Transcripts For BLOOMBERG Countdown 20150423

Was therefore 5, 6 years he was a legend. During the financial crisis this guy had faults. He used to get into big positions, saw the risks and reward and took on the trade. Mark a former colleague of the allegedly lash crashed rater, calling him a legend. We are live as he fights extradition to the united states. Welcome to countdown. Caroline coming up, youtubes 10th anniversary. We will take a look at how the video giant went from business to a global phenomenon. But there is one social network that will surpass youtube and videos in the u. S. , and that is facebook. The breakdown facebook, as they talk all things tech. Mark more evidence this morning that the slowdown in china falls to its lowest level. Hsbcs flash pmi came at 49. 2 making a mark for contraction. For more detail, lets go to zeb in hong kong. This is the lowest level we have seen in 12 months. Zeb yes, and it could get worse. New orders and prices deteriorating jobs shedding. This survey suggests that the peoples bank of china and policy makers will need to undertake further reserve ratio cuts in china, and Interest Rate cuts. Lets not forget that earlier this week, we did have that rrr cut, the second this year, and there could be more ahead. Back to those manufacturing numbers they had immediate effect on the market early on. We saw earlier declines in the shanghai deposit. Take a look at the manufacturing numbers, coming in at 49. 2 from hsbc. The estimate was for 49. 6. Any number below 50 indicates contraction. This is our First Reading of the economic help for april, and it just deepens concern over the slow down. Those firstquarter numbers show the weakest Economic Growth since 2009. The policy makers in china will today have a very delicate dance. They need to keep the Property Market moving along as well as equity and they need to make sure that they support these markets and do not allow them to soften any further. It will be an interesting time and perhaps troubling. Across the region, we are generally seeing gains for regional stock. And looks like australia and new zealand the big trading partners, are outstripping them on the commoditys front. We have shrugged off those declines so far on the hang seng. Hans thank you. The reserve requirement in 1999 stood at 6 , which leads them a considerable amount of room. Mark the worlds biggest drugmaker is warning that the swiss bank profits have beaten estimates on all three key metrics operating. Analysts are estimating 3. 17 million. Sales are narrowly below estimates for the quarter. 12. 8 billion was the estimate. What is important is that it confirmed its target for the year. Back on january 27, it said it expects mid singledigit percent Net Sales Growth this year with core operating income growing ahead of sales at the high singledigit rate. It has confirmed those forecasts for the year. Back in january, the company said it will seek to cut costs and switzerland after predicting that frank gains will hurt profit in 2015. The chief executive says that novatis will examine operations in its home country, accounting for 30 of its costs, to find ways to alleviate which has strengthened since the Swiss National bank in january, surprising the world by ending the cap. The currentcys rising value offset declining profits for all drugs with a reorganization, including disposibles. Cancer Business Sales narrowly missing profit. They will meet its forecast. Caroline lets turn our attention to Deutsche Bank. The bank is poised to settle u. K. And u. S. Investigations into benchmark Interest Rates for about 2 billion euros, according to a person briefed on the matter. Lets go to shane stronach. Shane, how does this 1. 5 billion euro litigation cost compare with Deutsche Banks total Legal Provisions . Shane that morning. Good morning. We know they set aside about 3. 2 billion euros for all possible litigation costs. They dont break down that figure. In the First Quarter, they will have litigation cost around 1. 5 billion, roughly half of what they set aside. There are several issues open at Deutsche Bank so they have investigations into effect stealings, assetbacked securities, allegedly sanction violations, and a possible settlement with u. S. And u. K. Authorities could come as early as today. Most people think that the 1. 5 billion euros will mostly go toward a potential libel settlement, but we dont know at this point. We hope to get more clarity. Caroline what do you think analysts are viewing on this potential settlement . Is it a relief . Shane the number sounds big but what we heard is it will most likely be over 1. 5 billion. It would be bigger than the largest settlement so far. But the largest so far was up to 2012, at ubs. It looks like analysts are saying about who cares . There is so much going on at Deutsche Bank right now, they just want to have this off the table so they can concentrate on a strategic review. Caroline talk to us about the strategic review. This is a rather interesting timing, if they do indeed announce this libel settlement. Shane right, so tomorrow we heard that the Supervisory Board should be meeting to review the options presented to them by management. Potentially they could sign off on an option. Having libel wiped off the table and pushed aside gives management a clear head going into this meeting with the Supervisory Board. Also it lets them look to firstquarter results, which they said last night they are expecting near record revenue in the First Quarter, and expect to be profitable despite the 1. 5 billion litigation cost. It will be interesting to see what happens in the next week there is a lot open at Deutsche Bank. Caroline we will look out for the reaction. Shane stronach in frankfurt, thank you. Hans European Central bank has doubled emergency funding to greek banks. The move comes ahead of a meeting today between the Prime Minister and Angela Merkel. On the sidelines of the European Union immigration summit. Reports of a softening stance on reforms. Hans nichols is on this story in east berlin. Hans, this new limit will be a bit of a relief. We are the understand that this is temporary that the liquidity has brought and it cant run forever. Hans the questions about how long it will run we dont know how high that circulated within the ecb. What we know is that they increased the amount by one point 5 billion, bringing you all the way to 75. 5 billion in emergency liquidity assistance. What the bank is try to do is have this number match the outflow and if you go all the way back to midfebruary when the first big increase was announced from 60 to 65 billion, that extends the midfebruary date in back of the envelope constellations. The question is what effect will that have on the economy, and growth . There is some reason to be optimistic about talks taking place here is what he had to say in recent days. There has been tangible progress in the quality of discussions. But there are significant differences on substance, and as you mentioned, they will be meeting on the sidelines of that summit in brussels today. It will be their third facetoface meeting. Manus there were some interesting market yesterday we have the deputy finance ministers comments. Merkel spoke and she gave praise to the periphery nations, but she wasnt so if use it when it came degrees, was she . Hans it was conspicuous by its absence. Heres what the chancellor said. She was talking about what some nations had done and she said some had gone through terry to programs and earned breathing space. I am thinking of spain and portugal. We can say that ireland is the Growth Engine of europe. Nothing on greece and merkels comments. She said germany was committed to doing reforms, even if the International Community which could be the u. S. Even if the International Community says they should head in a different direction. Manus hans thank you. Constables in berlin. Mark a british trader accused of helping cause the 2010 flash crash and he fights extradition to the united states. Conditions of the bail includes sleeping at his parents home in hounslow. Ryan good morning. What else to we know . Ryan other conditions of his bail are that he stayed between the hours of 11 00 p. M. And 4 00 p. M. Here in this suburb. He has to report to the Police Station three times a week. He must refrain from using the internet, even agreeing not to buy a phone. That is in addition to giving up his passport while he is fighting extradition and phoning up the 5 Million Pound bail. We spoke with his lawyer does he have the money . The lawyer says he does. In addition to about 100,000 pounds in betting accounts. There is some question about whether he would be able to pony up the bill. Before the flash crash happened we do know from u. S. Prosecutors that he set up some accounts offshore. Mark what are we learning ryan, about his trading practices . Ryan one of the most interesting things we have learned over the last 24 hours is that he wasnt doing all this is trading here at the family home. He was using trading firms, or trading outfits to do that, including a place in wo king. The way these trading firms work and there are dozens of the u. K. Are daytraders effectively pay a fee to use their resources and share any portion of their profits. At least that is often the case. He was working there for a good portion of the time during which prosecutors say he allegedly made about 40 million in illicit profits. He was a bit of a rock star, we now understand. Really revered by his colleagues. How to listen to what one of his former colleagues had to say about him when he was speaking to a group of want to be traders. This guy passed by the firm, and he was therefore i dont know, five or six years. A legend in our firm. During the financial crisis this guy for lack of better words had faults. He used to get into big positions and he saw the risks and rewards and he took on the trade. Ryan it is a port to point out that they have not been accused of any wrongdoing no suggestion from prosecutors on that front. Additionally, we also know that sarao wasnt working there at the time of the socalled flash crash. He was working out of a different spot. Very interesting, though. Could you really have been doing all that trading out of his home here . We have learned that the answer is no. Mark thank you. Caroline lets check out some of our other top stories. Brazils statecontrolled oil Company Released its first audited Financial Results since the scandal. It shut itself out of the bond market. The firm has suffered a net loss of 7. 2 billion. Facebook results missed analyst estimates. X by the strength of the u. S. Dollar. The networking giant gets more than half of its income outside the u. S. Facebook saw a 42 rise in sales, but said they could have been as high as 49 without currency effects. Google unveiled its wireless mobile phone service. Price plants should the pressure on at t and verizon with a service offered through sprint and tmobile. Google is trying to attract more users. Manus it is 6 16 in london, the start of another trading day. What happens next in a flash. Mark sarao is still trending. Manus this raises use questions raises huge questions, not just about the individual and his alleged role, but also about the exchanges in which he traded and how they are regulated, how they worked, and how do we actually know . One man went so undetected on a trading floor, made a Million Dollars in one day . Mark later, we will look at the ericsson firstquarter earnings then caroline will break down the facebook numbers. Plus, what a strong dollar could mean for other u. S. Tech giants. We will catch up on the avengers debut. Could it be the next billiondollar blockbuster . Caroline first, china pmi has fallen to a 12 month low. Our next guest when the prolonged slowdown will and, and what it will do to equities. Mark chinas pmi dropped to 49. 2 in april, missing the estimates. That is a 12 month low for the manufacturers suggesting government efforts to cushion a slowdown are yet to revive chinas factories. Lets bring in edmund. Time to cash in your chinese equity gains over the last 12 months . Edmund dont be so dramatic. I would rather focus on the fact that chinese equities are the underperforming Global Equity market over the longterm. What we are in right now is a catchup phase. Despite the substantial rally, it looks amazing. The valuations are still much cheaper than the global markets. If you put it against the s p 500, china is a, way cheaper. Hong kong as well. Manus we have a story out this morning that says that the record valuation was 23. 7. You dont think it is overly bulked . I just thought id go in. Edmund there is clearly going to be lots of volatility. Lets be honest. But that would be the buying trigger. Caroline what would spark that setback . Is it raining in some of the trading habits that have been allowed . Edmund exactly. The Chinese Government is trying to encourage the chinese public to invest more, to save but not in the form of cash savings, but to put money where it can be used to affect the real economy. Maybe they have gone too far. If you pull it back a little bit, some fine tuning. Mark greece. Edmund that is what i put on my bike chain. [laughter] mark are we any closer to a resolution . Lets not go into the minutia. Are we closer to a resolution or are we heading closer to a crisis . Edmund both. We are on a knife edge. We can go one way or the other. It will be something that the European Union members will necessarily want or crease will want, it will just or greece will want, it will just happen. The potential for cock up his massive. Is massive. We hope that they will see sense but politicians seeing sense is not their forte. Manus one of the great debates is whether the word continues to find German Government specifically because of what you just said. You would have guessed yesterday mark the trade of a lifetime. Manus where are you . Edmund he can say what he likes. The fact is, you can talk about the trade but you cant talk about the trade a trait has the direction that is not timing. That is a longterm view. As a traitor that is useless to me. I can get absolutely murdered in the meantime. There are more than 2 trillion euros of european government bonds at negative yield. Mark give us a trade for today in making money trade inequity. Edmund japan. By japan. Caroline any industry . Edmund i like airport related industries. Sony in particular is still through its restructuring and has done fantastically well, but if you look at the potential gains in earnings that could make and the repositioning of the company, it still has a long way to go. Caroline even though we still keep getting these negative headlines . Wikileaks getting involved . Edmund i dont care as an investor. The underlying story is that Consumer Electronics is not what sony does principally. The films are incredibly successful, but it is also building a massive platform and semiconductors. That is one of the growth platforms in the company. Manus they have a huge generic coming up on the next five years you have an interesting take. Edmund i love pharma. I think there will be more m a activity. You have seen we will buy mylan, what is going on it tells you that they are threatened, they will no longer be the leading world generics maker, and i think they will respond. Mark good to see you. Edmund shing. Coming up ericsson reports earnings we will break down the numbers. Mark manus welcome back. We are looking at risk this morning. No huge reaction in the Australian Dollar. We dipped when we saw the index come out as a contraction. But we are balancing off those low levels 7757 is where you are. Again, just trying to put in a base level. The bank of australia, the what be surprised if he goes lower. Analysts have been running the numbers. They use an analytic system called regression analysis. The Australian Dollar should fall by another 6 . We can change the image in a flash. Lets have a look at kiwi. You are getting a bit of bang for your buck. We have the central bank. 7757 is where we are. Rates remain for a prolonged period of time. Consider cutting rates. We have weakening demand and domestic inflation rates. They have miles to go before they run out of air, anything in terms of rate cutting ability. 57 probability of a rate cut i december. Cut by december. Dollaryen. We have seen it bank of america says by dollaryen. By dollar, sell yen. The target is 128. 45. Bank of america is always good for a call. Caroline thank you. Lets have a look at breaking news. Ericsson is the biggest maker of Wireless Networks and telecommunications products, and it is missing on assessments. 53. 5 billion krone. Analysts have been looking it seems as though they are saying deposited foreign currency effects helps numbers. Sales fell from 6 operating nearly half of where analysts estimated. 2. 1 billion swedish krona. A big mess. Miss. The biggest you seems to be a slow the big issue seems to be a slow broadband market. Providers of mobile have been investing in their networks and infrastructure but we already have 4g. So slow down in the u. S. , they say, they also make the margin decrease. Analysts have been looking at 37 . Stay with bloomberg for more on this. We will be speaking to the ericsson chief executive. Mark top stories on bloomberg. Firstquarter profits at beat, as they begin to benefit from a swap transaction. Core operating income findings, 9 for the quarter. The chinese manufacturing gauge fell to a 12 month low in april, suggesting the effort to cushion the slow down. The ecb is doubling emergency funding for greek banks, but the deal remains elusive. Tomorrow, the central bank will raise the cap by 1. 5 billion euros, according to greek banks. Manus the british trader accused of helping to cause the 2010 flash crash has been granted bail by a london judge while he fights his extradition to the u. S. One man who knows a thing or two about a battle for repatriation is david birmingham, one of three accused by the u. S. Government of conspiring to defraud the bank. He now runs strategic consulting. He joins us now. What would you be telling this man right now as he sits under house arrest . David i would make it clear i dont admire these people, but what i would say his chances of avoiding extradition from the u. K. Are probably slim to none. In circumstances like that, i think objectively one is significantly better off trying to engage with u. S. Prosecutors find out what they want. The answer is almost always some kind of a deal. Manus i noticed this morning on your website, you said sometimes the best legal advice is no substitute for experience. What can he face in the very near term in terms of trying to work out what the u. S. Authorities actually want from him . David i know no more than you do, aside from what is available on the internet. The allegations are extremely serious and the amount of money involved that is a very motivated aspect. The fact of the matter is that if he endeavors he has two courses of action he can try to fight the extradition, automatic rights of appeal curtailed. If you does fight extradition if he does fight next tradition and he loses he would be automatically designated a fugitive on arrival in the u. S. He would be locked up in a Detention Center pending any deal that he may want to make it has leisure thereafter. If on the other hand he engages early with the prosecutors, he may be able to come to some kind of arrangement where he travels there voluntarily and has a conversation with prosecutors along the lines of what they want to consider. Manus this is part of the advice that you give to some of your clients that come to you. Is that, from your experience and i am going back quite a ways you were extradited in 2006. Do you think cooperate, go voluntarily participate is that a more constructive way to deal in these scenarios then to string it out . We are showing some images now of him appearing in court yesterday. David you just have to deal objectively. I know it is hard for people to do. If you ignore innocence or guilt but the facts to one side and deal just with the circumstances with the statistics, 98 of people indicted in the federal system in america end up doing a plea bargain. Because of the way that the system works there is an all a lot of innocent people in american prisons. Once you get to america, your chances of walking away a free man are 2 or less. If you add to that the concept that you are a foreign person whose extradition if you can test that that your chances become slimmer still. On arrival, you will be thrown somewhere that is a normally difficult for you to defend your case even if you are absolutely innocent. But i can never advise someone to plead guilty. I am never interested in the real evidence around that case. My job is to see if these people understand how the system works. It is not about innocence or guilt. Once you arrive our guilds, innocence or guilt is long since behind you. Manus i am absolutely stunned by your comments that the american system there are so many innocent people behind bars. Run it past those statistics, because im sure if he is watching he would want to know those. David i couldnt tell you how many innocent people are behind bars but i can tell you that 98 of people indicted in the federal system enter into plea bargains rather than go to trial. There was a strong interview published in the new yorker by a district judge in the Southern District of new york, who is a very evident criminal judge. He basically said our system is broken. We are sending large numbers of innocent people to jail simply because the prosecutors, judge judge and we no longer have what we purport to have because the prosecutors people just arent going to trial. The risks that they run in terms of sentencing if they go to trial and lose our hernandez. R arendare horrendous. Manus we will have to leave it there. Mark we are in the earnings season of the tech tyitans. Caroline, you have more on the companys performance. Caroline both of these companies have Big International presence. Facebook gets more than half of its sales outside the united states. Stripping out the rest you have to hand it to facebook. It is the First Time Since 2012 that the numbers have been this stellar. Lets take a look. We saw growth miss estimates, but it was the dollars when you look at it, sales are up some 42 . If the dollar hadnt been so strong, if you hadnt had the currency effect, it would have been 49 . They would be selling more advertisements, more users. It now has 1. 4 4 billion active users per month. 1. 44 billion active users per month. They have 4 billion videos watched per day. We are being lured in all the time, about three quarters of advertising revenue is now from the mobile space. Sheryl sandberg pointed out forget about the dollar. The most important thing is that we are boosting the underlying business. It is a problem in terms of Dollar Strength but they are still looking pretty stellar when you go through the numbers. In terms of getting a really international presence. Lets look at what is happening to ebay. Despite the Dollar Strength, it was hit. Sales and profit grew and beat analyst estimates. This is an online marketplace and we saw shares trade up. They are slashing their costs to protect their margin and profitability. 2400 job cuts of their First Quarter alone. A smooth separation, though, is what they are promising from paypal stop that will occur in the third quarter. Investors have been pushing them to get rid of the payment business. The worrying thing is that paypal is bringing in more revenue than ebay. What does that mean when you separate the two . Where is the value left in ebay overall . Why is it losing out to amazon . Why is it lacking in pace . Those are the questions but for now, everyone likes the way paypal is going. Mark brazils oil company has released its first Financial Results since the scandal effectively shut its companies out of bond markets. They reported a 2. 1 billion corruption related charge. Talk us through this figure, is 2. 1 billion figure. Hi. It is a complicated figure. They took them several months. In january they tried to present a different number, which led to a long discussion. At the time, the former ceo wanted to write down 88 billion, and now they are writing down 6 billion. This is the big surprise from yesterday i think they will be pretty happy. It also carries 44 billion for loss of evaluations and other factors. It is not only the success. Mark does the Company Provide and create more credibility to petrobras . Rodrigo without a doubt. One of the things the ceo said last night with a presented the results was that they are feeling embarrassed, which is understandable. That they question everybody was asking was the auditor going to back these statements, would it have reservations . The earnings were presented without any reservations from the auditor, which is a great time for markets, because there was risk of breaching. This wont be the case. Mark thank you. Manus the avengers hits theaters today. Will it live up to its predecessor . We will talk movies with a critic after the break. Mark now for our english viewers today might be st. Georges day, but for marvel movie fans, the release of the latest avengers film is far more important. It is hitting theaters before its release will it live up to its billing . I am joined by simon. Great to have you. Is it any good . Simon its very good. Whether its as good as the first, i dont know. What it does is that it wraps up phase two. It sets up the ones in phase three and four, which will be the big money spenders. In the next couple months, we have antman, ages of shield. It pushes all the previous films forward. It is got the action, the humor the cast, a good villain. Its just a little bit too busy. Mark will it crack 1. 5 billion which the original avengers cracked, making it the biggest superhero ever . Simon easily. I really think it will reach 1 billion. They are already predicting that it will open to 240 million. It opened outside of america this weekend and it is already predicting 160 160 million. We are looking about 500 million within about seven days. Reaching 1 billion will be easy. Mark disney equals kaching doesnt it . Ironman 3, captain america, and it goes on. Simon the end of last year, disney and marvel laid out the entire universe. They have a 12 year plan and phase two has just finished. There will be more off the back of that. Dont forget, outside of that you have things like antman, but you have proven franchises. Who would have thought guardians of the galaxy it was brilliant. They could have gone horribly wrong but it was a massive success. There will be two more avengers movies. We will have more thor, captain america. Mark are we nearing peak marvel . Simon dont forget that it is not just marvel. Warner bros. Have a lot of franchises coming up aquaman, wonder woman. They have Justice League which is d. C. s avengers. Then you will have people crossing over from studios and franchises. That gives a whole load of other options that you can have. Really, this is just the tip of the iceberg. Audiences are turning out more than ever for these movies so i think the audiences are up for it. Mark i have to talk about batman versus superman. I watched it just after i watched the force awakens trailer. Lets start with batman, because it is relevant. Simon its dark, isnt it . But thats the way batman has done. It moved away from the 1960s and became darker. It went down really well with audiences. If it aint broke, dont fix it. Mark but it wasnt a massive success. Simon but it was still popular enough for a sequel and there is a whole these the universe to explore. Youve got Justice League and it lot of options. Mark disney has got marvel, star wars, the old franchises like cinderella, rebooting them, and frozen. It is firing on all four cylinders. The force awakens i am still trailing. Simon i cried. Star wars is not just one new film. We are looking at several star wars movies were looking at spinoffs. Frozen more pirates of the caribbean. Mark we dont need more pirates of the caribbean. Star wars will be kac hing. Simon and there are liveaction movies they are doing as well. Beauty and the beast, and dumon. Bo. Finding nemo, and a new film called inside out. If that goes down well, i think we can expect inside out 2. Mark theyve got fast and furious, they are franchises in themselves. Simon that is already the second most successful film of the year. There is hunger for these kinds of franchises. There are several things warner bros. Had mad max, that is expected to be massive. We know there will be at least two more. Mark thanks for joining us. Manus i think thats the best line im still tingling. We will have a chat with you about that when you get back on set. Vladimir putin is hitting the road. This is putins health angels. Hells angels. These guys are called the night wolves. They commemorate the soviet victory in world war ii tracing the red armys path to berlin. Look at vladimir putin. Caroline trying to look like the dude. Manus he has the tight leather jacket. Caroline i am going digital. The uber cofounder he is worth about 5 billion. He has got a new app called operator. It synthesizes physical and digital worlds. Say you really like a pair of shoes. You take a picture and upload it. They will be able to find something for it and help you buy it. Then they sent it to you. It looks like he could be a dream i am not sure how it would work in practice or how they are going to make any money. Operator if it works as well as uber. Countdown continues in the next hour. Mark chinas manufacturing slumps to a 12month low signaling stimulus hasnt yet stemmed its slowdown. We are live in hong kong with the market reaction. Manus germanys biggest bank could pay the biggest libor Bank Settlement to date. Set to face a 2 billion penalty in u. K. And u. S. Probes. Were live to frafpk further for the details. Caroline greek banks get a lifeline after bleeding deposits. The e. C. B. Nearly doubles its cap on emergency Funds Available to the lenders. A deal with european creditors, though to unlock aid remains elusive ahead of the week. Mark and the alleged flash crash trader fights extradition to the u. S. Were live as Navinder Saraos home after he was granted five Million Pound bail. Mark welcome to countdown. Im mark barton. Anna well take a look at how the video giant went from these new clips to a global phenomenon. But theres one official network that has surpassed youtube in individual joe views in the u. S. And thats facebook. We break down facebooks First Quarter and talk all things tech. Manus more evidence of a slowdown in china as factory sentiment forced to its lowest level in a year. Hsbcs flash p. M. I. For april came in at 49. 2. Marking a further contraction. For a little bit more lets go to hong kong and talk to zab eckert. Zab, this is a flash reading. But this almost vindicates what the central bank had been up to recently in terms of reducing the amount of capital the banks have to hold. Zab yeah. Absolutely. And we have seen actions such as that even this week with the reserve ratio move. The reserve ratio cut that we saw on monday. And there is the expectation that this willatest manufacturing number with the lowest level in 12 months. It suggests, then, that the easing is not over. That china needs more eefing for the government to arrest the slowdown and try to stimulate the factories. The factories just one element of course, of this overall slowdown in the chinese economy. Now, if you dig into these numbers today, you see several metrics that are showing signs of weakness. And we did have shares declining. Well get to that in just a moment. A rebound in the markets, though. But the numbers indicate that measures of new orders and prices deteriorating. Jobs shedding for an 18th month according this flash number. Its our first indication of aprils Economic Health in china. And of course, investors expect that well see perhaps as i said, more r. R. R. Cuts as well as an allout trait cut. Interest rate cut. In the markets, youre seeing utilities and banks quite active in the hong kong and shanghai sessions. But stocks shedding those earlier declines. The prospect of additional easing in china lifting shares. The hang seng up half a of one percent and even australia now looks like its flat. It had been down for most of the day. We should note the aussie dollar continues to trade lower. Its sensitive to commodities demand from china. These are the key movers in hong kong right now. The hang seng as we said, advancing china bank of china and china merchants. Two key banking stocks to keep in mind in this session. A busy day for the data out of china. As we assess the health of this economy. Well send it back to you in london. Manus zab. Thanks. Zab eckert in hong kong. Caroline lets bring it closer to home because Deutsche Bank is poised to settle u. S. And u. K. Investigations into the rigging of benchmark Interest Rates for about 2 billion. Thats according to a person briefed on the matter. For more lets get over to bloombergs shane stromat in frankfurt. 1. 5 billion euros. The litigation costs theyre setting aside. How does it compare with Deutsche Banks Legal Provisions so far . Good morning. Well, we know that Deutsche Bank set aside about 3. 2 billion euros at the end of 2014 for all possible litigation costs. But they dont break down that figure. So we dont know exactly what it was for. So what they said last night was theyre expecting in the First Quarter about 1. 5 billion euros of litigation. We dont know whats that for, either. But we heard as early as today a settlement with u. S. And u. K. Authorities on libor could come. Most likely, and most people are saying that this is this 1. 5 billion euros will most likely go toward that. So there are still several other issues open at the bank. For which theyve put provisions aside. For example, investigations into f. X. Handling. Into assetbacked securities. Mortgagebacked securities. And alleged u. S. Sanction violations. So it looks like the 1. 5 billion euros in litigation costs in the First Quarter will probably be for libor. But its difficult to say, still. Caroline and what do you think analysts and investors are thinking about as settlement coming as soon as today with u. S. And u. K. . Would it be a relief to get it off the book . Right. Well basically this number has been growing. And thats pretty typical in these sort of settlement situations. And so analysts are kind of saying listen, yeah, its getting more and more. And it will be it looks like the largest settlement so far. With authorities. On libor. The largest up to date was in 2012 from the u. B. S. At 1. 5 billion u. S. Dollars. So it looks like its going to be a big number. But lets just get this oust way. Theres so much going on at the bank right now that this should not be hanging over them while theyre doing their strategic review. Caroline yeah. Talk to us about that strategic review. Because its quite interesting timing that this settlement could be coming right in the midst of it. Exactly. Weve heard that the Supervisory Board should be meeting tomorrow. To review options from the management board. Such as selling off of either part or entirely their Retail Banking operations. And if they can go into this, with a clear head and say libor is behind this, thats one big issue we had out there. Heres how our Restructuring Plan to make the bank profitable and gives them relief and a clear head going into this meeting. Next week theyre also presenting one First Quarter results. And they said in their Statement Last night that theyre expecting with the First Quarter results near record level of revenue and despite the 1. 5 billion euro litigation costs the bank should still be profitable. So if they can get this libor settlement out of the way quickly and look forward with their strategic review, it would definitely be a big advantage for management. Caroline well see whether it breaks later today. And indeed how the shares perform. Shane stromat thank you very much indeed. In frankfurt. Manus five years since greece submitted an additional request for a bailout from the e. U. And the i. M. F. There be triggering the euro era debt cries. The European Central bank has doubled emergency funding for greek banks. The move comes ahead of a meeting today between Prime Minister siprus and Angela Merkel and thats on the sidelines of European Union immigration summit. We are in berlin with the story. Hans, what does this new limit, this new extension tell us about the outflows from the greek banks . Hans in general, this extension of the e. O. A. Is supposed to match the outflows. The increase was 1. 5 billion. Thats from last week. Theyre all the way up to 75. 5 billion euros. For emergency liquidity assistance. Thats the ceiling. So you work backward and have that big increase back in early february and mid february, from 60 billion to 65 billion the back of the envelope calculation suggests that there have been 15 billion in outflows. They like to keep a three billion ceiling just in case theres some sort of event that would trigger a crisis. So they have about a three billion buffer zone. Heres the latest and perhaps why the market was up a little bet yesterday. We saw the athens stock index. Was up about 12 . You had some positive comments. Not just out of mr. Fara fakas but benoit coor. Heres what he had to say. In recent days there has been tangible progress in the quality of discussions. However, and this is a key point, manus, significant differences on substance remain. Now, weve just heard from mr. Dombrowski the e. U. Vice chair in charge of European Commission issues. He says that you will not meet the end of april deadline for technical talks. And thats been pretty clear. But he also says that the e. U. Is working on the scenario. That greece will stay in the euro. Thats part and parcel of what weve heard out of brussels. Its there. With Angela Merkel and mr. Siprus will have their third facetoface meeting. Manus . Manus and Angela Merkel praised from those who have enacted change and structural reform. That was spain. And portugal. But no mention of greece. Hans if i praised all of our anchors in london but not you, i dont want you to take it personally but thats basically what Angela America deadline. Had praise for portugal, spain ireland being the Growth Engine of europe and con speckius in its absence no mention of greece. Manus . Manus hans, you just made mark bartons day there. You had a little bit of a chuckle just the source of me being hans, i leave you there. Thank you. Mark Navinder Sarao the british trader accused of causing the flash crash in 2010 was granted bail of five Million Pounds while he fights extradition to the u. S. Conditions of the bail include that he sleeps at his parents home in with a west london suburb and ryan good morning, what else do we know . Ryan we know that other conditions include he has to be at his home between the hours of 11 00 p. M. And 4 00 a. M. Thats to ensure that he is sleeping at the family home here in this west london suburb. Additionally, he has to report three times a week to the Police Station here in houndslo. And forfeited his passport. And as you said, he has to pony up that five Million Pound bail. We spoke with his lawyer yesterday. And says he does have the five Million Pounds. In addition to another 100,000 pounds roughly. In some betting accounts he has. Though its not entirely clear mark, that he has actually posted bail just yet. A lot of reporters already this morning turning up again here in west london. Waiting for mr. Sarao to appear in front of them. Mark . Mark and what more are we learning about his trading practices . Ryan , well you know, we are learning that hes been trading for a very long time. At his home. But also at trading outfits. Including one outside of london. In the city of woking where he worked when he was in his 20s. But he is a daytrader with significant amount of experience. Now, what has happened over the last 24 hours is people have begun to ask the question of whos really to blame here . Criminal charges a sign that the u. S. Has opened against him. Is it the regulators or is it mr. Sarao himself . Thats a conversation happening in the marketplace. A lot of people say mr. Sarao. Was just a lone trader. A day trader. And is it really fair to blame him for causing an entire market collapse . Was he really capable of that . What about the regulators and what about the individuals run being the markets that mr. Sarao was operating on . Like the futures market run by the c. M. E. , state side in chicago. And there are a couple of questions. For example, on the penalty side, there was another individual that was found engaged in this socalled spoofing and layering where you place a trade without the intention of ever executing it to push the market in one direction or another. He was effectively doing something very similar to what mr. Sarao has been accused of. Between 2010 and 2011. He was caught. And his fine was 150,000 dollars. And he was banned for trading for one month. There are a lot of people now and you can read about this in a very good editorial in the financial times, saying is that enough of a sanction . And then there are questions about whether this could have been caught earlier. We do know somewhat disturbing facts, for example, from the affidavit, the u. S. Prosecutors allege that mr. Sarao was actually contacted by c. M. E. In march of 2010. In other words two months before the flash crash. And he was told that he must ensure that his trades are indeed bona fide trades. And not sort of these trades where the trade actually never happens. Its just meant to move the price of an instrument. And he was even contacted on may 6, 2010, the day of the flash crash. And yet he continued on trading. And according to the affidavit, he even had the gall if you will to later that month, in may of 2010, tell his broker, i called those guys at c. M. E. And told them to kiss my you know what. So theres a lot of questions about what the responsibility is, say at c. M. E. And if these markets in general. But also the federal government, the united states, the regulators, what are they doing to make sure that the markets are safe, not vulnerable to these kinds of things, and being accurately or well regulated . Mark . Mark ryan, thank you. Well speak to you later. Ryan chilcoate. Caroline our top stories on bloomberg. And brazils statecontrolled Oil Company Petrobras released its first audited Financial Result since the scandal which all but shut it out of the bond market. And a reported 2. 1 billion dollar corruption charge and the net loss of 7. 2 billion for 2014. Facebook results missed analyst estimates for the First Time Since 2012. Hit by the strength of the u. S. Dollar. The social network giant gets half of its income outside of the united states. Facebook saw a 42 rise in the First Quarter sales. But said they could have been as high as 49 without currency effects. Google unveiled its wireless mobile phone service. Projected fi. It should put pressure on at t and verizon with the service and tmobile in the u. S. Googsl trying to attract more users to its Android Phone software. And half of americas 41 Fracking Companies will be dead or sold by the end of the year. Thats according to an executive with weatherford international. Folk says the firms will be hit by falling prices and spending cuts by oil firms. And in two weeks ahead of the u. K. General election ian woods, former chairman and chief executive of wood group, says the current u. K. Government delivered a good budget in march for the north sea oil industry. He told bloomberg in an exclusive interview that fewer jobs will be lost than he forecast earlier this year. Thanks to the budget and industry efforts to cut costs. The way we were going, i believe we would have been lucky, i would have said we might have recovered nine billion barrels and a push to get that and now the path that were on, was a reasonable recovery in the oil price, i. E. , 70 to 80, i think well probably get back up to 15 million or 16 Million Barrels and that is 100 a barrel, economic value to the u. K. Caroline and shares in aero surged that it will buy pace, a british set top box maker. The inversion deal will see arris incorporate in the United Kingdom. Where it will take advantage of a lower tax rate. Manus join all three of us on twitter. Were all there. We will pose a question to you now. Because its coming. I was off yesterday getting ready for it. During the special interview. What is business . Thats what were going to ask our audience as we go for a whole new world at bloomberg on april 28. Were going to be ask our guests, what is business . What does it mean to you . What is does the word actually mean . And i had a fascinating insight. That interview will be next week. One of britain caroline teasing. Manus teasing. A little bit of a photograph. Keeky photo of me leave you with that. A little bit of luxury. Mark and seven risks and seven opportunities how our next guest is looking at 2015. Well find out what they are. After the break. Manus welcome back. Seven risks and seven opportunities. That is how our next guest is looking at 2015. Lets find out what exactly they are. The senior global economist over at standard chartered. Youre welcome. And i sort of whizzed through most of the report this morning. Its optimistic. It says that we should focus on were going to weather things in a better way. Why are you so relatively upbeat . I think its fair to say that we are not relatively upbeat well, relatively upbeat but we do recognize there are risks. Which is why there are seven risks in the report which have been highlighted. And dangerous to ignore the risks. But we also think Something Like elastic magnification and add series of shocks and you had a series of shocks between 2008 and 2012 and people expect the next shock. And always on the lookout for the next crisis. And this is very different from in 2007 where everybody ignored all the worning signs. And there was a lot of my openia. Of myopia. Balance sheets are stronger and more monetary accommodation. And people have actually focused on the risks, on the regulatory side as well. So the combination of factors will imply that things are not as bad. And theyre actually quite a few opportunities that maybe people are missing. Caroline its interesting. Youve said the reform is uncertainty and founded upon these risks and these opportunities. One of them is the extent of chinas slowdown. P. M. I. Manufacturing data today. At 12month low. Are we how much should we be factoring in stimulus . Stocks are rallying on the back of that. I think thats a really good point. I think as you mentioned, there are four uncertainties and everyone is worried about china hard landing. But at the same time people are quite happy with the reform process thats going on over there. This is essential for sustainable growth. And in the meantime, of course maybe the growth was of the slowdown was sharper than the government expected. So they have cut the reserve requirement ratio by 100 basis points. We expect them to cut the deposit rate by five basis points so more stimulus coming through. And you have to remember that the global liquidity is still flush. So all of these factors together, we think that the possibility of a soft landing in china, is actually much bigger than people are willing to accept. And that for us is a big opportunity. In the global economy. That people should be looking at. Because you got this good combination now coming of still a huge focus of reforms. And getting the longterm story right. But also providing some shortterm stabilization. Mark another uncertainty. Revolves around the euro zone of course. On one side. The crisis reemerges and on the other side the euro fears subside. Where are you leaning . Right now . Clearly of course greece is the focal point right now. And were lurching from one date to another critical date to another. Theres one tomorrow. But clearly thats not really that relevant anymore. And, you know, it will be may 11. And may 12. Clearly they have they have the some resources at their disposal to be able to meet payments. But really, in the absence of reforms, this is euro zone will be the key factor that causes uncertainty to increase. And to persist in the global economy. And really we think that at this point in time it is a tossup between which of these two will work. A lot of things have improved in the euro area. The e. C. B. Is providing a lot of support. If you look at a country like portugal, theyre their program really did work. And making good reform progress. But in the absence of a proper solution for greece, people will continue to question whats happening in the euro area. Especially the lack of any fiscal union. And as a result, i think if you go to look at all the uncertainties, then euro area is more for risk in that sense. Than say china would be. In our view. Manus some of the other Big Questions that we have here, lets bring it back to markets. Which is the dollar. In the 1980s, the dollar rose by over 50 . In the 1990s it rose by 34 . And you say in your report the dollar is only just beginning to up 18 since 2011. So is that the big momentum, that comes through for markets . I think we have a view of course that the dollar will continue to be to strengthen over the course of this year. But once the fed starts to raise rates, then, you know, a lot of this Dollar Strength will have been already factored in. And then what people will start focusing on is that the pace of tightening and the actual final point of tightening would be much lower. So we dont expect the final funds rate to be at 2 . Which is much lower historically than weve had in previous tightening cycles. And once that happens, then people will maybe move away from this tightening scenario and look at other currencies. Right now the dollar is going to be the dominant currency. But maybe as we progress over the course of the year and into next year, then this Dollar Strength story begins to dissipate a little bit. But in the meantime its great for emerging Market Countries and other countries where theyre looking to use their currency weakness to boost exports. The danger there is that you have this kind of currency war going on. Probably. Manus great to have you with us and thank you very much for your insight and analysis there. The senior global economist at standard chartered. Mark 7 26. Still to come we will take a look at face boobs First Quarter and then coming up at 7 40, well look ahead to the markets and we have our eyes on novartis today. Caroline but first were in the midst of the earnings season of course. And tech titans of Silicon Valley will get around to that ast break. Manus welcome back to countdown. 7 30 in london this thursday morning. Its ironic in that the big news story is china. But the big tax move is down under and not even australia. The new Zealand Dollar down. 75. 59 is where we are. The Central Bank Governor there of the reserve bank of new zealand says that rates will remain stimulated for a prolonged period. They are considering cutting rates. Theyve got a weakening demand. And a weakening domestic inflation scenario. Now, when you think about whos got enough powder in their gun the chinese certainly have where the reserve rates up around and traits that have got a capacity Interest Rates that have got a capacity to be dropped. New zealand rates down to 3. 5 . So far away from the zero percent rate that we have around the rest of the euro zone. Along with negative rates, for example, in switzerland. So you got 3. 5 . They have scope to cut. The reckoning a 57 chance that new zealand will cut their rates by december of this year. China. We had a chat but the start of the trading day over there in hong kong in terms of how the equity markets reacted. Here we are with the aussie dollar. So linked to what happens in china. The manufacturing, the lowest in 12 months. The p. M. I. , purchasing managers index, its a flash reading. For april. Thats what we refer to it. A contraction in manufacturing. The number missed estimates. The aussie dollar, very initially skirmished lower but the trend in aussie dollar and dollar, the last 30 days, has more or less been on a downward sweep as we get some of that data from china. Progressing into the negative story. Now, glen stevens, who is the Central Bank Governor over in australia, he actually said he wouldnt be surprised if the aussie dollar doesnt go down somewhat. Of course we know what glen stevens is all about. Hes a jaw boner. And hes constantly trying to talk his currency down. Bloomberg analytics have done a little bit of what we call regression analysis. Way above my level. But their regression analysis, their analytics on the technicals, suggest that theres room for the aussie dollar to drop down another 6 in terms of balancing out the real values in the aussie Dollar Dollar trade. Lets quickly finish the f. X. Check and look at dollaryen. You saw initially day four of the dollar rising and the yen falling. Thats just changed direction ever so slightly. Yen is gaining, dollar is falling. And unsure of its direction. Bank of america, mink, however, Merrill Lynch however, is a substantive core and say you should buy dollaryen with a target up to 124. Lets pop these up here for you. Up to a target of 124. 59. Dont forget the. 9. With a target level up 128. Will we have enough room on the screen . Yes. 45. Thats the target. Bank of america. Merrill, in the very, very near term. So if you want to be long, thats where you want to be long. Mark manus is just showing off today. Top stories on bloomberg this hour. Novartis reporting First Quarter profit that beat. The Company Begins to benefit from excessive asset swap transactions. That make it smaller. And more profitable. Core operating income climbed 9 in the quarter. Chinese manufacturing gauge fell to a 12month low in april. To just that efforts to cushion the slowdown are yet to revive the nations factories. The e. C. B. Doubled emergency funding for greek banks. As a deal for the country remains elusive, and the central bank raising the cap by 1. 5 billion euros. This brings greek bank cash buffers to 2. 9 billion euros. According to a person familiar. We are in the midst. Earnings season for the tech titans of Silicon Valley. Yesterday, we had two of the most recognizable, caroline, you are focusing on facebook. And ebay. It seems both are being hit by a strong dollar . Caroline both are. Particularly facebook. Of course. And thats because most of its sales coming out of the united states, building up in asia and europe. This floating dollar graphic, these two companies have seen their profit and their sales hit by the dollar. Amazing growth if youre actually looking at the underlying numbers of facebook. But growth did actually miss analyst estimates. In fact, thats the First Time Since 2012 that we have seen Mark Zuckerbergs company miss analyst estimates. We did actually still see pretty phenomenal growth. Sales up 42 . But if you cut out the effect of this strong dollar, in fact, sales would have risen 49 . Even more. So clearly they are being reined back by the dollars strength overall. And Advertising Sales doing particularly well at the moment. If youre looking at them users, 1. 44 billion of us clicking on facebook every single month. Almost one billion of those are clicking on every single day. Were getting more addicted. That was up 17 . So phenomenal amount of growth. But also the ad sales. This is where the bulk of the revenues of facebook come from. About 90 of all their revenue is from advertising on facebook. And remember, theyre building a platform. Theyre letting other people build games on facebook. Theyre also helping other apps be developed via facebook to be put on other parts of your mobile phone. And your other games and fostering a whole facebook platform and investing and going out and finding tech talent. Whether it be in russia, in minsk and ukraine they say they found tech talent of late. Building apps for facebook and then to roll out and of course help them build advertising Going Forward. So amazing amount of growth also in hiring. This is a phenomenal statistic for you. They are hiring like crazy. And the last 12 months, facebook has ramped up their head count 48 . They now have more than 10,000 people working for facebook. This is all about quality. Its about reach of advertising. And look, ignore the Dollar Strength. This is about boosting the underlying business. And yes, shares did fall ever so slightly in after hours trading. But i think many are convinced of the vision that Mark Zuckberg has. And when youve got four billion videos being watched a day, and most of their revenue now coming from mobile, clearly theyve made that leap that many wanted to see. Get on mobile and get about video content. Ebay, its more about cost cutting thats helped profit. Rather than growth in the business. Ebay actually beat analyst estimates overall. But it was held back slightly by the Dollar Strength. But they were able nevertheless to grow sales and grow their profit. Remember, it was a loss and doing it by cutting costs and get this 2,400 jobs go in the First Quarter for them. Now, this is all about getting themselves ready for a complete change in the business. Remember, after much duress from shareholders, they are splitting themselves in two. Paypal will smoothly separate, they say, in the third quarter. But a bit of transparency and clarity for the Investor Base and want to know when this will happen. Third quarter is when were on track to see pay pal, the payment division, split out from ebay. But ebay, the marketplace, online remember, it really led the charge and forged the way that we used the internet. But fallen behind competitors. Google. Amazon. The way that we shop nowadays, we go to online retailers. That we dont need to go to ebay anymore. What then when you remove pay pal . Pay pal actually makes up a bulk of the revenue for ebay . And this is the first time we saw this happen that pay pal is actually bringing in more than ebay. What happens when it separates . When we bring in out that cash cow . What about the future of ebay on its own . The company is saying, theyre standing tall and saying look, youre actually going to be able to build some strength by being separated. But well have to wait to see whether the value does indeed increase, once we separate the two. But so far ebay beating analyst estimates. Back to you guys. Manus thanks for that, caroline. Lets crack along and have a look at novartis. They reported their First Quarter earnings. The headline numbers they beat this morning. Lets go to paris. Our bloomberg intelligence, the head of research joins us from paris. And sam, great to have you with us this morning. Lets just look at this business. Joe jim snez jimenez finished the call and some of their big blockbuster drugs glevac and diovan coming into the fray. What do you make of the numbers . Good morning, first, manus. On the face of it, the top line missed analyst estimates. By a pretty wide margin. And then lower down on the p. N. L. They seem to have beaten analyst estimates. Of course, the confusion here is that we have to be careful that we are comparing apples and apples. And in that, the company has obviously got several discontinued operations that they had for various lengths of time during the First Quarter. When you add those back in, and we which we suspect were accounted for in consensus then the misses on the top line and the beats on the operating income etc. , dont look as wide as they do when you just look at the continuing operations. So really on that front, thats that. The key thing here that weve seen which is very nice to see is that the improvement in margin remember one of the key things with all the work that noach tis management is novartis is doing is to improve margins through their portfolio transformation and work that theyre doing with novartis business services. Etc. Some of those margin improvements that weve been seeing in the First Quarter were not all annihilated by the currency effect. So about a half of the improvements in various areas were still maintained. So there was positive margin improvement. Manus and that just shows you how hard they are working on the margin improvement, sam. That they can as it were overcome that currency move. And still the swiss frank is appreciating. One of the strongest currencies as you know. In the past number of weeks in the gman 10. Were looking at some of these comments from jimenez. And hes saying were still looking for bold acquisitions between 2 billion and 5 billion but not doing anything with their stake in rush. Does that all square up for you, sam . Sam it does. This is the same question is asked every quarter. Quarter in, quarter out. And the answers are always the same. And i think on the a game that the companies together are playing and continue to play, obviously its work for novartis in terms of their stake. Getting better value and higher value. And with regard to m. A, you know Companies Generally say that. And then when a great deal comes along thats twice the size that they just said they wont do, theyll do it. So rosh was saying much the same things. All along for a couple of years. And then the go and buy a company thats 8 billion or 10 billion valuation. So its got to have to be done opportunity lick. And you take the opportunity that you got. The key things to look for when we look at novartis Going Forward is whether the 9 operating income rise is likely to mean that come the rest of 2015, they will be able to beat their own year view that they have maintained. Theyve said they have year view 2015 sales growth of mid single digits. And operating Income Growth higher than that. Well they came with operating Income Growth of 9 in the First Quarter. Thats obviously on continuing business. So a lot of the drivers that are in the First Quarter should continue Going Forward. So the question is, whether theres an opportunity for them to do better than what theyre hoping. And then aside from that we want to know about a lot of questions will be about bio similars or this new copies of biologic drugs and their ability and the speed with which they will get this blockbuster product for Heart Failure into market. With which we should be from which we should be hearing by the middle of august hopefully. Manus sam, thanks for that roundup. And just say to our viewers that novartis at the moment is indicated 1 to 2 higher in the market on the market call this morning. Sam fazeli, head of research in paris. Caroline you can join on a conversation on twitter and what you think of these earnings from novartis and tweet out about funding circle, one of the big Success Stories the United Kingdom. Raising money itself. And help peers lend to other companies of 1 billion in terms of loans. And now theyre getting 150 million in the door themselves. Interesting list of investors. Notably blackrock. And get this. Getting the asian funds up, too. Mark up next bar chart time. Has draghi slayed the specter of deflation . Stay tuned. Mark welcome back. Time for todays bar chart. Has draghi slayed the specter of deflation . Lets look at the evidence. When it comes to headline inflation, deflationary pressures seem to be easing. Look at the top chart there. This is euro zone inflation over the last 12 months. There have been four consecutive months of below zero inflation. In the euro zone. Nevertheless Consumer Prices did drop. 1 and nearly in march. Which is an improvement. See the white circle. From the minus. 6 in april. Which in january, excuse, which matched the biggest decline in prices in the history of these single currency going back to 2009. The 2 target to be fair. The e. C. B. s 2 target. Inflation target. Is still, though, a long way off. And yet Inflation Expectations are picking up. The second chart is Mario Draghis preferred gauge for Inflation Expectations. The fiveyear fiveyear inflation swap rate. Now, back in january, it fell to 1. 48 . Thats the yellow circle there. Thats the lowest since at least 2004. And draghis preferred inflation gauge has risen to 1. 8 . Lets move on to the final chart i want to show you. This is germanys fiveyear break even rate. This is the yield difference between nominal and inflation index linked bonds. Over the fiveyear period. Now, this is another measure of Inflation Expectations. The trend down from a year ago through january. The low was january. When it fell to minus 26 basis points. The difference between nominal and inflation. Back in january was minus 26 basis points. The lowest since 2008. And as with the other charts, the trend has improved to plus 87 basis points. Or. 87 . Near the highest since may last year. So theres the evidence. Has draghi slayed the specter of deflation . From looking at these three charts at least you would have to say that things are certainly looking up for the e. C. B. President. Since those three lows in january. Keep looking at this chart. Manus before we give you our top stories on bloomberg this morning, we just want to give a convict correct on the a quick correct on the novartis story. Weave we have a restatement. Novartis First Quarter, core operating profit, comes in at 3. 55 billion. The estimate was for 3. 17 billion. That is a very quick and to the point bloomberg correct. And lets give you the top stories on bloomberg this hour. Visa and mastercard after the Chinese Government cleared the way for the Payment Providers to operate in the country by ending the monopoly of union pay. Visa was the biggest gainer on the dow, rising by 4 . Mastercard made similar gain. In germany a rail strike cuts train service. Over pay and hours. The walkout may result in the consolation of two thirds of the Passenger Services and half freight transports. Strike lasts until tomorrow morning. Shares in georgiabased arris group surged as news that it agreed to buy british tv set top box maker pace. For 2. 1 billion. The inversion deal will see arris incorporate in the u. K. Where it will take advantage of a lower tax rate. Caroline were just two weeks away from the United Kingdom election. The former chairman and chief executive of wood group says the current u. K. Government delivered a good budget in march. For the north sea oil industry. He spoke to bloomberg in an exclusive interview and said he now believes that fewer jobs will be lost in the forecast earlier this year. Thanks to the budget and to industry efforts to cut costs. The way we were going, i believe we would have been lucky, i would have said we might have recovered nine billion barrels and a push to get that and the party that were on, with a reasonable recovery in the oil price, 70 to 80 get back up to 15 million or 16 Million Barrels and thats 600 billion at 100 billion 100 a barrel 600 billion of value to the u. K. Ihe doesnt see major differences between the u. K. Political parties apart from the green party and said that the north sea operators would prefer a deal with a United Kingdom rather than an independent scotland and had these cautionary words. What nicholas is saying is she is entering into the debate constructively. To try and help the u. K. Thats great. And to me, it just i would frankly feel a bit of shame as a scotsman. If we use that position having said were going to come and be partners with the u. K. And help the u. K. If we use that position to effectively try and achieve independence for scotland. Mark youre looking at the live shot of the city of london. Equities set to open in roughly eight minutes time. Futures pointing to a higher start today. The benchmark finished yesterday at 7028. 60 away from the alltime high on april 15. Well be back in two. Mark the british trader accused of helping to cause the flash crash in 2010 was granted bail of five Million Pounds while he fights extradition to the u. S. Coach ryan is on the ryan chilcoate is on the ground. What doles we know about this . Ryan he has posted bail or been granted bail i should say and we know a lot about the conditions of that. He has been told that when he is released, we it is not clear that he has been released just yet. He will have to stay at his family home here in this west london suburb. He has to be here between between 9 00 p. M. Or 11 00 p. M. In the evening and 4 00 in the morning. He has to wear electronic tag. He will have to post a five Million Pound bond. His parents even have to post a bond. But i think perhaps the most interesting thing, mark, is that he is banned from using the internet. The prosecutors even said youre not even allowed to buy a phone that has internet access. Mark, back to you. Mark ryan, thanks a lot. Ryan chilcoate in a noisy hounslow. Caroline on the move is next. Manus they will be focusing on pharma novartis. And where all the opportunities are in that. The futures is the to open higher. Novartis is called 1 to 2 higher and in ryan in hounslow, it doesnt get much better than that. Welcome to on the move. The asian slowdown. A preliminary reading of japanese manufacturing goes to contraction for the first time in a year. A price tag of up to 2 billion euros. And a not so happy anniversary. Five years to the day since greece officially submitted a bailout request. Recovery remains elusive. We will be talking about the trader. Markets are pretty much dead flat. Manus, what were you doing five years ago to the day . Five years ago great government bonds and a few more institutions were slightly longer than they are today. Bonds are trading at 12. 97 percent. It takes one line to come from greece. Convergence is clear. Yesterday they were talking about a meeting of minds as we build toward the discussion. You saw the biggest move in German Government bond yield in three months. It took that line to be