Lacqua. We are getting breaking news from the eurozone. Pmi figures coming in below estimates. Euro area manufacturing pmi falls to 51. 9. It is not surprising. We had not only a weak but a weak german number had an impact on this eurozone manufacturing pmi. Guy it was interesting listening to the minutes out of the bank of england yesterday, suggesting that the slowdown in the state is temporary. May some evidence beginning to emerge that this very early recovery in the eurozone is starting to falter a little bit. Francine eurodollar, 1. 06. You can see the drop. That is when the german figure came out. The European CentralBank Emergency funding for greek banks. This comes ahead of a meeting today between Alexis Tsipras and Angela Merkel on the sidelines of this european immigration summit. Reports of a softening stance from the eurozone on reforms is what we in what weve been hearing. Hans nichols joins us from berlin. Nikos joins us from athens. Hans, what does the ecb limit tell us about outflows . Hans outflows the last week have been 1. 5 billion euros. Ela is now 75. 5 billion euros. They have a about a 3 billion buffer. That is the buffer theyd like to keep for the banks. When you look at where you lay was in mid to early february where ela was in mid to early february, greek outflows have been around 15 billion euros. That is going to have any effect on the economy. Yesterday, indices were up. Some optimism that you get closer to a deal. You had been walk or, the central banker benoit couere, the central banker. Here is what he said. We had eu officials in berlin saying that april deadline for talks is going to be blown. It may be in may or so. We still have that to figure out. We have this meeting between Angela Merkel and Alexis Tsipras. Guy hans, we heard from her call yesterday. Praying for spain and portugal. Somebody missing from the list, greece. Hans it was conspicuous in its absence. She had clear words of praise. She said, some nations have gone through very tough programs earned a bit of breathing space. Im thinking of spain. Im thinking of portugal. We can go on now to say that ireland is the Growth Engine of europe. That is from chancellor merkel. Nothing positive about greece. Francine nikos, this is the fiveyear anniversary of when greece first asked for a bailout. What is next . The eurogroup meeting, tsipras is meeting with Angela Merkel today, what are we going to look at . Nikos officials from Credit Institutions report incremental progress in negotiations between the two sides. That is not enough for the disbursement of bailout funds which will save greece from a potential default in the next few weeks. Greeces Prime Minister is in brussels today. He may meet the german chancellor Angela Merkel at the summit. The euro area finance ministers meet tomorrow. We dont expect any concrete decisions from these meetings, just renewed calls for greece to comply with its bailout commitments. The greeks now pin their hopes on an extra ordinary eurogroup conference or the next scheduled meeting on the 11th of may for bailout funds. Guy talk to me about where we are in the negotiations. The technical talks versus the heads of state talks area talks. They seem to have been on different tracks. Nikos officials from creditor institutions say that the progress has been incremental, that the atmosphere in the talks has improved, but in terms of substance, there are big differences remaining. Politicians are a bit more upbeat. They acknowledge progress. The greek finance minister expects his colleagues to acknowledge this progress tomorrow in the meeting in latvia. That is the best greece can hope for at this stage. A statement from the eurogroup acknowledging that we are moving forward. Francine nikos, thank you so much. Guy we are joined now by gabriel stern. Good morning. You have been a longtime follower of the greek situation. What light are we flashing at the moment in terms of how serious the situation is . Gabriel i think it is a bright orange. It was very interesting, the point you made about the fifth anniversary. How can a crisis go on so long five years . Greek debt has never been made sustainable. It is not as if you can write a profile down on paper. You have to have a little support for it. Francine that and i guess the fact that we havent seen any reforms or tax collections. Is that fair . Gabriel i think blame lies on both sides. The fiscal adjustment has been extraordinary. In essence, the underlying problem is that the troy got have always been the troika have always been reluctant to make greek debt sustainable. You take your hand off the throat of greece and you worry about momentum. In a sense, you have to make it sustainable at some point. You can kind of blame syriza to a certain extent but the troika didnt give birth to syriza but they fed the Political Sentiment that nurtured it. In a sense, they have themselves to blame. Guy what do you make of the volatility we see in greek debt . Gabriel it is extraordinary. If you talk to the holders, there is still the hope of an upside. If you do get portuguese yields you make a time of money. If it doesnt work and greece exits, you are probably down to 1112. A lot of people are not playing for that 90. They might just say, if greece does get a new agreement, that could be a big pop and i will sell them. Theres all sorts of players. It is not like a couple years ago. They are very smart players. To me, they are taking too much risk. Francine you believe that with every passing day, theres more of a chance that greece defaults and leaves. Gabriel the way i approach it you come up with a price and the probability of an exit is i think getting big enough to make the whole greek Government Bond overpriced given the risk. I guess that is not the only asset in the world that is overpriced. Once you stare into the whites of the eyes of default, you see it right in front of you, and it seems more real. Guy what chance would you a sign . Give us some probabilities. Gabriel i take maybe an 18month view. To me, it is getting towards 40 . I think you will probably get an agreement but you could easily not. If you do go into capital controls without an agreement, without a clear plan like you had in cyprus, it is going to be very difficult to get out of them. The other, if you do get the agreement, im still fairly pessimistic. There isnt a political constituency in greece to implement it. It is not cyprus. Cyprus was very painful, huge opposition to capital controls. On the other hand cyprus had a program. They just got rid of a very extreme socalled communist government. There was huge consensus at the center right. They wanted more structural reforms. Implementing the program was extraordinarily smooth. It was credible within weeks. In greece, it is nothing like that. Capital controls in cyprus lasted two years. In greece, they could last a short time with an exit, or probably double that at least. Francine thank you so much. 40 chance of greece leaving the eurozone in 18 months. That is the prediction from gabriel sterne. He stays with us. Guy in the meantime, we are going to tell you what is on our radar. Facebook saw a 42 rise in firstquarter sales. It could have been as high as 49 . The social networking giant gets more than half of its income outside the United States. Francine petrobras has reported a 2. 1 billion charge related to its recent corruption scandal. Petrobras has been all but shut out of bond markets since an investigation began into a decade of a legit kickbacks, bribes, and inflated contracts. Guy in germany, a rail strike continues. The Rail Drivers Union is staging a walkout. The strike may result in the cancellation of two thirds of Passenger Services and half of freight transport. Francine still ahead, Deutsche Bank is said to pay 2 billion euros. We are live in frankfurt for the latest on the possible libor settlement. Guy we will look at googles new mobile phone service. Francine and later, what is spoofing . What does it have to do with the 2010 flash crash . We will break it down right here on the pulse. Francine welcome back to the pulse. We are live on bloomberg tv and radio. Guy Deutsche Bank may pay a 2 billion euros settlement in a libor probe with the u. K. And the u. S. Lets get over to Shane Strowmatt in frankfurt. How is the 1. 5 billion euros cost comparing with the total litigation cost to this company . Shane the cost they announced last night, about 1. 5 billion euros. They only said at the end of last year the provisions for total legal costs is about 3. 2 billion euros. Neither of the figures have been broken down. Several different investigations are open at the same time. Investigations into fx dealing assetbacked securitiesk and a legit u. S. Sanctions. Weve heard a libor settlement could come early. Nobody knows what that 1. 5 billion euros will be for. We dont know exactly what they provisioned for. It is difficult to compare. Francine what do analysts and investors think about this . Is it fair . Are we going to see more settlements like this . Shane weve seen a lot of libor settlements in the past. Deutsche bank will probably be the largest so far. The largest to date was ubs with 1. 5 billion. Weve heard that Deutsche Bank would come in around 2 billion euros. Analysts and investors arent really concerned about the some. They just want to get this out of the way. Particularly in the context of the Strategic Review they are going through right now. Guy in terms of the timing of the libor settlement we got a strategy review this bank is conducting at the moment. Will it feed back into that strategy . Shane basically, the idea is just to get this out of the way. The management has this hanging over them. We have heard that the Supervisory Board will be meeting to renew to review the Strategic Options. Management can say, we have this settlement done and over with, lets concentrate on the future. They also came out last night and said along with the litigation cost they expect they also said despite the litigation cost, they will be profitable in the First Quarter and they are expecting near record revenue. If they get libor out of the way , get Supervisory Board approval and put down excellent firstquarter results it could look very different. Francine Shane Strowmatt there in frankfurt with the very latest on Deutsche Bank. Guy lets change direction and talk about the u. K. We are back with gabriel sterne, editor at oxford economics. The view over the last few days seems to have shifted. We are now heading toward some sort of laborled administration. Mixed views from the business community. If you look at the economic plans of both parties, im not sure theres a huge difference in them. Are we getting overly exercised about the differences that exist and whether or not labor is going to be a disaster for the economy . Gabriel i think we are. You put it very nicely. We run our plans for the economic models. It is not surprising that the conservative plans probably mean lower debt in the end and slightly lower bond yields. On the other hand, the liberal and labor plans mean better output. They are more expansionary. Markets probably are just focusing on the fluffy stuff that they dont like about distribution. What is more important is what it does for the economy. It is not obvious that having expansionary fiscal policy at the moment is a bad thing. I think two years down the line, when the annoying tax increases the overall fiscal stance is fairly plausible. Francine not much difference is what you are saying . How do you play it . Do you sit still until you understand the agreements . Gabriel if you take equity prices, before the last election, they hit a rocky bit in advance, and then the coalition came in and it turned out fine. I think basically the british institutions are fine. We are not talking anything extreme. I guess the one thing that markets would worry about is perhaps a possibility of a euro referendum. That now seems very remote as well. You need a tory majority or an alliance with ukip. It doesnt seem likely. Guy why havent i heard about [indiscernible] you have the productivity story. The feedthrough from changing that one number would be enormous. Gabriel you have heard bits and pieces. Yesterday or the day before there was a speech on this. I guess one of the things is it is probably ambitious to think you can do too much. You have low productivity in the sense of a global phenomenon. I guess what you need is for investment to pick up or people to stop getting jobs shifting from finance to lower productivity areas. Theres only so much the politicians can do. Francine gabriel, thank you so much. Guy just dont tell them that. Coming up, novartis beats estimates. We break down the numbers by sales. That is coming up next here on the pulse. Francine welcome back. Novartis reported profit that beat estimates. For more, lets bring in bloombergs health reporter. He joins us from geneva. This is a company thats undergone a major transformation. How is that affecting results . Good morning. A year ago, no artist novartis announced a change to the company. They sold the Vaccines Division title xo smithkline. And they sold the Animal Health business. They brought in glaxo cancer drugs. Kind of a complete reshaping of the country. This quarter is the first taste we are getting of what that new company is going to look like, the glaxo deal just having been completed in early march. So far, so good. They were ahead of what the market is looking for. What they created is a company slightly smaller on the top line but more profitable on the bottom line. Investors like that. Guy sometimes it is nice to report in dollars and sometimes it is not this being the latter. Simeon exactly right. They were up against a u. S. Dollar headwind for the full year. They were estimating a 12 hit to their operating income from that. Today, theyve said it could be a little worse than that. Lets see how the rest of the year pans out. Francine Bloomberg Health reporter, simeon bennett. Guy coming up, we are going to speak to a company that is going to be offering that to small and mediumsized companies. Francine welcome back to the pulse. Guy good morning. Here are the Bloomberg Top stories. Francine a key gauge of chinese manufacturing fell in april. The pmi was at 49. 2 a number below 50 indicates contraction. The numbers suggest that efforts to cushion a slowdown have yet to revive factories. Guy the Chinese Government cleared the way for Payment Providers to operate in the country by ending the monopoly of union pay. Visa was the biggest gainer on the dow yesterday. Mastercard shares had slightly less games. Francine the European Central bank has almost doubled an increase in emergency funding for greek banks. The governing council raised the cap on emergency liquidity assets of by about 1. 5 billion euros. The move comes ahead of a meeting today between Prime Minister tsipras and german chancellor merkel on the sidelines of a European Union summit. Guy u. K. Retail sales for the month of march our way week. Really week. We will get you a pound number in just a minute. That sits alongside an expectation that we were seeing some credit origination. Anyway, down by 0. 5 . The pound is down. This time yesterday, it rose on the bank of england minutes. We are trading lower today. Francine we are also in the midst of the earnings season of the tech titans of silicon valley. Yesterday, we heard from facebook. Caroline hyde joins us for more. It seems that the strong dollar had a very big impact on sales. Caroline this is facebook, the company that does most of its business internationally. These falling dollar signs some of the dragging effect that it had on its sales. Lets dig into the numbers. For the First Time Since 2012 and as i mentioned, the strength of the u. S. Dollar is what pulled it down, you can see they had 49 growth in sales. That is a phenomenal figure. It was only 42 when you factor in the drag of the u. S. Dollar. Underlying this business, some phenomenal statistics. This company is gaining in terms of users and ad sales. We are now up to 1. 4 4 billion users per month. Every single day, they are getting more addicted. Almost one billion people checking in every single day. Mobile is where they are at. We are seeing them up in the 50 range because about three quarters of their business is done on mobile. They are becoming a platform for mobile apps. Crazy stats in terms of how much they are hiring as well. 48 increase year on year. They now have 10,000 people working for them. Underlying its business is one of strength. We saw it do the same for ebay as well the Dollar Strength hurting sales slightly, but the Company Managed to outperform. We saw it eat analyst estimates. Beat analyst estimates. They did cut 2400 jobs. Guy we are going to hear from google later today. Theyve confirmed that they are not just a tech company anymore. Caroline youre right. We got a big unveil, the big mobile product. This is the future for google. They want to own our digital life. They are launching mobile project fi. No contract mobile phone service that you can use abroad. No contract, but you do need a nexus 6 Google Android phone. It starts at just 20. Unlimited texting and calls in the u. S. When you are out and about, you get on sprint and tmobile networks. This is where it starts to work when you are not tethered to wifi. If you want 10 gigabytes of data, you pay 10. It is quite interesting. If you dont use that data, you get refunded the money. When you are abroad you get very ch