francine: hijacked. a domestic egypt airplane is seized and forced to land in cyprus by a passenger reported to be wearing an explosive else. falters aheadly of a speech by janet yellen. the u.s. drops its case against apple. ♪ francine: welcome to "the pulse." europe's headquarters.

for a lot ofture the european stocks. stoxx 600 0.6%. this is a concern there are more stockpiles in the u.s. next line -- u.s. we are expecting japanese prime minister abe to give a news conference in an hour from now. let's get straight to the bloomberg first word news with nejra cehic. nejra: negotiations are continuing with a hijacker who forced in egypt air alexandra to cairo plane to reroute. an majority of passengers were released. one hijacker said tesh is said to you wearing a bomb belt. -- is said to you wearing a bomb belt. a case againstd

apple after successfully hacking into the iphone of a san bernardino hijacker -- san bernardino terrorist. apple says the court case should've never been brought. police have shot a man after he pulled a weapon at a u.s. capitol checkpoint. officials have identified him as larry dawson of tennessee. he was previously known to police who arrested him last october for disrupting house proceedings and yelling he was a prophet of god. he has been taken to a local hospital where police say he is in critical condition. global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. you can find more stores on the bloomberg at top . francine: dollar gold remained skittish. its first decline in seven days. that is ahead of a speech from the federal reserve chair janet yellen later today. john williams echoed the dovish

tone struck in the march meeting. friday jobs number expected to ship unemployment to an eight year low and an additional 200,000 jobs are likely it convicting messages about the fred -- fed hike pat. hike half. this is always confusing. you have a dovish and yelling -- you have a dovish janet yellen. guest: almost every data --eased at this point payrolls. we have contraction in the earnings data. looking for to friday, it is the earnings data that is key. for me, the marginal swing voters looking toward that april decision, the june decision, will want to see the eyes of wage inflation before their content to move rates higher.

francine: how much do they look at? how much do they look at what is happening in china as a message they need to start mobilizing? simon: if we were having this conversation five is ago, they would not be looking at it at all. what is apparent in the meeting, how the u.s. economy simply cannot be coupled and other central banks who are all pretty much in producing territory. therefore the fed is trying to chart a path against the tide and can it do that consistent head at theoday back end of last year. francine: you think to hikes is ambitious -- you think two hikes is ambitious? simon: with an election at the

back of the year. the risks are asymmetric. one rate rise this year. they --: less it means unless it means they realized they didn't have enough tools to deal with the next shock. simon: i don't pay much credibility to the argument they have to restock. there is a lot they can do in regular monetary policy. francine: negative rates? simon: not for the u.s. economy but certainly the opportunity with a new administration in the in the fiscal space for the u.s. economy. require headline changes in interest rates. francine: what is the argument for the dollar? is at the end of the rally? --

is it the end of the rally? simon: it is starting to call into question rather -- whether the dollar can continue its pace. question mark now is what is the stainless that is going to drive the u.s. dollar higher? we are going to look at janet yellen's speech today. further signals when all of the noise is put to one side, the u.s. economy remains the single and most powerful economy in the world. francine: this as huge invocations for the emerging markets. when we have a dovish janet yellen that has applications for a currency in the emerging markets. does it change the name of the game? two hikes andet there is a more aggressive path, then the pressure on u.s.

denominated debt, just accentuates. that is the big fear. it represents the biggest single fear till global desk to the -- to economy is whether the global economy is whether -- because the fed moves faster than the market expects. francine: simon french, think p we have lots more. we'll -- simon french, thank you. we have lots more. u.k. voters are undecided as to whether they will stay in the eu or past grexit -- past grexit. s brexit. that is all in the next 15 minutes. ♪

francine: welcome back. let's get to the bloomberg business flash with nejra cehic. nejra: virgin america is said to have received takeover offers from jetblue airways and alaska air. that is as it put itself up for sale. discussions between virgin america and the two bidders are ongoing and a deal could be announced as early as next week. the stakes have been raised in the battle for starwood hotels. the owner of the sheraton, westin, says it has received a

$14 billion offer from china. cash deals bid tops valued at $13 billion. amongrmer hsbc boss is 250 is as leaders backing the push for the u.k. to leave the european union. from 2006 to hsbc 2010. his call for the brexit is in contrast to the bank's current management. that is your bloomberg business flash. francine? -- let's get to economists -- just to recap, we understand egypt air hijacking is not related to terrorism and we seem to understand that most of the passengers have been released. this hijacker claimed to have

been wearing an explosive belt, forcing this plane to land in cyprus. my question to you though is if you are in the market, how do you deal with any kind of geopolitical threat, whether it is real? stoxx, soldw the off initially but balanced on the news that you give them that there is less severity for this particular incident. terrible-- it follows terrorist attacks in pakistan over the weekend. it is an increasingly dangerous world out there. triggerents potentially a new module within terrorist outrage. they target different sectors and it seems to be more than we

have seen before. risk-offthat shift of the hader. -- behavior. francine: it is against inflation. of 2016, if there is any risk, people are piling to gold? is wheree question does gold go from here in terms of it has had a very good run. when i talked previously about risk,s of geopolitical there has to be significant change from what we are currently seeing.

francine: the plane landed. understand this is not an act of terror. elliott: that is certainly how it seems. -- theident has said president said it is not linked to terror. there was no explosive belt after all the hijacker had used that as a ruse to get diverted to the airport where it has been reported his ex-wife resides. he has asked for a translator and asylum in cyprus. he has asked for a letter to be given to his former wife. there are still four foreigners on board. we are moving toward a peaceful resolution to what at first

seemed like a very worrying situation with this flight from egypt diverted to cyprus carrying 81 passengers and crew on board. francine: elliott gotkine our middle east editor. we talk about the movement on the markets when there is an attack or fear. how difficult is it for you to look at brexit? . know there is a link i know there is a tenuous link. i don't have the numbers. simon: i don't think there is a tenuous link. i think there is a clear .ovement we saw in markets we saw the likelihood of brexit move from five to 10 to two to one. francine: i say it is tenuous because the fact you would be itonger, or it -- or strengthens row exit -- .trengthens pro exit

simon: the points targeting the geopolitical backdrop, it gives way to a campaign being founded on the u.k. being quite isolationist. therefore, there is a fear that those swing voters of which we get about 15 percent to 20% will be influenced should there be a terrorist outrage. -- we sawloser to three months out, if we start to three weeks to polling day -- x line francine: -- francine: what does this country look like if we did brexit? -- if we get brexit? simon: i think there is a lot of misinformation out there. actually from an economic

standpoint, the most preferred situation for investors would be for the u.k. government on the 24th of june to quickly continue with an awful lot of what already exists. the illusion of sovereignty in the u.k., the idea that you have the power to change rules, regulations, but actually it doesn't become an uk's economic interest to pursue that path. you get the same legislative background. francine: what happens to pound? simon: the pound got a lot of commentary last week. at itly if you look historically and what a peek and volatility indicates, it shows a

strengthening on average 50 days following a peek in implied volatility. you get a 1.2% strengthening on basis. weighted asus -- we should be looking for troughs in implied volatility is an indication of short-term weakness. francine: we have went around the world in six minutes. fed.litics, brexit, the isn't there a policy mistake read -- policy mistake waiting to happen? are you concerned -- is there a policy mistake ready to happen? are you concerned? simon: every time we see a about thenk talking possibility of going for the negative, we see the financials selling off. when you talk about a policy mistake, it is a very delicate balancing act to maintain the

status quo. the u.s., u.k., there is a status quo of extremely accommodative monetary policy. the move decisively in one -- ction francine: because it is an experiment? i am not trying to blame center bankers. they are experimenting -- blame essential bankers, but they are -- blame central bankers, but they are experimenting. simon: the kind of metrics you could's consistently work with and forecasting models. this is the case for investors, central bankers and this is why there remains a sentiment on global risk markets, because they cannot understand is a different this time? it looks different when you look

at nominal measures. francine: simon french. up next, the starwood bid battle. we will bring you the details next. ♪

francine: let's get to bloomberg's first word news with nejra cehic. nejra: a hijacker who claims he was wearing explosive belts flight to- and egypt

land in cyprus. the passengers and crew have been released. -- the u.s. has dropped its privacy case against apple after successfully hacking into the iphone used by one of the san bernardino terrorists. the justice department says it unlocked the phone with the help of an unnamed third party and without optimizing data. apple says the court case should've never been brought. police shot a man after he pulled a weapon at a u.s. capitol checkpoint. officials have identified him as larry dawson of tennessee. they say he was previously known to police who in october arrested dawson for disrupting proceedings and yelling he was a prophet of god did -- of god. global news, 24 hours a day, powered by 2400 journalists in

more than 150 news bureaus around the world. you can find more stories on the bloomberg at top . francine: and corporate news, marriott international is facing to aspect of losing starwood a chinese -- a higher offer has been made by a chinese group. erin, great to have you on the program as always. i always learn stuff when i speak to you. guest: what people are talking about is marriott came back with the higher bid after they came back with an offer. at one point does he get too expensive? -- does it get too expensive? marriott can only afford to pay so much good francine: why is -- pay so much. anncine: why is in -- why is

bang so intent on getting this deal? >> we have seen $102 billion in chinese acquisitions. that is more this year than all of last year. it is about expanding abroad, getting into the various sectors. all --., they own the they own the waldorf astoria. companieschinese wanting to have good valuations or have influence across the board? >> it is probably a mix of both. they want to get property assets. their money abroad. slower growth, a bit more volatile. more stable to go abroad. the chinese government is backing that idea. the numbers have shown it francine: regulation is there it -- number section. francine: regulation is there. -- >> a little more lacks

we had a discussion this morning, will there be regulatory questions for the hotel acquisition? marriott, starwood, they want to adjust those issues but hotels, you cannot argue that national strategic interest for the u.s., they bought the u.s. -- they bought the waldorf-astoria. muchould not see too predatory push back on this deal. francine: do we know how much money the chinese have? does it not work like that? >> that is a hard thing to find out. they have very good access to cheap financing. they have support of the local banks. if they want a deal, they can do it. is bloomberg's mea team leader.

pound andok at the give you some of the biggest movers on the european stocks higher. ♪

francine: welcome to "the pulse," live from london. a touch; withwn the caroline hyde with the charts. caroline: i'm checking out copper. i'm checking out a function that will show you all the import data you get for china. china is the number one commander of copper. this is the index. you can dig into all the e intricacies, but it is the blue i want you to cast

your -- the blue line a way to cast your eye on. .his is the premium it is sinking to the lowest we have seen since november; 50 at the moment. does this therefore signal that we could see demand on the wane? if you're not willing to pay is higher premium, does that mean is a precursor to reigning in demand? could we see us come to an end? this is the function that shows you everything going on in the world of commodities. 1% whens down 3/10 of you look at copper traded. it's also down in shanghai overnight. commodities across the board -- barcaly'si, brent, adding to the concern. we have kevin durant

norish are at risk of steep decline; copper could go as low as 4000. he sees oil going as low as $30. why? because the improvements we have seen in march, the significant rally, is not backed up by fundamentals. so perhaps that is why we are seeing a down for a fourth day. oflost 6% since the 18th march, but it is still up from the month. u.s. data is once again showing off the glut. let's have a look at the market. this is your overall stoxx 600, going into the industries into grr. we're seeing miners on the downside. the only industry that game this seeing metals; we're

insurers leading the charge. the first time in five days we are seeing a gain on the market. i leave you with this one killer chart, dollar-yen. look at the care we have been on. tele-unit has been up for eight straight days, the longest winning streak since july, 2014. will that continue as we see janet yellen take to the stage of the economic club of new york? will she sound that much more hawkish? francine: thank you, caroline. the bank of england financial policy committee will today released a statement from the last meeting. it was the last before the referendum on eu membership. for more on how it breaks it would impact the beer we, we are joined by raoul uberel. great to have you. are we in our out? >> well, the polls show it is 52% to 48%, but if you look at the underlying factors, if

people think it will be an economic risk, better off or worse off, they show a slightly bigger lead for remain. i think remain is ahead, but there is still a long way to go, and i think turnout will be a key issue. francine: it's undecided. have we seen a campaign that talks to women? and how to the undecided decide? visit economic or security concerns? >> i think for the undecideds, they're the people who are mostly conservative, who think things are going well, and don't necessarily want to rock the boat, but they don't love the eu. for me, they are likely to vote on economic grounds, on risk, and that is why we are seeing a lot of negative campaigning. in terms of the security issue, over the past few years we have seen foreign policy and defense ranking low on issues of concern, but that changes when we see things like paris and brussels.

that is an unknown effect, but for the most part the voters h ave voted on security issues. francine: we need research to look at what a post-brexit eu would look like -- who do you turn to? >> there is a huge amount of research out there, and everyone has their own interests. francine: everything seems slanted. it's not good for trade. >> i think what we have to look at is the difference between short-term and long-term effects. short-term uncertainty -- everyone except that there will be disruption. but it is hard to model. people have tried to do it that i think the assumptions don't hold up. we don't know what will happen the short-term period. looking at the longer-term, there is a broad consensus around with the impact might be. some may have a few percentage points plus or minus gdp. there could be an initial negative shock offset by a treaade agreement.

i think there is a consensus that shows that, generally, if you are going through shock, what you have to do is try to be open to migration, to trade. i think those questions to pose challenges for what type of britain they want afterwards. francine: you are talking about a shock, and i am trying to figure out how much a shock this would be to the whole system. if we leave the u.k. to one side for a second, is there a concern that this is a leave anhman mov? the money transmission mechanisms also get blocked? >> if possible, although we don't see my -- it's possible, although we don't see much evidence. we are seeing effexor sterling; i'm not sure we're seeing a broader concern in the fancy. we're not seeing a huge amount of noise in credit markets. lehman-likek it is

for the most part it is on how it affects the eu -- where does the eu go from here? can they find a new way to go forward? francine: can there be a game changer? i don't know if the person on the street lessons to treasury select committee -- i don't know if they look at how they consume. >> it is hard to say. i think you are right that people -- for the most part, it is the base. i think the reason for that is most swing voters don't start listening until close to the referendum. i don't think we will see a big appeal until there are two weeks left. i think a lot of it will be on the balance of risk. in terms of game changers, there are lots of things cameron could promise to assuage fears.

there is a lot of talk about the referendum -- i think a lot of people are concerned that if they don't photo now, they will never get another vote. in could also offer promises terms of how eu policy goes. turkish membership might change the nature of the eu; you could offer a promise to vote on that. the huge numbers could pull out the hat, but at that moment, i think it is still uncertain, and i think the problem with swing voters is many of them don't care too much. it gets quite hard to appeal to them. francine: all right. raoul, thank you for coming. up next, emerging-market stocks are heading for their best market in four years, but how much do investors need to be focused on political risk? we will talk brazil, turkey, and emerging markets as a whole. ♪

francine: let's get straight to the bloomberg business flash with nejra cehic. nejra: thanks. virgin america is set to receive takeover offers from jetblue airways and alaska air after the carrier put itself up for sale, according to people familiar with the matter. discussions between virgin america and the other bidders is ongoing, and a deal could be announced as early as next week. mistakes have been raised again starboardtle for hotels.

they have received an improved $14 billion offer from anbang. it tops the lash deal, valued at $13 billion. they have spent four months pursuing starwood. among 250gan is business leaders backing the push for the u.k. to leave the european union. he was ceo of hsbc from 2006-2010, and his support for a brexit is in contrast to the current management. and that's your bloomberg business flash. francine: thank you so much. let's talk emerging markets. the brazilian president will try to ward off impeachment, according to people briefed on the strategy. it comes as the biggest political party considers leaving the ruling coalition. so how much do em investors need to be focused on political risk?

brazil's stock market has performed the best when impeachment stories have been in the news. here with more is craig botham, great to have you. when you look at emerging markets, you think of brazil. do you think of de la ru oussef. do we need to see an impeachment to move on? >> i think so. at this point, the main problem for brazil is that there is risk of political uncertainty. people want to invest, but we don't know what policies would be made, and without investment, you can't get growth; without growth, the crisis continues. francine: how quickly does this need to be resolved? do we need to see an impeachment process? we may see the beginning of her losing some of the votes she needs to stay in power as soon as today, but after two months, if it drags on too much, is a counterproductive for investors? >> i think at this point, we are

almost at rock-bottom. the longer this goes on and it, andill start to see discount the probability. the sooner this can get resolved, the better. francine: what is your favorite emerging-market? is there such a thing? turkey is something we follow, but political risk is there. it seems to be rife. >> it is. turkey is definitely not my favorite. i think they are further behind than brazil, and that story has yet to play out. there is overseas credit risk which could still blow up if the credit suisse hikes. francine: we had a chart mean for you. let's have a look. our chart man made a great chart. the more the lira weakens, the more the stock rises. he's giving himself or powers,

which look closely like -- i wouldn't call it a dictatorship, but getting there. >> we are getting into a pressure-like scenario. you could swap the president and prime minister, and i'm not sure investors would see it as a big problem. with the export links and the stronger euro, trade is doing better. francine: we have another charge for you. it looks at the brick d showses an shows where we are seeing growth. yet we have a lot of concerns for both countries. >> people always have concerns over the numbers. i have figure concerns over india's gdp numbers. they measure gdp and since then there has been a big disconnect between gdp and industrial production, and so on.

we think indian gdp is still probably going around 5%. india,e: in terms of have we also not seen the reforms that were promised? we have prime minister modi as the best thing that could happen to india; has he not delivered? >> the question is the usual politics. the need for reform. for the last government, modi's party blocked them; now it is his turn to be frustrated. labor reform isn't going to happen at the federal level, although we have seen things about the bankruptcy code, bank reform, recapitalization. things at the margin. francine: what about china? >> in china, with the national people's congress at the start of march, that a policy direction and stimulus, i think everyone was expecting a lot of stimulus. we talk abouta

every day. the authorities keep on telling us they want to actively devalue the yuan -- we believe it? >> i think so. i think their stock is small, so the big valuations aren't there. they stake a lot on the currency not moving. they would lose a lot of credibility if they went back on that so rapidly, particularly with what happened last year. i think they could lose a lot of public support, and what they worry about most in china is social security. francine: overall, is china really growing at 6.5%? >> our measures suggest the gdp numbers are correct. they will signal expansion or deceleration correctly. 5.5%.ink maybe 5%-five .5% francine: how much do you look

at janet yellen's policy? she has a lifeboat, when she turned dovish. a hugedollar is influence on emerging-market assets performance. on the growth side, the big risk is dollar liquidity; turkey has a lot of exposure there. south africa has a lot of dollar borrowing. the latin american side as well. there is a risk. francine: overall, we are hearing from janet yellen today. are you expecting her to be more dovish? i covered the-- imf in lima last year. what i was told was watch out for emerging markets that borrowed dollar. if janet yellen starts normalizing to quickly, then dollar goes up, and you play that it hurts leveraging markets. >> i think the longer it goes on, the more emerging markets will take advantage to fix the

hole in the roof. the longer it goes on, the more it builds up. francine: all right. craig botham. up next, iphone row. the u.s. has dropped its privacy case against apple. ♪

francine: let's get to the first word with nejra cehic. nejra: thanks. the hijacker who claimed he was wearing explosive belts and forced the domestic egypt flight to land. the majority of those on board, except a few foreigners and crew, have been released. it is the latest in egypt suffered to project an image of stability five months after the downing of a russian passenger plane over sinai. the u.s. has dropped its privacy case against apple after successfully hacking into the iphone used by one of the san bernardino terrorist. the justice department said it unlocked the help with an unnamed -- unlocked the phone with an unnamed third parties help. up and after he pulled a weapon at the u.s. capitol. officials have identified him as a 56-year-old from tennessee. they say he was previously known to police and was last october arrested for disrupting a house proceeding, yelling about being a "prophet of god."

police say he is in a stable by critical condition. you can find more stories on the bloomberg at top . .uy thankguy: thank francine: thank you. a ukrainian billionaire has said he wants to return to his home country. he's fighting extradition to the united states, where he is wanted on bribery charges. ss, welcome home where he has been threatened with arrest. ryan chilcote sat down with him. >> [speaking ukrainian]

francine: ryan joins us now. firtash still wants to be involved in ukrainian politics. ryan: yeah. the thing is, he hasn't been charged with anything in the ukraine. but he says as he can't leave vienna until he is absolutely sure that he has won the extradition battle. he is fearful that if you go somewhere else, you get arrested, and that would prevent him from showing about the extra edition hearings; then he would at a minimum lose his $140 million bail that he posted, which is something you would not like to happen. when it comes to politics, he is sitting in vienna, and yes, he says he is still very much involved. of course he wants to continue to be involved in politics. if you don't get involved in politics, politics get involved with you, as he put it. but he doesn't like the current

government, as you gather from his comments. he doesn't like the finance minister, for example. according to one scenario, the ukrainian parliament meeting today, she could get an expanded portfolio -- we don't know. the ukrainian parliament is just beginning to discuss what the new government will look like. but he is very interested and he thinks everything that has happened over the last two years has not been for the better. francine: we want to know more about him. this is the most secretive billionaire you have interviewed. 10 seconds -- what's exciting about him? ryan: he has been represented by a team of lawyers to be this exhibition wrap, including lanny davis, the lawyer who represented bill clinton in the monica lewinsky -- francine: i like that! great job, ryan chilcote. stay with bloomberg; plenty more coming up today. civil aviation ministry conference on the hijacked plane. shortly after, shinzo abe holds a press conference in just under

half an hour. we'll bring you headlines as they break. tha speech.'s coming up next is "surveillance." ♪

francine: europe in the green; stocks gain after a 40 weekend. y falters aheadie of a speech by janet yellen. the u.s. government drops its case against apple after breaking into an iphone. personal security and national privacy are still being debated. hijacked airplane forced to land by a passenger claiming to have an explosive belt. this is bloomberg "surveillance." tom keene is in new york.