but we are learning from people close to the central bank that pboc is instructing banks to hold offsetting their own deposit rates. we know the pboc in the past, including the governor, has said that deposit rate reform and removing the cap altogether is one of the riskiest forms of rate liberalization in china. he did say that could happen in the next couple of years. this is the next step as we face a steeper slowing of the chinese economy. how far to the reforms go at this time? banks have some risk right now, the slowest profit growth in a decade and that interest margins being squeezed. the central bank wants to see those funds in the real economy, working. does that mean raising the cap? does not make that meaningless? that is the big question. rishaad: he will have a more detailed look later in the program. we want your opinion. tweet us your thoughts with the #trendingbusiness. it is a busy friday. here is a roundup. reporter: you are talking about two of the world's largest announcingvelopers, they are working together in a joint partnership. it may lead to a $16 billion wo

pboc says there are plenty of tools available if more action is needed. let's bring in christine. christine, this wasn't a surprise. reporter: it was pretty much in line with what analysts were expecting. this is an likely to be the last rate cut we see this year. we have to look at chinese monetary policy as the whole package. bank reserve ratios -- and they have been injecting liquidity into banks. another way to basically shore up economic activity. the last rate cut was 100 basis points. 25 basis points is relatively modest. citigroup says another 50 basis points will be cut this year. bloomberg economist are looking for race to go down again in the third quarter if this trend continues. according to market news international, the central bank says there will be no quantitative easing programs. any kind of fiscal move the government may do indirectly through policy rather than through i direct stimulus package. the real issue is, what is the government going to do about the massive debt at the local government level? which, essentially, is blocking any real movement forward ev

pboc is saying we will raise the cap but we will tell you what it should be. stephen engle, thanks for cutting that through for us. up next, helping push the s&p 500 to a closing record. we will have the latest with wells fargo. when first up returns. ♪ they say japan must be allowed to play a stronger world wall -- world role. many voters in japan are unhappy with the idea. the prime minister insists he's not looking for a fight. >> it is absolutely wrong to label this as wawrinka -- more legislation. these bills are to make japan readyssible for senate -- for any possible scenario and be prepared to act. angie: the number of people killed in a fire at a rubber shoe factory has risen. windowsills on the prevented victims from escaping. it is thought that the blaze was sparked by welding work. they spread rapidly, forcing workers to climb to the second floor where most of the bodies have been found. praised bilateral ties. the meeting in gigi pings home province was outside beijing. china says india is the market for a range of products from high-speed trains

futures point lowers as equities shrug off another pboc rate cut. baba takes a stake in zulily for $150 million. and goldman sachs will reportedly pay $130 million to settle a foreign exchange rigging lawsuit. we're back in two. >>> reports coming in that russian foreign minister and u.s. secretary of state are to meet on may 12th to discuss ukraine, syria, yemen and iran. that is according to reports that the russian foreign minister and the u.s. secretary of state are schedule to meet on may 12th to discuss a variety of items. >>> let's look at european markets. we've got the dax, cac 40 and ftse trading in the red. that's quite a big slide. the rate cut coming out of china not really helping either. maybe what we're seeing is a little bit of profit-taking some concerns about greece creeping back into the picture. the ftse 100 is still bucking the trend. higher by .22%. ths a continuation of the celebration of the conservatives big win on friday. >>> let's take a look at u.s. futures. right now, markets suggesting a lower open. this is coming afte

what is the pboc worried about? surprise,ink it was a though maybe not that surprising.e are starting to get a lot of these weekend moves. they are still concerned about growth. i think the correction has been longer and steeper than they expected. one day after we get the trade data last week, we get another rate cut. i and not sure they can do much about the trade data, but the authorities are still clearly concerned about growth. angie: they released q&a as part of their policy moves and the pboc noted that it is having to walk a very fine line when it comes to monetary operations because it has got one eye on the slowing economy, and another eye on growing debt. paul: they have a tricky trade-off. we got into this mess by having mispriced credit and too many developers building too much stuff. now they want to make sure monetary conditions do not get too tight. they do not want another debt boom. they are trying to -- to find a nice path that splits the difference between those two. whether they can have growth around 6.5%-7%, which is where they will be focused on t

what the government needs to do is to accelerate fiscal policy limitation so the pboc can cut lendingates again to lower chinese firms operating costs. >> that is what we are hearing after the mayday holiday, a lot of talk that it could happen as early as this week, a rate cut from the central bank. do you agree? >> we think this month, we may see that. we do think if you look at liquidity conditions in china, key is tunneling. whether pboc can direct the interest rate to the right place to a small and medium-sized enterprise. at this moment, they still face significant height real interest rate. shery: investors markets seem to think we will see additional stimulus. markets of an rallying, and that is why confidence in financial situations. confidenceex shows is strong but not so much when it comes to consumer sentiment. >> that's right. it seems like the stock market rally has not influenced chinese consumer confidence. this is perhaps the reason why we still see very weak retail sales. i think overall, this current stock market rally is not something that can be sustained. shery: y

pboc has to get in and prop up banks to fill in the gap in some capacity. joe: the bubble goes on and on. alix: we want to -- that says it all. we want to bring in tom lee and carl riccadonna. good to see you. tom: good to be here. alix: joe, you were looking at something in the gdp. joe: one of the things you were tweeting about this morning, carl, these corporate income did not have a very good first quarter. but it wasn't a bad quarter for labor. the on employment rate continues to decline. so i'm wondering -- unemployment rate continues to decline to someone wondering if we're seeing a shift to labor may be getting some strength at the expense of business? carl: we saw a slowdown last quarter. march was pretty lousy. some rebound in april, but march got revise even further down when the report came out. so i don't think there is a big shift happening here. rather, corporate income and profits in particular tend to be a leading indicator of this decision-making. if the profit number is slumping, businesses tend to decide to invest less in infrastructure

the pboc have increase interest rates twice in the past month.ch means banks lend more into the economy and other options. to encourage more lending through the bank toward the government which is keeping the company. it will lead to something more likely of an interest rate push. they need to cut rates because they are quite high compared to the rest of the world. mark: what about the 7% target? can they be realistically met or not? enda curran: it is surely getting harder to achieve with the readings as this. the government set a target of about 7%. the imf expects growth below 7%. some are even more there were sprint of have options. they can cut to raise. -- some are even more bullish. they have options. they can cut rates. they can keep the economy over the target. mark: thank you to enda curran for joining us. striking a deal. tahi invest -- thai investors said he reached a deal with berlusconi for a stake in the football club. stay with us. ♪ mark: welcome back to "the pulse." i am mark barton. isis supporters have thwarted what is a claim

we will get to see where the pboc wants the rates to go. they will be injecting.take a look at corporate stories making headlines. shery ahn your. shery: a private equity fund buyed by jack ma is set to 1.3 million new shares for $346 million. the company shares have been suspended its april 21 and are due to resume trading in hong kong this morning. another deal may be underway. intel is close to buying rival altera. a deal may be announced monday. the chipmakers have been in contact since earlier this year. offer rejected an initial in april. still not known what caused the death of the president of american express. ed gilligan was flying from tokyo to an orc when he fell ill. efforts to resuscitate him were unsuccessful. gilligan joined amex as an intern. he is survived by his wife and four children. woman,asia's richest mining billionaire gina rinehart, may be facing legal action by her son to remove her as director of their flagship mining company. just last week, she lost control of the family's $4 billion trust after a court battle. let's get over to paul

enda curran: people say that is why china stock exchange is surging on the year now because the pbocentral bank will step in. they have cut the requirement ratio which is less a landing and more into the economy and they have tools at their disposal. -- which is less bank lending and more into the economy and they have tools at their disposal. most economists expect more. to encourage lending. jonathan: with the talk about growth target. several percent target. do you think it can be met. -- we have to talk about growth target. -- 7% target. -- and do you think it can be met? vincent juvyns -- enda curran: i do not think people are hanging there ha -- their hat on the target. the 70% target is under a little bit of a threat. more stimulus is the central-bank. and more the infrastructure side and more spending on building roads and public works. trying to make up the 7% target. jonathan: asian correspondent enda curran. let's check in where markets are trained. stoxx 600 a touch lower than last time i looked. a ugly week last week. the worst for the stoxx 600 this year. the euro was s

is it fundamental growth or pboc?ew is that you have a real shift, china is changing gears. it is moving from an investment and export oriented economy to a consumption oriented economy. that will be a bumpy path, but there will be winners and losers and the key thing will be to identify who will win will. alix: from where you sit, who are the winners and losers? this shift has limited tools at some point. guest: when you look at it, it is kind of the old-school aoe's. a lot of these sectors are doing very well and the tech sector for example those are not really exciting stories when it comes to innovation and new business creation. i think patrick is quite right that there will be a bumpy transition and back to the theme of the opening, pboc have to step in sooner or later to smooth things out. that is really their role at some point. they are trying to step back and not joined the qe club, but sooner or later i think they will have to as patrick said, to smooth things over. alix: how can that actually help? there a

important, what the imf thinks, but it is more important what the pboc thanks, right?hey really have to change the mechanism as to how they set the daily med point. if the midpoint is not that by is not as, the story blocked by investors. now, investment implications. it basically means a portion of global currency reserves will eventually have to move into the yuan assets. i think standard chartered out a number. mrs. is over the next five years. agie: it is trying to become major reserve currency. how far along on the road to this are we? david: they review this basket every five years. it just turns out they are reviewing it late this year, and consists of four. dollar/yen, euro/sterling. usable, andreely whether that is up to interpretation, that is another thing altogether. it remainedunt, relatively strict, because you move from being currencies for trade to investment and to reserves. two to three years, that is the timetable given for the imf for china to implicitly put in that condition or me to that condition, so we will see. we was the again. they review it

a look at the tools available to the pboc. ♪ yvonne: welcome back.his morning. thank you so much for joining us. the markets have been pretty prepared for this. >> the latest data was week. there is but the of speculation in the mainland media and in the market that something would happen soon and in fact, a lot of economists and investors are looking at deeper cuts. we may get some decline in interest-rate markets, but that will be a small negative. yvonne: they talked about this as asymmetric easing. will they put this back in motion a little bit, or will it be enough to present some of the fluctuations in the stock market? dariusz: and the chinese stock market, things are not a stretched as people think they are. when you look at how the valuations appear in other markets, they are more expensive historically, but not by the same margins as elsewhere in asia. in relative terms, chinese equities are still offering value. i think they will continue to move higher. some of the liquidity that is cheaper now will certainly moved to the equity markets.

having said that, the pboc is likely to ease monetary service.he risk reward ratio is not in favor of china right now. i think that are -- better opportunities are elsewhere. angie: how does an investor like yourself take a look at hanergy? these are indicators of a market that needs more discipline. i think that is precisely it. run uprkets like china so much, you have to be careful. somethingighlight is that is on the radar screens of a lot of people. something like that would create a lot of nervousness. china,market like corporate governance is an issue. prospective investors would want to have some money in china. but they would be careful, having run up so much. angie: what about japan? have trade balance data coming out today. , things are looking pretty good so far. but this is a big week for the data out of japan. what are your thoughts? angie: -- >> i think the recent economic data has been better-than-expected. first-quarter, growth at 2.5%. where japan is falling short is inflation numbers. the boj has set a target of 2%. at this junc

pboc: finally, if the stance is described as an aggressive easing stance at this stage, and we will alsoind lending properties picking up and we think that is a precursor, so we will be watching that. perhaps this is a first sign of an uptick in chinese activity. angie: with switch over our bojs on japan, we have the meeting, what do you think japan is going to do? on one hand, you have the businesses doing well, but on the other, you have japanese workers not seen 2% inflation in their wages -- seeing 2% inflation in their wages. glenn: exactly, and we are looking at the corporate and industrial sector which is doing quite well, and the yen is very strong against regional peers, so industrial exports are doing ok, so we think looking at the gdp figures is key to growth. whereas japanese households are experiencing real wage reflation's, so adjusting nominal wages for inflation, they are having declining pay packets. that is going to be a very big obstacle to overcome. youink as a result of that, are going to continue to see this split between the investment and the industrial and househ

you are making a call this someone is going to fall off immediately, then it is going to go to the pboc is left in their arsenal of tools to help spur growth and help it trickle down to the stock market? leland: people keep talking about how to get more money into the circulation? the problem is that firms don't want to bother -- borrow right now and they don't want to spend either. this does not work this way, we have been seeing this in our data for over a year now, firms are simply not wanting to borrow or spend. alix: we have heard some reports that there are miss -- municipal bonds with no guarantee from the government there would be no guarantee they would bail them out if they got into trouble. leland: they are trying to get rid of these bad loans, but it goes back to the idea are they able to spend the money? right now the answer is no. it is not that there is no effect, it is just that there is no way the market -- it is not the way the market expects. alix: you looked at specific data as far as the truth in china, and i want to show you china's rate traffic, and it has been dr

we did see that the pboc actually lowered that reference rate to the load weakest level -- to the weakesta month. we have seen the chinese currency fall for the past four days, but overall, strengthening quite a bit against most of its peers, including its trading partners and the u.s. dollar. mark: thanks a lot. we are getting some breaking news from zurich from the federal office of justice in switzerland. just to confirm, six soccer officials have been arrested in zurich today according to the fo j. u.s. authorities suspect them of having received bribes totaling in the u.s. dollar millions of $100 million. the six soccer functionaries were arrested in zurich by these are a capitol police. the arrest warrants were issued on a request by the u.s. authorities. the attorneys office for the east district of new york is investigating these individuals on the suspicion of accepting bribes and kickbacks between the early 1990's and the present day. the bribery suspects who are represented as sports media and sports promotions firms are alleged to be involved in schemes to make payments to the

the pboc could start taking loans that are destined to default off the books of the big banks and municipalitiestil now zhou has only initiated baby steps." are you seeing any change in foreign flows in the u.s. institutional real estate? bill: i think you are seeing tremendous demand for u.s. real estate on all levels, from condos to office buildings to multifamily literally from around the world. our buyers are mostly local buyers. 70% are local buyers. but other parts of the city are still seeing tremendous demand. tom: and oblivious to currency dynamics are net value? bill: obviously currency has an impact, but in some markets where currency has a hit, other players step into the market. it is a very robust market throughout the whole city and the country, particularly east coast and west coast in terms of foreign buyers. tom: within your world, if brendan or i are looking at a property, are we crowded out by an all-cash foreign buyer? bill: you are not. there is diversity of product. in brooklyn, you want to be downtown. in our project, you want to be in lower manhattan or on the lower west

this is the pboc at their best. was it completely unexpected? christine: no.few economists predicted this rate cut after those lower than numbers on friday. there were concerns about the manufacturing sector. over the weekend, we had data come out. producer prices stayed in deflationary territory. we saw the saying i stock market -- the shanghai stock market coming together to make a good timing, giving the central bank plenty of incentive to move. we have seen three rate cuts since november of last year. in reality, real interest rates have kept rising throughout. they only shifted down a little since january. these rate cuts have+++ isn't going to get banks to start falling dramatically. debt levels are already so high. it is a chance for companies to refinance and de-leverage. that keeps the economy somewhat on course for the 7% target. manus: i suppose the question is, now that we've had this rate cut, the reserve requirement reduction in place, on the fiscal side, what is the thinking from the economist community? will there be fiscal stimulus as well? ma

the other factor here that i've been hearing and this is unconfirmed that is the pboc have been draining liquidity through the back door to try to enforce more discipline on the stock market. the big question for me is whether this is the healthy correction that encourages more investors back into the markets to have another go. if they missed the bus the first time around or whether we're going to see an extension up the slide on tomorrow's session. on friday. again i spoke to darius about this and he said that the momentum was very strong. so it's conceivable that we could see an extension of that slide into friday. remember as well next week is going to be another big test for chinese equities because we have pmi data out. back to you now. >> just following up here it's just a crack down on margin lending that may be the reason we saw the sell off in the chinese market. do you think valuations are also a part of the story? i believe stocks trading at 70 times forward looking earnings? >> yeah be that as it may there's a sense in the market that valuations are still quite attractive de

the pboc added it does see some potential risk in stock margin trading which has been blamed for the wild swings. now on the year chinese stocks are up over 40%. definitely one of the out performers when looking at emerging markets. let's turn our attention to what's happening in europe because the economic reality facing greece is that they are running out of cash and this imf payment is approaching so the greek headlines, the reality facing greek leaders is one of the reasons stocks are moving lower in today's trade. we also got tepid growth out of italy. 0.3% quarter over quarter. the ftse mib trading at 23,657 down about .4%. more mixed messages on the developing situation in greece as we were just telling you. imf chief has warned a grexit could be possible as the country struggles with it's debt burden but it would not mean the end of the euro. meanwhile the greek government says it hopes to wrap up cash by sunday but the eu dampened hope saying some issues remain unresolved before the final 7.2 billion euros in loans can be released. steve is still at the meeting speaking to l

how that's weighing on global growth and what the pboc is trying to do and then this digital revolution transforming the landscape and how that's resulted in many players like apple and others trying to get their foot in the door. take a look at earnings from apple. 71% jump in chinese revenue. that's astounding and on the other side we're talking about a slow down. there's a very interesting distinction between what's taking place in china. >> tim cook is very bullish on apple pay in china. it hasn't done that well though so far in the u.s. and europe so perhaps it could be much more successful. >> apple hit a snag in terms of china and the roll out of am pay because the latest operating system didn't support the bank cards for union pay and that's one of the biggest card issuers in china. once they overcome this issue, really just a technical issue the demand is huge. in the first quarter apple sold more iphones in china than the u.s. for the first time. the potential is there once they overcome some of the issues. >> why would alibaba want to team up with apple? surely they want to c