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tv   Countdown  Bloomberg  October 7, 2014 1:00am-3:01am EDT

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>> the first transmission of ebola outside africa. >> the world's largest smartphone posts its biggest rap in profit. the company spurns a merger. 6:00 a.m. in london.
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we are getting some breaking news from the bank of japan. no change at the boj. to as retained its plan ¥70 trillion rise. what is interesting that has emerged from the meeting, it seems as if there was a debate change their rhetoric about when the bank of japan will reach its 2% inflation target. bojmember proposed the would change its rhetoric. would finishrange in april next year. it was defeated and 88-1 vote. a majority of the board members think it should drop but that is
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not reflected in today's meeting. maybe that will happen further down the line. no change in policy but the division is occurring within the boj about this target which was put in place over a year ago to 2% inflationeral level within two years. >> this is a debate between shinzo abe who made statements about the weakness in the end at -- sincet time 1998, he was called a wave. he had to go into the diet and explain himself where he hinted again, hitting that target. take how see action if they needed to.
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we have got their deliberations now at least. is an hour and a half delay. it usually comes out of asia. -- i have theinto statement right here. when it comes to their comments on production let me read the exact line from the statement. it has continued to recover but there is some weakness on the production side. mainly because what we have noticed. it is a decline in demand because people have frontloaded a lot of purchases and that has filtered into things like inventory levels. it comes to private consumption it has remained resilient. as a trend with employment
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income, the situation improves steadily. housing investment declined also due to frontloaded purchases ahead of the increase. in the sales tax back in april. also he made some comments to lawmakers overnight for you guys midmorning for us. the positive there is that he is an exporter increasing gradually thanks to the drop in the end. there has been a lot of talk since last week whether there is a drop and whether it has run its course. it is causing more pain than gain. at this point the end is not an so far.minus they watching the fx -- they are watching the fx markets.
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back to you. thank you. joining us from hong kong. let's get to one of our other top stories. europe has the first transmission of the ebola outbreak. the spanish ministry confirmed a nurse and image red hospital has tested positive. >> the woman was part of a team that treated a spanish race to died from the virus. health officials say they are doing everything they can to contain the infection. came as the u.s. president barack obama described ebola as the top national security threat. he said america is doing all he can in regards to the virus spreading but no other nations needed to do the same. >> we have not seen other countries step up as aggressively as they need to.
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this is anat that area where everybody has to chip in and move quickly to get this under control. with us to bend duarte.e -- estaban what do we know about the woman who has been infected? ofwe know that she was part the team that took care of one of the two catholic priests that were [inaudible] passed away. holidays afterk the second priest. that was around the third week
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of september and the first symptoms started september 30. there was a press meeting with the health ministry. working on the case. >> the priority is to trace the people she came into contact before the symptoms first came into view on september 30. and after. >> [inaudible] one selected by the government to treat those cases.
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important to point out perhaps that experts have been telling bloomberg that they do not necessarily expect to see a major outbreak because of the significant difference that the right health care procedures can make in containing this virus. >> that has been the official line in spain until yesterday. are complying with the w.ho.o. protocols. statement is in question marks. >> thanks for joining us on the phone. apologies for that that connection. here with more on samsung's
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latest results is caroline hyde. not a good quarter. >> profit down 60%. ugly is how many people estimated it to be. it was a difficult quarter. profit -- thated was more than had been expected. the biggest drop in quarterly profits. that is when they started abiding by new rules. the run-up to these numbers, two thirds of the analysts that we track had already cut estimates on the outlook for samsung. they had anticipated this mess and largely is smart phone shipments. the profitability is falling. they are having to spend a lot more are kidding.
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it is all about apple have got bigger phones come of that is where simpson has dominated in terms of the size of the actual screen. if you have a lenovo, all these cheaper but still pretty dropped phones eating into china. >> they are being snapped up from the bottom and the top. they do everything under the sun. how do they fight back? is it -- they have launched a new phone, what have they got to do? >> analysts think that new phones will help. analysts are looking rather positively. this time we will see profit back of 63%. >> this could be the autumn. >> this could be the trough. we have newves said phones featuring new materials and better designs. , that should help
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bring a little bit of sales. have a wraparound. very necessary. -- what going to inject is crucial is it is realizing it does not have the dominance it used to in smartphones. today's reflected in share price. investors are focusing on what is coming. >> they are spending $15 billion on a new chip factory. ok. stay with us. show, second hour of the the participants coming into the studio arguing their cases.
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flanders from jpmorgan and simon smiles from ebs. -- ubs. lots to chat about today. we are cooking ahead to the bank of england rate decision. that is on thursday. philip schorr joins us next. ♪
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>> welcome back. time now for some company news. the european union is ready to start a formal investigation into amazon's luxembourg tax deal according to the financial times. the eu is looking into whether luxembourg allowed amazon to collect state subsidies for almost 10 years that may have been illegal. the financial times cites people familiar with the matter. the move would lead to a breakup of the portuguese film companies merger. according to someone close to the matter, they are looking to
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reach an agreement over the assets within weeks. rio tinto has confirmed it rejected a merger offer from glencore in august. there has been no further contact over the potential deal which would create the world's largest mining company. people familiar with the matter reached glencore has to gauge interest in a deal. >> our next guest thinks we will have to wait till next month to see any serious rate change discussions. about central back -- and central-bank meetings that have taken place. let's start with australia. therba governor said exchange rate remains high by historical standards. that is a bit of a theme.
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he definitely tried to talk the currency down as the economy adjusts from this mining boom. do you think he will talk it down further? is down 4%. >> the aussie dollar has come off not just in the past month but the past year. the australian economy is looking more competitive. it may well depend on whether the rba begins to hint that he could cut rates at some stage. >> they are talking at -- about .acro-prudential tools >> if we begin to see macro prudential tools biting on the housing market we could expect some effect on consumption. that is the point where the rba becomes more open.
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the aussie. gone >> it is interesting talking about the devaluation of the currency they would like to see in australia. we had the prime minister saying that the weakness in the end has been damaging. what might be good for exporters is not necessarily good for importers. it is a complicated story. you wish for,what it might come true. you are on a fine line here. overvalued, ay is depreciation helps that it is going to help to a certain degree and up to some point. if the currency falls too quickly or too far, you are raising the cost of imports and you're going to damage your consumption. all your firms that are imported are going to feel the squeeze. i think trying to achieve a
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istain level of the currency a dangerous situation. >> we heard that they are retaining their plans extending the monetary base. do you expect a change? >> no. not for the time being. there is a lot of uncertainty over how the economy is going to bounce back. the government is more likely to do stage to and what does monetary policy do? what happens is very important. that lays the foundations for the government's fiscal policy plans. >> the other was this. they might remove the target of 2% by 2015. taking that kind of guidance away, taking that kind of wording away. with that take fresh or off? it was defeated 8-1.
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there is a big element for all the central bankers. >> it will not remove the pressure. is tightening fiscal policy, there is a lot on the policy board to keep policy easy. we come back we will get the views on the u.k. economy. stay with us after the break. ♪
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want france's economy to become number one. now it is second. i have had enough of french bashing. i want to win this battle of image. france has strength and it has enough strength to say yes. france is here. --is moving, it is back on and undergoing reforms. >> that was the french prime minister yesterday here in london. we are back with the chief economist philip schorr. based on that message, very different rhetoric trying to -- structurally
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reforming? >> on its way. perhaps theing so tone of his message was crafted to suit an audience. it does appear the french government has realized its mistakes. the problem is reformist difficult. it takes time for the changes to come into the economy. of course he has got political pressure on the government to reverse. >> let's talk about the u.k.. we have a number of violations taking place and another to follow. what significance does this hold for you? >> it is an interesting situation. they defected to the u.k. party. it will be -- win by a large
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majority. it does not make a huge amount make --rence but what might make a difference is you are taking more conservative votes in the may election next year. it looks like it will be a pretty close election. that few percent could make a difference. the rhetoric is going to change as well. the conservatives are going to step up their anti-european rhetoric. policy could change. it is an interesting situation. expected, to members are dissenting. are we approaching a time when anymore members might be on the
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nasi at -- nay side? the quarterlyis inflation report which carries with it a new set of projections. they have been cooperating. all the -- our central view is we will see a rate increase next month. we are less constant than we were -- confident than we were. we would not be surprised if we saw tightening next month. >> coming up, and merger between glencore and rio could create the biggest mining company in the world but could it happen? we will learn more. ♪
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lex welcome back. it is a big day in terms of lack of decisions. let's kick it off with the dollar backdrop. we're seeing the dollar, its highs. this is a bloomberg spot index. policy gaps will continue keeping the dollar higher. living there rates unchanged. but thelation is tame
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jobs report may be understating the momentum we might see in wages. prepare the markets for rate rises. of japaned the bank and the rba. let's have a look at young. have tomr. korodo explain himself in parliament. they will take action if they need to. that took the dollar yen a little bit weaker. this is really hitting importers. no movement in terms of the timing for when they will hit the 2% inflation target. the aussie dollar was up by seven percent in the last quarters.
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the aussie dollar was just too strong. >> these are the top headlines. a nurse at him and dreaded hospital is pink diagnosed with ebola. this is the first known transmission outside west africa. they are investigating how the woman began infected. >> the academic study is being carried out after the results of this analysis which is being done on her and her husband. getting a list of who she has been in contact with. and to see at which point there could have been a contagion. repelledh forces have and islamic state assaults on the town of kobane. more than 45 fighters died in the clash. the reserve bank' has kept its key interest rates at a record
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low. the overnight cash rate target has been held at 2.5% for the 14th month following an attempt to spur hiring for the economy. the economy is struggling to expand. board rejected glencore's offer for a potential merger. we have more details. heard they before we had been shot down, what was being discussed? >> investors do not think that glencore is done just yet. you look at rio's shares trading and they are up close to 4%. after we announced that glencore was interested in rio, those shares trading in new york shut up 20%. clearly investors think that this may have some legs.
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we understand that glencore in addition to directly approaching the board and getting rejected is -- they have been talking to chanel co. -- chinalco. and is the% stake largest shareholder. if there is not to be a deal this year what about next year? shey want to gauge chinalco' interest in something like that. we understand that glencore thinks that chinalco could support the deal. they did not get a seat on the board and they have a joint venture with rio to develop some iron ore and ginny and it has not been going as quickly as they would like. they might be interested, glencore thinks we understand in a change of control and this would be about a deal next year. >> why would glencore be , with -- what is the
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rationale? different namespace to the consolidation we have seen in the industry. all the abbreviations. the simple thing is breadth and scale. they have been hitting in on owning mines. this would give them huge scale because rio is the second-largest iron ore exporter so they would have that as well and have that chinese connection. you think in terms of market cap . i just checked, glencore has 71 billion and rio 90 billion. the biggest miner out there right now is bhp with a market cap of $150 billion. a glencore rio combined company would be $160
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billion of this would create the biggest mining company in the world. the question is what would be the trigger for a deal because as you can see, glencore in terms of market cap, surprise. if you look at iron ore prices they have been plummeting. in addition so has the share price of rio, down 12%. not quite there perhaps. that the a note saying iron ore share prices have to drop to $70 per metric ton for this to make sense and in addition the prospects for glencore's monday trading business would have to improve that much as well before this deal would make sense. -- that is dying during the negotiation, they have to overcome a lot of hurdles. regulators, what is the biggest
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hurdle, is it convincing the board? >> there is the regulators which if you talk to the analysts would demand some asset sales. that could be a huge issue even if these entities will agree to the deal and the second part is chinalco. 8% stake in rio. you look at the shares of rio, it is half that. they want some kind of premium could [inaudible] as well. to find out what the future holds.
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>> i am in charge of research and technology. areas whereny looking into. one which is the most appealing, how can we customize and personalize the car and make it useful to its user. for example the driver approaches the car and threw a smart phone or any other identification feature, the car would know who is coming there to the car can send itself preferred settings. the car once you open it, you get the music that you prefer. to get the ambient lighting and the color that you prefer. has a diaryadays
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and it is full with all the meetings. what the car could do for you this take you to your next meeting. another example, you're driving and by the afternoon, you intend to go to the countryside. you have 10 liters of fuel and -- the car guide you to the fuel station. we are looking at what we can do in future. this is out in the next 50 months. >> coming up, samsung is heading for its roughest quarter. it is still a powerhouse. we have numbers for them next.
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>> welcome back. ."is is "countdown samsung is headed for its roughest quarter. rising competition from apple. more on what we can expect. today.ou for coming in investors seemed to be focusing on the future rather than the course of this being the worst quarter in a number of years. is that how you look at things? it's look at the products it has got coming out. ispart of the reason historically it is such a strong company and they have weathered so many changes in the landscape. i do not think it is a worry about long-term values. the fact that they have a massive semiconductor business which supplies chips to apple which is what is eating out from their high-end profit and their average selling price, that puts them in a good position. that -- it shows they are getting pressure, that does not
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mean it is a risk to the company. number oney remain and cell phones? so much pressure from the low-end as well. lenovonufacturers like and everything like that. they're not going to be able to retain market share. bigome sun makes [inaudible] people love the galaxy phone and the tablet but they -- is it ?ize and scale they have functions two years ago that the apple iphone have brought to market. there were a few products that people sleep out overnight for.
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and following for apple which is really rare. >> which leads to my next question. the prophet margin of the mobile unit declined because they are spending more on marketing and the phones are falling. do they have to keep spending more to keep up? >> that is not a good sign. i do not think $10 billion is what i saw earlier today in terms of what they are spending. they have to capture the imagination and the emotion of users. you're going to have to start speaking to consumers on that high-end. there seems to be a trend towards putting up some of these this this is. and hp concerning the story we were reporting yesterday that they would be splitting their business and half.
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--and enterprise on one hand [inaudible] that where these companies are going? bill -- where legacy businesses are going. of it is a level of innovation and its paces catching up with trends. them splitting up is good for them. they will become more agile and nimble. the reason i am contrasting that is you have apple and facebook which are adding to their businesses with payments which i keep talking about. >> they are adding on. facebook is growing. twitter will do the same thing. this is from the newer end of the spectrum and trying to add to their businesses whether it is hardware or software.
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what should weng ask when she comes in. do you think it would be better if they split the chips and the phone businesses -- take us forward. should thatappen or happen, would that make it more of an interesting prospect? >> that could happen. it would be similar to what happened to motorola. it would make it better. -- it is in so many sectors. that would be breaking up the strength that it has which is the power of distribution. it might be a little different. some of the conductors are strong and that is where you will see the growth. shares are down by 18% and
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they keep dropping. do you believe in the rocket internet story or not? >> there is lots of questions in there. i am a huge fan of what they have created. what you're saying is on owners and people who are coming out of this businesses, they are feeling like a new economy. they have done it very well. say that, i cannot put a number on it but it is all 2 billion and it is massive. the proof is in the market value and the combination of the businesses they invested in.
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i know you are [inaudible] me the hot, do not give 10. >> i can choose one. cyber security and cyber intelligence is an interesting place right now. that is begging the new frontier wait --ng sure we now what we are doing with data. is digitalavorites shadows. they do monitoring of digital footprints online. they did work for the nato summit and for the national crime agency. there was not spying but there hacktocked -- lots of
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ivist activities. tell lawas able to enforcement what they needed to do to get the systems back up. there is so much with the data that is being aggregated and accumulated. there is a huge opportunity. >> thank you. >> the return of a legendary fashion designer. we will tell you which iconic designer is launching a new fashion line. ♪
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>> welcome back. let's look at the papers. caroline joins us on the set. >> i am going with john galliano. background the past and with the new role in fashion -- back from the past and with a new role in fashion. he has been in rehab as we understand them a it was addiction that seem to be a real setback but now he is joining a
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company that is behind the likes of diesel. and he will be the creative designer. he has been creative director .or a russian perfumer shown remorse and many seem to be wishing him good luck. i am hoping -- we heard from the member of the holding company. >> a little bit of design. this lady is known as the queen of taupe. her company is 40 years old. i was staggered when i saw that. she is celebrating 40 years and
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i have been in a couple of houses she has designed. not my own. the bottom line is she is saying tough, this is a brand that has never been more popular. andears in the business passing. >> i have got something that has come from a literary festival. up thes a word to sum english and this is the word that has been picked out why one author as something about the english. this word, typical, is quintessentially english. it can be used for burnt toast or the outbreak of the third
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world war. are plenty of others and i am sure we have had them. must not grumble. make the best of it. >> stiff upper lip. is a bombshell. .ere are some of the things this is the former manager. and dangerously sour. this is incredible. and some of the players are
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beginning to fight back. >> they must have been bracin g themselves. stay with us. ♪
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>> a spanish nurse has been diagnosed with ebola in madrid. it is the first known transmission of the outbreak outside africa. >> assam some -- samsung struggles. posting the biggest drop in profits in five years. >> rio's rejection. an offer from created that would have the largest mining company. >> welcome to "countdown." of breakingbit
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news. data yesterday from germany. industrial production at 4%. the median estimate was 1.5% and that carries through. will get lots of reasons. some people talk about pressure on mario draghi. the top line on the german production. >> a comes after german factory orders plunged. dataays of disappointing from the supposedly engine of economy. let's talk about the big corporate story today. profit has slumped for the world's biggest maker of smartphones. it is interesting. the results were disappointing but investors are not looking at them.
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quarter since 2009. they had so many headwinds. we saw phones facing competition. apple with their biggest screens. you have competition from the higher-end phones and these entries in china. they are pretty high-end but much cheaper. theirave been eating into core business. we are seeing some slight slowing in demand for some of their displays. so headwinds there. this.ave anticipated analysts have been downgrading their estimates.
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>> how are they going to turn things around if that is the case? is that because of a new product they have got coming? >> they have launched one much quicker than they have anticipated. 4 and theyalaxy note want to get ahead of the game in terms of apple and china. that will help the fourth quarter. andhave a wraparound screen you can read your messages at an angle. it is apparently what everyone wants. these new phones but new lower end phones they're promising that will help sustain their market share. are -- many want to see them hold off this immersion. it is what people want to see.
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galaxy.theye s5 want this phone to drive sales. they are looking to diversify. -- supply must of their competitors with chips and tablets. ng that hasly samsu been the biggest maker of memory chips. they want to get into the internet of things. manage your thermostat and heating by smartphone. this is the future. they are spending $15 billion on this. building a new plant and they hope that will drive earnings. many field we will see profit climb back up next year. from ting a statement
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fiat. for its merger with chrysler. the new york stock exchange has approved a listing. the merger will be effective october 12 and shares will start on october 13. the combination will be the biggest automaker in the world. >> there is the current outbreak of ebola outside of west africa. a nurse has tested positive. quick she was part of the team that treated the spanish race to who died from the disease. health officials say they are doing everything they can to contain the infection. the epidemic study is being carried out after the results of this analysis which is being done on her and her husband. we are getting a list of everyone and contact.
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we will be in touch with these people to see at which point there could have been a contagion. >> president obama described obama -- ebola as a top national security threat and america is doing all they can to stop the virus spreading but said other nations needed to do the same. seen othernot countries step up as aggressively as they need to. i said the yuan and i will is an area this where ever but he has to chip in to get thisckly under control. >> we can cross to madrid to speak with the spanish bureau chief. thanks for joining us. how did this happen? get ae not supposed to bullet in a specialized
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treatment facility. -- ebola and a specialized treatment facility. how did this happen? >> we still do not know. we heard from the health minister last night. they were studying to see whether all the protocols have been followed correctly. we still do not have a good answer to that question. what do we know about the woman who has been infected? she was working at the hospital. we know more than that? >> she is 40 years old and galicia.y from she had been part of this team of staff that had been treating the spanish priest manuel garcia. from africa where he contracted ebola.
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has to beority tracing the contacts this nurse made before and after the symptoms emerged. is that what authorities are doing? >> that is right. the authorities are monitoring 30 medical staff who were involved in the treatment of manuel garcia. this nurse went on hollande theowing the death of priest. that will be a main focus for their investigations, to understand what her movements were and contacts ring that time. this infection, experts have been telling -- there are vastly
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different levels of sanitation. >> i am sure that their opinion is correct. this is a major test of the spanish authorities and their follow-up for seizures. the focus now is to contain it. >> thank you for joining us. there from you can join our conversations on twitter. we are joined by the ubs cio. and stephanie flanders. ♪
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>> time for today's company news. start an ready to investigation into amazons luxembourg tax deal. the eu is looking into whether luxembourg allowed amazon to
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collect state subsidies for almost 10 years. it may have been illegal. offers fromg merger glencore. there has been no further contact over the potential deal which would create the world's company. people say glencore has reached out to rios bigger -- biggest investor. and the biggest prize yet for chinese buyers. that would be the highest price paid for a single u.s. hotel. leaders debate the key issues in financial markets. they invite asset managers from .ther financial institutions
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joining us now is one of the challengers. jpmorgan'sase -- market strategists and one of officers. is it all very convivial and cordial? >> a bit of both. exude conviviality and strength of opinion. there is a combination. we are challenging each other in our views and lots of head shaking and eyes to the sky. how much healthy debate and retrospection goes on? let's say once every three months. something we decided previously or thought about doing, we ended
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up changing based on the debate. an argument month or nuance changes. >> let's ask the question you posed in your latest monthly now. will the measures set off this domino effect is the phrase that you use that leads to higher growth and inflation, what do you think? >> for now the jury is still out which is why we read -- remain neutral. mentioned the industrial production out of germany this morning. last week we had factory orders and inflation disappointing to the downside. we had pmi's floating and we had the ecb disappointed markets as it failed to commit to a balance sheet expansion.
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>> is it right that commentators like yourselves could continue to link the eurozone in japan? is it right doing that or not? a way that it has become more relevant. mario draghi highlighted that -- youy policy alone have to have a supportive structure. once the initial stimulus wears off the focus has to be on the structural reforms. you still need companies to [inaudible] or take on a new venture. somewhat takene that message to her that it is not just about the ecb anymore. the debates will be crucial to the moon in europe.
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i would say that some things go focus on. we they focus on the consumer side when they talk about data. we tend to be reporting industrial production numbers. if you look at consumer spending that has continued. perhaps things are not quite as bad as we thing but in terms of getting added momentum i agree we need something to change. >> this is what has been talked about for many years. whatis not just about mario draghi can do and what the ecb can do. it is about broader reform. our market expectations in line with where policy is moving to? eurozoneve your unemployment so there is an
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issue with respect to the consumer. interestingit was at our last investor forum. of faith thatot earnings were going to turn any time soon. there are no arguments about valuations. people thought it was trading and the headline valuations or not enough to be bullish. -- it is similar to the rationale early on and the japanese story with being long the nikkei. more importantis than ever and i was reading some of the bloomberg copy talking about buybacks at this stage rocking along in terms of income returning to investors.
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where should we be focusing in terms of income? always a question. what of those times when you talk about unconstrained fund managers. we have had this progression where people have been looking more about dividend income as part of their income rather than on the fixed income side because of where fixed income markets have got to. sectors a lot of looking pricey. it is harder to find value. and highmarkets dividend stocks looking much cheaper. it is that kind of thing you are looking the world over and lowering your expectations. the one worry i have is investors are coming out of this gh expectations
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with what you should be getting year after year. i hope they will not be mis-sold things on the expectation they will get that. >> we will discuss where it you should place your money after the break. joining us after the break. stay with us. ♪
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>> welcome back. is stephanie flanders and simon smiles. let's talk about the debate that you had this afternoon. isomberg has very discussions this morning who said get the markets ready for rate hikes. where are we in that debate and will that come up this afternoon? >> there will be in a mis-focus over the next few months over not just what the fed is going to do and when it is going to do it. we see the mood has changed on that as the strength of the data has come through particularly on the jobs market. i think and this is true of all of the world central banks. it is still true in the u.s. even if we are looking at tightening, even as investors
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should think about the impact of that on their portfolios. this is the world in which the fed wants more inflation and more growth than it is getting. the bias is toward reflation and i would think i would pushback from this view that the fed is behind the curve. it will be behind the curve and that is what forward guidance would be about. made -- we may forget that a little bit so i think i would not jump the gun and expecting a lot of rate rises. this greaterplay emergence in rate policy around the world, contrasting what the ecb and the doj are doing with the fed? >> now. -- no. to reinflate the economy and is willing to risk being behind the curve to reinsurance objectives of a
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self-sustaining recovery. you look at the situation in japan. increasingyears off interest rates. the u.s. will start to normalize monetary policy albeit from incredibly easy conditions we have today. probably notngland this week but we think next month will start to normalize interest-rate policy. -- a differentf view. >> it will be slower and more gradual. they have said that pretty much. they will be the first to raise rates in the first part of next year and because we have so much debt in the u.k. which is semi-variable or completely floating compared to the u.s. where you get these wonderful 30 year fixed-rate mortgages, that will make them have to go slowly because we are so much more sensitive to interest-rate change. mccaffertyu be a type person or in the camp of
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not ready yet? >> i would be in the seven. if you start earlier you will cut ability to go more slowly -- build credibility to go more slowly. see how much they want to avoid that outcome. at labor earnings in the u.k., that still suggests we have a lot of capacity in the economy but we want to get that back. we do not want to write it off. like american equities. >> we do. markets were disappointed by the ism. back to 2008rate
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levels and if you're looking for a growth story across the board it is the u.s. we do not think valuations are extended. thank you. ♪
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>> welcome back. 7:30 a.m. in london. a quick check on the exchange. talk about thes dollar. the dollar is just coming off its highs. we had a bit of a renaissance through the early part of the session. giving a little bit of value back. this is the dollar spot index. we drop in most since september 2013 yesterday. we are on again for that kind of a bit of a change.
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a little bit of position on the dollar. how does that translate? korodo was run into parliament, adjust policy. sources told us the bank of japan might move away from a time specific inflation. little bit of a reversal. the aussie dollar, they have had their meeting, no change. the risk is that you are going to see a hard china landing. that compared with softness, that could take you down to around the $.80 to the dollar level. byairly sanguine reaction
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the bank of japan and reserve bank of australia at the moment. >> these are the bloomberg top headlines. repelled thes have islamic state militants. they were forced to withdraw after less than an hour. more than 45 fighters died. the french prime minister was in london to promote his economic strategy. budget and ted a announced the european commission. we have been truthful about the reduction of public spending on reforms and the support of growth and there is no reason why we should not be able to convincingly must convince the european commission on the choices we have made. nurse at a madrid hospital has been diagnosed with ebola. this is the first known transmission outside west
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africa. health officials are keeping actions to keep doctors and staff safe while investigating how the woman became infected. rex the epidemic study is being carried out. after the result of this analysis, we are getting a list who could have been in contact. we will be in touch with these people to see at which point there could have been a contagion. ebola. more on in.ks for coming the us an idea of significance of the infection. this is the first time it has happened outside west africa. a similar it is case to the one we had in texas. this is a nurse who had been treating a patient or two patients who had contracted the disease. this is similar. it is not like the patient
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caught the disease in spain. to africa.on it is following the same pattern that we have expected with this virus and the way that it transmits. the big test would be in the next week or so what happens to the people who have been close in proximate contact with the person in texas. 21-days a two to incubation period. that would be the interesting time for them to look at for this particular disease. become equipped with more and peer cold knowledge and research and findings. how does that help progress the treatment question mark president obama said they would take all measures and steps to step up screening. nothing has been impacted yet and there is no process. they are in discussion at the moment. what needs to happen to keep
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the locked down as well as stories that say contagion is not a huge risk at this stage? a disease that you catch that easily. anthrax orhing like hiv. it is proximity like body fluid. the probability of it turning into a flu epidemic is nonexistent. the reality is how can you screen? sars, they were doing temperature checks pre-the patient to get through the net do not have any outward symptoms. the only way you can screen is to follow people who come out of africa. i do not know what plan they have. >> there is screening already taking place. >> there is still no cure but the drugmakers are stepping up efforts? >> we hear drugs here and there that are being used to treat the
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virus. what you need is a drug that potentially limits the spread of the infection within the body and vaccines. and vaccinated the first-line responders and contained the disease. or we will continue to see situations like texas and spain. a rio tinto has rejected measured approach by glencore that would have created the biggest mining company. tell us more. why israel looking -- why is rio looking to take over, or glencore? >> we have been sitting on the sidelines watching this frenzy and other sectors. this is about iron or. the prices tanked to a five-year low. an opportunistic
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time to attack. they are known for their opportunistic approach. they did $60 billion of deals in the last 10 years. >> there is a lovely piece of a red this morning. -- that i read this morning. they will do a deal with chinalco and go on the attack. that hasrt of report been rebuffed has gone to the major shareholder. they see some vulnerability and they're working on that angle. there is some huge [inaudible] to any deal and there are skeptics around as to if this could work. shareholders are
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conservative. they rejected a bhp approach in 2008. they will want to see an improvement. glencore does not offer that sort of premium. regulators in china will want to see some acid sales. -- asset sales. there to adles are deal taking place? forcedaw that they were to sell copper when they bought xstrata. export earner in australia will want to see some concessions. >> coming up on the program, we will discuss offshore trading of we are joined by the ceo china bank asset management. that is asset trading. after this short break.
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stay with us. ♪
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>> welcome back. bloomberg u.s. dollar high yield corporate bond
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index. it goes back from 2000. it is clear where this has been headed. this is the price, not the yield. rising, theave been yields have been following. i thought it would pinpoint a couple of dates. that was the middle of last year. the bond markets did not like it. the price of high yield bonds fell and deal rose. in july we hit a record high for bonds. since then the price of the bloomberg high yield index has been coming down principally because investors are starting to wonder when the fed is going to raise interest rates. is it time to start buying again? morgan stanley says it is. sanguine.
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morgan stanley says we no longer see the same complacency among investors but there are reasons to be cautious about this market. junk bond yields are still two point -- to percentage points lower than the average. if the fed lifts rates more quickly than investors anticipate and u.s. companies have been incurring debt at a record pace. bond time to get the junk party going? morgan stanley says yes it is. the party in risky debt may keep going as long as the money keeps flowing from central-bank school central banks globally. and thatrn about this sort of hatred that is pushing investors into all sorts of risky behavior.
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>> let's move on. let's have a conversation about china. , allood among investors those topics we can throw into the conversation with our next guest. joining us now. thank you for coming in to talk to us. let's talk about the internationalization of the currency and we can talk about the new products you're putting in what is. -- putting in place. is going to win out? that is the largest asset market in the world. -- we have never seen that in history before. so many sovereign governments embracing a new current see. in the space of four years. our foreign trade settled from
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zero to close to 30%. japan is to be the second-largest economy. it has 30% in the end. europe is 50 to 60%. >> it is exciting for you because in conjunction with citibank you are offering these products in europe. take-upand what sort of of these products would you expect? >> that is a great intro. do -- [indiscernible] forstors will have to look alternatives. if you look at history, it is a very good opportunity. all predicated or
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correct me if i am wrong. how much of that is predicated on a moderate landing. it is a rosy picture in terms of let's pick up higher yield chinese assets. understand the chinese economy. we hate inflation so that explains why our yield is higher. also you talk about china's slowdown. this is music to my ears because over the past decade we went for quantity growth. now we need to go for quality. youeed to restructure and see this slowdown. if we do not do that that will and the crisis. on thed we talk about debt side, if we look on the equity side.
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they are making a lot of policy to get more investors into chinese stocks. how far through that process are we? >> it has been phenomenal. -- this is ale two-way cycle. $4 foreign trade is trillion. circulate. >> can you give us an idea of the assets or the money that is floating in, there have been reports that moving -- money is moving from ukraine or russia to hong kong to maybe institutions
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like yourself. can you give us any idea of whether the flows of money recently have been coming from russia because of the ukraine crisis? have the flows been going on there recently? >> we have seen a lot of interest from russia but so far business.t done any debate what the world currency is going forward. is that the ultimate challenge, out a living,eke is there currency consideration? >> absolutely. i have to think the u.k. government. a reward fromt
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this. >> that is a critical move in our development of redmond the internationalization. the u.k. government would be the first sovereign issuing a renminbi bond. renminbi a major reserve currency. behindionale internationalization is diversification. away from the dollar. that becomes a risk and is a two-way process. china could not have forced our trading partners to use renminbi for trading settlements. there must be a rationale. >> is there a time when the renminbi will be the world's reserve currency? is happening. the austrian government has latest two-putt 5% and reserve into renminbi. some african countries have
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almost up to 30% of the reserve. >> thank you for joining us. good to see you in london. >> you are looking at a live picture. it is a little gray. equities are opening flat. we will talk about german production numbers. join us after the break. ♪
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>> welcome back. we are eight minutes away from the start of today's european equity session. jonathan ferro is here. we were talking about a german factory orders number. is it déjà vu? the most sinceg 2009. i will call it a plunge. down by 4%. clear is this weakness in the german economy and i look to japan. european politicians keep looking to the european central bank. look at how aggressive they were. this was around $80 billion a month. of theeconomy one third size, this is aggressive monetary stimulus and it has brought down the end. it is not helping the economy.
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>> we have a guest to tour attention to those comments. -- who brought our attention to those comments. debate at the center of are trying to work out the limits of their abilities. ande have minutes tomorrow a meeting at the end of the month and 12 policymakers speaking this week. will try to bring you up-to-date. he talked about the dollar saying it was maybe too strong. >> there is a lovely piece on of 1000 adultsy by the pew survey.
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notidentified her and 75 it . the chair of the central bank. people got it right that the minimum wage is seven dollars 25 and the unemployment rate. >> a do not know what to compare that to. her everyld hangs on word. maybe the financial world. >> this made me think of the poll conducted in august. the percentage of the population who knew what forward guidance was. 72% said they had never heard of forward guidance. the bank of england said this was a policy from main street. up you to follow that
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are looking at something like 4% that had any idea what it was and how it worked. "oin the move" is next. watching glencore very carefully. ♪
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>> welcome to "on the move." european futures are pretty flat. more signs of a slowdown. be careful what you wish for. with the japanese yen near a low, we're also going to talk about the largest mining company
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that was. glencore wasrned laying the groundwork. the dax is lower. cranny for in manus the open. more disappointing data out of germany. >> that is disappointing. is put onressure mario draghi? european equity markets are opening lower.


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