mark: prosecutors are said to look into the outgoing fifa boss. visa and mcdonald's are among the corporate names to welcome and over sweeping overhaul of football. and a selloff in europe and the u.s. spreads to asia. in the final offer for greece -- and the final offer for greece. creditors deliver a final poseable -- proposal to end the

debt deal standoff. hello. welcome to "countdown." i'm mark barton. coming up, optimism from oil peck. -- opec. we are live ahead of friday's meeting. and the football team can. we decide -- discuss the fifa president resignation. and greece this is a final offer from creditors. we are joined with mark rutte. prime minister of the netherlands later on "the pulse."

the reelection did not have widespread support. >> although the members of fifa i give him a new mandy and has reelected the president, it does seem to be supported by everyone in the world of sports. supporters, clubs players. mark: let's get more in dubai. good morning. what are the likely twists and turns ahead for the 2020 world cup? justin: we have had an indication of the likely reaction from stocks and bonds only last month when we saw arrests occurred. we saw the qatar stock market.

you might see a bit of a selloff. there'll be more uncertainty. this is a pretty resilient stock market. we sigh selloff yesterday -- a saw a selloff in the euro bonds. it was weaker before the blal tter announcement. the biggest drop in a month. you get an indication of what occurs when the market opens. what happens thereafter depends largely on what events and announcements we will see in terms of the election of a new president of fifa. and whether they'll be more questions asked about the wording of world cup to qatar.

mark: what is at stake for qa tar? hundreds of billions of dollars being pumped into the economy. justin: yes. an enormous amount of money paid about $200 billion is being spent on infrastructure preparation of the world cup. one analyst was telling us that qatar has been planning to spend a lot of money on this kind of infrastructure. a lot of other infrastructure the country needs. it is a very wealthy country. it is flush with natural gas and the biggest exporter of liquefied natural gas in the world. it can sustain it. it is a matter of prestige for

companies around the world that are invested in infrastructure project. many of those projects will probably go ahead anyway. mark: thanks for joining us. we will chat with you later. justin carrigan in dubai today. mark: overnight, global bond yields climbing is a selloff in european and u.s. debt spreads to asia. the same time, the us trillion dollar strengthening -- australian dollar strengthening. good morning. what can you tell us? >> good morning. those numbers are beating expectations and it is leaning to a gain in the currency. this is what we have at the moment. i'll check in on bonds in a moment. equities are following that selloff. in sydney, down 1%. stocks lower in the session.

in hong kong, we are -- yesterday the index and shanghai finished higher by 1.7%. interesting rotation. there are a lot of investors still interested in the chinese asia shares. they're coming to hong kong to buy them. that is why we're seeing stocks in this market gaining today. bank of china among those advancing. we talked about bonds markets. let's take a look at the situation. we have seen significant moves here in the asia-pacific as well. jumping 15 basis points. this is what you have to take a look at. south korea and japan look like this. the moves have been significant.

the bond yield we are watching closely. let's take a look at the australian currency. look at the trajectory. it shows you what happened when those numbers were released in hong kong. look at that. we traced some of that. one day after the bank decided to hold on interest rates, this gives us telling clues as to the direction of the aussie currency. a busy day in asia. that is what we have in the markets here right now. mark: thank you. that was zeb in hong kong. hans nichols is here with mark. good morning. what can we expect q? hans: we have this remarkable two ships in the night. we do not know what is in the

offer. it seems like the market has a great deal of optimism. they seem to be united finally. they put for this last offer. that is what the market is moving on. what they are not moving on is the negativity. there is quite a bit. quite a bit of pessimism. as long as it doesn't meet economic conditions, we cannot come to an agreement. there is a misunderstanding we should meet halfway. that doesn't sound my command man who is in a negotiating mood. we also heard -- the past five years of recession has been devastating. we must move forward without the mistake of the past. this is our main nonnegotiable position. mistakes of the past means austerity. clearly the creditors will demand that.

that is a showdown we're at right now. the proposal -- it is remarkable. mark: we have got the creditors proposal. the greek proposal. hans: 47 page document. they seem to think the primary surplus is a part of the budget that is beyond .8%. 0.8 percent for this year. 1.5% next year. that is lower than what the targets have been in the initial program. that is one area where it does seem like the creditors are willing to give. there's also different schedules and tax schedules. there may be a little give there. the question on what to do with the pension reform seems to be a dealbreaker.

the linguist is in seem like either side is willing to compromise. mark: hans nichols, stay with us. we'll bring you coverage of the ecb. 12:45 u.k. time. let's turn from greece to austria. opec members gapping for the international seminar. they will be discussing the energy outlook. the mood is one of optimism. >> the situation of the market is improving, yes. mark: ryan chilcote is in vienna. good morning, ryan. what have you been hearing so far? ryan: good morning good i will tell you what we are not hearing it were not hearing any calls for a production cut. the expectation is that they will keep the production target

as is. that is called a rollover. some analysts think they may even up the production target. i'm not sure that is a logical expectation. however you will still find some countries that would like to see the oil price at least five dollars higher than where it is right now. >> the right price -- right now it is about -- it's good. ryan: how do you get there? the answer is drill, baby, drill. you think the more supply you have the lower the price goes. in fact, what members think is the intuition -- sewage

and -- situation is demand driven. opec things it is ok to provide the market with even more oil than they are now. they are overproducing. producing e.on but there's up -- beyond what they are supposed to. at least in the last 25 years. there are some less influential members of the 12 opec nations that perhaps disagree, bowl not say it to loudly publicly. mark: what can we expect from these meetings? ryan: today we have a opec seminar. that is effectively the opec countries plus any opec executives that cares about his business. all the biggest oil executives really have to come to this opec seminar the last four two -- for two days.

it kicks off at 9:00. less than two hours from now. the saudi arabian oil minister will speak first. we've also here from others. and sure we'll hear an awful lot about the outlook. you will probably make a few nice comments about the opec producing comments. at the end of the day, they hold the keys to the oil fields right now. mark: thanks a lot. ryan chilcote in vienna. gdp advanced .9% according to government data. beating the forecast of 17% gain. -- 0.7% gain. hundreds of passengers from a chinese crew ship that capsized remain unaccounted for.

more than 450 passengers were onboard the ship. it may be the worst maritime accident in seven decades. mark: the u.s. congress voted to stop the nsa from collecting bulk of data from american phone calls. they have revived three other antiterrorism programs that expired on monday. they left the passage of the freedom act withheld from president obama and other democrats as a significant victory in bouncing security interest with the need to protect civil liberties. mark: u.k. prime minister david cameron facing his first weekly question time in the house of commons. he will face the active interim labor leader.

ed miliband resigned after losing the election last month. mark: join us on twitter. tell us what you are following. i'm mark barton. sepp blatter is trending. no surprise. this is a story where running today. -- we are running today. they are targeting blatter. they will step down as fifa president after a special election. it will take place at the end of this year before march of next year. mark: coming up stay with us for analysis and have the euro zone economy is shaping up. ♪

mark: they will be mulling over inflation numbers before making their announcements. we're now joined by managing director and chief economist.

good morning. let's start with the ecb. as far as the meetings and excitement goes, it's only the most exciting meeting. there was evidence of the economy picking up. it is the big elephant in the room. but on the economy itself, are you encouraged? >> yes. there's a time when it seems it is supporting the improvement of the micro fabric. it is still early days. there are still some early calls in the market. it has an depreciate against the dollar much further. we are seeing -- the cpi is finally bottoming out. it is much better than negative

inflation territory. the suggest that the ecb has some breathing room here. it is still very much intact. there is a huge growth gap. there is under investment. there is a credit gap. ultimately, the inflation gap. even taken that away it has been below the good eight years now. mark: you mentioned the bond markets. you put it to lack of the credit he and the bond market itself? lena: are number of factors

here. we are seeing improvement in the sentiment of recovery. there is zero negative interest rate. dark currency wars -- there are currency wars. markets are going to back away. the quantitative easing is working. it is also pushing bond yields. at the end of the day, even at 0.6% -- so, i think some of this backing away -- markets are stepping away from the extreme scenario that we feared at the start of the year.

there is this market collapse. they talked about risk uncertainty. the market is so unbalanced. at the same time there is capital control. i think they are choking up when they have to negotiate. they look to lineup bond exposure. mark: it seems the creditors have a proposal. are we any closer laying out to a compromise or not? lena: they think 11 hour

negotiation or 10 past 12. the reality on the ground is is a great deal of pragmatism that some compromise will have to be made. but the government needs is a strong social contract in exchange for a strong commitment . i think that will happen. mark: there will be another program that will involve some sort of debt forgiveness. yes? lena: interesting thing with greece is as long as greece operates the primary edit

surplus, it doesn't need funding support the governor it's day-to-day -- governments day-to-day. in other words, it doesn't need to get more eu funds in order to pay back eu interest payments. that is the key for greece's recovery. mark: what are the greek people saying? how are they taking the compromise? will it be backed in the parliament? will the other -- will there be another election?

we will probably have to have another mandate probably early election. it will eliminate -- i think that is probably necessary. wait to see. the most likely scenario is that he will get reelected. you'll probably be -- he will probably be -- mark: private payroll.

are we closer to a u.s. rate hike that we were a week ago? or are we further away given the data we have seen in the last five days? lena: yes. it has become the biggest -- on one hand, an extraordinary case over the last year. on the other hand, you have this weakness with weak real income growth. i think what we are going to be looking for is it is ok to expect some fall back in terms of this level of job creation. becker convince them to move

away. mark: good to see you. lena komileva. we are joined again after the break. focusing on greece. last to come on bloomberg. ♪ -- lots to come on bloomberg. ♪

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i feel like i've been here before. switch now and get the fastest wifi everywhere. comcast business. built for business. >> welcome back to "countdown." 10 to look at the foreign exchange markets. let's begin with the aussie do llar. it is up again today. what we had was gdp data. the economy grew faster than forecasted in the first quarter. that data came about because of boosted exports. the decision yesterday to keep rates steady. that is the aussie dollar for

you it we will be watching that closely today. we are seeing that strength again today. it is better than expected. listen to what they have to say. the outlook of the eurozone is currently better than any time since 2011. we should be heading for a decision on greece. the clock is ticking. greece is likely to be a big topic as well at the ecb meeting later today. we look at the rate decision at 12:45 london time. quantitative easing will be a big topic. keep an eye on that euro-dollar

trade. back to you. mark: thanks. top stores on bloomberg at this hour -- the top stories on bloomberg at this hour -- more than four to 50 passengers were onboard the ship -- 450 passengers were onboard the ship. the u.s. congress voted to stop the nsa from collecting bowl records on americans phone calls. the senate voted yesterday to limit nsa spying. the passage of the usa freedom act was seen by president obama and democrats as a victory with the need to protect civil liberties. mark: u.k. prime minister david

cameron faces questions following his election victory. he will face the acting interim labor leader is a party seeks a permanent successor to ed miliband who resigned after losing the election last month. mark: ecb decision day. he is expected to face questions involving the stimulus program. it comes to days after robbie -- draghi sat down with -- paul joins us. good morning. what can we expect from the council meetings? paul: good morning to you. they'll have plenty to talk about. one of the hardest decision has been taken.

that taken it up to 80 billion euros in deciding no change for now at least on that haircut. there is a big question of what to do next. what if they don't make the payment? not only do we get to the end of june, but we get to the point where it is clearly not going to happen. that is going to be pretty central. there will be a lot more to talk about as well. how to react? she we have any more of those? and the small circle briefings. mark: how encouraged will draghi be given the backdrop?

especially the data we saw yesterday. paul: right. inflation is back above zero. a long way to go. the issue here is we're getting quite a strong cyclical recovery. it looks like measures from the ecb last year with interest rate cuts and bank loans -- quantitative easing is probably too early to say. the qe wasn't really needed. those are cyclical factors. he will tell everyone that governments to get their acts together this will not last.

mark: paul gordon head of the ecb meeting. stay with us on bloomberg did it we will bring you coverage of the ecb upcoming rate decision 12:45 u.k. time followed by press conference at 1:30 p.m. u.k. time. mark: sepp blatter resigning as fifa president. good morning. what have the sponsors that? >> they said that decision will help fifa just from itself rapidly into a much-needed 21st century structured institution. they say fifa should take actions to address actions that were raised -- issues that were raised. the resignation is a step in the

right direction. budweiser is owned and expects the resignation to accelerate fifa efforts to resolve internal issues. visa was saying disappointment and concern was profound. it has called the resignation a significant first step. their expectations that fifa will take swift and immediate steps toward addressing issues within the organization. last week come is said that corruption scandal -- it kind of reiterated that the change in management doesn't perfect this punishment -- sponsorship either. they have done a lot in the development of football. mark: stoppage win a rock and a

hard place, aren't they? >> absolutely. the world cup is the most popular sport. 10 denies a dollars a year to have it in front of all of the fans. -- they spend thousands of dollars a year to have in front of all of the fans. some analysts have been saying in terms of reputation something like this corruption scandal is not necessarily as bad as drug use. that sort of thing. it doesn't mean that we have never had -- emirates airlines and sony drop sponsorship. they didn't say that was a cause of the corruption scandal. nonetheless, it is not totally immune to this sort of thing. mark: thanks for updating us on

the sponsors p u.s. sales beating estimates. the good news for bmw who sold a record of cars -- the battle for the luxury car market in the u.s. matt miller breaks it down. matt: u.s. auto sales in may beat analyst expectations across the board. absolutely crushing it. if the on general motors posting higher numbers than analysts expected as far as gains. afford posting a decline that was not as steep as expected to european automakers come americans are watching the race between bmw and mercedes to greet the biggest luxury carmaker -- to achieve the largest luxury car marker. present his head sales -- mercedes has had sales --

so, we're watching a closely. you're watching the sales in the u.s. it boosted the segment across all brands. utility vehicles were a huge gain. chrysler's well making up almost 80% of fiat chrysler total sales. jeep sales, as well as ram trucks. ford ancd chevy normally do well with trucks. ford had a decline. makeup make them as quickly as they need to to meet supply. chevy had an increase of 11%. the heavy-duty trucks did well but not as well as a midsized trucks. the chevy colorado and canyon were big sellers.

gas prices remain low. matt miller, bloomberg, new york. mark: john the conversation on twitter. it is all about -- join the conversation on twitter. it is all about seepp blatter. if you have just woken up or did that hear the news yesterday, he is stepping down as fifa president. a special election will take place between december of this year and march of next year. that is where you'll find me. coming up, we look ahead to opec meeting on friday. more importantly what they do -- does it matter? ♪

mark: the shell cfo was their preview waiting for a prediction on the opec meeting on friday. >> opec is a unitary body. a collection of collaborative interest. the statements made last year particularly by the saudis, were

about the oil prices have fallen . the basics of why they said that in terms of supply and demand, growth was six months ago lower. those basics really haven't changed. no reason at all why there should be a different outcome. mark: while kraus is -- oil prices -- joining us is managing director. good morning. it doesn't mean a thing to you, does it? why not? david: it is repeating patterns from the past. the way it works is you do not look at things as -- opec did

this and that peter we look at the interpretation investors will vote on. mark: this is your analysis. david: yes. mark: what is the telling us about the price of oil. david: let me give you a little background. i'm a little older than you. i remember when crude was $10 a gallon. it got up to $147. there was another station in new york. we have seen crude come down a lot. we said it would head down into the mid-40's. it went down to the mid-40's. we said it would come back to

the 60's. we think it may return back to the way it was. we don't know why. we just see the patterns. then you guys explain the reason. mark: why day the patterns from the past tell us so much? david: they do have freedom of choice, they will repeat in patterns. years ago guests was $12. it went down to six dollars. it was before the fracking knowledge. we said it would go towards two dollars and under. the canadian banks made a lot of loans. the price went to -- the bank's

and said we have underwater loans. you have got to pay us back. what did the newspapers and shows say? we say, something will happen to make it go down. we see where it is going to go. mark: you are telling us it will go to the 90's level. david: absolutely. listen, people forget it was $10. mark: that's not possible? david: it only -- it has a factor called levels. targets.

people want to know if it will go up. how long and when? they just need to know when to get out. the factor in the levels as well. we don't think it will go back down. mark: 140? david: we like to take it one step at a time. mark: you don't look at any of that? david: you look at any of that. mark: that is quite refreshing. david: we look at bloomberg because we like you guys. i spoke of bloomberg about eight years ago explaining the whole system. we don't the -- we think the

news comes along which will cause something to go down or up. mark: you chart this. david: totally. we think like fundamentalists pe. hadn't repeat from the past -- you are putting map on it. the whole idea that the past is governing the present is a very fundamental idea. just put numbers to it. a lot of people listen to him. mark: the evidence is clear. david: abbas -- across the board. bonds. let's go back. let's take 1981. rates were 80%. the dow was 1000.

today rates are -- if you played golf for cricket -- or cricket. mark: i will explain it. [laughter] david: i played baseball. i don't understand what is going on with cricket, but i would like to know. stocks have got. the bonds have continued up and down. the stoxx got beat up each time -- stocks got beat up each time. go back 60 years. a little before i was born. rates were 2%. look at what happened. that is a 60 year cycle.

1920, rates were high. u.s. have a lot more history. that is a 60 year cycle. we don't think anything will change it. rates will grow up. mark: thank you very much. later on today, we're going to speak to the executive director of the international energy agency at 10:15 on "the pulse." mark: e-mails -- apparently you are doing them wrong. ♪

>> it has become unnecessarily ubiquitous. mark: best regards. best wishes. >> yes. best on it is owned is probably the worst speed -- probably the worst. it is used to much. it doesn't mean anything. they said warmest regards.

thanks. sincerely. what you should end with is nothing at all. full stop. mark: rise and leave it. >> you can do that with people you know. i like thanks. mark: i do best regards. >> bill not pick you out among all of the many e-mails they get. -- they will not pick you out among all the e-mails they get. mark: interesting. there was a lovely piece. according to -- he was very vocal in his criticism of blatter.

blatter responded by not being favorable and what he viewed -- it seems he is a favorite to continue. "countdown" continues in the next hour. stay with us. ♪ . .

mark: prosecutors are said to be looking at the outgoing fifa boss. sponsors applaud blatter's exit. visit and mcdonald's are among those welcoming plans for world foot ball. bonds tumble. a selloff in the u.s. and europe spreads to asia. a final offer for greece. president tsipras heads to brussels.

hello, welcome to "countdown." also coming up, optimism from opec. data from the u.s. is expected to show the supply expanding of oil. opec members say the st rategy is working to read and the fall of football's kingpin. balttelatter's resignation. and the prime minister of the netherlands. that is in the polls. -- pulse u.s. prosecutors said to be looking into step platter --

sepp blatter as fifa is hit with allegations of corruption >> although the members of fifa have given me a new mandate this does not seem to be supported by everybody. mark: how could this resignation affect the decision to award the 2022 decision to -- world cup to qatar? >> that is the main question as far as investors are concerned. as to whether they knew -- the new election will lead to the award to qatar. they were -- there will be

plenty of twists and turns. we have seen with the euro bonds that qatar has, selling off a little bit. they are weaker even before the surprise announcement. it is difficult to gauge the level of sentiment and that respect. this is what investors and analysts have been saying overnight. we will see weakness as this kicks in. we saw the weakness last week when the arrests were made in zürich. the market recouped the losses. unless there are major events in this extraordinary saga going ahead, and there may be, you are likely to see the resilience. one of us are saying if there is a selloff, it is an opportunity

to pick up bargains. mark: how important is the 2022 world cup to qatar? we know they will invest hundreds of billions of dollars into the tournament. guest: $200 billion to be purchase ice -- precise. that is an enormous amount of money by any reckoning. qatar is a wealthy country. the biggest exporter of liquefied natural gas. huge resources of oil and natural gas. it has the highest per capita gdp ratio in the world. it is really a question of prestige. what is at stake is the enormous amount of investment foreign companies have been making in the infrastructure projects that qatar has undertaken in preparation for the tournament. what may happen, if qatar is to lose the tournament, you will

see a slowing down of those projects. many were in the works or had been planned for some time. there will be less of a rush to get them done. you will see that money being spent in the coming years anyway assuming qatar does not get the world cup. that is very much the open question at the moment. mark: great to chat with you. just in in dubai. global bond yields have climbed to a high level as the selloff in u.s. debt spreads to asia. the australian dollar strengthening after robust exports. let's get the details from zeb in hong kong. what have you got for us? zeb: eight tightening yield curve. i want to take you to the 10 year government notes. this is what we have.

take a look at australia which delivered a better-than-expected gdp report. sending the currency higher. take a look at a bonds. significant moves. australian 10 year that is reflected in other markets. check out south korea. japan has been active as well. consistent that the story we saw out of europe. coupled with the greek situation, both having a ripple effect around the world. nice gains for the australian dollar. down to 77. yesterday, the reserve bank holding on interest rates. not giving much guidance. rates in australia at a record low of 2%. the currency was active. 9:30 this morning when the gdp figures came out. the aussie dollar still up on

the day about 0.4%. we will watch it as the trading in sydney continues. volatility the keyword as equity is in play. the greek situation also in play. traders saying you will likely see significant volatility. markets mixed. the asia markets we between gains and losses. the regional equity market down. shanghai, the shares rotating away. energy shares, oil shares active. banks arm that. -- banks are mixed. c.k. property division ipo debuted on the hong kong stock exchange to a mixed performance. mark: great premised or suppress -- prime minister alexis tsipras

heads to brussels. hans nichols's is in london. what is the stance of european creditors right now? hans: they are unified right now. they seem to be on the same page. they put together a final proposal. we do not believe it has been sent to athens just yet. at the same time, mr. suppress -- tsipras has his own proposal. you saw the euro spike on this news. look at what he said. the head of the euro finance group. as long as it does not meet conditions, we cannot come to an agreement. there is a misunderstanding we should meet halfway. this is not a man that looks

like he wants to negotiate. here's what we have from alexis tsipras as well. the last five years of recession have been devastating. therefore, we must move forward without the mistakes of the past. mistakes of the past means austerity. it is clear that creditors are going to insist on pension and labor reform. the market seems to be positive. it is just because we finally have an agreement. you can see the potential for an endgame. mark: what about the greek proposal? hans: they want to bring the surplus down to 0.8%. spend more than they have previously indicated. let's go for some of the details. we have had so many conversations about what the red lines are.

has everyone stake out there redlines, it can be difficult for alexis tsipras to back away. how much room does he have to maneuver? we may get some answers. mark: why is alexis tsipras going to brussels tonight? guests: things are simple. after dozens of missed headlines, deadlines, sorry, creditors decided to take matters into their own hands. they asked the representatives of the european commission to hammer out a common approach of basel's policies greece needs to implement. this proposal will be communicated later today to the

european commission president. of course, alexis tsipras has said it is the greek proposal which is going to be discussed today. what we have been told by the creditors side is the proposal which greece sent yesterday, like so many before, it is not considered credible. it is not going to be on the table. what is going to be on the table is the creditor's proposal which was polished and finished up yesterday. it is going to be a difficult one for the prime minister to swallow. mark: is this really the end game the greece crisis saga? nikos: that endgame has started. the fact that some of the most powerful people, the head of the central bank, the french president gathered in the middle of the night in berlin on monday

in a secret meeting nobody else knew about until bloomberg broke the news. the greek government was not invited. the urgency of the situation. the fact that the leaders asked their own bureaucrats to -- also shows the urgency of the situation. let's remind viewers that the bailout expires in less than four weeks. there is not much time left for greece to comply. mark: thank you. let's turn from greece to austria. opec ministers gathering for the sixth annual international seminar. the mood is of optimism. ryan chilcote's life on the ground in vienna. what have you been hearing so far?

ryan: we are not hearing any of the countries calling for a production cut. we surveyed three dozen market watchers and only to thought opec would do anything other than roll over their current target. the expectation is they will keep things exactly as they are. that, mark, is not because they like where the oil price is. what they do like is the direction it has been moving since they met six months ago. we caught up with the iraqi oil minister and asked him what he thinks about the market. >> the situation of the market is improving. ryan: there are even a couple people saying we could see opec raise its production ceiling. in other words, allow countries to produce more oil than they are right now.

actually what it is is legalizing what is already going on. making room for iran should the sanctions against the islamic republic be removed. you have iraq, we just heard from the iraqi oil minister ramping up production despite the threat from the islamic state. production has been booming in iraq. you have saudi arabia producing more oil last month than in any month on record. the reason for that is because yes they want to push the sheol producers out of the market. get writ of the deep oil project. they think they can get a rising price because demand will increase in the second half of the year and they think that is happening because the global economy is improving. mark: we will see you later.

thank you. let's focus on the top stories. australia's economy expanded at a faster pace than expected. gdp advanced 0.9% according to government data. the growth spurred by a 5% jump in exports in the first quarter even as commodity prices fell. hundreds of passengers from a chinese cruise ship that capsized in the yangtze river remain unaccounted for as rescuers battled rain and strong winds. more than 450 passengers were onboard, identified as the eastern star when it overturned writ it may prove to be the worst martin accident for china in seven decades. david cameron will face. carmen -- face harriet carmen

the successor to, ed miliband. a drama free press conference. stay with us. ♪

mark: it is interest rate decision day at the european central bank. let's talk a rates with lawrence, the global head of interest rate strategy. the big article is bond yields globally hit their highest levels of 2015. shock horror.

what is it down to come of the fact that we are feeling better about the economy or a lack of liquidity? lawrence: it is down to a lot of things. if there are two big things, one is the fed is inching closer to beginning liftoff of fed funds. also, we have what you might call slightly improving direction of travel in terms of the greek situation, which will relieve some risk aversion. qe started and pushed bond levels to a low level. now they are on their way back up again. mark: will we revisit those low levels? we saw german ten-year rates almost negative. is that in the past? laurecnce: the problem with him

supply and demand, it is hard to know what is going on. although bond yields have gone up a lot, they have gone from eye watering the expensive to very expensive. mark: fundamentals matter now. with the ecb in the market do all the traditional metrics of valuation go out the window anyway? laurence: this is a weird thing. in the past, you have seen nominal bond yield go up. because once the central bank starts printing, the outlook for the nominal economy is supposed to improve. we were wrongfooted. it seems that if the market believes the ecb will ultimately

be effective and inflation expectations should revise yes bond yields should keep going up. mark: were you wrongfooted because of history? you were not alone in being wrongfooted, don't worry about that. laurence: the question was will be fundamentals outweigh the fundamental valuation change? qe is using it as a tool. those two things are in conflict. we were surprised that the supply and demand imbalance was so vigorous. i don't think that should have happened. we are still, to my mind, over the event horizon. mark: where is their value? if you had to pick a european market? spain is at 2.08.

italy 2.12. is their relative value? laurence: you are absolutely right. you can try to decompose where the bits of the yield are. certainly, if i look at the core, the bund yield, they are low. the message from break evens is a we are still not convinced central banks are going to be able to push inflation back up to where it should be. what about spain and italy? qe, again fundamentally is an undeniable good for these sovereigns. for one thing, if you think the trajectory of nominal gdp is going up tax receipts will go up, your debt dynamics are better. qe is going to stimulate the

economy. in the end, those spreads are going to narrow. i think it would seem more likely that the spreads narrow by germany coming up. mark: you mentioned break even yields. do you have any confidence the ecb will use it as the benchmark and use it as the target? we will no more when they give the forecast. do you share their confidence? laurence: if you look at the market five-year break even the thing that mario draghi referred to in december -- mark: inflation expectation

gauge, his preferred gauge. laurence: that has bounced, but is it back at two? obviously not. i would say that is true everywhere. not just europe. in the u.s., likewise. they have not returned to the levels before last summer and are nowhere near precrisis levels. the market globally is nervous all the downward forces on prices over time are not going to dissipate. just because qe is going on in europe. mark: where is the value? in the global bond the sphere, is their value or not? laurence: in the time before the fed is raising rates, you

would expect bonds to struggle. so really and the u.s. in particular, it is about positioning on yield curves. being a bit de about it, we can come up with value trades. i'm talking about the the belly of the yield curve outperforming the wings. when i look at how peripherals have performed, spreads have widened. it is about volatility. when you have high volatility you do have higher risk spreads. if the volatility in the core diminishes as qt becomes more established, on a volatility adjusted basis, sovereign spreads will there open. periphery overtime comes in. mark: how about qe?

value or not? worth line or not? laurence: the u.k. curve has been long for so long, it is hard to find a value. better value now. towards 2%. is it cheap enough to buy? probably not yet valuable enough especially with rates rising in other markets. mark: where are you with rates? laurence: moderately before then but not the side of the new year. mark: do not take too long. the global head of strategy. up next, eurozone interest rates. looking ahead to mario draghi's announcement. stay with us. ♪

linger: welcome back to countdown. let's start with the euro. it has flattened out. the ecb meeting happening later today. the decision coming at 1245. the press conference 45 minutes later. the expectation is for rates to be held at a record low.

the focus is likely to be on quantitative easing in degrees. the euro rallied the most in 11 weeks. yesterday we had inflation data that was better than expected and showed a rise in consumer prices. that is the euro. i want to turn to the dollar. this currency had its biggest drop since march 20. we have seen some weakness, although it has recouped some of its losses. the weakness came after federal reserve governor said the wiki data cast doubts on the strength of the u.s. economy. she was speaking after reports showing the economy shrank and consumer spending stalled in april. her comments contrast with a speech by janet yellen. investors watching all the data

closely for any clues as to the timing of a rate rise from the fed. don't forget, friday, we will get the all important jobs data. mark: hundreds of passengers from the chinese cruise ship that capsized in the enzi river -- yangtze remain missing. it may prove to be the worst maritime accident for china in decades. the u.s. congress voted to stop the nsa from collecting boca data from phone -- bulk phone data. the passage of the usa freedom act was hailed by president obama and other democrats as a significant victory in balancing security interest with the need to protect civil liberties.

a company is in early talks to buy a frozen fruit producer. the deal would follow another in april. the maker of birds i frozen vegetables for $2.9 billion. damer and -- david cameron faces his first question time. he will face harriet acting as interim labor leader as the party seeks a permanent successor to ed miliband terrific ecb decision day, the rate decision followed by a news conference from mario draghi. who is expected to face questions about his $1.1

trillion stimulus package. this comes after draghi sat down with european creditors. paul gordon joins us in frankfurt. how much of a focus will greece be the governing council today? paul: it is certainly a factor. we have a decision on emergency liquidity, which rose by another half dollars yesterday. also the decision not to change the collateral. the banks are being kept afloat. there was a governor's dinner which can get the boisterous. it may allow policymakers to focus on the other big issues largely quantitative easing. the pace at which it will succeed. the increased pace in the run-up to the summer months.

also, how to deal with the issue of small circle briefings. it is possible to move away from greece but it is not possible to ignore it. it hangs over the economic recovery. mark: how concerned is the ecb? we are hearing stories that will yields are the highest of the year. paul: it has been quite a rally. there are mixed views within the council. the vice president has noted the ecb is monitoring asset markets more closely. others will say simply there was a correction after an overly large rally in bond prices. one thing very important to

remember, yields will rise. that is a factor in any recovery. the ecb wants to control beast beat at which the rally takes place. that is an issue to discuss. mark: what is draghi likely to say about the economy and the revival in inflation? paul: i can almost guarantee he will say yes, things are on track, but it is not enough. the inflation it almost nothing compared to the 2% the ecb wants. second, it is a cyclical coverage riven by oil prices. the structural reform that need to take place driven by governments must happen, otherwise the cyclical recovery will not turn into a structural one and we could be back where we started. mark: scary thought. thank you, paul. paul gordon in frankfurt ahead of the ecb meeting.

12:45 london time. followed by a press conference at a press conference at 1:30. join me at twitter. blatter is trending. according to people familiar with the matter, he is being investigated by u.s. prosecutors. coming up, it is not often someone tramps and then quits days later. we will be speaking to mark come of the former boss of the english football association about this man, set the blatter -- sepp blatter's resignation. ♪

mark: time for today's bart chart. check out the chart. it shows euro-dollar the

exchange rate, that is the yellow rain. it that's the yellow line. and the price of crude oil. the right-hand access is the price of crude oil over the last 12 months. the euro is tracking crude prices more closely than at any time over the last two years. the correlation between euro-dollar. it has climbed to 0.4. a figure of one would mean the two rates moved in lockstep minus one would mean they were moving in opposite directions. from the euro's high last year of one 36, the yellow circle, the currency dropped 25% to the yellow circle right here. that is march 13.

1.04 was the height to the right. that narrowed, the drop in oil. the declines mirrored each other. once oil bottomed, and the euro bottomed as well, the yellow circle then the euro started to rise. it climbed up to here, 114. 51. may 15. they have mirrored each other for the last year. the rationale behind the correlation is the ties between oil and the expectations for consumer prices have strengthened in europe but weakened in the u.s. it means the ecb has given more weight to the impact of energy

prices on inflation then the fed. when oil started falling last year the middle of last year it was one more reason for the ecb to increase the pace of monetary stimulus. this leads to the question of what this means for the future direction of the euro, the yellow line. given the current correlation, predictions oil will not rebound in the next several months are providing support for the view the euro will fall toward parity. a forecast puts the euro at 1.05 by the end of 2015. crude oil is expected to reach $64 in the third quarter from $60 today, according to the 37 strategists we surveyed. are the euro and crude oil

joined at the hip? now the top stories on bloomberg this hour. australia's economy expanded at a faster pace than expected in the first three months of the year. gdp advanced 0.9%, beating the forecast. that was spurred by a growth in imports even as commodity prices fell. hundreds of passengers from a chinese cruise ship that capsized on the young sea river remained unaccounted for. more than 450 passengers were on the ship when it overturned. it may prove to be china's worst maritime accident in seven decades. the u.s. congress voted to stop the nsa from collecting bulk records on phone calls. the senate voted to limit spying

well reviving other antiterrorism programs that expired monday. the passage of the program was hailed by president obama and other democrats in balancing security interests with the need to protect civil liberties. prime minister david cameron faces his first weekly question time in the house of commons. facing his victory, he will face the interim labor party leader as the party seeks a successor to ed miliband. you are looking at a live shot of the city of london. equities set to open higher today. ftse futures trading up. we will look at what is driving the session today. ♪

mark: after 17 years as boss of fifa sepp blatter is stepping down. mark thank you for joining us. are you surprised at the timing? we chatted when this blew up. many would have thought blatter would have stepped down before the election. are you surprised? mark: what we saw in response to the initial arrests by the swiss and fbi, a very baltter response. he was even more defiant. to see this is quite amazing.

mark: what do you think caused the turnaround? a person familiar with the matter said he will be investigated by u.s. prosecutors. the net seems to be closing in on him, especially regarding the secretary-general and the alledge and payment which would have ultimately gone to jack warner who has been indicted to read the net seemed to be closing on him, didn't it? mark palios: for me, there were three agents of change. the sponsors. with regards to sponsors, being a real agent for change for commercial regionasons. and if law enforcement agencies started bringing the matter closer to blatter.

you make the supposition the net was closing, even if not linking it directly to blatter, two people close to him. his stance, saying i did not know about these things, i think it feels to me that something may be coming down the line from law enforcement agencies. mark: why go to the sponsors? i was in zürich at the end of last week. why haven't sponsors been more vocal? was it not in their interest? mark palios: i would never -- my view is if you look at the last world cup, what you sow was a fantastic world cup. at the same time, though organizing body fifa, was mired

in corruption claims. the officials were in hotels where they hid from the brazilian populace. and the brazilians are a football loving population. it shows you the fifa -- marketing guys are backing football, not be brand of fifa mark: who would you like to be the next president? mark palios: i will wait to see who puts the best case forward. this was something you never had in the past. there were claims -- i look forward to that. mark: i chased after a couple of people in zürich. i asked one of them, why didn't

you run? he said, i am too old. what about an english man? could we have an english president? mark palios: david is a good candidate. the problem he will have it is he is english. one of the strengths of ballatter was he was the person who had break and thus ringle hold the europeans and south americans had. he was very quick to paint the paradigm of the english who had never gotten out of the colonial years. that would be a problem for any englishman. mark: thank you for joining us. mark palios: the former chief executive of the football association. a couple more minutes until the start of the equity sisteression.

hello alastair. what is on your mind? alastair: greece and the ecb weigh heavily on everyone's thinking. some aggressive fluctuations yesterday with euro-dollar as the trials and tribulations of the austerity issue hung over the markets. you have to imagine alexis tsipras's plan is going to be insufficient. the extra funding that has gone toward the greek banks as cash continues to flow out. there are equities worth taking a look at, maybe not as far as market caps, but as far as sentiment is. performing quite well. one of the aspects they have not but will is the added geek squad

they have that assists with smartphones. the after sales issue will be more of an issue. another is smith. maybe not the largest of companies. high street sales down 4%. travel station sales up 8%. this is a trend we are seeing in a number of bases. -- places. is this a new trend in the retail environment? the click and collect? both of those key looking forward. mark: ahead of the big one on friday nonfarm payrolls. the unemployment change today. a big couple of days for u.s. data to point us in the direction as to whether the fed will raise rates.

alastair: adp figures, certainly in the next 68 months have not been the most accurate. nonetheless, very important. you do feel a bit of hesitance and reluctance to carry on the strategy of interest rate rises. struggling to carry on the convictions, getting sucked back by the rest of the environment where interest rate cuts are the stands. mark: thank you for joining us. alastair mccaig. on the move is next. john will be previewing the ecb decision. we will have it live for you on bloomberg television a bit later. 12:45 and 1:30. there i am on twitter. tell us, tell everyone what you are following and thinking of.

what is grabbing your attention. fee for, the story -- fifa, the story continues. i will see you nice and early tomorrow. ♪

jonathan: good morning and welcome to "on the move." we are moments away from the start of european trading. what a session yesterday was. let's get straight to the morning brief. global yields climb. the german bonds post their worst day since august 2012. the ecb stares down the european bond market and greece faces the prospect of being boxed into a corner as creditors prepare a final proposal. opec officials gather in vienna for thereby annual meeting after kicking off a price war that

started in november last year. the analysts are staying the course this week. dax futures up by 27 points. ptolemy and let's have a look at yesterday's session. what a move yesterday in the euro. euro-dollar having it rigorous day since march. up 2% now. two big reasons for this creditors, clearly escalating control. it looks like they are getting close to boxing greece and giving them a final proposal. cpi moving to 0.9%. that move in the euro echoed with fixed income. german bonds having the worst day since august 2012. we