It is 7 00 here in london. A parade of military might in of peace talks on tuesday. Fighting continues in the east. Angela merkel is warning not to expect a diplomatic breakthrough when president putin and president poroshenko talk. This is classic angela merkel. She is managing expectations. She is tempering expectations. She is visiting kiev, and she said, dont expect much on this meeting on tuesday. Trip washe quote. My aimed at preparing such a meeting, which wont bring about a breakthrough. Merkel also called for resolution of the dispute between ukraine and russia and gas from on natural gas transit and delivery. She said there wasnt a red alert yet, but the clock is ticking. Winter theloser to situation will demand and consume more energy. What is the latest on the ground in ukraine . These holdout cities are being surrounded by progovernment forces. At the parademe in kiev president poroshenko talked about the need for another 3 billion euros in additional funding. Quote e actual he also accused russia of sending artillery shells from russia into ukraine. One other thing is merkel added her voice to the nato calls, saying russia is clearly Arming Ukrainian rebels. It seems like diplomatically they are ratcheting up pressure on russia. Merkel said it could always come to another round of sanctions if russia continues its behavior. Started aarkets have weeks trade. David is standing by with an update. That. Ngs for it is a little better compared to the last time we spoke about an hour back. Its the time of the day when japanese markets are just about wrapping up their session. That is a standout. Japan is up by half of one percent. Hong kong is doing quite well. As is south korea. It is a mixed basket. We are looking at in volumes. I think the action is in the fx market when you have the likes of the dollar yen. Aussie dollar it is really about Dollar Strength pushing down a lot of these currencies. Chimingo point out the the chinese markets. We have seen this market rally 10 or 12 over the last few months. What they are saying is best case scenario, five to 10 upside. One of the warning shots they say wakeup calls is the pmi data, which came out last week. Something to watch. It is a fairly uneventful trading day. Talk to me about Malaysian Airlines. Gete is a speculation they job cuts, review their fleet size, and possibly look at their ceo and who is in charge. Where are we on this story . It just about what we know so far. Dramatic changes could be coming. Let me go through this so you can get the details. The airline is said to be it is asng job cuts. Much as 20 of the current workforce. They will be looking at reviewing their orders for new aircraft. Change ationed, that the top. They are looking at replacing the ceo. At as many looking as three people up for the job. Malaysian week airlines is set to report their. Ast set of earnings a lot of moving parts. All know the disasters Malaysian Airlines has had to an alreadyn top of very Competitive Airline market in southeast asia. Thanks for that roundup. Lets have a look at European Equity markets. London is closed for a bank holiday. Paris and frankfurt up nearly 9 10 of one percent. This is the druggie affect effect. I think acknowledging the da is new. F longterm you use this new gauge. Is a fiveyear inflation rate. It is fiveyear fiveyear felltion swap rate, which two percent this month. They werent in the original text. He went off script to do this. I think those equity market signified you and i just spoke. I said, what a dramatic shift. Your report was, he had the data. It shows you how materially and dexterous is he a central banker . Some would say he didnt implement qe. There are legal reasons why. There are political reasons. We all know that. Many say he should have done it sooner. Basically flagging that he probably will do it sooner rather than later. Perez said to open a little bit lower. Said to open a little more. There is paris. That is up 9 10 of one percent. We have looked at jackson hall, and every year on average on the day that the chairman had spoken the s p rose by 1. 5 . On friday we were down. There is a bit of hawkishness and dovish nist. Dovishness. There was no recipe. Progress mightr mean they may need to raise rates more quickly. We decode druggies message draghis message. That is after the break. Welcome back. The drugmaker has the first drug a the u. S. For what could be fatal lung disease. About theo talked significance. This is a great idea of the strategy. We lookall the criteria for. It is a strategic fit from the standpoint of a medical need with efficacy for this medicine. It is a pulled fully a portfolio fit. Also in our development pipeline, and it is a commercial fit because of our strengths in the United States and the outside world. Mario draghi has signaled the ecb is prepared to add fresh monetary stimulus to the euro zone. He said the central bank will use the available instruments needed to ensure price stability. Setting policy and so much more. With me is andriy andrew. Thank you for joining us. Good morning. Tell us the significance of Mario Draghis portion of his speech where he went off script and essentially pushed the ecb closer to qe because he warned investor bets indicated significant declines. How significant is that . I think that is the most significant part of the statement. He has the first time acknowledged longterm Inflation Expectations are beginning to da or. Hor to deanch while he didnt use the word this is the first time he has a ba did away from the message that Inflation Expectations have been firmly anchored. Most recently as the beginning of this month when he was saying they are firmly anchored. He is saying there are some singles for market next dictations that they are heading lower. Mean we start to bring forward our assessment of when we believe the ecb will implement qe, or is that jumping the gun . That depends on what your iitial expectations were. Still think the ecb will want to go through the motions in terms of rolling out the targeted lt ros. I think we would need a continuation of the recent qewdown in growth to bring forward. He certainly did lower the bar a little bit. This isine would be something that could happen from the First Quarter of next year on word unless we get an unforeseen negative shock. Good morning. Spanish yields record low. Italian yields record low. The spread against treasuries is widening. Is the markets ahead of the reality of what you have just said . Is were going to be in this wait and see mode. Are the markets ahead of themselves . Correct. If you look at where yields are in particular in comparison with the u. S. , they are anticipating some sort of action i would say. Wey have committed so that know liquidity is in there. Reasonse fundamental why they are merging with the u. K. And the u. S. That is because inflation in the euro zone is very low. Thestrongest country in eurozone and germany contracted again in the second quarter. There are economic reasons why yields are lower. Comments iner regards to fiscal discipline and ,he ability to address that saying two countries you need to reconsider what you are doing fiscally, is he moving more e . Wards aland holland this is an area where the policy committee perhaps shouldnt be. Think he is adapting to the situation. Eurozone had to frontload its fiscal austerity. Fiscaluntries had lost access. That is why there is so much emphasis in the beginning for the eurozone countries to frontload fiscal austerity. The u. K. And the u. S. Had the luxury of back loading it. Now that the sovereign debt crisis is abating, the fears of the eurozone are no longer there that it will break up. To takethey can afford the foot off the brake and switch to back loading their fiscal austerity. In that sense he is adapting to the new situation. We may see more use of fiscal deficits in the months and years ahead. That is a good thing. How do we continue to play this dislocation between asset economy . The real it is a topic that has been with the feded. Heading one way and the ecb and the boj and another, this dislocation might become more apparent. How do we best position ourselves for that . I think druggie had a showingl neutral chart the divergence powers of real Interest Rates. Means isads currencies should play a rebalancing role in the dollar should strengthen versus the euro, particularly if the monetary stance to verges, and i also think all efforts linked to the ecb that are in some ways under their umbrella, they have a strong effect from liquidity and possibly from additional asset purchases down the line. Longstanding core position should be in periphery assets, bonds or stocks. Those things should play a positive role in a portfolio. Good to chat to you. Thanks for joining us. Coming up, the battle for the brazilian broadband unit and billions of dollars in state at state. We take a look at the bidding wars. Welcome back. Ikea has grown to become the Worlds Largest furniture chain. Now it is trying Something Different in germany. Innercity stores. Same, butn is the there is something radically different about the store underneath. It is in the pedestrian city , not a parking lot. That means no car to ferry your goods home. Mean my colleague in hamburg. Hands full. I am going to try to lighten his load i proving or disproving you can do and ikea shop without wheels. That means Public Transportation and a short walk. Expensive that for the swedish company. It just what he five percent mueller than most stores and was almost twice as expensive to build. It is between 40 or 50 million for a normal sized one. Here we invested 80 million euros. We know in hamburg we have 43 of people without cars. Berlin we know between 20 or 30 of people, without cars. I have my colleagues essentials. How do i get them home . Ikea is offering transport bikes to help innercity dwellers. They are free for the first three hours. If you are helpless they will even help you load up. Then you are off. Tippy. Little tip the i dont know if i am road legal. Avoidn my best to standoffs with cars. Me, but iey respect have got a bell. Breaks. How are you . Good to see you. We have got some work to do. Help . Whacks you are on your own with assembly. I have got to get my bike back. We made it. We prove you can do a big ikea trek without a car. My think i will take a taxi. Menace has got an experience of ikea. Manis has got an experience in ikea. You cant escape. You have got to go the whole way through. And then you queue. I find veryomething difficult. Can you ride the bike with the dexterity. Cant wait to see mark barton in north london at ikea. Up, they say too much of anything isnt good for you. We will tell you why too much fed up a miss and hurt equities, next. Too much fed optimism might hurt equities. Welcome back. We are closed in london, but the rest of europe is trading today. The dollar extending its gains post jackson hole, or is the euro expanding . Most of our stories lead with Dollar Strength. The euro is declining. Traders are the most short on the euro. It is the 25 month high in terms of short positions. Policy divergence is the theme. Druggie moving into easing. You are at an 11monthold. I am looking at the relative strength is whether the currency is overbought or oversold. Good advice on the market. Lets have a look at the swedish kroner. The swedes cut their overall growth target for the second time in two months. This years growth will be 1. 9 . That is below the two and a half percent originally targeted. Next year you see about three percent growth. The lows of 2012 for swedish kroner. These are the top headlines. Days after an american journalist was executed by islamic militants, another u. S. Journalist has been freed. He has been held in syria for an offshootears by group from al qaeda. He was released under the circumstances that have yet to be explained. The islamic militia says it has gained control of tripolis international airport. Weeks of fighting triggered an exodus. Meanwhile Parliament Says they will temporarily resume their sessions and could spend the day reviewing legislatures. Richard attenborough died. He acted in dozens of films. Gandhi won the academy award. He would have been 91 this week. Its a big week for telecom. , butnly are earnings up the race for the brazilian broadcast unit is heating up. Telefonica, Telecom Italia are aggressively competing, considering an offer as much as 7 billion euros. Joining us now is roderigo to talk about more. Companies, they really are beginning to push the envelope in terms of what they are prepared to bid for this company. Is that a Fair Assessment . It is. Theirnica has already put bid on the table. They have said they are willing to pay its. 7. 6. 7. Telecom has not officially made it. They have a Board Meeting. The report is they will be making a 7 billion euro offer. They expect telefonica to up that offer afterwards. Theyre really pushing it. Telefonica is actually cash. To get where it is going interesting. One is cast. One is stock and holdings. Where do we go next in this battle . Thats a great void. Both companies are offering some stocks. The differences telefonica is offering a big portion in cash. Telecom has not made the offer. The reports are it will be mostly stocks. The next step is a Board Meeting to officially approve the offer, and then we will be able to know exactly what they want. Boarde have the vivendi meeting as well where they will discuss the offer from telefonica. The next word meeting board the 28th. 28th. Then we will know where we stand. Who has got the upper hand . Will it come down to cash or who has got the better equity deals . When you look at it from a financial aspect telefonica would appear to be better positioned. Their financial situation is much stronger. They are offering cash. For a unit everyone has the impression the vivendi would be willing to sell because it doesnt have to do with longterm strategy, but Telecom Italia has got one thing going, and it is the relationship ofween their ceo and the ceo vivendi. Sometimes when it comes to big deals, personal relationships can weigh as much as the actual financial details. Lets see who wins out on the personal relationship side. 7 35 in london. European stock markets have been outperforming the u. S. For most of the year, but the tables have turned in the current quarter. European equities have been underperforming in the u. K. And germany. Stocks us is our reporter. Thank you for joining us. What has changed . In the sudden change fortunes of europe versus the u. S. . It is interesting europe has underperformed the u. S. Thomas especially given the contrasting central bank. I think it has been driven by the fact that investors think the ukraine and russian conflict will have a better impact on europe and the european economy, we have had weaker data. Investors thought the european economy was further along than the data is showing now. Is whether question good news is bad news. Meeting september coming up and jackson hole right behind us, will we enter a time where bad Economic Data and european equities rallying on expectations of the ecb doing more . Faqs they are traditionally months where we have seen large stock market the kleins, but the pressure ukraine story is not going to go away. It has clearly had an impact on psychology. I think the bigger question is will the economy with the highest exposure, will we see impacts in sanctions come through in thirdquarter Earnings Results . Unless there is a big risk to energy supply, investors have learned to live with it. Havent had a massive selloff you might expect to see. Volatility is one of my favorite major gauges. You have written great pieces of investors betting against that. Talk me through your thinking. The stocks recently reached a oneyear high. This is the european counterpart. U. S. The vix is near 11, near multiyear lows. The spot is near 17, which is close to a historical average. Reflectedat is being is european equities have underperformed the u. S. Investors are nervous about investing in a weaker asset. Germany is and underperforming. Is that an opportunity . Probably more so in germany. Has the most at stake in russia. That is why the dax has underperformed. Now they might look interesting to investors. Valuations are more average all across the board. If you are looking at value, germany is interesting. With the u. K. The risk is still interesting for investors. The strong pound also impact u. K. Companies more. I just want to get your interpretation. We have our biggest weekly rally in almost six months. The balance of payment showed pumpedropean investors one hundred 67 billion into overseas equities. Debt. Llion into offshore this is money leaving europe. And we had redemptions. I am wondering if that is the start. When you read that kind of data, does that say anything to you . I think that is related to the fact that the purple economy stocks did so well last year and even into this year. Areas look weaker, given the weaker Economic Data, that money comes into areas where there might be more value the u. S. Look stronger on an overall basis. Maybe that is a safer place to park your money. Thanks for coming in on this bank holiday. Coming up, russias multibilliondollar Company Makes way as we tell you why the company had to have this particular drum make rug maker. Coming up next. It is time for some company news. Fell the most in three years. Roche was said to have backed away from the bid for the company. They instead focused on an 8. 3 billion acquisition. Burger king, the secondlargest American Burger chain is in talks to buy the canadian doughnut chain and move its headquarters to canada. This would make it the latest to seek a relocation to a lower tax company. The merger would create the thirdlargest fast food chain. To resolve aorkers dispute over wages that resulted in a boycott that cost two days of extra weekend shifts. Workers are demanding the bonus be counted as part of their wages. Workers are doing their normal shifts but would not take on any additional duties during the suitealks. More m a the pharmaceutical sector. Burke spoke to the ceo about the deal and the strategy. We will continue to work on acquisitions like this. This is part of the strategy as we move forward. Have a high bar for products that come into the group. I think this is a good example of what we look for. They have expressed interest in diversifying. They have a great cancer business. They are working on an asthma treatment that is still in clinical trials. Buying with their existing sales force. They are basically buying this one drug. For drugrowing area companies. This is a growing area for them. It diversifies them nicely. It was a week ago we were sitting here talking about wanting to buy the japanese the stake in the japanese drugmaker. The reporting shows they approached and got some resistance from two guys in management. We dont know the details. They have shown they are a very disciplined buyer. They walked away when they felt the price was too high. They may have felt they didnt want to spend more money to bring management to the table. Interesting company they probably had their eye on. They are always working on multiple deals at once. They are looking at all sorts of opportunities. This is the deal that resulted. Itthe drug sector is where is all happening, isnt it . When you look at the global him a space him in a space are there more deals from roche . They have made it very clear. They are very focused on targeted deals. 8. 3 sounds like a big deal. Much ane that is very acquisition. They have got a lot of cash on hand and are paying down their debt. I think we will see more deals from them. Thanks for coming on today. Coming up, to tighten or not to tighten. That is the question. Federal reserve chair to janet they are coming to different conclusions. We will take a look at the policy gap. Welcome back. We are nine minutes before the start of european trading. London is closed for a bank holiday. Futures are set to close higher. The debate is policy divergence between mario draghi. Has janet yellen become more dovish . Are centralbank watcher is here. A new name. You the speech comes out, which i think is very important. We start with mario draghi. His speech is going to take the big headlines post jackson hole. Yield down. Pop in looking for a big equity markets in paris, frankfurt. What did he say . Basically he acknowledged. Ediumterm inflations he acknowledged they might have to do something. There was a key line that the risk of not doing enough outweighed the risk of doing too little. Dont worry about asset rates rising. Andrew was with us a little earlier. It got too far. He said he didnt seem to think so. Record lows in italy and spain. If you implement qe, how low can these fields go . How low can they go . The estimate is if you do the french get if you look at french government bonds, where do you go in terms of yield . 1. 3 in france. A bit more room in italy. I am rounding up. Probably a shock on the markets. Actually 2. 491. Every dip counts. One point five percent achievable. U. S. Treasury bond yields are 2. 1 . How much more can bond yields dropped . One of the arguments is it markets more attractive. When you look at what janet yellen is talking about, compare that speech to the ones earlier this year. She was very clear about slack and spare capacity. He had serious conviction a lot of people acknowledge janet yellen is starting to take a more middle ground. If you listen to the noise around jackson hole, septembers meeting could be massive. You are looking for the potential of communications. Particularly if rates wont rise. Qe ends in october. At the end of the meeting we could see a change. The progress continues to be more rapid than anticipated. Further increases could be more ifid. She did say conversely the goals remain italy since, the policy would be more remain elusive the policy would be. There is a real weakness for the rest of the eurozone. The councilmember talking about his concerns over that issue. Confidence wes are expecting a little bit of a drop. We had a great report earlier. Now investors are saying it is the time to buy german equities. They have fallen by 10 . The earnings are still strong. The price differentials with europe as well. Interpret my smiles as being market directional. We are back tomorrow. We are moments away from the start of european trading. It is bank holiday. We are expecting a significant move higher in European Equity. We start with you. The decision about what to , is of Janet Yellens shift she less optimistic . That is the debate. Then you have mario draghi. Last spoke since he to the markets. Arelmost seems like they prepared to acknowledge inflation is no longer well anchored. I am paraphrasing, but that is what a market makes of it. I will take it from there. A quick look at futures, cac 40 futures over one percent. Dax futures also a significant move higher. Best we can european equities since february. Euro zone cpi due on friday. Inflation is set to trend lower once again. Mario draghi acknowledging the fact. Does that mean they need to do more . Be on thethat might cards. I will speak to our guest in a couple minutes time. Now is manus cranny. What we have got is the of up to one trillion euros by christmas. We had a conversation with tim cook saying they are not too far away. The ecb are guiding us in terms of what to expect. Up byve got the omx seven. Lets see some of the names driving the markets. There are no decliners in the paris opening rotation. The one thing i would coffee out what isis statement is going to drive this market. There needs to be an addressing of this. 167 billion went overseas and 12 months. 178 billion went offshore. Sinceggest from europe 2008. They are pulling money from European Equity markets. You have got this qe debate, which is going to drive sentiment in the short term and the fundamental flow of money. Alarming amount of troops. Merkel says the gas situation needs to be sorted out. Will be ahe u. S. Driver. Some individual companies we are they arethis morning, going after their offer for their next charge. That is a deal possibly coming through. Then you have Telecom Italia. Are they preparing to up their offer for the brazilian assets of vivendi . We know both of these heads of the companies had substantial discussions. Would personal relationship trump the financial offer . You see German Government booms just inching past the one percent level. You are seeing a slight turn around in terms of German Government boom. Peripheral Italian Government bond yields two percent. The differentiation between germany and the u. S. Is set to expand further. A higher open this morning. If you look at the ftse, it is close. The dax is up i 1. 3 . Record yields in spain and italy. Some of with the chief bank. Ment officer of the he joins us live from europe. Simon, good morning. You are looking at a market moves this morning. They are quite significant. I am guessing mario draghi is taking the headlines post jackson hole. Forhis a man who is waiting qe to come . It is interesting. He was making the obvious observation we have seen inflationary trends continue and bond yields supported. In addition the Economic News we had coming out of europe, our secondquarter quarter gdp showing either stagnation or contraction in the largest three economies in europe, clearly not the sign of a robust european economy going forward. Linked to one was of the comments manus made, the comment toe went off deliver this. They have to be amended for these additional comments. It seems very much as though mr. Pressures trying to some others at the ecb to allow to pave the way for qe. How does it impact your view on equities . You have moved to neutral. Would this be a game changer if they did capitulate on qe . I think we are a long way from the ecb being able to capitulate. In terms of changing our todamental view, we need have confidence it will spark Earnings Growth and will help reverse this inflationary tendencies and willie this inflationary tendencies dis inflationary tendencies. German sentiment expected to trend lower this morning. Are you expecting it to play out simply that these readings go lower and lower . Get thenk we will latest survey. We have seen some weakness perhaps related to ukraine but also in respect to the Economic Outlook. Your comment about bond yields going lower and lower. Based on make a case fundamentals. The Economic Outlook has forecasters are expecting. 3 inflation in the eurozone. These things suggest the yields in the eurozone are not crazy low. We look at inflation we are expecting 0. 3 friday. Qe has always seen this emergency measure. In your mind, when does it come an emergency . Hand you have a price target by the ecb. The flipside of the coin you mentioned earlier, when you have spanish and italian 10 year are, it doesthey not yield to increased urgency when it comes to debt sustainability. The low level of yields in themselves suggest the lack. To talk about the Federal Reserve on friday as well. Afterl talk about that the break. Here is a look at what is coming up. Whatever it takes for mario draghi. Plus what is worth eight billion dollars . The drugmaker. We will break down the big bet as the taste of a new asset class. The repo bond. Stay with us. Welcome back. Equitytes into the trading session, check out European Equity markets. A 1. 24 push higher. Clearly mario draghi really taking the post jackson hole headlines. Are we going to get qe at all . More stimulus perhaps could be on the agenda. Insight,h us for more the cio joins us from zurich. Mario draghi is going to take headlines,x and hole but Janet Yellens speech is of significance. This one seemed to lack conviction. . Hat was your take there were plenty of headlines about janet yellen. They are seeming to suggest she suddenly shifted to the middle ground. That is the case. She was talking about the fact that if her view was wrong the Federal Reserve would have to move earlier. Then she said why she thought the ample slack was not wrong. I would caution a little. I think we have been reading a little bit into this shift to the middle. Based on those views, we are set to see a tweet next month, considering if they are data dependent, why have we got that line . Tweak . Ee a little there is always the potential for a tweak. Show itness survey did is building. There is not wider evidence to support that notion. We have seen earnings jump up dramatically. We saw the most recent payroll number. As Unemployment Rate rose you had people reenter the workforce. They expressed there is ample slack in the labor market. Lets talk asset allocation. You are still overweight u. S. Equities. Were back towards record highs. How much more have they got to run for the rest of the year . It is roughly six and a half times earnings, roughly in line with average earnings. And zero Interest Rates earnings at 10 in the second variousand with the other regional markets particularly having their own issues or concerns. Conviction with high in the u. S. I want to get your view on geopolitics. Oil has actually trended lower as geopolitical risk appears. The perception is it has gone higher. What is the story . Is it that geopolitical risk is not that high . Typically the highest spike in oil prices is the transition which leads to a general risk. Oil prices have trended lower. As we look at the specific instances of geopolitical risks the markets focused on, the ukraine, isis, and north iraq. None of those have actually disrupted oil supply. , gaza being not oilproducing. We have got to leave it there. Altra High Net Worth class. Thank you for joining us this morning. We are going to talk about bonds. A little bit of a different perspective. A london food chain is offering something unusual. Get eightot only percent interest every single year but free food whenever you visit one of their stores. It is quite a simple concept. You loan money over a fouryear period. We pay eight percent interest. We throw in some food as well. Invests in the bonds gets a couple of free meal vouchers. There are over 80 people so far. A freetitles them to meal once a week for the duration of the bond. That could be up to four years. We have been going for seven years now. Our first restaurant was on upper street. We have and through our share of mistakes. We became a lot stronger as a team. Is in focused on primary central london. We now have several restaurants. This will help fund the next three. I grew up in chicago, which few people realize is home to the secondlargest population of. Exicans in the United States to grow up in chicago and not like mexican food you are probably setting yourself up for starvation. For us a word has a bit more why does anybody want to live in a big city anywhere in the world, and for us it is about the vibrancy you wed in big city life. Strongly advise everyone who considers an investment to speak with a Financial Advisor before making an investment decision. We think at the end of the day we are offering an attractive investment opportunity. Thats for each and every person to decide for themselves. The reach for yield. I will let ud side. Up next burger king is considering a whopper of a deal. They may move headquarters to canada. Details next. Welcome back. Is bank holiday and the ftse is closed. The american fast food giant burger king is in talks. This would be the latest Company Seeking a relocation. 22 billion in annual sales. Roche is ying buying the drugmaker with cash. With the caught up chief operating officer and ask how it fits the broader strategy. This is the strategy. It fits all the criteria we look for. It is such a strategic fit from the standpoint of addressing a really big unmet need with significant efficacy. Because wetfolio have a portfolio on the markets. Also in our development pipeline. It is a commercial fit because of our strengths in the united. Tates they are paying a 38 premium on the friday closing price. We also asked about valuation. We had good conversations with intermune and feel confident about the price we put on the table here, that it will be attractive to the were are verynd excited about welcoming the. Mployees into roche for more on the story lets bring phil. Knows roche, they know they are known for making cancer drugs. This is quite a change for the company. What is the goal . I think dan alluded to that in that interview. They are known for cancer drugs. Cancer drugs. For this gives them the opportunity of putting it through their sales force. They think this is an area where the sales are going to be off the charts. Talking about 1 billion a year. For someone who already has the sales force in place, it is relatively easy to profit from Something Like this. Theiran put it through existing salespeople. Taking a look at japan, what happened to the buyout of chugai . Our report shows roche a deal. Ed chugai for that is all we know so far. Roger is not commenting. Roche is not commenting. They have a good history as a disciplined bidder. One can surmise they found management was opposed. Then how high a price you propose to try to get the deal done . At the same time intermune seem to be on the block. That was a good fit for roche. They turned their attention to instead of having to raise the price. Could we see more deals coming from roche now . Yes, ross has been very clear they are looking for a spring of targeted acquisitions like this one where you buy a company or a. Roduct this fills the need. They will do more deals like this one. Generates money, so we expect to see more mergers from them. Things for joining us. Thanks for joining us. And air. N to malaysia after suffering two disasters, the carrier is said to be considering a complete overhaul. The company is reportedly looking for a new ceo. From hong kong. You have got about two minutes to tell me how this Company Based onirection. Our sources we are looking at a few sweeping changes. We are looking at job cuts. We are looking at her have to review of their plan. We are looking at getting up from some of these current routes. The firm is also looking to replace the ceo. They are talking to as many as three people about the job. Malaysian Airlines Reports the latest results later this week. We are watching carefully. You have major restructuring, theh would essentially make company private. Major changes. It is scaling down and a bit of a refocused for malaysian after those major disasters we saw this year. Thank you very much. Malaysia in 60 seconds. Flexes ahead of preliminary peace talks with russia. A preview after the break. German football kicks up a notch with a leap across the atlantic, but will munich soccer stick in america . Here is a picture of the markets. European equity heading north by over one percent. If you want to talk markets, i am on twitter. On the move is back into. In two. On the move welcome back toon the move welcome back to on the move. Plenty of moves in the markets across europe. The stoxx 600 up. Chat from mario draghi pushing these markets higher. Business confidence comes in 30 minutes. We are expecting a drop off. A man who has got three stocks to watch, manus cranny at the touch screen. I can tell everyone is waiting for these three stocks. I think what you are seeing, autos are one of the biggest gainers this morning. Daimler leads that pack. Stock up by 1. 5 . Roche, talk about a flipflop. Roche going after a 10 billion deal in the United States after intermune. It is lung drugs. It could be a billiondollar blockbuster. But they are going after that. On the other side, they are dropping their deal for chugai in japan. What is the key focus for roche . The stock up 0. 4 . And vivendi, apparently the chairman is having long substantial talks with the Telecom Italia head. The question you have to ask yourself, telefonica and Telecom Italia both pursuing those gbt assets but who will trump who . Telecom italia getting ready to do a deal in terms of cash and equity. We will see how that turns out. At the moment, vivendi is hot to trot. It has two stalkers. The question is, who are the best placed to win that race. Thank you very much, manus cranny. Breaking news on the french government. French Prime Minister has presented the resignation of the government. This is big news. The french president says the new government is to be announced tomorrow. That is the french Prime Minister presenting resignation of the government. I am going to bring in christian for a quick conversation. This is a big surprise. That is a big surprise. The halflife of the french government seems to be getting shorter way chief with each government. They have got some legislation through despite resistance. This is a big surprise because it seemed that he had been on the right track. Maybe the internal divisions in the party were just too strong and they are trying to change things around to get moving again after the disastrous Economic Data. Is it disastrous Economic Data . Does pressure come within the party or outside the party . Real pressure on this particular Political Party . I would have thought that the change in march was there to address this, to get somebody in the government who had this tough talk and tough action image. He was there to counter the threat from the right, but also to get some of the Economic Reforms moving. Elections, the results were disastrous. He hasnt really delivered that. I would have expected them to give him a bit more time to get things moving. This looks like more due to the internal divisions within the party. Maybe not enough support for bigger reforms. In your mind, where does this lead mr. Hollande . He has got his mandate. He is there for five years. He can just sit it out and hope things will improve toward the end of his presidency. He will not want to go down in history as the least popular and least effective president. I think he does need to get things moving more quickly. I think he has made a lot of the right noises. It is just not getting through to legislation. Withins no recognition the party, or outside the party and outside the country that france is doing enough. The reforms,t Economic Data has been pathetic, yields keep going lower. Down by three basis points as we speak. Is this just the ecb mario draghi phenomenon that is going to keep the cap in france despite the economic reality . Looks like a financial crisis is not going to happen in france. Markets trust that the french will be able to pay back their debt because of their own domestic performance or because they implicitly have a german guarantee anyway. Germany is not going to let france ever drop. Market pressure, i dont think that is going to be the one that pushes hollande into reform. Theink it is going to unemployment which continues to rise. While we see improvements in countries like spain, portugal, greece, we dont see these improvements in france. It is more than just the ecb. It is more than just aggregate demand or the euro. It is domestic french problems. Mario draghis speech, a lot of people taken that as a significant step towards more stimulus. Was that your takeaway as well . Itmy first read of it was, was a very interesting discussion of fiscal policy to stimulate aggregate demand. I think there were some hints to berlin to do more to stimulate demand. Maybe some investment programs, especially tax cuts which germany has been discussing for a while. That was my initial first take. Then there is this ominous sentence about shortterm Inflation Expectations. The governing council acknowledging this and ensuring mediumterm price stability. I was struck obviously by this sentence. I think the rest of the speech sense ofeally have the urgency to do something immediately. I think he will push forward the discussion to doing more. Maybe by the end of the year, we will see more. Whether that means qe or other options that they have like potentially upgrading, we will see. In thereous sentence is something that we need to have a close look at. I think time horizon is important but there is no way to talk about it. They have talked about qe as some emergency policy. When does it become an emergency . Certainly not if we have one quarter with disappointing data which you can explain with the weather affect and putin. This is not an emergency. Were the crisis in ukraine to ,ave a deeper impact on germany if germany were to fall into recession, i think that could be a trigger to do more. I dont see that right now. Even more, if markets were to suddenly not believe the omp commitment and we will get tensions back in the sovereign bond market, maybe in response to the fed hiking rates, that could also be an emergency. Of relativelyrter disappointing gdp growth is not an emergency. The gdp number has been a one off on the quarter. Euro zone inflation has been trending nowhere for over 12 months. A new low again on friday. Are they behind the curve already . The inflation figures are something that happens now as draghi always explains. It is due to the exchange rates. Things beyond the control of the ecb. Away theseplain numbers to a certain degree. The real problem is Inflation Expectations. The lower inflation gets, the more it rains on that downward trajectory, the more people believe it is there to stay. Expectations stay low, that perpetuates low inflation. They need to do more. The question is what to do, when to do it. I think he has now pushed us more towards thinking the ecb will do more, maybe towards the end of the year, maybe even including qe. The speculation is already having an impact with these yields falling over, with a euro following the were. I think some stimulus is already on the way. Spanish and italian bond yields, new record lows. Thank you very much for joining us on that breaking news. Coming up, as the french government resigns, we will have more from paris. That is after the break. We leave you with a picture of the french market. Equity markets across europe are higher. You have the cac 40 bob by over 1 . The 10 year in france, the yield down by four basis points. That speaks to more action from the ecb. The politics in the market seem to be scintillating right now. Stay with on the move. We will be back in two. Welcome back. This is on the move live from london. Here are the Bloomberg Top headlines. Hamas leaders are not close to giving up in the recent hostilities with israel. That is after is really president Benjamin Netanyahu warned that any target connected to hamas would be considered a target and should evacuate. Upaeli ministers called reserve troops just last week. A malicious as it has gained control of tripolis international airport. The fighting triggers an exodus of foreigners. Libyas Parliament Says it will temporarily resume its session. That could set the stage for legislature amid a leader slip vacuum. An increase ined military spending before preliminary peace talks with Vladimir Putin tomorrow. The ukrainian president unveiled a in increase in spending. Putin know we will meet with his Ukrainian Partner during trade talks in the belarus capital. The big news this morning, french Prime Minister manuel valls and his government have resigned. President Francois Hollande once to name a new cabinet as soon as tomorrow. Resid offered his nation. Bloomberg news government david is going to join us shortly. For more on the french government, we are joined by caroline connan. Big news this morning and a big surprise as well. Yes, it is a big blow for the french government. We just have the message from paris saying that the entire government of Prime Minister manuel valls has to resign. That comes after the economy minister made some pretty strong comments over the weekend in a newspaper interview saying that the Economic Policy of the government had to be revised, that he had to tell the french the cruel truth about how the french government is failing in terms of Economic Policy. They were offering tax cuts of 16 billion euros. Shortly after that, the prime heister reacted, saying that had crossed the yellow line, he hads very much to react. This morning, president hollande decided that wasnt enough. The popularity of the Prime Minister has gone down in the past few weeks. His popularity went down from 45 to 36 . He lost about nine points of popularity in just one month. Tosident hollande wanted show his authority on the french government, that he still has control. He decided to tell the Prime Minister to resign the entire cabinet this morning. Thank you very much, caroline connan. That is the perspective inside france. Joining us from germany, International Correspondent hans nichols. Ae perception was there was standoff between germany and the french over budget deficit targets. Will this be music to the ears of the German Government this morning . It wont. This will add more confusion and more likelihood it seems as though the 3 deficit target will be broken. The germane in position is increasing isolation. You clearly saw mario draghi hinted the need for more fiscal stimulus, more fiscal flexibility. Is stilllike merkel fighting a rear guard action. They think that countries should follow the rules. Follow those 3 deficit targets. Otherwise, the entire rescue project isnt going to succeed. Their concern is that once you start seeing clear breaking of those 3 rules, you are going to see markets react. You are going to see borrowing costs go up and markets punish those countries that arent doing structural reform. We dont know entirely if this is a linear sort of equation, that because the government has resigned, france is going to break deficit targets. It seems like it is in that direction. That seems to set up a clash between merkels government and the ecb. Some of the fights we had 18 months ago replaying again in germany. What does this mean for internal politics within germany . Clearly there was pressure on hollande to do something. His reputation is going lower. Emboldened to she carry on pushing the austerity message to stick to these budget deficit targets . The trending lower of german data putting pressure on her . That is a very good question. There doesnt seem to be a lot of pressure on merkel to spend more. Yes, there is some call from the left on that, but most of those fights happened about six months ago when they had these Big Coalition negotiations. Now they just have to implement what they agreed to. Merkel is very much in control. Her popularity remains quite high. It is unlikely that she is going to feel pressure to reverse course on something she thought was the right thing to do. Argue for keeping the rules, argue for austerity and argue for structural reforms. Without structural reforms, you cant spend more money. There doesnt seem to be any crack along that side of the fence. Even within her coalition where she shares power with the social democrats. Thank you very much. The pulse is coming at the top of the hour. Anna edwards joins us now. That breaking news surely the top line. Our coverage will continue on that story. By othere joined voices during the program to talk about the eurozone growth story. It has put the euro zone story under the microscope. The combination of this news out of france, what mario draghi was saying over the weekend, where does that leave us in terms of Monetary Policy . We will ask all those questions of our guests. Angela merkel is in spain. We are expecting to hear from the german chancellor later on during the pulse. She will be focusing on the recovery of the periphery as she is in spain. Also on the agenda will be the European Commission nominations for the post. That is coming on saturday. And of course ukraine will be in focus. We will be talking to one of 16 Business Leaders. His name is igor. He along with 15 other Business Leaders from russia and ukraine, and internationally, have been asking president putin of russia for a meeting. They want to put forward the abuse ms. The business communitys case. We will be asking what role business has to play and he seems like a good person to ask. German Business Confidence in 10 minutes time. Expected to go lower. That wont be a shock to many people. We leave you with a picture of the french markets. On the move is back in two minutes time. Known that the french government Just Announced their resignation . We will talk about that again in two minutes time. Welcome back. I am Jonathan Ferro in london. Ikea have grown to become the Worlds Largest furniture chain. Now it is trying Something Different in germany. Bloombergs ons nichols attempted to do it like the hamburg locals do and transport some furniture home on a push bike. Buthe sign is the same there is Something Different about the store underneath. It is in the pedestrian city center, not a suburban parking lot. That means no car to ferry your goods home. My colleague in the german city of hamburg is on paternity leave. He has his hands full. I am going to try to lighten his load by proving or disproving that you can do and ikea shop without four wheels. That means Public Transportation and a short walk. Of three inne humbert and 49 in germany, is an expensive bet for the swedish company. It is 25 smaller than most stores. Almost twice the expenses. Are investing more than 8 million euros. Had people we without cars. If you look at the store in berlin, between 20 and 30 of people, without cars. I have my colleagues essentials. Now how do i get them home . Ikea is offering transport bikes to help innercity dwellers. They are free for the first three hours. If you are helpless, they will even let you load up. Then you are off. It is a little tippy i dont know if i am road legal or not. Best to avoid standoffs with cars. I think they respect me. But i have got a bell. How are you . Good to see you. We have some work to do here. A little help . You are on your own. I have to get that bike back. We made it. We proved that you can do a big ikea shop without a car. Next time, i think i will take a taxi. He almost fell off. Let me tell you something that is falling lower, the euro on the back of the resignation of the french Prime Ministers government. Hollande says a new government will be announced as soon as tomorrow. The euro slightly lower. Down by 0. 4 . You see the cac 40 higher though and yields in france also lower. The back ofer off more stimulus trap from mario draghi. If you wanted change in france, the move is coming from the ecb. Big surprise this morning. French Prime Minister valls presenting his resignation of the government. We will be talking about that all morning. If you want to talk markets, you can follow me on twitter. The pulse is coming up next. Calling it quits. The french government resigns following a rift on Economic Policy. A warning from merkel. Germanisiting kiev, the chancellor says the clock is ticking to resolve the battle between russia and ukraine. She speaks live this hour. Taking the temperature. Key data measuring Business Climate in germany is out now. Welcome to the pulse. I am anna edwards