a big week for mario draghi.e will look ahead to today's inflation and unemployment numbers from across the euro area. stay with us. ♪ mark: let's get the bloomberg business flash with nejra cehic. nejra: takata has ruled out bankruptcy. that is according to a person of knowledge. they say the company is instead seeking buyers to take a controlling stake and carry it through its process. -- findingstood that a suitor by the third quarter. jaguar land rover is helping to put cars with motors and the fast lane. thanks to the luxury brands sales. it -- it is cautiously optimistic about global growth. a new model drive's sails in the u.s. the airbag scandal may affect about 100,000 of its cars. it is put aside almost wanted to million dollars for repairs. the new york post is reporting that deutsche bank has emerged in a probe. the paper says no bank has been accused of any wrongdoing but investigators are narrowing their focus after requesting documents and communication from .ll of the 22 primary dealers deutsche b

or what draghi does? for up to five years, it is really all about draghi.lopment, it becomes more important. the long and is really 50-50. what is yelling doing -- yelling doing and the ecb. guy: do you think the ecb's maneuver is going to shrink? the politics in germany are increasingly important to ecb thinking. they are independent. they are going to make their independence very clear that they are aware of who their largest stakeholder is, i suspect. i expect the bundesbank is going to be interesting in that light. michael: good point. what do we think the ecb will do? we think there is a good chance that the next six months, we have a bit of a paul's because pause.it of a -- the credit to the private sector is improving. a natural case for waiting and do a little bit less. it might very well fit in nicely with the german election cycle without ecb doing something different as of the german election cycle. but because data is stabilizing. the only change will probably expect is the closer we come to end, which is indicated as much 2017 and will push tha

draghi drama. the ecb president hits back at critics and that savers cannot expect returns without economic reforms to rekindle demand. it is just gone 6:00 here in london. it has just gone 7:00 in berlin. in terms of these nubbers from commerzbank, the net profit, that is against a forecast of 160 million euros. just a touch above or in line of the forecast. in the ratio. 148loan-loss provision million and the estimate was 170 million so it looks as if they're having to make fewer provisions for loan losses than had been expected. before loan-loss provisions or 2.3 one billion -- 2.31 billion. the low interest rate we find ourselves in means that barclays suggesting that net interest income would most likely be dampened. keep an eye on what they say about that. another big theme has been cost-cutting. they are talking about aiming to keep their cost base stable. this deal see a full year moderate loss in long provisions. there talking about considering increasing the strategy of market share. we h

it is pretty good for mario draghi.erman give him some comfort that their policies are starting to take cold. a look at the german retail sales numbers and they were not rate. it is still early days. unemployment data must be the best since post-reunification. if you look at other parts of europe, the numbers are still lagging. it highlights the challenge that mario draghi has. we will be keeping a close eye on the german data and the rest of the data. always great to have you, richard jones. stay with us of course on bloomberg television. up next, it is the pulse coming on live. we will be breaking down more data. matt always a joy to have you. ♪ >> hawkish comments from the fed. janet yellen drives market as the dollar closes on its best month since september 2014. not the end of the road. vw reports a profit beat more than the 2016 sales declined as stock falls. the short on china. as the bearish specs yuan slumps. a money meant -- a one minute slump increases for the volatility. volatility. further ♪

draghi drama. the ecb

it is not just something that mario draghi can do. francine: sharon bell from goldman sachs.e will talk a little bit about oil next. we also have the chart of the hour. brent crude trading over $50 a barrel for the first time in six months, as u.s. oil stockpiles dropped more than forecast. that will be our chart of the hour coming up next. ♪ francine: welcome back to "the pulse." emergency mark -- emerging-market currencies -- topping $50 ade barrel. rejoining us a sharon bell, from goldman sachs. we have our chart of the hour. this is what we looked at what we came into the newsroom. this is the spread between high energy bonds and treasuries. a sickly this red line -- bas thely this red line is distress level. anything below 10 basis points, means they are healthier than if it is at, for example, 1.8 or something like that. this is oil at $29. and this is oil at $49. us? does this tell a lot of companies which may go into administration but are at distress level, get an easier time if oil goes back up? sharon: oil prices doubled over this period. it's a short period. in th

draghi is giving free lunch, i get how vibrant economies can deal with that.oes italy or portugal deal with easy money that leads to i thinkows? neville: europe is not issuing a free lunch. the free lunch that is available is much more stimulative policy from germany. the monetary stimulus we are seeing helps in two ways. it does allow for italian and portuguese corporate to continue to do love her, and part because they are not paying -- continue delever.r -- thosest way to fix nonperforming loans is to fix economic growth and deliver some sustained economic expansion, each is what we are seeing at the moment. as things like unemployment rates drift down so we should see nonperforming loan ratios drift down with a lag. what is at play here, and what is critical for us to see is that continued underwriting off the recovery we have got because over time, that is going to heal a lot of the problem areas the eurozone still faces particularly with bad debt. vonnie: are you concerned with , is there anything that could derail any kind of recovery in europe? neville

past three years, ecb president mario draghi has been trying to bring inflation back in line with itsandate. -- disappointing inflation news, but there may be some good news on the inflation forecast from the ecb on thursday. >> mario draghi is down to present new forecast in june -- new forecasts in june. growth forecasts will be higher than in march and this will be the best news for the ecb in quite a long time. let's cut to the chase, the last time inflation in the eurozone was anywhere near 2%, was the beginning of 2013. it is going to be a long call back to that level, isn't it -- long haul back to that level, isn't it? would make it in total, almost six years, well below target for the ecb, which is quite a long time. oil is going up and is going to help the ecb's work, but what the ecb really needs is wages and services to rise again because this would make the level of inflation sustainable and stable. let's not forget, this is important because higher foration means it is easier other countries to work down there pile of debt. this is important for countries like italy and g

this battle between the germans and draghi is key.o answer your first question, where is the euro going? we think it is going higher. our targer in bnp paribas is 1.16. thehi has signaled to market he does not really want to cut rates further. he is relying upon quantitative easing of the asset purchases. in that environment, if he is not going to cut rates, he will have to rely on inflation expectations rising to get the euro lower. we don't think that will happen. so, the key point is, we are very confident in our 1.16 target. caroline: what about the flip side? what about the dollar aspect to all of this? you are not buying that the new york fed president has said that two hikes are going to happen this year? >> we are definitely not expecting two rate hikes this year. our view is zero. the point we would make is the fed wants to hike. the question is, whether it has the opportunity, or the market conditions, to be able to deliver that hike. in our view, they won't get that. as far as the dollar is concerned, a key point is, what i

milton: your question was what is draghi had to do that? eric: we have not seen any -- it is extraordinary. milton: there is so much credit in the system. disallowing people to borrow more and more money does not help the system. -- it causes a greater bubble. when i got into business, there were many bubbles. each individual had its own trouble. united states inflating a bubble while germany was deflating. is one big bubble. all of the central banks are in unison. so when it pops, it will be terrible. eric: pretty terrible means what i don't know the answer. it is one of two major things. --her acceleration in place or they will turn to real inflation, which is no printing. helicopter money. it is disastrous either way. eric: a lot of people will disagree with you. some already have. why is this a bear market first 30 years? it a massive direction like we were discussing had things get back in track? milton: you can always go straight up the next 30 years. most people here believe in long-term buy stocks holding for 30 years and make eight

little bit about yen strength and i guess yen gets a little relief from fed policy, as does mario draghien you look at the fundamentals underlying abenomics, is it to zeus soon to call it a failure? jane: you can look at japan for 25 years and say where are the successes. this is a big problem that carries on. there's been lots of disappointments with abenomics. it is about slow growth in much of the developed world. term,k for japan, nearer i think a lot of the questions will find their answers in china. japan's largest trading partner and for the yen, i think china is going to be crucially important. the dollar has gotten a little stronger recently. mechanically, we get a left. a sign of relief maps to the authorities. i think we also need to be looking at the levels of the andinbi relative to the yen the levels of the renminbi overall. not only that, we've got to be considering confidence in china, global growth, and the fact that the yen is a safe haven currency. francine: what happens to renminbi. we've convinced ourselves they won't devalue. soon perhaps we were too in assuming tha

we saw draghi step away from that. focusing on getting credit growth.ments to be an as the story of 2015 which is a weaker euro and yen have both rebounded quite -- lose the power in the market. start to pivot toward domestic. francine: it seems that monetary policy is working more in asia. the asian central banks are staying strong and say we can still do more. we'll boj have to ease? and will it work? alex: we are approaching the limits of where central banks can go. the top 50 central banks have cut one is a 60 times. that is one interest rate every three trading days coupled with $24 trillion worth of assets. they run out of firepower's -- firepower. francine: you mean that it backfires or it is useless? are seeing is firms are able to survive, rather than thrive as of the low interest rates. companies that would have gone to thewoods just going wolves are able to pay off the cheap interest rates. that sucks capital away from more productive this assists. that is what we are starting to see. productivity has been absent since 2008. the impact that s

he takes a leave out of draghi's book.f you are going to invert, you have to increase the extent of your program, meeting by meeting, regardless of whether you are closing the gap. you just have to keep -- francine: you suggest you disappointed last time, which is how the markets took it. >> i think it has caused. it has yet the lead out-of-the-box, and there is a slight paper tiger, because as jack lew put it, the hurdle to describe the yen as a disorderly market, where the u.s. would permit intervention, is by no means met. francine: so they can't intervene, or they are just waiting for the g7? there's nothing worse than intervening -- >> i think they will want a non-from the u.s., and i don't think they will intervene, but i think they will come back with an even more aggressive plan, and i think it will reserve in some part the funding for lending program, which the bank of england put in place in 2012-2013, where rather than using negative rates to paralyze banks, you pay them to take money off you to lend it -- franc

it is clear that the fed is ready and mario draghi wants to do better.ot talk about it anymore? narrativeimes the follows, other than the other way around. amis one of the reasons i skeptical of a secret agreement in shanghai. i think that now we have them , people will start thinking .gain about parity i think the next big stopping point is the old range. francine: what happens to swissie? >> good question. i think a lot depends on what happens in brexit. most likely we want the long dollar. swiss rate is the could he dragged down by the euro. tom: this is a trend, if i ever had seen it. is this was national bank managing the chart or is there some other story there? managing.ss are points. at -70 basis tom: they have latitude. .apan doesn't >> i think a lot of them are focusing on the japanese. i want to say this. it is not the u.s. and japan. the eu is not seeing japanese intervention either. look at the chart rate. the canadian dollar has strengthened, but canada is not threatening about intervention. francine: what does it mean? you are not expectin

i want to point to something -- some mario draghi headlines. he is speaking at an annual meeting and paying that lower or negative rates are not unprecedented and that it is felt all over the world. he says structural rebalancing is advancing too slowly, as if we did not know that and he says that reforms to u.n. institutions is essential to boost demand. he is saying what he has been saying for some time. let's get to first word news. kayla rates is in the newsroom. taylor: bernie sanders says front runner helder clinton will not have at pledged delegates to win the nomination. he is counting on being able to flip some of these superdelegates who are supporting clinton. tomorrow's indiana primary has become a last stand for republican ted cruz. a new poll shows he has some work to do. according to wall street journal, he is trailing donald trump by 15 points in indiana. he is hoping his grassroots organization can counter donald trump's appeal to displaced middle-class workers. a car bombing has killed at least 18 shiite pilgrims commemorating

back in september, 2014, mario draghi said he was going to boost the ecb's balance sheet to 3 trillion euros. back then it was roughly $2 trillion. the aim was to achieve 2% inflation. guess what? the balance sheet has expanded to 3 trillion euros but guess what? yellow line of inflation is , well below the target of 2%. it tells you that milestones are very dangerous in this age where central bankers are finding it area hard to get traction on prices. this is a wonderful charge. let's turn to the egyptair flight which went missing on its way to cairo from paris yesterday. we go live to paris. thanks for joining us. what can you tell us? >> not much has changed since this morning. the breakthrough today is the egyptian planes have cited debris from the plane. they have established it is from the plan unlike yesterday were there were false reports. investigators will go into action now and there are three investigators from france who have gone out there to help egyptians and will analyze the debris. they have no idea how long it will take it they have been very tightlipped. the pieces

in-line but still not great for president draghi. paul: inflation just below zero, employment just above 10%, a flight improvement and reason for the ecb to say the stimulus is starting to work at a long way to go. where did the inflation come from? it has never really come from industrial goods, it used to come from energy and that may return briefly but it is hard to see that sustained. services inflation is where the ecb needs to see prices increasing and that is a stretch at this moment. jonathan: if you are looking for a company that probably does not need to wait is germany. -- qe is germany. hand, they are likely to provide their inflation projection a little bit higher but he does not want to strike too much of an optimistic tone? paul: inflation projections may be revised a little higher or unchanged but the last four revisions have all been down so that is the first good news of the year for the ecb. there will be a writer -- reiteration that the ecb needs time to feed through. there was a discussion at last meeting that mo

i was on stage with mario draghi.on't forget, we're here in frankford, with these members, particularly the german, about monetary policy from. and that's taking place. in the backdrop, you've got angela merkel touring around speaking, pressing the case for more german exports. but taking a swipe at supply chains across emerging markets calling for decent sand fair practices. all that as emerging markets come to europe. and talking about the challenges they're facing, depreciating currencies, and you can see the undercurrent taking place across the board. let me just reference this music that you can hear behind me. this is not the call of more central bank action. this is actually japanese music as the annual meeting is going to shift to japan next year. i think one of the expectations has been the chinese bank set up for economies. no one was very welcoming when this bank first came to light, even adb because it was seen as one of the world challenges. but the president of the bank was here yesterday, talking about

draghi changes something in the environment, we have a difficult -- to do with it.ank you for those comments on the sensitive issue of negative interest rates. when we look at the persistencey of the chronic nation negative rates, we are aware of the struggles with italian banking. we are aware of the struggles with medium and small size of german banks. can those struggles come over to commerzbank? are we missing the point that the big banks could have the same balance sheet issues and retail banking issues that the little banks are having? of theels: i think part current situation, including substantial investment -- and regulatory -- does require a for banks.e the economies of scale work in favor of the bigger banks. it remains to be seen whether that works all the same across europe. has taken on the challenge to make sure we all get a level playing field provided. i guess the future will tell. francine: sir, a quick one on how your balance building capital buffers and your higher dividend payouts. this is the main challenge for yourselves and all your rivals. 1

rate policy here and in asia are not -- is not helping the banks policy regardless of what mario draghi may suggest. these lawsuits, they have paid up $14 billion since 2012. that could get bigger. john cryan has said that is one of his main focus is is putting a stop to one of the big losses this year. first quarter profit fell 61 percent. when we were here last year, john cryan said he may have another loss this year. a second annual loss, there are a lot of problems facing him. the most interesting thing will be sit -- will to see -- if we get a turnaround in the slump and if this zero interest rate policy actually is helping banks as draghi has suggested. guy: matt, thank you very much indeed. remember we are watching unicredit today. will he be there at the end of the day? coming up later, we are going to be talking in an interview with berkeley's ceo, just daily -- -- jess ceo, just daily staley. got-- we've problems at deutsche bank, germany's biggest bank. we need to get this fixed. how far away are we? moody's is concern that it is going to struggle. jean: it is all about the e

coming up, mario draghi reaches and ec be milestone.u that next on "bloomberg ." ♪ years whenn two mario draghi said he would boost met thes meet -- he has limit. julie hyman is here. what do we get for 3 trillion euros? julie: a whole lot of nothing. he said he would boost the balance sheet around 2012 levels around 3 trillion euros. goal is toadded, the spur inflation. here is a balance sheet and the white line. we reached that milestone. it is a problem -- this site is inflation, so now we are looking at negative inflation. the blue line is inflation. essentially, mario draghi has not gotten what he has paid for. crux ofngs us to the the matter and the challenge with central banks -- their effectiveness with stimulus in achieving their goals. david: this is roughly october, november, and december of 2014. it is a huge diversions here, right? counterfactual, this would be lower if they had not done this? julie: you can argue that it is not the ec be's fault. here in the u.s., we should point out that we have seen an expansion of t

matt: was going to ask what you think draghi will make of this. is going to put out new projections for growth. it looks like what he's done so far is working as he would hope, rich. >> i think we've got some traction. these numbers are probably a little too close to 50. the french numbers, the manufacturing numbers, are below 50. having said that, these are green shoots of encouragement. guy: we are building up to yellen on friday. what a week we have. richard jones joining us from bloomberg first word news. stay with bloomberg television. "the pulse" is next. jon ferro and i are going to be on the radio with rich jones. we will kick around what we think this week is going to look like and what europe should make up the numbers we are seeing this morning. all that on bloomberg television and bloomberg radio. ♪ francine: japan exports fall in april as g-7 leaders disagree on currency wars. a german company offers a $62 billion all-cash deal for monsanto as shareholders worry about overpay. recession.dum on a david cameron a george osborne say brit

strikes against new labor reform measures, beginning with mario draghi. in cann,

strikes against new labor reform measures, beginning with mario draghi. in cann, the parade of hollywood stars continues along the plaza, with robert de niro hitting the red carpet. we begin in vienna, where world powers are meeting to stabilize a shaky syrian cease-fire, while reestablishing peace talks. these are the differences between world leaders. that's cross to our correspondent anthony mills in vienna. what is expected to come out of today? the different parties involved in these talks are hoping that they are going to be cease-fireive apache that has been -- a apache cease-fire that has been shattered and use those patchy cease-fires that will in some ways diminish the violence in syria, and hoping they will use those cease-fires to draw the opposing parties, the assad regime on the one side, and the militants who oppose him on the other toward some kind of dialogue, something that can manage this peace process, if that is one could call it, forward in the direction of the ofe durable absence violence. that is something proving because of the en

it's mario draghi look at these figures trying to figure out what janet yellen does next. many ways, the fed has a broader mandate. it has a full employment as well as inflation. it has asymmetrical inflation target. it sets policy in the world to a larger degree. this is the magic of home depot. this is the last thing i bought at home depot. this is the dog bowtie collar. that's the magic. michael: they don't have dogs. they are not just selling two by fours. good morning. we will continue. janet henry, thank you so much. michael mckee and i will -- forward with hours of bluebird surveillance this morning. on greece.g ♪ is the new 2045. new demands for greek debt relief. oil continues to move ever barrel the$60 per new $50? on digital as king. this is "bloomberg surveillance." it's tuesday, may 17. with mean is francine lacqua. the may 24 eun, meeting of ministers becomes important. francine: i would argue that it has always been important because we have been following the renegotiations, the bailout, the money and the debt relief for quite some time. in europe for the l

it's difficult to get rid of mario draghi. this is why spread concern across -- widespread concern across the eurozone. the understandable given youth unemployment problems. betty: this is behind us. mark: 41% don't know. the probability crunch is still in favor. it's the bloomberg machine. it's numbercrunching. neil: i think you need to check youfuses in the machine think the percent to remain as much too high? i do follow it. it's very useful. that includes the president and everyone else. be a disasteruld during how come the probability is 77% that we will stay? betty: we will come back and debate more. we have more economists like yourself going for brexit. it's good to see you. hotels, shares are jumping on the london trading debut. investors so interested? ♪ mark: you're watching bloomberg markets. i am mark barton in london. betty: this is the european let's talk chocolate. mark: shares her story today on the london trading debut. thestock rose 33% on investment target. is $322e of the country million. 33%. the jew expe

jonathan: so you are on the draghi side of the argument? dan: we are.the marketplace that it is unlocking credit? dan: his official execution does not get started until june. the corporate bond part, he expanded the qe and went further negative. you are waiting until june to see whether the corporate bond buying? dan: exactly. to your point, we have not seen as much of an impact. --nie: dan: our team is mostly a u.s. equity focus. the european debt is still an overweight when you look at their portfolio and when you look at the reasoning, you are trading at historic discounts and cheapness to the u.s. we think credit growth and draghi's initiatives will get better growth going. david: the third story that markets are falling today is about apple. apple is struggling to crack into the world's fastest-growing smartphone market. is saidlling in india likely to keep apple from opening retail stores. it requires 30% of apple components must be sourced locally in order for them to have a retail presence. the largest company in the world, one of the largest ec

what does commerzbank need from mario draghi?a listen to the chief financial officer. >> we had a difficult first quarter like almost all of our peers. the negative interest rate environment, we have a strong capital ratio. i think the market reaction will be solid. the bank shares are getting hammered today, down by 9%. mark: have a look at what's happening in the currency market. they raised all losses for the year against the dollar. it rebounded 5.5%. up the seventh day against the dollar. u.k. guilds are rising. we had u.k. manufacturing unexpectedly shrinking for the first time in three years in april. the spanish yield is down by a to 1.57%.t there will be an election in spain on june 26. moving from the markets to summer holidays. itsival section is out with travel guide. we're walking through the recommendations. thanks for joining us. it's not summer in sydney. why should i go to sydney when it's winter? brett: now is a great time to go to sydney. the us trillion dollar against the u.s. dollar is at a six year low. in t

at mario when you look draghi, he does not have an easy job.ou look at the euro, qe has diminished and we do not expect any said that the can -- significant move in euro-dollar. that will be premised on if the fed steps up to the plate instead of if the ecb issues more quantitative easing. tom: if the swiss franc's litmus paper for the system, explain that. kamal: we have been challenged slightly in our view that the swiss franc would make some strong gains headed into the eu referendum, particularly as the risks around the referendum are localized but what we are seeing according to the data that swiss equity funds are showing outflows. we think that could be driven by the forthcoming ecb corporate sector program where according to our credit strategists, we are seeing significant inflows into the investment grade world. against a backdrop of a swiss economy is still in the throes of deflation, where growth is still very mediocre, and of course where we have negative rates. that is the opportunity to invest in investment grade in europe is qui

growth was better than expected. ,nflation, not so good highlighting the challenge for mario draghi.e inflation is far below his 2% target. today, we will get manufacturing pmi data. at 10:00, we get eurozone manufacturing data. we get some before that for spain, italy, france, and germany. onwill be keeping an eye those numbers and any reaction we see in euro-dollar. right now, pretty much unchanged. itwill be keeping an eye on after the data. manus: no conversation with my european colleagues would be complete without brexit. what is the latest? >> a poll over the weekend show 46% back brexit. 43% favor the eu. the thing is, some of our editors at bloomberg are saying, do not make too much of a big deal about this. online polls show a major divide in phone polls. our own number cruncher has it still at 80% stake, 20% leave. manus: thank you very much, nira. protestersres of breaching the supposedly secure green zone raised eyebrows around the world and raised questions about the iraqi government. andrew joins me now. a warm welcome. ours to consider the implications. talk me throug

draghi. it is very undeserving. francine: thank you so much, willem buiter.oomberg markets, .t is mohamed el-erian that is at 11:00 a.m. in new york, 4:00 p.m. in london. it is jobs day. a lot of the markets around the world are taking it in their stride, selling off a little bit , futures at the negative. ♪ jobs day.it is francine lacqua with tom keene. let's get to bloomberg first word news with nejra cehic. nejra: in the u.k., voters in global and regional elections gave no sign they are ready to defy their leaders and leave the european union. david cameron posco conservative party appears to be on the brink -- david cameron's conservative party appears to be on the brink of picking up seats. extend hergeon will term as they head of their semiautonomous government. and we will learn who will be the mayor of london later today. north korea's meeting gives kim jong-un a further chance to solidify his grip on the country. he came to power five years ago after the death of his father, kim jong-il he may focus on economic growth and military strength. cease-fi

draghi will say we will never pre-commit.pare for a range of possibilities and anything can happen. you cannot pinpoint. sometimes you can just say -- right now i do not think it is a live meeting. tom: y2k. michael mckee, you have got to be kidding me. they are going to raise rates 8 days before brexit. mike: the polls suggest the brits are about to vote to leave the european union, then they may put it off, and september becomes the live meeting. but at this point, if the polls are to be believed and the brits are voting to stay in and the economy develops -- we get the 200,000 jobs we are forecasting, they want to go in june. tom: i want to rip up the script. productivity, how big of a thing is it? all of a sudden productivity matters. mike: it has mattered for quite a while. they do not know why it is not rising. business is not investing. we have not come up with any new products. the question is when does it come back? tom: michael mckee, always wandering through "surveillance." oflistens to every second bloomberg "surv

you will be a friend to mario draghi for a long time for some stay with me, we have a lot more to get are watching "bloomberg markets: middle east." ♪ manus: welcome back, you are watching "bloomberg markets: middle east." he sultan ahmed is still with me. world, weok at the had some data from china this morning. we know that china is going to this rebalancing. 6.5% is the magic number from the chinese. do you think, from what you have avoided a hard landing in china? he sultan ahmed: we are in china. we ahve se -- have seen growth. china's biggest challenge in my opinion is cutting costs. we have told them we are facing a 20% increase in labor every year for the past seven years. what china is doing is cutting growth. last year, it was the first to the number of chinese entering the job market is less than who exited. danger, it is the about the working population. are you concerned about overcapacity? they don'tbout that have a grip on that overcapacity? he sultan ahmed: they are deliberately trying to. deliberately. they are moving some manufactured from the coastline which is a pl

these things tend to have that much of an impact but when we look at uncertain times and what mario draghi may or may not do, it may. 111.44. stay with "the pulse." in half an hour we speak to the president of the ifo institute. let's check the markets. this is a picture for worldwide markets. global stocks rallying with some of these emerging-market currencies. i want to show you yuan and the 10-year greek bond. we have an agreement, not on debt relief, but the european governments will disperse some money to greece. that meant the 10-year greek bond yield fell below 7%. now creeping a little bit backup. let's get straight to bloomberg first word news. nejra: the ceo of unicredit has agreed to step down after almost six years at the helm of italy's biggest bank. after his efforts to improve capital and revive profit -- lost its supportive investor. he and the board agreed there was a need for a management change. bayer says it is still optimistic in pursuit of monsanto will succeed despite the $62 billion bid being ejected. share offerys $112 a does not address the execution risk of the d

francine: what can mario draghi due to counter that? by equities? -- buy equities? much firepower does he need to put behind it to play on currencies. andreas: i think they have run out of power, to be on this, the central banks. it will be less effective whatever they do. both in terms of market psychology and in terms of real economic impact. francine: where do you see the most value in terms of regions? do you look at it like that? andreas: no. spread product. it is liquidity premium, for example. term premia. it is currency. it is not where the market was. francine: thank you so much for now. he stays with us. we'll talk a little bit about brexit and the u.k. and sterling next. the u.k. is not hiring. that is the forecast for this morning's unemployment figures. we break those down next. we look at the applications of brexit. this is the cloud -- like you can see over st. paul's. ♪ francine: welcome to "francine: the pulse" at bloomberg headquarters. u.k. unemployment. a low unemployment rate in line with expectations, weekly earnings a touch weaker than expecte

draghi, the president of the ecb, will be hoping that march's boost to stimulus will stimulate inflation as well. we will be here to tell you all about it. betty: let's check in on the "b loomberg first word news." willce president joe biden announce new rules on overtime that may give more than 4 million americans a pay raise. it may also give them a reason to vote for democrats in november. the new rule says workers must be paid at least $47,000 before they can be considered managers that are ineligible for overtime pay, twice as much as the current threshold. onto california. it was a split decision last night for hillary clinton and bernie sanders. the democratic presidential primary in oregon, while clinton claimed victory in kentucky. sanders is running out of chances to stop clinton. june 7, big tests are primaries in california, new jersey, and four other states. california water officials will consider dropping a mandate that requires conservation while the state is in its fifth year of a drought. the state water control resources board will vote on whether to give local water d

>> what i would like to know is how do you hold 42 billion euros of debt to the policies of mario draghind other central bankers? you have the gift of free money. what happens to this transaction if interest rates go up? all, were looking at a well blended financing structure. generateability to free cash flows and the ability to also d lever. that is a coreng element of prudent financial policy and you may have seen the statement of standard & poor's and assessing what the financial structure and balance sheet of bayer is going to look like going forward. we are very pleased because it is an indication that were going to have a very solid investment great rating going forward and gives us a chance to obtain an excellent business profile for rating purposes. shery: if monsanto rejection offer, do you have the capacity to increase the offer? >> will totally convinced about the attractiveness of our offer here if you look at the fact that it's a 37% premium over and of mayhe share price as 9, that's a strong testimony to the value of the position for shareholders. the also in line with tra

you've got to imagine mario draghi's frustration here. >> absolutely.s the trillion-dollar question for everybody. how can they do more. the european banks are unique in the sense they're financing major financiers of the commodity boom. most is coming from the european bank nchl the world they're a unique type of species. now, ubs in and of itself, you can refer to several other things. they're horn't. their wealth management was horrible and they didn't say it was getting better, so the operating environmental for financial firms is just terrible. there's no growth driver for them. so this is not surprising. and even if the ecb does something more, i'm not sure it's something that file turs like ubs. >> it comes back to the u.s. banks. so much of that was predicated operates going higher. now they're kind of casting around for direction. >> only predicated on that. i know everyone has another story that they're cheap and there's other reasons that they look okay. butly say the yield curve didn't exactly flatten tremendously in the u.s. the treasuries

if i'm mario draghi sitting back in frankfurt, my question would be why sit back in time when desperateor european corporate, why not taking advantage of low rates. >> i think fundamental, long-term equities, long-term projects, and a very strong balance sheet. so a very strong balance sheet is extremely positive for day-to-day activities. in addition to achieve our 2020 strategy, we intend to invest in order -- worldwide, also in order to boost our gross acquisitions. so for the debt situation, it allows us to take the balance sheet to improve and further accelerate our strategy. >> does that suggest you expect to take on more debt through as you step up that investment? >> i think that is a possibility to invest in the coming years. either in this or to invest. >> what does this level of investment mean for your margin, you talk be about innovation, trying to meet the demand of countries looking at your fuel efficient and innovative products. what do you expect for margins going forward? >> well, looking at 2020 a margin of 7,000. we have moved this year from 12.8 to 5.3. we're leanin

so they are able to turn the taps on much easier than the japanese or indeed mario draghi or janet yellenat's really what's going on. soros is printing a weaker yen because of the size of the monetary base, nearly the size of that of the united states. manus? manus: thank you very much. anna edwards and i will be back in just under a couple minutes. the dollar -- what happens next? our guest joins us for "countdown." stay with oil is on the rise. expanding wildfires in canada knock out one million barrels a day of output. saudi shakeup. the kingdom replaces ali al-naimi with khaled al-falih as its new oil minister. he promises to keep pumping in a bid to break the -- and channeling churchill. david cameron speaks of memories of the wartime leader as he presses the case of keeping britain within the eu. a w

when i would like to know is how beholden is your 42 billion euros of debt to the policies of mario draghither central bankers. you have the gift of free money. what happens to your company? what happens to this transaction if interest rates go up? look at af all, we well blended financing structure of securities that align with our ability to generate free cash flows and with it the ability to also deliver. that is something that is a core element of prudent financial policy. you may have seen the statement of standard & poor's of what the financial structure and balance sheet of bayer is going to look like going forward. are very pleased because there's an indication that we're going to have a very solid investment grade rating going forward and also chance that we will have an excellent profile for rating purposes. >> if monsanto rejects your offer, are you ready or do you have a capacity to increase offer? >> we are totally convinced about the attractiveness of our offer. it is a 37% premium over and above the unaffected share price as of midnight. i think that is broad testimony for t

in terms of favorable, you'd want mario draghi from of the ecb finally be saying, look, he's an oliveranch. we're not going to punish you if you don't lend. but the 40 basis point rate is about as favorable as you can get. he's basically saying we'll pay you and just die little lending to the economy. >> to participate is the question here. >> while we have you with us before we say good-bye, a brief glance at another chart as well. this is the euro high grade market size. that's just going to continue to grow, increase? >> if our view of animal spirits being unleashed on the corporate side is correct because as their program ends we're looking at a doubling, i think, of the credit market in five years. >> that much? >> yeah. >> what does that amount to each year? >> 2.5 trillion growth. about 500. but the u.s. market told us that these things happen. i mean, this isn't a dream. is this say reality. >> and u.s. corporate spending, that pulse, is higher than europe? >> the u.s. has picked it up and done what they should have done understand a policy world. our corporates in europe have

we know that mario draghi and the ecb are going to do whatever it takes.n the meantime, it means time for the policies tort. we will see how that progresses through the summer and comes back to q3. mark: good to see you on the other side of the pond. betty, be nice to him. cook atok, -- jeremy world first. shares of royal shell next. the company beat on earnings despite oil prices hovering in the lowest levels in 12 years. why are shares falling? europeanook at how stocks are faring 10 minutes ahead of the wednesday a similar story to what is happening in the u.s. today. the stoxx 600 is down by 1.1%. ♪ mark: you are watching "bloomberg markets." i am mark barton in london. betty: i'm betty liu in new york. this is the european mark close. mark: shells acquisition is starting to pay off. first quarter estimates beat encounteringr record low crude prices. ryan chilcote is chomping at the bit and the chief executive will be happy that the peg acquisition is starting to pay off. ryan: it had its doubters and skeptics. $54 billion sounds like an awful lot to p

i think mario draghi is having a freakout, too. >> there are those that make the argument that the jobson of what the economy is, and not the gdp. >> yeah. you hear that. i think the other thing is, just going back to what robin was talking about, i think it's interesting, because we had such great paper telling us about some of these metals, gold, silver, some of these obviously a reflection of the dollar. it's really interesting. we have not seen that continue the way we have. that sort of dried up. we've had this great run. are we going to see those stepped any further than they have? i'm not so sure about that anymore. >> do you think nathan definitely makes that shift over to the telestrator? >> i think he makes it. he's a quick son of a gun. >> a flurry of activity in, where else, but the options pits. our boy dan nathan breaking it down. >> now we've seen oil, it's done its in trars are starting to lok the other way as it relates to oil and gas. etfs, today, the s&p, oil and gas etf had options volume trading 2 1/2 times average. puts were four times of that calls. one large trad

to the speak, and going against the grain of japan and in many other countries like draw gi -- -- draghirozone, it is not outside of the realm of possible that the rise by the fed could give us a steep yield. >> thank you, rick santelli. >>> and now, looking at tim cook and his speaking of the future of the television world. >> apps are the future of tv. and so we have launched the new apple tv product, but it is clear to us as we pull the string, there is a lot left to do, and we'd like to be a catalyst in changing the world of entertainment. >> carl, a lot left to do. >> i picture tim cook in this headquarters of apple and filled with string, because the first time he talked about pulling string was february of 2012. and it is a lot of string if you have been pulling it for 4 1/2 years, and still pulling it, my goodness, knit a sweater. they have to come out with an over the top tv and the interative strings, come on. >> tell it to gene munster. >> and is the future of mobile in your hand. >> he paid with his hand. he put the hand up, and you are good to go. and like that, is crazy. >>

it is interesting to see how draghi is dealing. the san francisco fed president, mr.s he believes a june rate hike is possible. he says we should not ignore the possibility, but the market only has a 12% probability of that happening priced in. ♪ guy: 51 minutes into the equity market session. the market is down by .2%. one of the reasons for that is what i will show you here on the bloomberg, and that is bhp. as you can see, it has fallen l ower. on a three-day basis, it is down by 12%. this is related to the stories surrounding what happened down bursting and the dam and what that will mean for the business. we have seen a similar gap lower her eine in london. we have got the final number on french april services. so, still north of 50, but softer than the preliminary number, which was 50.8. data fromt a slew of the knotted states, including a reading on the state of the service sector. an hour and a half after that, we have david cameron testifying in front of lawmakers regarding the upcoming brexit referendum. 30 tonight, 11: minneapolis fed president kashkari spe

draghi can play an important political role at the european level.e quantitative easing for the greek debt and restructuring in the long-term. needist on that, we cooperation and agreement with the european investment bank. for public investment increase. >> it's a very complicated issue and it involves a lot more explaining a lot more understanding, it is a good thing you are doing it. thank you so much for joining us. guy, back to you. guy: great interview. let's talk a little bit about what this means. richard jones is joining us now. greece is off the table. we don't have to worry about that for quite some time. equity markets are on the front foot and rallying pretty hard. the world seems a complex place right now in the fed will raise rates. next i think that today's equity price axis stands out because we really have not seen too much of it lately. it strikes in the equities have been going nowhere for quite a long time. if you see this kind of president price action continue beyond a couple of days than it becomes interesting because then you

to get these banks to do what our banks have not done which is to firm up the balance sheets, and draghis pushing it out there longer, and that is something for a considerable amount of time to help us to put a hand under the market. >> all right. >> that is my belief. >> and alibaba is on the move on earnings, and jim chanos said he is still betting against the company. and on the other hand, we were told that others are long, and so we will hear more on that. and the dow is up 30. we will be back after this. no. it's all about understanding patterns. like the mail guy at 3:12pm every day or jerry getting dumped every third tuesday. jerry: every third tuesday. we have pattern recognition technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. td ameritrade. ♪ ♪ (charge music) you wouldn't hire an organist without hearing them first. charge! so why would you invest without checking brokercheck? check your broker with brokercheck. >>> we're back on the "halftime report." alibaba is on the move after report

mario draghi has been very bold to draw a soft line underneath negative interest rates.een toe ecb are not have a stronger exchange rate, there's very little they can do about the fact that this is a market reluctant to take risk, even with the taxation of savings through negative interest rates. the concern is coming very much through the fact that in a world of negative interest rates, you don't have incentives to generate more productivity. you are creating incentives for exploiting operational leverage. when that is the case, unfortunately currencies like the yen and the euro tend to bear the brunt of the dp creation -- of the depreciation pressures. you can create a negative feedback loop. this is a very hated stock market recovery. nobody wants to take the risk. guy: we will talk about savers as well when we come back. let's talk about what is happening with this open. we are 10 minutes away. looks like it is going to be a positive one. it is a big week for earnings in germany. we need to tell you all the companies you need to pay attention to this morning. lufthan

draghi, buto from -- you wonder whether this is the next really big scene that comes through from centralng. these pools ofe savings that exist around europe and around the world, we need to get them moving. >> negative rates will do that. if you are getting 0% in your bank account, i think the big move might be to have negative rates. some of the banks have been very effective in reducing their deposit interest rates in line with what the ecb is doing. if we start to see them making negative saving rates, that would incite people to invest in things like equity, and also to move into more risky assets. guy: to buy gold? >> well, gold is interesting. if you have negative interest rates, it is no longer a reaping asset. what would you buy? i would buy something that would forgive me a return. creditor equity, which gives you 3.6%. a very fat dividend for european equity. guy: are they sustainable? i look at a whole bunch of sectors at the moment, and the cover is not there. >> if we see the earnings growth, yes. guy: so everything hangs around -- >> these have got to go through. guy: when