beats after surprising return. we bring you the numbers and strategy update at 9:15. mitsubishi admits to improper testing back to 1991. sterling strengthens as investors resist the brexit. we speak with former british defense secretary liam fox.

welcome to the pulse live from london. i am francine lacqua. we have great guests lined up for you. we have the new ceo on this morning's earnings in just under half an hour. we speak to be one of the campaign's leading figures. he is former defense secretary liam fox. bp profit down by 80%. however, did beat expectations. we saw profit and investors are piling into that, getting 3%, despite much smaller gains for crude. i went to show you japanese yen later this week. let's get to the first word news. >> bp has reported a surprise first-quarter profit despite the slump in oil prices. profit adjusted for one-time items and inventory changes totaled 500 to -- $532 million.

analysts expected a loss. offset business helped sliding crude prices. junior doctors are holding their first all-out strike in the 70 year history of the country's national health service. almost 13,000 operations and more than 100,000 outpatient appointments have been canceled to free up staff. the walkout comes amid a fresh round of appeals to call out actions by britain's health secretary. japan's prime minister wants to see action from the drg when it meets this week. the comments reflect raising pressure on the central bank as data indicates growing risk for reaching the 2% inflation project. they expect additional easing from the boj this week.

you can find more stories on the bloomberg app. francine? francine: plunging for a fifth day in tokyo after it is madeted the automaker fuel tests inconsistent with guidelines since 1991. this goes back about 20 years. at the time, we were not talking about omissions, but fuel efficiency. ryan: i would describe it as miles per gallon. how many miles do you get for every gallon you purchase at the pump with your car going all the way back to 1991? that is in distinction from the fuel omissions, i would say, scandal that has enveloped many other carmakers. volkswagen, but there have been probes elsewhere. effectively admitted

that they manipulated the tests that they were using, that they were inconsistent, if you will, with what the government was expecting of them as they self regulated the fuel economy of their cars for the past quarter century. francine: what does it tell us about the car industry? are we more concerned than we were 24 hours ago because this dates back so long ago? ryan: i think what we should see this as is another black eye for the car industry after the scandal that info, that enveloped volkswagen when it came to cheating on diesel omissions in united states and around the world. what it is likely to harold is more scrutiny and what would worry carmakers is more regulation. a move away from the self-regulation, self certification that we had with the mortgage industry in this country in the early 2000's, the

lead up to the financial crisis to a lot more outside intervention and outside control. when it comes to shareholders, their share price, mitsubishi's share price, is down almost 50%. it means more uncertainty. no one knows where this is going. it is gathering steam. with the ryan chilcote latest on mitsubishi. the federal reserve's two day meeting gets underway in washington today. 10 year treasury yields are near a four-week high, underscoring speculations the fed will point to gradually increasing rates. traders think there is no chance of a u.s. rate hike this month and less than 20% at a june gathering. i want to read the golden cross on the s&p 500. this is the other chart of the hour. looking at fed funds and the second one is what you call a golden cross. this is when the 50 moving

average, so this is a moving average on a 50 day basis, the pink line, and the yellow cross. s&p 600 has the further leg to go up. we are joined by jim rickard, author of "the new case for gold." great to have you on the program. you have been bullish on gold for quite some time. you have been proven right. this has to do with inflation expectations, currencies, but it is at the end of the day a haven . people pile into it. jim: i don't think of it as an investment. i think of it as money. it competes with other kinds of money. dollars, euro, yen. you have a subjective preference for money. as investors lose confidence in central banks, which is what is going on. have said we don't

know what we're doing. we make it up as we go along, experiment. the president of the chicago fed said that probably -- said that publicly. francine: a lot of people make it up as they go along. jim: that is right. i spoke to ben bernanke. he described everything as an experiment. in that world, gold does better. there are tens of trillions of dollars of sovereign debt with negative yields to maturity. gold has zero yield. zero is higher than -50. francine: i made this chart for you. this is the golden cross on the s&p 600. it shows the 200 day moving average versus the 50. it means on a technical level it goes up. jim: i agree. the reason stocks are going up is because johnny elmore has

gone full dutch. there is nothing the stock market doesn't like about free money and maybe negative interest rates are on the table for next year. that is bullish for stocks, but also for gold. gold and stocks sometimes correlate. there is no long-term correlation. in a world of easy money and negative yields, it is good for stocks and good for gold. francine: what is your technical level on gold? is it technical level or a lot like the yen? they don't know how far it can go? jim: i have a technical level. $10,000 an ounce. francine: that has not changed? jim: it gets bigger over time because it is accumulation of physical gold to printed money. physical gold is not go up much. the dollar target goes up more. it is the implied non-deflationary price of gold. if you have to go back to a gold standard, that is the number you must have to avoid deflation. it is not a guess. francine: even if we have it, what happens if janet yellen starts normalizing? what does that do to gold? jim: that would probably throw

us into a recession. as she tries to normalize in december -- francine: even if it is an acute rate hike? jim: 25 points in december through the stock market into a 10% correction. francine: the stock market is not gdp so it is not a reception. jim: it looks like first quarter gdp we will find out this week. it looks like it will be well below 1%. there was only a fraction in the fourth quarter. two back-to-back quarters of week -- what is the difference between one half and negative one half? growth is extremely weak. she has the best understanding of international monetary internet on x -- monetary economics. larry summers, laura brenner, they have more inflows.

janet yellen does not understand the international implications as much. francine: do you think she is right, or being very dovish? jim: this is no time to raise rates. the risk is the u.s. economy is extremely weak. you don't raise rates in a recession. francine: this is because of out side risk? jim: as well as the u.s. economy being fondly of -- fundamentally weak. the time to raise rates was 2011. jim: when you look at -- francine: when you look at china, it seems to be stabilizing. employment is not doing badly in the u.s.. gdp is stronger than expected. is there a case to raise rates6 francine: jim: i disagree. i think the currency is a unicorn. you can describe it but it does not exist. the bigger play is what i call the shank i accord coming out -- the shanghai accord. francine: you are saying this is an accord between janet yellen and the pboc? jim: and the ecb and the bank of

japan. it is the big four. francine: a secretive accord? jim: exactly. the evidence is overwhelming. china needs this. the last two times china needs, -- eased, the u.s. stock market fell out a bit. how do you ease china without destroying stock markets? keep the dollar cross rate unchanged at titan japan and york. that is why we have the stronger yen and stronger euro. it is a backdoor easing of china. cross rate is unchanged. sure if: i am not murray would have agreed to the kabul we'll discuss that next. jim: he is my favorite central banker. francine: jim stays with us. plenty coming up, including setting the standard. we kick off the bank earnings season. is the ceo's recovery plan

working? the negative. subzero interest rates eat into revenue. we speak with the ceo. the british public has been betrayed by the prime minister david cameron, so says former defense secretary liam fox. he is one of the campaign's leading figures and we speak to him. ♪

francine: welcome back. this is "the pulse." we have been talking about gold. that is one of the best havens out there. jim rickards has been making the case for gold going higher. we do have an exclusive interview with the ceo a little bit later on the first quarter operating income at $3.5 billion. that is actually down 24% from the first quarter of 2015. this is a bank that is skewed to the emerging markets. they were not touched by the financial crisis, but they lent a lot of money to companies when they probably shouldn't have if you speak to some of the analysts.

they are trying to restructure the bank under bill winters. 539it before taxation, billion dollars. standard over two days, down 6.1%. over the year it has fallen significantly. it has fallen some 20%. compared to some of the other banks, they have not done badly at all. billionincome is $3.3 in pretax profit of $589 million. this is what we know. we are sifting through their net quarter, net income revenue. we will get you any more breaking news. we are expecting an up eight on the strategy that bill wonders put in place. that means refocusing. i know a lot of investors will also have specific questions on some of the countries that have been more problematic. that pretax profit coming in at $539 million before taxation. if you are a bloomberg user, you

can go on top live. it is a great function that we started three months ago and it is a live update, live blog. we will also follow that news conference from the cfo later. catch our exclusive interview with bill winters. it is his first on camera interview since he became ceo. anyll also keep an eye of breaking news. let's get more with jim rickards. when i look at standard chartered, this is a bank that was unscathed during the financial crisis but became too bullish on emerging markets. they have not been doing great and there are concerns about possible defaults. what is your outtake overall in the emerging markets? do we need to be more cautious or do we need to give them more time to recover?

jim: we need to be extremely cautious. so much of what is going on in the emerging markets. we can go back to 2011. when you have a weak dollar and easy money for the fed, you put the carriage on. we say to investors, we have your back. follow insured dollars. sudden, the fed does taper talk. they do the taper. they forward guidance and the risk is offered sell emerging markets, bring the dollar back. close out my dollars shares. the money is going back into emerging markets, but it is in and out based on a reaction function to the fed. it is extremely dangerous for investors. i've been to south africa and malaysia and they don't know which way to turn. we are not doing anything, it is the fed manipulating it. francine: i wanted to show our viewers standard chargers that the stock is getting to 2.3%.

investors are liking what they see in the numbers. it depends on whether you are a country that has pushed through the structural reforms needed. jim: correct. step back from everything we just talked. the fundamentals are weak because of china. china is slowing down perceptibly. their growth is overstated because 45% of chinese investment, at least half of that was wasted. the head of the bank of china said they were a ponzi. it affects all the emerging markets. the fundamentals are weak. when they get an uptick in the currency of stocks, it is a hot money influx. thank you so much for now. haveine: up next, how negative rates affected sweden's biggest mortgage lender?

francine: welcome back. profit at fed bank stagnated last quarter as negative interest rates. brigitte joins us. you have taken over into mulch was times for the bank. what will be your main focus for swedbank?

brigitte: they are following dramatic times at the same time. we have published an incredibly strong report this morning, which makes me very happy and proud. it shows you that this bank is a lot more than a few people. my focus is on execution. we have a steady, well-anchored strategy. we have a retail bank of four markets. we are in lithuania. i focus on operationalizing, executing, attention to the i.t. agenda, to changing the operating model even further to be able to meet our customers where and when they want to meet us. you cope how long can with these negative central bank interest rates squeezing margins, especially at the same time credit demands leaving mortgages to one side. it is growing only marginally.

birgitte: i think, to be very pragmatic, so far, so good. a takedown ofis 15 basis points and we almost mitigated it by increasing volumes on the mortgage side. we are 20% of new sales, which is where we should be. we have a back book of 25% market share and we have partners saving bank. we are will liquid ice at the moment. where we are now, this is where we should be. we also have seen in this in lending increase on the corporate side. corporate's throughout sweden. it is small and medium-sized corporate's. we have seen a small growth in countries. we have seen it in estonia and

lithuania. this is very positive. francine: are you concerned, or will you have to pass on negative rates to retail clients? birgitte: we are not doing it at the moment. we have decided to leave this out of the equation with our core customers, the many households and businesses. however, on the institutional applying are negative rates to some of these contracts. francine: one of your board members said the bank return target of 15% is too high given the current market conditions. do you refute that? when you achieve that 15% target? birgitte: you know what? i can't comment. that is a board issue. that i thinky is for a bank like ours with high profitability, low risk, and

also cost efficiency, i think being a huge retail bank is what we should strive for. we should have high ambitions. francine: talk to me about the dividend payout ratio target. it is the highest in the nordic reason, 75% of project. we stick to that? birgitte: that is also a board decision. at the moment, this is where it is. francine: for the moment, you're confident? i'm just trying to get a sense on whether you are confident whether these targets are achievable. looking at these results and given the environment, you are confident that you can stick to these? isgitte: what i'm saying that the board -- this is a board decision and these are where the actual targets are for the moment and this is what we strive towards. francine: great to have you on the program. birgitte: thank you so much for having me.

up, where u.k.g voters stitched up by prime minister david cameron when he renegotiated britain's new membership? we speak to liam fox.

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change the way you experience tv with xfinity x1. francine: welcome to "the pulse." by from london. let's get right to the first news. bp has reported a profit despite the slump oil prices printed it was adjusted for one time at vitamin changes. expected to be lower. that's a stronger-than-expected number. the impact of sliding

crude prices. pp is trading higher. doctors are striking for the first time. almost 13,000 operations and more than 100,000 outpatient appointments have been counseled. -- canceled. there is an appeal to coffee action. the economic advisor to japan's prime minister once see action from the boj when it meets this week. there is rising pressure on the central bank. there are growing risks for reaching the 2% inflation target. economists project additional easing from the boj this week. global news 24 hours a day powered by our 2400 journalists. you can find more stories on the bloomberg app. francine: we had some breaking news.

the share price on the back of that is gaining 5%. we are looking at some costs. they have not been that bullish on the stock output. target price was below the share price for the last two weeks. , the calle changes with the cfo is about to start. we speak exclusively to the sea -- cfo. we will watch that later on tonight. markets are in the green. let's head to the bloomberg with mark barton. is boosting the banking gauge. it's the best performing industry group today, rising by 1.8%. ck 600 is rising. there is a wide array of earnings from a whole number of companies. let's start with pp.

it reported an unexpected profit. crude prices continue to slide. relying oninter is refining margins. out of the 20, all three are rising. which is up.by bp shares of column. that is the biggest decline on the stock sticks hundred. they manufacture aerospace and defense technology. that's the biggest drop ever since the company went public in 1989. first quarter trading was behind expectations. there was a profit warning. they said profits will be 15 pounds below previous

expectations. there was a true for seven rights issue. they will sort out the balance sheet issue. premiere shares of the hotel chain. they have stronger than estimated 12 greece -- 12% increase. the shares have lost the third of their value since allison britain who was the former head of retail banking at lloyds. they reported fourth-quarter sales. this prompted some investors to make a sale for one of those divisions. shares are up 1.27%.

francine: recently, i next test asks if voters have been stitched up. has the negotiation and a scam? the pleased to welcome doctor liam fox. that'se a medical doctor why we still refer to you as doctor. obama shows up in the u k. he argues that the u.k. should stay within the eu. how hard was last week for the vote leave campaign? liam: he gets all the pictures. whether he of flex any votes, we have yet to see. i don't think his intervention was powerful. number one, he won't be there if britain decides to leave. that will not be involving him put his successor. i think he was undermined by this argument that he is asking to have its laws

overruled by foreign courts. it has its finances largely determined by the european commission. the united states would never in a million years except any of those. he's talking from a trade point of view. he is the leader of the free world. he says you will be worse off. it won't take much longer. i don't believe that. francine: he's saying it's the truth. liam: he is saying it. just because a politician says it it must be the truth. trigger towill be get it through with 27 other countries to get a bilateral agreement with the u.k.. after trading volumes and values are much the same. when you look at the lack of

progress, the fact that any of those 27 countries can stop the process, the united states would not want to have a balance with its trading partners as a political lesson. i just don't think it's realistic. finance: the french minister says look, if you leave you will have to join for trade agreements. liam: why do we get trade agreements? they are beneficially mutual. the u.k. exports goods and services. are we believing that the french in a presidential election year are going to say that? to make that work they will have to actually diminish profits of their own companies and risk higher unemployment and a presidential election year. to. merkel is going to say bmw don't sale -- sell cars to

the brits? francine: are you ready to take him down? liam: this is a referendum. we think the british people deserve a say on this no one in britain under the age of 58 has had a chance to say whether they want to be part of this european project were not. once we've made that statement, it was inevitable. we would be on both sides. francine: if this country decides to leave is the prime minister a casualty? liam: we all knew it we were getting into. this is largely dependent on how well we treat one another. the more difficult we make it, the harder we answered. it will get more ugly in the next two months. liam: i would say it's been

strongly held views that are passionately held and that's what we need to see. the country needs to see a proper debate. we have a genuine difference in future hair. you cannot vote for the status quo. you are going to vote for britain to take a different future outside the eu with the risks that brings or you stay in with all the risks of greater integration including risks the city will have to carry. francine: if brexit happens the prime minister will have to go. liam: it's not true constitutionally. we will have to decide. the interesting thing about this referendum is the conservative party will still be the majority governing party. we will have to govern that country up to 2020. what is it we are going to renegotiate? i believe as the voters vote to

leave that's what we have to do. it's not about getting a better bargaining position. we have to lay the ground for that. a big political debate. i think we are capable of doing that. francine: some of you have been anti-europe for a long time. some have been anti-europe for about five minutes. liam: taurus is an asset to the campaign. i wouldn't say anti-europe. there is a difference between europe and the european union. francine: you have been consistent in your views. liam: i always welcome converts. i think it's important that people have had to sit down and think about which side they are really on. there's only one of two futures available to us. i want a country that can set its own priorities and write its own laws. our dependence on the eu is diminishing as a market, as a

trading entity, and the problems of europe are mounting. if you look at what's coming crisis, italian bank part fences going up across the continent. it's not healthy. the direction of travel is a course that was set in the 1950's. francine: i'm not sure whether a impact moreion will or less the u.k.. liam: it will. our mechanism to the budget is how well our economy is doing. the irony here is -- francine: you gain so much from trade. liam: we are a trading nation. our trade to europe shrinking.

all of these arguments are still being made as if this is the europe of the 1960's and 70's. it's less relevant in the world economy than it was then. we need to be looking outwards and forwards. the problem with the eu is its backwards and inwards looking all the time. it feels a bit lonely. when you see the rise of china and global trade agreements, is it better to be outside the block? liam: we should be looking to get access to these markets as quickly as we can. this argument that britain will be isolated, we still have a seat. a permanent seat on the u.n.. we are still in nato. we are the sixth biggest economy. we are the heart of the commonwealth. it doesn't sound like being thrown into isolated darkness. francine: the latest poll his

51% to remain. if the vote is close, will you a moral victory? liam: a victory is a victory in elections. it athat would do is make large issue. i think of vote to leave settles the issue. anything else with the report on the table and the potential for further integration deepening, that may present britain with a dilemma. my argument would be that when theeuro was created eurozone started to leave us. the danger for the united kingdom and all of this is the prime minister traded away our veto. you have already kind

of broken up. now you're just a distant relative area -- relative. liam: i think we would remain very close partners. we have a mutual interest to do so. we can cooperate as a sovereign nation. we do that with france on defense issues. on a that with switzerland bilateral basis. there is no reason why britain, a much bigger clout economy can't have a strong relationship with countries that long been our friends and allies. francine: as long as they don't their grudges. stay with bloomberg for more on the brexit conversation. where weost a debate will be joined by former politicians and influential business leaders before a global audience. it begins at 8:30 a.m. london time. capitalist andre

a famous french businessman. up next, shares have jumped. we break down this morning.

francine: let's get to the bloomberg flash. >> mitsubishi admits they used

the same that's wrong fuel efficiency tests as far back as 1991. they can't say if the problem extends beyond minicars. shares slumped for a fifth day in tokyo. down 50% since the story first emerged. the african finance committee hadded i bob diamond has discussions looking to combine the firm with a u.k. lender. they are using the new york-based equity vehicle and working with another group for a mutual approach. at the same time, there are people tax profits of $19.2 million for the year. started aswedbank interest rates eight into revenue. net income reached 4.3 billion krone.

it is virtually unchanged from the same time a year earlier. francine:bp has reported case prize profit. there is an inventory that changes. oflysts had expected a loss 240 49 million. let's bring in ryan. bp is confident longer-term. they are repositioning their business to be a free cash flow positive at a price range between 50 and 55 dollars a barrel for oil. that is on the back of the company preparing for six dollar oil. was anticipating a royal price of $60 a barrel to do that. in thisy are doing is

earnings statement saying we are recalibrating the company so that we can make sure we can ensure that dividend for you even if oil price is as low as $50 a barrel. francine: thank you so much. there is a 64% drop in profits as revenue fell. revenue for the time fell by almost order. they missed analyst expectation. you could let's say it's in line. were expecting 3.49 and what we got was three point or five. jonathans for moore is tice. we are talking about nonperforming loans. obviously, investors are liking what they are seeing. jonathan: the stock rallied from lows in to these numbers. is not much in there for

the bears. there's nothing disappointing. i think the part about revenue is the key. there is in a consensus. we knew last year that the revenues fell. part of that was currently and commodities impact. are -- the alone positives are the right numbers. costs have fallen 10% year over year. that's 6% if you adjust for currency. is the the bad news challenge is well understood. there isn't any new bad news there. francine: thank you so much for the moment. hillary clinton is expected to take the big prizes of pennsylvania and maryland today. we break that down next.

francine: we notfrancine have another big round of primaries today. up for grabs are 172 delegates for the republicans and 463 for the democrats. hans nichols joins us. hans: i will take it.

fancy states on the east coast the 10 to be more liberal. the republican primaries in this are very conservative, especially pennsylvania. even though it's a blue state, they tend to be more conservative. james carvilles said he got philadelphia and and pittsburgh with alabama in between. think of these almost as southern by mary's. donald trump will do very well today. in some ways, it does not matter. we are coming into trench warfare. on that front, ted cruz has eight stopping, blocking about to stop donald trump from getting the number he needs. that is the arrangement that ted cruz and john kasich made. francine: donald trump says that's unfair. dirtyif you think of the

tricks of taken place, they used to detach car trains. hans: they have analytes. if indiana can be one for ted cruz, it makes it that much more difficult for donald trump. contestedthe most state? hans: it comes down to cleveland. the most contested state is going to be indiana. that is in may. hillary clinton is going to have a good day. it's going to be harder for bernie sanders to stay in the race. bernie sanders might not drop out. there's been no indication. he wants to change the platform. they call them cottages in rhode island. i wasn't expecting

this conversation to go there. why not? stay with bloomberg "surveillance." we will talk about the fed. ♪

surprise costas a got to mitigate shares jumping. shares wipe out their losses for the year. investors like what they see in the strategy update. economists believe a rate hike in june may be on the table and we speak to joseph stiglitz later. michael mckee is in new york. it's a busy day. we have new holes for brexit. we have earnings from europe.