Transcripts For BLOOMBERG The Pulse 20150402

Lacqua. After working through the night it appears that western and iranian diplomats could be nearing a deal. Guy talks on Irans Nuclear program are still underway. Lets get the latest from elliott gotkine. How much progress have we made . Elliott well, they are still they say making progress. They have been inching towards a deal. The National Agreement has so far proved elusive. You do have to admire the stamina of the negotiators from the world powers and iran. They and jordan at 6 00 a. M. Local time. Irans Prime Minister has been spotted. He says that a joint statement is expected from todays talks and any agreement may be upended to a u. N. Resolution. We have some optimistic words from the french Prime Minister. He was absent from these talks for most of yesterday. Day eight of negotiations. Will it be the last . Francine what comes next . Even if they reach a deal, it is not the end. There is another deadline, june 30. Elliott the interim agreement with iran for some sanctions relief, that remains in place until june 30, which is the definitive deadline for a definitive deal on Irans Nuclear program. It is not impossible to see some kind of agreement coming out, perhaps today. We could get some kind of agreement that is vaguer than initially hoped for and will leave the legwork to be done over the next three months. The technical talks over how much uranium, that is one of the main gaps that needs to be bridged. Diplomatic speakers prefer to a snapback, the reimposition of sanctions on iran if it is found to have cheated. They would prefer some kind of automatic reimposition of sanctions. The russians and the chinese would be more inclined to have the reimposition of sanctions coming before the un security council. There are still some differences between world powers and the iranians. They are trying to bridge those gaps today. Irans foreign minister seems to be suggesting we will get a statement today. Lets not hold our breath. Francine elliott, thank you so much. Elliott will be keeping on top of these developments. Guy we will as well. Now, the oil markets. A deal is likely to put prices lower. For more on this, lets bring in unicredits chief global economist, eric nielsen. Back in the states, which is good timing. What is your sense of what Lower Oil Prices would mean from here . Do you get another push down . Eric it is good. The importers are the europeans and the americans. That is good for consumers. It is a boost to domestic demand in part of the world that has been struggling a bit. Francine we talk about a lot of this oil coming to the market. We know that iran has between 7 million and 35 Million Barrels stockpiled. It would be very gradual. What kind of Price Movement can we expect . Erik our forecast is quite flat from here. It is very difficult to square this sort of recovery in the world we have now which is in relative terms, more european more Energy Efficient per gdp unit. But supplies are huge. It is difficult to see Oil Prices Spike higher unless you have a serious supply shock. Guy weve had a big move down in oil. Is it a law of diminishing returns . As oil goes from 100 to 50, do you get a bigger bang from your book . How does the curve work . Is it, as you come down the top, you get more of an impact . Im wondering how the dynamic works. Erik very difficult question. It is not linear, for sure. A lot of the energy that goes to the consumers is taxed heavily and it is taxed in volume terms. So the europeans get a little less bang for the buck than the americans because of higher taxation. It doesnt keep on going. It is flattening out in a sense. Francine when we look at oil we talk about oil on a daily basis, we talk about the fed, we talk about greece, what is being missed by markets . Erik clearly, the fixed income markets. The long end of the socalled riskfree rate bonds particularly is mispriced. Part of it is qe. It is a simple supply or demand story. We think there is a bit of shock in the market about the size of the ecbs qe. While we have that is completely abnormal. Guy why is it mispriced . I understand what you are saying, but it is not mispriced is it . It is perfectly priced. Erik everything is always perfectly priced. Guy this is what we price everything on. It is doing what it is doing. If we assume something is mispriced we assume it is going to change. Are you sure that this is going to change . Erik yes. Guy i remember you telling me a while back [indiscernible] that was a year ago. Erik i got this wrong for a year. Completely wrong. It was the most disastrous forecast we put down. Think of it this way. Remember 1999. I cant tell you how many people said, this is a new world. Then we had oil. That moved to 100. It is a new world. This was mispriced permanently. You see all these start to move up. Now we have these ideas that the yields have permanently moved down. Francine they could go even lower. I had an economist saying that he sees 10year bonds negative. Erik that could happen. I speculated when we started. I wouldnt be surprised if you see 10years dip below. Who knows how it works right now , because it is as you say the ecb is buying about 95 billion euros. [indiscernible] certainly, it could wait. But this is not normal. You see house prices in germany start to pick up quite nicely. Guy if you price everything off what i assume is a riskfree asset, lets say a 10year bond, lets call it a riskfree asset lets price everything off that. Is that right . Is that the correct assumption . Erik i think the riskfree usually is the u. S. Treasury but given the congress, we never know if it is riskfree. Instead of trying to go out and look at em you can take this and say, given the fact that riskfree is wrong i would start by looking at fundamentals. The Treasury Curve is moving of it now. The ecb is there. Do you really want to go against the ecb . If you borrow at zero this is for me the problem. Europe. Those who benefit from these amazing low yield dont want to borrow. We have decided that we are in a fiscal straitjacket. We have to have that transmitted to small and Mediumsized Enterprises and others that go through the banking system. So that is not so much a policy. Im out. It is strange. Guy beyond strange. It is a new weird. Francine we will talk plenty more about the fed next with erik nielsen. We will take a break. Before we do that, what is on our radar. The ecb Party Leaders will take the stage for a tv debate. They will square off before the general elections. Each will make a short opening and closing statement and have a minute to answer questions. Francine Clothing Sales at marks and spencers rebounded for the First Time Since 2011. Samestore sales gained. The improved numbers follow difficulties in previous quarters. Guy in a bloomberg exclusive interview, the belarusian president and host of ukrainian peace talks in minsk has outlined the threat from the east. He spoke to bloombergs ryan chilcote. President lukashenko there are a lot of people in russia who think imperialistic and they dont see belarus as anything other than a northwestern crossing. Francine im looking forward to that interview. Coming up greece struggles to get bailout funds. Guy later in the show, we are joined by a rugby legend. Lets call him a god. Brian odriscoll is going to be here with us to tell us about his rugby website. You dont want to miss that. We will see what happens on that one. That brings us to todays twitter question. Francine i want to hear him answer this. What can sports stars teach politicians . That will especially focus on the u. K. Election. You have to have stamina. It is mental. What kind of advice does he have for David Cameron and ed miliband . Francine welcome back. The clock is ticking for greece. The government submitted a new list to their creditors in the hopes of securing a bailout. Guy the Opposition Leader bloomberg that he joined a coalition to keep greece and the euro. Lets bring in hans nichols in berlin. Marcus bensasson is in athens. Greece is trying to secure the funds. They have submitted a revamped version of the reforms less. Our event is it . Hans bank it is much longer. Whenever you look at these were formless these reform lists, you want to look at what is there for the creditors and the domestic audience. For the domestic audience, there is 1. 1 billion in spending this year. 600 million of that comes from a pension reform. So much of what weve heard is that pension reform is going the opposite direction. On that side, it looks like a veer towards the domestic audience. For the International Audience 3. 7 billion, a little bit more cracking down on offshore tax accounts. That is where they are going in that direction. We had some news out of the finance minister from france this morning, saying that progress is being made. That is perhaps the most positive sign that was discussed. Up to this point, it was mostly the greek side saying they sensed a positive mood. Lets see if anyone adds to sapins comments. Francine the ecb approved an increase in ela funds. It was smaller. Why . Hans they want to let greek Central Banks know that they cannot spend freely and they want to keep them on a tight leash. This is a 700 million increase. Last week, it was one billion. Tight leash from the ecb. Guy hans, thank you very much. Marcus, the former Prime Minister speaking to bloomberg. Talk to us about what he said and his view on he could potentially help. Marcus summer us samaras message was, do what it takes to keep greece and the euro. Stop flirting with russia. Make an agreement to extend the bailout. If you cant carry your own commitments, then we are there if you need to form a unity government. That is the simple message. Of course, theres a big rivalry. How well warmly this would be received is a question. But that is his pitch. Francine marcus, what is the latest on greeces payment next week. Will they make it or not . Marcus greece says yes, we will make the payment. What we did have yesterday was the interior minister suggesting a delaying of payments. The government spokesman this is not a guy who is who would be calling the shots on this. What it does highlight is the difficulty this government has had from day one in speaking with one voice. We have so many conflicting signals over the last couple of months. So much of what the government spokesman has to do is support various statements. Thats where you get some of that, suggesting that they will need his help too. Francine marcus, thank you. Marcus bensasson in athens and hans nichols in berlin. Guy lets carry on the conversation on greece. Erik nielsen still with us. Your sense of how nervous the ecb is . Derek i think they are very nervous. It is quite easy in a sense for the ecb. At the end of the day, if greece is squeezed out, it has to be a political decision. They have a clear mandate that they cannot provide monetary finance. That is why the ela increases are so limited. They put restrictions on what the greek bank can do. They are playing hardball. But they have no choice. Francine are they underplaying it . Is it 5050 chance . It seems that we are again to the liar. To the wire. Erik my guess is that they will not leave. But this could play for another week, month or two easily. But they will not provide the Legal Framework to start a new currency because it is political suicide. I think that may be why samaras is saying, we could do a coalition. Then the government would have to reconstitute itself. I think it is more likely that they say, we have a new drama. Nobody wants that drama. The public employees, do they want some money that has no value . It is inconceivable. That road is not really there for them. Guy youve just come back from the states. What are u. S. Investors thinking about europe . Erik number one, everyone agreed that european recovery is on the way. The american corporate sector everyone talks about a pickup in demand domestic demand but also external side. People have a less critical stance on greece. A complete shift from a year or two ago. Nobody today says that greece should use its own currency and leave. They are not predicting what would happen, but there is a much better understanding today in america that leaving is not an option that is attractive. It could happen by accident. Francine but not attractive. Thank you so much for now erik nielsen. Francine tomorrow, we get the latest u. S. Jobs data. What does it mean for the fed . Erik it is very important for them. Our guess is still june, but we will see. We wouldnt be surprised if they push it back to september. Guy does it matter . Erik from an economics point of view, there is not [indiscernible] maybe we are wrong. The story is that from an economics point of view, they are behind the curve. It is a tossup for us. We have been sitting on june for a while. Francine so you will see tomorrow. Thanks so much, eric nielsen. Guy up next, we bring you our exclusive interview with the belarusian president. That is coming up with our colleague, ryan chilcote. Just because im away from my desk doesnt mean im not working. Comcast business understands that. Their wifi isnt just fast near the router. Its fast in the break room. Fast in the conference room. Fast in toms office. Fast in other toms office. Fast in the foyer [pronounced foyyer] or is it foyer [pronounced foyyay] . Fast in the hallway. I feel like ive been here before. Switch now and get the fastest wifi everywhere. Comcast business. Built for business. Francine welcome back to the pulse. Im francine lacqua. Guy and im guy johnson. Francine talks between iran and world powers have entered an eighth day. The u. S. State Department Said that progress had been made in meetings between secretary of state john kerry and his iranian counterpart toward continuing talks. Negotiations are aimed at ending the standoff over the republics nuclear program. Guy greece has submitted a new list to their creditors in the hopes of securing a financial bailout as Opposition Leader samaras tells bloomberg he would join a coalition to keep greece in the euro. He signaled his willingness to join a unity government if the concession is required to win the emergency loans. Francine suspected islamist militants have formed a University Campus in eastern kenya, taking students and teachers hostage. Assailants rated the university raided the university. That is according to that Operations Center according to what it said on twitter. Two people were killed. Guy president Alexander Lukashenko, europes longestserving leader, is also called the last remaining dictator. This year, his 21st on the job in belarus. Hes preparing an election that will see him potentially in power for another five years. In a rare interview, he sat down with ryan chilcote. What did he have to say . Ryan Alexander Lukashenko, if he does win this election is an interesting guy from a lot of different perspectives. Not just his crackdown on domestic opposition, which is why hes sanctioned in the west but also is geopolitical position. He is perhaps Vladimir Putins closest ally in the postsoviet space outside of russia. Yet he has directly criticized the annexation of crimea and has shown some support for the ukrainian side. One thing i was interested to hear from him about is if he thinks crimea was a oneoff, as many people say perhaps it was, or if there could be more crimea as. If there could be more, could his own country, belarus, be one . I started by asking if he thinks there are people in the kremlin that might have that plan in mind. President lukashenko there are a lot of people in russia who dont see belarus as anything other than a northwestern crossing. We want peace. Just like we will never get into conflict with russia. We are people, and i include ukrainians, that grew from a common root. And i think this conflict was also good for russia, if one can say so. Russia became convinced that it is dangerous to take by force, conquer, in the northern world. Moreover, it is impossible. I stress this again. Whoever comes to us with a sword will die from a sword. We will fight against europeans, americans, russians, against anybody who would conquer this piece of land where belarusians should live. Ryan you knew vladimir putin. What does the russian president want . President lukashenko i may disappoint you, but it is often said in the west that putin wants to restore some kind of empire and so on. He is a different kind of person. He will not aspire to recreate some kind of empire. But, if anyone gets too cheeky and begins to wag their fingers at russia russia, she has such a mentality that she will answer. One should tread carefully about russia. Ryan two takeaways. I think he is saying the reason russia is involved in ukraine is russia helped threat in. And if the United States doesnt join the negotiation remember, Alexander Lukashenko hosted the minsk talks. You had Angela Merkel, francois hollande, and the president s of ukraine and russia. You didnt have the americans. He basically said the americans werent there because they would be the perceived threat. The talks were only so valuable. He didnt suggest that belarus could be the next target. He said there are people that would want to do that but that is not going to happen. Lets not forget the sensitive nature that he is sitting in. He is one of russias closest allies. This is something they are concerned about. Even him suggesting that it is something he occasionally things about and feels the need to say they would defend themselves, is perhaps remarkable. Francine the belarusian economy is in dire straits. He still says he wants to go back to the market this year. Ryan thats right. They have 4 billion or 5 billion in reserves. He says they are going to do it. If you look at their bonds, you can see the world of hurt they are in. The yield is 12. 5 . It is less than ukraine but borrowing at 12. 5 is no fun. The imf, is that money going to be forthcoming, not clear. Lukashenko told me those talks had begun. But it is eurobonds, which he says they are going to try to do this year, or it is russia. He says he is going to ask money from russia. That is evidence of the sticky geopolitical situation hes in. Francine thank you so much, ryan chilcote. Guy that exclusive interview with the belarusian president. Much more throughout the morning. Francine coming up, we will discuss the Leaders Debate taking place in the u. K. How can politicians win the hearts of voters . Guy stay with us. Francine welcome back to the pulse. Guy as the u. K. General election draws closer, the first and only tv debate between all seven Party Leaders takes place tonight. We are joined now by a psychologist and pinnacle therapy founder, richard. And Senior Researcher tonya abraham. Im looking forward to tonight. Tonya, we know who the big leaders are. We know who David Cameron is and nick clegg, and ed miliband. But in terms of putting them all on the same stage, is the biggest change here going to be that people actually know who is the leader . We know who nigel farage is, but there are people on the stage who most people wont be familiar with. This is going to be interesting on many levels, partially because of the inclusion of so many people. The inclusion of the snp leader, it all adds to the element of this debate. Im sure there are people who dont know who these leaders are. This is their chance to showcase who they are. Francine richard, how difficult is it for someone to connect with the people at this moment . 35 days until the election. Psychologically, if im one of those people, do i have to be friendly aggressive, or is it just being themselves . Richard i think the biggest thing that is missing for most of these people is being authentic. We are seeing so many people being polished and trying to act in a way which is not who they are. We see that a lot with David Cameron. It is lot of managed thumb pointing. Guy once youve seen it, you cant go voicing it. Richard and ed miliband, we saw how he tried to be a tough guy. One of the criticisms is that hes being too soft. I thought he overdid it. I think he was too aggressive. There was one point when he said hell yeah. I just held a cringe in my stomach. It felt so out of character, almost as though that was what he had been told to say. People dont buy into that. Francine you actually see the people in front of you and you are talking facetoface. Guy tanya there are seven of them. It is going to be a mess. That is the only prediction i think we can make with any degree of certainty. But how reflective of u. K. Politics is tonights debate . Youve still got the main parties and they still command lots of votes, but weve got seven of them. Is tonight actually we could write essays on what is representative but is tonight representative of british politics . Tanya i think this election has shown a shift in terms of moving away from that twoparty system that we are used to seeing to really including these other leaders. Snp is doing relatively well in scotland. They have a lead over labour. Labour is doing well in wales. It needs to be reflected in the debates as a whole. The issue is something that we havent seen before at all. How it pans out to the viewer is something that will be interesting to see. Francine richard, who has the most to lose and who has the most to win . Richard i think the person who has the most to win is nigel farage. He has really made his presence known in a minority group. I think the person who needs to make up the most ground is the green party. We saw that with the interview they gave on lbc. Which went really well. The fact that she not only didnt know some of the facts around housebuilding policies, but also the fact that she stumbled so much, really doesnt give people confidence that this is somebody who can lead the country. Guy last time, we saw nick clegg. Nobody knew really who he was. Do you think we get a repeat performance here . This is a really good debater. She could really stand out here. Is some good somebody going to pull a clefgg out of this one . Tanya we are waiting to see what happens. They have a short amount of time to put their point across. Is there that point where cleggmania could come the second time . What effect could this have in terms of what people think after the debate . Francine richard, in terms of people, if you look at the mood amongst voters, we were just talking about the fact that they have to be authentic, but is there something that peopl are looking for in the quality of their leader . Is it someone that is a little bit more in tune with inequality . How would you quantify what the british citizens want us to mark one . Richard i think they want someone who recognizes their hopes and fears. At the moment, far too many arent doing that. This is one of the reasons weve seen nigel farage having such an influence. The other thing we are seeing is a strong reaction to the lack of authenticity, a lot of reaction to how politics has been so dirty over the last few years, reaction to how the banks have managed the financial situation. Some of these outside groups are getting more interest. Guy this has the potential to be a everybody gangs of on cameron. You can see it going that way. If you were cameron, and you were briefing him, how would you get him in the right place . What does he need to do if that happens, from a psychological point of view . Richard when that starts to happen, it is really being emotionally cold. You have to remain anchored. Grounding yourself, managing your breathing, but also staying focused on your points, not getting pulled into petty arguments and squabbles. What we saw with ed miliband last week, it is very easy to go into those realms. That starts to show that you are rattled. We need some composure. Guy in terms of what could classify as a victory here cameron didnt do that well in the first one. The party were expecting him to do more. Conditionally, can you, leaders yantanya, leaders tend to do the Second Time Around better. Is the second debate generally better . How does it work from one to the other . Tanya i think people are more prepped in terms of what they can expect as far as questions and formats. Obviously with the sevenway debate, that is going to change slightly. We also have to look at trust credibility, and how this relates to how they are putting forward their views. Ed miliband saw an upward rating in terms of opinions towards him. People thought he was more trusting and honest. He also faced a challenge. Not as many people thought he could potentially be a leader compared to David Cameron. Francine how much are we focusing on policy . We talked about the way they present themselves. How much percentage of voters will decide poorly purely on personality . Tanya most people pay more attention to the election in the twoweek period prior. I debating politics, we have an interest in politics specifically. Generally, most people only take notice in the period coming up to it. Regardless of whether theyve seen the policy details, it is really about the image of the political leader, the party as a whole and how that feeds into their opinion. Not people not many people really know the minutia. It is so difficult to keep on top of all these things. What they are seeing in the media is how it might inform their opinion. Francine looking forward to the debate. Thank you so much. Guy richard reid, znand Tanya Abraham joining us. Francine coming up, we are on the verge of a tie up with china. We will hear from their chairman after the break. Guy Morgan Stanleys ceo was the recipient of the biggest rate on wall street raise on wall street last year. 22. 5 million. Morgan stanley shares jumped over 20 in each of the last three years. The return on equity was still short. Francine mcdonalds will raise pay for some employees and offer paid holiday time as it pushes to get an edge on rivals. The changes take effect on july 1 and will affect about 90,000 workers. By the end of 2016, average pay will be over 10 an hour. The move will not affect the 90 of restaurants that are franchises. Guy the company which announced a merger with fines last month is said to have illegally influenced wheat futures prices by holding contracts it did not intend to fulfill. Francine per rally is on course to be taken over by china in a deal that could bolster credit in the industrial market. Guy should the chinese deal go through pirelli would take a slice of the largest auto market while continuing to focus on highend tires. Erik johnson has this report. Erik it is a deal that could save pirelli from a puncture in the future. The tire maker is on the cusp of a deal that the chairman hopes will keep it on course long after hes done. He says the company is his life and after marrying into the family, he invested his own fortune in it. No wonder it is personal. Provide a safe future. Erik of future he is referring to is chun one with cam china. Takeover talks have been on and off for the last three years. The latest is said to be worth 7. 4 billion euros. The italian companys business will be combined, leaving pirelli to focus on this. [indiscernible] eric pirellis italian heritage is attractive but chem china is also gaining access to the latest tech. It provides information in order to improve the safety of the car in order to provide the best information. Eric he is seen as one of the remaining old guard of italian business. It took him almost two decades to restructure pirelli, but he also took the company into and out of the telecoms industry at a near 4 billion euro loss. Still, he is convinced this deal is the right one. It has the same goals that i had, to protect the company. It makes me comfortable looking forward. Francine for those listening on bloomberg radio, the first word is next. For our viewers, a second hour of the pulse is coming up. Guy we are going to be talking rugby. Former ireland and british lions captain Brian Odriscoll will be here to tell us about his ultimate rugby website, and how [indiscernible] francine dont miss that interview. Todays twitter question, what can sports stars teach politicians . Especially 38 days from a general election. Guy tonight is a bit later. Youve got a scrum going on. How do you play that one . We will see you in a moment. Francine still talking. Diplomats stay put in switzerland. Guy revamped reforms. Greece submits the 26page list to its creditors clarifying the economic plan. Francine Party Leaders get set for a tv debate their first and only time together. Guy good morning to our viewers in europe. Good evening to those in asia and a warm welcome to those just waking up in the United States. Im guy johnson. Francine im francine lacqua. This is the pulse live from our European Headquarters in london. Guy it appears that western and iranian diplomats could be nearing a deal. Talks on Irans Nuclear program are underway in switzerland. Lets get the latest from elliott gotkine. This is not a sprints. This is definitely a marathon, isnt it . Elliott it was a marathon all night session, guy. Almost becoming a test of stamina as well as a test of political wills here. It adjourned at 3 00 a. M. And then 3 1 2 hours later they were due to resume. We spotted a couple of the Foreign Ministers out and about so far. Irans said Good Progress had been made. He added that a joint statement should be released today. Now he said it is a statement. Doesnt mean there is going to be an grem. It could be a statement saying that the talks had broken down or it could be a statement that there is some kind of grem or that they are going to stay on continuing to negotiate until they reach an agreement. When asked if progress had been made he nodded emphatically and said oui and when asked if a deal was to be done, he gave what is the standard here, well see is what he said. No sense of when the final whistle is going to be blown. Francine it seems that iran wants a much broader agreement. Something more fuzzy and actually the u. S. Counterparts want to flesh out something with a lot of detail linking the phasing out of sanctions with the nuclear program. Elliott yeah, there has been disagreements when it comes to the amount of enrichment iran should be able to do and what to do with the existing stockpile and also what they call in diplomatic speak, snap back, the mechanisms that will be put in place if it is found have cheated any of the details. The definitive agreement they hope to sign by june 30. The iranians are more inclined to have a vague declaration or agreement to go toward that june 30 july 1 deadline. The americans want details. They want numbers, not just for the sake of it but lets not forget that the secretary of state john kerry when he goes back to president obama, obama has to sell any deal her to a Skeptical Congress which is going to impose fresh sanctions on iran if it doesnt like what comes out of this meeting. Kerry needs those numbers and needs to show something progress and this they will have a deal that congress and the white house can live with and are happy with. Guy thank you very much r indeed. Francine the iran talks could impakt pact oil markets. We talk about iran and talk about it for the last five days. If get an agreement, it is not going to dramatically change the price of oil. We understand that sanctions will be gradually phased out. Is that fair . Not in the near term. It is a way to diversify supply for europe. Which is crucial to avoid any threat from Eastern Europe and russia. It is a good step. It is i think part of a broader strategy to isolate russia and put more pressure on and at the same time get more Energy Independence for europe which is something that america has been working on. Guy another reason why oil shouldnt go up, isnt it . Iran has around 1 3 of the Production Capacity than russia. By itself it is not a huge game changer. It is a bigger structural story. There is lowering demand in the emerging markets. Capacity is getting full. There is some time the Oil Industry Needs to cut capacity before levels go back higher. Francine if we look at the price of oil it seems it is between 50 and 60. What does it mean for Inflation Expectations if we dont get a huge am of supply on the market or some kind of huge crisis that takes a lot of millions of barrels off. Suppose it stays where it is. Maybe it recovers, starts recovering slightly toward 60s, 70s next year. It could add a little bit to inflation. The big drop that we saw was up from december of last year. The deflationary effect is going to last until the on the other hand this year. In europe, inflation would stay low. Similarly in the u. S. It is uneven. Some countries are doing better and some worse. Within the u. S. , there are sectors of the population that are doing much better. The richer have gotten richer. The have nots more or less the same. This means market policy will stay very easy. Even if the feds hike this year, maybe one hike maybe two this year. Very few next year. They will stop very early. The market is focused on the first hike but it will be a very gradual path. Guy how will oil impact that path . If you look at the rate path and assume the oil stays where it is now. You can probably get a good idea. Oil has been volatile of late. To offset one, put one graph over the other for me and tell me what happens. If you start to get increased volatility in oil. What the central bankers tell you is they try to look through it. It is not just oil. It is a lot of other things linked to it. The shale industry for example was responsible for around 40 of u. S. Job creation since the crisis. Before the crisis, u. S. Economy was heavily reliant on construction and real estate. It was up to 20 of g. D. P. If you take the construction workers and put them in a shale plant, do not put them to work at face book. Potentially this skills gap when the shale industry starts petering out, this skills gap is having an impact on job creation, on wages. These are all things fed looks at besides oil. Guy a derivative effect . It is the segmentation of the recovery. Some parts of the population are doing better. If you have a country where there is half of the states have growth and half have zero compared to a country where there is 2 in all of the states. This puts the fed between policy and politics really. Francine that is the exact problem that the e. C. B. Has near europe. Well talk about greece next. He stays with us. Well be talking about greece and a lot more about the fed. Guy lets talk about what else is on our radar. The leaders of the u. K. s main Political Parties will take the stage tonight in a tv debate. It is only time that all seven will square off. Each will make a short opening and close statement and then have a minute each to answer questions before a more general discussion i think a discussion is open for debate. Francine they wont have that much time. Trip the way they deliver which well be seeing if it changes the polls tomorrow. Recovery at m s said shares of its general merchandise unit rose thanks to sales at the nonfood division. The improved . S followed previous difficulties difficulties when a Distribution Center struggled to deliver 1 3 of black friday orders. Fred guy talks in minsk coming from the east. A lot of people in russia. Dont see anything other than not francine coming up the clock is ticking for greece. Well outline the latest. List. Guy joined by a rugby lenled. Brian odriscoll will be here to tell us about his new rugby act. Looking forward to that conversation. Francine what can sports stars teach politicians . This is crucial especially of that debate this evening. It will be interesting to get Brian Odriscolls tips . Guy more of a scrum than a debate. Pefrl positioned to give us advice. Well take a break. Guy welcome back. Youre watching the pulse. Now the clock is ticking for greece. They gave a 26page list to their creditors for a bailout. Lets bring our our International Correspondent hans nichols. He is in berlin. Hans, let me start with you. Greece is trying to secure the funds. They just submitted this revamped reform list. How revamped is it . Hans according to the finance minister in france, he said they made Good Progress but more work needs to be done. He said he senses a real desire on the part of greek government to come to an agreement. That said just in last hour we heard from the greek finance minister and he is saying for him a red line is an increased back tax for the islands. He said he wont sign off on any vat increase in the greek island. The government wants to avoid a vat increase there. It is a pretty strong red line there. The other red line is what you do about pension reform. The greek government in this proposal is talking about increasing pension reform adding a 13month for low income pensioners that will cost about 600 million euros. That is a big price tag. There may be a sticker shock when brussels and berlin digest that. Francine what is his pitch . A very simple message for the Prime Minister saying do what it wakes to keep greece in the euro. They signed the agreement to extend the plouts. You made a commitment then. Stick to them. Stop the visit ree onyx. Vitrionics. Try to keep your own coalition together. We can come in and we will join the National Unity government. How well that picture will be received is not the question. There is a big rivalry between two of them historically. That is where it is coming from. Guy lets talk a little bit about markets. Lets talk a little bit about what happened markets. Lets talk about what were expecting next week. The i. M. F. Payment. The money there for that but what happens afterwards . Fortunately we have alberto sitting next to us. Francine the head of factor row credit research. Alberto brought the list of reforms that have been put forward from the greek government. What do you make of them . I think it is very comprehensive in terms of the coverage but there needs to be a little bit more detail on the quantities of money that greece is there is a lot about taxation, additional revenues. The quantities need to be basically a bit more in detail. Also the timing of these improvements but it is comprehensive in terms of the scope. The Justice System banks, social security. Lots of parts. The payments this month are 450 million euro payment. Then there are two bills that need to be redeemed. One on april 14 1. 4 billion. Mid april we face this big maturity i think there is a cash shortfall problem if there isnt any disbursement to greece. But i think this reform plan is a good step. It goes deep enough in the technical details. It can be deepened even more. I think the announcement is also positive. The problem for tsipras is backing down from the promises, he faces a consensus problem. He told the electorate that he would stand for greece and propose the hair the cut sand backing down from a compromise but in reality, he is probably going to need more allies because some will not support him. If he gets more allies then perhaps this is something more fees nl. Feasible. Guy is that a blueprint under a third Bailout Program . I think at the moment what greece needs is to grow through the maturities and then there are some other debt payments in may and perhaps well have a third plout in june. A third bailout means extension of churts and lower interest costs. It is going to buy time. It is not going to be the solution for greece. Greece needs a flexible debt arrangement. It is in a currency union. Without it has a higher currency than it should have. Francine but this is a political situation. Do you think there is enough here in terms of the greek reforms to keep them satisfied and go on for the next three weeks . I think it is a good start. Buying time, not approve Something Like this, which can go into a little more detail because in front of a few weeks of payment, pensions, public salaries dont get paid would be a big disaster for greece. Politically but also for the g. D. P. Of the country which has already lost a quarter of growth. I think buying in a few weeks of time is politically very rational. And thats our best Case Scenario we dont believe in grexit. It means there is a political crisis. Tsipras may have issues internally. It doesnt mean you exit. Guy stay with us. We need to talk about the fed as well. We dont be here but it is jobs day tomorrow. Francine it is. The u. S. Will be on the air. Guy the jobs number after the break and the one missing piece in the employment recovery. Well talk about that. What is it . Well find out when we come back. Francine welcome back to the pulse live on bloomberg tv and streaming on the the ipad and bloomberg. Com. The u. S. Jobs market has been on a tear this year. The Unemployment Rate is down from 5. 5 from over 6 last summer and payrolls are rising at their fastest pace since the financial crisis. There is one missing piece for the u. S. Jobs recovery. It could affect the feds next move. The american job creation machine is back. 2014 had the most jobs created since 1999 and 2015 is on the same strong path. But there still remains persistent dispotomac. Wages. Average hourly wages are growing at a 2 rate, which is no better than they were five years ago. The current pace at precrisis rates were 3. 5 . Why are american salaries stagnant . The most popular explanation is there is a lot of slack in the labor market meaning there are more workers available than needed allowing employers to keep wages low. Still there are signs that wages should be picking up. A survey of Small Businesses said they are at the their highest levels since 2008. In the meantime, watch out. If we start to see an increase in wages, that could spur the fed to tighten faster than the market expects. Guy alberto with us. Structural cyclical. What is it . Alberto i think there is slack but you have to understand where it comes from. Before the crisis it was 20 of the u. S. G. D. P. Now this is not there anymore. You have to recover in some Industries Like shale which is now petering out. The work force was used to certain jobs which has been out of jobs for one or two years and it is structural there hovering around in low wage jobs. There is a skills gap. There is a skills gap that prevents wage growth across the board. This skills gap and this inequality is reflecting in terms of sectors and in the gap between wealth and people that had money before the crisis and people that didnt and in certain states there are areas of some states where house prices are still down 30 35 . In large cities like san francisco, new york, house prices are up from the peak of 2007. Other places with less foreign investors, a smaller more in the middle of the u. S. Prices are still down 30 , 35 . It is a very uneven recovery. This is the same we have seen in the u. K. Wages have just started to grow recent lie because of declining inflation and declining oil price. This is an asset rich recovery and a wagepoor recovery. Francine does that mean it is going to be more difficult for janet yellen to raise rates this year . I think they want to do the first hike this year. Our focus is for september but i think the path will be incredibly slow. I think investors are too focused and fixated with when it is going o happen either way, the path is going to be much much slower than we have ever seen in the past. Much slower than even greenspan did. Because of these inequalities. Because of these differences. It all comes down to what the Monetary Policy can solve. They are hiking because they want to show that they can hike. At the same time, you can soft these problems segmentation of sectors with Monetary Policy. It is a one size fits all you need politics. Politics dont make the hard choices. Francine alberto, thank you so much for that. Guy were going to take a break. Up after the break, Brian Odriscoll. Francine welcome back to the pulse. Guy good morning. Im guy johnson. These are the top headlines. Francine the u. S. State Department Said Late Wednesday enough progress has been made in meetings between the secretary of state john kerry and his iranian counterpart. The negotiations are aimed at ending the 12year standoff over the islamic republics nuclear program. Guy greece has added a 26page list in the hopes of securing a financial bailout. Samaras signaled his willingness to join a unity government if it drives a wedge through the ruling and antiausterity in athens. Francine an unknown number of heavilyly armed asillants raided kenyas state run National Disaster center. It said on 2013 two people were killed. Guy there are fewer bigger anytimes in rugby than Brian Odriscoll. They see highest scoring center of all time and captained since retiring he has remained very much involved with the rugby app. Were very pleased to be joined now by Brian Odriscoll and tech entrepreneur. Francine were very excited to have you on. Guy yes frans husband was quite excited. Brian, why a rugby app . Where did this come from . Where did you get involved in this . When i was still playing and ray was part of the young entrepreneurial setup and we were partnered together because from a mentor point of view where i could gain some ideas and some skills from him and his field and just the experience going into the next the age of whatever my career might be. We started banging heads and ray is a rugby fan and im obviously a fan as well as being a player. We decided there was no one app encompassing of all rugby. 1. 3 million download s. 600 to 800 monthly views. It is going great and with the world cup going now, it is a very exciting time for us. Francine can rugby actually overtake football . I dont think so but there is a huge audience. If you take the last five years the groth of audience share rugby is huge. Now youre talking about the stadiums regularly featuring rugby matches. Historically 10,000 was a lot to watch a match. The viewership is huge. We have 600,000 to 800,000 engaged relatively for the downloads, that is a hugely engaging app. Rugby is growing. The world cup is going to be huge for us. Guy how do you make money off of it . Mostly through partnerships and we have a clothing line that will mimic that too. Guy it is kind of like a traditional app model. It is a bit of a hybrid model. We have advertisers around the globe and a lot of brands. We were in competition for brands. Usually we offer a unique way to engage so we can build a game within the app like predict who go is going to win the world can you be cup might be a game. Francine who is going to win the world cup, brian . I think there is five or six teams that could win it. I would like to think that my own country is in the mix there too. The host nation england. New zealand and then africa and australia are always strong. Im going to go with new zealand. Because they have got the monkey off of their back. I think it is a how do you think pressure for them. For them to maybe beat ireland in the final. [laughter] guy that would be a great game. It would certainly be a great game. Does it need to get bigger than that . I know plenty of other teams are going to be playing. Does rugby need to get more embedded in other countries . Sure. I think it is important that you grow. The only way you do that is getting them to play against tier one nations more often. When you saw recently that went and played in chicago. There was huge hype surrounding it. That can only be good for the game in america and across the world. If you grow a game in america, the world tends to pay attention. With it going into the olympics, i think the game is definitely growing. Hopefully it will expand as well too. From a world cup point of view you know china loves from an olympic point of view point of view, china loves the olympics. If we can get there and promote it it is a great game. Just having come back from hong kong i saw some spectacular players. Some fun flown there too. The is great high scoring, high tempo. What is not to like about that . When get it out into the global domain, people will be drawn to it. Guy how big of a difference is it to have him sitting next to you . He is a rugby nerd. It makes it difficult for tech site. Were yin and yang. It works very well 3678 ill say we need to work on technology and brian will go were not showing the guys. The app changes pretty much daily. A lot of input from brian and from players. Guy how hands on is he . Well, he is more hands on than i am. Guy yeah. This is a whole new phase for you. Some things are not going to replace playing, but my passion is rugby. Well it is what i know best. Technology knowhow, the recent business acumen. It is a good partnership. We can continue growing. Guy how do we replicate that last weekend of the six nations . That was amazing. I watched from start to finish. It was one of the best weekends ever. But the rugby was different. Im wondering how get that. You need toveb play for you on the last day. You need teams chasing a score. Bonus points, for me, im more of a traditionalist. You would not have had that excitement. Perhaps it wasnt the best six nation after that. But people forget. I dont think were going to see a day like that for a very, very long type. Guy is that what the sport needs, though . People were on their feet in the last couple of games. Screaming at the television. It was amazing rugby to watch. It was. From the first game to the last. Wales. We thought sholed we even bother watching the irelandscotland game . For england to score 55 points and not get a 26point differential against a resurge ent french team you couldnt have scripted it. Well have the attitude of playing and trying score as many points as we did. Rugby is game of chance as well. You have to play the situation as well as playing the team. Francine what is the limit for rugby . This was an outdoor sport until 1995. There is a steep learning coifer. I finished up last year. It is a very different sport from one period to the next. So it is constantly evolving. With the game going to the olympics it is on a growing trajectory. And we want more people playing. The participation is huge, in the u. K. , a Million People play amateur rugby. It has a high participation at ground level. Even with the app. We allow your local kids school team to score within the app and publish it to the broader rugby audience so you can follow your alma mater and your kids game. Thats how well reach around to the grassroots around the world. Francine we have a political question for you brian. It always goes back to the u. K. Election. Guy a political scrum. Sports psychology. You have a whole boufrpbl guys in a political scrum. Francine seven to be exact. Guy should be eight. If you were standing up there on the stage how would you approach this . I think like all politicians, you have to be very careful with the answers you give. With regards to policies and your thought processes of your party and you have to be able to back it up when it comes to crunch time. So it is about giving quotes and giving statements but maybe not promising a whole lot. Guy a very political answer. Give them their sound bite but talk a lot but say very little. Francine this is great. We have a new coach. Brian odriscoll cofounder of ultimate rugby. Guy were going to take a break. Coming up, we will be talking about the debate tonight. Im going to take Brian Odriscolls view of this. Say nothing. That conversation coming up very shortly. After the break, the pulse continues. Francine welcome back to the pulse live from london on bloomberg tv. Lets bring you more from ryan chilcotes interview of sexander. You talked about the political risks and the economy and talked about the bond issuance. There was concern earlier this year that belarus could default on some of their debt. The president had a press conference, restructuring instead of refinance. The yields went to 20 in a matter of minute. Surprise surprise, he said they will pay their debts this year. Their yields went back to 12. 5 where they were before that press conference. Back in february. You know, generally speaking, 12. 5, that is still pretty mifmente ukraine is much higher. There is big concern about the potential of a hair cut there. You looked at russia. They are about 4. 5 . Part of the issue is the countrys economic dependence on russia and their inability to raise money elsewhere. That is what the president and i had a conversation about. Have a listen. Everyone thinkses the ukraine is a plus for poroshenko. Crimea is like a to you. Forget about lukashenko. Were worried about having a country. We would not lose our country because of crimea. We could lose our country only because our own brand of policy. Indeed it is a difficult situation. One should think 1,000 times before taking a single step not to lose the country. I am happy that think think this way. They demonstrate they are not ready to take power in belarus and keep the country together. If you cannot keep the country together, dont take power. Dont go after that responsibility. It is difficult to suggest the situation in crimea and the ukraine is houb it be . Belarus has begun to understand. Belarus has known for a while that our state should be stable and peace is the main priority. Maybe we will be a bit poorer, we dont have all the resources to be so rich but we will live in a peaceful country where our children and old people will not be dying from shrapnel and bullets. Francine condoleeza rice called him europes last dictator. How is he viewed by e. U. Leaders . The interesting thing is there is a prospect of a little bit of a thaw in terms of relations between the European Union and the United States and president lukashenko. The crackdown on the opposition which we were just talking about there. There is this sense that perhaps because of the sorry steist relationship between russia and the russian president and the west, that actually he is the lesser of evils. He said im not the last dictator anymore. He doesnt say who is. But he sort of infers that he is talking about putin. He says im the lesser of the evils now. He says he is joking but there is a little bit of truth in every joke right . Just like there is a little bit of joke in all the truth. What he means there is i can be an intermediary. And belarus is not russia. He is very skilled at sort of doing this balancing act between e. U. And nato to the west and russia to the east. He is very close generally speaking to the russian president. There has been a little bitor a warmup already to him. For example, when Angela America went there, that was the first time a german leader had travel Angela Merkel went there, that was first time a german leader had travel there had in half a century. Just allowing him to host that conference and with the e. U. Leaders being in town. Francine to you so much. You can catch more of that exclusive interthroughout the day and on bloomberg. Com. Coming up, well go back to switzerland. Is today the they reach a deal . Keep it here on the pulse. Francine welcome back. Here bloombergs top headlines. Morgan stanleys c. E. O. Got a boost in pay by 25 . Morgan stanley shares jumped over 20 in each of the past three years. The firms return on equity was still short of the 10 goal. Mcdonalds will raise pay for its employees and offer paid holiday time as it pushes to get an edge on rivals in an increasingly Competitive Labor market. The changes take verdict july 1 and apply to 90,000 workers. By the end of 2006 2016 the average pay will be 10 an hour. The company which announced a merger with heinze held contracts it didnt exend to fulfill. For a look at what were watching for for the rest of the day, were joined by our reporter by our guest in switzerland. What are the chances we find an agreement . At this point the latest signals we have are from the Iranian Foreign minister who indicated to reporters that although they are looking at trying to put out some sort of a statement today, they are not there yet. He also told roars they have not come to agreement on the major reporters they have not come to an agreement on the major principles they need to have to make a deal. It is looking like though we are likely to see some declaration, it looks like it is going to fall short of everything they had hoped for. An agreement on what steps iran would have to take and what steps the other side would have to take to get sanctions leaf. I dont think we can expect that yet. Francine the main Sticking Point is that the u. S. Wants a lot more details on the agreement and iran wants something much broader . I think it is more than that. The sticking spointh really on point is really on the substance. They have not greth agreed on the listing of sanctions which have to do with proliferation and military trade. These are such tough negotiations. One example of this is that a diplomatic historian told bloomberg these are the lodgest negotiations by a secretary of state in 37 years since camp david which brought about israeli egyptian peace. Think about that. Apparently the longest negotiations for a secretary of state on foreign soil in almost 100 years since the end of world war i. That is a sign of how difficult and intractable these issues are and why they have not been able to come up with a deal in the last 18 months but in the last 12 years that we have had this standoff with iran over their nuclear program. Francine if they reach an agreement, then we have another deadline at the end of june. Fran, youre absolutely right. With or without a deal, first of all, john kerry is going to go back to washington and have a big fight on his hands and have to go to congress and convince them this it is worth pursuing negotiations and not having more sanctions slapped on to iran and he is going to have to avoid the congressional oversight bill. The Obama Administration has a big fight ahead. Then for the negotiations themselves, there is the enormous struggle of trying to reach an agreement by june 30. If they cant even come up with the principles now, it is really going to be a hard and long slog over the next three months and we have been told by u. S. Diplomats that they are going to being literally over every if, and or but, every comma. Francine great to have you on the program. Well keep a very close eye on those negotiations throughout the day. That is it for the pulse. Keep it here on bloomberg tv. For the u. S. Viewers, surveillance is up next. U. S. Jobs numbers are due out tomorrow. On this side of the atlantic, it is the u. K. Election show as we count down to the may 7 vote. Note tom is it possible secretary kerry negotiates longer than president wilson in 1919 . America goes in search of a treaty of versailles with iran. We are in a new era. The west is running out of water. And cable tv hits a zerosum wall. They are pricing america out of the market. Good morning, everyone. This is bloomberg surveillance. It is thursday, april 2. Im tom keene. Joining me, Olivia Sterns in brendan greeley. Lets get straight to top headlines. Olivia there may be a deal in Nuclear Talks after an allnight session, the iranians say there is still no agreement at this hour, even after president obama told negotiators to ignore last nights deadline. The two sides may release a statement that falls short of the desired blueprint. Iran has exhibited and shown its readiness to engage with dignity, and it is time for our negotiation