Transcripts For BLOOMBERG Countdown 20150202

As the former managing director of the Monetary Fund goes on trial over an alleged vice ring. Hello, i am mark barton. And i am in its granny. I am manus cranny. Ryanair is reporting earnings, and their numbers for the third quarter, 40 9 Million Euros, valued above the estimate of 28 Million Euros and a significant improvement on the previous year. It is also above estimates when you look at just revenue. Traffic grew to 21 million customers, and the airline has raised its guidance, as well raising its fullyear forecast. They have done that a few times. They are also planning a 400 Million Euros Share Buyback for august of this year, so the fullyear forecast is raised to 450 Million Euros, and that is around 20 million or 30 Million Euros compared to the previous forecast. Well, lets get some expert analysis on these numbers. Covering airlines here at bloomberg, good to see you. So a strong set of numbers theyre in a period that is traditionally pretty weak for ryanair, so what does that tell us about the attempts to redo the image . Just to put this into context, this time last year, ryanair was actually issuing profit warnings, so this is the fifth upgrade they have had this year, approximately the fifth upgrade. It has been an incredible year for ryanair. They started the year saying we are going to change our image, rolling out a bunch of business products, apps, improving their website, and they were doing something over the winter, which was keeping planes in the air versus parking them on the ground, and passengers are up and more importantly, the load factors are up, and the fares are up about 2 for the quarter. There is maybe a little weakness in january but yes, it seems like they are going full speed ahead at this point. They are, indeed you ryanair is 90 hedged. That is very, very high, but you have got more prices coming down, and some of the Airline Stocks are reacting to that. Where are we in that debate . Yes, they did make a point about that this morning. They have a cautionary outlook for fiscal year 2016 and they tend to be very cautionary which is maybe why they had so many upgrades this year. They tend to be very cautionary about the upcoming year. It is very early, and it has not even started their fiscal year 2016, but having said that for the unhedged carriers, that is very beneficial, and they are warning this could weigh on prices. This could maybe add capacity across the board and this is something that could be seen as a strength. Something on their Balance Sheet could turn out to be a negative, he doesnt mean that they could hedged, so other Market Players are enjoying it right now. Absolutely. They are taking advantage of it for 2017, but they will make a lot out of the act that some airlines charge you surcharges which some dont, so they will be alongside politicians saying well, why do you offer fuel surcharges . Tiberio wanted to buy aer lingus, and ryanair owes a 30 stake in that. Iberia wanted to buy aer lingus. It is yet, as you know, a preliminary sort of preproposal, if anything, and so we will have to sort of saying how they react to this. Last week, the shares of aer lingus fell on the reaction to this and the politics so far. It seems very mired in politics. I was watching an irish hearing last week, and you can send that sort of the sympathies are not necessarily in favor. There is a lot of concern about regional connections to heathrow. And for pilots, as well, opposition. Yes. Thank you for the very latest on ryanair. He will go back to this story many times during the show, no doubt, but coming up later on the program, the chief Financial Officer from ryanair who will be joining us for a first on bloomberg interview, 7 00 u. K. Time. Breaking news with the number three player in the Private Banking industry in switzerland. Of course, they kick off the earnings season for the swiss banks. Their operating profit rises. When it comes to assets under management, they are seeing and uplift, two hundred 91 billion swiss francs by the end of the year. Total assets of by the same amount. If you are a shareholder in julius baer you may get a dividend. This is up but costcutting this is what we understand so far. They are going to start a 100 million swiss franc efficiency program, so we are going to get hopefully a little bit more detail on that, and, of course a lot of this goes back to the head of the Swiss Banking organization that said when the Swiss National bank dropped the cap to the euro it was a wakeup call. It was a wakeup call to many of the swiss institutions. It was about bringing forward the costcutting programs. Really, what we want to know and we will speak to him a little bit later on, is where are we with client . They have already said several hundred thousands of swiss francs but the very wealthy are remaining loyal. What is the situation there, and we want some detail on this 100 million swiss francs cost efficiency program, and we will catch up with him a little bit later in programming. The greek finance minister has said he wants a new deal with european creditors but some damage has already been done. The election of antiausterity officials said the greek tenyear benchmark bond yields soaring last week. Angela merkel stonewalled the new government plans for increased spending. Now on the hunt for allies, he is calling for his country to go cold turkey on new debt. Lets get to our International Correspondent hans nichols. In berlin, good morning. How does he plan to do this then . Well, he wanted to keep his window open. Good morning. He wants to keep the window open for liquidity assistance from the ecb, and in terms of giving up his addiction, as he put it to new loans, he does want to go cold turkey. The idea is to have a plan in place by may to refinance some of the debt and he acknowledged that the withdrawal process could be difficult. We resemble drug addicts craving the next dose. As we are now, we should be taking another tranche of loans . No. It is not that we dont need the money. We are desperate because of certain commitments and liabilities that we have. He was speaking in paris yesterday. Now, he did receive some symbolic response from the finance minister in france as well as president barack obama. Now here is the challenge for the greek government among so many. They need a dispensation. They need a waiver from the ecb, because they exit their Bailout Program, if they do leave it february 28, and the ecb strongly indicated over the weekend in a speech in cambridge that there will be no surprises no special exceptions if a country does not meet the necessary requirements, which is a good debt rating were some kind of dispensation from the eu. Now, there were some positive notes. Clearly, he wants to play a broker role. Have a listen to how he put it and what may be what france and the eu can do for greece. France will make it easier. France will always be there to find a solution for everyone to overcome their difficulties. We have this common belief that greece is in the euro and will stay in the euro. Now, the Prime Minister, he issued a statement over the weekend, trying to cool tensions a little bit, right . This was a saturday statement talking about how greece wants to stay in the eu, how they are working on their requirements and then going to cyprus and then rome, and not on anyones agenda, a visit to berlin for a meeting with Angela Merkel, the first time you will have a meeting between Angela Merkel and the new government in greece, february 12 in brussels. It will be an important meeting. Guys . And what did president obama have to say over the weekend . So this is really obama weighing in for the first time in some time over what greece and the eu should do, and he was largely sympathetic to the sort of greek challenge. In some ways, he was echoing a lot of what we heard during the election so we will see whether or not mr. Obamas comment have any effect, but he was clearly siding with the new party. Our International Course bonded hans nichols in berlin. Lets check at some of the other stories. Signaling contraction, the purchasing Managers Index unexpectedly fell below 50 for the First Time Since 2012, fueling speculation that the secondlargest economy will need to boost stimulus amid sliding tax relief. And former managing director of the international Monetary Fund, Dominique Strausskahn he will go on trial for alleged involvement in a prostitution ring. He and 13 others are accused of being in organized group, a charge which carries a maximum 10 years in prison and a 1. 5 million fine. A hostage has been released from prison in egypt and deported after more than one year behind bars on terrorism related charges. He was arrested in 2013 accused of aiding the Muslim Brotherhood and spreading false news but two of his colleagues from al jazeera remain in prison. You can join in the conversations with us this morning on twitter if you would like to. Here is where you can find us. Just about to tweet out a great story about what a french economist inks we can learn from japan. Monetary policy is not enough on it own, apparently. Coming up next on countdown why u. S. Oil workers are staging the largest strike since 1980. Stay with us for that story. \ time for todays company news. Lets start with the dealer that has been truly cemented. One company has agreed to buy cement businesses, a deal worth 6. 5 billion euros. They need to sell off the businesses in order to win the approval of regulators for their merger. And a Spanish Telecom operator telefonica is planning a share were four or 5 billion euros according to a report. Telefonica is said to have higher jpmorgan to handle the sale, and the money will be used to pay for recent acquisitions in europe. And u. S. Approval for a medicine to treat binge eating disorders. That is according to a report in the financial times. The company is said to have received the goahead from the u. S. Fda to market its drug. In cheating is thought to affect binge eating more than other disorders, such as anorexia and bulimia. And a magazine reported one man is being investigated by chinese authorities. They have a capitalization they say that president has stepped down for personal reasons, but another magazine says he is being quizzed by anticorruption authorities. Volatility in the oil markets today caused by the first strike called by a u. S. Refinery or u. S. Refinery workers since 1980, oil trader trading lower after negotiations failed to renew a new labor contract. Here is our business correspondence, caroline hyde. How much of the u. S. Refining market has been taken offline . What there are nine sites striking about 10 of all that is refined in the United States 1. 8 million barrels, in excess of 3000 workers, so this is pretty substantial, and this is across washington, kentucky others, and it could even get bigger. We understand that more refineries are standing by to join the strike. And as you see here, unions rejected five contract offers. Royal dutch shell is the company that is negotiating on behalf of the rest of the oil companies, and already five rejected. If there is a full walkout, this could affect two thirds of the entire refining fuel production in the United States, and as you said the first walkout since 1980, and that lasted three months, so clearly, there is concern here, and what workers are fighting for is they want to schedule a increases. They want rules to prevent fatigue and to keep workers. They want Union Workers to be protected more than contract workers, and 2012 is the last time we saw these contract negotiations happening. They happened at the national level, and then local unions negotiate on a local basis, but on a national basis, 2012 was when this last happened. And the world is a different place. You can understand. There is a bunch of them involved in this offer, isnt there . How are they responding . So shell is negotiating on behalf of the oil companies, and they say they want to go back to the negotiating tables. Marathon is one of the companies involved. They have got stoppages, and they say plans are in place to ensure the continued safe operation of their facilities. They sadly, they have got contingency plans to operate a refinery in deer park, and another says it is confident in their ability to produce transportation fuel, because this is all about diesel. This is all about patrol. Petrol. This is why we have seen oil prices cut in half. And there is too much going around. They are starting to see diesel prices spiked a little bit and we have heard from shell, havent we, this reporting season, and we will hear from some others. But exactly and how would this affect the negative concern for investors . You can see it has been very volatile. Friday, we saw a spike in oil prices. Why . There were concerning issues but also, there was a lot of data coming out, showing that oil rigs are being idle. People are stopping production because of the oil depression and we have got exon and then bp. Thanks caroline, caroline high. Now, lets get back to one of our top stories. Greece. The weekold government is seeking a new deal with its european creditors, but not everyone agrees on the way forward. Lets bring in our next guest in the conversation, a chief economist who joined us now. Will the greeks get the ecb to support them . Should they be allowed to have special leniency terms if that is the road they go . The greek political tackiness is on borrowed time. Literally, they are living on the euro credit card. This has become almost entirely dependent on something for the ecb emergency liquidity assistance program, a program that the ecb says they cannot continue indefinitely and will probably end at the end of next month if they fail to negotiate with the troika. What is interesting that is happening is the Market Expectations on greece prior to the elections, because they have contradicted the two attendance of the consensus. There is the radical rhetoric that we saw in the runup to the election a week ago and second we may see a lastminute compromise between the government and try to. It looks like, especially after the press conference, that the negotiations with the troika have ended before they have begun, so the question now is whether greece will become the paradox that becomes the norm for the eurozone and how long before other countries do what greece does which is to elect default . Especially in the aftermath over the protests in spain with the strong support it is becoming clear now that the question for investors is are we going to have greece default inside or outside . That is a question, but how long before spain and italy start to follow suit. So you will see a greek default. It is difficult to read what the greek stance is. On the one hand, they say they do not want anymore of this debt drug saying they do not want any more aid, but then saying they want a new heel in place. What is it that we think that the greeks do want here . I think that is the question. They are not following the path expected. So far, the weekold government has ignored the catastrophe, the economic crisis of confidence at home because it is not really an immediate funding threat. It is not coming from the eu. This means funding for the greek government at a time when it is defying all the conditionality accepted under the previous troika programs from other eurozone taxpayers. Lets not forget this is not about anticapitalism or antibank. Greece is suggesting that the only way forward for it is to these others are not in a position to carry them. We are talking italy, spain ireland, portugal. It is not just about germany, but it is also a question about the greek government. What is clear is that while ignoring the Funding Crisis in the Banking System resulted from the default, it seems to be a strike of greek taxpayers, the greek government suggesting it does not need anymore, but at the same time wanting to stay in the eurozone. There is a fringe of other eurozone nations, and it is clearly a strategy to try to increase direct Bargaining Power with eu nationstates. Why . Because greece knows very well that the quickest way to its election promises is to ask troika for a debt write off. It is just not going to happen. It is very difficult, across the eurozone for any National Government to ignore it seems to be a very public, popular revolt against eu austerity, which is what it has come to represent without facing a risk of a revolt. So will greek depositors continue to pull money out of the banks as they have done and a billion euro pays in the runoff to the election and will the bond yields continue to rise . 2. 5 Percentage Points last year alone. There is a suggestion that they do not need the troika bailout come at a time when it is already at a record low and 2 billion, and there is the unsustainable strategy with a Banking System that is hemorrhaging in terms of declining equity prices but also a flight of deposits. It does mean they will likely face higher yields only set to rise from here. Becoming a liquidity crisis this is the way out of the eurozone. If the ecb does look at their support for greek banks, and allow sufficient time to rally radical Party Support and in france in order to exercise enough power on the government to go over the troika and change the terms of the bailout. It is an extremely risky strategy. Were going to get another election in greece before the midyear. The next election will be a referendum on staying within the eurozone. But, in the meantime, we are going to have higher economic costs in acted. I think contagion in terms of italy and others. Were going to have to bring the conversation to a close. Spreading across europe. Lena chief economist. Thanks. Coming up, we would hear from a chief executive who is trying to tap into successful winemaking, which he says the key is in the music. You are watching countdown, six ernie london time monday morning. How are the foreign markets trading . The yuan is lower, manufacturing contracting for the first time in two years in china, and one question is is the next thing that they will do is the bandwidth to remove the chinese were minty currency . That is the first contraction in almost two years. Over the next 24 hours, youre going to see a lot of discussion. The next central bank to meet. Any central bank can join the party. This is the first in terms of cutting rates. This is the first rise in the aussie dollar in four sessions. And this is just on the 28th. Hiring was the best in november and december. It is up by 13 . Goldman sachs says so much is priced into this market move. We could be left in a rather more disappointed position. It is going to take a rather hefty anticipation of at least a half a percentage point cut to stop the aussie dollar from traveling back towards 80. The euro swiss very much in show. The swiss franc is at its weakest against the euro. This is at its weakest against the euro since they drop the cap on the 14th of december. The Swiss National bank has a bit of a move. That is what you call a fast market. They have an official quarter of 105 to 110 and that will cost them 10 billion swiss francs to defend that, so the swiss bank could have a new level that they want to defend, a new corridor that they want. That is speculation. It is also speculated that the Swiss National bank were doing what they did rather well for a period of time, which was getting involved in the Foreign Exchange markets on thursday and on friday, buying the euro, selling swiss francs to take you back off at pretty traumatic level that wiped out billions in terms of market capitalization for many of the swiss institutions and exporters. That is the move on euro swiss this morning. The Bloomberg Top headlines. The family of a journalist welcomed release from prison in egypt after more than one year in detention. Colleagues from al jazeera and he were taken on terrorism charges in 2013, and he is being deported from egypt, but the fate of his to double your colleagues is unknown. President obama is saying u. S. Companies pay an estimated 19 tax on their estimated future earnings. This is about 2 trillion which is being held in offshore profits, according to people familiar with this budget proposal. Companies would pay the tax regardless of whether the money was brought back to the United States, and the revenue would be used to pay for roads, bridges, and infrastructure projects. A former defense minister is now president , backed by the renzi party with a parliamentary ballot on saturday. Former Prime Minister Silvio Berlusconi asked his party to cast like ballots. Dominique strausskahn is facing fresh questions about his personal life in a french court room. The former managing director of the imf is one of 14 men and women on trial for alleged involvement in an International Prostitution ring. The case is being heard in one city and the trial is expected to last at least two weeks. His lawyers have declined to comment on the case. And the new england adrian won the super bowl. The patriots defeated the Seattle Seahawks 2820 four. They overcame a 10point deficit to secure their first nfl title in 10 years. Asian stocks have slumped over after signaling contraction. The official purchasing Managers Index fell below 50 for the First Time Since 2012, fueling speculation that the worlds secondlargest economy will need to boost monetary stimulus. Lets go live to hong kong. Bring us up to speed. And the china pmi fell to 49. 8 last month and down from 50. 1 in december. That not only missed analysts estimates, but, as you said, it fell below the crucial 50, which would separate expansion from contraction. The biggest weekly stock market drop in a year as well as physical data that showed the weakest Revenue Growth since 1991. Now, the reading of a january hsbc pmi also supporting this trend in manufacturing, humming in at 49 point seven today, also below 50. So there is no surprise there is speculation that policymakers will do more to spur growth. The cheap china economist at Deutsche Bank saying that this data is expected to weaken further, so there will be a push for the government to take further easing measures. Now already, policymakers have cut rates back or the first time in two years. I have also been easing Monetary Policy targeted measures to keys further. Now, with the disappointing data and the disappointing start to 2015, policymakers are expected to do more. Economists expect the pboc to cut the reserve requirement ratio for banks by 50 basis points and lower the deposit rates by 25 basis points in the first quarter. Now, were only talking about china right now. However, tomorrow, we have we may have more action from other Central Banks here in asia. The rba and the r. B. I. And many Analysts Expect the reserve bank of australia will cut by a quarter point, 2. 25 , while 27 out of 35 analyst expect india to actually not moved much, so we will be looking forward to what happens tomorrow. At to you. Thank you very much joining us from hong kong, and if you want more details about increasing the pressure on china to join the global monetary trend, lets go over to bloomberg. Com for some analysis. Lets shift gears a little bit now. Trying to attract a little bit more than just wine connoisseurs to a brand. The first French Company to actually lift shares on the list shares on the london stock exchange. Great to have you with us this morning. I have massacred your name in french. So you decided london is the best destination to raise the capital. Why not the french capital . There is no market that suits you there . Actually, we already raised money on the french markets. For the last 18 months we raised 2. 2 million euro on the french market. With the global brand, it is obvious to go to the london market, because it is global and london is the global place. It is fascinating what youre doing, because you are looking towards Institutional Investors but also to Retail Investors because you are looking at cloud funding. Why the retail angle . For the last six months, we are working with individuals and institutions, but we thought we have the best clientele and they are the best customers and the best promoters of the brand so we are very happy about the relationship, where we can get a little more, and we get a Good Relationship between the investor who love to come and visit us, loves to see our vineyard and the best promoter for wide. And your vineyard, you played music. Yes. We play music. We are looking at some surveys about the effect of music on water, and we know when you play hard walk music or Classical Music you have an effect, and you can look in your microscope and there is an effect, so we are looking at different directions. The quality of the wine is a combination of very, very small things. We are exploring different ideas, and music has been one of them. So Classical Music has a different effect to led zeppelin . Absolutely. You can look at various surveys of the impact of music. You would have a terrible impact if you would play hard rock music. And you should come and visit us at the vineyard. We have a very nice atmosphere. And what about the composers . So far, we have not been very successful. What is the best music to play to the perfect bottle of wine . It is too early to say. This is very serious, what were doing, and is a combination of a lot of things. For example, when we walk in the fields, six times a year, and we put the leaves on one place to protect the great sin from the sun in the afternoon. M people are very skeptical. Again, it is a combination of many many small things that were doing on a daily basis to get good results. We have better wine with good music. And a very nice atmosphere in our cellar. Are you an original in this way, raising money . Yes, we think we are absolutely original. We are the first ever to do that, and this is the first time a french one is listed on the public market. There were some listings with champagne, as far as i know but not this. You are trying to push into bric countries, and you have to raise 5 Million Euros. What is the plan . What are you going to spend that money on . Going to japan and canada and one is very specific to this country and this is not to invest in the new equipment. We already have the stateoftheart equipment. Basically the first brand is something that we like to call a burgundy, and there are 40 different types of wines. At the same time, it is very complex. With very volatile qualities. With the burgundy wine, you would never know depending on the year, because depending on the winemaker and many, many things, you would not necessarily know what is good about those wines, and with chanzy, we want to help you. A very young winemaker, 25 years old. We like to call this brand i love chardonnay. We will have to get you back in to talk about that the next time. It is far too early for us to be encouraged by a bottle of wine. Thank you so much for being with us this morning. Join the conversation on twitter. You play Classical Music when you drink your wine . Make or drink. I am with classic rock when i drink mine. Classic. And manus cranny. Coming up the Energy Industry in britain as the oil summit is held. Stay tuned. We will be back in two women it. Welcome back to countdown. Lets turn our focus to the middle east and centralbank policy. Joining us now is a managing director for london. It is james watson. Good to have you with us. Volatility for the brokerage industry. Some players will win. Acquiring new customers. You are launching a new brokerage, so some would say you are the bravest man in the city of london, or you are somewhat foolhardy. Which one is it . I would like to go with brave, is that is ok. It is the plan to launch the brokerage, so that was the plan. We were on a particular cycle. We opened in hong kong. We have opened in singapore. We have been waiting to come to london. What happened with the snb just focus all of the things we have been saying for quite a period of time, and what was a great idea on paper suddenly was happening with them, and it became, in a sense, part of our plan. I was reading this morning that across the city of london there have been some weaknesses with the number of Job Vacancies that have come through in january, and some are suggesting that is because of the snb, because of the greek election because of the u. K. Elections looming. I think first of all, we have concern and compassion for what happened in the market. Nobody likes to see a competitor go out of business or to see People Struggle or to see the market struggle, but our plan has been if you get your model right, and we based our model on capitalization, and you would expect that coming out of abu dhabi. We talk about regulation and technology. Being four years old, we have the advantage of not having to do things the way they were done and because we had this new technology, because we have this attitude towards risk and regulation it is very interesting. Being where i came from in the past with the banks, regulations was regulation, and they always said to us, to the whole Team Regulation is actually a template for risk, because if you get the regulation right you understand regulation, then it lends you to be very smart about risk. The rba may be the 13th centralbank to loosen policy in 2015, when it may go this week. The markets are very volatile are today. I we approaching a new period of volatility . Last year, there was no volatility, and we were pining or it. Be careful what you wish for . There is a currency war going on it which is as we see it. And there is this volatility, there is a great opportunity for people to trade. There are millions of people every day and law onto the systems, and they want to trade. What they are really looking for in that currency war is they are looking for some stability and once all of these changes are happening with interventions, and that will continue, the general public what to be able to trade in a manner that is safe. They want to know that i have got the tools in front of me. I have my bloomberg in front of me. I can get the information i want, but what is really important is i do not have to worry if my broker is going out of business him a so have got the tools in your point is good, there is going to be a lot of, and i think that will grow but at the same time, we think that is an opportunity for people to take advantage of that. The monthly gains in january of this year, money going into gold funds, hedge funds are the most bullish in two years. I mean, are the markets that fearful . Moving in gold that is telling you something . I think i am not qualified to give you the az of fundamentals and gold, but people normally retreat to save havens, and gold has always been seen as a safe haven, but people protect them selves. At the same time once you get that fundamental base in place people can take a step forward to look at the markets take advantage of the markets, trade in markets, but the public demand so much more now. They demand safety, tools, training, education. In the middle east, you have an interesting take. We are seeing the biggest strike at a u. S. Refinery since 1980 opec actually increasing production in january because of what iraq is doing. Where does this go from here . I would like to say i can give you that answer. I am probably not the right person. I can give you my opinion. I think that the u. S. Is sort of driving the gdp numbers, but if you think there is no reason for a rate hike because they have this Great Oil Price for themselves i am not 100 sure in my mind what will go. I think there are People Better placed. Thank you very much, james watson, with a london managing director. Coming up, we will be looking at our favorite stories from bloomberg digital, and we have got a couple of american stories, and i wonder if you can guess what they come from. We are talking politics and the skin after we return. Time now for little bit of our best of digital. We have the market story. Ceos are cutting their earnings forecast by the most since any time since the market crisis began, and it is up by nearly 8 , and the negative guidance consumers and drugmakers are the worst offenders. And just to remind you, procter gamble, caterpillar. It is the dollar that has tortured them, so get ready. Some of the american businesses, and i take new jersey is Chris Christie traveling to the u. K. , and he has not said if he will stand for the president ial elections in the u. S. Yet. The picture that ucf the top of the story coming is here talking trade and science, and he will be meeting with david cameron. And the patriots. The new England Patriots have been the Seattle Seahawks 28 to 24. They overcame a 10point deficit. The last minutes were absolutely frantic. Tom brady, the quarterback of the patriots has now four super bowl titles it tearing time with joe montana and terry bradshaw. Our time is up. In the next hour, we will be speaking with a chief officer of ryanair. It dont miss that. Greases finance minister rules out taking any more bailout money and says but greeces finance minister rules out taking any more bailout money. What this government is about is ending the addiction. Ryanair lifts its target. We will be speaking with the cfo in just a second. Crh agrees to buy the company for six point 5 billion euros. We will be live in france with Dominique Strauss kahn on trial. Hello, welcome to countdown. A warm welcome to the second hour. Europes Biggest Discount airliner ryanair lifted its fouryear profit goal this morning after a jump in traffic and lower fuel prices helped boost its third quarter. Joining us is the cfo of ryanair. Thank you so much for coming to join us. You have done a number of things. You made a number of announcements. You lifted your for your guidance. You keep lifting your guidance, but how much do we believe the guidance we are getting from ryanair . We have had a good year. We have seen it increased to 21 million passengers. A six percentage point increase. The customers are very pleased with the performance we have. We are delighted to increase it again to it hundred 40 to 840 million. The press conference strategy it is beginning to work. Business passengers are up. How much are premium customers willing to tolerate in pay . It is a new experience. How can you squeeze that . That is what you have got to do. We dont squeeze our passengers. We are nice to our customers. Encourage them to spend more money. I think our customers call to us because of the low fare. They stay with us because they like the reliability of the product. They make it more convenient with flexible fares, etc. , and there is a modest rhenium premium. The objective is to convert 10 of business passengers. You say Earnings Growth next year will be modest because of the hedging policy. Fuel hedging policy. Explain. It is not because of that. Next year it is 92 a barrel which is in a percent per passenger saving. Were saying due to low fuel, a number of weaker competitors who get an immediate benefit from fuel falling, and ryanairs objective has always been to give back low fares to our passengers. If we see a reduction in fares elsewhere, we will clearly beat that in the market. Were saying to people, dont expect the savings to go straight onto the bottom line. You want to temper their expectations for Earnings Growth in 2016. Is that correct . Were only doing our budgets now. We havent put our forecast out. The expectation would be the fuel would go to the bottom line. We will hit the passenger numbers, 100 million passengers next year. The First Time Ever a European Airline will carry that many passengers. We believe we will pass the lower fares to the customers, which is great. Every member when ryanair did not hedge oil. Do you regret the hedging you have in place . No, fuel is 45 per cost base. We can get certainty on that. We are happy. The hedging we have in place this year gives 10 savings on what we paid last year. As we move into fiscal year 17 if the remarks the marks the main where they are, we could be looking at further 16 . This level of certainty in managing the business is extremely important. Iag and qatar have a new relationship. Going towards earnings, a lot of political backlash in the papers at home over that deal. Will that deal get done . Will the government ratify it . We have put something in our press release this morning in relation to this where we say we know the proposals that have been made. Be on that there are no formal bids on the table. I would be commenting on speculation and rumor. Were not going to go into that area. They speak highly of each other. There must have been some conversations about what price ryanair will accept. Were those conversations not happening . Ryanair is such a big shareholder. There are no formal offers on the table at this time. We are moving into the area of rumor and speculation. Ryanair offered 280. Is it still worth that . It is a Different Airline than it was when we launched our first bid. We achieved a lot of what we would have done with them. We are not going to rule anything out at this point. Can you give us an idea about the deal announced on friday . Buying and 9. 9 stake. They seem to work quite well together. The ownership rules and iag are such that they can on the have 40 new ownership. I believe they are close to that level at the moment. It seems to be a good deal. It is interesting. And other interesting developments around the expansion in the southeast of england around airport capacity. Easyjet says they think expansion should take place at heathrow. That will bring more competition to heathrow and drive down prices. Do you agree . When in stansted, one in gatwick and one and heathrow. Our position has not changed in that. London is a hugely popular destination. We are growing in the next five years. We feel we could have a capacity for three more runways. Todays dividend youre earning stake is up for sale. Where else would you look for value . We are going organically. We have grown very well over the last dirty years. Were third the last dirty years. We are growing very well. You wouldnt rule out more m a . There has to be something really specific. We are very good at growing the business ourselves. We will continue to grow to 160 million passengers. We have a Share Buyback. Things are going well with our current strategy. Thank you very much. The greek finance minister has said he wants a new deal with european creditors. Some damage has already been done. Greeces tenure Government Bond yields soaring last week. Angela merkel stonewalled the plan for increased spending. He is calling for his country to go cold turkey on new debt. But get to our International Correspondent, hans nichols in berlin. How does he plan to do this . Good morning. He wants to keep the ability to draw funds from the ecb, at least from great banks, keep the ecb liquidity lines open. He does want to give up the addiction to eu and imf funding. He wants a new deal in place by may for longerterm debt. He was very clear when he was in france this is going to be a difficult process. We have resembled drug addicts craving the next dose. Do i believe greece should be taking another bunch of loans . No. It is not that we dont need the money. We are desperate because of certain commitments in my abilities we have. He did receive some support from the finance minister in france as well as from president barack obama who spoke later in the day. Here is what they want to do. They want to keep their lines open to the ecb so they can pay shortterm loans. The problem is if they exit the Bailout Program under the e. U. And that is february 28 the deadline. The ecb has been very clear they wont allow them to have emergency access to these open windows. The vice chairman of the ecb spoke over the weekend in cambridge. Very strongly hinting unless greece is in the ecb in the Bailout Program they wont have access to these funds. In terms of allies, he did get one ally from the french finance minister. He said they need to stand there to do what they need to do to help greece in this difficult time. France will make it easier. France will always be there to find a solution for everyone to overcome their difficulties. We have this, and believe common belief greece is in the euro and will stay in the euro. Greek bonds have spiked. We have seen bad news in the banking industry. The index is down 38 percent. The Prime Minister has had a more cautionary tone. He issued a statement over the weekend talking about how greece will stand by its obligations. We may have a little bit of Good Cop Bad Cop going on, but right now the bad cop is continuing his trip. The good cop will head to cyprus on rome and paris. President obama is weighing in on austerity as well. It was interesting to hear obama come in at this time and echo what mr. Street this strepuss party said. It is difficult to carry out reforms when your economy has shrunk by 20 . Obama seemed to be in line but didnt want to complicate it was too much and it stressed the importance of keeping the eurozone together. Hans nichols in berlin. Lets keep a look at some of the other stories we are following. Asian stocks have slumped after the chinese manufacturing gauges signaled contraction. The official purchasing Managers Index unexpectedly fell below zero for the First Time Since 2012, fueling speculation the worlds secondlargest economy will need to boost monetary stimulus amidst sliding tax receipts. And to join the monetary easing trend, head to bloomberg. Com for the full analysis. Dominique strauss kahn will go on trial in france later for alleged involvement in a prostitution ring. He and 13 others are accused of pimping in an organized group, a charge which carries a maximum sentence of 10 years in prison and 1. 5 Million Euros in fines. Well have more on this after the break. The al jazeera a man and not a zero journalist was arrested and accused of spreading false news. Two of his colleagues remain in prison. You can join the conversation on twitter. Let me know what youre thinking about. China slowing down. What happens next . It is the sexiest story of the day. Join me on twitter. That is one of the weirdest things i have heard. Coming up on the program, shyer wins u. S. Approval for the first retreat for eating disorders. We will bring you that story after the break. Welcome back. Dominique strauss kahn will be facing fresh questions about his personal life in a french court today. The former managing director of the imf is one of 14 men and women on trial for alleged involvement in an International Prostitution ring. Mark is in paris. Good morning to you. What are the charges Dominique Strauss kahn will be fighting in court today . Exactly as you said, he is fighting charges he was involved in a prostitution ring, but he was one of the organizers of a prostitution ring. That is the key question whether he was involved in organizing the ring because prostitution is illegal. We are talking about charges relating to 17 sex parties over the course of several years three of which were in washington and new york. The total cost of 100,000 euros. The trial starts today. It is scheduled to run three weeks. It could go over an extra week. If convicted strauss kahn could face 10 years in jail and a fine of as much as 1. 5 Million Euros. What is likely to be the legal arguments made in court . The key question is whether he knew whether he was involved in the organization. He is saying he didnt even know these were prostitutes. He is saying he thought they were parties organized by friends of his. He did nothing illegal, but there will be some of the prostitutes themselves will testify. That is what the key question is all about. Dominique strauss kahn and his lawyer and advisers declined to speak to us for reporting on this situation, but we will be hearing the arguments in coming days. Time for todays company news. Lets start off with a deal that has been truly cemented. The Building Company has agreed to buy cement business. Crh says its Fourth Quarter will be broadly similar to the previous years Fourth Quarter. The spanish operator telefonica is planning a share sale worth 4 billion euros. Telefonica is said to have hired j. P. Morgan to handle the sale. The money would be used to pay for recent acquisitions and to bolster its Balance Sheet. Drugmaker shire has one u. S. Approval for the first medication to treat binge eating disorders. Shyer is said to have received the goahead from the food and Drug Administration to market its drug. Binge eating is thought to affect more people than disorders such as anorexia and bulimia. Shares in the chinese bank have fallen after the president s design. A magazine reported he is being investigated by chinese authorities. The bank has a market capitalization bigger than Deutsche Bank or credit squeeze. The bank says the president has stepped down for personal reasons. The magazine claims he was quizzed by anticorruption authorities. Up next, we will be speaking with the ceo about his plans to cut more than 200 jobs as part of a 100 million savings drive. Cutting cost this year. A surge may quench profit. Great to have you with us. Lets get you the detail. The topline is 200 jobs to go. That is the human cost of what the action is having on your institution. Are these going to be private bankers . Are they going to be operational jobs that will go to a . Where will the ultimate human cost come from . We are talking about 200 positions. We are confident we can absorb that. Also natural attrition. It is less than 4 of our staff base. This is below what the normal staffer tatian would be. At 100 million swiss francs that is 4 . Can we expect this is the beginning of a bigger review, or is this a maximum structural change we can expect . I believe we are looking at a dynamic environment. We are putting together this package with the number of revenue initiatives that should trickle through relatively quickly this year. We do not anticipate making further shortterm cuts. Structurally we will continue to work on the cost structure as we did with the Merrill Lynch transaction, trying to diversify outside of switzerland. The pivot east is the critical thing for you. Do you think the action by dropping the cap, do you think they have done a great deal of damage for your country is a destination for private wealth . Have they damaged the brand . I dont think i can say they have damaged it, but i can say it was unexpected for the different participants. Shortterm it has increased the stress level for many market participants. In a few months the market has overreacted. In a few months time we will see it is the right thing to do. If the market has overreacted, what do you make of the press reports this morning, that there is this unofficial corridor . Is that what you see the euro swiss coming back to if you believe we have overreacted . Do you think that is a fair corridor to have it at . I dont think we know of any official or unofficial corridor. I think the swiss franc at parity with the euro is massively overvalued. I think it is going to be attending massively to 105, 110. I think its something we should be able to compensate through cost efficiency measures. Give me a sense of what customers are doing. Give us enough it. I know you said they were extremely wealthy and very loyal. Update us on that situation. Were seeing two things. For an individual segment, this is a great opportunity to maybe invest some of the cash they had. I think if all of us do that we are going to see liquidity come to the market. If anyone started to buy europe 10 days ago, i think he is looking at a distant return this year. If the swiss move again on rates, there must come a time when you have got to pass part of the costs on. Other institutions are doing it. Why do you think you hold so firm . I think it depends on each one of the institutions. We are using part of our Balance Sheet. It belongs to our clients. The issue is less pronounced. We must perfect much prefer clients with swiss account balances. I think we need to do our job is bankers and give our clients the choice of what they need to do. I am fascinated to know Thomas Jordan didnt speak when he was at tebows davos. We havent had a chance yet in the industry to have a debrief with him. I think this will happen very soon. How are you doing . You think you think he must be very lonely . Will not be breaking cake to the meeting . We will try to understand the rationale for the confusion and i am sure we will come to the conclusion these options were limited. Boris, a great deal of speculation when i caught up with one of the others eeo other ceos, the kind of costcutting programs you have to implement will leave you as a target for other people to pick up . Look, i think it is a question you should ask the people are interested in us. I know there are several institutions that look at our leadership. I think we have a Strong Capital position right now and we will see this year, actually the stock was oversold and will continue to enjoy greater momentum like in 2014. I think we will be a very expensive target. Of orbis, well done. Up 14 . Well done on the numbers and defending yourself in the Swiss National bank. I will see you next week. Thank you, Boris Collardi. The top headlines. An australian journalist has welcomed has released from prison in egypt after a year in detention for you after you detention. Two were released. He is being departed. President obama is proposing a u. S. Companies pay a minimum of 19 tax for their future foreign earnings and he is speaking off 40 tax of 2 trillion which is held in actual profit according to people familiar with his budget proposal. Companies would pay the tax regardless if the money was brought back to the u. S. And the revenue would be for roads and bridges and infrastructure. Italy has a new president a former minister. He was backed up by matteo renzi and received 600 65 votes and the parliamentary ballot on saturday. Dominique strausskahn is facing first questions about his personal life. The former managing director of the imf is one of 14 men and women for alleged involvement in prostitution ring. The case is being heard in a city and which trial is expected to last two weeks. Strausskahns lawyers have declined to comment. Ok, time for a little bit of a check in on the Foreign Exchange market. We have had a talk with one of the big players and Private Banking. Over at julius baer and the reaction by the swiss franc against the euro when the as of the departed wendy s p was overly aggressive. He feels that a corridor would be reasonable and the centralbank maybe a little bit lonely. Continued speculation that the imfb buying the euros to create this corridor. Keep an eye on euro swiss. Quite a significant move as you can see. The swiss franc declining. The euro rising. This is the weakest the swiss franc has been to the euro since the Swiss National Bank Released itself. The aussie dollar is almost, such a big move before the centralbanks meeting. This the first rebound in 4 days. It goes like this. On the 20th of january, it was 50 that the rba would drop rates. Higher Central Banks against the 2 months off hiring. Sydney house prices up by 13 . Goldman sachs indicating a substantial commitment to the aussie dollar to travel lower. A real engagement against the dollar. I have a look at the yuan. What are the chinese the first contraction in manufacturing and two years. What next for the yuan . Is that is the question in my mind. The polling we have done that they will not interfere with the currency. Moving almost at the maximum. The chinese do not like just do like the currency to move every day by a bandwidth. It is moving toward the maximum. This one a new subject we will pick up. Something i will ask our next guest about. Plenty to talk to our next guest on about. Lets continue our conversation. Stephen, lets talk about the swiss franc. We were talking to Boris Collardi any relief for anybody worried . We tend to think it is heading weaker, but clearly we have had shot in january. The point to we make here is we have a oneoff very large move. We do not think the Swiss National bank is stepping away from trying to influence a level of the swiss franc. Unofficial corridor . As with seen over the weekend, to talk about, they have done 2 things. Shipping away from fx as the front aligned. Interest rates are much lower. Relative to the eurozone. The negative deposit rate. This is important i do not think they are going to walk away. They will still be there selling swiss francs but not being held at 120 level. The danish krone, it is a big question and they say, no, the ecb said they have stopped selling Government Bonds now to stop it and flow of money into denmark. I think in the new world post snp, never say never. Having said that, quite significant differences between the euros was a euro danish. The major difference is that the danish krone is a property of the euro, they are following ecb policy. Secondly you do not have to pressure on the danish krone on the swiss franc you do not have the quality or the market suggesting it may go at some point. The point in summary yes it is possible, but the less likely to move. Before the smb, you was a is not possible but now everything is possible in light of the smb. That is the case. Very few of us thought that. We were very shocked by the Swiss National bank of because they made it was crucial. I think as far as it euro danish is concerned, because of the strong link between the euro and the proxy makes this slightly different. I covered the aussie dollar there and i was surprised. Hiring the best and home prices up. So much expectation on the aussie. Will they, should they . 66 we are pushing back against it. We are the 33. The key point here is like abuse was, we had a big surprise in canada. Canada cutting brings last month and no one expected it. Australia, new zealand to stand out as potential candidates. We do not think they cut the rates. One of the reasons as you mentioned is the unemployment market for we think it is improving at unemployment will fall to below 6 . The other point you mentioned is house Price Inflation especially in sydney and melbourne. Very strong. I am not sure the rba want to risk stoking that further. What is interesting is the market is really pricing in 50 basis points. If they disappoint, you could see the Australian Dollar bounce quite significantly. We like long aussie. Our favor is against the new Zealand Dollar and we like that across. Last month, if fell to 30 year lows. We would push back across. New zealand is a different story . It could be in a sense it is not price in. From that perspective, the aussie dollar is a much of honorable because vulnerable. New zealand led the way in raising rates. We had a meeting recently last week and they made it particular they are not buying hiking. We are ahead of tightening and thats the correct way to characterize. Greece. The perennial issue, they feel they can bargain their way here and get a backstop from the European Central bank. The dollars holding up remarkably well faced with very aggressive yes, the market has changed a lot when greek concerns were weighing on the euro. The point to we would make now is that it is really the ecb and qe that is driving the eurodollar. Were having this lower. Clearly, the negotiations and greece are important for greece and potentially for the periphery bonds. We do not think it is having a major impact on the euro. The euro is much stronger place. No one talking about a breakup of the euro. People speculated. The key point we would make is that even if that were to be a default and greece, the contagion is likely to be limited as we are seeing that at the moment. Steven, thank you. Steven saywell. We will get you some more after the break. I am on twitter. She is furious. ] the u. S. Treasury rally. [laughter] time for hot shots. The treasury rally, resistance is futile. Never did i think we will get in star trek star wars reference. Whats see talking about . All of you trekkies will know the borg forced other into their species. Fighting the strongest fighting the strongest treasury market a rally in a quarter century is like trying to resist the borg the words of holding it is futile. Look at this chart. This the bloomberg u. S. Bond index which includes treasury with a maturity greater than 12 months. It has risen for five story weeks. As you can see, the top righthand corner, resting at an alltime high year to date and has gained a 3 . On the canadian belgium, u. K. And danish sovereign bonds have started 2015 stronger. In january, the benchmark 10 year note dropped 53 basis points 21. 64 , the biggest decline in any january since 1998. The 30 year is any record low. Is at a record low. Plunging yields in europe are making those on amercos bonds more attractive. And they could continue to 1. 5 percent of the u. S. 10year note from 1. 64 . Only if stocks are falling. Analysts still forecast the tenant year yield debt 10 year yield 10 year yield, some discrepancy. The oil prices are playing a part in low inflation and Inflation Expectations are dropping. The difference between that 10year note immaturity and inflation or tips has fallen to 1. 6 points at the end of 2013. A final word, buying treasuries might feel like being cold joined with the cojoined with the borg. Respected. Resistance is futile. He is going to get a call from george lucas, i can assure you. When they make the next star wars movie, mark barton will be there. Would you agree that the momentum, it is a momentum and the dollar moves lower . And today, another boom because of personal consumption expansion. The lowest since 2009. On why would you not to buy bonds . Maybe that is a good idea. A couple of points on whats mark was talking about. Clearly, inflation is what is driving this certainly the very low level of headline inflation that is driving this. The sedative point i would make is looking after the overall bond, a difference between short end one year or two year or the long end. Long end as much more responsive to inflation. At the front end, more responsive to the fed and what the market thinks. Flattening in this environment is probably likely in the sense the fed will hike. But because of low inflation, they would not have to go super aggressive. Having said all that, we go through june at the first in rate hike. As a result, we think the market is quite complacent. Payrolls is going to be important on friday. Firstly, we think well get another strong number. Secondly unemployment and this is the key. We are calling for 5. 4 in unemployment. The point we would make it is the market is probably putting too much emphasis on low inflation and not enough emphasis on falling a reducing slack in the economy and unemployment falling which is a good forward indicator. Courts can i ask you about the dollar specifically . We have talked about how nobody in the market, i use the word loosely, nobody inside the snp moving. Everybody calls on and say the dollar is going higher, lower in 2015. Is there a danger and this one way battle for the u. S. Currency . There is a danger. We think the dollar goes higher but mostly other a low yield ares like in your. Not nestle like low yielders in europe. What i just gave there on the f ed if we get a federal rate hike, it will confirm convergence when the ecb is doing qe and the dollar rallies. The biggest risk we think is you do not get to that. If we are wrong in the fed it doesnt hike, it will be a bit of fallout from this strong dollar rally. And you are going to stay with us and take a bit of a break. Steven saywell. Welcome back. You are watching countdown. Steven saywell. Lets talk about the u. K. Economy the Rate Decision lets call it that. Nobody is expecting it. What is the discussion . It is really important because of the market has pushed that is expectations for the timing of the first rate hike considerably. Last time i looked around october 2016. Remember, not that long ago were talking potentially november of last year. That is a big move. It has stalled the rally and sterling to some extent. It is going pretty well against the euro. Our view is that is too late october 20 16. Our call is february. The reason is theres a lot of similarities between the u. S. And the u. K. Particularly they both are seeing unemployment fall quickly and faster than the centralbank. Falling unemployment is a classic indicator of inflation for a centralbank. A central banker is not looking at inflation today but two years out. From our perspective, we think the market will reassess those expectations. When they do, the pound will do well. A time for carney to put his foot down. Is it time for the boyfriend to Say Something to rein in Market Expectations . He has done something before. It is a possibility now. Clearly, like the u. S. , what they have is very low headline inflation and probably will continue to fall the largely driven by oil. He probably doesnt want to much complacency to come into market especially an extreme move in pushing that first rate hike the back. If we are right, the pound should pick up. Bank of japan have to react. Bank of japan it needs to do more to defend themselves . Monetary . I do not think so. I think they have made it clear they will continue to expand their Balance Sheet quite dramatically. What do they announce in october was the target for 2015 and that will monetary will increase. Have a good week. Steven saywell joining us. 7 55. On the move is next a will talk about airlines after ryan l rises is profit and more passengers were the key. Good morning and welcome to on the move. Moments away from the start of european a trading. Straight to your morning break. More money, more problems. Greece pledges not to take any more aid. The foreign minister is here to meet with the chancellor george osborne. Chinas official rating signals contraction for the First Time Since 2012. The biggest weekly stop stock market drop in over a year. Ryan air gets an upgrade. The biggest Budget Airline boosted its profit forecast once again to 815 Million Euros. The big question is on slower Earnings Growth next year. Three things will will watch a this monday morning. Future markets higher. I am looking at my else. The ftse 100 and the dax. We may get a higher opening. Straight to manus cranny. Only so much of the viewer can take. Equity markets, the best since 18 that in 1989. European equities arose by over 70 . Firstplace germany. The germans win. European equities rose by over 17 . If the euro stays together, germany wins. The omx that was up 7. 8 . I have omitted