could lose credibility if inflation does slip. francine: welcome to "the pulse" live from london. manus: french prime minister has said this morning that president hollande will meet with obama in washington and putin in moscow next week. francine: overnight starts destroyed islamic state's headquarters in raqqa. hans nichols is standing by in brussels. let's get across to guy johnson in paris on the ground. what has the french prime minister been saying this morning in regards to security spending? in regards to a variety of issues.
the radioas on confirming essentially what has president said to the joint session of parliament yesterday. the budget deficit rules, gone. we are going to spend some money and make sure our security services have what they need to take the fight to i.s. we are going to have more soldiers, more customs guys, more prison guards. all of that money is going to be spent. that means that france is essentially going to miss a 3.3% deficit target next year and its beyondget the year appeared beyond that, he is confirming we are going to continue to see a ramp-up in this idea that we will see a single coalition trying to be formed by france bringing everybody else together. but the emphasis is france going to very much get back on the front foot, telling the world it is prepared to do what it takes to spend what it takes to take the fight to i.s. following what
happened on friday. francine: tell us more about the airstrikes overnight. the airstrikes is just a continuation of what we have seen thus far. we saw attacks the previous night. just ight it was striking targets in raqqa. we are getting to see the formation of a coalition. u.s. jets striking targets, intel being provided by the u.s.. what we are going to see is more meetings. mr. valls is saying that mr. hollande is going to meet president putin in moscow, trying to form this coalition. we've already got a meeting taking place right now at the genesis of this process. elliseerry is at the
palace, trying to get the process in place to make this happening. the admission this morning by russian authorities that a bomb did down the jet in the sinai is another piece in the puzzle. st aggregate this group together and start the creation and the formation of this coalition. the russians have a need for it now as well. the americans and the french certainly do as well. back to you. manus: let's bring an hans nichols. france said that it will necessarily -- break two spending budgets. this is a very defiant hollande in terms of security and spending breaches. hans: at least rhetorically there is some precedent to having extraordinary exceptions throughout the greek refugee crisis there had been talking about firewalling some spending
for refugees and saying that would not affect the overall budget rules that we spent so much time talking about in brussels. we will later today get an update on those budget rules. in charge ofis this. he will put forward a proposal. then we also have what other members and folks in brussels have said about the budget. minister, for example, has been critical of the idea that you need to suspend budget rules for extraordinary events. , this does seem different. brussels is crawling with generals, crawling with defense ministers. there is a nato summit across town. normally the criticism from nato countries are not spending enough on defense. looks like it could be the polarity of that. but we'll find out later today how much heat up there is in mr. hollande's words to keep the security pact at bay for the
sake of a secure europe. manus: think you very much. francine: for more on the impact of the attacks in paris, jonathan ferro joins us with the latest. it is still an ongoing case because we are looking. there is a manhunt. they are looking for safe houses. we do not know how many terrorists perpetrated the paris attacks. putin sayinge that the plane was brought down by terrorists. >> we are starting to see the beginnings of a realignment of world powers. if you look at what happened in the last mother known western leaders have been shocked by this -- the scale at which a former state has been able to expand their capabilities. this comes after the attack and ruit.oot - in be
you're seeing the countries, the countries like the u.s.,, uk and france and russia learning to overcome their differences. manus: putin also seems to be intimating that there could be a rapprochement in regards to ukrainian debt. the ukrainian issue has been something that russia has not been prepared to discuss. >> one of the most interesting things to watch in all of this is what is the price that putin will demand for cooperation with the west on syria? it is true as he said yesterday he extended a hand on ukrainian debrt and said he was willing to restructure. putin does not forget russia's long-term objectives, and part of it is not only protecting the but moreflank important is making sure that ukraine stays within russia's orbit.
i am not sure how the ukrainians are going to feel. but for right now, ukraine and important as clamping down on islamic state. francine: how we deal of syria. talks over the weekend. no one from syria at the table. e timeline has been rapidly accelerated by the events of last week. at the weekend, there were lots of holes in the agreement that they came to on syria. but what is important is there is a process in place. europe.ard, kerry is in one of the key things is going to have to be that putin will insist that assad stay in power. he will say to the west, if you want to stop these refugees, if you want to halt the slow implosion of this country that is causing so many problems, assad is going to have to be
part of that solution. so the timeline has been accelerated. happens, it is impossible to predict. there is a real commitment in western capitals to at least try something new. manus: the other thing is that u.n.nde keen to bring a resolution. that could be something that could play to cameron's strength in terms of reconsidering his position. >> cameron has his own domestic difficulties. and i think that will help give the opposition on board. syria creates this huge -- reaction within the labour party itself. it's very difficult meeting. jeremy corbyn put into a tough spot. but a u.n. resolution would make it easier for the u.k. to come on board. francine: thank you so much. he's been working all the time.
manus: let's get you up to speed on what else is on our radar on "the pulse" this tuesday. easyjet posted a profit. after sales boost of, made up fo r more disruptions earlier of year including labor unrest and airport fires. easyjet -- the stock is trading down 2.5%. francine: liberty global has agreed to buy cable and wireless can occasions. w shareholders will get a special dividend when the deal closes. cable and wireless shares surging this morning. manus: volkswagen european market shares declines in october. the first four months of sales since the emissions scandal. the german manufacturer -- 25.2% of u.k. car registrations.
sales, car makers' across europe rose 2.7%. francine: next week here exclusively from peter praet about growth in the eurozone and the impact of friday's attacks in paris. a we have a fragile recovery, cyclical recovery. it's clearly be sort of events do not help restoring confidence in the recovery. ♪
manus: welcome back. this is "the pulse" live on bloomberg tv and streaming on bloomberg.com, your tablet on your phone. francine: central banks take center stage. the big question is will the ecb eases? as the fed we spoke to peter praet in frankfurt. not, willo area has in reach the level it had 2008 first quarter before early next year. so this is a very long period of recessionary conditions that we have. approved -- ae big problem if it had not been a case repeatedly a number of years before. this is not a new situation unfortunately. this raises the risk of, the
ofk of de-anchoring inflation expectations. we have a couple weeks before the meeting of december to reassess the situation. but the downside risks are very present. we see the european economy having difficulties in consolidating its recovery. there is a lot of uncertainty, a lot of long-term decisions like investment not being made because of uncertainty about the future. you try to stimulate the risk appetite. and that has 0-- that is dangerous to do. what are the risks of maybeances and the spillovers. the impact on inflation has been relatively disappointing so far. to clarify have at some point what happens after december.
what will you do with the assets coming to maturity? these are the sorts of things forward in terms of market signaling. but that will be the discussion. epending on your assessment of the situation, the markets to the reasoning. who will turn the argument the other way? there you have to absolutely make sure that inflation expectations remain anchored, because that would complicate to medically of markets would revise downwards the long-term inflation expectations. there is a high probability the expectation of future action is a high probability, that's true. so you have to see, you know. but it depends on the data you have at the time. the signs of positive turning points have we can. there are never things we are going to look at. it is not only looking at, i've mi's, confidence
indicators only. it will be more holistic. and so, i think the markets know what i mean with that. manus: that was the ecb executive board member speaking exclusively to jonathan ferro. we have our next guest from hermes investment. tim, listening to that conversation. the biggest worry for the ecb, i'm paraphrasing, is that we are all getting used to in europe no expectation of a hike. this is a vicious cycle that they want to try and break. they sound as if they are ready to go the extra mile to break that cycle. is that a fair assessment? >> that is. if you look at what is happened over the past year the one big move in headline inflation has been the oil price. that is been coming down. that has been lowering expectations. when it comes to the core number, you have got a lot of slack in your.
from away wages pointed you, there is not any person there. food price inflation as we saw on the u.k. remains low. the question going into next year is is the ecb going to get any help from these outside sources? i suspect it will not get help in the labor markets. outside of germany and u.k., there is a lot of slack. the question remains whether the oil price will be driven out by the increased political risk. from a food price inflation, pointed view, whether you get any movement from the so-called el nino cycle. francine: as we get into 2016, how concerned are you that we become japan 10 years ago? central banks have very little power to spur inflation. tim: if you look at central banks history in terms of spurring inflation, a think the threat is up there. most commodities are priced in u.s. dollars.
the fed has the upper hand. in terms of the ecp and draghi they are running to stand sti ll. you are right. that is a big risk. whether we become japan, i question that. i think there is also a cultural aspect which comes into play. and i think we have not yet got stuck into that rut of having a deflationary mindset. manus: that is going to be a relief. if we bring it back to the biggest issues of markets. we are long is long can be at dollars. the market is short -- at a 25 week high in terms of being shot rt at the euro. we're going to get minutes from the federal reserve. they still may well remain in that hawkish tone, but it is aing to be layered over twith dove is expectation. 2016 will not be aggressive. is that your center? -- is that your scenario?
how do you position? tim: absolutely. you said it. in terms of the long dollar position, i think that is really in extreme stretch. so, in terms of volatility going into the end of the year, it is probably impossible to call. onit is going to be volatile a daily basis because any sort which is tone, slightly more dovish than the market expects, is going to move things around a lot. i think even if the fed, we are certainly expecting it to raise in december. even though it has been well flagged and we have an talking about tapering for two years -- markets are still going to not like it. that would be my guess. francine: after two years we have been flagged. the markets are little -- that is the fair comment of the day. thanks very much. we have a great volatility chart. we will also talk japan. manus: we are going to go
we know they will discuss the terror attacks. you can look at that live shot microphones. we may or may not get a news conference but we think we will get something because they can to be set up for statement. rry arrived in the capitol on monday, the united states and france were not only friends but family. kerry has vowed to keep the fight up against islamic state. we have it number of major key meetings for hollande next week. one in washington and then we have putin. francine: of course, hollande and putin meet in moscow. we are seeing a little bit of movement. they are coming out. if we have someone speak, we will go straight to it. talk japan. the latest business investment figures -- helped push japan into its second recession under the prime minister abe. some: craig, why are
economist calling this latest data devastating news for abe? word that ans the economist uses in our story today. just going back through the numbers of yesterday's gdp report. it really was that break down in business investment that really is what is devastating here. because it just represents a sort of snub to abenomics. weakening the yen and improving the profits for companies with then we those companies to turn around and invest something that they haven't done as a result of a deflationary mindset. going back and giving -- francine: we have to interrupt. we are just getting secretary of state john kerry speaking at the elysee palace.
secretary kerry: significant steps i believe you can take it together in a number of different areas to increase our efforts and be more effective against daesh. we already are doing that. will bet hollande visiting washington in a week. the president will meet for further discussions. we are absolutely committed to increasing our efforts in every degree possible and thoughtfully, carefully. my sense is that everybody understands that with lebanon's attacks, with what's happened in with, with ankora, turkey, the attacks in paris, we have to step up our efforts to -- to get to their core or they are
planning and to do more on borders. but the level of cooperation could not be higher. we've agreed even to exchange more information. and i'm convinced that over the course of next week's daesh -- they're going to feel the pressure. they felt it today, yesterday. we have gained more territory. we have taken out leaders. we have liberated a significant community. communities in syria. 3/4 of the border of northern syria is now under control. it's taken away from daesh. we will be working with turkey to close the last portion. there is a clear strategy in place. confidentstep, i'm the momentum will pick up. and thank you all, particularly again, i'm confident that over the next
how toris -- which knows rebound, will do so. i look forward to being back here for the cop 21. with president obama. i will stay for even longer. i think that will be an important statement by the world that no one will interrupt the business of the global community, certainly not despicable cowardly acts of terror. thank you all very much. francine: that was secretary of state john kerry after his meeting with hollande, saying in the coming weeks i.s. will feel the increasing pressures. he was begin to reporters. he was saying we now have a solution. but he says certain world powers are committed to increase efforts against terrorism. manus: he also went on to say they had retaken territory.
very much speaking to the french public as well as on a global basis. stepping up the efforts and talking about cooperation that already at a high level but continuing to do that. interrupt the business of the global community, that was the line. francine: it is interesting. there are two ongoing things. first, world leaders are trying to deal with this. there is possibly a rap prochement between russia and france because now they have a common goal. we also have to keep an eye on the manhunt. let's get straight to tim crockford. we were talking about risk around the world. how do you view terrorism? it's very difficult to model, very difficult to know the impact on world growth. but this seems to be world powers coming a little bit together. does it make you feel, i guess, a low bit easier about the future? go: firstly, our thoughts
out to the friends and families of those who lost over the weekend. not just in paris, but all those other events which were mentioned in the run up to that. i think from an investment point of view, what have seen is that markets are typically result. you have initial jitters, but then markets comes back. the people themselves. after the initial shock, ec market starting to gain from lows - you see markets starting to gain from lows. francine: we have breakingu.k. -- inflation one of the biggest concerns for central banks. manus: as far as the u.k.'s concern, the biggest issue is how much of the drop in oil prices - let's get across to mark barton. a rise of .1%. .1% decline, matching the previous months. yo prices have been deflator
for the second consecutive months. so we are at levels -- we have only seen once or twice since 1960. just to reiterate, that is the third negative reading this european to be honest, it largely reflects weaker global commodity costs. core inflation which mark carney cited in o interviewur with him went john nichols spoke to him. core inflation which e and energyd prices actually accelerated. he says that is important because that strips out imported inflation from the outside. but it is a figure which tells us, we aren't going to be seeing a hike in interest rates anytime soon. francine: that's get back to tim. leader talking about deflation.
it is very difficult percent of banks to have the firepower and the tools to combat this. y difficult for the banks to have the firepower and the tools to combat this. the u.k. wants to raise rates. tim: that will become more apparent next year. as we were talking about earlier, it is going to depend on the outlook for commodities and what they do going into next year. there is also a big relative game going on. playing off different central banks and what the fed is going to do. it will depend, of course, how long and how high the fed is going to go with its rate rise. so it is very hard to make any calls on a six-twelve-month basis. i think the name of the game will be lower for longer for most central banks around the world. the fed is obviously the one exception. but even then, i do not think it will be one and done but i think it will be a few and they are through. manus: if you look at the
currency moves. if you look at euro-sterling, it is reacting on the back of the spirit we have got dollar-sterling just below 1.5200. to a certain extent, your portfolio is linked to your definition of where these currencies go. too we tried not to lose much of our lives trying to forecast these currencies because they have been so volatile. i think it has a lot less hair if we did looseleaf trying to predict where they go. but you are right. it makes the equity call more difficult. time: it does. for companies themselves, there is a translation effect, which pretty much prices into equity markets. other question is going forward, how much more competitive will a lower currency make in economy or the companies within the economy going forward? and that question is very much
an unknown because we do not know what central banks are going to be doing in a 6-12-month time. francine: thank you for all your time. tim crockford. now, let's talk about the business impact of the attacks, the atrocious attacks in paris last friday. corporate events planned in the french capital, well, they are going dark is the attacks spurred foreign companies to scrap visits because of concerns over security and travel disruptions. european our chief business correspondent joins us from paris. he has been one of the lead writers on our coverage. how bad is the business impact of these attacks? think itl, francine, i is important not to overstate it completely. there is clearly a lot of concerned among companies about holding big events here in
paris. and i think that is fair enough. airbnb cut short a conference that was planned. the new york times canceled a luxury conference planned for verisign. but i do think these are temporary measures. it is an enormous business center. and it will bounce back. but understandably there is a fair bit of nervousness among corporate event planners about putting on a big show or a big press conference here this week. obviously inlook, the immediacy, and the aftermath of these events, people do take prudent action on behalf of their employees here people do change their immediate travel plans, but the long-lasting impact -- the eiffel tower closed. iconic to the point of reference. paris,the lifeblood of is tourism. how long do we expect this to last? matt: manus, i think that is a very good question. there will be a lot of concern s, just as there
was in new york after 9/11. there has been a fair bit of research and what it tended to find is that when you have a real ongoing campaign years and years of terrorist action, then obviously there is a huge impact on tourism. ne-off events, thankfully and we do hope this is not something that will be repeated ever, do tend to have a limited effect. people are willing to come back here so i think everybody here, for obvious reasons, and the tourist industry is hoping that nothing like this ever occurs again. francine: thank you so much. matt campbell there. turn ourw, we conversation to the impact of these terrorists attacks and how it will impact a messy politics of the french republic. jonathan fendi is the author of "the history of modern france." seeays the french people
the attacks as an assault on the country's republican values. jonathan joins us in studio. great to have you with us this morning. this assault, it is a very physical assault on paris. it is a very physical assault on the nation. and they are at war, according to hollande. this is an injury politically and emotionally to france. th reaction you saw all over the weekende from ho llande and from leaders of left and right is that this was more than simply an awful huge terrorist attack. this was an attack on what france sees itself as standing for, which is republican values, equality, fraternity and so on. it was very much the mayor of paris -- she made this point again and again. that the real target was the way of life in the west, in paris. it's terrible to say but it takes on a kind of national
identity element to it. francine: what does that mean practically? does it mean the retaliation or the airstrikes will be strong? jonathan: it gives hollande more backing. this is not simply a present reacting to a terrible terrorist attack. this is defending france. manus: when you see his presentation in front of both chambers of parliament, i believe yesterday afternoon, an a globalr, calling for response. he and his prime minister ready to break the rules in terms of spending. is this a leader under siege, and how will we judge and how will france judge that he is handling the situation properly on their behalf? jonathan: this is a vital question. you put your finger on it. because not so long ago people were mocking hollande as a week le monde president. who could not make up his mind.
he was down to 18% in the polls. now he's become rather the w presidenta -- the war president. inthe middle east and so on. francine: i guess the issue is that a lot of people and friends are saying this was an intelligence flaw. the security services did not pick up. it goes back to hollande's handling of the crisis. this is not give more of a play and nicolas's hands sarkozy? anathan: last night that was big debate. politicians across the spectrum. the right wing politicians including the national front and them main street republicans were all saying, we were proposing stronger methods six or nine months ago and you did nothing. so in a sense hollande with a illesh at versa
yesterday, he is going to try to rally the nation behind him. and we will see what the reaction is. manus: where will he positioned himself with angela merkel and the refugee crisis? if we look at it within the making it clear, let's protect the real refugees and continue. i still expect one million. it will be interesting to see the hollande positions french in regards to the refugee crisis. jonathan: this is going to be a sensitive issue internally with his own party, the socialist party, which remains teite left-wing, qui resistant to the kind of security measures which he is bringing in. we will see all that. you will get the anti-european, the national front, and the far left movements against europe, no doubt. mustering their strengths. so this leaves the main street right in a rather difficult position. they want to back hollande, but they don't want to be out run by the national front.
francine: we cannot underestimate the fact that there will be social tension, even more than we have seen in france in 10 years, because these are homegrown terrorist. in belgium, they are very close. how is this being perceived in france? jonathan: it was there with the charlie hebdo. this is indiscriminate as against specific targets as we had in january. there is the realization that the french policy of assimilation, of the second generation, has not worked. i have been writing about this for 20 years. i was told initially when i dealt with this in a book 20 years ago, you're scaremongering. this a typical englishman. francine: is the u.k. doing a better? jonathan: it is doing it less badly. the real tension if you go out into the housing estates, mainly second generation immigrants outside the big cities, these ce, these are lost
parts of france with 40% unemployment, no hope and son o on. and that is where the students have enabled to fish for recruits. manus: putin, let's finish on this. putin obviously dealing with his own domestic issue on the airline insane terrorists -- putin reaching across the global table at the g 20. rebuffed. hollande is meeting him next week. what do we want to see? because boots on the ground is not something the west is prepared to do. in syria. jonathan: we want to watch more clearly defined policy towards syria. who are the enemy? what are you doing? or four three coalitions overlapping. you have to have clarity about where you are going and what kind of resources you are going to devote to this. it means, as you referred earlier on, the end of deficit cutting measures certainly in
lowest intraday price since may, two thousand nine. as oil flirted with $40 a barrel for the first time since august. francine: let's bring in our managing editor for energy. will kennedy. when we look at the slide and metal prices, this goes back to the concerns we have about a global slowdown. but also the higher dollar. last few days you have seen the impact on the dollar cross commodities. historically, that is a relationship, higher dollar puts pressure on commodities because you can buy more, the dollar is worth more. when: it is interesting, you look at typically when you see these big lurches and significant price points in copper and zinc, we see significant moves in the likes of glencore and rio and bhp. that is not happening today. so, to a certain extent, have the markets already priced in
the temperance within china? will: to some extent, yes. i would be a little cautious drawing too much from today's move. if copper continue sliding, that is going to be a big problem for glencore appeared remember when glencore announced its new strategy to repair its balance sheet. the ideaoduction -- it could turn the market around. that has not worked at all. unless we see a turnaround soon, people will focus on glencore' sdebt. francine: where does oil go? it is anything from $20 to $85. seeing a lot of analyst saying this is the darkest moment for the markets. higher.tockpiles ended a a lot of people will tell you if you look what is happening with production and the u.s., the rate at which people are cutting capital spending, there are reasons to think the market may start to balance next year.
whether that optimism is justified or misplaced i think will depend on what happens in the global economy. manus: one of the e-mails that drops into our inbox and tells us the daily price of brent. that is very interesting. that is below this mythical $40 a barrel. the reality of what is going on within opec is we are $40 of the cash price. now, we're charging towards this opec meeting. a couple guest last week you said you're not going to get a cut unless society begins to change their opinion. what is your thinking? the opecow $40 for average price demonstrates the pain a lot of members are going through. for reasons i said, i think saudi will be arguing this is our darkest moment. let's hold on and next year it will get better. there are reasons when you look at the oil market. look at the fall in shale
pulse" on bloomberg tv and radio, streaming on bloomberg.com. c&w shareholders will get a special dividend when the deal closes. ofncine: speaking as close lead to bloomberg, the cable and wireless ceo told us what he thinks it is a good deal. with're joining forces liberty global, which is the largest international cable player in the world. they bring a lot of content to us. they bring scale to us. i think it will be good for our people. they can develop more in the region. i think it will be good for our customers and good for our u.k. shareholders as well. we've seen the market cap go from $1.1 billion to $3.6 billion on the back of this deal. francine: now let's get back to the markets. mark barton has the charts that matter. i know m&a is in there. mark: shares in cable and
wireless are up by 8% today. the highest level since june, 2007. there is the chart going back six months. the offer price from liberty global. gosh, john malone is highly inquisitive. billion snapping up cable companies, buying cable and wireless, which gets half its revenue from panama and the caribbean. gives him critical mass in latin america. so, the big gainer today. french stocks are rallying, up high 2%. the biggest gain in four weeks. they opened lower yesterday. down by 1.2% after the friday attacks. they finish the day little change. interestingly the shares that slumpe yesterdayd such as europe's biggest hotel operator up.
lvma shares have read coat -- recouped all their losses. the bloomberg dollar stock index. investors are choosing to ignore a century the vevents in paris and choosing to focus on consumer prices in the united states. we have minutes from the october fed meeting. expectations are high that the fed will raise weights in december. that is boosting the spot index to its record highs level since it started trading in 2005. interestingly, hedge funds are bullish on the u.s. dollar. along with large speculators. they boosted bets of dollar gains versus 8 currencies in the last three weeks in the biggest jump since march, 2013. the dollar, by the way, this year has risen against all 16 of its major peers.
french stocks rebounded. cable and wireless jumping, and the dollar is at a record. manus: think you very much. that record dollar -- going across all of the stories we are talking about. here is a look at what else we will be watching for the rest of the day. first we get german -- survey for november. later in the day, we get the inflation figures and the industrial production from the u.s. we have those inflation number so the u.k., negative numbers. francine: so we have that. then we have the german zew in five minutes from now. what we're looking at is consumer confidence. this will have an impact because of the terror attacks in paris. trying to figure out the inflation figure and how that plays into central banks' thinking. we had a great conversation with will kennedy on commodities. we look at equities, they are up. when you look at commodities, they're actually not up. they are focusing one on world
growth and m&a activity. manus: the bloomberg dollar index -- a record level. the highest dollar that you have, obviously impacting some of the commodity moves. we've seen sterling recover. this is the third negative reading on record. getting over the initial shock of a negative reading. the core figure coming at 1.1%. francine: for those listening on bloomberg radio, the first word is up next. "surveillance" is up next. we will talk abenomics. we talk emerging markets with american banker and senior adviser for citi. and we continue our coverage of the paris terror attacks. we will have a great conversation with william mary, the former cia paris station chief -- william murray. when you look at the paris terror attacks, this will have
francine: the number of people involved in the paris attack is unknown. fightering as france's jets bomb syria. says an explosive device caused a plane crash in egypt. the bloomberg number index is at its lowest level since 1999. oil approaches $40 as investors are pessimistic about a global recovery. this is bloomberg "surveillance, " i amnc