Transcripts For BLOOMBERG Countdown 20240622

I am anna edwards. Lets get you the latest on what is happening with the greek story. Lets show you what has been happening on the euro. This is the euro against the dollar. We have seen the rhetoric continuing on both sides. Mario draghi says ball is in greece escort. The finance ministers are planning a Conference Call today ahead of that meeting on thursday. That is something to watch out for. That was surrounding a story in germany that suggested the eurozone ministers are getting closer to coming up with some sort of emergency plan for any grexit situation. As you can see the euro bounced and we are at the 112 mark. That takes us to our twitter question. In terms of following the great twitter story, who should make the next move to resolve the greek crisis . Lets recap the u. S. Markets. European markets were week as a result of the greek news flow and that fit into the u. S. Session. We had manufacturing data out of the u. S. Which missed estimates. We had two days of fed meetings that start tomorrow. No change in Interest Rates expected but that is on the radar. Looking at coverage today, what we have got on the block for you a real focus on the aviation industry. With the 51st Paris Air Show kicking off in paris we will be speaking to pratt whitney. The first lumber bloomberg interview. We will have plenty of more coverage coming from the Paris Air Show. And the air asia show ceo Tony Fernandes. They await any news surrounding the great crisis. Zeb great to see you and good morning. It is happening across the region. And a noted some of the macro issues. Greece factoring into the equation and investors in emerging markets looking toward the Federal Reserve is that today meeting gets underway. Lets take a look at how the markets are panning out today. It is a down day for the msci index. Youre seeing profittaking, a solace selloff in the market. The shanghai composite is off its earlier lows that it is down 1. 25. The focus is on two things three things. The underlying economic story in china. The level of margin debt that has been accumulative i chinese and domestic investors. 350 billion, a Staggering Amount that is a record and has the regulator taking a second look to make sure credit is not happen. And valuations themselves of what is being called the fragile rally we have seen in july. The valuations are not necessarily up to snuff given other issues in the chinese economy. Commodity prices having an impact in australia. The nikkei 225 is down by. 50 1 . And following the comments that caused a just or. You will have more on this in a few moments. The currency climbed against the dollar. He clarified those remarks today in parliament and said i gave a theoretical exclamation in response to a question. You have to be careful what to say. Back to you in london. Anna zeb was outlining current comments. He has been a from those comments today. We have the story. Good to see you. What did he say today at how did he explain the comments that proved so influential to markets last week . James he said basically today his comments had been on misunderstood. The currency he said the currency was week, he was talking about the Effective Exchange rate. The yen measured against tuesday one different currencies. It was not attempting to influence the end or any of the Exchange Rates. He was talking on those theoretical terms. He made the comment that the yen was the weakest it has been but he was questioned by a number of lawmakers and was asked why he thought he could move the currency and what he thought it was ok to talk about these things and he repeated that he was not trying to effect the Current Exchange rate but he was discussing get in this theoretical situation. Its strange for him to make those current comments. He has been the bank of japan governor for three years so you would expect he would understand any comments would move currency markets. He said that was not his intention and he was surprised with the reaction it generated. Anna he says he is being technical. He was explaining something technical as you say but many in the market interpreted his comments to have some significance for boj policy. The boj decides policy this friday. What is the market expecting . James a number of economists have pushed back expectations or canceled expectations for the boj easing because of his comments. We had about 21 economists forecasting the boj would have to ease more by october of this year. There has been an increase in the number of [inaudible] after the comments. We do not see the boj expending stimulus. No one is expecting the boj to make policy changes this week and that was the case previously. These comments on the currency level have affected how people are seeing the yen and saying bank of japan policy. Anna thank you. Joining us from tokyo with the latest on what kuroda did and did not mean for the currency. European leaders are increasing pressure on after what was seen as efforts falling through over the weekend. Hans nichols is in berlin. What are the creditors plans a nd what are the greeks plans . Both seem that feel that the ball is in the in the others court. Hans the greece side, they are preparing for nothing. They would not be cementing a new plan to creditors when they meet, when the eurogroup meets in luxembourg on thursday. Then you have mario draghi stepping in yesterday and he clearly is trying to ratchet up the pressure on greece. Incredible agreement is needed not only in the interests of grace but in the euro area as a whole. Why all actors would need to go the extra mile, the ball flies in the camp of the greek government to take the necessary steps. Hans all this talk they are using Anonymous Sources but what they are saying is eu officials have some sort of agreement theyre working out to have if there is not a deal, to give recent ultimatum and then impose capital controls which we need to be implemented by the greek government. So lots of talk about capital controls. How you would get greece to implement them, what charter of love or she would use, what sort of pressure points you would use. It seems like everywhere you look this morning, a u. S. Shoals, ecb officials, European Commission officials just ec officials, talking about what to do to prepare for an exit. You had the Spanish Foreign minister. There is a lot of talk on what you would do for any sort of contingency planning. Another backdrop to this the polling situation, the Public Opinion inside greece. Overnight there is appalled by megatv on who is to blame. These have been drawn out for so long. 57 of greek respondents said it was the creditors to blame. Only 30 36 blame their own country. That is what is girding the officials. They are bracing for a fight. They seem to be in a very feisty mode. You see the rhetoric coming out of mr. Tsipras. Blaming creditors for continuing the austerity. There are no obvious ways that this unravels itself today if it salts itself today. Well have more rhetoric and potentially a confirmation on what plan b is among the creditors. Anna that will be interesting. We will see if we can get more detail on the potential plan b. Our question that we are asking is, who should make the next move when it comes to resolving the greek crisis . Draghi is saying the ball is in the greeks court. One reply said that putin should make the next next move. Supers is is tsipras is on his way to moscow. And what the court will say about the bond buying program. Countdown is back in two minutes time. Anna welcome back to countdown everybody. Quarter past seven if you are watching in frankfurt. Here at the stories you need to know. European policy makers have put the pressure on greece to return to the bargaining table after weekend talks are properly. Mario draghi told lawmakers at the European Parliament in brussels yesterday the ball lies squarely in the camp of the greek government to take the necessary steps. The European Court of justice will deliver its verdict on the legality of the Monetary Transactions Program. The announcement on the bond buying scheme comes after germanys top Court Expressed doubt the policy may have exceeded the banks mandate in be seen as a form of monetary financing for government which eu treaties ban. The bank of japan governorhas said he was not trying to influence the yens Exchange Rate which after remarks that sent it climbing. The and was unlikely to weaken further in yen was unlikely to weaken further. Boeing grabs an early lead in orders and commitments on the first day of the Paris Air Show with an 18 billion haul. Amongst the deal was an agreement with indonesia 433 liners. The Paris Air Show continues today. The apple is between airbus and boeing. This time hostility between airlines and cells that is making the news. Guy johnson is in paris for us and he joins us day one to boeing then guy. Guy day one to boeing definitely. There was a close run. The order flow bigger than anticipated. People are talking about demand picking at this stage. Maybe because of Lower Oil Prices meeting the less inefficient planes are required. Maybe that is still the case but this time around there is next to twist as well. If you said between airlines themselves, were seeing the gulf carriers, the u. S. Carriers and to a certain extent the europeans fighting it out. They fight is between the gulf carriers and the u. S. Carriers in yesterday we got more fuel added to the fire. We spoke to qatars ceo and he made it very clear that the Oneworld Alliance which he recently joined which includes american airliness airlines membership could be in doubt. They welcomed us and new york and it is the airline with the new management that does not understand really what the alliance is all about. It is restricting inventory to us. It is restricting parking space in the terminal for us. It is going antiqatar airways in the media and private forms. What is all this Alliance Relationship about . If this is the way alliance is going to be a run, than we do not want to be part of it. We can go on our own. Guy you will leave one world . X yes if the situation will not improve. Guy as hans nichols put it he knows air miles, we will be talking to the ceo of emirates. To get his take on that story. Certainly a lot of heat ring added to the airline battle. Not just the airbus but the boeing battle. Anna never shy of the controversy, the ceo of qatar airways. Can manufacturers keep up with the demand . Guy that has been the perennial question for quite some time but it is really germane here at the show. The big manufacturers are going to ramp up programs for the a350 and the neo. It is the letter of those programs that the biggest question hangs over. There making sure the supply chain can deliver the big ramp up that they are delivering. They are talking about raising the possibility of manufacturing 60 of those aircraft airbus every single month. I spoke to the ceo of airbus yesterday and he says theyre looking at the possibility of raising manufacturing. We have decided from 40 to 50 in 2017 and we are studying whether we can go higher. I believe the market is still supporting higher production rates. But we talking to our suppliers because we can produce and assembled the aircraft but we need the parts and this is about that. Guy one of the biggest problems they face is getting parts for the plane and the seats that seem to be the missing piece of the puzzle. Some of the manufacturers have been having quite significant problems, actually delivering the numbers that airbus requires. Airbus has had to step in get their supplychain sort it out, and try and make this happen. It is not just the oemc, they boeings and airbuss that are the focus, it is very much the supplychain that people are talking about here in paris. Back to you. Anna thank you. I might be forgiven to think that you are in the heart. Qatar airways is a big presence. With european policy makers raising the heat on greece, our next guest says that Alexis Tsipras is taking negotiations down to the wire to seek concessions that will improve the chance for a deal that his country will eventually secure. Senior adviser to the years down eurozone economic forecast. Thank you for coming in. Down to the wire but which wire, that seems to be the question because some people talk about june 13. And some people say we are going to drag that out to july or later. Guest what we do know is on june 30 they have to pay 1. 5 billion euros and it is not clear how many piggybacked p banks it has that it can read. It is not clear how they [indiscernible] and then a larger amount of cash in august. Anna we seem to have the standoff. As you are saying one side is saying the other needs to make a move and vice versa. It would seem to us that it needs to be the greek government that needs to come back with a strategy for getting its primary surplus toward the target. There have been it has been loosened the little. And it does seem incumbent upon greece to have a solution to get to those targets. It is probably unfair to say that they are insisting on wage cuts. Greece is going to be able to make savings in those areas. Anna tsipras keep saying that he wants to see the writedown of greek debt. How do you bridge that gap . Guest the creditors will make the point quite fairly that greeces interest limits are very low. Not in comparison to their history but in comparison to one or two other eurozone countries. It does seem important from the greece governments perspective that there is a headline writedown of debt and that appears to be an important sticking point. It is difficult to ask about at the same time, they are asking for relaxation. It is difficult to lend the extra money if i am not paying the money i have already are owed from you. Anna we have finance holding a Conference Call today. Does this feel like the crunch week or is that a dangerous thing to say . Guest these things generally tend to play out until the last possible deadline. I think it would be unsurprising if they did not have something to offer the eurogroup on thursday. Nevertheless i did update that will be the key breakthrough. We will see gradual progress over the next couple of weeks. Anna the governments within the eurozone are making contingency plans for a grexit that could include capital controls. Would you be surprised if they were not . Guest the eurogroup has to make contingency plans. Not as far as greece is concerned but also what might happen in wider Financial Markets and the demonstration effect the greitxit might have for the vulnerable eurozone economies. Anna what about the ruling that we will get from the court of justice about the legality of the ecb on buying program . Could it move the dial significantly . Guest we think the cj will find that the omt is finally finan cing for two reasons. Firstly, only omt program would not be directly providing finance to governments. It is buying bonds off governments. Fundamentally the omt would only operate for a country where there is already imf programs in place. Anna thank you for joining us. Coming up on the program. Jim bush as he is running for president. We look at the challenges ahead for the men who could be the third bush in the white house. Anna welcome back to countdown. A little bit later if youre watching in tokyo. Lets take you to tokyo now in the sense of the currency markets. This is what has been happening in the japanese yen. This is the and against the dollar and trying to put in comments the we have had from the bank of japans kuroda. He said the yen was unlikely to weaken further in real effective terms. That was interpreted as having some significance in Monetary Policy and you can see that move there, the move in the end we saw. The strengthening was in result of the comments he made. He has backtracked this week and said he was talking last week about real effective rates so that is a trade weighted him him investment. The yen remains stronger than before kuroda made the comments. That is the currency markets. We will return to that story and tell you what else you need to know. The European Court of justice will deliver its verdict on the Monetary Transactions Program. The announcement comes after germanys top Court Expressed doubts that policy may have exceeded the banks mandate and may be seen as a financing of government which the ecb has banned. And he had been attending an African Union suburb summit in johannesburg. Increasing the pressure on greece to return to the negotiating table and make concessions to unlock it after weekend talks roca early. Mario draghi told reporters lawmakers that the European Parliament in brussels yesterday that the ball lies squarely in the camp of the green government greek government to take the necessary steps. Mario draghi told lawmakers as we said that the ball was in his court. Lets listen in. Mario draghi such a strong incredible agreement is needed. Why all actors will need to go the extra mile, the ball lies squarely in the camp of the greek government to take the necessary steps. Anna that was mario draghi. Lets bring in our guest. Good to have you on the program. Mario draghi says the ball is firmly in greeces court. How do we see this comment question mark this comment . Guest it seems to have been the phrase of the last two days. He is making it very clear point. If there is going to be any movement at all it has to come from grace. And you have seen clear stories coming out. Everybody within the institutions, or the troika they say they are going as far as they can. From that perspective we seem to have reached an impasse. I am guessing that right now when there is the decision over whether there will will be an extension of the emergency liquidity assistance to the greek banking system, the eurogroup meeting will come up on thursday. Very difficult to see if there is any kind of agreements can be reached in that state. We have not reached it by now. You have got to feel that we are at the state where it is going to be take it or leave it for greece. Anna how do you envisage a situation where the ecb makes life more difficult for greece by reducing its access to funds . Simon ecb is in the politics of the cyprus story and there were accusations levered that he had made a political decision by removing [inaudible] it will not be seen in that light. Therefore, it will want there to be some kind of move by the eurogroup first before it removes and it will be unlikely that it would do something tomorrow but were we to get to thursday and there was a taken the take it or leave it deal and greece said no, and the ecb might turn around and say were going to remove you. Anna would that have to see some level of debt reorganization . It seems like cyprus tsipras is making it part of the deal. Guest how do you get that message out in public . It politically will not float. From that perspective, no, i do not see the idea of Debt Reduction being on the table right now. Again, it was interesting to hear mario draghi yesterday. He was very careful with his words when he was talking about additional financing. Anna who are the players we need to watch . The action is at thursdays meeting. Shot clock juncker jeanclaud ye junker is there. The reason why he is incredibly important is because he was the big supporter for mr. Tsipras. It seems to be some kind of agreement that maybe we can find some Common Ground but one when mr. Tsipras turned his back on him, when he seemed to go back and accuse the European Commission of going no further from that point on, mr. Yunker junker has made it clear. Watching what germany is preparing for, what happens if there is a bankruptcy when we introduced capital controls will be the key story. Anna do you think there is truth to the reports that capital controls the governments are planning for a plan b that could involve capital controls, do you think all that is happening behind the scenes . Simon i did find it quite odd that overnight there were these stories leaking out about the possibility of capital controls as soon as this weekend. There have been stories behind the scenes about capital controls. Since last thursday or friday. Do i take it seriously . Absolutely. Could it happen this week . There is no answer. Anna what about the grexit . Simon i have been 5050 that there would be some sort of default since the start of the year. Which sounded bolder at the start of the year and conservative now. I do have to move toward the point where the default is probably the more likely outcome. Anna what does that mean for the grexit . Simon greece has to vote to leave but situations do force you toward the exit grexit. Support has to come from the Greek Central Bank so that money has to come from somewhere. There has been a number of different options. The hoarding of euros and issuing a parallel currency. Most of those ideas only act as a temporary stop. Whatever you do, as soon as you start issuing ious or anything like that youre heading toward a net it. An exit. Anna we will get his thoughts on a range of subject this morning. Former Florida Governor and republican jeb bush announced monday he is running for president of the united states. He would be the third in the bush family to take the presidency behind his father and older brother. Our former White House Correspondent hans nichols is with us again, wearing your other half this morning. How does he differentiate himself in a crowded field of republican candidates . Hans he wants to make this electability argument and that he is governor and has been in charge, not filing amendments to some senate held. That is a clear shot at marco rubio. He needed to address the dynasty issue and he said this is not your turn, it is always a test. He is clearly trying to be multicultural and inclusive but when you look at what he said his main argument is elected electability against hillary clinton. Jeb bush we do not need another president who holds a pampered spot among the elites of washington. We need a president willing to challenge and disrupt the culture in the Nations Capital and i will be the president. Hans he has a challenging half ahead of him. They said expectations high especially in terms of how much money they will raise, 100 million was the number they were talking about. Looks like they will fall short. Now he is an officially declared candidate, he needs to disassociate himself from the superpac. Less time for strategy and fundraising. He was here in europe and his basic message was its june. Chill out. We do not need to be first in the polls now. We do not have a primary vote until the beginning of 2016. We are in for a long race. You have gone through the u. K. Election. I can only look at you with envy. Your elections are six weeks long. This will stretch over 16 months and we will have a lot to talk about but it is a long process. Anna thank you. Once nichols, former White House Correspondent giving is uptodate in the latest on the republican party. The pope tackles Climate Change. We bring you that story. That is the latest on our website. Just a reminder for later this week, on friday, you can watch charlie rose in conversation with the russian president Vladimir Putin during his annual session at the st. Petersburg International Economic forum here on bloomberg television. We will bring you that live interview from the event from noon u. K. Time. Countdown is back in two minutes. Anna welcome back. 645 a. M. In london. European policymakers have increased pressure on race to return to the negotiating table and make further concessions to unlock aid after weekend talks broke of early. Mario draghi told lawmakers at the European Parliament in brussels yesterday that the ball lies squarely in the camp of the greek government to take the necessary steps. The European Court of justice will deliver its verdict on the legality of the Monetary Transactions Program. The announcement on the bond buying scheme comes after germanys talk Court Expressed doubts the policy may have exceeded the banks money mandate. Boeing grabs an early lead with an 18 billion hole. That top the 15 billion opening day tally for european rival airbus. Among the deal was an agreement with indonesia for three dreamliners. The mens market is increasingly lucrative. Mens fashion week in london is also becoming a bigger event. Yesterday burberry showed off its latest menswear design. Francine lacqua caught up with the companies ceo and creative director backstage. What we wanted to do with this is have a real combination of sartorial and traditional pieces. We had sartorial tailoring as well as the iconic trenchcoat that we make in yorkshire england as well as the iconic burberry scarves as well that we weave in scotland. It was a bit of a contradiction because we put it with lace shirts and lace ties. It was that sense of irony. England is very well known for lace making historically. I like that kind of play on different traditions that come together. We did that also with a music where we had the hugely talented musician and singer songwriter. He played with a classical orchestra. Francine what do men like when the dress question mark they want to feel confident and good in their clothes and make sure their close fit them. Most guys want something that has a mixture of something that is traditional but with something contemporary. I think how far along those lines guys go depends on what your personality is and where your lifestyle is like area divided not see every guy in a lace shirt but i do see many guys in a lace shirt. Of course in a show you will find the most beautiful Classic Cotton poplin shirts to go with this that we had on the runway. Francine what does it mean to be a british designer for menswear . We have such an incredible history and heritage of menswear in this country that is so embedded into burberry as a brand. It is a natural extension of Everything Else that we do. Menswear, the trenchcoat, were we say it is for men, it is for women of all different ages and lifestyle. But menswear is something that we show in london. Live streaming, we live spring livestream. It is important that the shows are becoming something not just for the live audience. That is still very important but it is a part of the audience. We have got people literally all over the world engaging in this and some people they come because they love the music and they come to hear that. Others just because they love fashion. Others because they love the idea of shows. Others because they are looking to shop. You have some any different types of people on the live stream. Francine one final question. Your type no tie. I like ties. Much. Probably the majority of time i do not wear them but normally the guy to my left is always in a tie. Ties or no ties depending on who you are and what youre doing and where youre going. Anna christofi Christopher Bailey there. He is not going to be tempted by a lace shirt. Also joining us is tim coulter. We have a range of dress senses on the table today. Lets start with one of the stories on the website. The pope on Climate Change. Tim this is the leaked draft from an italian magazine overnight. The pope his head man is responsible for Climate Change in the world must do something about it. Anna this could have policy implications, couldnt it . Tim this makes people uncomfortable who are against that view of Climate Change. People like republicans in the u. S. Who are running for Political Office will have to face questions, how do you reconcile your faith with your Public Policies . One of the republican candidates, rick santorum, a republican said the pope should leave science to the scientists. This is a sign that is the pope is becoming increasingly clinical. Tim i am no political expert. The pope thought it was time to intervene. People believe that the worst effects of Climate Change will affect those who have the least the most. Anna what about the Housing Market, an entirely separate subject . The strength of the Housing Market or the cooling was a topic this morning. Tim clearly, those statistics will show that the market is slowing. It is a big relief for mark carney. How is he owing to pull the Housing Market . Gone are the days of the doubledigit games. Anna i thought you were going to say normal. Tsimon does this suggest that the box of tools that the bank of england hails as a solution to preventing housing bubbles, is it working . Simon there have been so many factors that would have dampened the u. K. Housing market. Most importantly the election was a huge dampener on the especially in the south of england. They were concerns about what other taxes might come in. I do not think we can look at the numbers today and necessarily say this is [indiscernible] i think there are too many other paint things clouding the issue. Anna it is possible to use the tools to stop is having such big bubbles in the Housing Market. Simon the Monetary Policy on its own is an and blunt tool. There is a fairly decent argument that said Monetary Policy is set way too low in london. So almost the same way in a bigger scale, the eurozone, you need to [indiscernible] in the u. K. Economy the idea of trying to do something to cool the market make sense. Tim one of the problems is a supply problem and not a demand problem. How does Monetary Policy affect supply . Simon absolutely. Anna we will get our guests thoughts on the supply situation. Joining the list of nations that are chasing after the tax dollar , the tax euro from the sharing economy. I is suggesting that Government Support of the sharing economy is what is the gist of the story . That is how the economy is creating ways for vendors and sellers to avoid the tax man. With this story what the story is focusing on is the mushrooming marketplace economy. They are not necessarily saying these big corporations are intentionally skirting tax. No one would suggest that. Vendors selling things through ebay or other Online Market players which is mushrooming it is still a small part of this economy but it is growing. That is one of the areas that people are targeting. Anna hard to keep track all those small suppliers. Jim governments are looking for every euro or pound they can find. Anna tim coulter joinnging us. Simon no official ever speaks about currencies and does not know what they are doing. Kuroda knows all too well when he sums up. I expect a lot of political pressure was brought to bear afterwards. It is the minister who talks about policy, not the head of the bank of japan. Anna we will return to this story in the second hour of countdown. Coming up next. We are live from the harris air show in this time in a bloomberg first, Gregg Earnhardt ger nhardt joins us. And we get a take on the Housing Market. Anna europe raises the heat on tspipras. The ball is in greeces court. The bank of japan said he was not trying to influence the end when he spoke last week. The u. S. Playmaker halls in orders plane maker hauls in orders at the Paris Air Show. Welcome to countdown. It is 7 a. M. In london. Lets start with a look at the european market. Caroline hyde joins us. Countdown caroline we are seeing growth in the european car market. The slowest pace of growth in six months. We are on a downward trajectory. You see 1. 3 in terms of the month of may. The great debt debacle does seem to have an impact on the real economy. Were seeing european car sales across the board, down in germany and down in france as well. Down by 3. 5s 3. 5 . Spain up 14 . Double digit growth in italy. Even the u. K. Amidst the election still posted growth in car sales. This is according to the european manufacturers association. 1. 5 million vehicles were sold in may. Renaud was the only one of the top five european car sellers and europe that got any growth. They managed to see a 5 uptick. Pure show fell but it seems as if some of the key makers of the luxury cars, bmw and daimler it is the many compacts and the bmw and the smart city car for daimler. That to you. Anna i wonder if the headlines about race are weighing on peoples appetite for new cars. We get rhetoric continuing to come through from both sides and that caught the euro in a holding had an. Mario draghi saying the ball lies squarely in the greek camp and the greeks saying the ball lies squarely with the creditors. Last night we got a report out of a newspaper in germany that suggested a plan b was worked on by european leaders and there might be a plan that involves capital controls. That is the report. It did have a small effect on european markets. Who do you think should make the next move in the great crisis the ecb says the greeks should move first and the greeks say the creditors should move first . We had a few suggestions that the russians should play a role in this. European markets yesterday were week. The Athens Stock Exchange coming under pressure. U. S. Equity markets picking up and they were negative as you can see by the close down. We had the combination of the greek news flow and manufacturing data that missed estimates. We have a two day Federal Reserve meeting starting tomorrow. Also on the agenda, the air show in paris the 51st airshow. We are going into day two. We will bring you some live interviews. Whitney is talking to Engine Manufacturers over there in paris. We are talking to not just saffron but also airbus. Also air asias ceo. Lots more to come from paris. Perhaps the sun might even come out. Bringing us the first of those interviews. Hans you mentioned the fact that we are talking to pratt. Joining us now. Guy you are providing one of the engines on the new neo. You had a few issues as pretty much everybody does and the ramp up to these sort of thing programs. You found what it is, you know how to fix it and youre moving on. Is that the case . That is the case. We had a brief hiatus in flight testing. There is a small retaining clip that goes in the engine that we miss the manufacturing step on. We have new parts available and we are currently in the process of retrofitting all the engines. We will have engines retrofitted by the end of the month and we will start getting engines back to airbus by the end of june. It will all be on schedule. The neo, the engine is certified and we are meeting our commitments to airbus. Fuel commitment looks great. Noise is great and emissions. We tested and it looks very good. Guy give us a scale of the engineering challenge that is there. How much more fuelefficient is this . Greg 16 . Guy how difficult is that . Greg we spent years to get us where we are today. It is a balance between fuel burn and maintenance costs. We did it with a gear that allows you to optimize the engine. It is a good balance and very pleased with where we are and we are seeing wide acceptance within the customer base. Guy fuel prices have gone out gone down. Greg even if fuel prices come down we expect that to be a shortterm reduction. In the long term you will see fuel prices go back up. At 60 advise its way in. Guy talking about considering a step of two making 60 a320s for month. That is a lot of airplanes. You have two engines for every single one of those guys. Greg we are talking with airbus about that. Were talking to our suppliers and partners. It is a big deal. There is a large increase in the Industrial Base but we could do that. And our partners could do it so we are talking with airbus to make sure we find a solution. Guy when you work with airbus, how much time do you spend with them, when you talk to those guys they talk a lot about the supply chain and that is almost the biggest challenge. Greg one of the key focuses we have we are laser focused on the Industrial Base. We spent a billion dollars in our own facilities to make sure we are ready. We have put a lot of new technology in terms of assembling the engines authoma omation. And that it is producible. We are transitioning engineers to the industrial part, working inhouse with the pratt and whitney Manufacturing Base and our suppliers to make sure we can actually produce the part. Guy how hard is it to make an engine quieter . Greg quite honestly for the gpf if you look at the engine on the hv20 five times more air goes in. Todays engines are 12 to one bypass ratio. It is not easy to do. They gear enables us to do that but a lot of the noise reduction comes by the propulsion efficiency that we are putting most of the air around the court. Guy you guys are good at small engines. Not small engines. The widebody engines that go on a 787. Are you thinking about stepping up to the widebody . Greg right now we have five new platforms. We are laser focused to make sure we execute those flawlessly. It scales up very well and a lot of the air framers have seen the Value Proposition of what the gear provides so we are talking to a number of folks. You have to find that Business Solution that works for both of us. Greg just explain what the here turbo fan is and why it is so hard to do. Guest you have a gear in front of the engine. What it does right behind the low compressor. All it does is it divorces the low turbine to from the fan. And allows the fan to operate at its optimum speed. You have this gear in front of the engine so on and a320, if you were to put it in horsepower it is 33,000 per shaft horsepower going through that gear. The gearbox does not weigh much more than the transmission in your car. If you have a sports car maybe it is 500 sports horsepower. It is a big deal. We spent 20 years to get there. Guy very great talking to. Joining us from pratt whitney. Were talking to Tony Fernandes and tim clark, the ceo of emirates. His take on the flight taking place. More on bloomberg. Com. Some Great Stories from the scene at the Paris Air Show. Back to you. Anna thank you. Guy johnson live in paris. The fed meeting this week, they start the meeting today. They do not start tomorrow. It is a twoday meeting. We get the results of it tomorrow. Thank you to jerry for reminding me. Lets talk about the u. K. Housing market. It has been a good first half for Crest Nicholson and we are joined by the ceo, stephen stone. Great to see you. Some headlines from your release this morning. Revenues are up, other key metrics seem to be in the right direction. Give us your overall verdict on the numbers you put out this morning. Stephen we ipod back in february. We set ourselves targets of 2. 5 thousand two at a half thousand homes. We revised to 2016 to saying toward a billion pound revenue and around 3000 homes. After the election we have greater certainty going forward. Wages, growth and you have some of the best Mortgage Rates we have seen so we are setting ourselves a new target through 2019 of 4000 homes and 1. 4 billion revenue. You can see this is the right movement. Anna help us interpret how the election has moved the Housing Market because that matters for interpreting your results but looking at broader numbers coming out of the Housing Market. Get a cause a brief pickup that now we did it cause a brief pickup or effects on the Housing Market . Guest this year, we saw no decline at all. You build with each month, building and selling unlike the secondhand market where it is discretionary as to whether you put your home in the market. With jobs and Earnings Growth it is a great time to buy a house. How worried are you about the rising Interest Rates . The bank of england has been threatening to do something. It may be in the first half of next year. You see that impacting new buyers . Stephen if you look historically it is a home for life to live in. Mmr has been great, because it has taken it out from inflation. So affordability is checked every time we get a mortgage. There is already stress testing going on. A lot of people, fixed rates are coming to an end and they are getting great new variables. Anna do you have plans to broaden your business from the southeast . What plans do you have further afield . Stephen one of the things we announced today, we are interested in the private rental sector. Homeownership is declining to the mid60s to the upper 50s. We think the private rental sector will be an area to fill. The trick was to get institutions interested because you want longterm investment. We announced a month ago that we were going to deal with mnj m and g. Parts of the growth youd described you described, we will sell that to institutions and provide much needed venture combination. Anna it is covering our bases and giving us plenty of flexibility. Anna what about the share prices . Up 40 year to date. Strong performance very much tied to the Housing Market overall. What do you see as the headwinds that face your both business at the moment . Stephen they are Interest Rates are the lowest i have seen. Joy have a job, doing think i will have a job in a year or twos time and people take interestrate into their stride. It is jobs that are the real key and Interest Rates. How much is International Demand driving this . Stephen in london it is a big driver. We only produced 200 or 300 homes a year in london. We know that we have interest two interest these buyers and some of my colleagues will tell me it is quite. Outside of the southeast or the rest of the southeast is domestic market. Anna thank you for joining us. Stephen stone from Crest Nicholson. Could the bond buying plan be deemed illegal . It will deliver its verdict. We will bring you the latest after a short break. Anna welcome back. 19 minutes past seven. European policy makers have increased the pressure on greece to return to the negotiation table and make further concessions to unlock eight after weekend talks broke up early. Mario draghi told lawmakers in brussels yesterday that ball lies squarely in the camp of the great government to take the necessary steps. The bank of japans governor said he was not trying to influence the yens Exchange Rate and remarks that set the currency climbing. He told a parliamentary hearing that the yen was unlikely to weaken further and real effective terms. That was seen by some analysts to lessen the chance or the case for further Monetary Policy easing. The European Court of justice will deliver its verdict on the legality of the outright monetary attractions program. This comes after germanys top Court Expressed doubts that the policy may have exceeded the banks mandate and be seen as a former monetary financing of government which eu treaties ban. More on that story, lets get straight out to paul gordon who joins us from frankfurt. Good to see you. How important is this decision we will get or recommendation from the European Court of justice . Paul a lot depends on what the ruling is but also the fine print. Omt is legal and normally the ecj would follow that opinion. That is the expectation. It may give more quality on what constitutes monetary financing and what the differences between monetary and fiscal pile policies. The advocate general has suggested that the European Court of justice does not have the expertise or generally have the expertise to make those decisions and you have to trust the ecb to do its analysis. It will be interesting to see the ecj goes down that route. One point that is important is the advocate general had said the ecb should not have a blocking minority in bonds that it buys. That is quite important. It is a part of quantitative easing and it there may be indications there. Should things go the other way and should the ec j in a big surprise say that the ruling is illegal, that will send chaos reverberating through the markets. Omt and qe are not the same program. That will not stop legal challenges coming and not stop the market reacting. Anna that is what the ecb is resting with. What are the odds of the ecb tightening the screws on greece at their meeting tomorrow . Paul policymakers are meeting in frankfurt and some of them will want to tighten the screws on grace either by limiting the amount of emergency liquidity or tightening the collateral standards that banks have to post to get that liquidity. Total liquidity going to greece is about 118 billion euros. Two thirds of gdp. 83 billion of that is emergency which will be offered as long as great tanks are solvent. Conditions could be eased if there was a credible perspective to see the end of the review of the current bailout program, that is not insight. The comments are the greek finance minister suggest that there is no end in sight at the moment. Not at the eurogroup coming today. That makes it very difficult for the ace ecb. It does not want to be seen taking the lead from the politicians. The moment may come when it has to say something. Anna thank you very much. Paul gordon, our European Central bank editor joining us in right for it. Frankfurt. A fascinating conversation about the omt and the verdict we will get from the European Court. Let me bring you some european breaking news, he will trael vel to greece to show solid solidarity and bring a compromise from the europeans toward the greeks originating in austria. That does not sound like the most likely outcome. It does have the vague whiff of being aimed toward a domestic audience. It is up to institutions to negotiate the deal, not individual governments. Austria may present a compromise deal to greece but remember greece right now got its original deal on the table and theyre waiting for that. I find it very curious. Anna we have not talked much about the fed. The meeting includes tomorrow. You are not expecting any rate changes from the fed. When will be the date that you see the fed eventually moving on Interest Rates, september . Simon i have been penciling in september for a long time. The amount of talk we have heard from fed officials over the last few months about the strength of the dollar bags away in the back of my mind and the fact we have downward pressure on Commodity Prices and a wide range of Commodity Prices. The inflationary pressures just are not there right now. From that perspective at least it is a possibility that they may push back toward the end of the year. I am not as comfortable that they will make a quick, easy move. Anna if they need to explain not living on Interest Rates at all, would it be around the strong dollar, around greece . Simon to a degree they are two sides of the same story. You would be it would be far more about the week inflation numbers. That more than anything else will put them in a position where they get and maybe we can be more cautious than we previously have been. Anna thank you for joining us. Simon derrick joining us from bn y mellon. Growth slowed last month to a sixmonth low. We are taking a short break. Stay with countdown. Anna welcome back. Half past seven in london. Half past eight in frankfurt. The bank of japan governor kuroda has been leading the currency whether he intended to or not. Last week, he said the yen was unlikely to weaken further in real effective terms. That is a measure of the yens trade weighted adjustment value. He backed away from the comments and said he was talking in technical terms and had not meant to guide the currency market or to guide the yen. That is getting quite a bit of play, that story in the currency market even with todays clarification. The yen remains stronger than it was before kuroda spoke last week. That is what is happening on the currency markets. Here are some of the other stories you need to know. Also makers have increased the pressure on greece to return to the negotiating table and make further concessions to unlock aid after weekend talks broke up early. Ecb president mario draghi told lawmakers in brussels yesterday the ball lies squarely in the camp of the great government to take the necessary steps. The European Court of justice will deliver its verdict on the legality of the outright Monetary Transactions Program today. The announcement on the ecb bond buying scheme comes after germanys top Court Expressed doubts about whether the policy had exceeded the banks mandate and could be seen as a form of monetary financing of government which eu treaties ban. The sudanese president is backing khartoum after dodging arrest in south africa. He managed to flee the country as legal arguments over an International Criminal Court Indictment continue. Al bashir who faces arrest on war crimes has been attacking attending a summit in johannesburg. Less than an hour to go before we see the European Equity markets open up. Lets check in on the router market picture. The hand over from asia not a particularly positive one. Focusing on this middle section you will see under the heading where the markets look set to open. Down. 6 on the euro stocks and the ftse 100. All expected to open in terror negative territory. We had significantly weaker trading across europe yesterday as a result of the talks over the weekend on greece breaking down after 45 minutes. We are looking to pick up a little bit on that weekend weakness in todays session as we wait for a newly perhaps on that greek story. Lets switch gears. Lets take a closer look. How significant were the figures, then . Put them in context for us. Chris it was the weakest growth up 1. 4 . They markets like germany and france declined. It is a bit of a concern. There are some technical factors in terms of selling days in germany that were lower than a year ago. The bottom line is overall Market Recovery is still intact. The question is how long is that going to continue . . At some point we will see a decline. Even with the greek crisis sales are still rising in europe which is a good sign for the local automakers. Anna what concerns do they have . Headlines surrounding greece and uncertainty that is cast across the eurozone. Is that one of the factors that is putting buyers off, perhaps . Chris consumers are affected by a lot of things. Consume continuing talks about [indiscernible] has an effect on consumers. Any kind of uncertainty is not good for consumer sentiment. It is not helping the Auto Industry at all either. Anna thank you for joining us. With less than half an hour to go before the european markets open up, lets bring in our next guest. He says he is not worried about a greek default leading to destruction across the european banking system. Head of Global Equities thanks for taking time to come in. How worried are you about greece or not . Guest we do not know quite what is going to happen and when. Markets will continue to set off against this market of information vacuum of information. There has been plenty of warning, plenty of opportunity for european banks outside of greece to shed their exposure to great government debt. Much of that debt resides in the great bank system or the ecb. Provisions have also increased substantially. Capital ratios are a lot higher and the stress tests that we have gone through in recent years have been testing for scenarios such as this. You should expect the banks to withstand what may, out of greece but we do not know what will come out of greece and in what order and when. Anna you mentioned there are fewer linkages between the greek banks and the rest of the european Banking Sector but they are linked through the ecb. Do you envision a scenario where the ecb could limit the ability of the greeks to use emergency liquidity assistance . It would be quite a political statement to make. What a just be pragmatic, protecting their own Balance Sheets . Guest that is the dilemma. It would be protective of Balance Sheet but they would be the cause, be seen as the cause of the collapse of the greek ranking system. It is a elegant dance between the two. If the greek government do fail to pay, there will be a lag between the delay of the payment and the official default given how the imf rules work. There is the option to negotiate between them and that point as well. This crisis this could drag on still even though we are talking about this for a while this could drag out through the summer. Anna it could drag on for weeks and someone replied, try years. This could be kicked further into the future. Do you see is there much chance of any kind of deal on thursday or is it just too soon because we have not actually reached that wire. We are taking it down to the wire. The wire is not thursday. Guest that is right. We do not know. Especially in the context of where markets have come from. Over the last two years. We have talked about the banking system. Banks and europe performed strongly in aggregate. There are lots of profits still to be taken in the sector. There is standing back and watching. We can see opportunities that may arise. We had a pullback in the recent months but there could be opportunities that come out of this as markets get a big a bit more disorderly. As confusion reigns. Anna when you look at the Banking Sector, are there things to do with regulation and the way that banks are having to change their Business Models as a result of the Regulatory Environment . Guest banks might be set up if this uncertainty dissipates. We know from around the world, in terms of momentum there is more momentum then north america or perhaps asia or china. Domestic focus valuations would argue that they are not [inaudible] we have seen some big moves up this year. One of the uncertainties once the uncertainties pass it could be that the european banks are set up to improve. Loan growth is emerging from low levels. And attractive valuations. Anna does that apply to european stocks more broadly . I guessed was suggesting it this situation cannot be resolved we will look back in a few weeks time and ask what we why were we so interested or worried about greece . Perhaps we were missing out on the bigger picture. Guest there is every chance we are but there has to be a small possibility of greece having impact on europe. It would be our guest, our supposition that markets do look through what is occurring in greece. And markets could be set up quite nicely given the momentum and the support from the central bank and valuations that are not yet expensive. Anna thank you very much. Staying with us for another short conversation. Youre looking at a live shot of london this morning. We will talk about the fed a little bit and what we expect from the Federal Reserve over the next few days as well as this greek stories that keeps rumbling on. This is where futures suggest we will open. Some having risen earlier. We will be back in a couple minutes. 7 40 a. M. Anna welcome back to countdown. 7 43 a. M. In london. 8 43 a. M. If you are watching in paris. European policymakers have them print increased the pressure on greece to return to the table. Unlocking aid after talks broke up early. Mario draghi told lawmakers and brussels yesterday that the ball lies squarely in the camp of the greek government to take the necessary steps. The European Court of justice will deliver its verdict on the Transactions Program today. The announcement comes after germanys top Court Expressed doubts that policy may have exceeded the banks mandate and be seen as a form of monetary financing of government which eu treaties band. Boeing grabbed and early lead in orders and commitments on day one of the Paris Air Show with an 18 billion haul. Amongst the deal signed by the u. S. Planemaker was a deal for 30 airliners. Lets go global and talk about what the fed might do this week or maybe what the fed might say that might be of more interest. Matt the Big Questions overhanging markets are greece and if Interest Rates will be raised. There are stocks in the u. S. Market behaving like the rate rises about to happen. You can see expectations of a rate rise priced into the stocks. Anna in three months do you think . Guest there is a rate price happening in the autumn. And high rates are very important for banking stocks because it allows them to unmark gin which has been suppressed. Anna we have some interesting comments from the bank of japan governor kuroda. You could call it a uturn or all kinds of ways you could describe what he has been doing over the last 20 four hours but he basically said he did not mean to influence the yen Exchange Rate in remarks he said last week. He said he was talking technically about the yen and talking about real effective rates and not really trying to move the yen. Where do we end up on this currency story because regionally the currency story in japan is a very political one. Guest the yen is very comfortable for most participants in the current rate. In the one 20s. There is a great deal of angst because Small Businesses are the engine of any domestic japanese revival and it creates issues around the area. It is painful for export partners and you saw rate cuts in korea last week to try and stimulate underlying demand because korea is suffering at the hands of the strong yen. Japan is negotiating this trade deal with the u. S. And there are suggestions that north america would like to [indiscernible] currence word currency worded and keeping a lid on yen weakness. Anna do they need they can be responsible, grown up in their handling of the currency and it does not need to be legislated . Guest exactly. It has much wider ramifications. Hence the remarks you said from governor kuroda. Anna how do you look at the emerging markets when you see what happened to the yen and when you factor in what the fed might do in september . How does that make you look on emerging markets . Guest we have been invested in europe and japan. It is generally to our benefit we skew the emerging markets. We struggle to find bottomup ideas. But that is changing and we start to find stocks we want to buy. We have started to buy ici bank in india and research on some of the korean banks and some of the left behind adrlisted chinese stocks that have been left languishing in the strength of the rally in china. Emerging markets stocks are the fundamental bases for grounds are looking interesting. It does tend to be very company specific. Anna when you look at the chinese market, it is valued at 10 trillion for the first time ever. Having added on more than 6 trillion. Having added on market cap bigger than the size of the japanese market cap which is quite phenomenal performance. You go into a market like china, can you find stocks you want to buy can you find a level of transparency, a level of research around those companies that enabled you to get in . Guest in short, no. That is the challenge. We still have lots of concerns about information availability about Corporate Governance governments. And technical accents to lots of the stocks and that is the challenge that mobile investors will have to face as the market becomes more mainstream. Anna we have been talking about it this weekend. Matt thank you for joining us. 749 a. M. In london. Lets return to the stop top story in greece. Mario draghi urged the need for a deal yesterday. Lets listen. Mario draghi anna he was saying the ball is in the camp of the greeks and the greeks are saying it is in the court of the creditors. Watching this tennis game playing out. What are the creditors plans and what are the great plans . Hans they may be planning for capital controls after they given ultimatum to greece. A bombshell report we are trying to confirm. We see him taking to the pages of bild zeitung. He will not be bringing a new plan to the meeting on thursday. Essentially, a stalemate. Neither side is giving way. You mentioned what mr. Druggie is saying. He is very clear that next will ship the graces and they are saying it will not be our next move. When we get into the details of the report about capital controls, one thing to note is only the greek government that can impose controls and in some ways im looking at the most important meeting this week. Not much will be happening on thursday. I look tomorrow at the ecb. That is when they have to make a decision on what sort of collateral they are going to accept from greece. Are they going to impose a haircut when and if they expose emergency extend and raise assistance. Mario draghi talked about the collateral. He said right now the collateral is fine. He did not mention problems. If youre going to impose a haircut you need a two thirds majority in the ecb trade we will see if anything has shifted. Anna thank you very much. Keeping us up on the greek story. Just eight minutes to go until the European Equity markets open. On the move is next. Simon shamelessly stole one of your jokes. The first role of capital controls is fight club. It is kind of weird that it has been spoken about that there is a source and it makes you wonder why because it does become a selffulfilling prophecy. On friday you will probably withdraw its would put a lot of pressure on the greeks to make a deal this week. Anna the other things where watching, the ecb is focused on what is going on they have their own meeting later on this week with regards to the emergency liquidity assistance as they do very often. In the very short term on your program we will hear from the European Court of justice about the outright Monetary Policy and whether that is legal. Jonathan everyone expects this to get the banking of europes top court given what the advocate general said in january. It would be a big surprise if they reeled against omc. What is happening in the bond market is fascinating. You look at the likes of italy versus spain and the spread where italy was trading 44 basis points over spain in the back end of last year. That spread has no gone negative now gone negative. The highest so far in 2015. You wonder, we are at a point now where people are starting to differentiate between a Political Risk in italy and spain and what that means in the bond market. I will put that question to our guest. It is key. Getting over the great hurdle and perhaps ending up in a spanish one. Anna that would be questions asked about if other parts of europe want to stay or go. The bad the fed meets today. Jonathan there is a great piece on bloomberg. One of the problems it has not had his three months of nobody dissenting or three meetings of no one dissenting of the federal conserve reserve. Just for someone to put up their hand and say it is time to go. Anna thank you very much. We are back at the top of the hour. You can get that European Court of justice ruling during that program. Not expected to do anything surprising but that is the thing with expectations. Lets bring you to the end of countdown. More with Jonathan Ferro and the on the move team. Jonathan good morning and welcome to on the move. I am Jonathan Ferro. Moments away from the start of european trading. What an ugly session yesterday. Are we in for more of the same today . The pressure builts on degrees. Mario draghi said at the ball is in their court. The prospect of a deal fades. Omt on trial. The verdict on the legality of Mario Draghis unlimited bond buying plan. And kurodas uturn. He sent the yen surging. Today he back steps. He said he was not trying to influence the Exchange Rate but he did. Thats what we are watching. Future markets lower. Spreads widening. It looks like a repeat of monday this tuesday morning. Straight to the markets. Caroline hyde bring you the open. Zeb eckert with a wrap up in asia. A pretty ugly session and china. Caroline risk of urges of cross of the board. Yesterday it was ugly and it looks like another down day. How markets are opening. France is up by 0. 75 . We wait for the dax to open in germany. Greek debt continuing. Basically, we are gaining