anna: a big deal, pfizer pharmaceuticals is terminating the merger, after washington tightens rules on corporate inversions. donald trump loses the wisconsin primary, boosting the odds of a contested national convention. meanwhile, the clinton downplays her defeat in the state. and the panama papers claim the first casualty, iceland's prime minister resigns. and plans to exit capital controls. ♪

manus: welcome to countdown. anna: warm welcome, 6:00 here in london. now a good morning. things are a little bit colder in the asian markets, the asian session this morning. fairly flat, oil on the bounce. helping some of the oil-related companies in asia. also waiting on the fed minutes, the markets suggesting what christine lagarde had to say yesterday. a long list of risks to the global growth story. manus: over the next three months, how much of the risk is priced in? the brexit, the u.s. president, greece back on the board. aboutine lagarde warning the lack of additional stimulus from the fiscal side. while he have done this morning is try to pull this together really in this chart. the relationship between banks and the market, wti in the market. it is there. we talk about the all country world index.

just a little bit of a relief in oil, and you just see a little bit of stasis, as i would say, in terms of an uptick in the equity markets. but it is all about oil. let us have a look at the wti. taking higher, that is the real momentum in the markets. 38.64, just over 2% stronger. it seems that the kuwaiti is saying a phrase as possible, even without the iranian efforts back on the dohar meeting. other elements on the risk radar? as bit as big conscious level for the bank of japan. we were back up this morning. to that end, is the market counting the bank of japan for april 28? shows us your guns, some sign in terms of stimulus to take a dollar-yen higher. the asian-pacific index is

higher, we are seeing a bit. the s&p has not moved 1% in either direction for 15 session. could the fed minutes provoke a bit more reaction in the markets? anna: we have that later. let us get big details on the corporate merger, pfizer pharmaceuticals terminating. people,familiar with the biggest crackdown on corporate tax inversions. manus: well, who better to explain the nuances then nejra. pfizer pharmaceuticals taking quite a hit from the treasury department. it is interesting how the shape falls out. they told us yesterday, we are fine. the break up the never really priced that the deal would fall apart. nejra: look bloomberg was reporng that pfizer pharmaceuticals was scribbling to say the deal, after we heard about these new rules relating to tax and versions from the

u.s. treasury. a person familiar has now said that this $160 billion merger of the largest ever in the health care industry, is off. pfizer will need to pay a $400 billion feet to allergan. it is not the first time in recent history that the treasury department has derailed a major drug company deal. the agreement to terminate what would've been the biggest u.s. tax and version at the time. and that deal was terminated because of changes to u.s. treasury rules governing those tax inversions. and they had pay the breakup fee of $1.6 billion as a result. pfizer itself has had other m&a setback. in 2014, abandoning the assets to buy astrazeneca. but that was more astrazeneca project video. one shareholder in pfizer said the era of consolidation appears

to be coming to an end. certainly with this deal, it looks like a win for barack obama's administration and a loose for big pharma. anna: explaining the details of the story. from longview economics joins us in the studio and the rest of the hour. chris, great to have you. tax inversions as a subject of a great line in a story this morning, the first one was in 1982. the u.s. inversion. companies, 63 u.s. have shifted offshore for tax advantages. 42 out of 53 have taken place since 2012. it is been something that has gathered momentum, only a question of time before the government and the u.s. really took some solid action. chris: particularly this time when everyone is under so much pressure with taxes, becoming much more of an issue, coming much more concerned about it. i think this competitive corporate tax across the globe

is not helpful really. it would be better if we had a level playing field. cap snow corporation tax at all. somewhat radical, but i think it is an update in the world of globalization. it does not work very well. manus: we had a guest yesterday, it was interesting, change the rules. allow u.s. companies to bring the overseas revenue back on shore. good for shareholders, good for america, good for the markets. and on profits being equal. chris: that is certainly a good idea. you could do that. the resort cash and profits overseas, they could do it quite well and invested, and drive some growth. anna: is widely from longview economics stays with us. let us have a look at the bloomberg first were news. >> iceland's finance minister has promised to stick to a plan to remove capital controls the prime minister suddenly resigned, moving to turmoil. now iceland is comparing for option two free about $2.4

billion, held by investors in the so-called glacial bond. it is the last hurdle before they can exit capital controls for households and corporations, which were imposed during the financial crisis in 2008. the next corporate default wave comes, and it could hurt investors more than they expect. bank of america strategists see losses on bonds from default the companies, likely to be higher than in previous cycles because u.s. issuers have more debt, relative to the assets. now those high-levels of borrowing meaning that if they liquidate proceeds, they have to cover more liability. doubts may be mounting about the future of the u.k. membership in the european union. you would not know it from the country's tocks. rather than being punished for lack of certainty, they have become the most expensive relative to others in the region. the valuation of companies on

the index has climbed to 50.5 times of estimated earnings, a record for the stock 600. while still down for the year, shares are beating everything else in europe. global news 24 hours a day, powered by 2400 journalists in more than 150 views bureau's around the world. find more stories on the bloomberg at top . manus: thank you very much. let us get up to speed with the market. juliet saly is standing by. a little bit of a relief in oil markets, the mcsi getting an ever smaller game. i was looking at the nik ki. a fairlyeing tough time. juliette: lacking some conviction. we had some better gains about half an hour ago. but talking about that volatility, it has switched back

into negative territory again. really adding to those losses we saw yesterday when the equities led the region lower, that five-week low. generally speaking, we are being boosted by the energy players here in hong kong. also in sydney, higher on the rebound in oil. there has been some good oil buying in korea and in southeast asian markets. what you see some weakness still coming through in china. survey coming through for mark. it was a better rating than what we saw in february. but there has been a bit of a switch out coming through on the shanghai market after the lunch break, down 1/10 of 1%. also this coming through in taiwan, down by 1.6%. very much under performing the risk of the rating or because they were on holiday yesterday. i guess playing catch-up to the big selloff we had. this is what the regional index looks like at the moment of a pretty flat. you see banks are having this that between oil and gas players and the utilities, which are coming back. oil and gas stocks up by one

half of 1%. and these are the big movers we are seeing in that oil and gas . as i mentioned, shanghai is one of the best performers on the asian market. in shanghai, seeing a little bit but itaker petro china, is players in sydney, australia that are really lifting that sector higher. looking good in late australian trade. the yen the big story of the day, hitting that 110 level during new york trade. it is just a little bit weaker at the moment, against the greenback. but you can see it also had a very choppy session. now moving quite mythically against the greenback holding 110. 37. a little bit of a switch around equities. a bit of a better session we saw in asia yesterday. anna: thank you very much.

the wisconsin president for primaries have delivered defeat to the front-runners. ted cruz over donald trump increases the chances of a contested public and convention in july. manus: bernie sanders keeps his white house run a live with a clinton.ver hillary the democratic socialist has now won six contests, but still faces long odds to catch clinton in the delegate count. chris watling is on set to, i suppose, take a deeper dive into the politics of united states of america. 1230 7 -- the magic number for trump to win. it does not look mathematically that he will get there. back to throw us into what is called an open convention this summer. i love a good ride. chris: certainly turning out that way. it is bizarre. i thought some of this was interesting as well. clinton is the only establishment contender in the whole race.

and the fact that sanders picked up a little bit, i mean, i don't think anyone has changed odds on the sanders-clinton overnight. but we really forget that ted cruz is not an established that figure really. he is a bit of a troublemaker within the republican party. and yet he is seen as the favored candidate, versus crop. traveling it is comfortably looking from overseas. anna: what is your best case assumption? when he's been to clients, what are they assuming will happen on how that influence is the strategy? chris: look at the betting websites. and really, it is heavily favored towards clinton being president still drink it has not moved that much. i don't know what it did overnight, but i don't imagine that sharp a move. clinton has made some left-wing comments. but i think she will back down after that when she is president. and that is probably not such a big deal. if it is donald trump, or sanders, there is more to worry about in the markets. manus: if we take the risk and

go to the open forum, and i am extrapolating here -- by the way we have our own page here -- we have on the terminal here everything you could want. videos at the bottom, latest breakdown in terms of ted cruz and donald trump. but the risk is this. that donald trump goes nuclear, excuse the pun. and he runs independent. does not get the nomination. and potentially runs amok. chris: then, it is clinton. athink he is a nigel farage, protest vote. you'll really get above 25% of the electorate. that is the key point here. i'll don't think he causes a problem in the long-term. anna: chris, thank you. he stays with us. let us get some reaction on the ground michelle wie. then murphy joins us on phone, tracking what is happening. good to have you on the program. how much does tonight's loss,

take donald trump's path? megan: quite a bit. we expected him to lose wisconsin this evening. but seeing the reality of this, losing quite handily among really makes it much more difficult for him to pick up the needs to win out right before we get to the primary season. so this is a pretty significant roadblock for him. additionally makes it more likely that we are going to see that white whale of american politics, the contested convention, in july. anna: in terms of that theention in july, 1237 magic number, do people really believe that is where we will end up in the scenario? and to that end, where does that put ted cruz and that open forum? don't think this election has been so incredibly unpredictable. frankly,ides, democratic and republican side. and i think that tonight again

made it much more likely that we will get there, just because if you do the pure math, which is what we're getting down to, trump has narrowed quite significantly. we move into new york, we are expected to have a big victory there. but again, if the polling numbers don't -- manus: what about paul ryan coming back into the race? megan: right, this is the question on everyone's lip. a lot him out there means of technical difficulties yet overcome. have to get to a stage where you left the rules to get eight states to get on the nomination contest. you currently have establishment figures saying our nominee will be one of the three out there. not saying the paul ryan has been ruled out. there is not an establishment movement that would love to see him have the nominee, but the steps we need to get there are actually quite difficult to see that happening as well. anna: megan on the democrat side, did anything happen last night really change the big

picture story around the democratic race? megan: i don't think it changes the big picture in terms of the immense sort of delegate hurdle that bernie sanders needs to overcome. why do think it emphasizes is just how problematic her campaign has then and waiting momentum. campaignot the kind of you want to see in the shape in april. this is a campaign that needs to really figure out where the momentum is coming from. where her messages going. manus: well, that will come down where her knowledge and information is. a job. megan murphy giving us the latest on the presidential race. anna: up next on the program, angela merkel rules out on cutting greek that. but christine lagarde says she is hopeful in progress. details, next. ♪

anna: welcome back. looking at a live shot of hong kong harbor this morning, 1:19 in the afternoon.

it is 6:19 in london. let us get the bloomberg business flash. >> pfizer is terminating its $160 billion merger. ending the largest ever acquisition in health care, according to a person familiar with the matter. the move comes after the u.s. treasury said on monday that new rules would limit what it calls in version transactions. credit suites is cutting nine executives from fixed income and structured products in brazil, ump. an industry sl sergio medardo, is said to be leaving. he follows eight executives from a team who have already departed. devaluationf has showed up in publicly traded companies, investors are bracing for more pain.

firms80 listed chinese have losses of $7 billion, almost 13 times the amount in 2014. that is your bloomberg business flash. manus: thank you very much. angela merkel has ruled out cutting greece's debt. speaking after the meeting, christine lagarde said she hopes to see progress, soon to get greece back on the path to sustainable economic growth. christine: we are really not where we want to be. particularly, where greece should be, in order to be stable, in order to be respondus, in order to to the needs. those are clearly the objectives. we are delighted to hear that the authorities in greece are concerned about the willingness of private investors to invest in greece.

because that underlines precisely what is needed, which is long-term sustainability. anna: joining us live now from berlin is birgit. great to have you on the program. is there a danger that greece is running once again into terms of a grexit? birgit: i think it is a bit different this time. last year, they were very much behind the push -- getting greece at the border to concede to reform. but this time, they have adopted a bit of a more moderate tone. he has said that they are very optimistic that there will be a deal. and germany is much more flexible, it's health, now. they are ready for example to allow greece just to relax a bit on pension cuts. there is a stronger political will this time to get a smoother deal.

germany so opposed to a debt cut? this comes from angela merkel's speech. not simply a demand of the german government against the debt cut, but the way we see it in the euro area, we believe it notegally speaking possible. that is not sound like a compromising chancellor. cutit: yes, i mean, a debt is all politically not feasible. she is using a legal argument, basically to make the fact that this is a very much a red line, one that germany cannot pass across. so it is not so much the social democrats who are coalition partners, but really in her own party. like you cannot accept the debt electoratee the

would just not support this. so she just simply has to say that. anna: thank you so much. german government reporter. manus: chris is still with us. you listen to that, you have shor a lot of different issues. angela merkel standing fairly intransitive. how concerned are you that we will get a rerun of greece on the at europe on the edge, as we got last time. what has really changed? chris: i don't think we get a rerun in that sense. it is interesting because the , theest rates the tension politics to cut the debt, and the economists who say you should. i am with the imf. much debt.re is too any to write some of it all, move on. the debt is causing enormous headwind for growth. if you write it off and we can get back. i think the imf has a point.

anna: the banking sector, i know you have had concerns about how the banking sector is performing. the business models that they have adopted. what that tells us more broadly about risk appetites and all of those metrics. chris: there is basically too much debt in europe. it is running about 5 trillion flat for six or seven years. having really grown in the prior 15. the problem is that is not growing. so you cannot grow profitability. the system has a lot of nonperforming loans in europe. that is undermining the profitability of the banking sector. so we sort of have stagnant banks. they cannot lend. the profitability model is broken, personally, for a whole host of western banks. anna: some of the banks are trading at 40 year lows. upis: you can pull deutsche bank, hsbc, spanish banks, a couple of u.k. banks,

even american banks trading. i think the share price is telling us something. the stock market has a message about banks. the profitability model is not working anymore. manus: one thing that is an indication of volatility, this is short-term in the yen and sterling. and it is trumping, excuse the daily pun, long-term volatility. the next three months is the real eye of the storm. we have brexit on the agenda, greece is on the agenda, the migrant crisis as leading in the spring. what is a term tell you? chris: it is fascinating. spiketerm currency will among the long-term level. that tends to proceed the spike in equity markets. we also see spikes in bonds, and that is where the market is itself. i think it is telling us about nervousness of investors. anna: chris watling stays with us on the program. manus: up next, the panama

papers have claimed their first debt. we will have the latest right here on "coundtdown." ♪

show me movies with explosions. show me more like this. show me "previously watched." what's recommended for me. x1 makes it easy to find what blows you away. call or go onliand switch to x1. only with xfinity. great time for a shiny floor wax, no? not if you just put the finishing touches on your latest masterpiece. timing's important. comcast business knows that. that's why you can schedule an installation at a time that works for you. even late at night, or on the weekend, if that's what you need. because you have enough to worry about.

i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. manus: 6:30 in london. let us get the bloomberg first word news. >> good morning, manus. pfizer is terminating its $160 billion merger, ending the largest ever acquisition and health care. that is according to a person familiar with the matter. the move comes after the u.s. treasury said on monday that new rules would limit what it called inversion transactions. the wisconsin presidential primary has delivered a defeat to the front runners. ted cruz over donald trump increases the chances of a contested republican convention in july. bernie sanders keeps his white

house run a live with a victory over hillary clinton. this is despite the democratic socialist facing long odds to catch clinton in the delegate count. the next corporate default wave coming, it could hurt investors more than expected. bank of america strategists think losses on bonds are likely to be higher than in previous cycles because u.s. issuers have more debt relative to assets. now corporate bond investors on average lose about $.70 on the dollar when a buyer goes bust. but the strategists say that in this cycle, that figure could be in the mid-80's. global news 24 hours a day powered by 2400 journalists and more than 115 use bureaus around the world. you can find more stories on top . anna: let us check in on the market. nejra has details on asia,

waiting for later today. the morning. thea: if we look at asia-pacific index, it is pretty much unchanged. edging into negative territory. but yesterday we did see stocks around the world fall by the most in almost two months. there is some risk of sentiment there. i wanted to highlight oil and what that is doing. because we are seeing oil rebounding. that is the optimism that a deal will be struck to freeze out but after some comments from q&a. against the all world index. you see global energy shares moving pretty much in line with crude. atlook more specifically asian stocks, you can see that energy shares right up here up a tense of 1%. they are actually leaving the game, rising for the first time this month. got to move on to the yen. speaking of asia, this is where you really see the risk of

sentiment reflected. actually today, not the best performing g 10 currency. it is the aussie dollar. briefly questioned through on thursday, to the highest since governor corrode easing.ushed that is a strategy heightening intervention, as you can see the yen higher. we know the 10-year is below zero. these for the unforeseen consequences of that negative rate policy. and and finally, if you're talking about risk, you want to look at bonds. could this be a warning sign for the global economy? up here i have bank of america index.broad market this shows that global bond yields have fallen to a record. this is looking at the yield that is down to 1.3%, the lowest level in almost 20 years of data.

and bonds in this gauge is actually returned 3.6% this year, where the all country world index has dropped 1.5%. manus: there is a message in terms of the money thus far. thank you very much. let us talk about the future of the u.k. membership in the union. but you would not know what if you're talking stocks. and: that is the front page of our chart on the hour. guy, why so much resilience? guy: the pound. it is pretty straightforward. the chart, number of reasons why you would make a lot of it, the highest level since 2005. using the people would be selling, and you think that actual valuations will be going the opposite direction. but then think about it. look at that last little spike that we see. manus: this is the price earning. with the highest level mouse in

2005, that differential. guy: it is down for the pound. when did it start? november. what is the pound done? fallen 50% versus the euro. it is pretty easy, the stock is worth x. i do take the currency, the value you put on it, this is what is going to happen. manus: we talk about this yesterday, the short interest. 50 shares have dropped every single day since the referendum was announced by david cameron. and that sort of blows everybody's mind because that is sending a very different message , in terms of what goes on in the real economy. chris: i wonder if someone also relates to the fact that market seven rallying globally. so it is not a coincidence there. i don't know. peculiar.if you

look at sterling shorts in the currency, they're very high. so the market is very short already. guy: if you look at the risk-averse in sterling, it fell off a cliff. the market is anticipating we will see selling going down. it is seeing that already. maybe we get a little more coming through. ofa: this is the 350 gone 100. there is a big commodity element to this, as well. chris: most of it is the 350 in terms.cap i wonder if that valuation of the sterling is really monti and earnings falling. manus: gentlemen, thank you. guy johnson will be back in just under an hour's time. chris watling stays with us for little bit more conversation in terms of the market. when you listen to christine lagarde yesterday, when you think about what the ecb is actually doing, when you

look at the pmis from europe yesterday, are you more concerned? we had the rally. it looks like the rally is beginning to run out of steam in terms of equities. chris: i think we had the rally. for me, it is a classic bear market relief rally. 30has so far lasted into the number of trading days, which is very normal. you see a lot of covering of short positions. volatility has died down. it is all the classic sort of characteristics of a bear market rally. i think the most important thing is if you look at the background macroeconomics, yes data has been a little bit better for the last couple months. but really for the trend has not improved. anna: investors did not stop buying yen or gold, even when equity started to rally. chris: gold is fascinating. it has held up quite well. it tells you the nervousness about the long-term outlook for the global economy and monetary

policy. manus: the ecb used to buy complement bonds. physically getting your hands off of dislike japanese government bonds, let's have a look at this. this is a magnificent chart that we have in terms of talking about what is going on in the corporate bond market. they are writing in cds. i want to take some exposure to corporate bonds, i can i get my hand on the paper, i will write a cds. there we go, i have my exposure. s thenmore liquid than cdd incorporate paper. this is a folly. chris: i think a lot of these actions have built in consequence is that you do not want. and you get strange liquidity actions. and lack of liquidity, look at the japanese market since the boj, there is no liquidity at all. that is where the copper market for bonds will go.

strange things happened with the central banks fiddle. they are fiddling, basically. dare i finish that sentence? but fiddling, too much debt. rome is burning. we need dramatic new approaches. anna: suggesting that perhaps the losses on corporate defaults, when the next wave comes, could be higher than last time because the level of debt relative to asset in this cycle. chris: global debt has gone up $57 trillion in this cycle. more debt means higher default. the bottom line is that the recovery in the last six or seven years has seen very little what i call genuine wealth creation, that is really what you want. but we haven't had it. i think there is a challenge. manus: i will go away crying now. banks and between the relief rally, you had it

all, look for debt relief. you are not exactly inspiring me. and maybe were quite right. which is maybe we need to reawaken ourselves to the rest. what is the biggest risk for you in markets in the next three markets, if volatility is correct? biggest risk and markets is there in nude weakening of the bank stocks. they sit at the heart of the global economic -- anna: it does not rally without them. rally in had a brief 2014 into 2015 without the banks. but since mid-2014, they have been trending down. this is a big warning sign. it is more than the canary in the coal mine. it is a flock of canaries in the coal mine. manus: you talk about the relationship between the lack of steepening yield curve. and of course the relationship with banks, are there any steepening yield curves to be

had out there in terms of probability of banks? chris: china has deepened a little bit, but not a lot. the u.s. curve in this relief rally has knots deepened at all. it has been flat. i think that is one of the best signals on roble growth. you showed the bond growth earlier. as far as the multiyear lows, global growth of the look of your banks cannot rally around the curve. the stock market cannot really sustain a rally without banks. not so good. anna: chris watling, thank you. he stayed with us a little bit longer. iceland is apparent to option $2.4 billion in so-called glacier bonds. manasquan this is the last hurdle before the country can exit capital controls. the finance manager wanted to stick to the blank, after the sudden resignation of the prime minister. and that through the government into real turmoil. anna: joining us on the phone

from reykjavik is omar. he is been following the story since it has been unfolding. take us back a step. we saw the picture of the protests taking place on the street in reykjavik and elsewhere. why did he have to step down? omar: it certainly does. he and his wife certainly -- they had a company that was discovered in the prince virgin islands. and iteritance, basically kept things down for the prime minister, when he tried to lie his way out of questions with the swedish tv presenters in reykjavik. let's talk about who was possibly going to succeed him. the nuances of whether he actually resigned, it is an incredible story. who is on the sidelines to

replace them? omar: he proposed his replacement. thenow is actually agriculture minister. it remains to be seen whether the coalition partner coming up in a party, is willing to accept the replacement. muchght take over a pretty caretaker prime minister until the upcoming elections, which may come early, but are scheduled for april next year. anna: could come early. omar, i know you have been writing about this in context of the penama papers. there are many people out there suggesting there could be more -- these papers out of panama could have broader implications for the political scene. certainly, and as far as iceland goes to the finance minister was also named in these papers. his comedy was established long before he became involved in politics. looks around the, holding

in the islands, before he headed to politics. in regards to his career. omar, thanks for joining us on the phone from reykjavik. ancus: up next, the fr facelift. just how popular is cash in zurich? design, and weew are there. ♪

in a: welcome back. 1:47 in the morning in new york. we are expecting a little bounce in the equity trade in the u.s. when we get there. that is certainly suggesting on the bottom of the screen, but we will get the u.s. trading. let us get the bloomberg business flash. terminating its

$160 billion merger, ending the largest ever acquisition and health care. that is according to a person familiar with the matter. the move comes after the u.s. treasury said on monday that new rules would limit what it calls in version transactions. is cutting nine executives in brazil, amid an industry slump. that is according to people familiar with the matter. and managingdo, director, is said to be leaving. he follows eight executives from the team who have already departed. yuanmpact of august devaluation has showed up in public the traded corporations' results. some 980 listed chinese firms reported combined for exchange losses of $7.5 billion the last year. that is almost 13 times the

amount in 2014. air france's chief executive officer is stepping down. his departure ends his three-year struggle, amid fears of union resistance that last year culminated in physical attacks that made headlines around the world beard he is set to become the head of the airline industry lobby group in august. and that is your bloomberg business flash. manus: thank you very much. let us turn our sites to switzerland. thomas jordan says negative interest rates are indispensable when it comes to taking pressure off. as they release the draft design of banknotes. anna: very pretty read let us get to the new look. but what we actually want to talk about is how popular is cash, in the negative interest rate environment?

>> yes, as you mentioned, they are visiting new bank notes today. cash --ook at the data, aversion forge plastic. the use of a credit card is about one third that the u.k. or canada uses. at the same time, just an anecdotally, there are only stores that will only take cash. feeding into that, switzerland does have one of the highest manus: there is been quite a lot of international push back against the higher denominated bills. oeom that perspective, zeo e,'s or any plan to stop using the 100,000?

to plan onontinue issuing this bank note. a conversion terms for that is more than $1000. bank himme time, the you look at the youth, the latest data shows that the thousand franc note is more popular than ever before. it is partly said not used to be paid. but people use it to retain value. so you can imagine that a lot of the bank notes are actually stored in safes and swiss households. anna: we can imagine thatz exactly. oe, joining us from zurich. we will be speaking to thomas jordan later this morning. we will bring that to you when the interview happens. we will be talking about the new bank notes and negative interest rate. manus: we will indeed. let's get you set up with a

ahead. at the top of the hour, german industrial production. midday we get u.s. mortgage applications. 7:00 p.m. u.k. time we get the minutes of the fed march meeting. that is going to be the cruncher. anna: that is going to be crucial. we will talk to chris watling from the fed. the legacy investing lingering to next week. does the eu expect the minutes to reinforce that dovish message we heard? chris: we had a dovish meeting, hawkish government, there we had janet yellen -- i forget which one it is. it is a very mixed message. it is not clear at all where consensus is on the fed committee. i think the minutes will be fairly important in terms of steering the market. manus: back to the banks, i know he likes them, you are very

verbal in regard to the european perspective. and if we look at it from the u.s. perspective as well, a flat yield curve, not much movement in rates. two rate hikes is what we are we are being told again. monumentalay take return to profit ability in the u.s. banks? chris: yeah, this is bad for banks in the u.s. as well. seemingly would help. i think it would have flattened it even more. the reality is we have had what i call cheap recovery, but u.s. cheap money. you take away, you flatten the yield curve because you're taking away what is really driving growth -- cheap u.s. money. up until 2014 so on. o oreah, whether it is tw one, i think is negative. anna: the views on inflation in

the minutes, janet yellen seems clear that she is not convinced that inflation is going to hang about in the u.s.. that it is sustainable, i guess. how crucial is that for you? you do not think it is that sustainable? chris: there may be a tiny bit of cyclical inflation. if we really do get inflation the u.s. it is really game on. does this turns the fed completely. we are in a world that needs cheaper money. if we get inflation, we don't get that. manus: if you listen to christine lagarde, it was very much along those lines. which is everybody doing their bit. i want to switch gears little bit. we have to get some ecb and boj. the overseeing consequences, who cares what kuroda wants. sorry, mr. kuroda. anna: they said it would be ineffective.

that is what manus meant to say. dollar-yen bottom of your versus but dollar-yen the 10-year yield. i mean, this is a rather challenged market from a variety of levels. i was going to use another phrase there, but i will not, because i would get in trouble with it. selling,market, nobody contamination all the way around. this is policy running out of effectiveness or impact. 8th of april, more to come? chris: i think there has to be. as you were talking about earlier, the yen is back to where it was at beginning of october 14. they need it down to get growth. if you look at growth, it is softening at the margin. so they need the yen down.

anna: is cheaper money the way to do that? we talked about the diminishing effects. they should is what do and what central banks will do. and there is sicis cyclicalness. many to somehow get it there. but you are right. more negative you go, the worse it is for bank profit ability. manus: if there is anything to walk away with, i think we got the message. always great to have you with us. chris watling, ceo and chief market strategist at longview economics. anna, we are set up for interesting opening. we have london futures. mr.: an interview with bullard. that is on television and radio. up next, we will couple of the more about pfizer. manus: absolutely. this is a deal that has died. they are set to drop the $160

billion merger. what are the ramifications for u.s. corporate? we discussed that bright and cheery view of london. up 1/10 of 1%. ♪

manus: a bad deal. pfizer is said to terminate its $160 billion merger with allergan after washington tightens its rules on corporate inversions. front-runners fall back. donald trump loses the wisconsin primary, boosting the odds of a contested convention. hillary downplayed her defeat in the state. the panama papers claim their first casualty. prime minister resigned, but the country presses on with its plans to exit capital controls.

manus: "countdown you "countdown are welcomed to "countdown."i am manus cranny. anna: i am anna edwards. let's talk about german data. german industrial production data coming in with a negative reading but better than expected. the number for the month of february, down by 0.5 percent. the estimate in the survey was for a drop of 1.8%. unlike yesterday's data, the industrial production number was but it isn estimated, still negative, even as the domestic situation looks fairly resilient. we have seen the global trade picture did. rate, and that is something the bundesbank has been talking deteriorate,ure and that is something the bundesbank has been talking

about. handle oning to get a what was the residual impact of china, the global slowdown. people are getting canceled contracts.they are in a recession, speaking to people in abu dhabi, dubai. what you are seeing down there is the word recession. three different people all spoke about it. anna: this is a volatile set of numbers. what have we got from -- yeah, here we go -- first quarter growth margins come in at 52%. that's a little bit better. margins, just ahead of the estimates. the first quarter, however, was negatively infected by a negative u.s. dollar a fact. is playing a critical part in the numbers, profit negatively impacted by marking down their products in new zealand, cyprus, and puerto

rico. the margins seem to have gotten a little bit better. in actual headline numbers terms of pretax profits, $3.3 billion. that is below the estimate of $3.7 billion. anna: let's check in on the equity markets. it looks like we might get a bounce at the start of the european trading day. it looks as if we will be up 0.5%. the asian session, treading water. manus: a lot of this goes back to oil. broke the saudi story. it moved the oil market by 6%. then the kuwaitis said, delhomme might be something where we can but beargain -- doha something barbican we can get a bargain. let's have a look at the oil markets. we are seeing a nice relief rally, and that is what drove the asian session. you are seeing the oil prices.

$36 79 cents, both of those substantially higher coming on the back of the delegation suggesting that the conversations in doha might still matter. we have had the yen hitting its strongest in 17 months. it went through the 110 level, almost entirely unchanged overnight, but the store yesterday was about the continued strengthening of the japanese currency. manus: let's see if kuroda can move the yen. a: good morning. the wisconsin presidential primaries have delivered defeats for the two front runners. ted cruz paths clear win over trump increases the chances of a contested republican convention in july. bernie sanders can keep his run alive with a victory over hillary clinton.

the democratic socialist has 16 contests and faces long odds to catch clinton in the delegate count. finance minister has promised to stick to a plan to remove capital controls after minister's sudden resignation through the government into turmoil. iceland is preparing for an auction to free $2.4 billion held by investors in so-called glacier vaults. it's the last hurdle before the country can start exiting capital controls for households and corporations, which were imposed during the financial crisis. the next corporate default wave comes. it could hurt investors more than they expect. bank of america strategists think losses on bonds from defaulted companies are likely to be higher than in previous haves because u.s. issuers more debt relative to their assets. corporate bond asset investors lose about $.70 on the dollar

when a borrower goes bust, but strategists say in that cycle, that figure could be in the mid-80's. rather than being punished for a lack of certainty, u.k. stocks have become the most expensive. devaluation of companies in the ftse 300 index has climbed to earnings. record while still done for the year, u.k. shares are beating everything else in europe. global news 24 hours a day, powered by our 2400 journalists in more than 150 news. as around the world, and you can find more stories at top . anna: let's get back to our top corporate story. pfizer has decided to terminate .ts merger with allergan

that is according to a person familiar with the matter. date which would have given us one of the biggest health care acquisitions was ditched amidst a u.s. crackdown on corporate tax inversions. caroline hyde is here. , it was a allergan monster deal. the new rules from the treasury department are going to recount that, aren't they echo caroline: farewell, the biggest health care deal we've ever seen, all because of this cracked and we first heard unleashed on monday. it is the obama administration claiming a victory, because they made it relatively tough to keep going with these inversions, 22 of which have happened since 2012. no wonder they wanted to stop from companies eloping u.s. shores where there is a 35% tax rate and going to the likes of ireland with a top corporate tax rate of half of that.

the new rules proposed on monday are tougher. not only if you are a u.s. company such as pfizer, not only do you have to buy a company a quarter of your size, but that company cannot have bought itself out in the last three years doing other texan version deals. this is exactly what allergan had done over the past 36 months. it had been reaping through many ideal. to allergants name in march. this is where the crackdown is coming in overall. clearly, the deal doesn't make sense for pfizer, and this is why it is unwinding. it made sense because it had access to cash. you could do more buybacks. there is a $400 million fee , but that isrgan less than would usually be the case, because they knew this tax change risk was there. notably, they have been selling off their generic business.

interestingly, it might be the right thing for pfizer. blueprint intelligence says they might be focusing on some of the new and exciting drugs and can make a spinoff of their global expanding projects unit. anna: we will see how far the arms of this tax change reach. some suggest it could bring other businesses that we don't yet have an our site. the chief investment officer at seven investment management joins us. chris, good to see you. give us your thoughts on this deal. it would've been this enormous deal, falling apart because of this change, changing the way it would be treated by the u.s. authorities. chris: there is political risk mergers and acquisitions. one of the consequences is that corporate set been able to generate cash. governments are stressed for cash. where do you go? corporations have the cash.

is an example of politicians wanting to go after corporations. anna: they don't want those corporations running away from them. chris: the risk for governments is come even though you can't put the corporate tax rate out much, corporations will go to some other country. some of get away with this, particularly when it is a pr stunt. i think you can't really go for the whole hog and up corporation tax. manus: this is the third time the obama administration has done this. there were a couple of stories we have written recently. is of the big momentums that going to drive u.s. equity markets is share buybacks. part of this deal, part of the momentum behind this deal was share buybacks. from a markets perspective, we seem to be running into roadblocks.

we haven't had the s&p move by more than 1% and 15 days. the market is just beginning to look a little bit tired. the moves the down next for bowls or for the bears? chris: we have corporate earnings coming up, and that is one of the many roadblocks. you can't buy back your shares when you are in a closed period. we would normally look to corporate earnings to be a catalyst. manus: this quarter, they are set to fall by 10%. chris: i'm sure we will be that low bar. will it be significant enough to get markets on track? probably not. i think we are stuck in market malaise at the moment. investors are nervous about the level of liquidity and markets. we hear from fund managers that there is really poor liquidity. you can't sell at the mark. market have decided not to make markets.

anna: many commenters have written on that subject, market makers withdrawing from certain sectors of the financial services industry. other guests have suggested that -- made ins more volatile made things more volatile. chris: today, market do not carry inventory. they are now high-frequency trading type companies that hate inventory. they look to get rid of inventory in seconds. that is the absolute, 100% correlation coefficient with regulation and the weighted cost of capital. agree.i completely i think the regulators come down very hard on banks, and banks are pulling in now. that is hitting markets. anna: a lot more to discuss with chris. chris derbyshire, sticking with us. manus: we will have the latest ,n the libor rigging trial

gearing up for another day in court. ♪

anna: this is "countdown." 16 minutes past 8:00 in frankfurt. : pfizer is terminating its $160 billion merger with the largestding ever acquisition and health care, and that is according to a person familiar with the matter. the moves comes after the u.s. treasury and monday said new callswould limit what it in version transactions. credit squeeze is cutting nine executives from fixed income and in brazil oroducts that is according to two people with knowledge of the matter. a managing director at the head of the business is said to be leaving. he follows eight executives who have already departed. the impact of august 1's

devaluation have showed up in chinese publicly traded companies' results. 980 listed chinese firms reported combine foreign-exchange losses of $7.5 billion for last year. that is a most 13 times the amount in 2014. that is your bloomberg business flash. manus: good morning to you. to london now. the trial of five former barclays traders accused of rigging benchmark interest rates is underway in london. anna: all of them and denied the charges relate to the manipulation of libor between 2005 and 2007. susie ring is here on set with us. bring us up to speed with what has been happening. what happened so far in the courtroom? jury was selected yesterday, and the prosecution started presenting its case. so far, they are trying to

distill libor for the jury. if you have no financial background, it is completely alien. they have used analogies like mortgage rates and horseracing to explain libor and the accusations, which center on new londonersrs asking associated with libor to change their submissions. manus: where does this fit in the larger context of the global investigation? you referred to both london and new york. suzi: this has been going on for about eight years come and we have seen finds ratchet up to 9 billion on the banks. barclays was the first bank to pounds,, 290 million and of course, you had the famous resignation of their chief executive bob diamond. the interesting thing about this is it's the first time we have seen americans on trial. we have seen british traders on trial in america. anna: what can we expect?

is this going to take a few weeks? suzi: many, many weeks. we are looking at a 13-week trial. the prosecution is resting its case for the rest of this week, and then we will have something from the defense. i'm sure we will have lots of interesting witnesses. anna: thank you very much, suzi ring with the latest. manus: angela merkel has ruled out cutting greece's debt after discussing the bailout program christinemf's lagarde. this comes as alexis tsipras continues negotiations with his country's creditors. are talking about is not simply a demand of the german government against a dead haircut, but within the euro area, we believe legally speaking it is simply not possible. anna: our bureau chief in greece joins us now from athens.

good morning to you. angela merkel says she wants the imf to stay in the great program, and yet she says she is not willing to give greece debt relief. there's a bit of conflict. help us determine what is good and bad news for greece. it's bad news for greece's government. it risks getting the full imf's treatment in terms of the painful economic overhauls and austerity measures that have been asked for. greek prime minister alexis tsipras is fully aware of these risks, and he has been trying to the last fewer weeks. it was a heated exchange over the weekend. it seems his efforts didn't yield any results. as german chancellor angela

merkel said yesterday, germany wants the plan to stay on board. of course, greece will get something. that's what misses merkel hinted at in terms of debt relief. maybe longer maturities, a longer grace period, perhaps lower interest rates, but will these measures be enough to convince the greek public about the necessity of more austerity measures? we don't think so, but it remains to be seen. manus: the big question is this -- are we going to get a rerun of a rerun, in other words the precipitous moment last year when there was no agreement. what progress is being made? give us a sense of what is going stations, what is going on in terms of trying to compromise and create this deal. os: the latest review of the

greek bailout has been delayed again. this is not uncommon when it comes to greek negotiations. the greek government has proposed a package of austerity measures equal to 3% of the country's gdp. the imf says that this is not enough. some of these measures won't yield the results that the government has been promising, so there is still work to be done on the ground in the next few weeks. of course, the target remains to have a provisional agreement, what leaders call a staff level agreement, by 2022. it's a long shot, but it is still doable. at least that is what everyone is saying. experience has shown that creek

talks tend to drag on and on and on. what we know for certain is the dropdead date is july 20 when bonds held by the european central bank come due, and greece will not be able to repay those bonds if it hasn't secured additional emergency loans. manus: that is the best line ever. thank you so much. anna: chris derbyshire is still with us. threatening to, not even reappear if you have been following it consistently. an existential crisis for europe? chris:chris: we have seen it so many times before. it is hard to believe it will be taken existentially by the markets. risks,has so many of the with the rise of populist, separatist parties gaining traction, the migrants. ,anus: politics in the eurozone

obviously, taking and the yang is politics versus the european central bank. they are coming in to buy corporate bonds. the market is so hungry for bonds. i'm going to show you a little bit of a chart where the credit derivative traders are doing -- let's have a look at it. if you can't buy the bonds, you write credit default swaps. of we brewing for a bit hubble, bubble, toil, and trouble in the corporate bond market? have we overreached in corporate bonds? chris: yes, i think prices are very rich indeed, both in corporate bonds and government bonds. it's a problem with default. it's a problem of the markets being distorted. that's clearly a market problem. anna: talking about the actual economics, let's talk about inflation. you see it in the tea leaves.

you think it's not there, just resting. looking at the readings from the markets you echo bond yields are suggesting inflation worldwide is around 1.1%. that is not anybody's target. chris: it's a market distortion because we have created a force demand for bonds. if you forget about oil, which is depressing headline inflation, you've got it rising in every developed market, in the eurozone, even the japan if you strip out the vat hikes..in the u.s. a large number. when you look at the components of it, it's pretty broad-based. you have a lot of prices picking up, both for goods now -- even where there is dollar deflation, the prices are ticking up. services, it's quite a strong part of the economy. of course, wage growth isn't

bad. you put those together, and you probably have some inflation. manus: the big genie in the bottle was this country, china. looks like a donald trump there. china, china, china. this is cpi. the money supply is in blue, and the white line is cpr, year on year, up over 3%. china, the great deflator, is turning around. am i clutching at straws? chris: china has a lot more food in the basket. . people talk about ppi deflation in china. years and years, we have had it, and now it here is cpi. anna: we are going to get a report next week. chris, think you for joining us. that's it from anna and

i. "on the move" is up next. you are looking at a slightly better open. london up 19 points. the dax ♪ is up eight points. ♪

."y: welcome to "on the move it is 7:30 in london. we are counting you down to the european open. i am guy johnson alongside hans nichols. pfizer is said to terminate its withbillion merger allergan allergan after washington tightens its rules on corporate inversions. in theera of massive m&a drug sector over? donald trump loses the wisconsin primary, boosting the odds of the cont