Going green. Guy eurozone pmi coming in. The Services Data falling to 53. 3. The forecast was 53. 9. Q2 is not going to be as strong as it was in q1. Maybe this reality just beginning to fade a little bit. The manufacturing number stronger than anticipated for the aggregate number for the eurozone. Lets find out what is going on in paris. Leaders gathering for the business and climate summit. How will we cover this . We dispatched Francine Lacqua. You have been talking to great guests. Francine we certainly have. We are not expecting anything concrete, there is a clear sentiment that there has been a business shift. A lot of these leaders basically are starting to look at this because they are expecting some kind of agreement set in stone by the end of the year. We spoke to be loreal ceo exclusively, he was telling me they already have a lot of things in place for example for Waste Management, reducing packaging. If you look at oil and grass gas industries, that will be problematic if something done if something is done by the end of the year. We dont know what will happen, but that is certainly part of the conversation. We have plenty of exclusive ceos coming up on the show. Next we will speak to a waste treatment company. We will also speak to a maker of components of electrical components. Later this afternoon, i am excited to speak to the Saudi Oil Minister. It will be interesting to see his perspective. Guy i cant wait. Really looking forward to all of those conversations. That brings us to our twitter question, is Climate Change a priority in your company . Let us know the answer. What role is your Company Playing in this debate . Let us know the pulse. Beginning of the show, eurozone pmi data out, manufacturing a little stronger, services is appointing. Q2 looks like it will not be as strong as q1. Andrew scheetz joins us. Is the eurozone rallied . Andrew no, i think it is a rally that we still think has legs. I think that we are trying to think a little bit further out and focus on fullyear picture. I think if you look at that fullyear picture, we still have a environment for growth over the next few quarters. I think that as a backdrop investors will take well. Guy what are the critical swing factors in that . If for instance, the fed decides to defer raising rates and we see the euro continued to rally and get stronger how big a factor will that be . What about the price of oil . Andrew if the u. S. Economy fails to pick up, it is a headwind in two ways, it would strengthen the euro, it would be tough for europe. It would mean less demand for a very large european trading partner, which is not good. There are cases that say u. S. Growth looks stronger in the second half, if the Oil Price Rises marginally from here, you are still looking at a decent tailwind to the system. If you combine that with low rate ecb qe and low oil prices that amounts to significant easing of conditions. If anything even if the oil price stabilizes here, you have a pretty positive euro headline push to inflation. That would help engender a feeling that the eurozone is moving away from this deflationary fear and moving towards a reflation area outcome. Deflationary outcome. Guy i am looking at company numbers, they are not delivering. I am looking at an economy that is delivering meager growth at best. I am wondering whether or not this justifies a significant rally in assets . I appreciate the qe a gram in place, but when you look at fundamentals what are they telling you . I andrew i think you raise a good point. I think we are trying to combine or look at a number of factors one is that the European Equity market has been later versus other markets like the u. S. It has been stronger recently, but that is catching up to what has been a dismal performance. They are also focused on European Companies are not doing all of their business in europe. There is the global aspect there when we look at the global picture weighted by the revenue exposure of European Companies. We do think the weaker euro, even the weakness already in the pipeline will be a positive factor Going Forward for earnings. We need both to come through. We need stronger Earnings Growth than what we have seen to push the equity market higher. Guy dismal data out of china how much more stimulus do you think they can take . Andrew i think if you look around the world, you see very low, negative real rate across the developed world. If you look at emerging markets especially china, real rates are significantly positive. They are some of the positive real rates in the economy. There is further capacity to cut those rate. We think that would be the most likely form of stimulus that you could the see. They are running some of the highest real rates in the world. We would expect further easing over the next couple of quarters. Guy thank you for your time. Andrew scheetz. Deutsche bank is giving andrew jake direct oversight over strategy after the overhaul last month. Stephane crouse will be stepping down as chief financial officer. The banks general meeting has just kicked off in for a first. We will have more on that a little later. David cameron will pledge to reduce immigration and they have laws to punish illegal workers and tax foreign criminals. A speech is set for later today, he will say that uncontrolled immigration can push down wages. The largest suspension Music Streaming Services are adding strategies to attract more advertising. Up next, a productivity problem George Osborne takes on what he sees as britains key economic challenge. Guy good morning and welcome back to the pulse. We are on your tablet and phone we had it covered. George osborne has told the government to find further cuts to save 13 billion pounds by 2017. Appearing at the reddish industry dinner he also addressed the issue of productivity. Backing business is not about abstract economic policy, it is about backing those who provide jobs and opportunities to the working people of britain. When others predicted unemployment was rampant, it was you who created the 2 million new jobs. Guy George Osborne. This speech was about the economy, the budget is a big part of the conversation, any suggestion on what is going to be in that legit . Yes he specifically asked Government Departments to find extra savings by july and say you promised 13 billion by 2017 this is how we will do it. Guy he talks about productivity. That is something that puzzles everyone. The top economics are trying to figure out why productivity is so low. Yes, he has promised a productivity plan to address these issues. Of course there are no quick fixes, essentially he will look at how to improve infrastructure, things like broadband, how to make business more efficient. Of course it does not look at various business investments. Guy identifying the problem is part of the issue. Cameron is also speaking today he will speak about in them immigration. This is part of the relationship with the eu, what will he say . Ask he will promise the words on seizing salaries of Illegal Migrants in the u. K. Deporting people for good so none of this people get deported and come back to the problem here is that immigration is the number one toxic issue to every politician. Cameron has had to deal with a lot of at it. He has got to seem tough. Of course the Eu Referendum has been linked to immigration. Freedom of movement of workers guy how does the balance it. Europe is watching. If there is thing we have learned from greece, domestic conversations transfer quickly. Everyone is watching what he says domestically and on the european stage. The speech is about Illegal Migrants which do not cover eu migrants. This has always been an issue. Freedom of movement is one of the key principles that the eu is based on. I think, it is how he packages it. If he can turn around before the referendum and say, i have done all of these things, i have been tough on immigration, we are not joking, we are making sure that british people get british jobs. That would make him a more credible advocate. Guy tank you very much indeed thank you very much indeed. On july 8 we will bring you live coverage of George Osbornes summer budget. I think we should always have summer budget. Deutsche banks agm is underway. We will bring you all of the conversation happening there. How shareholders vote when it comes to management later. Some big groups saying they may not to vote in management favor. We will take you back to paris to the business and climate summits. Guy 20 minutes past the hour, welcome back you are watching the pulse. Lets go to paris now. The leaders of ministry and government are gathered there for the climate. On it francine is there. Francine we have had some great exclusive ceo interviews. We have been talking about their own initiatives in the companies and what they hope to achieve by the end of the year. I am joined by the Schneider Electric ceo. Thank you so much for joining us. It seems that the Business Community is finally understanding something needs to be done to help combat Climate Change. You dont have any targets yet with will we get them by the end of the year . We have been working on Climate Change for a long time. For most of our companies the platform is a large part of our p l. People want to make proposals to the government, they want to put figures behind the transition. They want to say to the government what they need so they catalyze a transformation. If you take a short review, view it is one thing, but if you take the long view, a lot has been done. Francine you have different industries, you have someone like yourself who is in charge of one of the companies that will benefit. For example, oil and gas, it will be more difficult. Are you prepared for some kind of agreement . How much will it impact your company . One of the major issues that we have to define is to we want to have a longterm view on what we will do . If we are just thinking about short terms, we will never find the right solution. What are the measures that can make Companies Invest in longterm, in order to reduce this is in my view a major question. We know recycling materials consumed less energy than virgin materials. We are preparing technology, but we are also repairing to adapt preparing to adapt any carbon systems. Francine why is now such an important time for Climate Change . We have tried this 21 times before. Does the Business Community really have to spearhead this . Is this because of shareholders . There are many factors that make this an issue. Take renewables they have decreased by 100 in the past 20 years. Energysaving is a reality. For the first time you have the u. S. And china in agreement aligned with europe to push for different reasons. Public opinion, in the past years, germany has shown that Public Opinion defines society. The tough part is what does the company say . They say they have a solution. We need a frame. Which will catalyze this transformation. It has to be simple, easy to apply and understand. Carbon price, so far it has been speculative. We need something more solid. We think about private, public partnership, how do we join forces to make things happen in a simple way. All of those things are getting debated. Francine can you give and it example of something your company has transformed . For example, we are consuming 150 pounds more plastic than 50 years ago. Were producing 4 billion of waste worldwide each year. The question is can you continue to consume so much raw materials, or can we try to establish a kind of flow that we can recycle. Can we go back from plastic to fuel . We can do a lot of things using much less energy. And we can get good quality products. We need to speak about water issues. What could happen with the problem of Climate Change . The first issue is water. Enough water for drinking energy industry, for other needs. This is one of the main issues coming in the next few months and years. This is why people have to stop and want to try to change the world. Francine if you look at the numbers, something needs to be done about Climate Change. Guy welcome back. Youre watching the pulse live from bloombergs European Headquarters in london. Francine lacqua is in very sunny paris this morning. P. M. I. Numbers for the eurozone show the economic recovery is faultering for a second straight month. While it is above the 50 mark which indicates expansion from contraction, the eurozone is performing ok. France and germany are lagging. China slipped to a 15month low. That pretty much underscores the lukewarm response to government efforts to temper the slowdown that were seeing at the moment. People talking about much more stimulus coming through. Cameron will say in a speech that uncontrolled immigration can damage the u. K. s labor market. And Deutsche Banks leaders are facing their doubters today. The banks annual meeting started earlier today in frankfurt last night. Deutsche bank announced they will have oversight over the strategy. Last months overhaul to boogs returns though not impressing investors. With one saying it will promote the actions. Hans nichols is there where it is taking place. Talk us through the frustration. Hans the frustration is about the strategy review. There have been two of them. What Deutsche Bank shares have been doing. Some of the investors said they are not necessarily calling for heads to roll but they want to see some changes in the strategy. He said they made a couple of mistakes and said the legacy issues are taking a little bit longer for them to resolve and he is saying that cost cutting has proved difficult. There is still some difficulty there. It seems like were getting a humble tone from jain. Late last night he derived a lot more power. He is getting a lot more control. The coc. E. O. That he runs the bank with appears to be losing some of his power and then Stefan Krouse was the c. F. O. Will be in charge of operationals for noncore operational units. A little bit of musical chairs. Right now he is asking for forbearness from his shareholders and seems to be striking a humble tone. Guy . Guy management changes, frustrations for investors. Are these changes going to be enough . Hans the old target was for a 12 return on equity. They said they were going to change to 10 . They are shutting down a lot of Retail Operations including some retail Deutsche Bank operations. They are going to drop from 70 countries down to about 60. They are going to take post bank. Another key issue, this is what im listening for today. Will investors, will the shareholders believe the argument that they are not going to need another Capital Increase . A lot of the argument up to this point has been this is a Deutsche Bank argument. We have provisioned for costs but we have they are coming in higher than expected but we have provisioned for them. Guy is the overall strategy to stick with Investment Banking . Other institutions across europe have decided this is not the business for them. Deutsche is stick with it . They are sticking with it but modifying their approach. This is where jain came from. This is his home. They built the bank up. They are going to focus they are going to be dialing that back a little bit and they like a lot of companies, a lot of banks want to focus on private wealth, asset management. Were going to be listening today on how many people are calling for a change in management and how many will be calling for a change in strategy. Guy . Guy yeah. He is highlighting the obvious to a certain extent what were hearing talking about these comments. Talking about the fact that cost efficiency remains a huge challenge. I think the people that talked about it the legacy litigation taking longer than planned. None of this sounds particularly what investors i suspect want to hear. We have a big legal bill. We dont have much visibility on that. It is taking longer than anticipated. Cost remains a challenge. The problem is this Management Team has been in place for really quite a long time. And you have got to wonder how much more runway that investors are going to give them. Thats why when the vote comes down tonight, thr going to be several issues they will be voting on. Thats why we have to look at what is going to be on the vote. We just heard earlier from investors. You dont want to see heads roll. There seems to be confidence in the management structure, not necessarily the management strategy. It is that distinction well be listening for throughout the day. And the final talley. What is the ultimate number . How much are they going to lose in terms of shareholder support . Can they really be confident they can continue with their most recent strategy announcement . Guy thank you very much indeed. Hans nichols in frankfurt at the Deutsche Bank event. We have some data out of the u. K. The data interesting from a logistical and financial point of view. Net immigration. The heist level since 2005 according to the office of national statistics. This is understandable. You have an economy producing jobs. It is understandable piano people would be seeking jobs in the u. K. Were about to hear a speech from David Cameron focusing on illegal immigration. The pound is rising a little bit. Retail sales data out. It looks like sterling creeping a little bit higher on the back of that data as well. A couple of interesting numbers being generated out of the u. K. Over the last few minutes. The immigration story i guarantee you will make headlines in tomorrow mornings newspapers. A number of people will be talking about that. Lets get more now on the business and Climate Change summit that is taking place in paris. Francine sitting down with the c. E. O. Of loreal. For an exclusive interview. He talked about the fact that his company is looking to be more environmentally friendly. Part of the global commitment. We took a commitment which i think is pretty unique. Not knowledge this industry but globally. By 2020 all products that we will market will have a positive impact in terms of environment or social impact. Every product put in the market will have to demonstrate that it has it makes a difference with the product before. So packaging is definitely a large part of that. In our industry from duty products either formula or packaging and we are making progress on both sides. Francine water that you use a lot in your products. That is something i guess youre focusing on the Climate Change story. Yes. Two sides. We are committed to reduce by of our gas emission. We also are committed to reduce by of our use of water and we are also working because it is important in our business to find solutions so that consumers also can use less water when using our products. For instance sham h piano. When you shampoo your hair, when you use the shampoo, generally you use between five and seven liters of water to rinse off your shampoo. Were working on a new formula that will allow you to rinse it off with one liter. That makes a big difference because of course we are selling 6. 5 billion products. If we make this kind of progress for every product, that would be very important. Francine can i ask you about something that is very exciting for us . Fake skins. How much is that going to grow . How much do you sell them for . Do you have any idea of the size and scope of it . It is suddenly used for research. For research and testing. This would allow us to first to centralize testing and maybe to invent new test products, to test pigments to test different tints. So it is a very application of all the new innovations in r danched personal products. Francine you will sell it to certain competitors to enable testing . We dont know yet. For the moment we have made them available because it was also a way to help the industry get out and thats why we did it. This one we will see. Francine one final question. I know it is cold. What are you most excited about this year . Many things. [laughter] many things. I think that the company is moving in new directions. I have three objectives for the company to transform the company in the years to come. One is to make the company more universal. Universal. We have the new big market like china, india. This is moving fast. Make it more digital. We are in the middle of a digital revolution. That is pretty exciting. The third thing is to make the company absolutely responsible and exemplary. I think that the exciting part is that the whole company is aligned a clear target and we are really moving fast. Francine what surprised you the most in terms of sales . When you look at your company about either a challenge that you have overcome or products for men . There are many things that are surprising. Globally the markets this year are much more dynamic for luxury. It is Pretty Amazing when you look at the states, for example, the sales in the expensive department strorse growing much faster than the sales at walmart or target. You see that in the u. S. You see that in europe. You see that in many countries. That is pretty surprising. Of course we hear about the fact that the middle class is being squeezed but we really see it in our business today. The mass market is under pressure worldwide. Other divisions like Luxury Products are enjoying a very strong role. It is pretty surprising. Guy a view from loreal. Plenty more from paris later on. More on that story when we come back. Guy welcome back to the pulse live from bloombergs london headquarters. Growth is to be honest a priority for just about every small business. Freeing them up from every other activity like filing accounts and dealing with taxes. One company that is growing by offering directly that is free agent. They we are joined by their c. E. O. You have already grown considerably. You have delivered your product to what is it ho,000 already at the moment it is an opportunity for us to grow even faster. 5. 2 million businesses in the u. K. 95 of them have fewer than 10 employees and some have no employees at all. That is an army of freelancers and independent professionals and trades people and shopkeepers who are poorly served by accounting. They are using paper. Spread sheets. It is just a major pain. The market that we saw was suspending 12 days a year just keeping up with the retirements alone. We have great opportunity there to make that more efficient. Guy what is the money going to be used for . Does your product need to be better or is it the fact that you need to spend more on customer acquisitions . We have a great ambition. Were already doing things different from the typical Accounting Software. We have things like tax filing. We have lots of ambitious things to make it more simple. We think mobile is important. Increasingly we see our customers skipping the laptop and going straight to mobile. This is their office they carry around with them in their pocket. Thats who were trying to make sure we do. Guy why crowd fubbed funding . Funding . We think crowd funding is an interesting way of us engaging more with our customers. What is great about those guys is that our Customer Satisfaction ratings are the heist of any Software Production we have seen. Were up there on par with apple, amazon, southwest airlines. The industry stars. This is Accounting Software were talking about. Guy exciting stuff. Were having some success. Customers are engaging with us. For us this is a great opportunity to get our customers to engage and share in the success. Guy he was talking about needing to solve britains productivity we think we might be able to halve that. No guarantees. Guy six more days they could be using growing their businesses or spending more time with their families. It is all good. Guy it is simple things like that. Do you see red tape, mechanics of having to run a business as a pretty big block now . It is. Most people are afraid of it. There is a people are anxious. They feel guilty. They are afraid of the tax man because they are not in control. Thats what were trying to do. I think the accounting profession has a lot to help here as well. It helps them sit down with their client and look at the business in realtime opposed to what happened last year. I think it really helps them reconfigure to become more advisory rather than just number crunching. Guy your thin tech companies, youre also a technology company. The Prime Minister is going to be talking about immigration later on. He is going to be talking about illegal immigration. Im interested on your take on immigration. I presume you have engineers and programmers. They are very, very hard to find. In software companies, a great engineer is about 10 times for productive than an average engineer. We need to find great engineers. There are not enough great engineers in the u. K. We bring in as well. We would like that to be easier. Guy and life in scotland carries on . As beautiful as it was last year. It is a great place to be. Would it be better to be in london . Were well connected to the universities for hiring. We are really enjoying being up there. Guy what about the opportunity to take your business more into other markets . I remember you and i met at an event on downing street. I remember hearing you talk about expanding into europe. How big a problem how easy is it to scale a business . I think it is possible. Were very focused on the u. K. Now because we are so deeply localized. That is really our secret sauce. Thats why people are so engaged. Someone said i enjoy putting my expenses in because i enjoy watching my taxes go down. They are really understanding the mechanics of the business. Those are not easy things to build. We think of other markets. We think of the u. S. The german tax credit is the largest in the world. At least if it is written down, you can write in code. In the future, we can see it being an interesting market. Guy you still have a big scale of jobs here. How long does it take you to go from 40,000 to 5 million . How long is that process . I think our crowd funding will help us get there faster certainly. I would like to see i think in three or four years us with a very sizable part of the u. K. Market making million s of businesses much more productive and happier and start to take our first steps out to europe. Guy thank you. The c. E. O. Of free agents. Let me walk you through bloombergs top headlines. Islamic militants have seized control in a city in the northern part of syria. Al qaedas founder bin laden remained committed to attacks on the u. S. Documents show and the national for pretax profit to beat estimates. 2. 8 billion pounds against an estimate 2. 8. Deciding whether they have misleading information into the national grid. I dont think it does. I think what it should do is for a certain extent. Have some insurance that it will continue to check that everything that goes on through these processs is absolutely right and accurate. Guy spotify that is announced plans on becoming more than just a streaming music service. Here is everything that you need to know about spotify events in 80 seconds. Hey guys. Today were introducing a new spotify experience. The new spotify has been built to deliver new types of contests including nonmuskse contents. What a perfect marriage to put Audio Content on one of the best audio platforms in the world spot tie. In the per suit of making video content and i know that spotify is jumping into this world and the audience that you guys have, it is the perfect thing to do. We are thrilled to be here on the launching for the new spotify platform. You know we want to watch those clips. We are the demo. We love the demo. Were talking about our clip and how they are going to slide right in there. They are a short clip that people can watch in the middle of the day. Your phone already has sensors built in that can predict how you move. Spotify can take that information, figure out your pace and find that that magically matches the beat of your feet. Even between socks. There is an Incredible Opportunity to sound track your entire day and your entire life in all of its complexity and were just taking a huge leap ahead to give it to you. Guy spotify. Not just music now. Focusing on bloomberg radio, the first word is up next. For tv it is the second hour of the pulse. Were going to go back to paris where francine will be speaking. And christina the u. N. Framework convention on Climate Change. And later on this afternoon for bloomberg. Com in europe, you can see a panel hosted by fran which includes the Saudi Arabian oil minister. That brings us to our twitter question of the day. Is Climate Change a priority for your company . Guy shareholder showdown. Deutsche bank announced its cochief executive is to lead the strategy overhaul of their biggest lender. Youre looking at live pictures coming from frankfurt. Well have more on that in just a moment. P. M. I. Data shows German Growth losing a little momentum. Francine in paris for the business and climate summit. With the environment in focus, ill be speaking to many more exclusive c. E. O. S businesses here are very worried about the challenge s of going green. Guy 10 00 in london. 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. This is the pulse live from bloombergs European Headquarters in london. Were not just in london today. Were in paris as well. Business leaders gathering there for the business and climate summit. Francine is there. That is why she is not sitting next to me. It has been a busy morning already. But you have some great guests coming up, havent you . Francine we certainly have. We have a panel coming up from a u. N. Special envoy. Of course this is were now 200 days from the important climate. The problem is that were at cop 21. The Business Community here certainly thinks that something can be achieved to put these global targets. When you speak to Business Leaders, they have been working on it for a long time. It is a little bit of pressure from shareholders and the media and it just makes sense for future generations that they have all of these targets within their own companies. It is very if youre in Waste Management or Water Management or oil and gas. Im very excited about two things. Ill be speaking to a big Materials Company and it will be interesting to see how much more plastic or less plastic they use in their components. Then a little bit later on this afternoon, also well be speaking to the e. D. F. C. E. O. And the oil minister of saudi arabia. I havent really heard him talk about Climate Change. Trib interesting to see how he marries the two. It will be interesting to see how he marries the two. Guy were talking about european growth. The p. M. I. Data is out. Well be talking about the story do you get a sense from these guys that the focus on Climate Change is progressing their businesses . Is good for their businesses or is holding them back . Francine i spoke to the c. E. O. Yesterday. This is the biggest medics maker in the world. Te said there is still a paradox certainly for his business. They are trying to reduce packaging which is very important when you look attributey products. He said the paradox is if you do a survey 80 to 90 of people want to be more kindly, friendly and energy efficient. These are beauty products. When youre faced with these products on the shelves, a lot of industries i think it is still some sort of collective consciousness, Business Inside their firms, makes them more environmentally friendly. Whether that translates into sales, i would say probably not yet but we hope soon. Guy thanks very much indeed. Francine enjoying the nice climate in paris. That brings us to our twitter question of the day. Is Climate Change a priority for your company . Tweet us at guy johnson, at flacqua. Let us know what your business is doing. Is this a priority for you . Are you worried it might hold your business back or is it a positive story . Lets talk about the eurozone story we have been talking about throughout the morning. The data on the manufacturing side are showing the recovery may be weaker for a second month. Germany losing momentum here. Good morning. Good morning. Guy germany is very fascinating to me. It has a really weak euro at the moment. Guy it is struggling a bit. I wonder what is going on. It may well be that the german industry has become a lot more sensitive. We have seen in p. M. I. Numbers, a threemonth low. I think there is another factor given that germany find out whats going on in gobal markets. Guy draw the line between the german p. M. I. Numbers. Look at china. The actual growth rate is probably way below the target. The chinese p. M. I. Is still very much in contraction territory. Despite the stimulus measures that the Chinese Central Bank has been implementing recently, reserve requirements the loss of liquidity isnt finding its way into the economy. Some 20 down on a year ago. Where that liquidity is ending up is in the stock market. That is going to be a big problem. A big challenge for the authority. Guy i look at the rest of the eurozone. They are looking better. Countries like france who have been on the floor. Starting to look better. Spain is starting to grow again. So there is some indications that those companies other countries like greece it is a mixed picture. I think the story of the eurozone is enjoying a cyclical recovery. Cyclical rather than structural. We need the growth for sure. The official forecast said 1. 5 which isnt great but it is better than nothing. I think that is where were going. The eurozone may be outperforming. The u. S. Where the picture still very much guy do you think that is going to be case . Look at where the eurozone is. The data. The potential for surprise out in the u. S. On the upside looks much greater. I think that is the fair point. The economic surprise index. That has been on the floor. It tends to disappoint. The potential for an upside surprise i guess the next big test will be the u. S. Jobs report on june 5. But you know, the fed is still you know walking on egg shells as we saw with the publication last month. They are hesitant to pull the trigger. It looks as if the june fomc meeting is possible but not likely. The market thinks september is perhaps the earliest they can do it. I am worried that the fed is taking risks with financial starblet. Starblet. Stability. All of a that. I think there is a risk that fed may have left it too late. They have missed the boat. They may be looking to raise Interest Rates into a much more pronounce down swing in the cycle. This thesis that they have there is going to be a rebound or the first quarter, once you redo the adjustments is better than the official data remains to be seen. They are running out of time. We need to see a pick up in u. S. Growths quickly, over the next four to six weeks. Otherwise they are in trouble. Guy lets take a look at what else is on our radar this thursday morning. Dache banks is taking place in frarning further. The german lender is direct oversight of strategy after last months overall. Jain said it will take longer than planned. The bank has failed to deliver on two key promises. Well bring you more on deutsche prank as it breaks from this meeting in frankfurt. Spotify is adding pod casts and video content. And in the u. K. David cameron will pledge to reduce immigration later. His administration is preparing new laws to step up deportation. U. K. Immigration was 300,000 in 2014. The highest since 2005. Were going to be looking at camerons plans next and find out what osborne has to say since the elections up next on the pulse. Guy good morning. Youre watching the pulse live from our European Headquarters in london. That is recent story that came out last night. Osborne talked about the issue of productivity. It was a big theme of the speech and he emphasized the importance of supporting british business. Economic policy is about backing those who provide the jobs and offer the opportunities to the working people of britain. When others predicted that unemployment would rocket, it was you who created the 2 million new jobs. Guy talk to us about what we heard from osborne. We know the cuts are coming and we know he is going to solve what is vexing many economists at the moment. Whats happening with productivity. The productivity puzzle. Why is so productivity so low in business . Osborne said he can provide a solution by improving structure proving Communications Like broad band. He also has to make sure investors improve. Of course this is no quick fix but it is basically telling businesses we hear you and know this is an issue. We want growth that is long lasting. Well have to see if that works. Guy were going to need more infrastructure because there is more people here. Absolutely. The immigration numbers came out. They wont make for pleasant reading for David Cameron who of course set a target of 100,000 which he knows he couldnt really make. He admitted it was unrealistic. The numbers are 318,000 for the last calendar year. Big increase from e. U. Immigration. Guy particularly from bulgaria, places like that, which will not play well with the British Public. No, it wont. Especially since David Cameron is trying to convince the British Public that the u. K. Wants to guy how does he spin these numbers . He has made some big promises in the speech today where he said he will seize wages of Illegal Immigrants and also crackdown down on appeals and on the possibility of deported immigrants coming back. These are big measures. They sound good in practice but they are probably not very easy to implement. Guy when we talks about the need maybe to find a way of dealing with it . Not really. Because at the end of the day, they always clash. On this one issue that Freedoms Movement is one of the tenants on which the e. U. Has been built. Britain is not the only country to face that problem. Guy thank you very much indeed. Were building up to the budget very, very shortly. July 8. George osborne is going to be telling us what he is going to do to deliver growth. We heard a lot about austerity in the run up to the election. Well find out and bring it to you live and in full. Coming up, going green. We want to know is Climate Change a priority for your company . Tweet us at guy johnson tv. At flacqua. Guy welcome back. Youre watching the pulse. It is 20 past the hour. Time to take you back to paris and Francine Lacqua. Fran, over to you. Francine thank you so much. Were joined by Business Leaders and c. E. O. S. We have a great panel now to talk about what can be achieved this career. Im pleased to say im joined by rachel kite and a guest from the u. N. Framework. One of the things we have been trying to understand is why this year we hope that get an agreement. Let me start with you. Is there enough momentum behind Business Leaders behind governments that we are going to get a global reaching agreement . I think your question is not why do we hope but why do we know were going to get an agreement. Francine youre confident 100 . I am. There are many reasons for that. The first is technology. The cost of technology and efficiency of Renewable Energy across the border and increasingly on storage is coming down. Efficiency is going up. Much more from a technical point of view. Second much more engagement of business. This week really proves that there is a huge momentum of business who are doing this not to save the planet. They are doing it because they understand that this is their best investment in business continuity. That is why they are doing it. Thirdly, because there is so much more policy at the national level. We have now 800 the latest report is coming out with 800 either regulation or laws in Climate Change around the world and finally much more political will than we had six years ago. So all in all, a much, much better context. In the broader realization which is the painful part of it that the impacts of Climate Change are being felt so much more deeply and so much more often than they were before. Francine what can the Business Community do to make sure that governments it and will sign up to it . Talk and listen. I think that is really what is beginning to happen. Is that rather what we have had over the last few years, the Business Community sort of saying to themselves if government would only do this then we could do that. Youre actually starting to see now this global conversation represented here in paris. Country by country, province by province city by city business and government working together, saying ok if, the goal here is to grow, create jobs, build prosperity, build it with les carbon in the economy, how are we going to do that. Francine is the price on carbon the most important thing we can achieve . It is necessary. What is quite incredible here is you have coast and Business Leaders from every sector of the economy saying put a price on carbon. Thats what we want less of in the economy. Make sure it is stable. Do it whatever way you want to do it but we need to be predictable and slowly rising. Francine are you a little bit more disappointed that at this summit there are more european coast . No. Were not disappointed because this started as a europeanbased summit. It is not the first and wont be the last. The there are many, many different engagement s of business. Davos not being the most unimportant of those. Each of these, what is comforting is to see that were really breaking out of the choir. It used to be a small group of visionary forward leading companies and c. E. O. S who were standing up there ringing the bell. Now that were breaking out of that and we have more and more Companies Really understanding this as an opportunity, not as a burden. Francine what about oil and gas . Of course they have issues, were talking about Carbon Capture and new technologies that you mentioned with oil coming down. This makes less sense to folks on renewables. Not really. This is not there is no miraculous solution to Climate Change and there certainly is not an overnight solution. We have to understand that this is a multiprocess an it has to be a gradual thoughtful transition and oil and gas have a very Important Role to play in that transition. One thing does not negate the other. Francine rachel which is the one is there either a group of businesses or a cluster of countries that may hinder this process . No. I think that every country is at a certain stage in its development and has different challenges. But all countries are really concerned about propelling growth and they want that to be a job i think most countries understand that there has to be less carbon in the mix. We have to wean ourselves off a carbon intensive growth model. How to do that will be different country by country. There are very real pressing reasons to do that. This will go to the competitiveness. This gos to air. There are real reasons for doing this. As well as counting those global emissions. Francine there is a lot of noise from companies. I wish i could share your optimism. This noise is translating to higher emissions year by year. Definitely. Emissions are still going up. Im certainly the first witness of that. That is why this is absolutely urgent. Because emissions are still going up and we do have to get to global peaking of emissions and then rapidly descend. What is i think very hartening is that last year and one year does not make a trend but last year was the first year in which we actually had Global Growth and completely flat g. H. G. Emissions. Bottom line, what were trying to do here is to decouple the growth, the g. D. P. From the g. H. G. It is that and were beginning to see it. Francine thank you so much for joining us. You can see there is a lot of passion. Well of course continue talking about this. We have great exclusive c. E. O. Interviews coming up. You can see the passion in the people that have been working on this. C. E. O. S say they are behind it. Now we need to see some concrete targets. Guy yeah, talk and action and delivering. That is obviously the big challenge. Great stuff. Thank you very much indeed. My colleague Francine Lacqua out in paris. It is beginning to look a little bit more like it is going to rain. The climate is not improving. Coming up Deutsche Banks slowdown with shareholders. Well have the latest from frankfurt after the break. Is there such a thing as a sure thing in business . Some say buy gold. Others say buy soybeans. I say, buy comcast business internet. Unlike internet providers that slow down when traffic picks up, you get speed you can rely on. Its a safe bet. Like a goldplated soybean. Reliably fast internet starts at 69. 95 a month. Comcast business. Built for business. Guy welcome back. Youre watching the pulse live from bloombergs European Headquarters here in london. Im guy johnson. My colleague, Francine Lacqua is out in paris. These are the Bloomberg Top headlines. P. M. I. Numbers in the eurozone show the economic recovery faltered last month. The Confidence Index down from 53. 9 in april. Germany a big factor here. That links us nicely to our next story. Remember germany big exporter. Chinese manufacturing, slipping to a 13month low. Cause and effect. The preliminary number from hsbc came in at 41. 9 for may. In the u. K. , David Cameron will pledge to reduce immigration today. He is giving a speech in about 30 minutes time. The latest statistics showing the u. K. Net immigration 318,000 in 2014. The highest since 2005. The e. U. Number is going to be the problem i suspect that David Cameron will have because that rose sharply. How are the markets digesting all of the data . We have data out of the u. K. As well. Jonathan it really is. Equities pulling back a little bit. What an exciting start to the week. Monday tuesday, the board were loving it. The biggest twoday rally. Wednesday was a breather. Thursday the pull pullback. Not just in germany but on the periphery as well. The brits right here, they like shopping. Retail sales jumping again for a record stretch. Where is that number right here . 26 straight quarters. Retail sales in the u. K. Climbing. Remarkable. This is the fx impact. A weaker euro. A stronger pound. The analyst at citigroup looking for a potential 8 drop to 65 from where we are now at 71. That is punchy. Portugal. Draghi speaking later this evening and we get those e. C. B. Minutes as well. A busy day for the rest of europe. Im looking at bond yields. Germany, pretty much dead flat. Elsewhere, on the periphery, the italian 10year with the yield down to 1. 8 h . Big moves on the back of this data. China disappointing. Eurozone slipping. A lot of data in the u. S. Later in this session. Look out for that u. S. Manufacturing p. M. I. As well. Back to you, guy. Guy thank you very much indeed. Deutsche banks leaders are facing their doubters. The annual meeting is taking place in frankfurt. Ahead of the meeting, the bank announced they will have direct oversight over the companys new strategy. Hans nichols is there. Jain has been talking this morning and acknowledged things havent exactly gone to plan. Hans he talked about legacy litigation costing more than expected and taking time to wind down. He also talked about cost savings, cost cutting being a little more difficult an challenging. The strategy review they announced at the end of april they talked about cutting some 3. 5 billion euros. They have not given specifics yet. That is on top of the previous costcutting strategies. So some more questions there. Once we get investors start asking questions, making their speeches, well have a better sense of whether or not they are really under pressure. More about the strategy less about the actual management, the actual personnel though. Jain appears to have solidified a little bit of control and power. This appears to be his thing heading forward. Guy . Guy walk us through the changes. What exactly does a jainled Deutsche Bank actually look like an give us a sense how they are going to to us. Hans technically we have two coc. E. O. S. The c. F. O. Is leaving his c. F. O. Position but the strategy role that he had, that is going to be directed at andrew jain. He is going to be in charge of that. Stefan krouse will be taking a lightly different role. He will be in charge of core operations. And then three new partners. The c. E. O. Of the Pacific Region and then the c. E. O. Of the United Kingdom and then the head of private and Business Climate division. So much talk has been about what they are going do to do with their Investment Bank and how they are going to remain profitable. Last quarter, Deutsche Bank had a very good quarter. The actual revenues were pretty good last year. In part because of fixed incomes, currencies and commodities. Guy . Guy it is going to be interesting to see how that performs next, reporting live because obviously we have had a lot of volatility in that space. Hans, thank you very much indeed. Now coming up should countries adopt carbon taxes . Were back in the business and climate side of paris to get a view from europes biggest supplier of building materials. Guy welcome back. You are watching the pulse live from london. Im in london. France seen in paris. Let me take you back to there now. Day one of the business and climate summit. Fran, over to you. Francine thank you so much, guy. Im pleased to i have we have another exclusive interview. Im joined by a c. E. O. Of europes biggest supplier of building materials. Thank you so much for joining us. This is an exciting opportunity. You see a lot of Business Leaders coming here saying they are doing the right things and this is important for the future generations. Does this come from shareholder pressure . Well, shareholders i think there is a growing style of social responsibility. It is our strategy. Solutions to save energy in buildings. We are offering the building sector in europe which emits the most co 26r7b. That is where it is the easiest to reduce consumption. Francine Climate Change is good for your business . What are the initiatives that youre taking specifically . We provide solutions. Internally, we need to make more efforts. That is a little more difficult. We are so committed to that. I expressed our commitment in terms of reducing our co 2 emissions even though the global contribution is very positive. Im welcoming the fact that people all over the world are more serious about this. Francine the rumor is that we hear a lot of noise. If you look at the number of emissions, it is still going up every year. Do you believe were going to find a framework that will have to be applied globally at the on the other hand this year . I think 2014 is the first year where the emissions are not growing. Because china is a major contributor is also lowering its i want to be opt might have been. But clearly what we need thats why the other objectives on this Summit Companies need a framework. That has to come from the government. That is why it is so important that we get a global agreement here in december. Francine youre confident. Why would we get it now . Because technology has been reducing in price . Is it because it is easier now to be more Energy First Quarter or Climate Change friendly . I think it is difficult. I think there is a growing momentum. Population is growing in that direction. Business is something we need. There are still a lot of difficult issues between government and different places in the world. I hope governments are going to agree. Because you know, we all live on the same planet. Francine we certainly do and we have children and future generations to take care of. As somebody said, we are the last generation francine that can do something about it. You provided solutions. What are you clients still asking of you . If im to change some of the materials in a building to become more Energy First Quarter, how much of a cost will that be to me . Well, it depends. That is where the more energy is expensive. That is why there is a price the carbon price is so important. Our customers they are able to get a payback because they will save consume less energy when they are done. It depends on where you live. If you in the north then the paybacks are quicker than if you are in the south. Globally there is a willingness from the government to push, to incentivize, to regulate Energy Efficiency in buildings which is an important area. Francine here in paris, ive had a lot of interviews with c. E. O. S. They say they are behind the movement and want to do more. Would it be a different story if we go to the emerging markets or the u. S. . They are hardly present here. Europe has been at the forefront of these initiatives. But i think as a growing trend, if you go to a country like india which is said to be a bit behind politically there are a number of coast who are doing that. They believe that these kind of social responsibilities is good for their company. More and more companies are taking a stance on responsibilities. They are citizens of the world. I think there is a momentum. Events like this one are important to bring that momentum to a higher level. Francine keeping people updated and what c. E. O. S are thinking. Do you have a model . How much that would translate into sales or revenue . Trends . I think it will come in our sector which is in our building. You a lot of industries where the progress are different depending you have a level playing field. In our sector, we can make more progress in europe. Big progress is on regulation. To renovate buildings. But buildings regulated in europe. That is a good way that we need to do the same thing on renovations. I am very optimistic but i think the governments in europe are probably ahead of the others in the world on this subject. Francine there certainly seems to be a will at the moment. Well have plenty more exclusive interviews. Im speaking to the Saudi Oil Minister later on today. I want to get his view, big oil. Very big oil and Climate Change dont usually go hand in hand. It will be interesting to see his philosophy and how he has used all of these talks. Guy you can get him to talk about the oil price. Thalingd probably help as well. If you can figure out how saudi is going to be part of the energy mix going from here, that is going to be a big step forward. That is coming up a little bit later. Francine lacqua. So many great interviews coming out of paris. It is a big feature of bloombergs coverage over the next few months. Staying with Climate Change it is clear that energy generated from biomass will be an important topic. Is burning wood really environmentally sound . Bloomberg went to find out. We were the u. K. s largest emitter of carbon. We are now the biggest decarbonizeation project in europe. Increasingly coal becomes less economic in the u. K. We have to take a direct transformation. Were taking 12 million tons of carbon out of the atmosphere by removing which is the as taking 3 million cars off the road, about 10 of u. K. s cars. 80 of our biomass last year was sourced from canada. Cutting the big trees into wood that goes into house building. The saw dust is collected and made into a pellet in mississippi or louisiana and transported by truck or rail to baton rouge, and loaded on big ships. Then delivered to our east coast port. We have three along the east coast. We then have specially dedesigned rail wagons to bring them in. Everything we do is sustainable. We source all of our material from sustainable forests. These are forests that are growing more than we are taking out. We and others. We are just a very, very small part of the forestry sector in the u. S. Currently intent about up to 700 Million Pounds that is the investment we have made on the site here and have built two pellet farms in the u. S. The transformation to biomass has to be an attractive one financially as well. We believe it is. Future for coal in this country and across europe is looking great. Greg great stuff. Great package. Let me bring you some more of bloombergs top headlines. The European Central bank said it will stop providing embargoed speech text to the media. The rest of the market found out the morning after. Islamic militants have seized control of palmyra a city in syria. It contains the ruins of a 2,000yearold city. Newly released documents show that bin laden remained committed to thwarting attacks on the u. S. Even as he struggled to control followers. The documents were recovered where u. S. Forces killed bin laden in 2011. It has been a pretty busy day already. We have plenty more to come here on bloomberg television. After the break, well tell you what you need to watch for the rest of the day. Guy hey guys. So today were introducing a new spotify experience. The new spotify has been built to deliver new types of contests including nonmusic contents. What a perfect marriage to put Audio Content on one of the best audio platforms in the world. Spotify. In the pursuit of making video content and i know that spotify is jumping into this world and the audience that you guys have, it is the perfect thing to do. We are thrilled to be here on the launching for the new spotify platform. You know we want to watch those clips. We are the demo. We love the demo. We are talking about our clips and how they are going to slide right in there. They are short clips that people can watch in the middle of the day. Your phone already has sensors built in that can predict how you move spotify can take that information and figure out your pace and find that track that matches the beat of your feet. Even between songs. There is an Incredible Opportunity to sound track your entire day and your entire life in all of its complexity and we are just taking a huge leap ahead to give it to you. Guy fascinating stuff. Lets talk about what you need to know about for the rest of the day. Hans nichols is in frankfurt. Hans we have already heard from andrew jain. Are investors convinced about this Management Team . Hans well some are expressing their concerns. Thats what were hearing throughout the day and eventually there will be a vote, a series of votes on proposals. Mr. Jain is expected to pass pass most of those. Well have to see how late it is. One quick note on this guy. Under german law, everyone that asks a question gets an answer. This could go on. Guy were up to latvia tsipras is going to be there. Greece is not going to be too far off the agenda when it comes to this e. U. Summit . Hans i believe he succeeded merkel for the in is seated next to merkel for the dinner. There appears to be a georgian wine. A little bit of color for you out of latvia. This is an important meeting in establishing the temperature and dramaticics. In terms of specifics were not going to get a lot coming out. That puts more pressure on next week when it looks like it will be crumple time. Looking forward to hearing about that georgian wine. Absolutely nothing wrong with it. We will find out. Hans nichols getting everything covered. The full menu. That wraps things up for the pulse. There is plenty more on the menu. Stay tuned. Surveillance is up next. We need to look at whats happening. The feds, what the message is that has been communicated. You want to follow us on twitter, im here in the studio at guy johnson tv. Francine lacqua is still in paris carrying on the good work with our climate coverage. She is at fracture wa. Well see you tomorrow. Announcer this is bloomberg surveillance. Tom Deutsche Bank admits failure. They will search for effective delivery. Anshu jains strategy is about getting to 2016. Salesforce kills on earnings. Many do not buy the story. Fracking is unamerican thing. No one else wants to frack. This is bloomberg surveillance, live from new york. Thursday, may 21. Joining me is brendan greeley. An odd day. No news but brendan we had a conversation how do you talk about there being no news as in itself a news item. Tom the fed, one big yawn. Brendan one interesting thing the fed minutes was nothing new except they are considering different ways to lift off. One of them is reducing what they pay on reserves. Tom the methodology was there. We will talk about this on radio and television. Our top headlines. Vonnie quinn . Vonnie a