will the focus shift from fx to fiscal stimulus? and the hud for the missing egyptair airplane enters its second day in they've dismissed reports that debris from the jet have been found. it looks like we are going to get a positive start. watch the luxury stocks. the dax is up by 0.9%. in 29 minutes time looking solid here in europe. >> it looks like less concern around the world. this is a lot more than we are pricing in at the beginning of the work week. it doesn't seem to be affecting markets as much today. we have asian markets up overnight. their biggest back-to-back slump in a month. brent crude oil is rising as well. at 48 56.p there trading almost and parity the dollar index has been earlier.ttle bit that may be because the slight possibility of a june fed hike has been priced in over the next couple of days. >> the new york fed president bill dudley says the federal reserve is moving closer earlie. that may be because the slight possibility of to raising rates as one of the -- at one of the next two meetings. >> june is definitely a live meeting but what we do depends on how the economy is going to evolve. we're working -- looking at the market expectations it looks like june is one in three. the tightening through the july meeting looks to be about 60%. meanwhile, the double line capital at blackrock says it is time for bond traders to start pricing back in the federal reserve. the chief investment officer at blackrock says officials are likely to wait until july to gauge the outcome and implications of britain's eu referendum on june 23. france's foreign minister says there is total cooperation between his company and egypt. after the plane flying from cairo to paris finished overnight. dismissedorities reports that debris from the aircraft had been found. investigators say that the flight made a series of stunt -- sudden turns before descending rapidly. the pilot sent no distress signals. >> at 3:30 the aircraft was approximately 10 to 15 miles inside egyptian airspace at an altitude of 37,000 feet. it executed a turn of 90 degrees left and then 360 degrees for 37,000ht, dropping from to 15,000 feet. then the picture we had was lost at 10,000 feet. >> the u.k. economy has slowed and may require additional stimulus if it does not rebound quickly. in the event of britain opting to stay in the european union. he says if additional stimulus more quantitative easing could be on the table. >> a group of employees examining whether they improperly traded. the company says it is reviewing a transaction but may have involved unacceptable conflict of interest and will take the disciplinary measures where appropriate. global news 24 hours a day powered by 2400 journalists in more than 150 news bureaus around the world. you can find more stories on bloomberg top . g7 finance ministers and central bankers are gathering in japan. the number three economy to avoid weakening the yen. the u.s. has warned that currency intervention will not give boost to global growth. japan for is live in more. what exactly is washington saying. what are they doing -- yvonne: it seems the u.s. is nuts -- showing much sympathy when it comes to currency manipulation. that germany as well as china has been put on this watchlist for currency manipulation. the finance ministers meets in about an hour from now. when it comes to what this what has official said it is basically that global growth in trade flows are weaker than it should be that this really shouldn't be something they should be doing because any movement can signal they're trying to boost competitiveness and ultimately this is not going to help when it comes to the recovery in the global economy. like intervention and currency exchange does not dominate the headlines here. the bank of japan governor -- he of declined to comment and avoided the question altogether. he did talk about the policy of little bit talking about how negative rates are working. to policy makers other countries and they understand the negative rate policy. we are ready to take any actions if necessary, anytime. referring to the topic of brexit. when it comes to the impact on financial markets. and u.k. growth. those issues have been singled out. guy: yvonne, thank you very much. in our next guest and kick all of this around. good morning first of all. are you expecting any big ideas out of g7? >> no. in terms of what can be done at key point to address the concerns around the global economy, not very much. meetingat the shanghai we seem to have had this deal done on currency volatility and it does seem as if this will be more like do your own thing and get on with it. >> the policy levers are very weak. things like yen intervention are a bit of a sideshow. it keeps dialogue and communication channels open. delivery from something like this should below. >> i thought it was fairly amusing that the u.s. would warn on currency intervention. it hasn't worked across central banks around the world. they cannot achieve any action there. i know canada is asking for more spending around the world. case to bethere is a using fiscal policy more aggressively. looking at the debt to gdp ratio, you can see the difficulties that are out there. there is a case for it nonetheless. it's a matter of whether central banks and the public. the general public consumption will buy a story of more public money. monetary policy levers are looking pretty tired and exhausted at this point. guy: what the market is looking for now is what is next. we talked about fx. fiscal policy is an open question. what comes after this? what are we going to do? how is the global economy going to be stimulated to see that we get decent growth numbers? we have tried everything at this point. >> we see the limits of negative rates already an action in europe and japan -- in action in europe and japan. i think the fiscal policy has to be the next option. i don't think it will be helicopter money. ofhink it has to be a case subprime inc., using fiscal policy, infrastructure spends. up next -- guy: up next we are on fed watch as more voices suggest that could be a hike. we will hear from bill dudley. ♪ >> i am matt miller in berlin and you looking at a live shot of the brandenburg gate. live in london, 7:40 four there and 8:44 here. let's get to the bloomberg business flash. >> france's foreign minister says there is total cooperation between his country and egypt. for the mystery surrounding the disappearance of the egyptair jet has deepened after greek authorities dismissed reports that debris from the aircraft had been found. the palate -- pilot sent no distress signal. -- richemore say -- cartier jewelry also reported for your earnings that missed estimates. aberdeen asset management ceo says his firm has resisted interest from competitors seeking to buy the company. do get never tried -- we a lot of people wanting to buy us which is very nice but so far we've managed -- >> european? >> yes european. greatmanagement are business because of the return on capital is so high. it's profitable and predictable. there is a lot of interest but being independent is a massive benefit to us. >> that is your bloomberg business flash. thank you very much. the new york fed president bill dudley says the federal reserve is moving closer to raising interest rates at one of its next two meetings. he echoed sentiment from the minutes in the fomc meeting published this week. >> what we do depends on how the economy is going to evolve. looking at the market expectations, i think it looks like june is roughly one in three and tightening through the july meeting looks like about 60% of the federal funds futures market. ofthe federal reserve bank richemont's president jeffrey lacher comfortable with a june rate hike. >> i was control with the june protection -- projection. four rate increases this year. suggestshink the data that the u.s. economy suggest much of a change in views about the appropriateness of that. get as close to that as we can by the end of the year. >> let's bring in our guests ahead of asset comedic asian. -- communication. we have heard from so many different fed governors out of dallas and atlanta. we just heard from lacher. live meeting.a look like weted would seriously consider it but we only have a 28% chance as far as futures traders are convinced. where do you put the odds of a fed rate hike? >> lower than 28%. i do not think that brexit coinciding rate hike would work. this year is a case of now or never because i do not think that the fed would like to repeat the mistakes of three years ago when it effectively held back. think it is a case of pushing rates -- etermining guy: what about july? but we is very possible, have to have a flow of decent data in the run up to it. >> the data are improving. the market reaction to what they been saying over the past three days are really quite positive. >> we have to look. the verdict would be what happens to the slope. guy: fair enough. this is the u.s. yield curve. the curve has flattened out, the front and has reacted. >> it has been flattening for some time. this is the big challenge and this is what is different to two or three years ago. the market is disbelieving the fed. if they raise rates too quickly the economy will not stand it. >> which it of the curve are you worried about? the 10 year is an anomaly. look at the term premium. >> the term premium is negative. is a matter of how you read the messages there. if you look at break even inflation rates, it's trying to the market is still not convinced. but it does not believe the fed fund rate can get to the 3% that the fed would like you to believe in the next two years. that is the message coming through. >> let me ask, we have some amazing headlines. armani says he is not interested in the unicredit ceo job. he also says that the ecb -- the low rates have become an excuse , thatid government reform is pretty obvious and that is a case across the globe. what i find most interesting, you mentioned brexit, he says that brexit would be a big trauma for europe which most educated commenters have agreed on over the last couple of months but most interesting, he says that brexit might bring about a more unified european union. i should make it clear that i'm only reading the headline here but that to me is a shocker. that is a big one sing that wrecks it would bring a more unified eu. what do you think about that? >> i would strongly disagree. is inr existential crisis store if brexit happens. it is as stark as that. guy: i'm surprised he said that and i will wait and see whether there we're lost in translation element. >> here is what i'm thinking. maybe what he's saying is that the brexit vote may bring about a more unified eu. if the u.k. votes to stay that would make the union stronger. a try want to clarify. and just reading the headline here. we will continue to follow these headlines and we will get clarity on that. making some very interesting points there. japan will stay with us. we are minutes away from the open. up next, we will look at the potential corporate movers. analyst missing estimates. what is going on in luxury? ♪ guy: we are minutes away from the european open. some of the stocks to pay attention to, richmont in the focus today. sales plunged 18% in april. also closed lower this morning on a negative read. they are both in the watch business. just a quick comment from you. when you look at the consumer around the world at the moment, the only driver of growth is the -- by lowconsumer is bouyed inflation. incomes for the majority are doing all right. that's the only can of growth lever out there. it's the hardest nut to crack. if your fiscal and monetary levers are exhausted, and you consumereliant on the it is tough to follow through. guy: he will stay with us. the market open is coming up next. guy: good morning and welcome to on the move. brief.s your morning matthew: i do indeed you don't fight the fed. blackrock says it is time for traders to price in a move. it's a new york fed phil dudley pointing toward june or july. is the bond market ready? finance minister tells tokyo to give intervention and miss. will the main focus focus test will the main focus shift to stimulus? the hunt for the egypt airplane enters a second day. greek authorities dismiss reports that debris has been found. guy, a mystery continues. guy: it does. we will talk about that. let me tell you european equities are expected to open on the front foot. the fed back to beginning to fade. the market just beginning to kick off. let's show you where we stand. these numbers are green in just his second. ftse up .2%. back about that 6000 line. the dax, just wait for the german market makers to get going. you expect those numbers to climb a little bit. 1%.cac up a full let's get the details on what is driving this rally with nejra cehic. nejra: it does seem the impact of the fed minute beginning to fade a little. it seems like a slightly weaker open with the stoxx 600 up .2%. all industry groups are higher, as if they were in asia. in asia we saw energy stocks leading the gains. , leadingocks up 1.6% this rally on the stoxx 600. we are seeing wti and brent rebound. wti at a six-month high. it is financials that are also the best performers on the stoxx 600. let's take a look at some of the stocks that we are watching. some moves expected in the market, starting with the luxury sector in general it keep an eye on that. richemont forecast a difficult first half after sales plunged 18% in april. it also reported full-year earnings that missed analyst estimates, really dealing a blow to the luxury goods industry. down 5% at the open. daimler, i am not sure that is today, but it has been called -- it is up 1%. this is after it said its profit will be lower this year. back in 2015, it increased its estimates for forecast. we got this after the market closed yesterday, it said truck sales are falling in north america and middle east. related expenses expected to be -- we are seeing in gains. we are keeping and i guess eyeing an eye -- keeping an on selling for just shops to get approval for a merger. some analysts seeing this as positive, meaning the merger could happen as long as these sales go ahead. a spokesman said it is a significant step. we'll see how that stock opens as the day moves on. guide, matt. muchew: thank you very deutsche bank has halted bonus payments while examining whether they had improperly traded from their pas with the firm. the company is reviewing a transaction that may have involved unacceptable conflicts of interest. they will take disciplinary measures where appropriate. deutsche bank held its shareholders meeting yesterday. i was there. you saw me watching bloomberg in the morning. .nvestors seeming confident the co-ceo john cryan will take over as so ceo. gave him more than 90% vote of approval. incidentally, the chairman got an almost 98% -- 87% vote of approval there. that is a better result than some had feared. deutsche bank really struck a positive note yesterday. john cryan speaking excellent german. i was very surprised when he referred to german -- germany as the homeland. of course he is a britt. shareholders that went into the meeting, angry because the shares of them cut in half, seemed really pleased. they seemed really impressed after the speech and the q&a session that followed. we had these headlines. the ceo of ubs, he was making comments about smaller banks in europe saying he does not think all of the banks in europe are going to survive, especially the smaller ones getting hit hard. guy: this is an interesting point. look at what is happening in the global banking sector. i am not saying we are going to see deutsche becoming one of those. you look at what is happening in europe and you think about the banking sector and you think about the u.s. economy is surging ahead because it has better capitalized banks. let's get tapan datta's comments. europe's have -- europe has too many weak banks. is merging some of these institutions the way to go? tapan: yes it is. i think we need a real step up and consolidation. -- and consolidation. guy: the regulators should be forcing -- tapan: i believe he is on the case. i think it is recognized by really a lot of folks. guy: what does he do? busy raise tier wants -- does he -- does he raise tier ones? tapan: i am not sure it is agreed by the makers themselves that consolidation is needed. the brexit question desk to really get that degree of consolidation, otherwise we will have more problems -- to really get that degree of consolidation, otherwise we'll get more problems down the road. guy: you can see them being the hubs. any help banks that you can see? -- anynot at the moment help banks that you can see? tapan: not at the moment. you need to think in terms of that high-level structure of banks and the competition. one of the things you don't want -- in some sense, even though it is very unconsolidated . the level of competition may not be strong enough. you want to get that balance right. i think regulators to do a better job in pushing that through. matthew: we've had some clear vacation out of rome. he is saying it would be a great trauma for europe if britain voted to leave the union, but that eventually positive implications, bringing the union more strongly together might be seen. do you disagree with that? over the long-term we could see the eu's remaining safety be more integrated? tapan: i don't think it is a big breakup risk as such. time whencomes at a it is realistically, what have we seen more of? integration? or fragmentation? we have seen more fragmentation. europe is more fragmented than it was a few years ago. brexit will hardly help of that cause. it will accelerate that aggregation process. -- that fragmentation process. i think it adds to that momentum which is going in the wrong direction for the entire eu project. matthew: we do see momentum going in favor of the remain campaign in britain. it seems as we it close to the june 23 vote, more people in the polling are looking to remain. tapan: votes are all of the place. after the general election, i think we need to be very skeptical but the messages are telling you. it is a clear -- it depends on how many people turn out on the day. i think it is unlikely that it will happen, i would not want to be putting too much money on it. the odds are not favorable. odds as far as the bookies are probably too low on brexit happening. it guy: let's talk about how you as investors view all of this? you wonder what is going to bring them back. valuations such as data starting to improve european economy. you get brexit, how long are they going to stay away for? tapan: in terms of investor flows into the market? that is a -- that is one of the best things going for it. everybody displays the rally. that tells you that potentially it could go -- guy: is it wrong if the u.k. decides to leave? tapan: i think all bets are off. my sense is the u.k. will not be able to avoid the fallout from that. guy: tappan, stay with us. up next, we're going to look at richemont. under pressure. down 5%. that story next. ♪ guy: 12 minutes into the market day in europe. mystic a look. -- let's take a look. the fed paying attention to this kind of stuff. if the market is taking its move toward june or july, that is going to encourage members. where up .8% -- we are up 8%. unicredit is having a solid day. you can see it in the forms of london, the miners are moving very nicely. that is the main story we are watching. .he latest news down here >> bill dudley says the federal reserve is moving closer to raising rates in one of the next two meetings. he admitted to the fmo sees april meeting which will publish this week. >> it was a live meeting but it depends on the economy is going to evolve. we're looking at the market expectation. -- tighteningy through the july meeting looks 60% if you look the federal funds futures market. -- has: -- >> chief investment officer of global fixed income and blackrock says apple officials are likely to wait until july to gauge the outcome and applications of britain's eu referendum on june 23. france's foreign minister says total cooperation between his country and egypt after a plane flying from paris to cairo vanished over the mediterranean. other mysteries surrounding the disappearance of egypt air jet has deepened after greek authorities in this report says debris have been found. investigators say the flight made a series of sudden turns before descending rapidly. 66 passengers and crew were on board. the pilot sent no distress signal. at 3:37, the aircraft was a insidelly 10 to 15 miles egyptian airspace at an altitude of 37,000 feet, executed a turn of 90 degrees left and then a turn of 360 degrees toward the 37,000 theping from 15,000 feet. 37,000 to 15,000 feet. the u.k. economy has slowed in may require additional -- if it doesn't rebound quickly in the event that britain opts to stay in. if additional stimulus is needed, those rate cuts should be on the table. he also said so-called helicopter money is inconsistent with the federal mandate. bonus paymentsds to a group of employees while investigating whether they improperly traded -- it may have involved context of interest and will take disciplinary measures where appropriate. global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. you can find more stories on the bloomberg at top . much at thank you very richemont shares are lower after that company says it does not expect market of luxury goods to improve after sales plunged 18% in the month of april. the maker of rta jewelry -- of to 2.06jewelry fell billion euros. year foren a difficult luxury brands. ,ata ahead of asset allocation -- i continue to hear negative stories out of your on luxury sales. what is going on in the market, specifically in the european market? tapan: my sense is among the wealthy -- among the wealthy is low. there is a sense of despondency. you can see this in the way they are managing their wealth which casherly being held in rather than investments. the caution is coming through. europe is one part of the story. the other is the other big markets like china where they are other negative drivers -- where there are other negative drivers. guy: china has been the one just been causing concern. story and whatng if the chinese authority has started to crack down on that. the story really tense to the luxury sector. tapan: the luxury driver is still with us. until the policy changes, we will see. at the moment, it is hard to argue that that is going to be reversed. too much political momentum into that drive. outlook looksthe promising anytime soon. matthew: across the world, do you think it is a tough outlook across the globe? the pointgoes back to of the sentiment. , there'saying disbelief in the market rally. it doesn't mean that is here for the next few years. what we do see is these ultralow interest rates. the fact that growth is feeble around the world. the china market is still adding up to a year of subdued conditions. guy: how worried are you about china? plenty of important investors are now saying china, their problem is our problem. it is not as insulated as we think it is. yes, it may be more insulated than the u.s. economy is in terms of the read across. is this one of the things you , 2016, how is it going to develop? .co it is actually vital. is thinkingthat incrementally, that is a big change. that is hugely worrisome because no country that has the scale of that big up the scale of debt buildup -- scale of debt buildup. china is different. it is centrally planned. how different china is and whether it can manage. the market feels the market desk feels that china can still negotiate its way. -- feels that china can still negotiate its way. china does not make it through this big debt speculation -- debt accumulation problem. matthew: getting away from luxury. china,eresting play in people that are moving into the lower middle class, right? 6%,ong as we have growth of 5%, 4%. there are going to be a massive amount of people who are going to be buying more shoes, i am talking about shoes. tapan: totally. that sort of story is not controversial. the issue is given the imbalance that is in the economy, canada china negotiate its way out of the -- can china negotiate its way out of that? china did appear to change course. and it restimulated the economy which i think is a pretty difficult exercise given the debt stocks are still high. that is one issue or the other is the political infighting that we see in terms of who is reading policy. is the other issue about how china navigates its way out of the current difficulties? you've got to be a little bit careful in terms of expectation that all will be fine. it is not quite as straightforward. history is not on the side of china, in terms of the scale of the buildup and whether it manages to navigate. guy: that politic story at the top of the chinese economy absently critical. -- absolutely critical. tapan datta, think he so much for spending your time with us -- thank you so much for spending your time with us. the eldest son of french billionaire. our exclusive conversation is coming up at 9:40 u.k. time. it is our chart of the hour. we will go to germany. it is all about the dax. ♪ matthew: welcome back to bloomberg. that's bring you an update on egyptair. france foreign minister says there's total corporation between his country and egypt after a plane flying from paris to cairo vanished of the mediterranean. the mystery surrounding the disappearance has a deepened after greek authorities dismissed reports that the debris from the aircraft have been found. investigators say the flight ms 804 made a series of sudden terms just a sudden turns before -- a sudden -- sudden turns before rapidly descending. 66 passengers and crew members were aboard. the pilot sent note distress signal. it is time for our chart of the error -- chart of the hour. nejra cehic is here. nejra: this is been one of the worst performers this week. my chart shows it is pushed its valuation versus the stoxx 600 to a record low. we are talking about estimated earnings on the dax, about 12 times. of course, the dax almost entered a market last month. we see high on april 23. since then, the core ratio on this has also been increasing, meaning the traders are getting increase -- increasingly bearish on the germany benchmark. concerns that weak global growth could affect exporters on this index. the question is how low does the evaluation need to go before this becomes a -- help low does the valuation need to go before this becomes a -- next, a loyalist is set to take the premier post. we're talking about the prime minister's post. where life is them both -- we are live from istanbul next. ♪ show me top new artist. ah, ha ha. show me top male artist. my whole belieber fan group. it's not a competition, but if it was i won. xfinity x1 lets you access the greatest library of billboard music awards moments, simply by using your voice. the billboard music awards, live sunday may 22nd, 8/5 pacific, only on abc. guy: welcome back. you're watching "on the move." let's see how things are shaping up. this is how the market looks here. where of 4.5 -- we are up 4.5% on the month in the market -- on the london market. miners.pside, we have some of the banks are trading higher. the luxury sector is being knocked. richemont trading lower. swatch is trading lower. some of the luxury stocks not finding their feet this morning. as get more details -- let's get more details from their change. jumping.icredit it is considering the sale of a stake in fin ago bank. this of course, different options to boost capital. we have seen the shares move higher. the final decision may only be taken after the management change. so no decision has been made at the moment. possible management change been made -- that may affect the review. this is the worst performer, quite simply first quarter sales down 4%, even though the outlook for the four year for 2016 remains unchanged. the sales number that is driving this stock lower. richemont and other luxury stocks down as well. richemont down after a forecast of a difficult first half. sales plunged 18% in april. reported for your earnings and -- earnings that beat analyst estimates. guy? matt? matt: thank you very much. at a is set to become turkeys -- erdogan's loyalist is that the become turkey's next prime minister. benjamin, how significant a step is this for erdogan? how is this working procedurally? is it the passing of a bill that makes this possible? turkeys -- erdogan's loyalist is that the asjamin: no, it starts internal party politics. the party accepted a new leader. officially selected for that role. after that, he will become the prime minister and asked to form a government. guy: can i pick up and talk about what this means. do we now have a de facto executive presidency? benjamin: we are moving towards that. most -- into one of the in politics. the prime minister is the most powerful position in turkey. in reality, the response ability will now be to make himself relevant. he has been accepted that she has been -- undermining the powers of the prime minister. turn those powers to president erdogan. he wants to end a two headed system of government in which the two heads are the prime minister and the president. guy: how do you think european politicians will be doing this? we draw a line under that and say we are going to have to start again? how does it work in terms of the local relationships? -- in terms of the clinical relationships? benjamin: i think it does it all into uncertainty. advancing the eu refugee deal. anyone took a much harder line -- erdogan took a much harder line. it is not clear who european politicians are going to be interacting with. what is clear is the ultimate decision-maker in this country is resident erdogan -- is president erdogan. guy: joining us now, gary greenberg, head of the emerging markets. if global investors are worried about turkey before, does this signal a new concern? we now have an executive residency. --executive presidency. how do you invest in a country --? >> the outlook for the turkish lira. there are two other factors that influence the turkish lira, oil, because they have a deficit. with low oil prices, that shrinks. the other is the dollar, because turkey has a very low foreign exchange reserves. a strong dollar makes investing in turkey a difficult game to play. if the oil price goes up from here, that will make it difficult and the turkish lira will depreciate. if the dollar stays modest in terms of appreciation, if the oil price remains at this level, then there are some positives for turkey. the economy is going pretty nicely. inflation is coming down. valuationare historically cheap. guy: it could be so much better. the story was radically different. to come back to the currency. you look at what is happening -- currency, you look at what is happening to the central bank. he was the guy that would not do what erdogan wanted. gary: there might be a replacement -- guy: where do you go after that? gary: this is the problem in many emerging markets. difficult. what one would want in terms of politics. a government which representation really is a broad. where you have an orthodox economic policy. we are not getting that any movement -- in many emerging markets. it is a difficult situation. we viewed turkey as neutral, because all of the politics are getting worse. the economy is ok. policieshodox economic , especially monetary policies which are probably coming, however are going to hurt in the long-term. turkeys long-term outlook does not look that great. guy: gary comes to that thing back in your ear. matt: i wanted to ask about emerging markets. there come back into vogue. is from the dollar makes that type of investment makes it more difficult. a littlelike we have bit of divergence. the fed saying it is becoming more hawkish. the ecb, we're getting headlines accommodative policy stance have warranted. if the dollar continues to strengthen from here, isn't that bad news for all emerging market investments? the: it is bad news for commodity exporter, such as brazil, mexico, south africa and countries which are dependent on foreign capital. turkey would be one of those. south africa, again another one of those. the countries that have large surpluses that have a huge foreign exchange reserves, such as china, korea, taiwan, those countries will be less affected. overall, the benchmark that we have seen will probably give up some of its gains. within emerging markets, partly the asian economy and the ones with strong external balances will do better. matt: what you think about the asian economy right now? china has been a topic of conversation a lot lately, as lending seems to be getting out of control their -- out of control there. the sinking yuan makes it difficult for the japanese to strengthen their yen. a summer dollar -- a stronger dollar is a blessing across the board. gary: china has been slow on reforms. that is a worry as a previous guest said. it is really quite difficult to see the country making long-term progress without doing something about its debt. economy is not giving the policymakers enough rope to bring in austerity and cut the debt growth. china is in a difficult situation. guy: at the beginning of the year, he said he had these massive outflows. maybe as we start to talk about the fed raising rates again, you can get back to that position. we are getting to interesting levels in terms of that. you could see a flight. that would be bad news. erika i think that is true. the fed -- gary: i think that is true. the fed has to proceed carefully. guy: is that the biggest risk? unwindingd be a big in the fixed income rate. the chinese economy teetering on the edge. gary: i think the fed would like to put together -- for the next recession. they would like to raise rates a lot more than they are going to. that's because the chinese currency is delicately balanced. guy: how bad is a get in the commodity currency? you see this big drop in the commodities have come back. anything seems to be stable. i am not sure that was engineered -- everything seems to be stable. i'm not sure that was engineered. the currencies are in danger because the rally was based on the dollar, and not based on the supply coming out. dawn based onse the idea that china was going to be growing quickly again. china has a stimulus -- had a stimulus but the stimulus is being taken off. we are not going to see a huge recovery. some has happened that it is going to trended downward again. there's a lot of risk of their. that's a lot of risk. -- a lot of risk there. ms 804.next, the mystery. we are live in the french capital with the latest. ♪ matt: after spending a day in frank from yesterday,, is paying me back with a gorgeous -- karma is paying me back with a gorgeous -- the tourists starting to amass for a weekend in the german capital. this is on the move. i want to take a look at the equity markets here. where up across the board with gains -- we are up across the board with gains of 1% or more on the broader indexes. easy the stoxx 600 up .1%. .he dax in frank for gaining the cac up just as much as the ftse at 1.4%. energy, materials and health care stocks lead the way. mean.get to haslinda a haslinda: richemont shares are lower after saying it doesn't expect the market and luxury goods to improve after sales plunged 18% in april. the maker of jewelry reported for your earnings that missed analyst estimates. eurosl to 2.0 6 billion just 2.0 6 billion euros. -- 2.0 6 billion euros. -- reduce costs in response to a revenue slump, that is according to people with knowledge. they say at least a dozen london-based employees lost their jobs this week. positions were eliminated in equities, debt, capital markets, leveraged finance and real estate. aberdeen asset management ceo says his son has resisted interest from competitors seeking to buy the company. francine lacqua was told he plans to remain independent. >> i don't plan to sell the business and we did get a lot of people wanting to buy us. so far we have managed it. europeans, australians, everywhere around the world. asset management is a great business, because of the return on capital is so high. it is probable -- profitable, it is predictable. being independent is a massive benefit. haslinda: the entire interview in full tonight. -- tonight right here on bloomberg tv. that is your bloomberg business flash. guy: let's return to one of our top stories. the mystery of the disappearance 804.ypt flight ms 66 people were on board the jet which left paris after 11:00 p.m. on wednesday on route to cairo. its last known location was over the mediterranean sea. , they are having a pretty close look at security. greg: they certainly are. they have been going over the tapes tot -- tapes -- see if there was any unusual activity, anyone who should not have got on the plane. they insist there were lots of -- there was a real effort on the evening news shows who insist on how well these screen -- how well they screen check bags. let's, we do not know if there is a contact. -- there was an attack. tunisia.en in cairo, this plane has traveled quite a bit. it is not necessarily in paris if something was introduced. if that is what happened. there is the airport in paris which is in great pains to stress how good it security is. matt: from your coverage of similar tragedies throughout the years, don't we have technology in place so that when commercial airliner goes down, we can pinpoint its location fairly quickly? is there certain kind of accidents that put that technology out of commission? greg: this came out in all previous crashes. to track theystem exact location of every plane. there is radar. planes check in periodically. once that radar -- once they are lost on radar, that is there --s there is not a system lost radar, there is not a system. it should be transmitting data to some base where it is being stored, rather than having to physically retrieve the black box. we are not there yet. the once they get below radar, that seems to be where the gap emerges. asseems they have a picture to what happened to the aircraft. thank you very much. greg viscusi joining us out of paris. double line in blackrock says it is time for the bond market to stop pricing and central-bank action. talking about the fed. more next. ♪ guy: welcome back. you're watching "on the move." we are 52 minutes into the market session. the market is up in london. i think we should be looking at big bend. data accurate here at bloomberg. let's talk about some of the highlights. matt. matt: let's look at what is going on in the u.k. and the ..s., 3:00 p.m. in london u.s. existing home sales data comes out. after the market closed, we are due to get updates on several economies on the side of atlantic -- side of the atlantic, including kuwait. banks central bank governors -- central bank governors wrap up their meeting tomorrow. bill dudley says the federal reserve is moving closer to raising interest rates at one of the next two meetings. his remarks echoed sentiment in the minutes which were published this week. >> two is -- it depends on how the economy has evolved. in looking at the market expectations, i think it looks tightening looks about 60%. matt: federal reserve bank of richemont -- richmond gave positive signals about a june rate hike. >> a december projection of a median s&p projection. data suggeststhey the u.s. economy suggests much of a change in views. i would like to get u.s. -- you as close to that as we can. guy: sorry. yeah. we both get excited when trichet comes on -- when richard comes on. richard jones. i am thinking about divergence week we've got these headlines the the ecb saying accommodative policy is good and right here. we are getting all of these headlines from fed speakers saying the tightening is likely in june or july, or maybe we will see three this year. thislooking at imf fo -- is a great way to look at the global inflation picture. you can get so much information. down at the bottom, you got a draft we can put any inflation expectations or any inflation forecasts. i have the u.s. and euro area. you see real divergence at the end of the chart. we are getting a pickup in inflation in the u.s. it is not looking so great in europe. when we have that in only 5% unemployment which would be a dream come true for any european country. should not the fed -- shouldn't the fed be raising rates? richard: the problem is if you look at it, in 2014, we had a similar divergence developing. it proved to be a false start. i think you are absolutely right. i think 5% unemployment is something that anybody would give their right arm for. dudley's comments yesterday, he still says the fed is data dependent. he is kept the options open. rolled back a little bit in saying that we need to see the data. guy: you still don't believe, do you? richard: july? it becomes more interesting because you get the brexit out of the way, the spanish elections out of the way. also, it you get the odds get into levels which have been consistent with what the fed has done in the past. matt: richard jones, thank you. guy: matt, it is been a great show. bloomberg tv. francine lacqua on the pulse. the radio is going to be continuing. jon ferro and i. ♪ francine: don't fight the fed. as the central bank talk sunday june rate hike, global stocks rally. g7 finance ministers meeting japan. yen strength sharpens the debate about stimulus versus austerity. and a hunt for the missing egypt airplane with 66 passengers and crew enters a second day. greek authorities dismissed reports that debris from the jet had been found. welcome to