francine: hsbc could cut as many as 25,000 jobs as they plan to save $5 billion a year. apple seeks to regain dominance and the music market with a new streaming servers. frustration mounts with greece. angela merkel demands urgency. and president obama voices his concerns. ♪ francine: welcome to "the pulse ." i am francine lacqua. we have had a lot of breaking

news from greece. we understand there is a greek proposal and we understand it has been sent to the european commission. negotiations going to coming between brussels and degrees. where plenty more. first hsbc has plans to cut 25,000 jobs. -- we will have more. they plan to save $5 billion a year. many will stem from automation, digital backing and administrative roles. the chief executive offer six to reverse profit decline. -- seeks to reverse profit decline. we bring in richard. huge news. how much of it was a surprise? richard: we heard last week or the week before that it would be around 20,000 job cuts and that was sources talking about thousands of job cuts. the actual number is bigger than that 25,000 is a huge number for

a bank this sign. even for a bank this size. there will be reduction in jobs as they exit in brazil and turkey the and will account for 25,000 more jobs. it is around 50,000 in total. the ceo has to make the job cuts. he is looking to improve profitability. this is the what you need to take out. francine: a lot will be lost in investment banking. also basically because of the digitalization or automation job losses because of that. richard partington: there is that part. we do not know how many jobs will go. they have told us around 80,000 jobs into the u.k. and that is one of the areas that have been more clear. across the border globally, they are going to make many of these jobs around 21,000 positions

will come from the back office and support functions. francine: i am surprised, richard. it is such a huge a bank and with not heard about really downsizing it or breaking it up. it is something analyst asked for. richard partington: the bank is global and hugely complex. one of the most complex in the world. that is something they are seeking to address. it's hard to be that size in this day and age in jurist -- in multiple jurisdictions looking at your balance sheets. you have to increase the number of compliance staff and as a huge cost. they are seeking to make savings elsewhere. francine: let's bring in one of our bloomberg view columnist. mark we were talking about a just received a couple of weeks ago saying that were looking to relocate elsewhere. we understand a decision will be made by the end of the year. this a huge bank. what do you make of it?

it seems like the ceo is aggressive of getting the business done. mark: richard's comments were perfect. this type of bank does not work anymore. you cannot have 99,000 employees and a scrolling empire in every market anymore. francine: this is something we have looked at and regulators have asked them to rain in certain units. there must be a couple of banks left with this model. hsbc saying they want to be a bank that is still global. mark gilbert: there is an argument saying people are pulling the way from certain areas and maybe you should expand. the universal bank and model, the argument was if you can offer big corporate clients everything they need, not only will you make more money but you are a better bank in some ways.

the credit crunch gave allies to some of those and the regulation after has made some plain unprofitable. hsbc is quite late to the party. you can argue ubs was first and they would claim in terms of shrinking and cherry picking where do we want to commit capital and where can we make money? the relocation issue, umm, it has been threatened. they make most of their profit in asia. it would make sense. just because it would be tax efficient in the u.k. today to hong kong does not mean it will make sense in five or 10 years. such a massive, expensive costly shift to an entirely new continent. i am not convinced. francine: richard, they may be late to the game. certain units, paid -- facing fines and mired in scandal, tax

evasion last year. what is left to do for hsbc? richard partington: an awful lot to do. this plan will not kick in until 2017. they have not ultimately decided what they will do with that. they're still in consultation with the regulation authority about how that will be implemented. we know they will shift the headquarters. and they have -- they may do something more radical and have speculated to not want to keep hold of that bank because there is an argument of how much you can control that sector. they may not be called hsbc, we do not know. that is something they said they are considering on a conference call. francine: the conference call is ongoing and the ceo said they are talking about the headquarters, possible

headquarters and it may take two years to execute a move. they will decide. it is nice to put everything into context. isn't there more to come on the play next week? mark gilbert: they will be talking with investors for a long time. even this morning up until noon time. a lot to digest in here. many objects they are going through today. it does feel as though they are pivoting. a wordy they are using toward asia. they're looking to invest and gross. -- invest and grow. especially china. they are also talking about hong kong. areas where they want to grow. this while they are retreating from other countries around the world. perhaps that shift is continuing. francine: thank you. richard partington and mark gilbert.

he stayed with us. we will talk about greece. the greek delegation is set of submit a revised proposal to creditors according to an international official. for more, let's go to athens. what are you hearing? reporter: well, we finally have the answer to the question whose turn to offer a proposal? it is said greece it delivers through a three-page proposal that is mainly focusing on fiscal targets a no mention on reform or the labor market. basically greece asks to repay. use their remaining funds and create a new seller. will it tackle the liquidity problem through a fiscal agreement?

this bodes well with what the prime minister said yesterday that where very close to a fiscal agreement and we will see about the rest. some sort of agreement, an extension through a fiscal agreement, will have to say. they are assessing it. and whether they are really in favor of it or not, we have to wait because it is fresh news. francine: thank you. let's go over to berlin. we go in a couple of minutes. we will speak to our berlin bureau chief and want to know more about mr. schaeuble and angela merkel. here's a look of what is on our radar. south korea has received -- mer s. the government has decided for an aggressive response.

hong kong has a red alert on outbound travel indicating a significant threat. apple has unveiled a new music streaming service taking on spotify. it came at the worldwide developers conference in san francisco. it will give users access to a vast library of songs. and msci will decide whether to add china's locally traded shares. it would be historic shift because of the potential to put billions of dollars into mainland stocks. more on that now. mark barton is standing by with the latest. it has had quite a ride. mark: check out the bloomberg china market cap. a chart of the market cap of all chinese equities over the last 12 months. in the last year, $6.5 trillion.

that's enough to buy apple eight times or circle the earth to enter 50 times with 100 don't -- to circle the earth 250 times with $100 bills. you get the gist. big, big test. 10:00 p.m. london time, msci will decide whether mainland securities are eligible for indices used by $9.5 trillion worldwide. if it is a yes, it is global acceptance for equities area a lot of overseas fund managers for the last 25 years. if it is a no a massive blow to the chinese bull market. check of the bull market. over the last 12 months, up by 150 8%, francine. a big day today for the msci.

if it is a yes, signs of access cropping up everywhere. borrowing at a record $340 billion to bet. an unprecedented pace and price to earnings ratio have climbed to the highest level in five years. the economy is mired in the week's expansion since 1990. day today on consumer prices or producer prices have confirmed the week domestic and external demand for china. big big day. that decision at 10:00 p.m. tonight. what a stat. $6.5 trillion added to the chinese stock market and the last 12 months. you can circle the earth 250 times with $100 bills. francine: thank you so much for you mark barton with the latest from china.

we will take a quick break. we will talk to mark gilbert about to. that is coming up next. ♪ -- about greece. -- that is coming up next. ♪

francine: welcome back. plenty of news out of greece. over the last 10 minutes or so we understand greece has mentioned a new plan. greece has had to submit a

revised three-page proposal to creditors. the way i take it, we were up more on the ground is that it would be a counter proposal of what the creditors had entered through on friday. the spanish finance minister saying the greek accord will be reached on that proposal. we understand that the greeks are asking to increase the t-bills and asking creditors for money to repay the ecb. how this played out in germany? let's head to thomas chad. what more can you tell us first of all about how it will be perceived in germany? they had a bit imf a bill to pay friday and that has been delayed. are the german citizens going to be fed up with the negotiations that seem to be indicating that agrees does not want to pay their bills right away? reporter: it will be seen as a positive and they have submitted some sort of plan.

it remains to be seen the reaction to the plan was the government has a chance to look at it. certainly the fact they are now responding will be seen as a positive. as you know, german chancellor angela merkel said repeatedly she wants to reach a deal with greece. she sees this in geopolitical terms. she is willing to make compromises. she is at odds with her own finance minister mr. schaeuble looking at this through a finance plan and taking a harder stance and then angela merkel and said greece needs structural reform and they are not willing to go in make the structural reforms. he is willing to let greece exit the euro. this was where hearing from various sources here in berlin over the last couple of days. if the bank chad, thank you. chad thomas. -- francine: chad, thank you.

also with us is mark gilbert who has been writing extensively with greece. this negotiation they wanted the money to pay for something else. you take and you gifts. it seems convoluted in a convoluted way. m&a: the technical term is a -- mark gilbert: the technical term is a shell game where you are moving things around. schaeuble decided quite a while ago he is willing to let degrees and goal. in greece is now willing to play by the rules, that is very planes. -- he is willing to let greece go. angela merkel does not want to be the chancellor active power power when the euro started to splinter. do not forget, we do not know what the repercussions would be of a grexit. it is a positive sign they have come back with a new proposal. it depends on the content. and if it reflects what they

were given either european union as a proposal. with heard what tsipras -- we have heard what tsipras called over the weekend and varoufakis think they need debt forgiveness. it is not clear if this will bridge the gap. caroline: -- francine: the rift between creditors and greece for such a long time. is it going to come to a halt? is there a danger that schaeuble resigns over this? mark gilbert: tricky to know. no reason why he would. he is a proud man. one person said greece is going to run out of money before it runs out of money. that is a real risk. bumbling the imf loans gives you a temporary stopgap. they took it down and borrowed their own account to pay last month and now one places billion

euros to pay by the end of the calendar euro. -- calendar month. they are running out of the days. greece has seen so many deadlines come and go. if you are in default to the imf, is at the central-bank going to continue to fund your banking system? you have to think about capital controls. anybody who cannot move -- anybody who cannot move money out of greece it is moving. francine: thank you. mark gilbert. you can find a mark on twitter. coming up -- apple enters the streaming music again. we will tell you about the new service and other developments from the developers conference. we are on "the pulse" and we are just getting started. ♪

francine: streaming music service and apple hey and new service -- apple hey and new services were some the updates from the worldwide developers conference. josh was in san francisco yesterday and breaks down the three important things you need to know. josh: were at apple's worldwide developer conference in san francisco.

three big takeaways today. first apple wants to be in music in a big way. you have spotify and pandora nipping at its heel. they introduce apple music to take on those services and maybe more. they are launching radio stations not too dissimilar from sirius. and creating a new service called apple music in net which allows market -- artists to share photos and new music with listeners. they i -- they released a lot of features for ios nine. the most significant is the ability on the ipad to use two apps side-by-side making get more connectivity. one thing you have noticed today is they are on of the attack. they launched a new service called apple news which is take a shot at flip aboard and a made several comments about privacy user data clearly aimed at google and facebook.

and finally, they introduce a new service called apple intelligence which is like a google now. it is all about predicting how you will use your device and aims to make your apps more integrated. all in all, a developer's conference. a lot of updates to services but no huge wham bang. the closest they got was the music streaming. it could be a first competitor in that space. francine: for more on apple's announcements. it is taking aim at streaming startups. caroline: it is. the relation -- our relationship started with apple with ipod. they lost the forward thinking. they allowed sound cloud and spotify and pandora to get in on

the streaming devices. that is how you and i want to consume our music. we want to stream it, not downloaded. that is where apple dominates 80% of downloading. they are a little late to the party. they are unveiling apple music where you can stream and connect where you can interact with the musicians. jimmy iovine he put it perfectly. jimmy: all of the ways you love music in one place. that place is almost and one billion hands around the world. one app on your iphone. caroline: that is it. it is about making the iphone more desirable. not making the money, it will not really add to their revenue. it is about pushing out some of the other competitors. and having the cool factor. drake was in there.

francine: thank you. our twitter question of the day, is apple too late to streaming? up next brexit in the referendum. ♪ .

francine: welcome back to pus pulse live from bloomberg's european headquarters in london. i'm francine lacqua. we're just getting some breaking news. the u.k. trade balance figures. here is mark barton. mark: a bit of a surprise. nair owing more than economists forecast. the good trade gap got nair owed to 8.-- narrowed to 8.6 billion pounds. economists forecast a deficit of 10 billion pounds based on the

median estimate in a bloomberg survey. exports jumped 2.8% in april from the previous month. sales to none.u. nations surged 4.7% led by a surge of chemical exports to the united states. this is the u.k. trades deficit going back to 1955. i have drawn the line at zero which means that essentially for most of the time since 1955 britain had been importing more than it's exporting. it has had a trade deficit. a minus figure for most of the period since 1955. the early 1980's you can see there, we went positive briefly but this is the problem that the u.k. economy has. we're importing more than we're exporting. inle that figure starts going in

that direction, that is problematic for the u.k. economy. at least the trend in april was a positive one. francine: thank you. hsbc will cut as many as 25,000 jobs about 10% of its workforce. apple is launching a music streaming service which will be available to consumers from the end of the next month. the announcement came at the firm's worldwide developer conference in san francisco. and talks between greece and its creditors continue in brussels today. greece submitted a three-page proposal to its creditors. the document covered only fiscal targets. let's check back in with mark on the markets. any movement in bonds?

mark: what a few weeks swe have had. the biggest drop in 10-year bond yields. stocks are down for a sixth consecutive day. the longest losing stretch since december. an interesting development in the hsbc share price versus the stoxx 600 banks index price. hsbc cutting as many as 25,000 jobs through 2017. 10% of its workforce. i charted the hsbc share price in 2015. you can see very clearly the white line, the shares have barely moved year to date. they are down by .4%. compare that to the sox 600 bank. hsbc shares are the 37 best performing banks out of 47. on evaluation basis it is

trading at 13.89 times earnings. the median is 12.5 times. the it is trading on 13.4 estimated earnings. the analyst community, 29% say you should buy the stocks. 46% say you should hold the stock. 24 hkt say you would sell the --% say you should sell the stock. if that price target does materialize in the next 12 months you would be sitting on a 3.8% upside. that is hsbc. this is something i focused on yesterday. i can't get away from it because it absolutely blows my mind. the msci emerging markets index yesterday, it fell for an 11th consecutive day. today francine it is down for a 129 consecutive day. the longest losing stretch since

september 28 1990. i looked back at september 28 1990. back then that was the longest losing stretch since the index began in january 1998. two factors are affecting this move. the prospect of high u.s. rates and the signs of cooling demand in china. we have had more evidence today of that because of weak inflation data. in the 12 days, have a look here, when the index has fallen by 6.44%, it has lost $330 billion in market value. that is lot of money. $330 billion has been wiped off the msci emerging market index in the last 12 days and the decline in stocks has been accompanied by decline in currencies. we have had a two-week selloff in currencies that could puts on these currencies.

be aware that foreign investors hold more than 30% of local currency, emerging market debt. nobody wants to see foreign investors flee these emerging markets. they are down for 12 consecutive days. francine: the e.u.'s frustration is mounting and angela merkel said there is not a lot of time to reach a deal. joining us now is a chief economist. great to have you on the program on the day where we understand there may be a proposal that greece has sent to the creditors. a three-page proposal in which they asked to borrow money from the e.s.m. in order to repay the e.c.b. this is con volume luted. they are broke. -- they are convoluted. absolutely. greece needs cash before the end

of the month to pay the i.m.f. 1.6 billion. 6.7 billion in bond redemptions in july and august. that is not going to be covered by the current bailout which is 7.2 billion. it is quite a clever ponofle the sense that -- proposal in the sense that it would use funds without the need for a third bailout which would take a lot more time. how realistic it is is another matter. there are another couple of things which have been discussed to sort that july/august problem out. francine: t bills. >> that would be a lot of t bills really to cover 6.7 billion. another point that some have raised is greece didn't use all of the financial stability funds to recapitalize its banks.

there is about 11 billion euros left there. that could be back on the table. we wait and see what the creditors say on the latest document. francine: given all of this, is there just not capital controls? if you had money in greece, why would you keep it in a greek bank? that is beyond me. >> it has fallen sharply over the last 10 years with periodic sharp withdrawals over the past few months. part of the european union is the free movement to labor and capital and once you impose capital controls, history shows -- francine: it is tricky. >> history shows it takes a long time before you're able to withdraw them. i think that is one reason why the greek government is hesitant to go down that route. francine: you see a lot of volatility in terms of bonds. german bonds, almost a meltdown

the last couple of weeks. is this going to get worse? i'm still yet to figure out if there is a greek default, what happens to europe? is it positive or negative? >> it is a lot of thing happening in the bond markets and indeed the other eurozone core markets at the moment. one of them is a complete lack of liquidity. better inflation. stronger inflation numbers which are adding to yields. but greece is having more of an impact on various markets as well. we have seen that in equities as well as government bonds. were there to be a greek default, i think that raises the level of uncertainty over whether greece remains in the euro. that is probably negative for the euro. it is negative for risk assets as well. bonds become a safe haven once again. it doesn't necessarily mean the -- if grease were to default you

would get a -- greece were to default, yoult you would get a grexit. francine: are we going to see a -- in price? >> i don't think so. it seems to be a solid 0.4 increase in g.d.p. over the first quarter. the survey data perhaps a little bit disappointing but still consistent with the recovery building slowly. it is always difficult to predict revisions. in so far as the recovery is gathering some positive momentum we would expect more -- for the rest of the year. francine: what is your take on germany? i'm interested in this political rift between schaeuble and merkel. merkel does not want a greek exit to be her legacy as chanceler. wolfgang schaeuble we understand maybe decided a couple of months ago if greece were to leave, so be it. is that something that has an impact on the way germany is run or is it just political machinations?

>> it could be. it is just a classic case of good cop, bad cop. the end event is if greece is to avoid a default and avoid a grexit then there has to be some sort of compromise between credit others on the greek side. by exactly how much is unclear. francine: we're just getting the euro area g.d.p. figures. they are a little bit early for once. the economy grew if the previous year. household consumption up 0.5%. fixed investment rises for the euro area in the first quarter again, 0.8%. overall quarter-on-quarter, it is exactly line with what economists were forecasting. >> that sounds like a pretty decent set of numbers. we're looking at two things potentially pushing economy forward of the remainder of the

year and one is the weakness of the euro which we think is coming pettive. and also what we're looking at within the money spli numbers is some strength engine credit growth particularly to the household sector and the corporate sector. those two things we think will keep the recovery going. francine: great to have you on the program. coming up, the mrsa outbreak in sourks causing school closures and canceled visits. how bad with can the economic impact get? we'll go live to seoul after the break. ♪ 1

francine: welcome back to "the pulse" live from bloomberg's london headquarters. the prime minister, david cameron was forced to clarify comments he made about government ministers having to support the bill. great to have you on the program. first of all, just run us through he said everybody has to support the bill and then he came under so much pressure and said no, not really. how did he backtrack it? >> if one person's claire fixation another person's u turn. what actually happened is he said basically if you're not going to have said, then you --

the government. of course this is not well received by some of his ministers who are euro skeptics. what he said now is you need to back me through the negotiations and then we'll see. it will translate as once we get through proper campaigning to keep it inward what is chs what he is trying to achieve. francine: we'll come back to what's happening in the u.k. in a second but we're getting breaking news out of greece. we found out they submitted a three-page proposal to its creditors. an official is saying that the greek revised proposal remains vague. they say actually the wording is a little bit harsher. they said it is a vague rehash of the earlier plans that the revised greek plan is not credible. let's have a look at whether it is having an impact on the euro/dollar.

every time we see this not going forward, the negotiations stalling, we understand from this new plan that actually greece was asking creditors for e.s.m. money to pay the e.c.b. we had a chief economist on the program saying that doesn't make sense. that is taking with one hand and giveing with the other. the greek machinations don't make that much sense. we'll have plenty more on this breaking news. we'll go live to athens and get the view from mark gilbert. he has a great 380-degree vision about how this is going to end. let's get back to the u.k. you were telling us basically basically about this u turn by david cameron on him forcing his m.p.'s to vote for staying in the e.u. what exactly is he trying to negotiate ahead of that? >> ahead of that he has set up a list of things he wants to achieve.

the trickiest one is going to be trying to curb inward benefits. that is a really sticky point. not only have the polls said that is no a no go zone. germany has indicated publicly and recently that they see that as likely -- it is one of the cornerstones of the embs u., it would be discriminatory to impose that on its citizens. francine: that is what all the british press are talking about. thank you so much. our u.k. reporter. now let's have more on south korea. it reported its second death from mirrorsa. -- mrsa. what are the economic implications of an outbreak that is spreading? >> i think the -- one of the main implications is a concern

from economists but also from the government that the way the public is reacting to this they are avoiding public spaces. avoiding going shopping malls, baseball games. all kinds of public activity that helps consumer spending. the public is kind of avoiding at the moment and it is coming at a time when the economic recovery is very fragile. the bank of korea has been in an easing cycle. rates are at the lowest ever. this was the wrong time for this kind of outbreak to happen, if ever there is a right time. but i think the other thing to remember on this situation is that there is parallels as early as last year, as recently as last year when the ferry sank. again, it is a very different type of event but we're seeing it plate out in the same way. people changing their activities and not in way that is helpful

for the economy. >> do you think that the virus is coming under control? it seems that the acting prime minister of south korea has vowed this will be curbed by the end of this week. >> certainly the numbers of new infections were higher than they had been over the weekend and today they fell quite sharply. i think that is a main reason why the government feels that it is able to predict that they may be under control this week. that is consistent also with the w.h.o. view last week that we would see a spike in the next few days and then a gradual decrease in the number of new infections. so there is hope buts there also a lot that still has to happen. don't forget that the number itself of infections is increasing. it is up over 90 now. and we have more than 2,000 people in quarantine. so it is not over by any means, but certainly the numbers are more optimistic than they have

been. francine: all right. thank you so much. coming up, the robots of the future will be soft and safer. a company that is pioneering inflatable robotics. stay with us. ♪

francine: welcome back to "the pulse" live from bloomberg tv

and radio, streaming on your tablet and phone and bloomberg.com. when you think of robots you picture machines made of steel. >> brain or brawn? that has long been the divide in the world of robotics. cutesy toys connecting emotionally with humans versus industrial giants serving heavy industries. now a san francisco start-up is looking for a new way replacing steel and motors with fabric and air. >> focused on building a new class of robots that are lighter and safer and more mobile than anything that has been invented before. >> industrial robes are made from stiff and heavy materials so running into one is like being hit by a car.

that's why they have been stuck in factory cages. they make the robotic arm that has no hard skeleton and is made mostly out of fabric you find in backpack straps. >> the advantage is that you can build a sense of touch and a sense of interaction into the robot on a material level. >> what is also surprising is that pound for pound inflatables are stronger than their metal counterparts. a typical factory robot is five to 10 times heavier than the load it can left. this prototype can lift more than its own weight. >> hello. i am bamax. >> disney gives a preview in big hero 6. its protagonist is a lovable huggable health care robot. >> i will scan you for injuries. >> don't scan moment >> scan complete. >> unbelievable. >> the character was inspired by

a real life prototype developed by carnegie mellon university. >> if you're going to do things like dress them, clean them, there is just no way you can get a big, heavy robot up close to someone safely. >> a robot like bamax is still science fiction, but inflatables are come soon. robotics hopes to launch its first product as early as next year. francine: everybody needs a big white, fluffy robot. for those listening on bloomberg radio "first word" is up next. for those watching the next hour of "the pulse" is up next. spoke to international officials. brussels insiders. they said this is just a rehash of a plan that was earlier rejected and we'll talk to the

world health organization's mission in korea about mrsa. and we'll take a look at the new driverless car launched by mercedes-benz. all of that and more coming your way. ♪

francine: hsbc to cut as many as 25,000 jobs as europe's biggest bank attempts to save $5 billion a year by 2017. greece sends over a revised proposal but insiders say it is not credible. apple is -- has a new streaming service. now good morning to our viewers in europe. good evening to those in asia and welcome to those just waking up in the united states. i'm francine lacqua. this is "the pulse" live from

bloomberg's european headquarters in london. first of all, hsbc has announced plans to cut as many as 25,000 jobs in an attempt to save up to $5 billion a year by 2017. as many as 21,000 of the cuts will stem from initiatives such as automation, digital banking and administrative roles. speaking earlier the c.e.o. said that several how the of the roles -- thousand of the roles to go will be from the u.k. >> we believe there will be about 7,000 to 8,000 role reductions in the u.k. a large chunk of which will probably be managed through natural attrition. we turn over about 3800 staff in the u.k. each year. francine: let's bring in one of our -- two experts on the subject. mark gilbert and jonathan tice.

thank you so much for joining us. mark, let's start off with you. we'll go on the job cuts in a second and see if the implications -- these are huge measures. but they want to remain a huge bank. it is a highly complex bank. why not break up? >> they said the bank in tuck might have a different name. it seems logical that the next step from that could be to start thinking about dividing up the units. the universal banking model has been in place for jeeverls now. it works well in some cases but it needs to be smaller. the regulators have tried to persuade the banks to shrink by imposing regulation that makes some businesses unprofitable and some units unprofitable. hsbc is reacting to that environment. it is goings to need to be

smaller. you cannot be a sprawling bank. francine: is that right? they should have done this quicker? it seems like a pretty aggressive plan. >> in terms of cost cutting, it is going to be in line with expectations. they actually explained if they wanted to get to a top 3 banking position in either of those countries they would need to increase assets six fold. they are detailing their strategy over the fact that its investment -- and that is what their bank is about. mexico we still love. we think it is on the cusp of doing very well is 30% of g.d.p. is driven by trade. i think what they are doing is appropriate. it is still about revenue growth. when your costs grow faster than revenues, angela chancellor has

the same problem. that is the biggest issue. demonstrate to market what revenue growth will be. there is no question, why were they in turkey and brazil in the first place? they are not going to be a top three bank there. that is a misadventure that they should have quit earlier when they realized they were not going to make a success of it. >> they were looking to grow. look at what the currency has done. the rand and the lira. at some point you to do a strategy review. clearly the rules have changed dramaly over the past five years. i think a good question is for example china. the big chinese banks are pumping billions in there. i think it is about the growth and the investment and growth. they got it wrong in turkey and brazil. how do we know where they are looking now is not going to turn out to be a problem. francine: you look at the returns on china so far, as long as they have the regulatory support in the country i guess that is the number one key to

this, then it looks like at least it is a more aggressive plan their their peers. >> the chinese companies don't stand aside and just let you come in. i think that banks will find they will be encouraged to have partnerships. they will lose their excel act chal property and sudden -- intellectual property. francine: when you look at the 10-point plan, what is the surprise? if relieve the job cuts to one side? >> initially i was quite surprised that north america as -- they want to return to profitability. if you step back and say these guys are a giant corporate bank to facilitate for international

clients, it makes sense what they are saying. their targets rely on getting an extra 2 billion of -- from having these relationships. i've been looking at banks a long time. whenever i see synergies as a rule everything they have done is credible. sensible. they need them to demonstrate what revenue growth is going to be. there are a will the of variables that could derail that. they will deliver on cost. are they looking to grow in the right areas and can they grow? francine: they will also make the decision whether to leave the u.k. headquarters by the end of this year. they have had these reviews in the past like every three or four years. what is going to change apart from the fact that they want to be under in asia and their c.e.o. wants -- an asian bank. >> it will take two to three years to do. massively disruptive at a time when you're fighting fires

everywhere in your business. it strikes me as somewhat crazy to decide that. mostly for what might be transstory -- you want to move everything over to asia and have that massive dislocation of your business for two years. >> it got tougher in the u.k. than people expected. from here, they committed to the u.k. they committed to the u.k. business. i don't think it is a straightforward that they will be near two years. i would be surprised if they were not. francine: thank you. now greek delegation in brussels is said to have submitted a three-page plan for creditors. what do we know about the content of this new proposal submitted by greece? >> yes greece came back with a three-page proposal mainly focused on fiscal targets with no comments on or reforms on the

labor market or on the pension front. there is also -- for notes on how which will tackle liquidities i basically by having the european subletting mechanism, paying back the e.c.b. bonds. using the e.s.f. this is a deal -- the counterphase at the moment. dealing with the large -- later on. basically something that prime minister tsipras said in an interview this morning. from the first feedback we have from officials, it is not positive. one said that we're still assessing it and there is no conclusion yet. but another official said it is not credible. it is vague a vague repetition

of what has already been discussed. there is nothing new here. francine: this of course -- you were talking about the rehash and we saw some really harsh words from some of the insiders. is this dead in the water? can it be the basis of something? does its mean that we're back to square one? every time greece submits a proposal we take a step backwards if the creditors slam it down so harshly. >> the creators want to see some development. they see no progress on the pension front and the labor market front. yes, we're back to square one. greece hopes to get an agreement. on meeting some fiscal targets. however i understand that the creators need to see progress on the other fronts as well.

you varoufakis saying that the creators are -- the negotiations and if there is an accident, it won't be that much of an accident. it will be the creators fault. the counterparts saying we cannot give any more leeway to greece. it is really astonishing that they have not accepted the proposal given by creators already. francine: thank you so much. here is a look at what else is on our radar this tuesday morning. south korea has reported itself second death from the mrsa. the government has decided to begin an aggressive response system ending the mrsa situation within a week. hong kong has issued a red alert on outbound travel from south korea indicating a significant threat. apple has unveiled a new music streaming service to take on

spotify. the new slfs give users access to a vass inventory of songs for just under $10 a month. we're going to take a short break and talk about emerging markets and central banks next. the twitter question of the day we have, is apple too late to music stream? you can also tweet about that. our three main stories, greece, hsbc and apple. tweet us. i'm at flacqua. mark gilbert is also here. we're back in two. ♪

francine: welcome back to "the pulse." we're getting breaking news out of deutsche bank. we understand there is a search ongoing in frank furts. frankfurt offices are being searched and they are saying that staff at the bank is not accused of wrongdoing but the search is related to security deals by clients. this is what a deutsche bank spokesperson has just told us on the phone. we'll be following any developments from deutsche bank and bring you any updates on that. at the moment, as we speak, those offices, deutsche bank

offices in frankfurt are being searched but they are not being accused of wrongdoing. you can see the share prices down 1.5% on the back of that news. for more, we're joined by a managing director for -- and mark gilbert. this is a significant date for china. if you look at you know, the pace at which chinese stocks have increased? we have been worrying about a bubble but i've been told don't worry. bubbles can last for a long time. at what point does that bubble burst? >> it is partly at the msci and the slowdown in china and the

decision, repeated decision to ease policy. what's happening is that china is researching and adjusting and managing the slowdown and partly as a consequence of this series of changes, the bubble, the pressure for demand for assets has shifted from property to equities and on top of that, we have foreign inflows. it probably does have a bit further to go despite the fact that as china rebalances and reforms, growth is going to be slower. if the underlying hope is that the return on capital will improve it is a government becomes less interested in high rates of growth and maybe a better quality of growth in the economy. francine: the shanghai composite was gaining 7% in one day. 40% in three weeks. is a central -- is an interest rate hike going to affect that at all or is that a different

trend for the chinese markets? >> i think there will be some effect on the foreign part of this -- the international part of the story here, but the domestic part will probably continue and have a bit of a blip when and if the fed does raise rates and it will depend when and how the fed raises rates. if we get this dovish hike which is likely, the ball is effect may be mealuated relative to a stronger effect. >> china is going to be a big target for them. this idea of a growing middle class that needs somewhere to store assets is a big part of the story. whether china is going to be series about having the kind of audit rules, the kind of scrutiny that western investors are use to. by and large you expects company balance sheets to be trust

worthy. not convinced that is actually the case yet in china. so there is a question of whether the real consist keep up with the flows of money in terms of capital. if you had one or two or three too many corporate scandals, that might be the thing that might burst the bubble or slow the enthusiasm down. you need to keep up with the financial markets. i don't think that is the case quite yet. >> i couldn't agree more but what i would say is you can hear from my accent that i have an american twang. in the united states in the early 2000s we had enron tyco. this problem is as old as capitalism. we're going to have this problem in china. we have it in the u.s. and western europe as well. the rules may be better and they may be more likely to be enforced francine: exactly. you find it, you deal with it.

>> they keep coming back anyways. i agree. i think it is a problem in china. i'm just saying it is not a unique problem to china. it is rampant throughout emerging markets. francine: what do you make of turkey? i know looking at the scenarios, we had a hugse selloff yesterday in markets in the turkish lira. should you hold back to see how the negotiations are going to form a government? >> i think it depends on the kind of investor you are. if you're going to be a very active trader maybe this is a moment to jump in when there is a signal of some sort of a coalition being formed. for a more strategic long-term investors, i would question that prop addition decision. -- proposition. it looks like it will be difficult to form a coalition and it won't have a steady coalition and the story is that the president has been spending a lots of time and energy

undermining the already weak institutions of the turkish state, including the central bank. turkey is still running quite large deficits. it sticks out a bit like a sore thumb among the fragile five. the others have done a lot more adjusting and have improved their structural characteristics and economic management as well whereas turkey has gone not so far on the external adjustment has gone a long way on a lot of the policy aspects of it. francine: what is your favorite emerging market to be investing in now? >> that is a tough one. qunk the lower beta ones -- i think the o lower beta ones, the countries that are running large deficits or have serious issues like brazil are not the ones to buy. mexico is probably better off. india, there is probably not

that much upside. i think, you know, it is much more of a trading market in general in emerging markets rather than for a while it is going to be rather than a place where you can go and say the trend is your friend. i close my eyes. there is no trend. francine: the friend is not your friend. thank you for joining us. coming up, apple finally enters the streaming music game. we'll tell you about the tech giant's new service and the other big announcements from apple's annual development conference. stay with us. we're right on "the pulse." ♪

francine: welcome back to "the pulse." a streaming music service. an apple pay update and services for the apple watch. those were just some of the highlights from apple's worldwide developer conference. bloomberg was there and we break down the three important things you need to know. >> this is josh and we are at apple's worldwide developers conference in san francisco. three big takeaways today are first that apple really wants to be in music in a big way no matter what is going on in the world. you have spotify and pandora nipping at its heels.

it aims to take on those services and maybe some more. they are launching radio stations that are not dissimilar from what serius is offering in satellite radio. and apple music connect which lets artists share music and songs with listeners. the new division of its mobile operating system. the most significant might be the able of thepad to be able to use two apps side by side. one other thing you might have noticed about apple is they are definitely on the attack. they launched a new service called apple news which is definitely taking a shot at flip board and they made several congressmens aimed at google and facebook and they introduced a new service called apple intelligence which is very much like google now and is all about predicting how you're going to use your device and it aims to

make your apps for integrated with one another. there are a lot updates to software and services but no huge wham bang moment. the closest they got was the introduction of the music service, which if it taps into itune's library of songs, it could be a fierce competitor in that space. francine: for more on apple's announcement, let's bring in caroline hyde. it is taking aim at streaming startups. caroline: they got the ball of it didn't they? we understand that. the ipod. itunes. streaming came in. they are unleashing the radio. they have drake doing some of the announcements about kinect, how they can communicates with fans. they are playing into that.

i think what is interesting is apple pay announcements and notably more women presenting at the apple events. francine: they had the first woman on stage. we're back in two. ♪

francine: welcome back to "the pulse" live from bloomberg's european headquarters in london. i'm francine lacqua. these are bloomberg's top headlines. hsbc is to cut up to 50,000 jobs worldwide as part of a plan to save $5 billion a year by 2017. achieving those savings may cost between $4 billion an $5 billion over that period according to the company. apple is to launch a new music streaming service. the announcement came at the firm's worldwide developer conference in san francisco.

they will have 30 million songs for just $10 a month. talks between greece and its creditors continue in brussels. the report of a split wheen angela merkel and her finance minister wolfgang schaeuble on what to do next. schaeuble is willing to let greece go if they fail to make necessary economic reforms. a choppy morning. jonathan ferro has more. jonathan: ftse 100 down 1/3 of 1%. hsbc has traded lower and the ftse has traded lower with it. the dax down 1%. lost 6% on the ibex in spain the complex in europe, the stoxx 600 on a five-day losing streak. that is the longest so far this

year. the dax over the year the. it has been a phenomenal story. this right here in late january, the announcement of e.c.b. q.e. . we go higher. they start buying bonds in early mausm. we go higher. they hit a peak in april. that is a record high. then comes the rollover. down 10% since april. that is correction territory. bob of nomura on the show today, said there could be another 10% of downsize in these european stocks. that is a bear market. who was calling for that april when we were at an all time high. quite a turnaround. it can be told by the story in the fx market. the euro hitting those lows in early march. $1.05 against the euro. then we came back to $1.12. still down 7% on the year but it is the turnaround from march, april that has told the story. that story has come from the

bond market. of course the correlation between the bond market and stocks hit a 1 1/2-year high. equities go south as well. german bond yields on the climb again this morning. 0.88%. another selloff yesterday. even though we're come offing the worst week for the german bond since 1998. the word i would use is historic. the selloffs that we're seeing have also been historic. this is story. the shanghai composite closes lower. msci will decide whether to include those chinese equities on some of their indexes. this market needed more fuel to that fire. francine, back to you. francine: exactly. we're in a bubble. it is just whether it will burst at some point. in about 25 minutes, we're

joined by new york -- from new york by tom keene. tom: imagine 25,000 bodies out and another 25,000 to get thrown off of exiting businesses. i know you have been talking about it all morning. you have jpmorgan chase and hsbc that really gets my attention as a trend. you wonder what deutsche bank will do as well and then it is on to bonds as john ferro said. really to talk about the correlations that are out there. the link-ups there. equities doing a little bit better. all of a sudden, bonds are front and center. francine: i'm looking forward to hearing your conversation about hsbc. the biggest bank in europe. 250,000 people. this is a very complex bank. there was so much pressure from regulators to break it up. i wonder if they are going after the american model trying to be too much.

tom: you wonder where we're going. i go back to a comment that meredith whitney made. the she is controversial, particularly on municipal bonds but she was way out front with this and thinking about not 50,000 but 100,000 or more layoffs within the restructuring of all of banking both on this side over the atlantic and on the other side. you wonder where we're going to be in 36 months. francine: yep, of course at the same time we're waiting for breaking news out of deutsche bank saying their frankfurt offices are being searched today. i know you'll bring us an update on that. let's head to south korea where mrsa or middle east respiratory syndrome has left seven people dead. for the latest we're joined by mark receipt harris of the world health organization korea mission. give us an update on your take of what the deputy prime minister said, that he thinks

this outbreak will be under control in south korea by the end of week. is its too optimistic? >> i'm here with a mission as he said with the world health organization to look at what is going on. this is -- and we are just in the early stage s of this mission. so really it is too early to make a call like that. certainly from our point of view. but what i can say is that the koreans are pulling -- putting in an enormous effort and they have some really outstanding people working on this. francine: mark receipt, what -- why are we seeing -- margaret, why are we seeing this in south korea now? >> we have never actually seen it in south korea. in fact, mers in south korea didn't see the sars epidemic. in order this is a virus that nobody, not even their very best

doctors had any experience of. when the first person became ill and this is a man who had been doing some work in the -- in the middle east, where this virus is circulating quite widely, he himself, the man himself didn't really link his illness. he had a bit of a cough. a bit of a fever. didn't get better. went to three or four hospitals, but he himself didn't realize that he might have this virus. it was actually when a very smart doctor did start thinking about it and did the test. by that stage, this first patient had been in a number of hospitals and hospitals are where this virus likes to thrive because of procedures done and the way in which -- because it is a virus that can spread itself much more easily in hospitals. that is why he had a large explosion. not really because they did anything wrong, but simply because it was a really new virus for this setting.

francine: margaret, is there any evident to suggest that the virus has mutated into a form more easily transmitted from human to human? >> no there is no evidence of that at this stage. so we're looking at transmission patterns and they look very similar to what we have seen in the middle east and we have had quite a lot of large scrout breaks in the middle east, but we are -- lot of large outbreaks in the middle east. we are here to go over everything with a fine-tooth comb to see if there are subtle differences and if things need to be done differently. francine: how concerned are you and the who that it could be the beginning of something bigger and more dangerous. >> it is the world health organization's job to always be concerned about any virus, any bacteria, any threat to human health. of course we are concerned as we would be about any outbreak

anywhere and of course that is why we brought together the very best people who know about this particular virus and brought them to korea to work with their counterparts so that we can make sure we do the very best to control this virus. francine: all right. margaret. thanks so much. coming up, mercedes gears towards driverless cars. we'll be talking about the future of automated driving next. ♪

francine: welcome back to "the pulse" live from london on bloomberg tv. mercedes is upping its luxury game and the driverless car could hit the markets as early as next year. for the impact it could have on the roads, we're joined by a consultant. great to have you on the program. we have been talking about driverless cars for over a year and a half now. this is the big new thing. we still vice president dealt with regulation and mercedes are are saying they are going to puts something on the road by may of next year. is that really going to happen, timing-wise? >> for sure. it is a concept that is on the news for more than two years. we have to differentiate between

total driverless cars and partially sem automated cars. mercedes is going to launch automated driving on the highway which is the safest condition for an automated car where you travel at constant speed and follow the flow. francine: i'm on the highway and i kind of -- you still won't be able to talk on the phone or do anything like that burks basically the car takes over for -- but basically the car takes over for certain periods of time. you're basically going in a straight line. >> right. that is need actually from the customers that can be supported by recent technologies. francine: once this happens, how fast is going to be the switch from automated to fully driverless cars? >> there are many challenges to consider. and i have to say they are the

challenges are probably higher than the benefits for dealers. first of all is acceptance. are we prepared to completely leave the control of the car? probably not yet. and then the cost. the first introduction will be premium models. this is a way to ditch shate your -- differentiate your brand. there was a report from google where google started to publish a case of accidents of the self-driving car they are testing. all the time when the accidents occurred, it was human error. not the car error. so this is going to happen and -- francine: daimler wants to take the lead in driverless cars in 2020. if you look at the cars and the auto manufactures which someone ahead of the game? is that where investors should be putting their money? >> daimler leads not only in

italy but in the truck. they have good technology development. i would say -- they introduce driving -- but mercedes has ineventsed a completely new concept also. i do believe that they are leading the way. b.m.w., they have switched to the ibrand. they also have is system for automated driving. i would say they are all more or less on the same level. francine: you're a transportation analyst. you have to become a technology analyst. your job is more with this industry as well. should i be looking if i want to make money as an investor in this area? should i be looking at the googles who do the software? >> i was doing an article on the stocks to watch out for.

many of them come from that sector. chips. also technology -- software developers. there is a lot of room for new service providers to come into the market. this is because the innovation is in technology now. traditional areas like engine and body shapes, these will become commodities. francine: principle consult and at frost and sullivan. deutsche bank has said its frankfurt offices have been searched by authorities this morning. a spokesman said it was related to security deals by clients and staff at the bank were not accused of wrongdoing. south korea has reported seven deaths from middle east respiratory syndrome. they have decided to begin an aggressive response system aimed at ending it within the week.

hong kong has a red alert on out bond travel from south korea indicating a significant threat. china's consumer prices rose at a slower pace for may. inflation increased by 1 tony 2% falling short of estimates. the producer price index fell 4.6% extending a more than three-year decline. in a country renowned for the quality of its food products one maker of the famed cheese has taken things a step further introducing a kosher process to get the jewish food standards seal of approval and boost exports. we got a look behind the scenes. >> healthy and happy cows, smart sanitation and on the spot inspections, just a few of the ingredients that go into making

kosher certified parmesan. it is worth about $12.5 billion in the u.s. alone. >> it is a brand itself and adding a new brand that is soberer compliant can be something that was enforced already. >> but in order to get the kosher brand seal of approval didn't come cheap. they spent 1.5 million euros changing their production line. he also opened up his factory to jewish food inspectors to ensure his processes are meeting their strict requirements. >> i think in the near future many producers in the agricultural business will invest in the kosher market and i think it will be the right choice. >> it is a valuable commodity. the business is worth about 2 billion euros and a single 39

kilo wheel like this can sell for more than 700 euros. they are so valuable in fact that some banks hold them as collateral for loans to producers. a luxembourg firm has bought the entire 2015 production. that is 6,000 wheels available on the market next october. making kosher parmesan costs about 30% more than producing the more common variety, but the experts are betting this new brand will prove appetizing for cheese fans both kosher and otherwise. today about 58% of products on grocery shelves in the u.s. are kosher. just imagine what will happen in europe in a few years from now. francine: coming up, a brexit debate. the u.k. parliament begins discussion of a bill that would

set the parameters for a referendum on the e.u. membership. a look at that after the break. ♪

francine: welcome back to "the pulse" live on bloomberg tv and streaming on the ipad and bloomberg.com. for a look at what we're watching for for the rest of the day, we're joined by bark

barton. mark, let's kick it off with you. we had a lot of news coming out of greece. mark: we're hearing that the greek government submitted a three-page budget proposal to its creditors. in order to unlock the bail-out funds which expire at the end of june. this is according to two international officials with direct knowledge of this. the document covered only fiscal targets according to one of these people. greece also gave its creditors a separate note, also three pages long on how to address the country's financing needs in which the government asked to use funds from the european stability mechanism to repay about 6.7 billion euros of bonds held by the e.c.b. that comes due in july and august. that is the next debt collection after the june deadline. one of the officials said that the revised greek plan is a vague rehash of earlier

proposals and is still not considered credible. the second official said the european commission -- the european central bank and the international monetary fund are assessing the plan, which they received this morning. both asked not to be named. they have not been authorized to speak publicly on the matter. . a greek spokesman did not respond to two phone calls made by us here at bloomberg. as you know, there is only three weeks to go before this bailout agreement expires. the second bailout agreement expires, greece needs to pay the i.m.f. 1.6 billion euros by the end of june and then you have got this massive clip, we'll call it the e.c.b. cliff where greece has to pay the e.c.b. to the tune of roughly 7 billion euros by tend of august. they want to use the european stability mechanism to pay off

the e.c.b., but we should definitely remember what one of the officials has allegedly said. these plans are a vague rehash. we have heard this before, francine. francine: we certainly have. usually people take with one hand to give to the other. this is kind of taking with the same hand. it doesn't look very credible to me. let's get to what else we're watching for the rest of the day. are we expecting the u.k. referendum bill to pass? >> yes. we have a majority. labor has said that they are ok withholding a referendum. this is just setting up the wording and setting up the terms. it is not setting out are we allowed to campaign for it or against. which is when it gets into tricky territory. francine: what are the risk? >> really as we have seen with what cameron caused with his

comments in germany over the weekend, where he suggested that people wouldn't be able to campaign for an exit within their party, they didn't like that one bit. so we had what downing stree street referred to a clarification of his comments. the problem is if he alienates them in a government with a small majority, that has a lot more power than they did before they could start causing all kinds of trouble. delaying the bill. making a lot of noise. signing petitions. all sort s of mischief. francine: that's what we're watching out for today as well. that's it for "the pulse." keep it here on bloomberg tv. stay tuned for the "surveillance team." they are up next live from new york. you can follow us on twitter. i'm at flacqua.

you can tweet about anything due, the referendum, politics hsbc. we hope to find out more news on deutsche bank. we understand their headquarters have been raided. ♪

e bank the how to cut costs playbook. up to 50,000 jobs cut. it is suggested they will follow

the rest of the industry. bonds try to find a bid. apple's developer chit was well, it took forever. apple wants to remind brendan greeley to take a copy of the top of his car. good morning, everyone. this is "bloomberg surveillance " live from our world headquarters in new york. tom keene and joining me, brendan greeley. take the cup of coffee off your car. brendan: siri has never worked for me. the only time i hear is when my children push the button to talk to siri. tom: just outcome a built uncle bert's team on small business -- bill dunkelberg's team on small business. a little rift in the german government. brendan: