Retailer is struggliing as he says he cannot promise that things will get better. And big discounter offers stock at 21 euros per share. Good morning or good evening if youre in asia. We kick off with another set of data before the ecbs meeting tomorrow. Its the final pmis for may, final services pmi 53. 2. Its a tick down from the flash of 53. 5. It is still nevertheless the highest since june 2011. And it is higher. Aprils was 52. 1. The final composite pmi has come in at 53. 5, a tick down from 53. 9 which is the flash april 54. We did see of course the french number coming down just a little bit as well. The german private sector growing for the 13th straight month in may. Well break down that but of course another key bit of data ahead of the ecbs meeting tomorrow. Theyre widely expected to take action. How much, of course, is still to be decided as they will come back, euro dollar around the 1. 36 mark we were yesterday. Before that, though, lets talk about the g8. What was supposed to be the g8, that was going to be held in the russian resort town of sochi. It is now going to be the g7 and it will be in brussels this after russia was ejected from the group after the issues in ukraine. There are other points of contention that might make for awkward meetings. The fallout of the european elections has seen a broad shift in recent days, both britain and germany have been in deep discussions over who should take presidency. The rhetoric between french officials and u. S. Regulators harshened as the spat over the fine for bnp paribas looks set to hit nearly 10 billion. Jules is there in the old location of brussels. Its an old one for you, jules. Yes, im used to this. G7 meeting later on this evening, in particular, the first time in 17 years that russia hasnt been present. Youve said theyve been excluded. People here i think would argue, the officials would argue that russia excluded itself with its actions in crimea. That point is moot right now. The message is as far as theyre concerned, on the Foreign Policy front ukraine tops the agenda right now. Of course, Vladimir Putin not present but very much setting that agenda as far as their process or movements in the ukraine, the influence in that region is concerned in particular. As far as its crisis is concerned, diplomacy dialogue has to be at center stage. The likely statement from g7 to say were still ready to apply additional sanctions if theyre required in this region. When i spoke to officials yesterday, they acknowledged the steps that russia is making, the softening perhaps of the tone, some level of acknowledgement right now in working with the new Ukrainian Government in particular. But of course theyre still saying they believe russia is inciting and influencing the violence were seeing in the east. Theres still a certain level of tension and concern about that. I think we have to look at well as what obama did as far as boosting military support from some of the eastern nato nations to, yes, dialogue is important but there will be a firm line beneath that. If you look underneath the front that the g7 portray over the next two days, we know the disagreement, theres going to be dialogue between cameron and putin, hollande and putin next week. Obama said absolutely not, hes not going to have any bilateral meeting with putin right now. It does seem that theres a Cold Shoulder from the country thats most concerned about the resurgence of a cold war in this region, ross. Back to you. Jules, thanks to are that. More to come of course from the g7 as it is now. Lets just recap the final pmis for may. Services pmi coming weaker than the flash, 53. 2, 53. 5 was the flash. The final composite pmi 53. 5. The flash was 53. 9. Heres the interesting point. The composite output price pmi 48. 8. 48. 7 was the flash. But the point is firms have been cutting prices for the 26th straight month. And its the low inflation yesterday, 0. 5 that has people all aflutter with the ecb. Joining us with his thoughts for the first time today, charles deeble. Charlie, good to see you. Good morning. The cutting of the prices is the key point here. France is back in traction as well. Yes. Where does this leave the ecb . It leaves them very much having to do something. I mean, that is clearly the consensus in the market at this point in time. But i think really the key was a comment we had from an official last week where we they started or seemed to be hinting that perhaps Price Expectations were becoming unanchored. Thats the real fear here. They do have an inflation target below but close to 2 . We spent quite a period a long below that. It looks like well continue do that now. The key will be in the star forecast we get on thursday. You know, theyll revise it down. How much they revise it down is really the key. Maybe a determinative of how aggressive they are. Without a doubt, you know, there is this vague hint, if youd like, that europe is turning a little bit japanese and faces this not necessarily just disinflation threat but could in time face a deflation threat. Can the ecb actually do anything about that . To some extent, yes, because inflation is a monetary phenomena. If they force money into the system, eventually you should be able to create inflation. However, that would require if you have a repaired Banking System that would be rather difficult. That obviously does need to be fixed. Thats all part of the process were going through with the asset quality review and everything else. You also have to take seriously at some point theyll have to do qe on sovereign bonds, not just on assetbacked securities. We dont expect it necessarily tomorrow. No. The euro down from 1. 40 to 1. 36 over a couple of weeks. Is it all in the price of the euro . Is the risk only here . The ecb apart from one occasion have a big history of talking big and delivering small. And thats fostering this expectation in the markets that there will be something of a disappointment. Unless they do wheel out guns that really people arent expecting such a sovereign qe. I think that is the risk well see. All right. We were talking about the ecb, the euro as we say has fallen almost 2 against the dollar in the last 30 days. Steve liesman has more on what may be priced in. The stakes are high for mario draghi and the European Central bank for its meeting thursday, a special ecb edition of the cnbc fed survey shows overwhelming Market Expectations for easing to be announced. 65 of survey respondents expect the European Central bank to take at least one of three substantial actions. Cutting the deposit rate or announcing a longterm finance option, or ltro. A quart think all three will happen. The leading choice, 55 , think the ecb will cut the refi rate with the average being 11 basis points from 25 basis points. 52 think the deposit rate will be reduced and the average there is a negative, negative, ten basis points. A third look for a longterm refi operation and a third say the ecb could do outright quantitative easing. Twothirds are also expecting a repeat of the guidance that rates will remain low for a long time. As for the u. S. Federal reserve, respondents look for less of a rate hike. The expected fed funds rate plunged to 0. 68 from 1 in the prior survey. Market participants now do not expect the fed to reduce its Balance Sheet until 2016 thats four months later than our april survey. Eurozone gdp is coming in at 1. 1 yearonyear. Inflation estimated to increase 0. 7 . And the euro, it seemed to go to 1. 30 to the dollar. It suggests that the ecb risk disappointing the market certainly if it does nothing but also if it takes just a single action. Back to you. You dont think thats going to happen, a single action . No. I think at a minimum, it would take youll see all three. Good at a minimum . At a minimum, yes. So theres a chance they might lay out what they would take to launch full qe then . I think theyre also probably going to announce something along the lines of how theyre going to structure the ab market and try and stimulate the lending profile within the eurozone. As you rightly pointed out, thats one of the key they goin sovereign qe . No. Are you saying are we looking at a restarting ltro plus the equivalent of a lending scheme . Its going to be targeted, for sure. Thats what theyll try and do. Theyll stop sterilizing the smp holdings. That is an injection of liquidity that arguably could come back out as people drain excess reserves and everything else. If its in a targeted fashion so that banks can start avoiding the negative deposit rate by perhaps proving they do contribute to an fls style liquidity support for smes, then, you know, i think that structure would convince people to a agree theyre serious. Charlie, stick around. We have Services Pmis coming out of the uk in 20 minutes. Youll stick around for that. We want to know how are you positioned to benefit from the expected job and asset markets . A rise in single currency . Let us know, join the conversation on worldwide exchange, email us worldwide cnbc. Com, twee tweet cnbcwex or direct to me rosswestgate. Now, tesco has posted its worst sales figures in britain in over a decade. Well look at the future for britains leading retailer later in the show. Over 1. 2 billion eyeballs are on us during the two weeks at wimbledon. True tennis fans want to know whats happening, they dont want to just see whats happening, they want to know and understand why its happening. Anybody can just put data up, but we want to get a reaction, make it far more interactive. We rely on the cloud to provide that immersive digital capability. Deep brewhos got two relahooves and just got a claim status update from geico . This guy, thats who. Sfx bing. And i just got a. Oh no, thats mom. Sorry. Claim status updates. Just a tap away on the geico app. Fame, makes a man take things over fame, lets him loose, hard to swallow fame, puts you there where things are hollow the evolution of luxury continues. The next generation 2015 escalade. Were just an hour and 15 minutes into the trading day here in europe. Even stevens on the dow jones 600. The ftse was down 20 points yesterday. Theres a few individual corporates we can look at. The ftse this morning, first of all thank you very much is flat. As is the xetra dax and the cac current. The ftse mib is down 0. 4 . The dow snaps their win streak. They are up at record high. Just a small pullback from that. Tesco is very much in focus this morning. Shares up, they were up, theyre actually flat at the moment, just down a penny, about a third of a percent as you can see. The company has posted its worse sales in over a decade. Tescos likeforlike sales drop 3. 7 in the First Quarter. The ceo says he cant make any promises that things will get better. Other sales, the swiss travel retailer taking off, dufry making an acquisition, helping bolster its business in the mediterranean region. A newspaper suggests the groups ceo says it is a core asset. Up 2. 5 , coloplast. Denmarks fourth Biggest Company by stock market value. Finally, bouygues, down 3 , saying the stock is a reduce, previously a hold. The group is facing more challenges, including a struggling public works environment in france. Switch over to bond rates, treasury yields of course we saw last thursday down at this 11month low at 2. 42 . Yesterday during the session, a threeweek high. The yield is back down to 2. 57. Were looking ahead to adp numbers. We got the strong nonfarm payroll report. Will the same happen today . Adp will be a sentiment shift of an outlier number. On the currency markets, we showed you where the euro dollar is trading, just above 1. 36. Dollar yen, strong at 102. 61. Sri is with us out of singapore. Very good morning to you, ross. As you pointed out, the u. S. Markets took a bit of a wobble overnight. Sentiment on this side of the world in our region is weaker as well. But were not seeing wholesale capitulation by that token. Losses seem to be capped just under 1 . If you look at the Greater China markets and the s p asx 200. Twoweek lows youre looking at here despite the fact that we did see betterthanexpected First Quarter gdp. But its the miners one again that have laid the Australian Market low today. The similar story for the banks. Shanghai composite down as well, despite the fact that we did see fairly reasonable pmi numbers from hsbc, fourmonth low. But remember, that domestic diamond remains quite sluggish and thats down to what is going on in the property sector which has been weaker. And no surprises there. The property counts as both on the Hong Kong Market and the shanghai comp were weaker as well. Thats when we got the negative leadership from. All in all, fairly weaker session. A lot of these markets are in a Holding Pattern until we get some leadership from your side of the world from the ecb, what theyre going to do on policy and then stateside with the nonfarm payrolls. Back to you now, sir. Thanks to are that, sri. Catch you a little bit later. Well, deputy head of Corporate Investment banking at unit credit joining us from the milan. Thank you for joining us. Were wondering whether the ecb will take any more action, whether we can impair what is a broken credit mechanism amongst the european banking sector. What are you talking about . Well, i think its obviously recovery is coming back but its coming back too slowly in our opinion. This is something which is shared among all the agents of the economy at the moment. Theres risk for lower inflation, lower growth. We still live in the mark net europe which is fragmented, because the nonfinancial sector in the peripheral country is at higher rates. Obviously theres a case from the ecb to act. The question would be conventional to the most unconventional measures. Everything has to be taken into account. We cannot rule out any measure. We probably expect some action on the negative deficit. There is a strong case for further easing. There could be discussion right now to be open on asset purchases. Everything is open. The question would be how should it be distributed throughout the coming weeks and the coming months, especially facing the asset quality review as well. It has to be taken into account. Theres a strong case for the ecb to act. Yes. Now, were looking to see whether they will do their own version of what bank of england did with the funding for lending scheme to try and get credit for smaller businesses, medium sized businesses as well. Do you think that will be effective . And do you think there is what we discovered in the uk was actually it wasnt that there wasnt a lack of money so much as there was a lack of demand. I wonder what you think. I think theres its not necessarily a lack of money because there is a lot of money around. I think its coming from different fact. First of all, the ecb made sure in the past years up to now that all the markets would be open. If we can see whats going on now in the market in the european market, we have the banking market which is open, the Capital Market that are open and to a wider and wider in the numbers. Obviously, a lending scheme could be at the edge. I expect the ecb would take that into account, whether its going to be implemented right now or in the first year of the future is more of a question mark. I would say thats in any case there is a strong case for taking action. The action probably would be conventional starting with and we would go to the most unconventional one moving forward. And everything has to be taken into account because everything will be done by the ecb to make sure that the Downside Risk for growth and lower inflation is going to be stopped. How would you then describe sort of the flow at the moment for the Capital Markets, debt Capital Market flow . I think today we are hosting 200 investors for the italian investment conference. And we must say that audience, its 100 more than last year. Why that . Because theres a growing appetite for Capital Market, should it be debt or equity debt Capital Market. A great rebalancing of the banking market and the Capital Market. We had last year an increase of 50 of equity Capital Market issuance. This year so far, yeartoyear, an increase of 200 Capital Market in europe. That demonstrates theres a huge case for good Capital Market working. There is huge liquidity around, great news for borrowers. They can access the market through the capital structure. There is a great deal of opportunity for investors while looking for yield. In such a low environment for yield everything has to be taken into account and the opportunity has to be caught in order to fulfill the liability requirement in terms of yields. Thanks so much for joining us, olivier khayat. Thank you. Deutsche bank is expected to price its capital at a big discount today. The issue will likely price between 20 to 21 euros. Its a big discount to the Current Trading price. The german lender is looking to strengthen its Balance Sheets in light of pending cost cuts. The subscription rights will be allowed to trade immediately after the price has been set. Meanwhile, within the last hour or so, Goldman Sachs has upgraded its rating on deutsch, reflecting what it says has been a recent underperformance. The firm has upgraded Credit Suisse following the set. Ment of its u. S. Tax cases. Meanwhile, lloyds bankers withdrawing from a trade Financing Deal that involved rosneft. And restrictions placed on mortgage lending. This according to reuters. The nationalized bank will implement a capital four times loantoincome lending with a maximum term of 30 for all mortgages worth 500,000 pounds or more. Still to come after disappointing manufacturing construction numbers this week, can Britain Services industry buck the trended . Well have the latest breakdown of activity with the pmi numbers and reaction right after this. Youre watching worldwide exchang