francine: the yen rallies as stocks in tokyo extend two weeks of losses. just how high japan's currency can go. turbulence shares -- as shares slump is the italian fashion house reports is lowest profit in 10 years. cameron prepares to face parliament. ♪ francine: welcome to the pulse.

life from bloomberg's european headquarters here in london. i am francine lacqua. first of all, let's check the markets. this is the picture for european stocks. their signaling that the investor conference remains quite low as you can see. the stoxx 600 opening lower. the gain is still quite subdued. a little bit of movement on yen. 1.07half hour ago, it was -- it was 107. authorities are trying to dampen speculation that the yen will continue rising. copper atshow you .47%. cameron will face lawmakers later over scrutiny. it comes after the publishing of six years of taxing. minister alsoime admitted his handling of the scandal has not been great. >> i know that i should've

handled this better. i could've handled this better. i know there are lessons to learn and i will learn them. do not blame number 10 downing street or nameless advisors. blame me. i will learn the lesson. caroline: standard chartered is seeking to sell assets in asia. it is part of a plan by the london placed -- after booking record impairments. -- the first britt to win the masters in 20 years. the defending champion jordan spieth led by five shots in the approach to the tent. the 10th.h to global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. you can find more on the stores on bloomberg at top .

francine: china's consumer prices remain -- food prices coming in at 2.3% in march from a year earlier. .e are joined by enda curran this the inflation data spell out a more sustained recovery in the economy? enda: good morning. it is pushing china away from the disinflation or deflationary territory. we had some one-off impact naming it -- naming for prices. the old weather impacted the -- the cold weather impacted the -- pushing up the price of pork. even after we look at all of that, the better inflation numbers -- the emerging -- the ppi numbers at two that did they continue to be mired in records.

that is in this that an end this site. take it altogether, inflation numbers probably not a bad reading today for china. heading the right direction -- heading in the right direction. francine: what does a signal for economic restructuring? -- what does it signal for economic restructuring? and duncan: it should -- enda: it should encourage policymakers. some of it is excess production and profit. not all of that. monty prices are part of the problem as well. commodity prices are a part of the problem as well. increase wages and drive economy. they have to tackled the esso we sector. numbers like this might

encourage them further in that direction. francine: enda curran, chief asian economic correspondent. , how are you looking at the markets of the moment? sophisticated. they are looking for central-bank activity. governor davis's blog highlights the fact that the fed is worried about china exporting deflation and a sharp evaluation -- sharp devaluation of you on. -- of u.n. -- you on. there's -- being helped by strengthening the euro and the strength of the yen which is helping the people's bank of china at the moment. clearly the fed is wise enough

that they are looking at that being a big problem this year. francine: i heard the are using china is excuse. .hey are worried about china they are holding off normalizing because that would hurt china. this is a little bit of i am helping you, china. -- do devalue to quickly not devalue too quickly. what does that mean for what janet yellen will go from here? core inflation is 1.7%. marcus: it is a mixed bag in the states. labor conditions are not that great. if you take a look at it either way. 1.1, that is terrible. rated.y it is whether

it is -- they got their rate hike in december. price -- it looks as if the economy was recovering. [indiscernible] yellen. francine: at the same time, we see the economics in great experiment it not working out. brexit concerns which have been .aised to a global problem now it is not only about the u.k. and the eu bests: he has tried his with the bank of japan's kuroda. francine: it is not working. marcus: it isn't. we looked at $46 billion of setting stocks by foreigners.

6%.nikkei is down the and is up 4.5%. it is pushing on what is working. this is worrying for folks. francine: what is going on with yen? is people piling into the yen? is it a haven? are people realizing that negative rates with a wrong move? marcus: putting some of the money back in that is the short end affect. it is been quite clear. it has been one of five. -- 105. francine: marcus, thank you so much for now. marcus ashworth stays with us.

we will be talking with him on emerging markets. coming up next, intervention threshold. expect bank of japan action when the yen hits 100 against the dollar. speculation amounts -- inflation mounts about when the boj to aviews -- we speak suitcase that i can borrow that's we speak to his 2k said dr. borrow. the prime minister space to lawmakers later this morning after his text data -- tax data fails. the latest on the panama papers fallout. joine daily mail about to the verizon? -- joined verizon? ♪

francine: welcome back. let's turn our focus to japan and stocks fell in tokyo extending two weeks of losses as the yen rallied for a seventh day. it is still at a 17 month high. sakakibara.e eisuke he is an official in charge of intervention. he is a university professor but is known around the world as mr. yen. thank you for joining the pulse. how high can the yen go?

eisuke: within a matter of a next few months, it will [indiscernible] if you think in terms of six makes to a year, it might 100. francine: 100? by win? -- by when? by the end of the year? eisuke: underlying causes for the deflation of yen is [indiscernible] increased dramatically last year and it has continued. this is because of the decline of prices of natural resources here it -- resources. , u.s. monetary policy, it is expected the u.s. will raise interest rates this year.

market expectation is once or twice. to growth will lead depreciation of the dollar as contrasted to the former expectations. that is another factor of depreciation of yen. yes. francine: you think yen can touch 100 before the summer? eisuke: yes. well before summer, i don't know . by the end of the year, i think it will touch 100. francine: then what happens yet good you said in the past that actually there will be little risk of intervention before it touches 100.

the market saying they would intervene at 105. eisuke: i don't think so. kurodanot talked to mr. on this issue. intervention could only be done with the other party. for bank of japan to intervene allowing 105. because thee decline of the dollar. they have been suffering somewhat. intervention will not be possible at 105. intervention could only be done with agreement of other after party. --t's other counterparty other counterparty.

105 is when it becomes problematic? but not before then? 105 is all right for the japanese economy. when mr. kuroda to go over in was 95.13, yen dollar yen has depreciated. to 110.ow come back no problem for the japanese economy. 80, thenoward 90 or some problem would be created. allow 100, no problem. francine: the market is expecting the boj to expand its stimulus program at the end of the month. d think they will do it? -- do you think they will do it?

eisuke: i think so. to what extent? they will probably take the position of aggressively easing the monetary policy. very possible. francine: what is aggressive? further negative rates? was that a mistake? eisuke: i don't think negative rates was a mistake. mr. kuroda is quite straightforward. ofmight increase the label further level.to confident. francine: he is confident. the markets are not confident. are the markets misunderstanding why governor kuroda went to negative rates?

eisuke: it will probably take change thet of market perception. right now, because of the yen, theon of the nikkei dow has been declining. it can -- it continues to decline so that perception of , it is note economy good at this moment. francine: you say that yen could break 100 by the end of the year . you say that yen is not a problem for the japanese until it hits 105. if and when it hits 105, because it is so psychological, do you think it will go quickly to 100? eisuke: it could. it would break5, 100. if brics 100 and hits to 90 or 80, that would make some sort of

problem. francine: thank you so much for joining us. mr. eisuke sakakibara. the gemma known as mr. yen. great things -- the gentleman known as mr. yen. we look ahead to the good and the bad. ♪

francine: it is the pulse. let's get straight to bloomberg's business flash with caroline hyde. caroline: s.a.p. reported sales that missed analyst estimates. estimatesith analyst of 4.8 billion. some deals in the americas region were signed late. it reiterated its forecast for the year. italian treasury and central bank officials will meet with executives of major banks. they will discuss the creation of the funds that will buy institutions? the -- institutions tackle loans. deadline fored the the offers to next monday. francine? francine: time for today's chart of the hour. first we had to pick something that was yen related.

i picked something out of topics and basically benchmarking the topix index. to seef all interesting the orange circle on the screen. that was when negative rates were down. if you look at what we heard from one of the banks, they are trading at about 0.44 times book value here it that is one of the guest book value here that is one of the cheapest assets out there. book value. that is one of the cheapest assets out there. for yen thatay bet it can only go up? attemptedat is quite desk quite quaint of him -- quite cleaned of him to say that

the japanese authorities were only chat with the fed. it has to be correlated. -- it has to be coordinated. euro.her currencies, the the question is whether the people's bank of china has been helping the yen. the chinese are very careful on what the japanese are doing in regards to the currency. gets 105 and it breaks, we will probably have a real scramble towards 100. we will see what happens. francine: will go back to janet yellen? she could intervene verbally. japanese think the overall nextthe few weeks. in hopes to rough it out. the banks have been quite active in supporting the yen.

-- [indiscernible] francine: are you expecting choppy markets until the u.s. election? marcus: it is going to be difficult times. a big selloff of several wealth funds. in particular you took for the japanese banks. the negative rate environment, the economy is very hard for the banks to make any money. francine: where does this leave mario draghi? qe's?t lead to more marcus: this is the thing, if you have bought china by weakening the dollar, the effect is you are going to hit assets --t draghi in the euro [indiscernible] the euro and the yen will suffer if the dollar is weakened to

help ease the problems of the emerging markets. francine: as a market strategist, what would you do, follow the money? follow trends? or do you next six months out? marcus: i think is a great trading market. don't get to worried with thanks. it is not a long-term market. sit back and watch. you don't have to be nimble. it is about making sure that you understand rates are falling everywhere. therefore it is probably -- [indiscernible] francine: marcus, thank you so much for joining us. .hief market strategist up next, suffering the penama paints. will it be that banks who take the biggest hits. we speak to -- talk about markets, banks and the

currencies. we talk about yen. it is missing in touch. it was gaining earlier. it is one away .07. we are back in a couple of -- it is 107 -- 108.07.

welcome to "the pulse" live from bloomberg's european headquarters in london. i'm francine lacqua. let's get the bloomberg first word news with caroline hyde. caroline: chinese consumer prices remain buoyant on surging food prices. food prices jumped 7.6%. producer price declines narrowed 4.3% from 4.9% in february. blackrock chief executive larry

think has called negative particularlys worrying and potentially counterproductive. he reckons nations are leaning too much on monetary policies while failing to make key decisions and invest in infrastructure. willssue of negative rates hang over bankers and finance ministers as they head to washington for meetings of the imf and world bank. seeking toartered is sell at least $4.4 billion of assets in asia according to people with knowledge of the matter. it is part of plans to reduce its balance sheet. danny willett has become the first briton to win the masters in 20 years. the englishman claimed is major with five under par 67. jordan spieth led by five shots as he approached the 10th, but lost six shots in three holes. little news 24 hours of a inered by 2400 journalists

150 news bureaus around the world. find more stories on the bloomberg at top . francine: markets slightly lower this morning. let's head to mark barton. coming onpean stocks the back of four weeks of losses. the longest losing stretch since 2014. if the stoxx 600 falls for a 14th week, it will be the longest stretch since june 2014. china very much setting the agenda today. consumer prices remained buoyant thanks to surging food prices. producer prices posted the first increase since 2013. 0.3%, led600 is up by by basic resources, banks, and real estate. want to show you what is happening to the yen today, rising for a seventh consecutive day against the dollar, the longest winning stretch since

september 2012, trading at the highest level since october 2014. hedge funds and other large speculators have boosted to the highest level since at least 1992. this chart shows that very clearly. the white line shows speculators have increased bets on the yen gains against the dollar to contracts in the week ended april 5. that is the most since data back to 1992. dollar-yen is the blue line. it has been inverted. the market is going long as the yen continues to rise. standard chartered, big news today, seeking to sell at least $4.4 billion of assets in asia according to people with knowledge of the matter. standard chartered is the upt-performing tank today, 1.5%. i'm going to change the chart

showing how all these banks have fared year-to-date. you will see a big difference. all but one are falling. standard chartered down by 20%. fared worse hsbc than standard chartered. this is a lovely chart showing that you're small-cap stocks have favored better than their bigger peers. this is the euro stoxx small index. its rebounded more than euro stoxx 50 peers since the february 11 low. the gauge is at its highest level versus the euro stoxx 50 in two years. that is what that chart has shown. small caps outperforming their bigger peers since that big bottom on february 11. much.ne: thank you so nevermind the russians, david cameron, or china's top politicians. the panama papers will be all about the banks.

great to have you on the program. thank you for joining us. you argue that the fallout is not going to be political scalps, but the banks. how much more are they under scrutiny? >> they were already under scrutiny. lawsuits andrs of scandals. a lot of the panama papers revelations are historical. a lot of banks saying, we've done a lot since then, but there's no denying there's going to be more scrutiny. in france, socgen's ceo has already been asked to come and see the finance minister and explain what the bank meant when it said years ago that it had stopped doing business in tax havens. clearly a lot of questions being asked of the banks. francine: is there anyone that was dragged through the mud more than we would have thought? we've had issues in the pass

with some of the swiss banks. we understand that steps had been taken to avoid this happening. lionel: the big multinational socgen, all named as active partners of mossack fonseca, the law firm named in the panama papers. not such a huge surprise. the banks say they do their due diligence, that they know what is going on and perhaps other parts of the system don't. report,pen the annual you will see a lot of subsidiaries in a lot of tax havens and clearly there's perhaps more questions that could be asked and will be asked of banks in these areas. francine: what have banks been doing, saying we will take further steps, or saying we should have done more? lionel: banks have been slightly more transparent, basically reporting more and showing more what they have in these areas.

more often than not, the response is to sell. banks have been selling their subsidiaries in these areas. they have been reducing their exposure. this may continue. whether it is enough and whether they've been able to continue operating may be under the radar, who knows, but it is going to be more scrutiny. francine: are we talking about fines yet? nothing is illegal so far as we know. lionel: no, which is a great question. is this about legality, legitimacy, ethics, or transparency? it is probably just about transparency. do we still know even today what is going on under the hood in these large financial institutions, in these areas, probably not. francine: maybe we are a step closer because of the panama papers. thank you for joining us. banks, with european

italian treasury in central bank officials are due to hold talks today. that is according to people with knowledge of the matter. the fund would buy shares in bank recapitalization and help institutions tackle nonperforming loans. what is the likelihood of a deal being reached? i think we are getting into the final stages of reaching an agreement. as you know, in italy, the conditional is required. there's apparently, according to the people that we are citing, in our story, there could be a meeting later today. i think clearly the messages, italy wants to get a deal done this week. for a number of reasons. as to all, because bank capitalization is underway and they need to find a solution to this.

francine: why is it so crucial to reach a solution on these issues? dan: i think there are two pillars to the thing. you have italian banks led me to the recapitalized. the european central bank has identified banks that need to boost capital. the other issue is to deal with the ongoing problem of bad loans. italy ranks near the top of the league in europe in terms of this bad loan mount and. one way perhaps of dealing with that is creating this entity which will help resolve those issues, the capitalization and the bad loans. francine: dan, thank you so much. up next, could the daily mail be a contender? yahoo! extends deadlines for the core business. who is in the running and why? ♪

francine: let's get straight to the bloomberg business flash with caroline hyde. caroline: standard chartered is seeking to sell $4.4 billion of assets in asia. of plans by the london-based lender to reduce its balance sheet after record impairment. lower after it reported sales missed analyst estimates. revenues rose 5.1% in the first quarter.

that was compared to estimates of 4.82 billion. the software maker reiterated its forecast for the year. italian treasury and central bank officials will meet with executives in major banks later according to people with knowledge of the talks. they will discuss the creation of a fund that would buy shares to help institutions tackle nonperforming loans. francine. francine: thank you so much. the owner of the u.k. newspaper "the daily mail" has confirmed it is in talks for yahoo!. richard kramer is managing director of i retain research. what does this mean for yahoo!? great to have you on the program. first of all, were you surprised that "daily mail" are interested? richard: not at all. francine: because yahoo! assets,

we see it as the dog of the internet companies, but they are compelling in some sort. richard: the core business has been losing money for some time and the equity story is about whether they have to pay capital gains on their alibaba shares. they've been getting their profits from alibaba and yahoo! japan while they try to grow a new business in yahoo!. surprising that everybody will look at one of the few global brands in internet that has this very low valuation, very much like aol, a collection of assets that could be turned around. you throw the daily mail name on the list along with dozens of other folks who will take the opportunity. francine: daily mail twomey was surprising because they haven't been that inquisitive to my knowledge, but also they are a media company. richard: yahoo! has been trying to turn itself into a media property in areas like fantasy sports or magazines.

roughly 85% of their business is in the americas. it is not really a global business, but it may be a global brand. the question is whether this would be a way for a foreign company to get a hold in the u.s. market. francine: you believe that everyone is looking at it. who has the most to gain from acquiring it? richard: there's a lot of companies that want to take a chance combining it with other assets. verizon bought aol. there was a long-standing view that aol should combine with yahoo! and become a larger collection of assets. and they would be the logical front runner to do that. number ofd be any companies that want to take the search traffic currently being given to google or microsoft and bring that in-house or auction it off. be the right would management for yahoo!?

if you were in charge, where would you put you? the main issue is they don't have the seasoned management teams you get in other sectors. what yahoo! really needs, what a lot of companies really need, is tough coo's, not visionary ceo's. a lot of the issues you've seen with internet companies in this last set of earnings and last year were around execution. there aren't enough seasoned managers in the space who know how to get things done to distribute among all the properties. francine: do you think it will end up going to an american company? you mentioned the chinese. richard: it is very difficult to imagine a company with large data center assets in the u.s. being sold to a chinese entity any more than you could imagine facebook or google or amazon being allowed to buy parts of

alibaba or any of these companies in china. i think that would spark multi-year review. francine: if you leave the chinese to one side, can it be a european company or our u.s. authorities trying to keep it in house? richard: you have seen multiple examples where u.s. and european companies make assets the question is whether anyone has the capital, the scale, to take on a project like yahoo! and manage it any better than folks in the states. francine: can marissa mayer stay? richard: that is an interesting question. we were discussing that this morning. toone hand, she has a duty the shareholders to get the highest price. on the other hand, she may want to stay on as chief executive. right now, we regard the proxy fight as noise to this story. the company is up for sale.

there's nothing to be gained by creating further disruption and dissension around the company and who sits on the board. the process is underway. i think the best outcome would be a swift conclusion. francine: you own the stock because of this m&a opportunity, because you think it will be sold off at a good price? richard: i owned yahoo! for many years simply on the fact that they had a number of assets which led the core business to trade at a discount to net asset value. even with sharply reduced forecasts, that is still the case. there is some positive value. but i've owned it for a long time and i think this has been -- this is really the end of the story, separating the core of yahoo! from the other assets. francine: i know it is a very difficult question. are you expecting this to be messy?

are you expecting fights over yahoo!? richard: i think it will be messy. contrary to what every investment bank would claim, m&a is always messy. it rarely works out to find the synergies which are kind of like unicorns. you look around for them, but you don't often see them. if you look at the acquisition of aol by verizon, that was substantially less messy, but a company that had very few other options and had been treading water for some time. it was a relatively easy ingestion to buy a company with $3 billion of revenue, four of which were in broadband resale. francine: richard, thank you so much. we have to get you back on. richard kramer. next, addressing the penama fallout in parliament. the u.k.'s prime minister p there's to be questioned by

lawmakers. can he draw a line under the scandal? we will discuss at next. ♪

thecine: the fallout from penama leaks continues to rumble on with the u.k. prime minister. despite publishing six years worth of tax data, david cameron

has failed to silence his critics. the prime minister has also admitted he managed the scandal badly. >> i know that i should have handled this better. i could have handled this better. i know there are lessons to learn and i will learn. blame number 10 downing street or nameless advisors. blame me and i will learn the lesson. i think he took a long time to say what money he had in those trusts, what money was given to him by his family, what money is received as a result of it, and what taxis paid on it. there's been a series of rather changing stories coming out of downing street. why he couldn't say the whole thing last monday, but he still not finished yet. he hasn't said how much tax he did or didn't pay. >> i don't believe there's any evidence that this prime minister has done anything

improper, let alone a legal. >> the thing that has been crushingly disappointing for even his own supporters is that just to a straight question, he couldn't give a straight answer. the fullhaven't got tax returns. i think there's a lot more questions to be asked. francine: let's get more with our u.k. politics reporter, svenja o'donnell. how damaging is this for david cameron? svenja: this is really a question of trust. not disclosing everything immediately, he made a lot of people think, what else has he got to hide? there is no question that he's done anything illegal or even particularly wrong, but if you are prime minister, he makes a big deal out of tax transparency and being straightforward. then dragging this out over a

week is not really a great show. francine: i've seen a lot of economists trying to figure out whether this actually negatively impacts exit, because people say he's not that trustworthy or, i didn't know about this so maybe i can't trust him on the eu either. svenja: the problem with any referendum is people rarely answer the question posed to them. knee-jerkme, it is a reaction to the government at the time. there's still quite a few weeks away. a week is a long time in politics. as david cameron himself would probably tell you right now. francine: he's had a rough week and a half, two weeks. it started before this. there have been calls for him to resign. are we there yet? svenja: it takes a lot more than this for a british prime minister to resign. the budget wasn't exactly a shining success either.

he is someone who has been able to bounce back in the past. the difference now is that he said he's going to step down before the next election so he's already in a lot of people's minds something of a pass and that makes him vulnerable to this kind of attack. francine: what are we going to hear from him today? he's justifying the last couple days and the shares and the money he got from his mother in parliament. svenja: it is the first time he's going to face mps. they have been in recess. what he's also going to announce is a crackdown, trying to force companies to react if their employees avoid tax. this is an attempt by cameron to regain control of the situation. he's been caught on the back foot. this is an attempt for him to show some initiative. francine: thank you so much. svenja o'donnell with the latest on david cameron.

"surveillance" is next. i will be joined by tom keene from new york. david cameron,, yen, and the markets. join us for the conversation on "surveillance." ♪

francine: the yen rises again, the longest winning streak in years as speculators defied the authorities. cameron releases his tax details and faces parliament today. will the fallout put the outcome of the brexit referendum at risk? rada turbulence. where is asian luxury demand going? this is "surveillance." i'm francine lacqua in london. tom keene i