issues a little bit of an for mr. hollande. but get straight to david tweed. this is going to be disappointing news. very disappointing news, particularly after we saw the french economy stalling in the first quarter. it is going to put even more pressure on francois hollande. he is trying to overhaul the economy. he is trying to spur growth. he is trying to bring down the unemployment rate. i will be back in a few minutes to give you the details of why we see this contraction. >> ok, david. we will get into that breakdown shortly. to allurn our attention things online and property. daily mail. >> celebrity hunting, house hunting, job hunting, they had assets in it. sales are up 2%. profit also up 16%. that is a nice takeaway. they are trying to manipulate their portfolio. they are disposing of the significant chunk of zoopla, the second-biggest u.k. property search company. some say it might be down, but secondly it is online looking at property. daily mail up 6.3%. >> we will talk about that story later on. euro/dollar is down a quarter of one percent. that is a shocker from france on the pmi. >> plenty for the ecb to think about. early this morning, futures were higher with a little optimism in this market. i am in the dark. hopefully someone will put the lights on and you can see me. equity markets higher by 0.2%. the dax up by 0.3% as well. chinese pmi still in contraction. call it a five-month high if you are optimistic. focus,there is only one euro/dollar off the back of that pretty bad pmi reading out of france. you did see it did lower. this one here is a three-month low. plenty for the ecb to think about. it is italy,t -- spain, france. pmi is in contraction territory. the euro does not like it. the market expects the ecb to do something next month. >> we can all expect what we like. thank you very much. joining me now for his perspective, it is james mccormick, the global head of asset allocations. right to have you with us this morning. should we be really shocked that purchasing managers index in france comes in and underwhelmed the market? europe is under pressure. >> i think that we were always going to reach a point sometime this year where the good news finally started to fade. expectations were so bad a year ago. it is a problem. if you look at european markets in the past, you always had stress coinciding or being proceeded by weakness in growth. it is something to watch out for. i am not surprised that we had some widening and peripheral bonds last week. your top look through strategies, i am looking at risk number five. risk of deflation in the eurozone in your perspective is reminiscent of what we had in terms of the data coming from japan. this is everything that mario draghi covered month in, month out. we are not japan. go, nearly all early-stage drivers of japan's deflationary shock are present in the eurozone today. >> that is right. if you do a like for like comparison, japan versus europe, there is a lot of similarities. most of the risks around europe on a like for like comparison are smaller. mario draghi is right. difference. been muchicy has tighter in europe than it was in japan during the same time. europe deflation is part of the solution, at least in some of the countries, places like spain, portugal, greece. germany is also running inflation close to 1% and that increases the risk. >> that certainly does. for blood orbaying action from the european central bank. it is about growth. getting europe to grow in the periphery is the critical issue. what do they need to do? from an assay kit -- from an asset allocator's point of view, what do you want to see from the ecb? >> you definitely need looser policy. in 1996, 97, the ecb is beginning to look tight. you need to target policy toward the banking system in these peripheral countries. we have to see what they are going to deliver. >> i was having a conversation the other day, the perception of what quantitative easing is and has been versus what perhaps could be capital easing or biting of capital bonds here in europe. it is going to be a different form. it is not going to be qe as we are all wrestling for. >> it will be a different form. the weight the ecb is looking at it is, qe is the last bullet to spend. they can do it. they will do it if necessary but probably not at that point just yet. >> we are going to get into some of your big asset allocations. we will talk about that when we come back from the break. of course we have the china data in a moment. barclays.ick from here is a look at what else is coming up today. hold the sauce. unilever sheds two big labels. the daily mail owned property company has a london listing. with thealk strategy chief executive of the biggest bank in the united arab emirates. what is their agenda? we will tell you what that is. stay with us. ♪ >> we open with chinese purchasing managers index. miners getting some relief. harris unchanged. the dax rising. >> i am manus cranny in london and this is "on the move" streaming online, on your phone, apple tv and the new amazon fire tv. here is a couple of stocks. we have got daily mail rising about 5.25%. they announced the much-anticipated cashing in on their property website, zoopla. looks like they are going to go for an ipo. racing is set to come. the ua shins are adding up to one billion pounds. they are going to seek to cash in on that. royal mail, stock declining. in october.ipo back what we saw was operating profits. so the markets were a little bit disappointed on those numbers. it has had a fairly good run as of late. those are a couple stocks. we are getting the purchasing managers index figures from europe this morning. french manufacturing slowed down at the top of the hour. we are joined by david tweed. you have had a chance to look over these french numbers and go into them in more detail. what is your take away? is, you haveay another disappointment coming out of france. this is a big economy in europe which continues to disappoint. looking at the detail here, manufacturing and services both contracted. both under that important 50 the which indicates difference between expansion and contraction. economists also saying that new businesses decreased for the second month running. the rate of contraction was the fastest rate since february and , purchasings managers are saying it is lackluster demand conditions. also, i think this is interesting, delays in decision-making. those could be related. they could be related to concerns about the slowdown taking place in china. concerns about what the affects are going to be of the ukraine crisis. on the employment front, more bad news. france's rabbit sector employment fell for the seventh successive month in may. also in services and manufacturing. all in all, this doesn't bode at all well for the second quarter. first quarter gdp in france stalled. this indicates we will see another quarter of stalling gdp, maybe even contraction. jack kennedy, the economist making the point at the end of this release, the malaysian dashs looks set to any hopes of a recovery taking hold. in an hour, we will get the european -- the eurozone. i will be back with that. let's hope those pmi's aren't as depressing as this one. >> mario draghi is focused on the survey data. david, i believe it with you. we will talk more about the numbers throughout the morning. the big viewsfor from barclays, it is jim head ofk, the global asset allocation. thanks for staying with me. give us the nuance of what the fed said last night. talk to me about your perspective on global central-bank policy. arebank of england thinking about higher rates. the fed are talking about exit. there is a divergence in policy. what does it mean for you? what is the challenge when you talk about it? >> the interesting perspective is that if you look at macro volatility across the world, it is sitting at multi-year lows. we are at this intersection where we will finally get a monetary policy divergence that everyone has been waiting for for a long period of time. is look at the u.s., the fed setting the market up to start hiking rates at some point. while the fed says inflation isn't yet a problem, if you look at the numbers, inflation is picking up. complete opposite issue in the eurozone. by are likely to get an ease them in june. in terms of both interest rates and foreign exchange, you have a really interesting environment in the next 6, 12, 18 months. the market doesn't see it. >> which brings me to, if the market doesn't see it, how is barclays positioning for it? how should i be thinking about it? underweight u.s. equity you say because of the fed policy risk. it is much more natural to think about being long u.s. equity. >> when you look at the u.s. equity market and the u.s. credit market, these are two markets that have benefited from loss of things. one of those things is very easy monetary policy from the fed. you don't see that in asset prices across the globe but you see it in the u.s. i think better growth and the beginning of central-bank policy tightening is probably a mix that will still keep global equities doing ok. just not the u.s. areot the u.s. -- you taking your foot slightly off the u.s. position but you are overweight peripheral equities here in europe. is that predicated on tightening by the ecb? is it the big blockbuster headlines that we are all talking about? >> i think it is a two-part story. if you look at peripheral equity versus peripheral bonds, spreads have collapsed in the last few years. draghi says whatever it takes an risk premium has fallen. the equity market hasn't done the same thing. it has been waiting. the earnings have been slow to come but it looks like they are trickling in. if you are going to take a positive view on europe, peripheral equity is the place to take it. >> we have had the chinese purchasing managers index. if you look through the headline, it is still contracting. still a five-month high. how do you view china? it is an incredibly important part of our global growth jigsaw. >> without a doubt. our view for several months now overweightin start g a merging markets. the market took a very long time in this three-year adjustment and growth to recognize it. now i think the market is getting very negative on china just as chinese policymakers are telling you that they need to stabilize the ship. they have eased monetary policy. they are talking about speeding up the easing of fiscal policy. you have got this intersection of the market going one way and policymakers going the other. you are starting to see the growth numbers improve. >> which then takes me to the back of your report which talks about europe's exposure. this was a trend last year in equity markets. nature you have got your exposure to china and emerging markets. obviously, that theme still carries through to a certain extent. >> i think that if you look at europe, the one market that has done fantastically well in recent years has been germany. there has been two reasons for it. you have had very easy monetary policy. you have had exposure to emerging markets. thesaw german stocks at start of this year consisted with some of the worries around emerging markets. if emerging markets stabilize, maybe german stocks start to stabilize as well. i think they are overvalued relative to most other european equities. >> emerging-market equities, we talk sometimes about the currencies. the debt, local debt and equities. your perspective on those asset classes where would you want to be? the emerging-market story to me is a two-part story. the macro isn't as bad as people think. you see that with the improvement in china's data. the amount of risk premium that has been put back into these markets over the last year has been quite substantial. you are being compensated for the macro risk you are taking. >> we are going to leave it there. we have cover the world. right to have you with me. jim mccormick at barclays, thank you so much. take a newe -- parliament. voting starts in britain today and will continue across europe as eu residents hit the polls for the first time in five years. hans nichols joins us now to tell us a little bit more. context for me. i know we have had the indians go to the poll. that is huge. this is the first time in five years that europe speaks. logistically, india is slightly bigger. this is a massive undertaking. this time is different because voters aren't just electing a new parliament, but they are -- headse to have some of state of each government will be bound. unclear, onnt is when they select the next eu commission president which is where the real power resides. some challenges that election planners have, they have got to figure out how to get turnout up . since 1979, it is down almost 20%. that is really their challenge. 751 seats are at stake. i won't ask you if you have already voted because i know they have started in the u.k. and we would be violating some sort of broadcast rules. >> after the discussion i had yesterday, i have zero comment on that. thank you for putting that into context for us. coming up, zoopla's ipo. means fory what it daily mail. join me for that conversation with caroline hyde. zoopla, what is it worth? ♪ >> welcome back. u.k. media company daily mail half of its first results today as well as some key asset disposal news. crucially, the hotly anticipated sale of zoopla. here with more on the numbers and the story is caroline hyde. take me through the numbers. there is a lot of business in this group. >> you and i are typically house obsessed so let's steer away from that. youy mail tracks whether are celebrity on thing, job hunting, this is the company that had assets for it. online, thely mail most popular website. >> i find that amazing. >> it is all about pictures isn't it? >> lots of gossip. up 16%. up, profit cost savings are helping with profit but it is all about property management. this is why they are looking to dispose of job site. they are selling that off to axel springer, the german media company. they are getting money into that. notably it is all about the initial shares sellers. >> that is the big one. what is it worth? take me through some of the big traffic numbers. it isy seven years old, the second-biggest property website in the u.k. it is prime location, smart new homes. as well as managing third-party websites. worth about one billion pounds according to analysts. the scale of growth for the company, 40 million people access the website per month. 2 million make inquiries over homes from that. that is quite a good return. the notable thing for daily mail, they own 52.6% of this. about a half billion pound stake. they are not going to sell it all but they will dispose of some of those shares, as will the founder of zoopla. all these companies are going to be selling some of their shares, june. >> that is all very clap happy stuff. there is something in me that says they are selling their jobhunting site, cashing in on zoopla, it just has all the hallmarks of cash in and run. stay with me. i have the united arab emirates banking chief after the break. ♪ >> welcome back to "on the move ." i am manus cranny at bloomberg's european headquarters in london. 30 minutes into the trading day. let's give you breaking news here. beat at 56.4.s and you factoring comes in lower than the market had anticipated at 52.9. that is less than the consensus. it is an overall beat for germany. story toy different what you saw from the french. fedng equity markets as the says they are in the market for no change in rates for a while. you have just seen spain come back down. y for get over to jonn a quick reaction. >> how do you compare germany to france? they have been doing this for the last couple of months. ecb play this? how much weight does it put on germany? at some point, you have got to look at these growth figures in france, spain, italy. it is dire. you have a pmi contraction in france. that could be fuel on the fire for the ecb to do something about it. >> i look forward to the breakdown on those issues. time for the top headlines. fed officials believe there is no risk of inflation as the central bank continues to unwind its record stimulus program. minutes from the april meeting show that officials questioned whether there was a trade-off between lower unemployment and inflation. with both items still below target, officials believe stimulus will improve both goals. asian stocks rose after a chinese manufacturing gauge rose to a five-month high in may. the preliminary pmi reading from hsbc rose to 49.7 which beat economist estimates. the report feels optimism that china's economy is stabilizing. is sending mixed signals about when its troops will withdraw from the ukraine border. president putin said he plans to this weekend's presidential election by pulling troops back. however the defense ministry says they won't finish withdrawing until a week after the vote. attention now our to the middle east. one of the biggest lenders is the national bank of abu dhabi. i have got the privilege of having the ceo with me, alex thursby. right to have you with me. it is an interesting week. you have come to town. a lot of middle east institutions have come to town. what is that about? who wants to do business in your region and who in your region wants to come up here? >> i think the mood is very positive. stablebi is seen as very place to invest and very well located. it is interesting to note that 30% of gdp above singapore. i think you will see this flow into medical services, construction. it is not just europe. you are seeing a lot of investment from asia and africa. >> this is very much part of -- you have a couple of big themes. corridord about this that runs west to east. as somebody who has been to the middle east, i have gone north to south. this is a very different perspective on where the growth will come from. think there is to fundamentals behind this. the first is that the growth of the east is pulling both the middle east and africa along. if you look at what each region offers, basically they require each other. it is not a political alliance. it is an economic alliance. that is one key thing. behind that, the trade flows, the investment flows are all expected to the at double-digit levels. >> where is the big opportunity for you? -- i'ms north africa sorry, west over to east, which part of these businesses are you interested in participating in? >> the first place is where the large flows are. our rating allows us to build in the business of banking. we don't just have to lend. it allows us to deal with the wealth management product. establishing us across the west-east corridor, i believe in the longer run, these are the sorts of places where we start to operate. >> which brings me now to the concept -- when i think of the hubs of abu dhabi, the power to me is centered. goldman sachs, hsbc, standard howter, credit suisse, ubs, do you want to challenge these guys? is there an opportunity for you to get hold of good talent as we see changes in what is going on with people being let go? >> i think there is to themes behind that. people realize the world is changing. the high growth rates are ranging from 7.5% to 3%. some of the best people in the world now want to work in there and we fit in the middle. from thethe banks west-east corridor are better capitalized. a number of them are in the 15% tier one capital base. >> some people cry for that. >> within that, the liquidity. those banks are running somewhere between 100% to 70% loan deposit ratios. they have liquidity. what you are seeing now is the best people in the world beginning to see us as an attractive place to work. >> take the conversation a little bit more broadly. the last time i was down in your neck of the woods on holiday, it was just after the big property crash in dubai. what is your feeling? a nascent it is recovery, or i trust it? what is your take? that is how we look at your part of the world first off. >> i think there is always a little bit of volatility in high-growth areas. hong kong property markets. i do believe what has happened .fter 2009 was a learning curve in the long term, i see this as a very sustainable model. >> dubai expo is coming up in 2020. that is going to be great for the region. it focuses the international attention on what can be done in the region. is that another opportunity for nbad in terms of the next five-year plan? >> our local market will expand. i think what is happening is it is bringing more people in, which gives us an opportunity. opportunitiesous not only for the fundamental of suchountry, but also evens as expo. >> as an ex-pat, i have got to ask you this. there has never been a tax done in your neck of the woods. can you envision a day when taxes will -- >> not on the medium-short-term. long-term, who knows? i do believe as a philosophy that private enterprise knows how to allocate resource better than government. that is the philosophy that policy makers have. >> we will leave it there. great to have you with us. come back and talk to us again. -- alex thursby. up next, president putin lands a deal that will last a decade. that is not the only partnership between russia and china. we will head to saint petersburg next. we will find out why they are looking east. ♪ >> i am manus cranny in london and this is "on the move." petersburg international economic forum is russia's biggest gathering of business leaders this year. it has been controversial as sian and western relations are strained. ryan chilcote is live in st. petersburg with a guest who has been strengthening the sino russian relationship. >> that is right. he is the ceo of the russian direct investment fund. thanks for joining me. i want to talk about shanghai and the deals with china in a second. first, i talked to the economy minister. he said the threat of economic sanctions thus far has been a great the tarrant. -- deterrent. he likened it to nukes. he said it won't happen. do you agree? >> yes. i think it is the right description. we want a peaceful solution. what we have seen is that sanctions increased will not achieve its objective. the idea of sanctions making doesn'tore conservative allow the problem to dissolve. lots of investors around the world are aware of the consequences. likening it to nukes is the right analogy. russia has a debt that it needs to be repaying. if there are sanctions, -- i think hopefully we are moving forward. economy doesn't need another major crisis. trying to find peaceful positive solutions is what we have got to do. >> a lot of ceos have stayed away. a lot of european ceos have stayed away. you deal with private equity and sovereign wealth funds. are they staying away as well? we are managing $3 trillion, which is almost $1 trillion more than last year. the idea behind this is to be a completely economically focused not only in russia but outside and building strong partnerships. it is through the u.s. and european investor -- >> even on the private equity side? let them speak for themselves. we have some from u.s., some from europe. frankly, the amount of energy ence,was put in deterr maybe putin is solving some other issues. or secretaries were making phone calls to the ceos. let's talk about shanghai. you did some deals there. president putin oversaw the signing of that gas contract. of thisthe whole idea new relationship with china? is this kind of an insurance policy against further isolation from western europe and the united states? >> the china relationship is key for russia. china is becoming number one economy in the world. there is a very strong basis for trade between russia and china right now. strong fundamental reasons to have this relationship. >> plus the chinese don't complain about ukraine. >> china and russia signed agreement against unilateral sanctions. unilateral sanctions are nuclear weapons that can make the economy of the world explode. also there is three deals we have done in china. believe the investments will go romantically and the gas deal is important not only because of gas supplies to china, but we are looking at a $9 billion petrochemical plant that will be enabled by this contract. it will enable lots of investment. could the russian government give you 10 billion to: best for foreign investment -- to coin vest for foreign investment? >> we have up to 8 billion that could be contributed to infrastructure. >> this is new money that would be made available. capital and ity would allow us important projects. one is to increase internet penetration in russia. another is a russian grid system. for infrastructure projects we now have a debt component that allows us to do projects that otherwise would not meet our criteria. we can now make lots of large investments. >> your mandate is to increase foreign investment in russia. given everything that is going on, fair to say that you have to handicap your expectations right now? >> difficult environment. , thank youmitriev very much for your time. that was the head of russia's direct investment fund saying they are looking at the middle east and china for investment. >> ryan, let's leave that there. that is one of the themes that has come through in the past hour. well done. we look forward to more roaming coming from st. petersburg. "the pulse" is up at the top of the hour. mark barton joins us from the newsroom. more conversations to come from st. petersburg. >> it is all about ryan today. st. petersburg, the international economic forum takes front and center stage. we have a full lineup of guests. ryan is there. we have the ceo of the moscow stock exchange. the president of summer group. two big interviews coming up in "the pulse." in our new energy segment, it is a fascinating chat with the founder of a company that makes biofuel from waste coffee grinds. here is a fascinating fact for you. london coffee shops and instant coffee factories produce over 200,000 tons of coffee waste each year. with those 200,000 tons, you can make 1.3 million liters of biodiesel. how many of those tons are from manus cranny's coffee drinking habits? finally, big day for data. just had some pmi numbers out of germany. we have got the eurozone data at 9:00. we have the fed minutes to discuss. china manufacturing as well. when is the first rate hike going to happen in the u.s.? paul joins us. is a show. see you later. >> we certainly look forward to that. that is." -- that is "the pulse." royal mail is the biggest loser on the stoxx 600. the company posted revenue from parcel delivery. parcels made up 50% of the group's revenue. the company has been trying to adapt its letter focused business toward more lucrative package delivery. electric component shares are lower. the company distributes electronics products and calls itself amazon for engineers. profit came in at 100 million pounds. >> things are picking up and generally getting better. it is much more global. when the world feels good, everything follows. the hotspots -- japan is doing very well but in europe we are more taking market share. the u.s. is strong. expects a change in business conditions this year. it posted its full-year earnings that matched estimates. growth will continue to be driven by developing markets. adverse currency movements will remain a difficulty. coming up, unilever sells sauce. ofwill dig into the shedding the sauce brands next. ♪ >> welcome back to "on the move ." i am manus cranny in london. .nilever the sale of ragu and bertolli will write over $2 billion. for more on the story, jon ferro has the news. 2 billion dollars is quite a sizable deal. >> it is. the sale, not a surprise. the amount of money, not a surprise. unilever a link back some food. they are going into the health and these the business -- health and beauty business. they sold skippy peanut butter last year. selling ragu, not a big surprise. thoseet revenue out of two products. it is a big sale. 2.15? that is a little bit higher. let's talk slightly more broad context. we had disappointing purchasing managers index from france. and germany possibly is the ballast. >> we say no shock and france but the market was expecting expansion. it was certainly a disappointment in that regard. when you have gdp at zero percent, we were looking for a rebound in this quarter. the main pmi is showing a contraction. that is not pretty. germany, are they going to bail out the rest of the eurozone? you have pressure on them to have some more domestic consumption to help the rest of the eurozone. are they going to start doing that? germany doing something, the rest of the europe stumbling. what can the ecb do about it? what music at the market reaction, europe a little bit higher. the peripherals have rallied. >> happy pmi day. it will take a very strong overall pmi day to alter this. the ecb will throw everything short of the kitchen sink at the economy. everything short of large-scale qe. consensuss to be this . morgan stanley called for a higher euro, never got it. perhaps it is the beginning of a bigger move. >> the expectations for next month, how high are they? we read a lot of resource. >> they better not disappoint. >> mario draghi talking about heightened expectations. he is a big part of that. when he says, expect some action in june, the market expects some action in june. >> let's hope he can rally all the members of the european central bank to one single cause. thanks for that roundup. we are waiting for that final roundup in eurozone purchasing managers index. the composite is expected to dip slightly. still expanding at 53.9. that is the view, just down from 54. you will see the move there. mark barton is back with "the pulse at the top of the hour. stay with bloomberg. ♪ >> spotlight on st. petersburg. russia's biggest business summit kicks off. we are live with the chief executive of the country's biggest stock exchange and largest carmaker. >> cashing in on the u.k. housing boom. >> stock starts trading today as china's answer to amazon raises one point that it -- $1.8 billion in its u.s. ipo. welcome to "the pulse."