turbulence for travel industry air france klm and iag does not expect passenger demand to recover until 2023 hotel giants see room revenue plunge 80% >> the central bank said they only answer to the court not the government the call to justify its bond purchase program >>> significant loss of output has become inevitable. that is the message from the governor andrew bailee forecasting a 14% drop in gdp. sterling rising as the bank of england predicts a sharp recovery in 2021 >> caller: expect a recovery much more than the pull back from the financial crisis. >>> after the british telco cut its dividend looking to shake up its sector >>> a warm welcome to "street signs. let's get to our top data point, chinese exports jumped by 3.5% in april as reopened factories in the country moved to fulfill back log of orders. with a 2% fall in the month. the biggest decline since 2016 the trade surplus grew to $45.3 billion. far above expectations how meaningful is this jump in exports? is it reflective of rebust gains or concentrated in particular sectors? >> even after that beat? export numbers in

matt: i am just throwing iag into a comp screen.comp function on the bloomberg because it gives you a five-year look and you can compare stocks with the same measuring stick. over the last five years, ryanair has given an annual return of just about 2%, total return of 10% in a five-year period. iag has given you an annual loss of 10% over a five-year period. lufthansa with a loss of 7%. iag has been a serious loser, british airways and iberia. jonathan: let's bring in maria tadeo and had to brussels. fill us in, germany, austria, what's happening? maria: two things really changed the narrative in europe and one is that we are seeing a lockdown again in austria. we were told we were not going to see any lockdowns in europe again, that the vaccination would prevent that, and we are going into one for 20 days. austria is saying once they are finished with lockdown they will make the vaccination compulsory. this is much more drastic than anything in europe until now and much more drastic than we expected from the government. it could r

what it has meant for the larger airlines, iag, etc, is that hopefully they can push prices up.t an operating level, a difficult operating environment, try to decrease costs. it is difficult when you are dealing with large airports like heathrow. that is a good point. it is the nature of these things. there is a picture of the ceo, as say, salivating over the you say, salivating over the colla pse you say, salivating over the collapse of some of these smaller airlines. it is a reality, they have said it about consolidating in the industry, this point also about needing to push. he mentioned taking on heathrow at the moment. needing to push. he mentioned taking on heathrow at the momentm needing to push. he mentioned taking on heathrow at the moment. it is really important. british airways itself ‘ the landing really important. british airways itself ‘the landing slots itself has 51% of the landing slots at airport. heathrow at heathrow airport. heathrow airport is 65% more expensive than all other major european hubs. it is an incredibly tough operating environment. every airlin

iag, q1 is normally weak but they posted a profit. strong consumer demand, 80% booked in the second quarter. air france has a little more weakness. there are still labor issues. still issues they have to face. fuel prices are broadly coming down. alix: here we are firing on all cylinders. regional banks getting some relief. we saw a nice solid rally up 1.5%. if you think it has been shorting with the regionals may be you are seeing short covering today or is there optimism. apple under promised and delivered at their earnings are good. you are seeing the best rally for apple this year. that's helping the overall sentiment and this can help us absorb higher yields. we are firing on all cylinders. guy: talking about firing on all cylinders, travel continues. who would've thought we would still be seeing this kind of demand given the economic headwinds that are building. maybe today's job data will show travel is solid. this is data out of america. the chart you have here is the intention to travel to a foreign country within six months.

the big story, qatar airways taking that 9.9% stake in iag.will make them the company's largest shareholder. i want to show you what athens is doing. stocks in athens, a little bit higher after the brutal selloff in the first three days of this week. the banks got pummeled. alpha bank up by 7%. they are basically penny stocks jumping up and down. i'm going to talk to you about greek government debt in about an hour. stay tuned for that. yields are lower. off by 34% -- 34 basis points, rather. in a little bit of time, we get a big piece of data. euro-dollar, lower. 1.1321 is where we are right now. inflation data expected at -0.5%, the lowest since the summer of 2009. elsewhere, dollar-ruble, here is a cross to watch. stronger dollar, weaker ruble. that is a record low for the ruble on a closing basis. 69, approaching 70 ahead of a big central-bank decision at 10:30 u.k. time. rates 17%. i leave you with that. >> bit of a punchy number. jon, we will manage those for you as we work our way through the day. let's turn to attack now. investors che

looks like the market is ignoring iag. the market seems to think norwegian is back.side, down more than 13%. this swedish company deals with advanced measurement technology. they were out with a profit warning. they are citing trade tensions and weaker development in china. they will be cutting jobs. to the upside, osram. 3.4board has approved that billion euro bid from bain and crl ityle. bain and carlyle. china is sticking to its demand that the u.s. lift all tariffs as a condition for any trade deal. francine lacqua spoke to standard chartered's chief executive. ofi think the period , whiched globalization is part of what characterized the early part of the last decade, was very good for global growth, very good for a global bank like standard chartered. it was very good for its subset of the population and left another subset of the population behind, in particular, middle-class in developed countries. the political will to go back to unbridled globalization seems to have passed. i equate a national -- natural extension of the view that the population my small co

iag, we will get more details about that in a moment.next hour we will hear from the u.k. transport secretary laying out the narrative in terms of how the traffic light system is going to work in the u.k. how are you going to go on holiday, which countries can you go to? technologies underperforming. let's talk about the sector breakdown. adidas coming through, really delivered in terms of expectations. there is underlying concern about what is happening vis-a-vis china and that is a storage watch out for. that seems like it is for another day. today's numbers strong. we were just hearing about what is going on at siemens strong numbers. continuing picked up. interesting to compare and contrast with adidas. siemens getting strong numbers out of china. the pickup and offending the company, which has been so slimmed-down. there are ongoing commodity headwinds. iag, really cautious today. they are in a very different position. very cautious about what kind of pre-pandemic looks like going into the summer. we will see later about positive he

we are getting breaking news from iag.rs are not breaking robert levels, coming just ahead of estimates. 1.3 9 billion euros. they are saying that iberia had a 50 million euro operating profit. that is one of the headlines coming through. the sales have come in at 20.2 billion euros. that is ahead of the numbers penciled in by the analysts. it seems as if they've, in ahead of estimates. they say their 2015 operating profit will be in excess of 2.2 billion euros. that is the first hint of an outlook coming from a company that is trying to get it hands on aer lingus. they were suggesting before these numbers came out that the focus would be on the performance of the company itself. they are in negotiations with the government. they are still trying to get what kind of commitments they will have to make in order to make that offer palatable to the government. so that's international airlines group for the moment. manus: we've just had bank of ireland numbers. underlying pretax profit for the full-year returning to profit. bad

. >> iag shares are slumping after posting a 6% rise in second quarter profit shares are off almost 3.9% the owner of british airways backed its full-year guidance and said they expect to deliver a rise in 2018 operating profit given current fuel prices and exchange rates the ceo says the group is not in active takeover discussions with norwegian airlines, but continues to look at the carrier. >>> singapore airlines has been voted the world's best airline you can head to cnbc.com to find out more about its success and how it soared to the top spot. i experienced them quite a few times. had the pleasure >> lucky you >>> mediabanca shares are jumping after elliott has declined to comment on whether they have a stake in the bank.

saying the company, quote, does not have an absolute right to exist he warned that the parent company iag is burning 178 million pounds of cash researches a week. they plan to cut its work force despite the uk government furl owe scheme reacting well this morning up 12%. >>> shares in lufthansa up this morning despite the airline having been relevant gated from germany's blue chip dax index for the first time ever compounding the particularly turbulent first half of the year the exit comes after the coronavirus outbreak prompted a near total stop to global air travel, prompting shares to drop and forcing berlin to hand a 9 billion bailout. looking at the spot in the dax will be taken over making it the second group to enter the index. some housing could pile the pressure on rental and property prices in germany. >>> let's get out to annette you've been all over this lufthansa story. no surprise the stock has fallen out of the dax what do you think of the significant of the change? we have another real estate company entering the blue chip sector just as the airline falls out. >> exactly i

time iag lowers profit warning. the suggest operating will be 215 million euros lower, this follows the walk outs that led to canceling 4,000 flights the group warns that any further action will hurt things more and have an adverse effect on its results. pearson has also warned profits will be at the bottom end of the range. the british education business warned of lower. and dutch prosecutors suspect the bank delayed reporting or failed to report suspicious transaction and clients and alleged links to terrorism the bank said it will cooperate fully with that investigation. >>> coming up, a shock resignation from the ecb's board. we'll discuss whether that pushed the german representative touith j qt atob beyond the not-so-routine cases. comcast business is helping doctors provide care in whole new ways. all working with a new generation of technologies powered by our gig-speed network. because beyond technology... there is human ingenuity. every day, comcast business is helping businesses go beyond the expected. to

i age iage and, i age and, you know, iage and, you know, i i age and, you know, i think you can neverhey have been the captain, because you're not sure how they will act. you don't really know how they will do thejob. he you don't really know how they will do the job. he is a world—class player, the best batsmen in the team. i think he is a very thoughtful player, i think tactically he is very astute. i do think he will make a very good captain for england, and if it is next year i think he will do a tremendousjob, no next year i think he will do a tremendous job, no doubt about it. the twice wimbledon champion petra kvitova has undergone a four—hour potentially career—saving operation after a knife attack in her own home. the world number 11 says she's ‘fortunate to be alive' after grappling with a burglar at her flat in the czech republic. surgeons operated on her left hand, her racket hand, to repair tendons and nerves. she'll be out of action for at least three months and the likelihood of a full recovery is unknown. celtic have gone 14 points clear at the top of the scottish prem

iag and some numbers. >> iag, british airways, iberia. alsh pulled it out of the bag.tly missed in the third quarter. it is still up 31%. compare that to the profits that went tumbling at rivals air fr ance and klm. and also the second profit warning and five months we had at lufthansa. they're outperforming the market. profit up 31%. the full-year forecast -- raised. we could see profits up 77% compared to last year. previously, they thought they might climb 64%. but they are managing to get a grip of prices. they have got fuel down 7.5%. nonfuel costs 4 down.%. down 4.5%.osts they have 25 analyst saying buy. basically will wash fast forward to the process. he came through the end of the problems he had with the iberian unit far faster than his rivals. whilst the continental europeans are dealing with a weak economy, b.a. has been managing to tap some of the strength by expanding b.a. > >> capacity. >> rbs could be a strong performance. >> iag called higher. at last, they returned to a profit. it is the first time we've seen a third-quarter profit for rbs in three yea

. -- iag looks to enlarge the group. chanel and louis vuitton was the only luxury brands to increase in value last year. that is according to mill worth brown. vuitton rose 20% while chanel rose 15% to $9 billion. up next with the imf payment deadline looming, greek officials planned to meet with creditors in brussels. francine: welcome back to "the pulse." greek officials plan to meet with creditors in brussels today to secure a deal before the country meets the payment to the imf at the end of next week. for the latest let's go live to hans nichols before he makes his way to dresden. it is not looking very promising. on the boy -- hans boy -- hans: you had a u.s. official overnight saying the secretary of treasury will be warning about contagion and the unpredictability of the global recovery. contrast that with the german view. we just heard from schmidt who is a key advisor to angela merkel and he repeated this argument and has quite a bit of credence. the contagion could be limited. everyone will be arriving later t

alix: we will have guys interview -- guy's interview with the ceo of iag coming up next.is bloomberg. ♪ ♪ ritika: this is "bloomberg markets." coming up, alexis ohanian, red of co-founder -- reddit co-founder. this is bloomberg. ♪ guy: welcome back. we are watching the unfolding events down the road at carb ebay. the bidens and the johnsons standing next to the big g7 banner. we are now starting to get maybe some of the playback coming through from the meeting that is taking place between boris johnson and joe biden. in terms of what these two are saying to each other, clearly i think it is going to be a focus on making sure that this is a success, delivering upon the apparent promise to deliver around one billion vaccines to vaccinate 80% of the population. but a rekindling of the relationship. alix: and also, a big part of that, and i mentioned it earlier , that low hanging fruit has to do with climate. the draft communique seems to be setting some climate financing goals, asking for a new study of the coronavirus and the origins of that. so the stuff that everyone can

what should investors make from the announcement from iag this morning?> reporter: good morning, silvia. look, when you compare to some of the other airlines that we've been speaking to, we have been speaking to wiz az air the othe day. one note for sure is there is a stark difference with the performance of the flag carrier, iag with british airways and iberian fading within that portfolio amongst others. what is interesting is the transformation program seems to be putting out sufficient growth for the company to maintain the strong economic picture for now at least. one thing is they expect demand to improve. let's remember that figure of 1.24 billion actually is a slight drawdown from the 1.25 billion that we have previously seen. the interesting part to that is it still beat out estimates from the market. you saw even the margin, the operating margin of one-time expenses drop from 16.3%. that is within the medium term of the objectives of the company with 12% and 15%. that gives you the sense that the transformation process of 7,000 employees in the

is that it for iag? >> international airlines group.is vision is to create this enormous umbrella with different airlines under it. now to siberia, aer lingus british airways -- i don't think he sees that as a limit. he will want all of those companies feeding in and making the entire group profitable. he will definitely continue looking. they want to make sure that works and does well for the bottom line but he will be definitely keeping his eyes open. jon: up next on this show, stocks in china surged today. we will bring you the latest from hong kong after the break. let's check in on equities. equity markets pushing higher. the dax up by 2%. gain on the periphery as well. switch up the board and have a quick look at the euro. a relief rally in the fx market. a stronger euro. yields lower in italy and higher in germany. back in two. jon: good morning and welcome back. a relief rally across the european equity space. the cac 40 up by 5.5%. seemingly greece giving into a lot of the demands from predators. -- creditors. if they stay in t

airways hastish some iag shareholders.t showing what happened since the crash in ethiopia. this is happening, if you can see it to my don't know what is going on -- there we go. the blue line is boeing. ship rate is down about 11%. there was about a 5% increase off the back of this deal. normally with these airshows, the big deals are announced the first couple of days and we've gotten those out of the way. so what are we seeing so far? angus: the first-day was dominated by airbus, it's in its own backyard. it came out with the 13 million u.s. dollars that first day from boeing. now they are premature at parity. -- pretty much at parity. this was unexpected. boeing also nabbed a 20 dream line order from korean airlines. it is right back in the mix. the other thing to say on the max, they are one of the main -- one of the main questions is whether customers will be happy to fly in the max. the airline chief executives we are spoken to in recent weeks have said one of the main challenges is convincing the public it is a safe

despite the impact >> iag luke to raise 3 billion euros and klm unveils an operating loss sending both shares into the red. six years of growth wiped out in spain as gdp drops in the second quarter but the french economy shrinks less than expected down 15.8%. happy friday welcome to "street signs." we've got a lot of earnings to get to let's talk gdp first we've heard from france and spain. now numbers from italy preliminary q 2 gdp slank quarter on quarter less expected a value. they've advised their q 1 estimate of 5.4% contraction quarter on quarter and 5.4% year on year. slightly worse than anticipated. q 1 marginally worse but q 2 better than expecting. an unprecedented slump for italy but the takeaway better than analysts had feared. not quite as grim as the market had been bracing for looking at the euro gaining ground currently trades around 118.77 we have the france and spain numbers. spain's economy shrunk 18.5% lockdowns and travel restrictions weighed on the tourism industry the fall also raised six years of growth. the french economy slank 15.8 as strict lockdown measures

that is iag, i promise you. oil prices moving up 2.73%.t the euro, the pound down against the euro below one .10. still a better way before the lowest it's been, but not looking too strong at the moment. we are here and now that president trump spoke to new prime minister borisjohnson trump spoke to new prime minister boris johnson yesterday to discuss new areas of cooperation, especially relating to trade. the president has reiterated his strong appreciation for the special relationship between the us and the uk, noted he is looking forward to meeting the prime minister at the g7 summit later this month. the trade war between the united states and china also escalating today, beige and threatening to unleash what it calls countermeasures against us plans to impose tariffs on chinese goods. and the quote from the foreign ministry spokeswoman was, china expresses its strong dissatisfaction and resolute opposition, and if the us implements the talent measures, they will have to ta ke the talent measures, they will have to take measures to re

iag is the worst performing the stoxx 600 of this morning.y said they cannot give an accurate view due to the impact of the coronavirus. easyjet was out with another warning after planning on holding act other flights. tui is also getting hit. the entire sector is getting hit hard. francine: thanks very much. next, we are live in italy. more onve plenty italian bonds and how they compare to german bonds. this is a bloomberg. -- is bloomberg. >> there is a general recognition that we are not ready for big outbreaks and we are playing catch-up right now. >> the united states government must address the spread of the deadly coronavirus in a smart, strategic, and serious way. >> we have done an incredible job. it's going to disappear one day. it's like a miracle. it could get worse before it gets better, it could maybe go away. francine: that some of what we heard yesterday on the virus. let's get to maria tadeo in naples. how much is the government at fault here? thehere is huge pressure on administration to show it is able to tackle the virus.

we have set numbers from iag, the parent company of iberia. manus is here.h -- like walsh is delivering at iag. >> music to everybody's ears. iberia, the losses dropped by over 50%. ba, operating losses absolutely getting crushed. that comes down to 5 million pounds from 72 last year. iberia, you are seeing the losses dropped. -- they areeing flat. the take away is first-quarter operating loss 150 million euros. the estimates were 168. employee costs are getting crushed. parties., various ifthe top one for costs -- ,ou can squeeze your cost down down by 12%, that is the headline number in the first quarter. he is telling the market that operating profits for rise over half a billion euros this year. he has been on the tape -- i want to get through some of these breaking headlines. he is on a conference call. sher willhe -- sla tagline. >> they have not paid dividends since 2008. this is all about re-equipping the fleet. one of the biggest criticisms has been his building capacity in the transatlantic areas. there is the view that he is building too far too f

iag is probably best positioned.have made the most progress and probably have the least execution risks left. >> we will see you after those are released in about 27 minutes. angela merkel began her speech to the british parliament by telling the audience that she has come to disappoint them. should not weigh in on the debate over u.k. and the eu membership, she said the country shared responsibility to make europe stronger and more competitive. were the comments well received by lawmakers? certainly those under expecting angela merkel to arrive in london with a list of concessions that she was ready to give to the u.k.. they would certainly have been disappointed. she did have one message that .hey could've agreed with >> we need a strong united kingdom with a strong voice inside of the european union. we have that, we will be able to make the necessary changes for the benefit of all. her sameere you have something which is actually on the platform of all three major political parties. that the european union could

iag reported a jump in profit in the second quarter.erry lundgren joins us now for a look behind the numbers. from air france and lufthansa, i might have expected something similar here. >> analysts and investors were wondering if we would hear something similar from iag. i spoke to willie walsh earlier this morning and he sounded pleased with himself over these numbers. all three units profitable. generally, things going very well in spain. they announced that iberia is getting 18 planes. rings are going very well for them, which is a big success. >> let's talk about the overcapacity in the transatlantic market. any concerns on that? >> this is an area that other airlines have flag. said that there might have been a little bit of greediness. they are being very selective on their routes. the group as a whole is trimming capacity by about 3%. he was saying that is en route for extra flights going at this point. on transatlantic, he says it is choosing the right routes. he wasn't being specific about the new places they were flying. he s

guy: when i looked at my screen after the pfizer news came out, iag was up 30%. lufthansa was up something similar. all of the entire travel sector was roaring higher. is that indication of the potential that these companies could have, were we to see some positive news being cemented? how much upside could there be in some of these most deep down -- most beaten-down sectors? andrew: i just think it is pretty interesting that if you look at the way the market has been trading up until this point, and i think this is still the case, even as there was supposedly a lot of optimism around the vaccine, if you listen to the news or talk to investors, i thick a lot of investors were very open to the idea that a vaccine would be successful. yet if you look at what was leading the market higher, it was still very recently many companies that benefit from abnormality, that benefit from more restrictive economic activity. is a good step towards this idea that maybe can be more normal. it might be the more cyclical parts of the market where there is more operating leverage,

iag says the recovery of passenger demand to 2019 levels will take years.ace to advise the public to wear masks in areas where social distancing is difficultm distancing is difficult, such as shops and on public transport. the uk government is yet to announce its decision on masks but the health secretary said their use was based on weak science. spain's prime minister, pedro sanchez, has outlined a four—phase withdrawal from one of europe's strictest lockdowns, with the aim of getting back to something like normality by the end ofjune. social distancing will remain but schools won't re—open until september. president putin says the peak of the coronavirus outbreak in russia has not yet been reached and he's extending the lockdown until may the 12th. he said the spread had been slowed but warned of the risk of acting too quickly to lift restrictions. so far there's been 867 recorded deaths. vietnam has won praise as one of the most successful countries in combating the coronavirus pandemic, so much so, vietnamese nationals in other countries are now returni

iag says the recovery of passenger demand to 2019 levels will take years. homes in england are to be eligible for coronavirus tests from wednesday, whether they have symptoms or not. scotland, wales and northern ireland are expected to follow soon. latest figures suggest a third of all deaths in england and wales related to covid—19 are in care homes. they've not been included in official figures so far. 0ur social affairs correspondent, alison holt reports. at st cecilia's nursing home in scarborough, like many homes across the country, they believe the fight they have been waging against coronavirus for weeks is only now being reflected in officialfigures. this is the area that we will have for anyone that's being barrier nursed. they locked down early, have areas set aside for nursing coronavirus residents, and people stick to their rooms. but still, across the three homes in the group, they've had 11 deaths, four confirmed as covid—19. i was called and did see her for the last — on the day that she died... one of the residents who died was reg kemp's wi

that was the chief executive of iag.ges. this headline from the seattle times. a lot of the newspapers are covering this story that the boss of hours and briefly became the world's richest man before slumping back down to number two. do great riches come with great responsibility? what should we be doing with these levels of wealth? ifi doing with these levels of wealth? if i were him i would use my money in scientific research to help find a cure of aids. a couple of other tweets have also suggested a similar tack. that is interesting. amongst the world of the super rich here is unique in his lack of philanthropy. i'm not sure that is necessarily true. we should acknowledge that people like mr gates has given around 30 billion, he has made a vast contribution to philanthropy. there is a history in the united states of leading players providing large sums of money. he is spending around $1 billion a year on his rocket business. it is all very well saying he should give the money away. he would have to sell the shares. wh

so do you think iag will chase it?ope to scandinavia business which makes loss. iag could come in and through —— pics free potential issues, which is the long haul business need more protection, and more corporate travellers, which iag could switch on overnight and give them the track record in restructuring low—cost airlines like vueling. they could help norwegian how to improve profitability on the tube to scandinavia routes. it has to raise more funds and it made a loss last year. it is struggling a bit, isn't it? i am concerned at this point. we are at the point where norwegian has not increased any fuel hedges, which means increased in the fuel price hits their bottom line and they are deepening their losses. they are -7.1%, deepening their losses. they are —7.1%, and that is not a pretty picture. norwegian, without any deal, will have to consider restructuring the business fundamentally. are theyjust holding up fundamentally. are theyjust holding up more from iag? it has been made clear today that iag will not pa

today, iag, it was up more than 2%.pite the second reduction in public guidance since the referendum. it really is a matter of things not being as bad as we originally anticipated it to be. guy: how will the market react when they say they are going to raise the prices? >> it is an interesting dynamic. it is something that was spoken about earlier today on a call. he said there is no chance they would lower prices. that is quite a big benefit for them. potentially raising prices especially on the transatlantic routes which is interesting because there is a heightened competition on the transatlantic these days including the u.s. as well as the norwegian and others. how much are we going to see a change in direction for the u.k. airlines vis-a-vis the rest of europe? weather theve to sterling storm on their own? brexit, things are shaping up to be better than they thought. it is a good question. ba has been quite positive about brexit and the impact on business travelers. i had of the referendum, they were warning that t

iag may be implemented of what is happening elsewhere. kailey: this market has repriced expectations to a significant degree over the last several weeks and it is having to do that even more so today after that inflation data. the preferred inflation gauge came in hot on every metric. headline core year-over-year, all living deliver -- all of the delivering the surprise. the s&p 500 down 1.6%. the nasdaq 100 down about dew points 25 percent. the two year treasury yield up 11 basis points to 4.81. this is the highest we have seen since july of 2007. all of this translating into a stronger dollar. the bloomberg dollar index higher by 0.7% on the day. guy: all of this really maybe has a big geopolitical element to it as well which is why it is worth spending time talking about what is happening in ukraine. this is what is happening in kyiv. a press conference is being held by president zelensky. he is briefing the media right now. he is looking to involve china and india to back his peace plan. we had a proposal from china earlier on. let's

iag is trading higher. i want to talk about iag. it is trading in sympathy with air france.ll say next is more but public service announcement. iag lost a court case in the u.k.. that case was designed to stop its pilots going on strike in august. i know a lot of you spend a lot of time on her planes crisscrossing the atlantic and europe. it looks like iag could be facing stripes. -- stripes -- will be facing strikes. credit suisse is trading higher. that is look at the european close. vonnie: let's have a lacrosse assets. -- major indices fluctuating the major moves are beneath the surface. on fomc day, all eyes are on the 10 year. gold futures down slightly. we also had crude oil inventories, another drop-down that was larger than expected, four times larger. we saw crude oil rise more than 1%. still $58.41. let's get the some of the movers in the stock market. apple is moderating gains. above 5% earlier. analysts are pleased with the quarter even though sales of iphones were at the lowest since 2012. the attention is turning to services and other apps. analysts are lookin

this is notjust disrupting iag, but other carriers.pean commission to enforce the overflight rules, which is part of free movement within the eu. and this is very important. the airlines including iag are saying we are not challenging the controllers right to strike, but why can we not fly over the airspace? why do we have to have the airspace? why do we have to have the flights disrupted ? the airspace? why do we have to have the flights disrupted? when that happens, diverted flights will increase the fuel consumption and eventually the house and knock on impact on the airline ticket price. that is one challenged airlines. another, the rising fuel costs. exactly. and they are showing no signs of abating. 0bviously, fuel, isa signs of abating. 0bviously, fuel, is a fact of life for people. it is something they have to live with. it is their bloodline. they need that fuel to be able to operate, so some airlines hedge against that so that they can manage through the lean times. 0bviously, they have to keep a weather eye on the cost of fu

manus: for iag what does this mean?one of the big things will be they are thinking of dublin as another runway for heathrow. it will be years before heathrow gets another runway. iag and aer lingus will definitely be making a push to focus on the fact that you can clear customs in dublin, go to the u.s., build on their transatlantic powerhouse that they have developed and focus on what they have been doing so well. manus: we will carry the aviation thing forward. this is the airbus experimental electric plane. it has taken off. this is of course a project run by aer lingus, it is an electric plane taking off from the u.k.. it is flying across the english channel, a journey that the plane maker said was a huge step. can this go into commercial production? there you go. up next making a drachma out of a crisis, just how come located with a currency change be for greece? ♪ manus: welcome back live from bloomberg's european headquarters in london, i manus cranny. shanghai composite index has enjoyed the biggest jump since 2

iag is down by 2.9%.ad a mixed set of results coming there, and guidance i suppose coming through from the aviation sector. air france perhaps more optimistic. iag says it operates in a different regulatory space and a different market to air france. the market is down on that stock. let's get a bloomberg business flash. here's annabelle droulers. >> thanks. natwest group says it aims to distribute a minimum of one million pounds a year from 2021 to 2023 via a combination of ordinary and special dividends. that's after the u.k.'s biggest corporate lender reversed more of the provisions it took earlier in the pandemic, helping it beat earnings forecast in the second quarter. >> strong performance across all of our businesses, driven by an increase in lending with mortgage growth. the mortgage market here remains very strong. as we come out of lockdown, consumer spending is starting to recover back to pre-covid levels. what we are seeing is very low level of default. businesses have been remarkably resilien

will take a closer look at iag a little later on in the program. also coming up, we have talked about russia. will putin's military showcase add to tensions as pro-russian rebels prepare a referendum in ukraine? we will get insight from the head of markets at bcs financial group. ♪ to "the pulse." president putin is expected to review warships off the coast of crimea. we are joined by the managing director at bcs financial group. ryan chilcote is here with his perspective as well. joseph, let's talk about the russian economy. all of thisact geopolitical tension is having on the ground. >> at the moment, we haven't seen any structural hit to the russian economy. we have seen expectations for economic output come down. have, russia will probably small growth this year. we have seen investment in consumption being delayed. point, we haven't seen anything structural. >> that is key for you as to whether this becomes a much bigger issue. whether sanctions are expanded or not. >> absolutely. russia is still hugely dependent on commodity pricing which is

matt: let's talk also about iag. british airwaves -- airways as well as the spanish -- >> yes. it is kind of half-and-half between madrid and london in terms of their key bases, and iag sold an initial stick to qatar back in 2016. that was big news. you know, a middle eastern company coming in for a stake in the main british institution, which is british airways, and now we have seen them increase it. there was actually a rule change recently where they changed the allowances for foreign ownership in airlines. i think it was up to 26%, and there is actually a rule in the u.k. that if it went up 30%, they would be required to make a takeover offer for the company, so we would not inspect to see it coming up much further now given it is heading toward that 30% already, but, yeah, it is kind of a little bit controversial in terms of the investment but definitely something i think investors will take on. matt: so they increase their ownership to 29.1%. it is interesting because it comes at the same time there is speculat

iag, slightly more optimistic. whether they have a target they can maintain or whether they have to revise them. to the industry, klm cutting up to 5000 positions. this comes on top of the industry cutting 400,000 jobs. either they were fired or furloughed. what at the end of this pandemic you see as the loss of an limit to the industry? >> there will be fewer people in this industry. from airbus. they said they would cut thousands of jobs. lufthansa, which like air france and klm, received bailouts. there is only one way to get through this. that is to cut costs. ground your aircraft or get rid of employees or both. raise fresh funds as we heard from iag. they are increasing money. arer airways, they achieving they announced they in spain.an airline they want to renegotiate the price tag. they only want to pay about half of that. ways,e seeing creative less creative in terms of job cuts, airlines trying to cut costs. when i flyy, vacation,for work or i'm going to look for a hotel to stay in. restaurants to check o

iag shares rise. norwegian is going down.berg. >> let's talk about what is happening in these markets. marketshave is the looking a little negative when it comes to the french markets. the banks are the big story this morning. socgen and bnp paribas are suffering this morning. koester trading on the downside as well. matt, it is the french banks that are suffering. hsbc under pressure as well. hsbc i would have thought watching the global trade story. matt: we'll continue talking about that. markets are following very closely, especially after the white house -- on its trade news with china by demanding a $200 billion cut in the u.s.-china trade deficit. our next guest says any weakening of the u.s.-china trade relationship will be a problem for germany. this is the president of the kiel institute for the world economy. still with us is the head of em cross asset strategy at ubs. i am also covering developed markets as well. we will be covering everything. let me ask about the boosting of targets by donald trump. that chinadi

british airways owner iag is cancelling 75% of flights in april and may.e to ground most of its planes. the uk aviation industry wants more help from the government to survive a long—term travel freeze. there are lots of different ways to do that. one is to prevent those flights from having to take off nearly empty, those ghost flights that we have been dealing with, then there's things like time to pay, facilities through hmrc. be in no doubt, we understand the severity of what is going on. and other operators, including ryanair have warned that the grounding of entire fleets cannot be ruled out. so many airlines are cutting capacity. some are also laying off staff. it's not just capacity. some are also laying off staff. it's notjust the airlines but the other businesses that rely on them to get customers around. it's a crisis of unprecedented scale, and the industry are struggling to get his head round it. meanwhile, on the railways, monday morning rush—hour was much quieter than usual. more companies are asking staff to work from home, overfears about t

now they have a telephone call right to the heart of iag. no breaking news on the dealmaking. rose came in at 6.5% -- growth came in at six point 5%. this is an expensive shop. i can't afford to go into it. europe is doing well. but america is what disappointed. the big issue is this. japan beat 3.8%. do i have time for a little foreign exchange? these russians are going to tell us where they are with interest rates. we had that conversation this morning. russia doesn't have the ability to move on. you are going to find out what is in the vaults. the swiss franc against the euro since the tumultuous day when they moved away. >> iag is the big story in the stock market. we are looking at gdp out of spain. apparently the relation is not the end of the world. -1.4%. prices forecast to drop by half of 1% last year. the greek prime minister guarantees stability. investors are reassured. yesterday a racing some of the losses earlier in the week. you have the president of the euro group today. what is on the agenda? >> he is going to meet the greek prime minister this afternoon. the

norwegian airlines has rejected two separate takeover bids by the british airways owner iag.tes across the atlantic. it said that iag's bids fundamentally undervalue the firm and its prospects for further growth. iag also published some pretty healthy operating profits — up 75% for the first quarter of this year — and it's among the top risers on the ftse today. a bounce back for car sales. after months of falling sales, the industry has finally reported a rise in new car registrations of 10% in april. however, that should be put in context. it is 10% up on april 2017 when sales saw a massive 20% collapse on the introduction of new tax rules. a series of national competitions and programmes are under way, designed to identify, inspire and enable more young people to go into the cyber security profession. they are the winners of a contest designed by the bank and cyber security challenge uk to find the next generation of cyber defenders. they were asked to put together a plan to defend britain's central bank against cyberattacks. but how hard is it to find young people to take

there are some major carriers, like iag, lufthansa, ryanair, these carriers, like iag, lufthansa, ryaups carriers, like iag, lufthansa, ryanair, these groups do have large amounts of cash but they will start to see that go down. it is the smaller carriers, or those that have not been around so long, that you have got to look at to question just how long they can survive. norwegian airlines, with air, alitalia, which has survived so many disasters over the years, can you come out of this? airlines will be sent to government, uk government, we badly need your help now. so far, the government has said we are not prepared to help you. it is going to be interesting to see if they do step in. when you realise just how much of an economic emergency this is, notjust a public health emergency. do airlines have insurance? yes, insurers backed them through the aircraft particularly, doggedly business insurance as well, but as we have seen, airlines do go under. flybe most recently in the uk, and coronavirus really was the nail on the coffin for them. i think you saw last week lufthansa of german

in other developments, iag, the pa rent other developments, iag, the parent company of british airwaysas warned the airline could make up to 12,000 workers redundant. agencies is a lack of resources in conflict zones should see the spread of the virus continue, while in france, all food shops will reopen for may the 11th, but bars and reopen for may the 11th, but bars a nd restau ra nts reopen for may the 11th, but bars and restaurants will remain closed. we will have much more on all of stories, but firstjudy much more on all of stories, but first judy bryant much more on all of stories, but firstjudy bryant reports. a salute to the covid warriors. the blue angels and thunderbirds paying tribute to those on the front lines on the battle against corona writers. they flew across the northeast and a —— uplifting spectacle for residents and lockdown. new york continues hit, but today a glimmer of hope. what we've seen is clearly progress. when we can start to make some of the move to open things up, but i will say it again, we are being cautious and careful and governed. it will be gather

the british airways owner iag has posted record profits of $1.8 billion forjuly to september.ted capacity by almost 18% with the delivery of 20 new aircraft. iag says its forward bookings are looking good, but that it's mindful that economic and geopolitical uncertainties could affect the rest of this year. us chip—maker intel reported results that beat wall street expectations for the july to september quarter. despite its overall revenue declining about 8% the same period a year ago, shares rose about 6% in late trading. the company also said it is on track to catch up with chipmaking rival tsmc in an increasingly competitive industry. american car—maker ford also reported its earnings. but unlike intel, it missed analysts expectations and saw shares falling about 3% in after—hours trading. the us auto sector is also in a state of flux — with ongoing worker strikes that have lasted six weeks, demanding fair pay and better benefits. the company said the strikes will likely reflect in the results for the next quarter. stay in touch with the @bbcbusiness team and me on socials,

iag sees the value. it is hard to see what the picture is.e profitable and we have the means to continue to grow and we will consent to do so. toy're on their own paths recover into profitability and maximize. oles. our own r we are set to develop. >> it is between iberia and iag . you must see some pods or holes where there is possible m&a. >> there are also -- there are always opportunities. we are focused on running the business. 30% is a huge challenge for us this year. as what we will be focused on primarily. will he tell you more about that. >> will ask him. your name has been mentioned in the past for successor to the top job at siberia. you are putting a face. does a man you are interested, would not be interested? -- it does it mean you are interested, would not be interested? started in> we have 2006 together and he is the boss. he is the best person. he has been dealing with labor issues. i cannot think of anybody better for the job. else.ot think of anybody >> ok, fine. low cost, long haul. a vested interest from new york. can it

iag's ceo says he's worried about fuel prices and inflation.loomberg at iag headquarters. >> it is a crucial moment because it is one of our main markets. we needed to have that capacity, so i think it is a day where we are going to see the future in some way. we can fly all the aircraft we are holding. it is an important day for us. ritika: he says he also sees a reduction in global corporate travel -- a return to global corporate travel in 2023. credit suisse is exiting the unit that lost billions in the archegos collapse. that is your business flash. guy: thank you very much, indeed. this seems to be the direction of travel. basically, a come at a has an issue with its prime business, decides it doesn't want to do it anymore because it encompasses quite a lot of risk, and as a result, bnp goes i will have some of that. alix: i have to wonder for credit suisse, does it clean house enough? matt levine, who writes for bloomberg opinion, was talking about the fact that it wasn't a hedge fund, but the wealthy client who went to credit suisse and

shares in iag — the owner of british airways — are down.ing the cost of the disruption — with some estimates suggesting compensation and lost business could cost the airline £150 million. let's get detailed analysis of those stories and the effect they're having on the stock markets. jeremy cook is chief economist at world first — the currency exchange firm. good to see you. let's begin with ba. when you see how much the share price has moved, it is down a little. why you expecting bigger moves, or is that in line with the reaction you would expect from investors ? reaction you would expect from investors? i think there is more to come, to be honest. the reputational risk british airways brand has suffered over the last couple of yea rs suffered over the last couple of years as people realise costs are continuing to be cut, and the proposition is falling away. then there was a pick—up in share prices when they said they would charge for food and short—haul flights but if you cannot get the passengers to where they need to go, that's the ess

going into winter, what is the outlook for iag?: it is one thing that willie walsh refuses to give an indication. we have that from ryanair and lufthansa. they are expecting fares to be tougher. we also know that virgin and a couple airlines are dropping capacity. iag has told us they were going to drop from 5.5% to 5.2% across the airlines. jonathan: you say you've heard from willie walsh. how is he performing against the two big rivals? performing walsh is well against his competitors. 11.5%. risen about his competitors, lufthansa and air france, have both dropped over the period since the beginning of the year. willie walsh is reaping the rewards from his tough negotiations and treatment of the unions when he first joined. now, we are seeing air france and lufthansa still struggling to get into those negotiations with their unions. bid.here is the aer lingus transatlantic is the biggest burner of their business. that is more heathrow slots flying to the americas. jonathan: thank you very much. that's almost it from me. break, we

thank you, caroline hyde on iag. clean energy vehicles gain ground. the u.k.'electric car club come after the break. ♪ >> welcome back to "the pulse." television andrg radio. streaming on bloomberg.com. the u.k. has its first entirely electric pay-per-use car club. designed to provide members with the convenience of a full-sized private car without the high cost of owning one. here to speak more is ecar's cofounder and managing director chris morris. you are not the first such in the world. paris has one. i'm going to ask you, we are aboutg -- when i think it, my concern would be repair and maintenance. you do not have that problem. >> no, we do not. it is common across all electric vehicles. there is little to go wrong. there is no motor, there is no electric engine. maintenance costs are low. it is one of the many issues the electric vehicles public has, in practice they tend to dissolve. >> do you have a main concern? scalability or how you grow this and bring it to a bigger market? >> we are a young business. we have all the consent that go the fundraising