ends today. talks resume. they are three of the things i will be talking about. i'm looking at futures market softer. for the future is pretty much unchanged. the stock mover, i know caroline hart is going to talk about it. caroline: it is never too early to talk about booze. we will also be digging into what is moving these markets. ftse likely to push a little bit higher. the rest of europe basically flat. down goes the cac 40 in france, off by 0.3%. once again, variation in central-bank policy and worries about greece. five months of negotiations, five years of a debt debacle and still no deal. they are trying to push through that. at the g7, obama is trying to put his concerns on the table. the market is just revving up to

see whether we will get any sort of compromise out of that g7. we understand that merkel, who long, and cipro's will not meet unless a deal is close. it is all about u.s. jobs. i want to take us over to asia. that was what pushed asia lower across the board. apart from china, everywhere else downward. basically, downward trajectory. emerging markets feeling the heat from u.s. jobs data. doing much better than expected. once again, a rate rise comes into everyone's trajectory. we are likely to see rate increases in the u.s. what does that mean for emerging markets? stock selloff, bond selloff. china still looking very high indeed. this is about a variation in central-bank policy. we saw exports down for a third straight month, down by almost 3%.

imports down by 18%. once again, it shows the fragility in the domestic market. calls for more stimulus in china. that is pushing the stocks higher, hopes that we will see more stimulus to boost that particular area. meanwhile, let's have a look. at the moment, we are seeing the euro up almost 5% versus the turkish lira. the lira feeling the heat. stocks plunging 8%, turkish stocks, all because of political instability. the market reacts. they are likely to think that erdioogan, is his strength at its peak? is that going to unravel? it is the first time since 2002 we see a long majority in the turkish parliament. we see the ak party flip away from the majority.

that is affecting the turkish market. let's have a look at some stocks. i'm looking at the got. it is also about deutsche bank. management ainge is. we are likely to see the stock move anywhere up to 7% higher. the market likes that they are getting out of ansghuhu jain. who is taking up the helm? it is the previous cfo of ubs john cryan. there you go, it pops up 8%. what a move. they like the sound of a new man in charge. the ngo would like to move -- diageo would like to move by a similar amount. talks about the wealthiest man in brazil buying in. how realistic is that? lastly, act kelly and --- actellion.

back to you. jonathan: caroline hyde, thank you very much. some fascinating moves. dollar-lira, record high. bond yields surging, the stock market plunging. for now, i want to get to a big market mover. deutsche bank stock up almost 8%. changes at the top. the co-ceo's offered their resignations at an emergency board meeting yesterday. john cruyan will take the top job. let's get out to shane's traumatic. how much of a surprise are the management changes? how big a change is this in terms of a shift in ito's -- in ethoes? >> it was a surprise, definitely. jain was given responsibility for overseeing the bank's new

strategy. now, it is a huge reversal. he will be the first to go. that is a big change. it doesn't seem to be something that people were expecting. they were under huge pressure from shareholders to change management. just a few weeks back, they had the lowest shareholder support in a decade. at some point, they were expecting something like this. the timing did throw a lot of people off. jonathan: when i look at a market move of 8%, i'm assuming the expectations for the new ceo are pretty big. >> definitely. this is a guy who essentially has crisis experience. he went into ubs in 2008, while the bank was taking huge losses. the subprime mortgage markets collapsed. by the time he left, three years later, he had the bank at a point where they were profitable again.

people are looking at deutsche bank and saying, can he do this? the expectations are high. also, the cost-cutting measures. can he get costs under control? that is what people will be watching. it will be interesting to see if this is a new phase for the strategies they were planning or if this will bring changes to the strategy with it. jonathan: shane strohm at joining us live from frankfurt. let's get the investors take on the story. voicing active concern about the leadership at deutsche bank. you and i have spoken before. you said you didn't want to see heads roll. heads seem to be rolling. are you happy with the changes? >> good morning. of course, we were not asking immediately for heads to roll

but we were saying it is really for the supervisory board to take another look at the composition of the management board. overall, we very much worked on what has now happened. it is a good thing for deutsche bank. jonathan: i imagine the shareholders are happy as well. for you do new faces change the same strategy? is that what you expect, a new face but the same strategy? >> in a way, it is a new face but he brings an interesting nation of having been on a supervisory board. he has been very closely involved in developing the new strategy. what we are not expecting is that deutsche bank will go back to what they have announced. we expect there are new faces but there will be continuity on

the new strategies that are represented. jonathan: when you voiced concern on management just a month ago, you sit here now knowing that you will have john cryan as the sole ceo of this bank. what do you want this bank to look like? how quickly do you expect to see those changes made? >> it is a tough challenge. they have given themselves until the end of july to deliver the details. that is the first step. then, it is all about implementation. he has a very good track record from ubs in delivering similar changes, cost-cutting, trimming further down the investment bank, and also getting on with the d consolidation. that is what jonathan: we will measure him against. jonathan: we've got to talk about the timing. what were the board thinking, allowing the ceo's to implement a new strategy?

a whole bunch of investors voiced their concern. then, just some random weekend, these changes. what has happened at deutsche bank? >> there was a very thorough strategy review process which they finished with the announcement in april. then, there was the libor settlement announcement. then, there was the agm. 40% of shareholders voted against the management. you have to consider these different steps. and then also the soul-searching after the agm. it took a little bit of time. i wouldn't speculate about the other recent news events. jonathan: one of the recent news events was friday. there will be an internal probe over trades with russian clients. could that be seen as the final straw in all this?

>> i think that is a very separate issue. you should look at new strategy. libor plays a role. also, just about delivery of the old strategy. shareholders expressing their discontent very strongly. i think that was the decisive event. jonathan: the cost to income ratio, big problem for deutsche bank. do you think that's where we can see the john cryan stamp? if so, what does he do that anshu jain was not going to do? >> investors want clarity on how they will achieve the cost-cutting. that was missing. then, it is all about implementation. deutsche bank acknowledges that the cost income ratio was not one of the areas where they made enough progress. jonathan: just to wrap things up, where would you like to see the cuts?

>> that is something for deutsche bank to explain to investors. it is not something for investors to say. that's why it was so disappointing when they came out in april? jonathan: great to have you on the show. the executive director of hermes equity ownership services. deutsche bank surging this morning. we will break down the story for you. coming up, once more greece steals the sage. g-7 leaders unite. later, voters punish turkish politics. and, bad day for china can't scare investors. those stories and more throughout the hour. ♪

jonathan: good morning and welcome back to "on the move." i'm jonathan ferro. let's bring you up to speed with bloomberg's top stories. the turkish majority lost its majority in parliament. the result deals a blow to president erdogan's ambitions. turkish stocks and the lira have both slumped. china's exports fell in may while imports slumped the most in three months. overseas shipments fell from a year earlier while imports plunged more than 17%. stocks on the shanghai composite rose, closing up more than 2%.

a brazilian billionaire is said to be considering a takeover bid for liquor giant dua iageo. shares up as 8%. let's get to another top story. greece always a top story. still no deal. even u.s. president obama has had enough. hans nichols is there to cover this story. and, our athens bureau chief has the greek angle. hans, leaders, i guess they are getting as sick as investors over the never-ending story that is greece. hans: sick fed up, tired. frustration would be one word that i would use. it is ample evidence in these alpine hills. we have everything gathering. even some of mr. ct sipras' allies seem to be

expressing their frustration as well. have a look at what mr. juncker said about what friendship means. >> i don't have a problem. he was my friend. but friendship has to observe some rules. hans: what european officials are concerned about, almost angry about, is this idea that mr. tsipras went back to parliament and talk about a deal that didn't reflect the offer he was given. this is the offer that was hashed out in berlin, when the guard, merkel and hollange all got together. the greeks insisted was their offer, that that is the offer. the europeans are willing to make some concessions. we are not that stringent on what hats to happen. as long as greece can make up the deficit elsewhere.

that is where we are at today. president obama and angela merkel discussed it as well. what everyone wants to see is an end to the volatility. it is difficult to see how you end the volatility without a deal. even angela merkel was acknowledging that. there is very little reason to be optimistic about this meeting. jonathan: nikos, i was going to begin by asking you if there were any signs the greek government could be getting closer to a deal. the speech tells me we are not closer at all, are we? nikos: mr. tsipras said we cannot accept the proposal hammered out by creditors last week. he also said we are getting closer to a deal. these two things may not sound

compatible. the thing is greek officials will resume talks today in brussels and try to bridge differences between them. we've heard greece's economy minister just a short while ago saying that there are two big hurdles. creditors asked for a streamlining of the sales tax system. the creditors demand further pension cuts. the greek government cannot accept further pension cuts. that is what mr. tsipras told lawmakers last week. what is certain is that time is running short. there's just three weeks to go before greece's euro area bailout expires. they need to allow some time for parliament to approve any deal.

the time is really closing. jonathan: hans, the time window is closing. an opportunity to get these talks back on track. where does the power center lie right now? berlin, is best where this can be sought out? hans: it seems bigger than just berlin. it seems like the difference between mr. tsipras and all his creditors. that is the fundamental shift i've noticed. all the creditors seem to be frustrated with the steps taken by athens. there was some possibility on wednesday. there is this summit. mr. hollande will be there. what we have just heard from a french official is that there will not be a meeting if there no hope of a deal. the big shift that i've sensed is that europeans no longer want to talk for the sake of talking. they only want to talk if there is a prospect of a deal. from that same french official

indicating that june 14 is the new deadline. that is when they need to have a deal. jonathan, you and i have talked about deadlines far too much to put that much stock in a june 14 deadline. we just have to put it through our own modifiers and figure out what the discount premium is on that june 14 date. jonathan: hans nichols. nikos let's wrap this up. a june 14 deadline. you've got a great story on bloomberg.com about this crisis not ending anytime soon. we've talked about the release of a little bit of aid that might get them through the summer. what is the risk of the country needing another bailout? how long can this go on? nikos: even if greece and its creditors agree for the disbursement of the next bailout, before the euro area backed bailout expires, it is not as if greece will regain

market access in july. it will need a new bailout. it is probably going to take about 30 billion euros. if the disbursement takes so long, imagine how long it will take for a new deal to be sealed. you have been watching this saga unfolding for the past five years. it may not be over anytime soon. jonathan: nikos hans, thank you very much for joining us. we are joined by patrick head of global asset strategy at j.p. morgan asset management. great to have you with us this morning. stephen, we are in this classic dilemma where the creditors can see the end of the year and an election in spain, and the greek

government can see four months that if they blink now could be wasted. the last four months, we have asked, who blinks first? at this point, who blinks first? >> you have to follow the politics in europe. the numbers have been thrown around. they are quite frankly confusing. nobody knows the program that was put to the greek parliament last week. the politics are critical. in the spanish elections last month, the ruling party really had a serious pullback. with parliamentary elections in december, i think what the spanish are saying ok what they are saying is that greece has to be made an example of. there is no comprehensive deal now accept on very serious terms, the terms which we saw last week. i think tsipras was quite clearly caught in the politics. he was effectively pulled back

had to go to athens, go to the parliament and row backwards or forwards. we also know that he did not have support. the politics is telling us this is going to happen in june. there is a large amount of money to be paid. i don't think it is going to happen. jonathan: patrick, the numbers are quite clear. we don't know whether the endgame is the end of june, or whether the banks can last that long. what is the view at jpmorgan? >> i think it is political. the money needs to be found. it will be found. the problem is politicians they are all playing the different audiences. tsipras has to play to his domestic audience. he has to look conciliatory to his creditors.

the initial strategy that the greeks had of getting some contagion going has failed. their bad luck is that this all started blowing up while the ecb is already in the market. you look at the spreads, they have come up, but they are well contained. there's one other area of contagion, capital flight. there is nothing in the rest of the periphery of europe. their leverage is very low. jonathan: we look at the market moves, and at one hand, i understand it is not 2012. but at the same time, the idea that there's no contagion risk -- over the last couple weeks, i've been talking about the policy response. you are conducting qe. if greece really hits the exit button just to start ramping up qe, the existing policies, are they big enough? >> i don't think they have to wrap up qe. i think we are in a much more

dangerous phase. i think last week's reaction in the bond market, and nonfarm payroll on friday, are more interesting. we've had a couple of pretty major calls to say that asset prices have peaked. i'll give you another humorous view. there's been a book written in the states called "park avenue primaries" talking about wife bonuses. this is another example of the hubris we are in. asset prices generally greece isn't helping. i think we are in a pretty nasty corrective phase. jonathan: if you wanted to look for a proxy, you could look at the art world. patrick, i look at the bond market. that is where the big shakeout has been. germany, biggest selloff in years. is that where the focus is for you? >> that has been the big discussion point.

we actually think it has been a bit of everything that has driven bond markets. clearly, people have been far too much over positioned. you have seen inflation expectations rise and you have seen people taking the growth expectations up. the economy is getting better in europe. the economy is probably getting better even in the u.s. that also matters in the background. jonathan: stay with us. we are going to talk about turkey. the lira plunging. stocks down almost 8% at the open. bond yields surging. president erdogan is not going to get the power he wanted as president. the ak party did not get a majority. we will head to istanbul after the break. ♪

jonathan: the ftse 100 up by 0.4%. i will tell you this. the dax down by about 0.1%. not as much as the cac 40. caroline hyde will tell you why. let's get to caroline hyde. these index stories are stock stories. caroline: they are indeed. at the top of the open, we said these players were going to be the biggest movers. they are driving indexes higher. diageo, the ftse 100 being

helped by the biggest move for this stock in almost seven years, up 7%. there is suddenly all this talk that the wealthiest man in brazil could be driving forward for a bid for diageo. it could be up to $90 billion. that is what analysts are saying. maybe they are just after the guinness brand. this is what is driving it higher. the wealthy man is being cited in the brazilian press as thinking about a bid. citigroup says it is the right pool of assets for 3g capital. deutsche bank also climbing this morning. it is the biggest move in this stock since august 2012. people liking the fact that there is a new team at the helm. and you jane is going to be leaving in june. who takes the reins? john cryan. he was previously cfo at ubs.

they are liking the new leadership. actelion is the other big mover today. it is looking potentially to buy a swiss drugmaker. all about rare drugs of course. many are worrying about their pipeline of drugs. clearly, actelion is the way they can go. they want to be looking at this particular stock. driving it up almost 7% this morning. it could be worth 12 billion pounds. you can get into the rare drugs. jonathan: caroline hyde, thank you very much. some big stock movers this morning. some big moves in turkey as well. elections really shaking up that market. dollar-lira at a record high.

the equity market opening 8% lower. bond yields surging. the stock market now off by just 5.58%. dollar-lira up by just 3.89%. the big moves are still big moves. let's get out to elliott gotkine in turkey for us. he stands by with a guest. elliott: good morning, jonathan. stocks down almost 10%. bond yields rising as well in turkey. you get the impression that investors aren't particularly happy. i'm joined by the ceo of capital markets in turkey. great to have you with us. what would you be telling clients to do? >> kerepep calm. after such election results it is difficult with the market opening 8% down. yesterday evening, down almost 6%. it is hard to keep calm.

what we are facing now is uncertainty, especially after the speeches of the party leaders. there is a bit of uncertainty. this outcome has been expected. it has been reflected in the polls. we just need to calm down. we need to probably spend the next one week looking into what kind of coalition possibilities are there. it is for sure that there can't be a single government anymore. the combination of what can happen and how can happen will probably hurt the markets. elliott: now that it is clear we are not going to have single party rule not winning a parliamentary majority, what is the best case scenario from the perspective of investment and the economy? >> the one thing to understand,

turkey does not need another round of crisis. turkey does not want another round of uncertainty. today, the note that the public has given to the politicians is, find a deal. we want a country where macroeconomic stability is to continue. still, they are the first party they are close. 18 million people voted for them. turkey and the political parties need to sit down and start business again. have a proper talk of what can be done. elliott: the electorate seems to have told president erdogan, we don't want you to have any more power than you already have. can one assume that the bank of turkey will feel more free to make decisions without the intervention of president erdogan? >> the issue has been solved

somehow, even though we don't know how at the present. obviously, i think there will be some kind of relief on the central bank overall. still, the uncertainty you can see in the markets reflects directly to the central bank. [indiscernible] it might have an effect. the target of the central bank is price stability. elliott: part of the problem is the lira plummeting to new depths today. that is likely to stay inflation further. what would you expect the bank of turkey to do when it meets on june 23? what kind of rate hike would you foresee? >> this is obviously dependent

on how this environment evolves until that time. if there's no coalition if we are talking about new elections dollar-turkish lira is weakening further, and inflation is much about what target the central bank of turkey has put. if this happens, they would need to hike rates. if there is a kind of coalition formed, the market can actually see that market stability can go further. elliott: of course, these are the internal issues. the external one is what the federal reserve might do this year. we have seen the hot money that's in turkey moving away. how much of an impact is that likely to have on the turkish economy? >> after the latest nonfarm payrolls we saw on friday, and

the resistance -- the revisions made in april, i think the fed should increase the rates, or would increase the rates by september. hiking the rates will probably relax the economics. i've talked a lot about hiking it but now we have to do it. elliott: thanks so much for joining us today to make sense of these elections in turkey where the ruling party has won but it is a defeat for them. jonathan: elliott gotkine, thank you very much. i have investors standing by for comments. [patrik and stephen. the bigger story outside turkey, the prospects for a rate hike at the end of the year. madame lagarde doing the fighting. is that what is happening now? >> i think that is right.

the glib answer is, markets don't like uncertainty. the bigger story is what you are getting at. the dollar trend in my view is likely to continue driven by the fed going to hike interest rates. these are not good times to be invested in emerging-market assets. we have seen what has happened to fx. we have seen their performance year-to-date. i guess in turkey you don't want to have political uncertainty. jonathan: not the view of stephen isaacs. why not? >> the way to play emerging markets is to counter trade them. buy when there is blood on the streets. there has been a story today. there was a story in russia, and brazil all of which led to a great entry levels. we see good entry levels in emerging markets. global growth is ok. in europe, it is picking up.

that is what matters to emerging markets. there is a different cycle, u.s. interest rates and asset prices and we see great opportunities to take risk off the table in the u.s. particularly the u.s. dollar, where everybody is bullish. jonathan: not so much as they were in q1. i think that dollar rally died off somewhat. it might ignite once again. do you think there's still that massive consensus out there? >> employment is the lagging indicator. we did have a strong figure on friday. most of the other figures, gdp figures are all showing a significant slowdown in the u.s. economy. this is at a time when most forecasters of the major banks are looking for 3% for this year. jonathan: the fed looking for

2.5% gdp growth. next year i'm a 2.2%. stevens view is pretty clear that the fed is not going to hike this year. for you to move your target out to 2016, what needs to happen? >> we need to see significant deterioration in the u.s. economy. all the data you are looking at doesn't give you that. i think it is pretty clear that we had a combination of factors that gave you a very weak q1. if you look at the underlying data, there are problems with the u.s. data. i think the signs are pretty clear that the u.s. economy is accelerating. staying above that 2% handle, i think so. if you look at the u.s. dollar, it is pretty clear it overshot massively earlier this year. we had a correction in that. you look at the fundamentals. it is hard to argue against the continuing uptrend.

will it be as fast as years before? it will not be. but if you look at what happens to assets, i wouldn't be aggressive here. jonathan: i can't get you to agree on the u.s. area i will try to get you to agree on china. up next, we take the conversation further east. a big beat for japanese growth as chinese exports continue to slump and the shanghai composite keeps heading north. ♪

jonathan: good morning and welcome back. we are closely watching the data out of asia. let's get to hong kong where shery ahn has the breakdown. shery: markets in asia had to go through a lot of data today. trade data out of china shows exports last month fell 2.5% from a year earlier, falling for a third month. imports plunged 17.6%. that left a trade surplus of $59.5 billion. the data underscores a sluggish domestic environment. the slowdown also coincides with a slump in investment growth putting china's growth target of about 7% at risk. a different story in japan. data shows the economy expanded

more than previously thought in the first quarter, growing an annualized 3.9%. that was at a faster pace than the initial estimate. also, beat analyst estimates. the growth was led by a stronger pickup in business investment as well as inventory. jonathan: shery ahn over in hong kong. what does all the data out of china mean for the stock market? not a lot. i will tell you where the stock market has not been surging. germany's dax now down more than 10% from a record high. it is in correction. we are going to get a correction on the shanghai composite. maybe not. let's bring in our guest stephen isaacs. a correction, when is that coming? >> it is a roller coaster. these are very speculative markets. i don't think anybody knows where the next 10% is going to

be. it show you that when people give up on an emerging market and china has been in the doldrums, it stock market didn't move or anything, then suddenly something happens. in this case, it was monetary policy. yes, the economy -- i can see you reading through it. the market is up 2%. it is because the market believes that there will be further easing. jonathan: but there are limitations to monetary policy. look at europe right now. the ecb still has its foot on the qe paddle. there is the dax down 10%. you can't just play the qe low rates trade forever. >> i think both china and japan are pretty special. i'm not sure in europe the situation is the same. something we can agree on in europe is pretty real. in china, it has been said the

data doesn't look encouraging at all. in japan, the bank of japan is running out of things to buy. the strong economic data people are now talking about, when are they going to stop qe? the chinese have a lot of power. there is a lot more they can do. how much longer can that rally run? who knows? as i said, it hasn't helped em equities. jonathan: i get the china bowls on the show and they say it has been a domestic trade. when do we get the international fuel? tomorrow, the msci going to announce whether to add local shares to the benchmark. does that move the dial? >> it does. there is a certain amount of front running of index tracking strategies. there is so much money that they

are going to end up forcing international buyers into a lot of these markets, and these chinese stocks will benefit greatly. we are still a long way from the highs. in 2009, we were 50% higher than this. this has been a very impressive rally from a market that was bombed out. the percentage numbers look incredible. we got a long way to see a meaningful recovery. jonathan: just to rip up the script a little bit and talk about europe, we could have been talking about europe at the start of the year. qe coming, people frontloading. the euphoria of q1 seems to have died just like that. equities brought down a little bit. what is your outlook for the next 12 months? >> we still like them. they have gone a lot. i think the next leg in europe has to be driven by an upturn in earnings. i actually think there is still

a chance for a surprise to the upside. i actually just have a gut feeling they could be surprised on the upside. jonathan: what is stephen isaacs' gut feeling? >> we are pretty cautious on all these economies. greece going out will represent a significant tightening of potential future monetary conditions. if greece stays in, it will be the cost of another notch down in the euro as a sound currency. it will be an effective debasement. the euro will be more and more a southern european currency. if greece goes out, the germans will be able to say look, sorry. we have to have some sort of sense in how we run this currency. i think that is a tightening of conditions. we see in a rather uncertain

world for international assets anyway, we see european assets going forward. jonathan: some problems going forward. the shanghai composite, 8%. we are getting closer. maybe the ball capitulates. [atrikpatrik and stephen, thank you very much for joining us. still to come, an exclusive conversation with outgoing credit suisse ceo brady dugan. ♪

jonathan: good morning and welcome back. about 54 minutes into the session, some big market moves. the dax down 10% from a record high in april. the shanghai composite, just almost 8% below that 2007 hi. a lot to talk about. some big banking stories as well. after eight years, the ceo of credit suisse, brady dugan, will say goodbye. he spoke to manus cranny in an exclusive interview. >> obviously, the biggest question to me is where we stop. are we going to continue to ratchet up the requirements? my belief is that the financial system is very important. the banks are important to promoting financial growth

economic growth, job creation and i think we have to keep that in mind. at some point, i do think enough is enough. jonathan: manus cranny joins us now. it now is the time where enough is enough? manus: i think he was saying they have done a lot at credit suisse. they had problems last year. so has the whole industry. regulations fines litigation topping almost $300 billion at the moment. the point he was making is that there comes that balancing moment between regulation and enforcement. we may see that from george osborne in regards to the banks in the u.k. as an outgoing ceo, he's had that moment where he can say enough possibly is enough in terms of regulation. jonathan: coming up i imagine deutsche bank is going to be play quite highly. manus: deutsche bank is going to

be one of the top stories we have. the co-ceos were heralded at their arrival. they were not delivering enough change in the face-off. they didn't set brave enough targets in terms of return of equity. and shoot jane comes from the investment bank. this is a political hot potato. germany favors the consumer bank. that's simply, probably, not going to work in the new world paradigm. jonathan: manus cranny, thank you very much. coming up on "the pulse" with francine lacqua. that is it for me. germany's dax down 10% from an april high. there's the market right there. the ftse 100 just in positive territory.

we will talk about that through the morning. that's it from me. good luck for the rest of your day. ♪

francine: deutsche bank departures. the co-ceos resign from germany's biggest bank. john cryan will replace them. manus: a whole lot of work still ahead. angela merkel's warning on greece as she hosts the g-7 summit in bavaria. francine: turkey's currency and markets tumble as the ruling party loses its parliamentary majority in a vote for president erdogan. welcome to "the pulse"