portion. jon: i get the one argument that you get some ugly data out of the u.s. in the narrative and story that rates stay low for longer is and/or spy that weakening data. surely that is deflationary. which one is it? jon: that is white we have a role limited upside for gold

primarily because of that. you do get a positive through the opportunity costs. low interest rates and low inflation. a relatively good opportunity if you want to buy gold. but to get a really strong rally, you would need some higher inflation. jon: when i look at the medium forecast, looking at up median forecast of 2.4, year end, 12.20. pretty much where we are now. guest: we are looking for a little bit higher. our average for the year -- we are looking for it to be closer to 1300 toward the end of the year. jon: i know this is why you have to talk to clients what can the stew for my portfolio? a fixed income investment.

i am very afraid of what inflation will do. his gold the best way to do it? it used to be thought that way, is it still? guest: nobody is saying to keep a large portion of your portfolio in gold, but there was a good story to economists, they pointed out that during a crisis, a full-blown crisis gold is one of the best things to have. if you buy it during a crisis you will generally be too late. you really have to hold it in advance in the hope -- in case a crisis were to occur. jon: when we talk about a crisis we're talking about an end of the world kind of crisis, is that what you would call a crisis? guest: that's where you see the

potential of gold coming in. that is why one would probably want a small amount of their portfolio in gold. jon: the dollar story, very briefly mi essentially just trading the dollar in the short-term? guest: that is probably the single biggest impact on gold, the dollar. gold is always inversely correlated. it tends to be most correlated with the second reserve currency which at the moment is the euro. jon: big conviction traitor in 2014, gold or silver? guest: they will be about the same. there might be a little bit more pent-up demand in the silver. you get down near $15 and the coin demand tends to pick up and silver is very widely used across industry. jon: how is the coin demand outside of china and india? guest: it did fall off earlier

this year but we think it got down to levels where it is likely to be stimulated. jon: james steele, all the way from new york. coming up in the show, oil flinders around at $60. is it all over? more on crude next. ♪

jon: good morning and welcome back. it is time to talk about crude. have we found the ceiling for the price of oil for the short-term? investors are losing faith in the four-month rally. the opec meeting next month may keep increasing supply. oil is up 43% in the last four months and then stalling. the big question, is the rally over? ryan: there are indications that perhaps it is and i don't want to speculate. but it has either flatlined or fallen and if you look at the oil-producing countries, you can see part of the reason for that. we heard today from several oil ministers saying don't expect a cut in production from the

cartel when they meet on the fifth of june even though ironic would like to see one hurting badly because of the sanctions. they need a higher oil price. we also heard from the kuwaiti oil mixture saying that because it has risen means there has been more support within the cartel among the naysayers and skeptics about opec policy. we also heard from the iea last week saying opec may just be starting their battle for market share and they may increase production even further. saudi arabia is producing more oil than it has in the last 30 years. the iea said a staggering increase in fact global oil production up by more than 3 million barrels in a day, that is a lot. jon: the other side of the equation is what the shale producers do.

the declines have started to smooth out a little bit now what does it mean for shale producers at $60 a barrel? ryan: we got those numbers friday and there was a decrease just like we have seen for the last 23 weeks and we have seen the numbers fall by about 50% but that is only half the story because the total production of oil has come down just a tad. that is a forward looking statistic. that is a cut in production later on. a lot of people say the efficiencies that shale producers have been able to make for themselves will keep them in the game. a lot of people saying you will get more opec supply meeting more and more oil and pressure on the oil price. jon: ryan chilcote, the man who will be at that opec meeting in

a month. let's get to some of these top stories. prices in china dropped last month. china eased mortgage policy and down payment requirements for homebuyers at the end of march. it started back in september. the chicago president repeated his call to hold interest rate and zero until early next year. speaking of stockholm he said inflation is too far below the fed's goals. >> on this forecast and the rest of the outlook i think the committee should refrain from raising the federal funding rate until there is much greater confidence that inflation one or two years ahead will be at our 2% inflation target. i see no compelling reason to be and a hurry to tighten financial conditions until then. jon: not really coming as much

of a surprise to anyone in the market this morning. 100,000 jobs could be lost at whitehall as the u.k. chancellor seeks to balance the books. george osborne targeting 10 billion pounds of cuts. the asking prices for london homes found the most in -- how they would impose a so-called mansion tax. staying in the u.k. the first day in a new parliament under a conservative majority led by david cameron. a big day for them, they have already called a budget in july of all things. guest: this is the first budget we will get for quite some time. you mentioned the job cuts.

these are part of spending cuts outlined however, he now can go even further. he has also promised savings and welfare up to 12 billion. he has also promised a great increase in funding for the nhs. what we need now is detail. jon: will be get any clarity? governor mark carney has been sticking his nose into this as well. guest: a lot of calls from lobby groups, from labor. jon: is that a surprise? guest: know, because i am a cynic, but it is the way of really distancing himself from ed miliband's leadership. i think these calls will multiply as we get closer to

this deadline. cameron himself has said he will bring it forward if he cam. jon: how long does that renegotiation process take? until they have done that they cannot hold referendum. how long is that process? guest: it is difficult to say, but i cannot see how they have been doing it. a lot of issues and freedom of movement is a big one. the briton's european partnership has said they will not budge on it. how we get a deal will seem a little bit more later this month. as a newly elected prime minister. it should take a minute to get the kind of reforms that will please them. jon: a bit of an inside baseball question when prime minister's

questions comes about, who is asking the questions from some of these parties. guest: that is all up in the air at the moment. at the moment we have an acting leader. the leadership election will not come until september. everyday there seems to be a new candidate coming out of the woodwork. we will have to let the acting leaders do their job. jon: and another candidate stepping down every day as well. "on the move" 47 minutes into the session. we are up by about 100 points, .9 percent higher. coming up on this show, the south african energy crisis. we will hear from the finance minister about rolling blackouts. ♪

jon: welcome back to "on the move." live from the city of london. south africa plagued with an energy crisis, facing rolling blackouts as the power grid fails to keep pace with demand. we spoke exclusively to the finance minister. we talk about power shortages. people who run businesses in liberia, it is a huge problem. south africa seems like the same problem. anna: i spoke to the finance

minister and it was interesting to explore what they are trying to do which is the power generator. growth could have been 10% higher than it is if we had not had so many power outages. that is the opportunity cost to growth. the finance minister conceded that the energy crisis is a risk to the economy. he does say that he wants the government to keep its majority as it opens up to more private investment. it seems that the government agrees that is something that is desirable. they are putting some money into the business. the first of that cash comes in june. in 2008 we saw a period of five days where industry had to shut down because of the extent of the power shortages. >> it is comparable to the size

of 2008 because we are seeing a lot of economy in our capacity. quite soon, we will also have new capacity coming out of the plant. we have also seen that this time around, the success of our alternative energy production has also had capacity. anna: not like 2008, but he does concede that the country needs a broader energy mix. the energy minister saying they think their members are not investing because they cannot be sure the investment will pay off. jon: not 2008 but in the markets, the big question is, do they face 13? -- do they face 2013?

anna: a lot of emerging markets reacting aggressively to those comments, they might rain in some of the bond buying programs. now of course the question is, it increases interest rates. there could be some variation around. nobody knows the details. he says he did concede there would be a tough two years ahead. there are risks to the outlook and they could be significant. he sticks to his gdp forecast. the size of the debt level, he said he wasn't worried about the rating becoming junk. >> we are not that close to a junk rating. but you recall, what that would

mean is an increase in the cost of borrowing which would put a squeeze on our expenditure. if you look at our exposure to foreign debt, it is kept at a reasonable rate. anna: more broadly around the rest of the economy he says foreign investment is not in too bad estate. -- too bad the state. another gauge on unemployment tomorrow. we will get another reading in tomorrow's session. jon: i expect the finance minister to talk down the credit rating agencies -- anna: to what extent can anybody price in the impact to an event that has not happened

and we don't know what kind of impact it will have. you might want to explore that further. to what extent is it priced in? he talked about the interest rates that they experience that they are at moderate levels which gives the economy room to remove -- maneuver. jon: maybe he should be a southside analyst. before we head out and wrap up this show let's check out what is coming next week. tomorrow, the eurozone cpi is coming down. inflation dates coming up this week and then and ecb form. they call that the jackson hall for the ecb. the same day, a summit in latvia. guess what they will talk about? most likely greece on the top of that agenda. tsipras remains defiant. so do creditors as well. how will that and?

anyone's guess. before we head to the break let's check in on bhp. one of the biggest losers this morning. down 4%. that following a disappointing debut sped off. evaluation valuation is a little bit over $9 billion. we will be speaking to the ceo later on "the pulse." the ftse 100 higher by .6%. i'm looking at martin spencer this week and interested in the numbers that cannot wednesday. a report in the papers that they might be increasing dividends. the dax this morning up .7%. look at the other asset classes. one euro buying 1.1395 and one small pound coin buying meat

$1.5675. the crude rally back on up by over 1.5%. for more i am on twitter. good luck with the rest of your day. ♪

francine: the endgame looms for greece. prime minister tsipras says he won't back down on his pledges to end austerity. heading south, the biggest mining spinoff in a decade. a $9 billion valuation that missed analyst estimates. we will talk to the ceo. and ramadi taken in a major blow to u.s.-backed efforts. welcome to "the pulse"