We are getting breaking news. Eurozone pmi Manufacturing Service figures. A touchhanged at 53. 1, below estimates, but not by much. Manufacturing pmi fell to 51. 5, also lower than expected. We were expecting 51. 9. Remember, anything above 50 still means we are in expansion, however we are seeing a little bit more of a fall than was expected. This is the picture for eurodollar. Weve had a lot of currency moves, as a lot of central bankers were in japan. You can see eurodollar 112. 14. This is. European stocks falling. 19. E oil, 48 it data briefly sink below 48. Emergingmarket shares extending the rebound we saw on friday. I also want to show you bayer, making an unsolicited 62 billion allcash offer to acquire monsanto, as shareholders worry about overpaying and valuation. Lets get to the first word with nejra cehic. Nejra thanks. The u. S. Economy should be solid enough to merit an Interest Rate increase this year, and the central bank wont cave to political pressure to refrain from tightening during a president ial election. The San Francisco fed william president says so. He says well global threat has created a balancing act, fed officials probably will raise the benchmark Interest Rate sometime this year. Bayer has offered to buy monsanto for about 62 billion. The German Company offered 122 per share in an allcash bid, a 20 premium to their last close in the u. S. It would create the worlds biggest supplier of Farm Chemicals and genetically modified seed. Well be speaking later to the bayer ceo. Japans exports fall for a seventh consecutive month in april asked again strengthens. It underscores the mounting pressures for shinzo abes efforts to revise growth. Shipments declined in april from a year earlier, worse than the 9. 9 drop estimated. Leaving all 23. 3 , trade surplus of 7. 5 billion. Global news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. You can find more stories on the bloomberg at top. Francine thanks so much. Its exactly one month until the eu referendum. David camerons government has stepped up its campaign for an in vote. The country could face a yearlong recession in the event of a brexit. These campaigners say the treasury document is deeply biased. Lets introduce our guest. Great to have you. As always, thank you for coming on. When you look at the Brexit Debate, what concerns you the most . Sure, there is a lot of pressure on sterling. There seems to be a lot of pressure on investment. But what is the key thing . I think the markets have been very logical. Sterling has been the perfect barometer. It fell sharply when Boris Johnson joined the campaign; it rallied modestlyw hen barack obama intervened to speak. It has been creeping up. Looking at the other indicators, the equity market has been extraordinary. That is europes bestperforming major equity market this year by a considerable margin. Yes, u. K. Has 70 of earnings coming from overseas, but nevertheless, it shows you that equities are taken broadly in their stride. Its a little more volatile; sharply, sold off but not wildly out of line. Francine overall, how do you model a brexit . What does it mean for investors wanting to still be long on u. K. Equities . There are three things you want to do. As the made momentum continues to build the remainder momentum continues to build, i would be adding to sterling. I would be subtly hedging, and if this momentum continues, i would go overweight. In the u. K. , i think the best hedge is to buy banks. Particularly hsbc and lloyods. Beneficiarieshe of the u. S. And u. K. Returning from a rising cycle, tying in quite nicely with a hedge against francine overall, what polls do you believe when you look at the Brexit Debate . The problem is that we dont know what the endgame is, if breaks it were to happen, so you need to take a guesstimate. Do you believe the current polls . I believe the remain side is making progress, but this is very different from previous euro crises, if you call this a crisis. In the event of greece or portugal, you have no currency market to measure the sentiment, it. Ested here we have a very dynamic pound. As long as sterling is saying the same thing, go with it. Francine what happens to your investments if brexit happens . If brexit happens, its quite a big global shock. First of all, u. K. Assets fall. If the exit is any prior example, the pound has another turn, but i think the euro comes down as well, which triggers a bout the dollar strength, and emerging markets start to nastyand we get into a spiral. There will be liquidity injections not only from the bank of england, but quite an aggressive ecb. It will be choppy into nasty. Francine whatever happens, will strength . Lar are we talking about real divergence and centralbank Monetary Policy . I think most of that is priced in. What i think is of more interest i know the competent manufacturing number in europe was weak but in france or germany they are more robust. There is a slightly better than expected turn of european data, coupled with a remain in carney starts putting back on the table a rate rise in the u. K. , suddenly we b are beginning to synchronize. Francine thanks for that. He stays with us. Will be talking about yen, g7, and m a, so stay with the pulse. Plenty coming your way, including the biggest ever corporate deal. We will bring you the details. A 62 billion offer for monsanto. And the biggest Construction Company will ask about a new strategic plan. Plus, we talked to boeings Top Executive in asia as the aircraft maker signs a deal in vietnam. All of that and more, coming up. Francine welcome back. Lets get to the Bloomberg Business flash with nejra cehic. Nejra shares in fiat have fallen in the lawn today after a germanys federal Motor Transport Authority found they allegedly used illegal stop or to manipulate admissions. Reiterated that they comply with emissions rules. Ryanair will slow this year. Europes largest discount airliner expects earnings to rise about 13 this year after a 43 surge in the 12 months through march, that is as airlines cut ticket prices to entice customers wary of flying after recent attacks. The ceo told bloomberg that the egyptair crash will put further pressure on your lines. The fact that we have had the bomb attacks in paris, now the egyptair flight, it isnt good. Great thing about terrorism is it is always doomed to fail, but they change the way people behave. Its going to put downward pressure on airline pricing. Will stop has said it investing in tobacco and will divest 1. 8 billion into the industry. Eurosl sell 200 billion worth of stock in tobacco company, and will run off its Tobacco Industry bond holding, valued at 1. 6 billion euros. In a statement on the decision, smoking poses the biggest threat to Public Health in the world today. And that is the Bloomberg Business flash. Francine thank you. Yen strength took the headline in the g7 meeting, as the u. S. And host nation disagreed over the effects. [speaking japanese] there are no heated discussions between mr. Lew and me. We have different views, and it is natural to have gaps in perspective as well as different interests. The only difference between the u. S. And japan is that the u. S. Dollar as a reserve currency. Francine japans exports slid for a seventh month straight as the yen continued to take its toll. The Prime Minister hinted that the frustration within the government about this years 9 toge as g7 nations pushed hold off intervention in the currency market. [speaking japanese] i made it clear that stability and Exchange Rates are important. Excess volatility and disorderly movements and currency will have adverse effects on economic and fiscal stability. Francine lets get more thoughts from the chief Investment Officer thanks for sticking around. Yen is a little bit of a conundrum. Yen does indirectly translate to abenomics, but if you have the strength putting pressure on earnings, then it is very difficult to do wage growth and inflation. Thats absolutely right. Remember, for all the hype of the headlines of abenomics, in five of the past 12 quarters since abenomics has been in place has there been inflation in japan. Because,inating, really, its the heart of the Experimental Laboratory of quantitive easing. Were buying more of the bond market, etf, and still, we cannot seem to readirect inflation. The yen starts to move, and wealthy americans have been able to see unlimited innovation of the kiwi side, we seemed to have press a sensitive button on the currency. That seems to be one step too far. Francine but discover new kuroda need to do next . We have a chart that tracks the jgb the 30 year jgb is in blue, and the 10 year is an purple. This is where governor kuroda decides to go negative. I think he extends his kiwi package. He takes a leave out of draghis book. If you are going to invert, you have to increase the extent of your program, meeting by meeting, regardless of whether you are closing the gap. You just have to keep francine you suggest you disappointed last time, which is how the markets took it. I think it has caused. It has yet the lead outofthebox, and there is a slight paper tiger, because as jack lew put it, the hurdle to describe the yen as a disorderly market, where the u. S. Would permit intervention, is by no means met. Francine so they cant intervene, or they are just waiting for the g7 . Theres nothing worse than intervening i think they will want a nonfrom the u. S. , and i dont think they will intervene, but i think they will come back with an even more aggressive plan, and i think it will reserve in some part the funding for lending program, which the bank of england put in place in 20122013, where rather than using negative rates to paralyze banks, you pay them to take money off you to lend it francine which is what we thought he would do last time. Selected governor kuroda not deliver . There seems to be an underlying thought that he doesnt want to be in the trap where he sees janet yellen being. I think you just have to learn from draghi. You have to keep on pleasing the market, if secretly. Arm,e got the intervention and you have to keep hammering at home. The markets taught him a lesson, and i expected quite aggressive program, continuing to hedge exposure. Francine so you think abenomics will work, or is it too soon to say . I think they would love to say it has worked already, and in a sense it has worked in that core inflation is now stable but below target. I think they will have to go a lot further on the psychology. Francine all right. Thank you so much. He stays with us. We will be talking about bayer and monsanto. It could be the biggest ever corporate deal. We will bring you up to speed with the 62 billion offer for the u. S. Feed company monsanto. Francine bayer has made an unsolicited offer for monsanto. Is successful, the offer would create the worlds biggest supplier of Farm Chemicals and gmc. Later, we will be speaking to bayer. Of our guest is still with us. Lets also bring in our european deals reporter. Thank you so much for sticking around, and for joining us. First of all, the price that they are proposing to pay is pretty punchy. It is, absolutely. And i think people are looking for a comparison at what cam china was offering for syngenta, about 16 times, and what bayer is offering is 15. 8 times. Its comparable, but with the syngenta deal happened, people said it was punchy. One of the things to keep in mind is that there is a lot of consolidation in this space. Ith agenda, you saw dow, didnt go through. If all the Big Companies are saying, what do we do now do francine the problem is it is a punchy price. Its very high, but i guess there are very few Companies Left like monsanto. Bayer says, i want that, maybe it makes sense. Is it worth it strategically . Yes. Seeds, ithemicals, makes sense for them and puts them at the lead with the biggest company. Youre imagining that the regulators will be looking at it carefully if monsanto does agree, the one thing to keep in mind is that monsanto has tried to do acquisitions in the past. Its under pressure. This isnt a deal where they can say, no, we dont want to engage. Francine what really struck me is that it is an all cash deal. This is they really want this. Are talking about inequity increase of 25 of the i havent seen something that they can a really long time. I guess thats why investors are putting pressure on the stock. Francine you wake up, you find out about this deal. First thought is what . First thought is 2015 was a record year for global m a. 2016 began rather slowly. So we are starting to get back in the game. My Second Thought is we have been waiting for the german dog to bark at funding costs, which are extremely low. The company itself is looking for markets outside of your. The scale of the deal is a surprise. The nearest we have is daimler buying chrysler in 1998. This is almost double that. This is the real thing, and it is cash funded, and i think it is quite positively out of the market. Francine because it means there is muted optimism . The first thing i thought is it is such a big deal, and big deals tend not to work out, unless they are complementary. And it the biggest german deal this year. When they broke the story two weeks back, we had people from analysts to investigators calling us up and say it, you guys are crazy, this is never going to happen. But you have a really ambitious man at the helm and his strategy is to do big, bold m a. Francine so is m a back . Its also just the logic of taking Interest Rates close to zero, taking bunds to a negative yield. It does become extremely easy to finance, and this is an extreme example of it in japan. I think they wont have a huge amount of problem placing a lot of this equity and debt. Francine without regulation . What about regulation . They may have to sell bits off, or do things to appease regulators. Absolutely. And this is a year when the biggest deal of 2015 fell apart after the treasury came in. Here, but youpply have to think that one of the u. S. Companies in the sector will be looking at it closely. European regulators will be looking at it closely. This deal is far from done. It goes back to food security. Francine is a little closer to our hearts than other m a. Are we going to see many more deals . Maybe not of this size, but chief Investment Officers always tell me ceos are shy because they dont know whats around the corner. I can grow know if my company 12 months from now. If this goes through, doesnt mean we are in a better place . I dont think they are shy. They are shy of the status quo, of trying to build topline in a relatively deflationary world. In many ways, perhaps this is the safer option, to make a crime blue chip industry changing acquisition. If the numbers are big, Interest Rates are low. One trades off against the other. I think this is a precursor of 2016 being more active with much higher profile names and we expected. Francine in 20 seconds, is it too difficult to buy m a . Yes, directly. No if you buy a good quality annchise, where there may be m a opportunity on the side, that most studies that you have to get that as a bonus. Francine take you so much for joining us. Up, we speak to the ceo of italys biggest Construction Company. They have things all around the world, including the panama canal. Okay, ready . Whoa [ explosion ] nothing should get in the way of the things you love. Get americas fastest internet. Only from xfinity. Francine welcome to the pulse, live from london. Im francine lacqua. Lets get straight to the first word with nejra cehic. Nejra thanks. The u. S. Economy should be solid enough to merit an Interest Rate increase this year, and the central bank wont caved to pressure to refrain from tightening during a president ial election. So says the San Francisco fed president john williams, who told fox news that while Global Growth has forced the balancing act against largely encouraging data in the u. S. , fed officials probably will raise the benchmark Interest Rate sometime this year. Iter shares lower after table the 62 billion bid for monsanto. It offered a 122 per share in an all cash bid, a 20 premium. It would create the worlds biggest supplier of Farm Chemicals and genetically modified feed. Later, we will be speaking to the ceo. Of japans exports fell for a seventh consecutive month in april as the yen strengthened. It underscores the mounting challenge its Prime Minister has to stimulate growth. Imports fell 23. 3 , leading a trade surplus of 7. 5 billion. barrel global news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. You can find more stories on the bloomberg at top. Francine thank you. Markets slightly higher this morning. Lets head to the bloomberg. Mark the stoxx 600 has rebounded, up by 4 10 of 1 after rising for two consecutive weeks after falling for two consecutive weeks. Travel and leisure were the bestperforming groups on the measure. Ma gos our wonderful function. I want to use it to highlight the biggest ever deal in german m a history. Bayer, of course, has tabled this bid, this 62 billion bid to buy monsanto to create the worlds biggest supplier of Farm Chemicals and genetically modified seed. It is a proposed acquisition that would be the biggest deal ever by a German Company. Deals, goings back in time. It is the second biggest deal to have placed. Theres never been a deal like this. Lets move on. Ryan there was in the news today, forecasting the Earnings Growth will slow this year as a state of terror attacks and lower fuel prices prompt airlines to cut ticket prices. It is europes largest discount carrier and expects net income to rise about 13 this year after a 43 surge last year. To get prices are due to fall 7 in fiscal 2017, with the paces of declines accelerating in the winter. These are the big Airlines Across europe. I have done a chart showing how they fared in 2016. The worst performer is easyjet, down by 8 . Lufthansa down, between 4 and 8 , the ryanairs top the pile. It has risen by 20 . I just what a show you whats happening to the end today. It has been falling for the last three weeks, the worst losing run since august, but today we had a trade surplus unexpectedly swelling to the biggest surge in six years. Japanese and u. S. Finance chiefs remaining divided over whether yen selling intervention was warranted following that g7 meeting over the weekend. There is the dollar versus the yen in 2016. Dont forget, the yen is still up by 10 this year. Francine thank you so much. Mark barton with your bloomberg. Is today releasing its new Business Plan and target through 2019. Joining us in his first interview of the day, the ceo of italys biggest Construction Company. Welcome to a local the pulse. Overall, you are very focused on the u. S. Are you confident in that economy . We are very confident about the u. S. Economys growth. We think they deserve better infrastructure. A lot of it was built at the beginning of the last century, which means its a little bit outdated. A different have system of communication, transport, better housing, better environments. I think there will be a Bright Future for us in the u. S. We just finished that acquisition of the company in the u. S. A leader in road construction. Putting on them the knowledge of other segments francine are you looking for more acquisitions in north america . Needor the time being, we to digest investments we just made. The deal of our plan is to release cash, which means that acquisition is not on the frame francine shareholders important, now very both to us and to the shareholders, to see a company which is not only growing, but also releasing cash. Francine do you know how much . Have you pinpointed the figure . Free cash flow will be one of the items most important of the Business Plan. Francine we are looking every day at i dont know if it is suffering, with africa, is that also what you want to be less reliant on those parts of the world, and focus more on the u. S. . Volatility and increasing complexity of the market, its now central. Making a company which is bigger means also safer and less volatility. Markets,g in stable for us, is what we should do, and to reduce the weight of countries that may put that at risk. Francine you were also heavily involved with the panama canal. That opens next month. What lessons have you learned . The facts that making the largest project in the world is always very complex, and being a who does only that may be a risk. We are also looking at portfolios in smaller project, not to be dependent on a single one. The Technical Expertise in the quality of the people you need to make projects like this, it is unique. It brings out the possibility to make large projects in the future. Francine because people associate you with such a difficult project and they say, i want to this group . They cannot choose us like that in terms of its very complex and a very regulated sector. But every state has a complex regulation. This is part of your experience, in the items by which you are choosing. Francine of course. You have to put in a pitch, but if they trust it has to be 30 of how you get chosen. Its a component. The one you have when you go for a large product, it is one of the major items. Francine you are a lot less italy centric at the moment. Have you ever thought of moving headquarters away from italy . We think we now live in around 50 countries, and the u. S. For us is very important. It will be 30 of our revenue in the future. In italy, it will account for less than 20 . When we think about where we are national, we of course have different choices, but this is not on the table at the moment. We would like to invest and grow, to look at this investment in a very strong asset. The growth of the future is largely dependent. Francine how many projects will you unveil the next 12 months . A lot of them i imagine will be in the u. S. Twoe will be looking at quarters for around 9 billion, which means we have to make a large chunk of this in italy and the u. S. The u. S. Has been quite successful so far, and we are very happy about that investment. Francine are you expecting more projects . We talk about the fact that central banks, Monetary Policy is taking so much of the heavy lifting, and that maybe what we need is more constructional Infrastructure Spending to make sure growth is being kickstarter the right way. To use a turning point . When i see that people need ank, at construction gives enormous opportunity not only for the people who work with it, but for the entire industry that what different items, indoor miss industry what an themous industry you have, technological systems, and also people physically at work. In italy, infrastructure will be one of the drivers of the recovery of the italian economy. Francine how much do you worry about currencies . Do you hedge . Currencies are extremely volatile and unpredictable. Hedge. Normally we that we have the payment for the foreign companies, which is its a currency you can hedge against. Francine one last question. I know you unveiled to investors everything this afternoon. Is there anything else it should be watching out for, apart from shareholder buyback or extra dividends . I think the policy of the company in the future will be more rewarding. So far we have invested an enormous amount of money for the company is being used in growth. When i was here in years ago the company was making 1. 4 billion, now we make more than 6 billion working in 50 countries, and this is an enormous process of investment. The next four years will make a and more safeth markets. It means the possibility to release more cash to shareholders. Francine which is really what they want across the board. Thank you so much. Pietro salini. Coming up next, boeing wins an order in vietnam. We spent to them about how they are performing in southeast asia. Francine welcome back to the pulse. Breaking news out of greece. Will understand is some kind of agreement between the eu and eces european creditors this is according to a bloomberg exclusive are preparing to allow 11 billion euros once they complete their bailout program. I imagine this is independent of debt relief. They will get a further lifeline of 11 billion euros, if the nation has successfully completed a review of the bailout program. We will have plenty more on that, according to a draft by the european commission, which has been seen by bloomberg news. We will have plenty more on this document throughout the hour, but now lets go to vietnam, where boeing has won a bid. It is only worth 11. 3 billion. Lets get more with the Top Executive in asia, the Senior Vice President for sales, joining us on the phone from hanoi. Great to have you. Thank you for coming. Vietjet is an airbus customer. At have multibilliondollar options. What incentives did boeing offer for you to switch . Were looking at the value of our new airplane, and it is the best airplane for the lowcost carrier anywhere in the world. Ryanair,launched by and clearly that airplane has 197 feet, and they saw the economics of that airplane and realized this was the best economy and the airplane can have in the world. Importance,rticular there are premium low carriers in vietnam to go in other parts of asia. They wanted to do a major order, and that is why they ordered 100 airplanes. Francine i understand for the country of vietnam. Francine i understand. That usually, a lot of but usually, a lot of these budget ai airplanes only offer one type. Did you have to promise something . Well, no. Incentive is we had to show them the value as to how they can make more money, then compare and people will buy the airplane when they see the price is right, and more importantly that the airplane meets the requirements. One of the routes they would fly would be from ho chi minh to , soo, with 197 passengers they saw these kinds of values and prices an important factor. It hashis airplane to meet all the functions. It is an amazing airplane for a lowcost carrier. Francine in an unprecedented step, there was an alliance formed. How do you see this development . Is it concerning you for aircraft manufacturers like boeing . No. It has done synergy for these carriers by having more access to the market. What they are going to do is have more passengers to fly and they cans chance have the luxury of traveling longer distances. We dont see any kind of difficult situation. I think it will require more airplanes to be acquired by particular airlines. Francine thank you so much for joining us. The senior vp of sales at boeing. Up next, the vote unsettling europe. It is not brexit, its the austrian president ial election. What it could mean for the eu, next. Francine welcome back. Lets get straight to the Bloomberg Business flash with nejra cehic. Nejra thanks. Shares in fiat cell today after germanysthat t federal Motor Transport Authority found the allegedly used Illegal Software to manipulate admissions. They reiterated that all vehicles comply with the mission rules. Bayer shares lower after a tabled 86 billion bid for monsanto. It offered 122 per share in an allcash bid, a 20 premium to their last close in the u. S. It would create the worlds biggest supplier of Farm Chemicals and genetically modified seed, and later we will be speaking to the ceo. Ryanair has forecast Earnings Growth will slow this year, even as profits jumped. The largest Discount Airlines expected earnings to rise after a 43 surge in the 12 months through march. Airlines cut ticket prices to entice customers wary of flying after terrorist attacks. The ceo told bloomberg that the egyptair crash will put further pressure on airlines. The fact that we have had the bomb attacks in paris, now the egyptair flight, it isnt good. Ont think it will alter the thing about terrorism is it is always doomed to fail. It tries to change the way people behave, but it wont stop people flying or traveling abroad, although it is going to put downward pressure on airline prices. Nejra axa has said it will stop investing in tobacco and will divest 1. 8 billion euros in the industry. It will sell 200 Million Euros worth of stock in Tobacco Companies and will run off its Tobacco Industry bond holdings, valued at 1. 6 billion euros. Saysstatement, axa smoking poses the biggest are to Public Health of the world today. And that is the Bloomberg Business flash. Francine thank you. Austrians Political Division has been laid bare as the antiimmigration Freedom Party and green party backed candidate were tied after yesterdays runoff president ial election. The outcome will be decided by absentee ballots today after the Freedom Party candidate failed to secure a victory. Were joined from the anna. From vienna. What does this say about politics and austria . That tells us several things. One thing is that it is important to take a step back. Its remarkable that you even have these two candidates in the runoff, because both are opposition candidates. That already shows you one thing, that there is a disaffection with the government and their performance in the last few years. The result of the runoff shows you a country that is deeply in many ideological themes, be it immigration and the refugee crisis, be into the relationship to the European Union or how to deal with lagging growth and rising unemployment. Out,ave voters turning 60 of men vote for the Freedom Party, 60 of women voting for the green party. It is deeply split. Francine thank you so much for joining us. Will go back to him throughout the day as they continue counting the votes. Stay with us. Surveillance is up next. We will kick off the conversation with a great number of guests. We speak to a lot of people about the market. Its a little bit under pressure as we start off monday. Can we go to g7; we talk about the huge, huge m a deal. 11 07 u. K. D at time, before it goes to centralbank watch. Francine this sevenmonth fly. As g7xports fall finance leaders disagree on currency wars. Buyer. A a 62 billion dollar cash deal for monsanto as shareholders worry about overpay. And referendum on a recession. Cameron and osborne say britain will be plunged into a crisis if they vote for brexit. Surveillance. I francine lacquam in