Hawkish. It looked at what we have some way to go on rates higher than people expected. That sent the market on the journey on the dow and s p down aggressively a lot of Companies Going down. The market decided we can ignore we will have to be potentially more aggressive on rates at the moment the time is coming it may come as soon as next meeting. The market decided to ignore the bit about inflation. Inflation needs to come down aggressively ive never thought about it as appropriate test for slowing the pace of increase the market ignored the cumulative tightening and the lags associated with the Monetary Policy with the inflation. If you wanted, there was a dovish narrative as well as the hawkish point. The market decided to focus on one side of the story. That was a minimal change from the federal reserve. You got the mixed picture on what would happen next guess what we are watching the data it is not end of story it is nearly when you consider that the markets down aggressively. We have a selloff in europe. As such, we are down another 1 in europe after those records yesterday. We see those fall across the board in travel is one of the worst hit down 2. 3 . Technology got hit badly down 2. 2 . Construction 6 easier. Basic resources, real estate also under a lot of pressure the fed is very aware of what the increase in 30year Mortgage Rates with the 7 handle doing to that hamarket if they are looking at the data and existing home sales and new home sales and sentiment a lot of those are flashing or red as we speak. Down 1. 6 . No set in positive territory the best of the bunch is the Banking Sector and Financial Sector they assure us they are down health care, a couple of names trying to get above the flat line down 1. 6 . European indices are under pressure across the board. Spot on with the calls we are down 1. 2 the ftse mib and the cac 40 down the dax down the federal vreserved raised Interest Rates 75 basis points for the fourth time in a row traders took new language in the fed statement on the pace of increase as a sign of a dovish pivot. Did they the dow down with a 1,000 point intraday swing it can still meet the guidance despite the major loss. It expects significant price rises across all areas in january renews the cfo of hannover re joins us. Can we talk through the earnings and tell us about why it is there and what it cisignifialsi . Happy to be with you. You will some seen the top line and we have seen stronger growth in property and casualty business and life and health insurance. As for the property and casualty business, you will have noticed our large loss losses that we quantify as 10 million euro the loss has been 1. 5 billion for the first nine months which is in excess of our budget for the year counting a couple of losses for exa example, the european loss and european with 276 million to that list. We have seen a run of losses with future inflation and there was a huge loss activity in the pe segment we have seen decredkcreasing cls on covid of 228 million that is expected decrease. That burden is still in the house. Profitability is very strong and we have 441 million to our earnings we have our strong Investment Income particularly inflation and bonds of 300 million to the bottom line and thats the reason why we believe we can still achieve our guidance for 2022 can we talk about the perception of higher premium rates at this point . Are you finding resistance to increases or potentially new commercial willing to pay the additional premiums or are they shopping around . If you look at the market environment and look at the last five or six years, we have seen the last couple years with not earning the customer capital the market environment was driven by price increases. We have seen the pandemic and we see the war in ukraine and now have inflation on top and as for what was explained earlier on the pe side, 2022 is another year of losses exceeding budgets. I think pressure is on and you see reaction in the market where the Department Withdraws capital. Now i think the environment has fundamentally changed now. We are really looking at a hard Market Going Forward and our objective for january will be driven by substantial price increases on the risk adjustment pace when i say risk adjustment, i say inflation. On top of normal price increases on top of inflation, we need to make sure prices are reflecting the environment. Yes, there might be resistance here or there, but on the same side, we need to recognize the fact that we increased burdens and that is the sound on recent meetings in monte carlo. How is the industry do we need to see changes for the industry in the 21st sc century . Do we need to see losses as you stated and the insurance premiums across germany, britain and United States becoming more and more brprevalent. Is the industry in the right place . We need to adapt. The speed of change is very high at the moment. I think we live in an environment of change so therefore for hannover re, it is one of our pillars which is our Lean Operating model adapting easily and pragmatic and cost leader. We need to be profitable and providing services to our clients being responsive and innovative in terms of Insurance Solutions is crucial Going Forward. So i think you are perfectly right. We need to adapt to be flexible. You will see changes here and there. I think for us it is important we keep that Lean Operating model and combined with underwriting which is our focus. Thats key for us and to be honest, i look through this price through the lens of opportunity. I think there are opportunities. Clients will seek service and Insurance Protection and i think there is also some light at the end of the tunnel. What have higher Interest Rates done to the model of the investment side of the business for insurers under pressure . We think rates will remain higher for longer and continue going up in europe as what has that done to the Business Model it is Interest Rates which is good for the insurance and real estate industry. Our ordinary income has been a contribution shortterm market valuations and fixed income has decreased equity that is really, if you do proper Asset Management and disciplined on duration and an matching liabilities, that is not an economic issue because we hold our investments until maturity it is not very sensitive shortterm, you have to make sure you have your liquidity in place. Liquidity plans in place other than that, longterm, the good thing is, the reaction from Central Banks and inflation has to be incorporated into our pricing. We are looking at more than 380 business lines and sub business lines to adjust accordingly to inflation with pricing the good thing in property and Casualty Insurance is you can do that on a yearly basis a bulk is renewed on the yearly basis. We have inflation in bonds which is more than 5 billion of our government bonds combined with inflation hedges therefore, i think we are on a good place and good shape to also manage inflation. Thats very crucial. Lovely speech today, sir. Thank you very much for your time and talking through the numbers. The cfo of hannover re. Ing with a tax profit for the Third Quarter down from a year ago and below expectations. The dutch bank has a Share Buyback program with a plan to purchase 1. 5 billion this shares ing was up. 2 it has posted better than expected Third Quarter results with revenue up 8 from a year earlier. Net income rose over 10 to 2. 7 billion euro charlotte rejoins us now with diet. All divisions contributed to this commercial and personal banking. Revenue up 9. 6 . The performance in france was strong cib and other european banks already published numbers. They benefitted there. Revenue up 6 and strong 25 and some equities did not do well revenue up 3 . That is again business with a spend to expand. They acquired the business of the dutch bank and pushing in that activity. One of the questions is what will bnp bank do with the business as they hope to complete this by the end of the year they will have a 7 billion euro cash pile. What will they do with it . And one name that surfaced in being interested in buying Credit Suisse products during the restuckructuringestructurin. I put the question to the cfo and if that is a type of purchase they would be interested in making. Whatever we look at the proceeds stemming from the bank of the west will be brought on we will not go in areas where we are not in countries we can very rapidly inn they gr integrate with the overall program. That is the stance we take not something of the scale of the acquisition of Deutsche Bank we are looking at acquisitions we can partially accelerate growth as we have seen this year it can be acquisitions or technology we acquired that is what we will do. That is what we have been doing. We acquired the banks and growing faster that is basically where we stand today. The cfo there saying they have seen better than expected numbers. They said they had an impact from the mortgage holiday in poland well below guidance that had been this year of 40 overall, the shares are higher on the cac up 0. 88 . You see it is mostly in the red. Is that a translation happy campers . It is an english expression yes it is english. There is no equal in french i learned one more thing you have generally better weather. All right. Well take a break on that bombshell. There is no french translation for happy camper well take a break well be back in just a moment stay with us we will be back at the bank of england and all that set to deliver what could be the largest rate hike since 1989 well see you in a moment. Why do nearly one million businesses choose stamps. Com to mail and ship . Stamps. Com is convenient you get the services of the post office right on your computer stamps. Com saves you money with great rates from usps and ups mail letters ship packages anytime anywhere for less a lot less get our special tv offer a 4week trial plus postage and a digital scale go to stamps. Com tv and get started today hugo boss down 2. 8 . The group has hiked guidance for earnings and sales the german fashion house has an 8 higher north cumber on the y. And staying in germany, bmw with higher Third Quarter earnings. Supported by car pricing however, the company says it expects raw material costs and energy to remain elevated. Now expects delivering in 2022 on an annual basis that is extraordinary. So much pent up demand and they expect delivers to fall on a yearly basis a confluence of problems for the sector stellantis is lower value in terms of price value of bmw. Stellantis has a 29 jump in shipments on the year due to improving semiconductor supply isnt that interesting you have several companies that said things are all right today. Hugo boss and bmw and stellantis you have the scenario in the United States. Shares of thyssen is lower cut the price target and down graded the stock from hold to buy. And elsewhere, is there any surprise with the big numbers from uniper . Shares down 3. 9 they have a net loss 40 billion euro for the first nine months of the year. The german utility is warning a negative adjusted ebit after the income at 3. 2 billion euro the group says it will not be able to give a more precise outlook for the year over gas volumes after russia suspended delivery. Lets move on to the ecb board member the Central Bank Says it has to make sure it doesnt raise the risk of protracted recession the ecb is looking to move in. I stand back i dont know what that means which market dysfunction are they talking about in terms of recession area concerns with the offset and inflation across europe . That needs more detail elsewhere, the bank of england set to deliver the largest rate increase in more than 30 years as it grapples with double digit inflation. A 75 point move today. We have lots of former chancellors in the country and this one saying flying blind after the mini budget caused turmoil in the market. Simple job today, joumanna, keep it simple. By the way, well done coping with that weather out there. Reporter a lot more challenging than baileys job. When it comes to the Interest Rate hike, the market is set on the 75 basis point hike from the bank of england today. The market went as high as 100 basis points after the mini budget turmoil they have to counter the fiscal stimulus coming. Since then, you have the new chancellor and prime minister. The physical outlook is still uncertain. The expectation Going Forward the fiscal stance will be more expansive. That is something for the bank of england to bear in mind the number one thing they have to focus on is the mandate that is price stability. When you have headline inflation at 10. 1 and core inflation, they have to do something which is why they are coming out with these rate hikes which had been getting bigger and bigger. The expectation is for 75 hike however, the flip side is it is also coming at a time when growth has actually started showing very strong signs of a down turn. You see it in the pmi and retail spending figures that started to come through you see some cracks in the property market. Now the market is pricing in a rate of 4. 5 percentage points. That will have an impact on the economy. The bank of england in august had the economy contracting by 1. 3 next year they are likely to revise that down as they opt for the 75 basis point hike Something Else that adds to the picture is as well is they dont know whether the price guarantee is coming for april of next year that will knock on the inflation forecast and growth forecast a lot of different factors here. The outlook from where they go and whether or not they are ready for a pivot on pivot, it doesnt seem like they will be ready for that given that these inflation levels are still running high of course, the governor will have a lot of questions of how they see the Interest Rate cycle planning out from here guys joumanna, thank you very much for that a whole cachophany from here chri Christine Legard saying it is not an issue and we will not speculate the Interest Rates in the eurozone will end we are in a different area from the United States. The ecb should not refrain from further hiking rates we have to bring inflation down in the midterm we will squeeze in a quick break. We will be back in just a moment well get some analysis on the commentary and if it implies to being anywhere close to peak hawkishness. See you in a moment. Why do nearly one million businesses choose stamps. Com to mail and ship . Stamps. Com is convenient you get the services of the post office right on your computer stamps. Com saves you money with great rates from usps and ups mail letters ship packages anytime anywhere for less a lot less get our special tv offer a 4week trial plus postage and a digital scale go to stamps. Com tv and get started today european equities seeing red after the fed chair jay powell sends stocks and bonds in a tailspin the hiking cycle the has a way to go and it is too soon to talk about pivoting it is very premature to think about pausing. People hear lags, they think pausing. Very premature to think about or talk about pausing our rate hikes. The bank of england looking at the largest hike in 30 years. Taking it to levels not seen since 2008 we have joumannas interview with the governor Andrew Bailey at 16 00 gmt and bnp with rising rates bolted net income. The cfo telling cnbc the wider macro outlook is still uncertain. There are several headwinds ahead of it. I will look at the situation we anticipate that in the duration, the return to normal situation will be rather in 2024 or 2025. And uniper with a 40 billion euro net loss and talking about a negative for the full year as it deals with disruption in the russian gas supplies just an update on the central bank comments we talked about the need to carry on hiking Interest Rates to deal with inflation we now have the Portuguese Central Bank governor also out there talking about Interest Rates. This is quote from the portuguese number publico. A good part of the rate increase should already have been doing inflation in the euro zone should reach this quarter which is fascinating it gives you perspective on the view from the south and view from the orth. We had the conversation earlier where he was given his perspective and also acknowledging there is a difference of opinion now with many of those Central Bank Governors saying maybe were done here. Maybe it is time for the ecb to be more relaxed Going Forward and in the north, youve got people like the baltic Central Bank Governors or chairman making all those comments at the imf meeting a few weeks back where they were dead certain we were going to have to see continuous hikes to really tame inflation in the eurozone. How can we be done when the highest european Interest Rates and several of them and deposit facilitiies was 1. 5 and the inflation at 10 how are we done it is the lag it implies you are thinking about the time it will take for the hikes youve already implemented to have an effect on the economy. We talk of 16 to 18 months thats sort of what the economists believe it takes before those hikes begin to really curtail borrowing and lending activity powell said that they would take into account the cumulative tightening what happened so far and the lags, lags in your word, with which Monetary Policy affects Economic Activity and inflation. They said we do. We appreciate that the market is down aggressively despite the consideration at this point. It did. It was a 1,000 point turn. It was, oh, good, he is talking about the lag. Oh, actually he is saying we are going to carry on. Look at the screen. Not the red bit. Below that lagarde. Recession wont be sufficient to tame inflation now, theres a lot in that again, a lot we shouldnt disseminate too much she wont have just said that. Are we saying we will have a recession, but still have raging inflation regardless of the rece recession . That is really the worst possible scenario for the European Equity investors, isnt it it depends on the depth of the recession. There is a point where recession becomes a depression if it gets out of hand. I think this is all about the lag, of course, i think the messaging around this is we understand that we may drive the economy into a recession, but we believe it will be a shallow recession. Most people will keep their jobs what we want to see is the reduction of risk taking activity perhaps less people going out and buying new cars on creditor or buying new houses on these Mortgage Rates lets pick up with the market stra strategist lael, sorry to keep you waiting. You had a line in your notes where we may be at peak aggressiveness right now does that still stand in light of what we heard from jay powell and some of the European Central bankers . Thank you very much good morning, everyone the most important thing is peak hawkishness is coming in the coming months. There is a case for front loading rate hikes as we have seen with the u. S. With the federal reserve. Also what we will see today with the bank of england. Of course, when winter months come, there will be high uncertainty with the weather turning out in terms of the squeeze and consumer incomes because of the High Energy Prices that is why we see the right hikes by the u. S. And uk to be prepared for those months ahead. Is it accepted wisdom now we are going to have to see a recession and we are going to have to see some job losses before the central bankers begin to believe their work is done . Look, i believe so. This is true for the u. S. And for the uk in the u. S. , we have 11 million jobs and 6 million unemployment. The fed needs to see the Unemployment Rate higher t it is true for the uk as well for the high wage pressure to come down. This is extremely important. To your discussion before, people always look at the magnitude of rate hikes. What it is missing is the duration for those restrictive policy in terms of bringing inflation down as well of i i think what they will do is stay in the environment for longer we will see rates around 5 for a period of time in the u. S. Lale, very good morning im sorry. Im not buying the restrictive rhetoric from anyone when you have u. S. Inflation with a higher 8 handle and higher in the curve. You have Interest Rates peak potentially at 4. 6 to 5 . That is not historically restrictive, is it of course were in a different environment at the moment in terms of understanding this is a recessionary environment where the pressures are coming from the war in europe and the Energy Dependency from russia. That is putting a lot of pressure on consumers. Keeping rates at 5 and that energy price is putting pressure on consumers, i believe would be a recessionary environment and restrictive environment in terms of Central Bank Policy the duration is going to be important in terms of staying at the restrictive levels we are not going to be in 1970s environment where they say stop and go and stop and go with the Interest Rate policy they will hike and stay at those levels. But we are in 1970s levels for inflation already. Ill make the point again, lale, we are not in restrictive territory. I hear about the pressure on consumers. We have rates which is lower than the rate of inflation and expected to stay lower than the rate of inflation. That is not anywhere near positive rates which some people believe are necessary to tame inflation. Of course, the Central Banks are looking to see if inflation will come as well. That lag effect that you were talking about before is going to come during winter months in my opinion. At some point they are hoping that actually inflation will come below those rate hikes we see at the moment. That will take time. So again, the case for rate hikes right now to see if inflation comes downs in winter months and if that creates that strict environment lale, i dont envy you of the task at the moment what should viewers be doing excuse me as a market strategist, what should viewers be doing at the moment with the vast amounts of cash on the sidelines . We were saying that get away from risk at the moment. I think there is going to be another leg down in the markets for january and february we are saying that short duration to hedge against the Interest Rate hikes and higher Interest Rate. Also, Equity Income with high inflation. We are defensive we are long in places like Consumer Staples and health care margin pressures are less. Therefore, those are the places that, you know, are going to see relatively good performance as opposed to other sectors well to see you thank you for hanging around lale, the strategist at bny mellon we will break the bank of england decision later today are you breaking it . No. Joumanna and julianna and arabile. They will have the decision at 12 00 gmt. Then this afternoon, 16 00 gmt and joumannas interview with Andrew Bailey. Look out. Hes behind you. Thats a painful experience. Coming up on the show. We hear from the groups chief executive as the Company Posts rising revenue despite the hit from the war in ukraine. Dont miss that interview after the break. Shipstation saves us so much time it makes it really easy and seamless pick an order print everything you need slap the label on ito the box and its ready to go our cost for shipping, were cut in half just like that go to shipstation tv and get 2 months free womanelcome back. Veon group has a Revenue Growth for the year despite the challenges from the war in ukraine. The company says growing subscriber numbers and 4g expansion are improving performance globally Kaan Terzioglu is the ceo and joining us this morning. Kaan, good to have you back with the program. I captnt think of two programs that are at the heart of the distressing conflict in europe can you update us on how the business proceeds from here on in given the challenges you face as a group geoff, good to be back. Thanks for having me as we have seen, the top line has grown 3. 6 it makes me more excited are Service Revenue which has grown 7. 8 7. 8 in uc. S. Dollars. We are able to keep track of the inflation pricing in the countries we operate in. Our data and digital Service Revenue is growing 15 overall subscriber numbers growing despite the challenges in ukraine and russia. It makes me happy we are executing on the strategy which we laid out a year ago in the Capital Markets before everything started frankly, if i exclude ukraine and russia from our numbers, or top line is growing 14. 9 . Exactly on the top end of what we said we would do executing strategy. Clearly a vindication of the approach you have taken. Are you in ukraine and russia at the moment any prospect of selling the business is that an issue with any other sale of business geoff, we made announcement we are conducting a sales process for the Russian Operations i have to be very clear about that this is not because we are pushed for the decision like this this is the decision from the business perspective because it is in the best interest of our shareholders and creditors and customers. Also every single employee we have in and out side russia. Im very happy over the last three years you have built a Beautiful Company which is in the attraction of other competitors and investors in russia as well as other management im happy we are now conducting the sales process. Im sorry i wont be able to give you more details on this, but we will surely keep people posted kaan, you are talking about the bueautiful business you are Building Telecom sector why is the scenario on the telco so under whewhelming geoff, i saw the red wall behind you the economy is changing and the higher Interest Rates as we see today will change the landscape of investing as well the companies with future Growth Potential versus the companies today operationally creating cash will have different perspectives from the investors side as well i think our strategy in terms of allowing to grow through adjacent markets so we dont only go after market share in telecom space, but go after the Consumer Spending in markets like pakistan and bangladesh is still dividends. This will position us uniquely i think we will see a comeback of the telecomsector it is about todays fundamentals, not future. Kaan, am i wrong . You are a growth stock the cost of the technology and promises on 3g and 4g and next 5g never seem to deliver im talking about the sector not your company they dont deliver the bang for the buck the cost of infrastructure and exciting area was pakistan and elsewhere. Where is the groewth from the profits in these areas i think we are in the arena of Big Decisions we have to think about the future and about being service companies. Thats why also as a company, we had been focusing of looking at infrastructure assets and making sure that we leverage the capabilities of the Tower Companies and Infrastructure Companies as we build on more customer intimacy. I think this is a change we have to see in the telecom space. The integrated Telecom Company has no future. We have adopted that to the strategy that is the way to prove value and create value for the shareholders can i ask about the i. T. Outsourcing, kaan . What growth do you see from here on in given we talked to the ceos this morning and a lot of sectors. They are all worried about the future and near future as we see the economies tipping toward recession at this stage. Do you think i. T. Outsourcing will remain strong i. T. Outsourcing is in an area where it has to change. I think we will see more and more cloud concept i. T. And ai coming together and more robotic as well. More from these projects to Ongoing Services models. We have to keep one thing in mind that i think as the globalization concept is heavily impaired, dont think about the cloud as one global cloud. That will not happen you will see national clouds and private clouds and i think the next generation of i. T. Outsourcing companies will be the ones that will lead that transformation from the core projects sir, thank you very much for your time and taking all of our questions. Kaan terzioglu who is the ceo of the veon group as our guest mentioned, red on the screen 14 or 15 of stocks in positive territory. That aside, a lot of declines in europe in 52 minutes of trading. 1. 1 should we have a look at the sectors . We know every sector is in negative territory banks are doing something interesting. One of the most rates sensitive sectors. We had good news of the banks. Solid from ing and solid from bnp. The insurers we spoken to hannover re this morning. Perhaps if you are worried about Interest Rates remaining higher for longer, no surprise, real estate losing 2. 5 . I thought very interesting, what with we heard from hannover re about the market. And what he said about the capital. It is fleeing the sector we sad here for years talking about how the johnny come latlately into the Insurance Market could do well in the space and now starting to be squeezed out by incumbents who have deeper pockets and dibi deeper relationships. A lot of people finding out it was more complicated in the high claim environment they must have been very excites 20 increase in premiums i go past the insurers and historical times big fat case we are moving into the busy period for insurers. We should mention also the cfo conversation my sense with the corporates here i dont know if you were following the statement from mike wilson at Morgan Stanley. The cio over there got the october call very right on the u. S. Markets higher now arguing a lot of the corporates on the earnings story areperhaps being rather vague. Deliberately vague on the outlook. His conclusion is Morgan Stanley bearishness will come. He was good on the october can we play the bite it talks about cfos are hoping for the best, but starting to plan for the worst. As i look at the books for the two to three months, we see moderation beyond normal factors. All of the news that we look at in the key indicators into next year suggest the storms are ahead. So we are going to wait for the waves to hit, but we are getting ready. We think we will weather the storms very well even in the climbing demand environment, we think we will do well and holding on to pricing and actually do pretty well from the demand point of view as well probably. 75 of the portfolio. We are ready for the 2023 challenges interesting earnings recession where is it . It is not there. Great research from citi as well this is briefly. The average contraction in the last series of recessions is 31 in earnings contract the longest was four years expects 5 eps Global Growth a long way away from the earnings recession forecast at the moment is there disparity in the market that gap will close as we sit here and talk. We have to say goodbye. Reminder, bank of england decision from 0120 gmt. Dont miss it. It is 5 00 a. M. At cnbc global headquarters. Here is your top five 5. Wall street waking up with a black eye after yesterdays broad based selloff with the dow swinging more than 1,000 points before ending the day sharply lower. This is all after fed chair jay powell delivered a 75 basis point hike for the fourth time in a row and admitted rates will top out higher than expected investors are bracing for a one