Transcripts For BLOOMBERG Countdown 20160725

Manager at 3 00 a. M. Welcome to countdown, im anna edwards. Im manus cranny. Anna theyre sticking to their full year forecast of 1. 375 billion and given what weve heard from lufthansa about the the state of the aviation industry, perhaps that would be seen as no mean feat. They see Second Quarter fares falling at least 6 . We previously heard that ticket prices would fall 5 to 7 in the first half of fiscal 2017. So that that would have been the first two quarters. Not right out of the ballpark. Theyre cutting, theyrey cut winter capacity due to brexit. This is something we heard from another company a week or so ago. That the Eastern European focused airline would be cutting capacity to u. K. As a result. Theyre pivoting growth away from u. K. , this is what was warned about previously. They see second half fares eclining 10 to 12 . They talked about weakness in prigses. Although theyre staking with it, theres Downside Risk. Well speak to ryanairs c. F. O. Joining us at 7 00 u. K. Time. Manus weve got phillips, they adjusted their number, 574 billion. They recently raised 750 Million Euros raised 750 Million Euros. We spoke to the c. E. O. Last week in term os they have outlook for 2016 for phillips, you want to think about the Health Care Business here, thats 45 of the revenue. At 2016 outlook will remain unchange the topline sales come in at 5. 9 billion, just slightly below the estimate, second half earnings outlook is going to see an improvement for them. Were going to speak to the phillips c. E. O. Shortly. You can catch that interview with anna and myself at just after 6 15 u. K. Time. And julius bear weve got number there is. Earnings per share 1. 84 swiss francs. The estimate was 1. 6. Profits of 362 million swiss francs. Well have that conversation as well. Anna hell be joining us on this program, countdown 7 00 a. M. U. K. Time. Witzerlands Third Largest money manager. Lets talk investors and viewers through what weve seen overnight on key assets. This is where we are on dollaryen. The dollar extending its gain against the japanese currency. 7 of economists surveyed from bloomberg except more stimulus from the d. O. J. Manus they had their longest losing streak, crude comes back unchanged, just off a twomonth, the number of rigs ht United States of america, increased for the fourth week in a row according to baker hughes money managers, adding to their bearish bets by the most this year. Nna lets talk about gold, 1. 37 , a lit more appetite for the likes of exy thes in the last couple of weeks. Lets go to Richard Sallam for more. Hey, ann nafment escalating concern about antiglobalization sentiment. Meeting in china other the weekend, members discussed renewed effort through fiscal efforts to boost global output. There was a consensus that more needs to be done to share the benefits of growth. Turkish Prime Minister has ruled out early election, say ing the government plans a multibillion Dollar Infrastructure Fund to keep growth on track he said the ountry is open for business. What were saying to Global Investors is, this has come and gone and the national will and the will of the citizens has destroyed the plotters. Life is back to normal in turkey and you can continue your longterm investments and well eliminate obstacles before you. We are laying out the turquoise carpet in front of investors. We have all kinds of tax incentive, investment incentive, and we are giving priorities to value added investments. At least 10 people near a musicfest value were attacked. The attacker was a syrian refugee denied asylum but allowed to remain in the country because of the danger of returning home. This follows another attack on friday night in which a gunman killed nine people. Verizon is set to buy yahoos core assets. That could come before trading begins today in new york. The deal is set to include yahoos real estate assets with some intellectual property. Yahoo will continue to hold stakes in ali baba and yahooa pan. Theresa may will have a meeting to discuss leaving the european union. She will visit scotland and wales. Northern ireland voted to remain. Tpwhrobal news powered by 2,600 journalists and analysts in more than 120 countries. If youre a bloomberg terminal user, go to top growth. Manus thank you very much. A little breaking news from the authority of singapore they said their current policy is appropriate for fighting inflation. This is the week, got the bank of japan, m. A. F. , stand in line. Alongside bank of england and the e. C. B. Lets see how the markets are doing. Judith is stand dig. Good morning. Judith we are seing in light of trade here in asia, stocks generally higher, regional index up. 1 . Despite being pretty flat about half an hour ago. Were seeing hong kong and china come back on loin after the lunch break. Hang seng is still weaker. The shanghai asian market is a touch higher, up by bnt 25 . Korea by. 25 . Korea in positive territory. Weve been watching the nikkei 225. The yen continuing to weaken. Great gains coming thru in australia and new zealand. Theyre up today to an alltime high. The big story once again has been pokemon go and nintendo saying it is likely to have a limited impact on earnings, thats sent nintendo shares down sharpalism mcdonalds which weve been talking about tying up with nintendo on pokemon go also falling in clabreags. An of course the news that verizon may be making a play for yahoo, to make it the parent owner of yahoo japan as well, though ja hao japan is pretty unchanged in late trade. Woolworths, the big supermarket giant in australia, is cutting jobs an closing stores. Investors appear to like the fact that thats a major cost cutting measure. A pop of about 8. 4 there from woolworths. Anna thank you. G20 finance chiefs signal concerns about a wave of antiglobalization sentiment. A month of u. K. s decision to leave the e. U. They step up emphasis on poll stoice boost growth and promote inclusiveness. Manus tom has more for us. Brexit is one of the main issues threatening the g20s core principles. Tom brexit was definitely near the top and front and center was the deteriorating Global Growth picture by the i. M. F. Forecast downfwradse we saw last week. A part of that mix a big part of that mix is brexit and how that unfolds that divorce from britain and the european union. Theres also a crystallization of concern about the rise in antiglobalization sentiment. Policymakers said is reflected, was reflected in the brexit vote and also reflected in the u. S. With the rise of donald trump. Now i spoke to secretary gene of the oecd and asked him about his views for the Global Economy going forward. Take a listen. Were going to renew our predictions in september and then going to go country by country in november. And unfortunately, i think that were going to have some weaker performances. Especial personally in the european theater. Bus of brexit but also because in general the recovery has been weaker than we thought. Manus on the very specific anna on the very specific issue of brexit, any news coming on that front from the event youre at . Tom well, britains new chancellor of the excheker was exchequer was here, he was particularly sought after by the europeans. We didnt get an exact date but we did get demands, particularly from the European Commission and the french, for more clarity on when article 50 may be triggered. I spoke to the European Commissioner for finance and economic affairs, heres what he had to say when i asked him when the brits should trigger article 50. Take a listen. Its up to them to evaluate that. I think represents certainly a huge work, its also something that we have to manage for ourselves. We need to prepare negotiations for the e. U. But not too much time. And one factor is predictability. Whatever this time is, i think one stage we must know what entities, theyll generate and so forth. Tom he said he expects to hear from the britons in september as to when theyll trigger article 0. We spoke to the French Foreign minister owho wants to see et triggered by the end of this year, at the very latest , he said at the beginning of next year. There is pressure on the brits to give clarity in this time frame. Of course the uncertainty around this is whats key for the french and European Commission. The u. S. Saying, look, the brits have got to get their house in order. So there is some debate around this. But they will want to hear more from Philip Hammond and theresa may in the weeks and months ahead. Manus great reporting there tom. She doesnt sound like a laity who is ready to move at anybody elses pace but her own. Joining us is the Global Market strategist from j. P. Morgan. Good morning. The g20 really concerned about this mediocre level of growth. I saw a tweet from other the weekend that plagued my conscience, the delusion of precks sit. Brexit. It will hurt them more than it hurts us. But here we are, the Services Dropping like a stone on friday. Versus this injure zone which is, you know, some would say flatlining. Theres the truth of brexit. I think this is where the u. K. Is swan diving in Economic Data was to be expected wevpl seen it reflected in business confidence, consumer confidence, everything looking like its been falling off a cliff since we had the referendum. Weve not had any official date from the o. N. S. Yet which is why the bank of england stayed on hold. What i would say is what were seeing in the u. K. And tpwhrobally is three big problems. One is productivity. The other is politics and the other is policy, both fiscal and monetary. Those three together are weighing on tpwhrobal growth and its why were in this sort of sub3 . One of the reasons the g20 financial meetings are increasingly important. Anna give us your thoughts on how much financial stimulus we need right now. Chancellor hammond talking about a reset being need. Jack lue talking about how the feeling at g20 was we dont need austerity, we need stimulus. Alexander i agree with those sentiments. Central wangers have threached limbs of what they can do. The top 50 Central Banks around the world cut Interest Rates 675 times. Thats one cut every flee freeh trading day combined with 24 billion worth of asset purchasing. They cant do anything more. Its now for the government to take advantage of the low borrowing cost that made it possible for the Monetary Policy side and in order to sort of do some old cool keynesian stimulus. The difficulty is politics. A lot of governments have come to pow thorne back of austerity promises. Manus what kind of reset can hammond deliver . Will it be tax relief for us or tax relief for corporates . We know were on our way to 15 , 17 is a stop off, isnt it . Alexander i think youll see the Corporate Tax and income tax. My concern is weve had two or three years austerity and trying to turn fiscal policy is a lot like trying to turn a tanker. The changes you make now wont be felt tomorrow, theyll be felt a year or two down the line. It will still feel like were tightening for at least the next few months unless theres a really meaningful shift. Im not particularly pinning my hopes on matsive monetary stimulus today to get growth omorrow. Anna for fiscal, we have to wait for the statements anyway. Alexander, thank you. Manus lets get your day aheadset up. E get a shot of germany. Climate survey. Thats at 9 00 a. M. U. K. Time. A the European Market closed, we get the earnings from the maker of ray bans. A little later this Democratic National Convention Opens in philadelphia and Hillary Clinton is set to accept the no, maam nation for president. Anna we speak to the c. E. O. Of dutch manufacturer phillips about results. At 6 30 u. K. Time, the turkish Prime Minister said rate agencies acted too quickly following the failed coup. Fol logue at 7 00 a. M. U. K. Time, the official start to the european bankings Bank Earnings season. This is bloomberg. Manus its 6 19 in u. K. Lets go to richard. Richard as much as 6 million has been wiped off the value of shares for nintendo. The correction coming after nintendo shares almost doubled since the pokemon go game was eleased. The announcement could come later today. Theres a deal set to include yahoos real estate assets work some intellectual property to be sold separately. Yahoo will continue to hold stake in ali baba and yahoo japan. The israeli founded 888 holding are considering a joint offer. Sunday times in the u. K. Saying the time could be worth around three billion pounds. That is a Bloomberg Business flash. Anna and manus. Anna thank you very much. The company is keeping its 2016 outlook and joining us now for his first interview of the day is c. E. O. Franz van how ten. Tissue outen. Vanhoudten. What worries you at the moment . We only have to listen to Bloomberg News to hear all about it, right . You know, we see brace basically volatility all over the world. In the middle east, brexit, elections coming up in the United States, maybe a positive is that i see china growth coming back. We had definitely also had a good growth quart for the china. But overall the world is a volatile place and thats just the reality. At phillips remain focused on our own Performance Improvement an im indeed happy with a solid quarter of both growth and Profit Improvement. Manus you talk about an unchanged outlook for 2016. Are you going to have to cuts to the costs more . You talk about efficient azzi and your own program, what will drive those two statements . Frans already a couple of quarters in a row we saw mid single digit growth for your Health Technology portfolio. We saw in the Second Quarter 90 basis points of Profit Improvement, very much driven by our accelerate breasm expect this kind of improvements to continue. Philips still continues to be a case of self help and the innovations brought to market are very much in demand. Our respiratory care business leverages the internet to deliver better sleep therapy to patients and that is driving high single digit growth in that business. Anna can you update us on lumilex, on the types of groups, companies, private equity and other trade buyers who might be interested in the company . Fa frans. I think knee need to invite you intoosh frans i said we expect to do a deal in the second half of this year and that outlook remains the samism expect to see Profit Improvement in their activities thanks to good design of our components in various products. So we stay focused on trying to come to resolution in the second half of this year. Do you still have competition concerns . Will any new deal you put together risk being blocked by regulators . Frans after the last time, obviously we are very, very focused on understanding all the regulatory hurdles. Trying to get a deal done that will pass, lets say, the scrutiny of the various governments. Manus what do you see what do corporate buyers delayed, what do you see from the consumer side what does brexit mean in your boardroom and your business . Frans i was in london one and a half weeks ago. First of all want to say that philips is entirely committed to the united king do we do manufacturing in the u. K. All of that will stay, no change. And when i speak about volatility, its more the macroeconomic effect of brexit that concerns me. That could affect spending power, that could affect the budget of the n. H. S. I think these are the kind of things we need to wait for at this time the impact is very limited. But that could change of course over the next years as, lets say, these matters unfold. I certainly dont know that. Im going to be focused on improving the philips business in the meantime. Manus you make a commitment to the u. K. , im curious to know, without even knowing if weve got access to the e. U. , youre still prepared to make that commitment without knowing all f the details . Frans yes. We have customers, we have employee, we have factories, i would be very amazed if the nditions would be so disadvantageous for that to disappear. It is in yurps and u. K. s interest to stay close. Ive always believed that, you know, europe will be stronger if we all Work Together tightly. Anna briefly, we look ahead to the vote in november in the u. S. , the president ial election, how big a risk is a Trump Presidency for your business and a rollback on obamacare . Frans well, lets say whatever the outcome of the elections is, i believe that the u. S. Is a great market. Philips is recording 33 of our revenues there. We have many assets. And you refer to obamacare. You know, in all my travels across the world, i know that the world will need more health care. And that needs to be affordable. The trend toward outcomebased care, valuebased health care is there to stay im sure of it. Manus thank you, this is bloomberg. Anna nitis shot of the tokyo imperial palace for you. In london. 6 30 daybreak is of available on your mobile. Lets look at some top stories theyre covering. We love the front cover of this one. The gleb on the couch having some sort of crisis. Talk coming out of g20 at least in that draft document bloomberg got hold of, talking about the world at a crossroads, we hear expansion, not austerity is what comes out of this g20 according to jack lue. More need for the benefit of Global Growth to be shared more evenly, according to christine lagar. Things may be changing. Manus they may be changing. That depends on what kind of stimulus you get. It will be interesting to see where we go next. G20 and of course back to the reality of what were dealing with, another suicide Bombing Mission a 27 dwreerled syrian man blew himself up near a bar after being turned away from a musicfest very. Is is after the attacks in , we saw the iday horrible images of the shooting in the Shopping Center there. This suspect is an asylum request. The incidences, the tragic, tragic incidences, nice a week ago, germany seven days later, they are coming fast and furious. This is what we have got to deal with in term os they have real of the a global issue. Anna and where does the e. U. Go under these conditions . Manus look at the u. K. , heightened security, roadblocks on peak days. Anna so those are the first two subjects were covering on daybreak. The other one, back to the business agenda. Asian currencies. Asian emerging market, foreign exchange, dropping before the fed and b. O. J. Both of those in focus this week. Of course it is very much a dollar story. Increasing strong from the United States, retail sales and jobs story. The work function on the bloomberg talking about a 45 chance of a rate hike by december. Manus you begin to see what state the emerging market currencies are in. Youve got the indian rupee under pressure. The only moment of reprieve, we have that interview from the turkish Prime Minister. Just keeping an eye on the turkish currency. Anna lets see how markets are performing. Caroline has more for us. Caroline good morning to the both of you. We are across the board seeing very flat trading when youre looking at the amex a. P. These are ethis individual movers. You can see its basically flat when it comes to the Overall Index but look at the screen you see on the downside. Nintendo down 17 , almost 18 which is the limit for the day. Huge plunge in that stock after on friday we heard financial impacts of the worldwide craze that is pokemon go is limited. Nintendo doesnt expect to revise its annual forecast higher so possibly some big movers. Nintendo down 17 . Generally flat. Cautious trading in stocks ahead of the Federal Reserve this week and the bank of japan. Such big bets for stimulus on the b. O. J. We havent seen more hope since the very first meeting back in 2013. So many analysts overall expecting some sort of stimulus from the bank of japan. And season high for the United States as well. You were talking about the work function, the Interest Rate probability have a look out on my screen screen. We are starting to see a pick up, a rate hike from the United States. This is a bet that will see ates climb up to 4. 5 by 2016. They are coming climbing up to 45 for a rate hikely december. Were gathering pace after almost where we were preblecks sit levels. We are starting to see more assumptions that potentially the world, the economy, in the United States is Strong Enough to withstand yet another rate hike and endeed perhaps not send shock waves throughout the rest of the world. Weve been hearing from the g20 concerns from the antiglobalization viewpoint coming from the overall market. One last chart for you before you go, its got to be about commodities, about oil. What money weve seen coming out of w. T. I. In particular, United States, were seeing oil in the blue as youll see the chart. W. T. I. Inching further lower, below the dollar mark. This as we see the baker hughes chart in white, the pickup in count, now at 371. That supply not going to get any better. With that, i hand things back to you, a somber time in germany but doesnt seem to be affecting stocks all that much today. Manus caroline, thank you very much with the latest on markets. And now to dubai. Good to see you. What have you chosen . Manus were keeping a close yra. On the l let me give you perspective on what happened with the sares. Turkey, which is pretty much the only Exchange Rate funded focused exclusively ton the couldnt are iequities. What youre seing on the charts is the weekly chaels that 15 plunge is the biggest drop since the 2008 financial crisis this as the government tries to reassure investors that Economic Reforms will continue despite the attempted military coup. Bear in mind that despite the loss of turkish equities on the year, years to date that is outperforming some of its peers, also news out from morgan stanley, research from them. They said the Turkish Central Bank would start hiking if moodys cuts its rating for turkey an also saying that kroul would be a very close call as well. Back to you. Anna thank you very much. Now tushish Prime Minister has ruled out early elections, saying the government plans a multibillion Dollar Infrastructure Fund to keep greth on track. Speaking to bloomberg excuse ily , he also said the rating agencies act today swiftly in downgrading the nations debt following the failed coup. The coup attempt had an Economic Impact on the turkish economy. S p immediately cut our rating and i think that was not an ethical stance. It was taking advantage of the situation. We have overcome a coup attempt, we have struggled to keep democracy running, and these agencies should not be rushing their decision. This was saddening for us. The turkish economy does not deserve this if you look at the indicator. It is an ideological and political decision. We have no doubt about that. What were saying to Global Investors is this has come and gone and the national will and the will of the citizens has destroyed the plotters. Life is back to normal in turkey and you can continue your longterm investments. We will eliminate obstacles before you. We are laying out the turquoise carpet in front of investors. We have all kinds of tax incentives, investment incentives, and we are giving priority to value added investments. Is it of concern to you that this might now lessen and therefore put pressure on the turkish economy on the weak spot which is the current account deficit which remains the third argest in the g0 nations. We will continue with our Large Scale Investments without putting our foot on the brake. Just before the religious holiday, we opened the bridge on june 30. July 26, we will have the third bridge inaugurated over the bosphorous and beginning in 2018, well have the first term until of the largest airport in europe inaugurated on december 20 and well have the tunnel under the b; sphorous. In 2016, well lay the cornerstones of the longest bridge in the World Without slowing down, turkey will continue etc. Investments. You mentioned that the government would increase investments in productive sectors. Rather than investment on social spending but more on investment side. That would mean the it would reinforce in a way the growth economy has seen which has been dependent on government spending. Do you are you plan anything measures beyond what you just mentioned to encourage private investment and Foreign Investment rather than just Foreign Investment in bonds and stocks but also maybe direct Foreign Investment into the turkish economy . We are establishing a Wealth Management fund. It is a structure that will finance large scale projects. We are going to finance investments through this funden in instead of they have general budget which will be cleared of problems. When you became Prime Minister you said that changing turkey into a president ial system a president ial democracy, was one of your priorities. Has anything changed in that after last week . For example, especially regarding the timeline of that change. Are you still considering a referendum should parliament not pass it as you desire . Is there a possibility of early elections . Early elections is out of the question. Im underlining this and being very clear about it. There are some circles who are trying to confuse the situation saying the ax party has come out stronger after this coup and will have an ambush election. This is not going through our minds and we dont find it ethical. We have power for four years and will use that power for the next four years. If theres anyone who is trying to seize that authority, we will fall on their heads like a sledgehammer and we did. From now on, if anyone is thinking about doing such a thing, they should watch their step. Why a president ial system is necessary, its necessary for stability and security. Under the president s president ial system, there would be no one attempting such an adventure because then an absolute political will would be in charge. A weak government would encourage coup plotters and theres been several such attempts. We have always succeeded in thwarting them. How we succeeded, because the nation was backing us. Anna alex from j. P. Mor began Asset Management is still with us. The Prime Minister in turkey talking tough about the need for president ial system. Evaluate for us the way they view turkey right now . I think most investors havent felt the impact of the coup. They make up just 2 of the International Market which is how a lot of investors gain exposure. Turkey is a prime case study of the Political Risk. The political sectors on the ground can be plude an things can change quickly. Id say look at the emerging new york city emerging market investment, so far weve seen a lot of inflows coming in. A stronger u. S. Dollar and weaker Commodity Prices both of those weaken the index by 15 last year. Oth of them start to recede. Theyre not having the worst year. Manus the weekly numbers, rope seeing record e. M. Sees 4. 7 billion of intros. On the risk radar, oil at the lowest level for two months this efed is set to talk this week. And its possible the fed will get a little more bullish. Weve got to be cautious about the rally. I dont think well go back to 100 a barrel oil any time soon. What this sort of stability or rebound weve had in commodities just allows many emerging market economies to brush themselves down and find their feet again after a year or two of quite challenging environment. On the u. S. Dollar front, i think im conscious that i dont think the fed are going to raise Interest Rate this is year. I think unless theres a major improvement within Economic Data, as much as we saw earlier, that the probability of a rate hike getting back up to 45 , its still significantly lower than where it was at the start of the year. Start of the year, were pricing in three to four Interest Rate hikes. Now were debating whether or not well get one at all. So i think we need to be a little coushes. I think the major head wind out to have the u. S. Dollar has receded. Anna well talk about it a little bit more but interesting the e spoke to representative from phillips, he said things were philips, he said things are looking better in china. What do you make of the china story at the moment . It was the case we were led on a merry dance. This year, not so much. I was surprised when the stock market was expanding and doubled in three or four months and how very few people were pointing out that saying, now is an exciting time to be in china. When the bubble popped there have been so many china bears in the market dooming and glooming over the situation, pointing at currency, at the stock market. For me a lot of whats been driving that for investors on asset basis has been technical rather than fundamental data. The chinese fundamental seems more stimulus out of the chinese economy to try and help organize some sort of soft landing. Overall im still confident in the long term potential of the chinese economy. This is an area with g. D. P. G. D. B. Per capita is the same as the anyone can republic. Manus tell me this, to you play china directly or vicariously . European access to china, u. S. Access to china . How do you play that . If you can gain exposure through european and u. S. Holdings and not relying on Chinese Authority twiddling rules around with rules of access thats important. Anna dollar bonds that returned the best, this is since the june 23 referendum. You have to be in el salvador and mongolia to get returns. Alex, thank you very much. Manus up next, the Democratic National Committee Chair quits over an email scandal. We have the details. Then at 7 00 a. M. Its the official start to european banks earning season and we have a conversation with the c. E. O. Jewels you bexar. Anna after that we spoke to the c. E. O. Of ryanair about the results pulling back from the u. K. This is bloomberg. Manus futures flat, 166. Its just gone 1 50 a. M. Sunday night, monday morning. Ets get a business flash. As much as 6 billion wiped off nintendo earnings. Pokemon go impacts on finance will be limited. This correction coming after nintendo shares almost doubled since the games release. Verizon set to buy yahoos core assets. The announcement could come before today. According to two people with direct knowledge, the deal is likely to include yahoos real estate assets with some intellectual property to be sold separately. Yo hao will cant to hold stakes in ali baba and yahoo japan. Ryanair warning it may lower its earnings forecast. This is europes Biggest Discount airline. They say brexits uncertainty could lead to an 8 trop in fares. Third biggest smart phone brand rows 30 in terms of revenues. The company is selling networking geared to expanding to premium phones to become chinas biggest mobile label last year. The latest installment of the rebooted star trek series sold almost 60 million in ticket sales. The secret life of pets is in the top spot. A disappointing debut for the fifth ice age animation. Viacom is trying to sell its stake in paramount. Thats your Bloomberg Business flash, back to you in london. Anna Democratic National Committee Chairman Debbie Wasserman schultz will resign at the end of the partys convention after a firestorm over leaked emails. The messages have shown Committee Staffers fared Hillary Clinton and attempted to undermine senator Bernie Sanders. Bloombergs steve yetino filed this report. Day one of the heading into day one of the Democratic National convention, a big unity moment after a bruising pry mear between Hillary Clinton and Bernie Sanders. Everything looked like it was going their way until this bomb dropped. Wikileaks leaked some emails that show the Democratic Party seeming to undermine Bernie Sanders, this plays into what sanders has been saying for a long time. Hes come out and supported Hillary Clinton. Hes endorsed her. But this puts him in an awkward situation today. The Democratic National Committee Chairman, Debbie Wasserman schultz, announced she will resign at the end of this convention. She will speak from the stage. She will gavel out the convention. Nd then she will resign. This is a big win for Bernie Sanders and his supporters. Bernie is speaking tomorrow night, monday night on the convention stage. Wohl be waiting to see what he says and how his delegates respond and whether or not theyll cause trouble for Illary Clinton here. Manus Alexander Dryden is analyst at j. P. Morgan. Great stuff you gave to us last week. Talk out through us through your latest thinking and how much more risk is there of a Trump Victory . Alex Hillary Clinton got mentioned 135 times, twees as much as how often trump was mentioned in the same three tais at the republican convention. What you are seeing in the u. S. Is polarization in support this ereason you unite behind a separate candidate is to keep the other candidate out of the white house. Thats playing into the markets in a little into a little factor. What i would say is despite all of this, its fallen to its lowest levels to date so clearly the markets arent too worried about the Political Risk just yet. Maybe that heightens later on. Anna is that because they dont think trump will win or because a trump win wouldnt be bad . Alex a president ial candidate doesnt open in a vacuum. Theyre held in check by the house, the senate, the court the International System as a whole. As weve seen over the last administration, if theres gridlock in washington its very hard to get stuff done. I think the markets will be considering that. Manus two major events this week are the Federal Reserve statement and bank of japan. Whats the possibility of a rate hike, thats reversed to over 40 . Probability. In the United States of america. Were getting closer to reality. But you still say theyll be one and tone this year. Alex to me, the fed have a lot of rm to move a lot of Market Pricing to go before they can think about raising Interest Rates. You want the markets to be closer to an 80 chance of an interest hike when you pull the trigger in order to minimize volatility. Anna if they want to give a message to the mark, come on, you need to catch up with us, this week is going to be the time to start doing that. Alex they need to be more hawk herb this eproblem is they expanded their mandate, onto the table of calm mark volatility. They get dovish even if one tai ta point can scuttle an Interest Rate hike. Manus didnt get to b. O. J. Yet. Alex bank of japan, i think theyll do something but broad based to try to help the japanese banks survive negative Interest Rates. Anna Alexander Dryden, thank you for joining us. Manus up next, another conversation, this time its julius bear. Anna following the banks selected Earnings Report. En well speak to the c. F. O. Of ryanair. This is countdown. Welcome this monday morning to countdown. Welcome to the program. It is 7 00 here in london. Ryan has warned it may lower its 2015 profit. Increased by 4. 5 . Joining us for his first interview of the day. Neil is the chief financial officer. Great to have you on the program. I want to pick up on a line that is coming from your Earnings Report today. Talking about down side risks to 2013 2015 profit good ands. We came out with our guidance in may, an increase of 12 . 1. 375 billion to 1. 425 billion. We are happy to retain that guidance. We believe that there are significant down side risks to that, but we continue to cut costs in the business. We continue to grow our profits and passenger numbers. We dont believe it is appropriate at this time to reduce the profit guidance. That said, post brexit, there are a number of risks out there. There is volatile currency, and we have the ongoing strikes in europe and the ongoing terror events. If we were to see more of this, then there could be down side risks. Some of those are quite the unknowns in terms of when they happen. You talk about pulling capacity. As sam said, you are going to reduce your capacity. Will you consider other capacity cuts . As part of our plan, and article 50 hasnt been invoked yet, so it is hard to know which way it is going to be. We ourselves pivoting growth in the next two years. We have seen sterling go from. 76 to. 83 over the last number of weeks. We are starting to run down a capacity out of the u. K. Sam said this winner. We will reduce frequencies of some of the routes. We are finalizing numbers at the moment. You mentioned article 50 has not been triggered. We dont know if the u. K. Is going to remain in a single market. If we dont, is that something that triggers greater capacity reduction in the u. K. . We have to look at it we have three domestic routes in the 1,00 route exit. If the u. K. Were to make a full exit, we would have to make a decision whether to cancel those three routes or get an air operator certificate. It is a challenge for our competitors as to whether they would be able to fly into europe as a result of that, and that may open up some opportunities for ourselves as well. You talk about the pivot away from the u. K. You have done contingency planning. Where is the prime private to . We are in a situation now we are taking 52 aircraft delivers this year and 50 next year. We still have more airports seeking our aircraft than flying. Who is at the top of the list . Whoever comes in with the best deal. We are the number one player in itsity and growing, number one in spain. We plan to freethrow in germany and portugal and eastern europe. Poland is an exciting market. This winter we open up new markets. We open a new base in prague. We have a huge amount of scope and depth out there for our aircraft. Is the risk with all this new capacity coming in and the new aircraft you have ordered, is the risk with the ongoing Terror Threat that people want to travel a lot less than they did and there four reduced capacity . People are tipping to travel, and continuing to travel in numbers. We are on average about 1 better booked than last year. We have increased our passenger target 116 million passengers to 117 million. We have the lowest cost, and we have the lowest fares. When there is a terror event, you do see a dip in booking. But if the price is right, people travel. You dont think visiting leisure nd family or travelers are sensitive to that . The last thing to go is usually the mortgage. People still travel in numbers. We are not seeing any difference this summer. There is a wonderful line in one of our stories. What matters is how the sector responds. You are usually the leader in terms of grabbing market share. You have already said about pricing. Is this what we are going to see, a price war in the Airline Space . We were already moving into a lower fare environment. People are getting benefit of lower fuel. As we move into winter, everybody is significantly better hedged than this time last year. So i think we were going to see lower fares in any vinny, but there is good value out there this year. We are targeting fares to be down 10 to 12 . It is a great time to be traveling. You talked about your growth plans. When we spoke to Michael Oleary before the brexit vote, he said the whole e. U. Project would unravel should there would be a vote for the brexit. It would become a big headache for you if the e. U. Were to unravel. How do you prepare internally for that . Like everything else, you make sure you are well positioned, keep your costs under control. Nobody knows what is going to happen over the next two years. We have to look at what will happen if there are w. T. O. , Bilateral Agreements or open skies. It is tough to answer because nobody knows what the various scenarios might be. Thank you for joining us. C. F. O. As ryan. Pretty big breaking news coming across the bloomberg terminal. This is in reark to ericsson. Was he going to see the Transformation Program through. He said he was. He steps down as the c. E. O. That is effective immediately. Hans steps down as the c. E. O. Of ericsson. Let me see actually what his total performance is. There is a little bit more breaking news. They said a new leader is needed in the current environment. The board has decided that the ime is right to 0 choose a sanu leader. They delivered last weeks numbers. So that c. E. O. Of ericsson is needed to accelerate the strategy that is already in place at ericsson. Just looking at the des page and the performance so far, lets have a look at that and a little more news. We have some consolidation in the ledger space. William hill confirming a highly policeman area approach from 888, the Online Gaming site and rang, the ledger business in the u. K. 88 and rang confirming they are evaluating a possible offer for william hill. No formal approach has been made, but as the william hill statement says, a highly preliminary approach is being made. The william hill rank 88 consortium with no proposal on price or terms. You see the logic in a combination and synergy. They see a logic in this combination. The consortium would be required to make a Firm Intention by august 21. Lets take a quick check on equity futures, up by an eighth in london and an eighth or therebuss in the paris markets. London at 6679. You may be back into bull territory, but if you are an international investor, you have lost approximately 6 of your investment post brexit. Reporting a rise in first half profit. Joining us now in his first interview of the day is the swiss bank c. Offerman e. , burriss carlotti. Great to have you. I wanted to ask you how you see the broad growth story for your business. What excites you the most in terms of growing the company right now . Good morning. We are off to a very promising start of the year. I have to say the First Quarter was extremely dull in terms of market environment, but momentum has picked up, and as you can see, we could post a record Asset Management in the first half of the year. Profit is up over the first half of last year. This week we can start the next phase of growth with we have hired over 200 bankers in First Six Months of this year. That is the best ever. While being mindful of the market environment, i think the relative strength is playing in our favor right now. Burriss, this is man us. Tell us where the new mcgee came from . Did it come from the new bankers that you hired . Give us a sense of where the growth came from in terms of funds and complexion . It came actually from existing bankers. The new bankers have just started joining us with the majority of them that will come on stream in the second half. These have basically come from all of our competitors. I think we are continuing to do very well compared to the rest of the sector. So we have a lot of demand for employment right now. Boris, the great difference in your business model, we know it to be the bank that does well when clients actually trade in a trading environment. Last quarter, one of your peers said there was a paralyzing volatility. Give us a sense of what clients are to doing pre and post trading volumes. There there was good news relied to brexit, it is definitely that investors are back in the market trying to understand what for do. Activity levels have picked up across the board. Asia, europe and the americas. We see clients being engaged, needing a lot of guidance, and more to come frankly. We have a lot of news ahead of us. Interest rate discussions, elections being out there, political processes going on. The second half should be quite interesting. Some of the banks have given us a bit of detail around money they manage the to make surrounding the brexit volatility. Will june 23 go down as a good day for julius baer . I mean we have seen clients really coming through on currencies, on fixed income and equities. Everyone taking closing positions, and i think many of them are reopening them on the back of stronger momentum than expected in the u. S. A. I think if you look at the indexes, it is continuing to be very strong. The high volatility here back in europe. I see that income pattern, basin come pattern tipping. This is, you have touched on a couple of times you have done. What types of banksers have you hired . Are they coming from Credit Suisse or u. B. F. . Where are you hiring, what kind of bankers are they . And the vetting process, how much tougher is it to vet the hires that you have got . I think if you look a lot our top 10 largest competitors, the hirings have come across from almost all of them almost equally. But also some of the british banks, some of the asian banks. So it has been i have to say quite well distributed. We have hired generally senior people, so people that have been in business many years that are quite well known in the market that have a special thing in one or another client segment. The vetting process takes the form of several interviews. We are quite well known in the markets. We know the markets reasonably well. So we would know most of these professionals. I understand that you have been encouraging some european clients to hold their assets through the booking platform in luxembourg and not in switzerland. Have accounts in switzerland lost some of their appeal or luster . I think these are two different client base. We are continuing to have the traditional longterm european clients booking and banking with switzerland land. But what we see is part of the new growth based also on the restricted Market Access we have some switzerland, is going to take place from european banks. We believe alex bjorg is very well positioned for. That they have done their homework, and this is the reason we are investing in europe and alex bjorg in particular. One final question to close. We know you are a man that looks for value. Can we expect a year of hunkering down in business or are you still ambitious to do another deal . If so, where is your prime geography . We are continuing to play to our strengths, which is growing profittably. If and when there will be an interesting done, i think we have shown in the past we are not shy. So we will certainly look at it, and if there is something good, we will do it. Thank you very much for joining us today, the c. E. O. Thank you. Receipts get you up to speed now with the first word news. Rich is with us. Finance chiefs from the worlds biggest economies have s. N. L. Ed concern about antiglobalization sentiment. G20 and the discussed measures to boost economic output. There was a consensus that more needs to be done to share benefits of growth. The turkish Prime Minister has ruled out early elections saying the government plans a multibillion Infrastructure Fund to keep growth on track. Speaking to bloomberg, he said the country is open for business. What we are saying to Global Investors is this has come and gone, and the national will and the will of the distance has destroyed the plotters. Life is back to normal in turkey, and you can continue our longterm investments. We will eliminate obstacles before you. We are laying out the turquoise carpet for investors. We have tax incentives, investment incentives. At uicide bombers wounded least 10 people in a music festival. The attacker was a syrian refugee who was denied asylum. And friday an 18yearold iranian gunman killed nine people. The u. K. Prime minister will scuss leaving the union with ireland. That is europes only land front with another e. U. Country. She seeks a u. K. Wide approach to brexit negotiations. Northern ireland voted to remain. 2,600 journalists and analyst. If you are a bloomberg user, use the function top go. Thank you, rich. 7 18 here in london. Let check how markets are doing. 40 minutes before we start trading here in europe. Juliet has details. In fact she doesnt. Lets check in on futures. We are going to talk about banking in a moment. U. K. Sated future us. 6 . We have issue with the bank of japan. All of these issues. Today it is all about the corporate earnings, but it is all about the banks. That is what we are going to be focused on. Joining us on set, we have more to talk about that very topic in terms of stress tests and the reporting season. It is going to be an absolutly huge week for european banks from the u. K. All the way across the continent. This friday we will get to see just how bad things are in italy with 360 billion in bad debts. We have two u. K. Banks reporting. So we will see a lot of brexit commentary. Are they going to have to deepen cost cuts, pull back from certain businesses . What is going to have if the bank of england has another rate cut . Just when you think banks are out of the woods, another round of fresh crisis seems to hit them. When we get to the stress tests at the end of the week, italy is the obvious focus. There are parts of the geography that will be nervous . I i would say the most interesting ones outside the italian banks would definitely be germans. That means Deutsche Bank, which is not out of the woods. It has a huge amount of short selling listed against it. And john is facing a difficult task to per stwade investors that his cost cuts and adjustments have what it takes to sort out the business. You mentioned with r. B. S. We sat down with ross on a couple of occasions. Part of the conversation was about divest tour of the government. They have still not solved all the issues, and we are still seeing legacy issues. R. B. S. Has done exactly what it was told to do. It was going to pull back and concentrate on landing Small Businesses and mortgages in the u. S. With a down turn in the u. K. , what they are going to see is perhaps another round of cost cuts there. More job production, and really just the idea of a state sale at the moment is not on the table. And the rights of banks in the e. U. , that is top . Banks are going to try and bat away these questions and say it is too early to have made any of these decisions, but ultimately they are going to meet every week and have their contingency plans in place. It is difficult to see a situation where at least some jobs wont have to move away from london. Bark lis has a subsidiary in dublin. That could be a way into europe for it. Nd hsbc has talked about moving a thousand Investment Bankers elsewhere. They were told to drum up the fierce before the referendum and now they are being told to play them down again. It can be contention to talk about them. There has to be some move or advantage involved. You see this risk of passporting to manifest, to make the call early and get out there and make your move . That was Deutsche Bank saying this is likely where all the banks in london will start moving their stuff. I think it is a bit too early to fire the starting gun. You have Second Quarter numbers coming out of bangs. Everyone is going to be looking for outlook and what is going to happen in the future. With the huge change in environment coming, the results almost dont mapper. Thank you very much. We have got you there. She is standing by. She is going to take us through the asian markets. Juliet . Yes, man us. Just under 40 minutes until the asian market closes in shanghai. It has been a fluctuating day on the asian market and here in hong kong. Hong kong seeing quite a bit of weakness coming through on the energy players. And taijuan has been sold off today. Interestingingly we saw japans market close pretty flat despite being up most in the session as we saw the dallas rise. Holding around 106 yen to the dollar. A gain today up about 6 . There was that nintendo effect and nintendo falling by the daily limit after saying that the earnings impact of pokemon go is likely to be limited. That weighed on sentiment, and we saw japans mark close. Korea also impactled a little by weakness from cosmetic stocks. But it did close higher by. 1 . The best were australia and new zealand. The asix closing at an 11month high. And new zealands market is actually at an alltime high now. Up by 1. 3 on the close there. Having a look as well at the chinese yuan. The off shore is weak at the moment. We actually had china fixing at the weakest since july 6 today. A call as well that we could see the chinese or officials trying to get that 6. 7 to the dollar level. A number of analysts saying that is where we are likely to see resistance. Looking at the yen, that has had the big impact on japanese equities. A little stronger in afternoon session. Perhaps that is the main reason we saw that turn around coming there from japanese equities, which has finished the session flat today. Thank juliet. Lets get back to some of the news that has been breaking. Ryan air giving us their earnings earlier on. A knockdown grading there, forecast around profit to the end of march of 2017. They are saying some Downside Risk to that. They said they are happy to keep that going, but there is that down side risk. Talking to him about where they are pulling back in the u. K. , he said they are reducing a little bit in terms of their winter capacity, but they dont really know by how much yet. They are not cutting routes, but reducing frequencies. An update on the ericsson situation. The c. E. O. Has step down immediately. Frye takes up the role of interim c. E. O. Until a new c. E. O. Is in place. I can tell you that he was there for 6. 6 years. This is on your d. E. S. Page. Chief executive for 6. 6 years. His total return that he delivered was 3. 19 . His peers facing aggressive competition from china. Total peer return was 6. . That is going to be one of the stocks to watch on open. Keep an eye on william high. A very preliminary approach from triplea and rank, two players going after this online book maker. William hill was up aggressively last week after c. E. O. Was ousted after two years in the role, paying the price for the struggle to keep pace with the fastgrowing world of online betting. This stock surged at the end of last week. Where will if go this morning on this preliminary approach . If it wants to do things more seriously, they need to be in touch with the business by august 21. Europe set for a slightly lower opening. You had a record friday night on the s p 500. You get first flash reading of the u. S. G. D. P. Dollaryen changed a little built. A little more strength. I am going to be here doing on the move. On the move is next. This is bloomberg. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org welcome to on the move. It has just gone 7 30 High Pressure in lone do not. It is 8 30 in berlin. We are counting down the market open. Here is what we are watching today. Globalization at risk. G20 finance chief sees increasing anxiety in the age of brexit, trump and terror. They warn of a profit down grade on brexit. We hear from the executives at