marco the deflation delay. japan's prime minister postpones the hike. stocks drop amid surges. crude slips as opec gathers in vienna. test lost control of the markets? no news for jaunty with inflation -- no news for jaunty with inflation the lowest in a month. when were data snapshot ahead of tomorrow's meeting.

♪ mark: welcome to the polls. -- welcome to "the pulse." i am mark barton. the manufacturing figures. 51.5, back in line with the earlier estimates. pmi manufacturing, 51.5, back in line. we have a busy show lined up today. in the next hour, we will bring you interviews with executives from embraer. live from the ground and the only cd formed in paris. speaking to year grumman you. just speaking to geer grumman you. stocks are lower. the stoxx 600 rises for the third month.

-- don't forget the m&a fell for the first time against the dollar. as opec ministers gather in indiana, -- in vienna, crude is falling. wti, that was brent crude rising . the longest stretch since 2011. here's nejra cehic. nejra: japanese stocks fell as begin soared after prime minister abe confirmed he will

untilne a sales tax hike 2019. oblique previously said only an economic shock or a major earthquake would cause a delay. china's official factory gains remain in expansion territory in may. that adds to eminence stabilization in the world's second-largest economy. pmi came in at 50.1. to private measure fell 49.2, matching economists estimates and down 49.4 in april. blackrock's larry bank says he expects consolidation. new u.s. rules favor passive strategies. the are too many money managers struggling to get anything better. -- there are too many money

managers struggling to get anything better. towe believe it is going create a huge consolidation in the industry. nejra: global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. you can find more stores on the bloomberg at top . -- more stories on the bloomberg at top . let's introduce our next guest, ashok shah. what is the take away when you look at manufacturing in china, close to 50 eurozone. years.s slowest in three why is manufacturing so week? what does that tell us about the global economy? ashok: the picture is one of subdued growth. at 2.5% gdpng rather than the percent.

-- rather than 3%. gently coming down. the tale tell signs have been around because one has to look at the indicators, particularly if you look at the situation in korea and taiwan on exports, imports, a lecture on extend all of them. they indicate bit -- electric -- electronics, all of them. the capital spending cycle is incredibly subdued. the big part of the cycle -- which is now absent. what we have seen is the consumption cye has delivered karma. the savings have not been fully felt across the board. in the meantime we have a rise in the oil price again. i would expect the consumer to be hesitant and spending.

spending.t in it has been about the supply shock rather than increase in demand. the demand is going to rise but very gently indeed. some of the interest will be used up in the next months. of course, the longer it stays in the 50 to 60 zone, the shutdown in the capacity we were expecting in the share of oil, therefore they will be reignited. of course, the discussion has always been it is much quicker to switch off and on the shale production. that is going to be put to the test to see how far the resumption of the production of the shale comes in to take up the leg of supply from -- mark: bay pushing it -- a e pushingack -- ab

back. -- ashok: those negative risks are going to be deep. it is the fiscal side that they are going to have to go into something big. the rise is a part of the fiscal strategy. there is a lot more of that to come. the situation in japan is the inflation is going into negative. never situation where will just where real interest rates is starting to rise. it delays any potential capital spending cycle. the profitability of the -- thee corporations expectation early in the year that the japanese earnings were going to great at 50% is going to be extremely optimistic. we will be lucky to get any positive numbers.

that is going to delay the capital spending cycle even further. the news flow that is coming from china and the rest of asia, where japan is very integrated is not very helpful. there is no lift that the japanese economy is going to get from the rest of asia either. we are in a stalemate of very low growth in japan. negative inflation and having to do a lot more heavy lifting before we can get anymore in the growth part. ,ark: i shop shaw -- ashok shah from the canadian government. we will speak to the company's ceo life from the conference in dublin. selling aircraft in a world where oil is $50 a barrel. you'll interview the chief commercial officer of embraer.

-- we will interview the chief commercial officer of embraer. ♪

mark: the international air transport association's conference kicks off today. we'll have great interviews for you today.

the country's federal government. let's head to the conference we bellemare.o a land -- alan bellemare. how are the talks? -- alain: working closely with eventual and the government for the past few months. on the quebec side, we have a very good solution and we are still working with the federal to find a win-win solution going forward. mark: are you expecting a culmination of these talks with the federal government soon? if not, are you willing to walk away? like i said, these are convex situations. we are working -- these are complex situations.

we are working with them and in constant communication. the dialogue is good. we are working toward a solution. mark: can you tell us what the issue is. what is the holdup? like i said, these are confidential discussions it when you look at deals of that size, there is many of -- many elements that go into the picture. this is not something we are discussing publicly. we are discussing it with the federal government and the quebec government. i am looking forward to a win-win solution going forward. a gameou talked about changing order when you received your order from delta. what is the momentum been like since you signed that deal? how has that manifested itself? alain: the momentum has been

great. fairly -- clearly, the delta deal was a game changing order. it came on the back of the air canada order. you look at the quality of customer that we have in the order of booking is solid. canada,korean air, air love times us lease and now delta -- lufthansa siu's and now delta. our team is working on new potential campaigns. mark: where are those campaigns? what regions are looking most hopeful for the c-series right now? alain: everywhere around the world. if you look at the market sector, the c-series is the best aircraft. it is a brand-new aircraft.

it brings significant operating benefits, in terms of lowest , greatng cost, fuel burn environmental benefits, noise and omission. every region -- noise and emission. every region would benefit. we are talking with customers with the goal to trade value for them. mark: to what extent was discounting a part of your delta when -- delta win? at what level will discounting continue to go forward? alain: like i said, when i took were ajob that we relaunch mode. we would take an aggressive toition to win new campaigns make sure we were going to regain momentum. that is exactly what we have done with delta.

it is exactly what we have done with air canada. we have regained the momentum that we were hoping for. right now we're in a much better place. we have a strong order book. we have a lot of potential options that customers can exercise. we find ourselves in the right stage in the program. -- mark: whatout about business jets? it has been your cash cow. nowhigh-end of the market is coming under pressure. have you started to think about ways to preserve this franchise? what are you going to do with business division to make sure it survives this global downturn? coming.e saw it i saw it coming in early 2015. that is the reason we took

proactive actions to reduce our production rate in line with market demands. that is exactly what we have done. today, we feel we are balanced. we are monitoring the situation pretty tightly. we saw this office in the russian market, and asia. right now, we believe we are in the right place. we have a production that is well-balanced with customer and demand. there is more softness on the large business aircraft. i guess having said that, if you look at what we have done in terms of landing 2016, -- terms of planning for 2016. thank you, sir, for speak to us today. life from dublin. up next, an online survey puts the lead campaign -- i am going

to bring you the chart of the hour on how the brexit debate is affecting the pound. ♪

mark: let's get the bloomberg is a splash with nejra cehic. nejra: banks are taking the hatchet to the banks again. it's is cutting senior positions again. meanwhile, a person with knowledge says they will shed

about -- japan and india. is following an industrywide trend that is scaling back of trading volume floor. paribas has announced cuts. $7.9 billion of its stake in the chinese e-commerce giant. , they willsales remain alibaba's largest shareholder. 21%aba's u.s. has gained since the company's ipo in september 2014. company'se on the hong kong debut after an ipo that raised $1.1 billion. , it iscraft leasing unit asia's second-biggest this year.

the company plans to use the proceeds to buy new planes as the region is set to overtake the u.s. cell of completed the -- european business completed the sale of its european business. it will trade under the name of british steel. and employs around 4000 forms of people in the u.k.. that is your bloomberg business flash. mark: i want to bring you our chart of the hour. an opinion poll released by icm yesterday show's of the campaign for britain to leave the eu has increased. in a phone poll 45% of respondents supported brexit. have a look at the chart to my right. yesterday's move was the most significant, falling by roughly 1% at one stage. we have seen a big rebound in

sterling in recent weeks, as support for their main desk for the remake -- for the remain camp. broadlyhat we know is that if we look at the sterling, if we were to stay in, this would probably recalibrate to 150 to 155. if they come here talking 130 21 35. it is broadly two thirds probability and a quarter probability out. that is roughly and lined with what you would get if you went to the bookies -- roughly in line with what you would get if you went to the bookies. we'll get a lot of volatility. yesterday's volatility were more to do with -- was more to do with the telephone calls. this is just confirming that.

we should expect continued volatility for now. quite heightened because it is going to remain very uncertain. ifdon't know at this point there are going to be any significant moves coming from the eu to make it easier for those who want to stay in, to help them. not just words but some kind of move in terms of the legislative process. which is doubtful has at this late stage, it is difficult to come up with any well-thought-out strategy. as we know, the main point about part hasout is a large been made in europe is made by people who are not elected and therefore we cannot this elect them if we do not like them -- we cannot diselect them if we do not like them. -- whereeady depending

are we going to find less thatwing the u.k. -- really causes the problem. we have had a lot of discussions on the economic benefits and the pain of leaving. we will never know until of the fullness of time the actual impact, because the transitional arrangements. we do not know what the new elements are going to be. it is impossible to forecast. clearly, we have allowed this data and information to be made by both sides. it is basically what i was saying, propaganda. very little to support it. you have all kinds of names being put on the table to support the clinical -- the political -- really unbiased and not paid by eu, etc..

mark: there are three biggies , and theil -- our oil u.s. dollar. linked to the fed. the fed goes in july? june? or afterwards? ashok: there is no need for the fed to hurry. when the rate rise comes in, there should be no surprise to the market. there should not be a violent reaction or fall down in terms of the spreads or how the equity desk how the equities behave. -- how the equities behave. is softer than that, it is self-defeating as the dollar begins to rise rapidly. the inflation targets are undershooting. exported. is getting the growth is going to

undershooting as well. the interest rate rises become self-defeating. mark: as shock, great to see you. thanks for joining us today. the pulse continues. ♪

mark: welcome to the pulse live from bloomberg's european headquarters in london. i am mark barton. more numbers crossing the bloomberg. any fracturing in the u.k. has rebounded above the 50 threshold u.k. hascturing in the rebounded above the 50 threshold. tweaked up,been 49.4. that figure last month or it the

month before last was the weakest in three years. manufacturing is growing once again. we are getting news out of the releasing its u.k. forecast. recoveryly, the global is failing to pick up in 2016. 2016ecd has raised its and area forecast to 1.6% that is encouraging for the ecb when it meets tomorrow because it will upgrade its own inflation and growth forecast. stay with bloomberg for more of those forecasts. we will speak with the luxembourg finance minister out of the oc be -- oecd forum. let's get more from the

conference in dublin as economic growth slows in china. brazilian playmaker and brianna plans to refocus. slattery who john joins us from dublin. thank you very much for joining us. if the u.k. decides to vote it self out of the eu, how will that hurt potential demand at of the u.k.? john: i think -- good morning, mark. i think if the u.k. exits the , the demand for international travel and a mystic travel will not be overly impacted. we already have a significant foot print within the iag group , so we areh airways looking forward to more opportunities within the u.k.

and more broadly. mark: i am guessing you would like the u.k. to stay in the eu? john: i will not speak on behalf of embraer. we have not made any public view on that. , ian irish man and european think i would probably be voting for them to stay in the european union, but we leave those decisions to our friends in the united kingdom to vote for themselves. mark: we were just talking to the chief executive of bombardier. will you be filing a claim against bombardier at the world trade organization? is considering all of the options open to us at the wto. certainly in relation to the recent transaction with delta airlines and the $500 million owners contract provision that was made in their books.

that would made us -- lead us to believe the aircraft are heavily subsidized, coming from the confidence on cartier has on subsidies -- bombardier has on subsidies. effectively now what we have is not a level playing field. we have the canadian taxpayers subsidizing c-series aircraft and perhaps even below cost. that is not sustainable. wants to compete on a level playing field and we have a very good track record. that we ared focusing on north america and western continental europe. we have a global perspective, but to talk about north america, since january 2013 we have over 80% market share in the regional market. embraer is competing very well indeed. mark: does bombardier's deal

with delta i get difficult for you to gain new orders -- make it difficult for you to gain new orders with your jet? john: not at all. we are in a number of active conversations around the world, not just in europe and the united states but in asia as well. the airlines want an oem that will be around to support the aircraft after it enters service. when airlines look at the types of provisions that bombardier took as a matter of public record on their accounts, one would be concerned that equity shareholding base of the of liberated -- obliterated. i am sure any other airline looking at the c-series is insisting to get the same pricing that delta airlines and air canada were lucky enough to secure. mark: the new brazilian government has estimated a big

budget deficit. is that going to make it more difficult to you to obtain the money you are owed for defense contracts? john: that is a different business within embraer. what i would say is that we have two aircraft in the flight test program, the only does go that we are planning to have in the program and it is going very well. 90% of embraer's revenues come from around the world. we have 70 operators in 50 countries so what is going on domestically in brazil, while it is of interest, we are a global organization today and our operator base and vendor base is largely global. we are as interested in what is going on with governments around the world and not just rozelle. -- brazil. the: do you have faith

economy will be restored? john: it is not my place or place to make any comment on any administration around the world. i am sure the new administration has the vote of the best wishes of everybody at embraer and we are hoping that result pulse through the -- brazil pulls through the difficulties they are experiencing. we have a lot of confidence and faith that over the next few years brazil will exit the current difficulties and get back to a long storm -- long-term sustained growth trajectory. chiefjohn slattery, operating officer at embraer. blasting government, saying the world is slipping into a low growth trap. we are live in paris with the latest from the forum.

♪

has raised its 2016 euros growth forecast to 1.6% after 1.4% in february. when it comes to the global economy they say the world is a self fulfilling world -- low growth trap. caroline hyde is joined by peter

crowe magna -- pierre gramegna. >> wonderful to have you here today. the oecd blasting government for are in at, saying we low growth trap and monetary policy is left do the work. pierre: i think europe is doing better than is normally commented and we will have around 2% growth in the eurozone this year, which is one of the best results since a long time. as thedoing better policies are starting to work out in the oecd has upgraded the forecast for your. -- for europe. that does not mean all of the problems are solved but we have done a lot of homework with the banking union and the yuan cup

plan to boost investments. it is trickling through and making sure we have no liquidity trap in those countries where we need to boost investments. caroline: which country still need help? france, clearly manufacturing is an contraction and greece as well. pierre: if you look at the global picture in europe, it is getting better. we still have a lot of investments in quite a few countries -- lack of investments in quite a few countries, both private and public. luxembourg, we will spend more than 4% of gdp and public investment and this is encouraging of the private sector to do more. it is also the task of governments to have a legal framework that is conducive to growth in terms of having a

digital services policy, things like that they can boost growth. caroline: are you worried about the emerging markets and commodities? are we seeing an end to the commodity spiral? pierre: the commodity prices are low are a tailwind for the european economy. is not goodand it for emerging countries that have a lot of commodities. there is a rebalancing taking place in terms of the prices of the commodities. they are probably too low now and were too high before so we have to find a good metal. the second thing is probably we should trust more in trade, international trade. it is only growing 3% now which historically is very low. in fact, it is one of the elements that drags the whole world economy down. we know there are some hesitations about trade.

it does not really bring a win-win situation for everyone and i think it does. the two engines we need our trade and investment. caroline: the political risk that we have on our doorstep as well, talk about the u.k. threatening to leave the european union. with that damage trade? risks: geopolitical always are hampering growth. if i take the issue of the u.k. remaining or not in the european already been obvious that some decisions on investment have been postponed so it is good that the referendum will happen in a couple of weeks to take out this uncertainty. i really hope that the remain campaign will win because staying in the european union is good for the u.k. and europe. caroline: would luxembourg

benefit if the u.k. left the european union? could your financial services might not get larger? andre: some people say so, it would be a very short-term benefit. the most important thing is that we have the u.k. inside the eu because it's financial center is the largest in the world. our financial center is working very closely with london and we are more complementary than competitive. caroline: in terms of politics within the eurozone, greece has remained a concern. how optimistic are you? pierre: totally optimistic on greece. i think there should be no talk anymore about grexit because it does not make sense anymore. we have struck a deal last week in the sense that we are implementing the first stage of

the bailout package. courageoushad very and ambitious measures in the past few weeks and parliament and i encourage everyone to look at up because they are tough, but good for the productivity of the country. second, we have agreed with the readjustment of the debt for greece in the medium and long-term, which means there is some alleviation. i think it is a win-win situation and we are on course. caroline: many feel that unfortunately these talks raise issues but nothing manages to reinvent the wheel. what would you want to see done to inspire trade or inspire growth, to exit the so-called i thinkth trap? pierre: this is the house of best practices so we can compare notes and see who is doing

better from different countries and continents, and inspire ourselves to be successful. caroline: would you have one key wish, what one policy would you like to see and acted? -- and acted? pierre: more investment. if you have more investment and more confident, you have more growth. caroline: the finance minister of luxembourg is in the oecd. we continue with a smile on our face. mark: more from caroline throughout the day. there with pierre gramegna. just getting some headlines from george osborne, the u.s. -- u.k. chancellor. it is in the wake of the forecast from oecd which downgraded its forecast for the 2.1%economy to 1.7 from and reiterated that brexit would

damage the economy by knocking half a percent off gdp this year 1.5% innd 2018, and 2019. says the oecd forecast is hugely significant. the oecd in an earlier assessment of the economy did highlight the risk both to leave the eu. pick clearly remains in the remain cap get -- the remain camp. markets are down. both get some meat on the bone. nejra: european stocks falling for a second day, down 8/10 of a percent on the stoxx 600. things for investors to take into account at the moment. brexit, the ecb

meeting tomorrow, and data from china earlier today. does this show stabilization or is it a sign of lackluster growth? i do not have the answer but let me show you a chart of the yuan. this tracks it back five years. it is drawing closer to eclipsing the lows it hit during january turmoil. a stronger dollar is playing a part, but have we come to the end of the sweet spot for the yuan? if we have, what will that mean both for the yuan and global markets? i want to show you the dollar-yen specifically, the yen headed for its biggest gain in a week. today, japanese prime minister shinzo abe said he would delay an increase in japan's sales-tax until 2019 and

pledged structural reforms and fiscal stimulus to achieve strong growth. here of course he was talking about fiscal stimulus as opposed to monitory -- monetary, or is this about more of that bid into the safe haven? off, brent risk crude and copper are dropping for different reasons. wti drops for a fourth day ahead of the opec meeting. there is not an expectation of an agreement to limit production so we are seeing oil lower and copper dropping largely on the china data. opec the doha meeting, delegates descend on vienna with little expectation of an agreement. crude heads lower. ♪

mark: more breaking news on the oecd report. cutting its economic forecast this year for the u.k. economy because of the upcoming referendum. it is warning the u.k. -- if the u.k. votes to leave the eu the economy will be hit. we had george osborne say a brexit is a price not worth paying and david cameron has said that the oecd is right to mourn on the brexit and the

consequences. the oecd was criticized in april thending out and saying possibility of a brexit would damage the u.k.. gathering in vienna ahead of a policy meeting tomorrow. agreement onee an freezing oil output at the meeting. ryan chilcote is at the meeting. you caught up with the oil minister of the uae. where does he stand? ryan: i do not think he is very happy with $50 oil but i think he is happy with the direction of travel we have seen since february, a near 85% rise in the price of brent oil. the reason why the comments from the uae energy minister matter is because he is sort of an unofficial spokesman for the gold faction within opec. the goal faction is perhaps the

most influential eco-saudi arabia is the most influential member. the uae is a bit of a proxy for thatand when he says to me he thinks that the market is going to correct itself, it just ares time, suggesting they going to be pushing for no change to their policy, keeping that production ceiling off the cards. that is kind of his way of talking to the other energy ministers and saying, let's just see this through. things are improving, give it some time. memberre all opec countries on board with the way that those in the gulf are thinking right now? ryan: not really. i caught up with the venezuelan oil minister about an hour ago and i asked him what he thought about this idea that we heard from the uae oil minister at the

market is correcting itself. several thingsen that are happening within the last three months. you need to remember the strike in kuwait. you also need to remember what eighted in canada, hundred thousand buyers were taken out and they have not recovered yet. unique -- you need to take in to account what happened in columbia. within 3 million buyers are out of the market. his message is, not so fast, uae. this is not about supply and demand pushing of dutch pushing up prices,-- pushing it is about production disruption. we have seen the oil price decline. that is what he is talking about. mark: ryan chilcote in vienna,

stay with us. "surveillance" is next. anna edwards will be taking over in london and tom keene in new york. an interview with the german economy minister at 1030.

tom: the failure if not delay of -nomics. the markets are range browned -- range bound. we have draghi on thursday and the fed on friday. we consider the swiss franc as currency of last resort. this is bloomberg "surveillance." i am tom keene and new york, anna edwards in london. good morning to you. the meetings in