And pimco says the worst of the price collapse could be over. Merkels moment to is the german chancellor about to win a Nobel Peace Prize . A warm welcome to the pulse, live from london. Im manus cranny. First up, minutes from the latest fed meeting show that the policymakers delayed the worsfit hike last month because of concerns about china. There was plenty of reaction from financial leaders of the imf and world bank. We will hear those voices in just a moment. But first, oil is about 50 a barrel, headed for its biggest weekly gain since august, coming as pimco calls the worst of the collapse and Commodity Prices is over. Bring in mark barton for some context. Mark have i got some stats for world the all country indexes rising for an eighth consecutive day, the longest winning stretch since february minutes from the september meeting are pushing out expectations for when the u. S. Central bank will hike interest rates. The msci in that eightday period has risen 5 , the biggest gain since december, 2018. December, 2014. Trillions has been added to Global Equities and we are coming off the worst quarter in four years, and have a look at the msci asiapacific index over 2015, asian stocks are heading for the biggest weekly ase in almost four years investors push back expectations for when the fed will raise rates. This is the msci asiapacific index, jumping 6 , the highest level since the end of august coming after the gains assigned 15 in the Third Quarter. The bestperforming equity index in asia this week wait for it indonesia, which soared by. 0 lets talk about emergingmarket currencies a Bloomberg Index tracking 20 emergingmarket currencies is on track for its best week in more than six years yes, you heard it. Been quite some turnaround for emergingmarket currencies after the Third Quarter when this gauge registered its biggest quarterly loss since 2011, and the biggest laggards are the biggest gainers this week. The indonesian rupiah, the russian ruble, the Malaysian Ringgit are the big gainers 9 , 8 , and 7 respectively. Are they going to be fleeting . According to forecasts, all 23 emergingmarket currencies are projected to weaken against the dollar by the First Quarter because of the worsening Global Economic output. Manus that is a feast of stats for our viewers. I want to bring you breaking news abm, the tussle continues. The author is on the table. The offer is on the table. The stocks are unchanged. Miller raised the annual cost savings target to at least 1. 05 billion by 2020. They are putting out this message that they are really going to push in terms of cost savings. They say more than 430 million of annualized savings through to march 31. Equities in areas like procurement are under one roof. Go to my twitter account, because you will see a bloomberg article there that talks about the cultural differences between bev and theab in hotels that sab likes. We have heard from the fomc and they have delayed raising rates last month because of concerns about china, and that decision was a big talking point at the imf and World Bank Annual meeting. That is where Francine Lacqua is when the fed should press the go button. Says wean authority will be data dependent, there are two drivers unemployment and inflation. What we are saying is Inflation Numbers have to be solid. We have to see them, and for the moment there is not much on that horizon, neither on inflation nor on wages. Favor asery much in soon as it is possible, to normalize what we do in Monetary Policy the same goes for europe. Place, the different u. S. Is ahead of us and economic recovery, but lets not postpone it. The fact is that americas recovery is anemic. If you look beyond the five point whatever percent Unemployment Rate, the true Unemployment Rate, people working parttime, is well over 11 , 12 . We think they will go at some point this year. The markets dont see it like that, and i am not in the business of guessing with the next fed move is what is much more important is the medium to longterm guidance it will get to the market wil. Manus lets bring in james burboun. My question is you read the minutes and saw the market reaction. Was this a prudent fed, a smart fed, that avoided a policy misstep, or did they miss the window . James i think they missed the window and while back. View thatly share the there is a problem brewing in the local economies. Subtext is that the governments need to spend more money. You wees, when prepared a great graphic that we when volatility had been on that river this is volatility, and what you do is we track the amount of time 4 debts ral forge ines i worry they may hike december and then begin a new barrage of qe. I suspect that they now feel like they have to act because they have made so many statements about their appetite policy rates. We have two more fed briefings do today and i realistically expect that we will be tightening soon. Manus it will be interesting to see if they go down that road the other big call this morning oil,mco was talking about oil stabilizing, above 50. You say this is also a critical part of the equation in how you look at stocks. Talk me through the correlation and how that works out. Price is me, the Oil Essentially a productive oversupply. So much depends on the Global Economy that is very low oil price is corrosive rather than supportive for big chunks of the economy. There has long been an expectation that the low oil toce has it worst round hit producers and only a very slow longterm benefit to the consumer. New the storyboard york taxi drivers pocket 2000 extra this year because of the oil price has fallen away. A harsh reality is that oil is now such an important part of Global Market and global economies that we will see a stronger oil price being driven by the controlled decline and rising level of demand to prevent a Solid Foundation for solid economic growth. Manus is that sustainable . We are up above this 50 a this is something we were talking to Peter Oppenheimer about. You have the retrenching, the qataris looking at asset sales does that worry you . James absolutely. When one thinks about why was it that the arab spring failed to engulf saudi and the other oil nations it was i suspect because the very significant Social Security program. People felt comfortable. The reality is that retrenchment was in the economy on the back of an oil price. Manus and glencore what a splendid chart. James isnt it fabulous . Manus they are renting the heart out of the zinc market as well, up 80 from its low point. What you make of that . It is also highly correlated to Commodity Prices. James we are playing rio tinto and bhp we believe that they are capable of making serious money to the commodities tackle, through a combination of strong free cash yields and sensible control. I want to be clear as to when Commodity Prices and on a permanent operative ejector he we know that the cycle typically runs through a period of Creative Destruction in order form a clear a base. I think it is too early to call the bottom for glencore. Manus ooh, challenging. We have a lot more to get through. Lets get you up to speed with the rest of the radar this morning. For gross is suing pimco 200 billion over a shock departure from the giants last year. He accuses executives of the company he cofounded of pushing him out in order to get their hands on his bonus. He says he wants to expose what he calls unethical behavior. Says like his u. S. Chief the admissions scandal may take years of testifying before congress. Companyhorns has the did not make a corporate decision to cheat the system, but it was done by a few engineers in germany. On behalf of our company, my colleagues in germany, and to me personally, i would like to offer the sincere apology, sincere apology, for our use of Software Programs that served to defeat the regular emissions testing regime. Prices have jumped at glencore as they cut production by one third. The company has already cut copper in coal, and are navigating a rise in Commodity Prices. Russia has denied claims that missiles fired in syria landing in around. They launched rockets at 11 targets. It would have taken them over northern iraq. U. S. Officials say at least four went off course. Offlix has raised its price the most popular streaming package. New customers will pay a next her dollar a month for the plan, which lets to viewers use a subscription at once. Existing customers will be given a grace period before the hike. Netflix shares closed 6 higher in new york. Coming up next, a bumpy ride for appearse u. S. Chief before congress with one politician saying admissions scandals are on the same scale as enron. We will hear more from his testimony, coming up next. Manus welcome back to the pulse. Volkswagen. The u. S. Chief says all the vehicles involved in the omissions scandals may take years. Michael horton said the company did not make a corporate decision to cheat the system, insisting it was done by just a few engineers in germany. Hans nichols is in berlin with more on this story. What else did he have to say . This was a pretty big Public Statement this was about quit about grasping the u. S. Metal. We heard quite a bit of contrition and some anger. This is the head of volkswagens u. S. Unit, seeing very disappointed and willing to match the lawmakers anger when it comes to the malfeasance of his own company. He did say that there wasnt an easy technical fix, and in some ways he says he would have taken it if it had been there. You have mentioned that roughly 500,000 cars are affected. Out of those, around about 430,000 cars are gen 1 vehicles, which were early starting in 2009. For those cars, we believe that the software only solution will not be possible, because to be quite frank, if it would have been possible they would have done in the first place. Enginethat 2. 0 liter is going to require a Software Upgrade but that is not the case in the states. A lot of them are smaller engines and they will have to add hardware. It will take a long time they dont even have a timeline, but they are still working on feasibly how they do this. As he was testifying, manus, there were raids in wolfsburg. This was done by the state of lower saxony, which is having a criminal prosecution into the matter. We also heard from the german vice chancellor yesterday. He says he wants a quick and fast solution to this crisis. Manus hans, fascinating. We are just getting some video it is almost like the perp walk. Letting the cameras catching him look stoic. That is not all bad news. There is a bit of good news. Hans audi put up some remarkable Sales Numbers in september. The interesting part is that they jumped in china, where they were seeing a slowdown. The audi is a necessarily being hurt. We saw strong members in the states, an overall increase. In germany they stayed flat but it could be seen as a positive sign. Something in the audi division, there is some hope for volkswagen. You take volkswagens overall profits, audi and porsche are three fourths of it. That audi hasnt been affected as a good sign for volkswagens Balance Sheet. Manus hans stays on the story. Still to come, could merkels handling of the refugee crisis when her this years Nobel Peace Prize . With a decision due in less than an hour, we look at her chances. Manus it has been a volatile week for two big lenders. Deutsche bank is posting a multibillion euro loss. That is due to a combination of writedowns and litigations. Uissehile, credit squ is announcing a new strategy later in the month amid growing speculation that it plans to sell shares. James is still here. Capital. Speculation Deutsche Bank is doing everything but to raising capital. James i think there are some clear global winners in the banking sector. When i think about who is doing well on the back of the fallout from the Global Financial crisis, i see wells fargo. I see amongst the investment banks, Goldman Sachs and jpmorgan. Over in europe, this is the right moment to be looking at the domestic players, but also the spanish banks. They are in a much stronger position, particularly with a turnaround in brazil. Tonus we have anna bot that whole risk in terms of being a Global Player with the wrong exposure james you talk about global risk and going back to the vw story, a lot of people say it is risky but at five times earnings on an Enterprise Sales ratio of. 2 that is not right for me because i worry about the deep government challenges. But i know a lot of people who think that price is cheap and i will go. Manus you mentioned vw. Thes the Lance Armstrong on industry. Peter welch is saying it is on the scale of enron. Vw t own any james thats right. The corporate governors were always suspect, i just didnt see adequate control to protect shareholder value, and i dont believe they are the Lance Armstrong. The problem in the cycle world is a hell of a lot of people involved in taking drugs. Cycling did it all. I dont think that is the case of the car industry at large. I look at toyota, which is a fantastic company we just dont know how they do it, we will make new technology, not in diesel. I think toyota is fantastic and will do well. Manus in terms of we have an article on the canary in the coal mine in regards to germany. Are you worried by the german data . James of course i am. I am worried about the whole of europe, spanish lenders being incredibly strong, a huge dry zone. The ferrari ipos coming up. Are you the man of a ferrari ipo . James it is a luxury stop but it is not for me. I see some fantastic longterm values instead. Manus always great to have you. Cio. Speaking of that gleaming red ferrari on your screen, that is what we will be talking about. How much is ferrari worth . They could launch a multibilliondollar ipo today. The details we go to milan. That story. I just had a horrible nightmare. My companys entire network went down, and i was home in bed, unaware. But that would never happen. Comcast business monitors my Companys Network 24 hours a day and calls and emails me if something, like this scary storm, takes it offline. So i can rest easy. What. You dont have a desk bed . Dont be left in the dark. Get proactive alerts 24 7. Comcast business. Built for business. Manus will come back to the pulse, live from london. Im manus cranny. Here are some of our top headlines this friday morning. Office september meeting of the fomc, an upbeat feeling about the u. S. Economy darkened by threats from abroad. Officials felt chinas a slowdown in growth and the threat to emerging market economies raised the risk that the dollar might strengthen further. That would make exports more expensive, and that could create an additional drag on the u. S. Economy. Are part of glencores plan to cut expenditures. They already curbed copper and coal as they attempted to navigate the right of Commodity Prices. It briefly went to 6 billion from its market value. Sab miller raised its annual cost savings target as it steps up its defense against a takeover bid. Brewery is aiming to save over a billion dollars by 2020, more than double the target set last year. The move comes just days after it rebuffed a 100 billion offer of its larger rival. Bill gross is suing pimco over his shocked departure last year. Executives at the company he cofounded pushed him out in order to get his hand to get their hands on his bonus. He says he wants to expose unethical behavior. That is how much ferrari could be valued at. According to people familiar with the matter, the official price range is going to be published today, and although the value may change amid market volatility, earlier we spoke to a majority owner of ferrari, along with his brother and sister, about the strength of the brand. Ferrari is a legend. It is a legend of its kind. It is a legend because it is capable. It has been capable to protect its brand, to protect the numbers, and not give more than what was needed. T has had great people in it i would say that there are a lot of great men and women in that company, in that company is a source of inspiration for me. I do believe also for many italians and people around the world. You dont sell a car, you sell a dream. Manus selling dreams. That is what we do every day on the pulse. Lets bring in our reporter at large, in milan. You follow this you chase marchione. You get the stories and break the news. Where are we on the pricing . Might be theoday day when finally we get the real price on ferrari. With respect to the final filing coming after u. S. Markets close in the next few days we will have to drive a ferrari. Marchionne is going to be investors offshore at the new york stock exchange. Finally, everyone will get a slice of ferrari. Manus looking at this valuation, they could be anything up to 12. 4 billion euros. How did marchione get this . I love with that grandson said this is not selling cars, but it is a out selling dreams. Everyone dreams about one of these showroom cars. Big lesson and gleam at 3 00 in the morning, and it is a dream, isnt it . They are not selling ferrari on the market as a carmaker. They are selling ferrari as a luxury good. Luxury goods makers are valued between 10 to 20 times their rivals. Marchione says that ferrari is more than a carmaker. Fiat chrysler is selling 10 of ferrari, and for the first time they can buy a stake in for ari. There are many people whoant to be part of that game. Manus it will be interesting to see who the institution of shareholders turn out to be, versus who do the retail owners that just want a little piece. Talk to me about the bigger story here. What i want to understand is why now . To move a zeitgeist luxury brand onto the market at the moment. Tell me what marchionne wants to do in the context of fiat. Tommaso first of all, lets talk about valuations. It is now valued at about 20 billion. Billion,s worth 12 and Fiat Chrysler, based on the news we broke 10 days ago, is about 25 of the market, that means ferrari is capped. That is the way for marchionne to free the value. Looking forward, we know that Fiat Chrysler is looking for merger. It is easier to do a merge without ferrari because on the other side, the other family has now secured control of ferrari. Included,ll not be and it will remain controlled by the family directly. On the other side, you also have Fiat Chrysler getting 10 of ferrari, about one billion euros. Then they are also getting a special cash payment, about 2 billion euros. Keepingood to see you it in the family. Great story. R bloomberg italy reporter at large. We will hear who thi this years Nobel Peace Prize winner is. We dont even know who has been nominated, but Angela Merkel has emerged as a way for it for the prestigious award. I am certainly not a betting man, but i know somebody who likes a little bit of it. Hans nichols in berlin. Hans, give me the odds. Show me the money. Hans manus, i thought we had that rule about vegas. If you are a betting man, 2 1 is what paddy power has. No one knows, though. When you look at merkels numbers, they are declining. We just had a Public Opinion poll she is down almost 2 . Support for refugee policy is falling. She has an internal challenge within her own party with her sister party as well. This is difficult for Angela Merkel. If she does end up getting the award now, which we will see in 23 minutes, it could be because of a refugee problem and that is the biggest headache. We should also mention some of the other candidates the priests, the congolese there are a lot of other worthy contenders. Im not sure we can even use the word contender because we are quite certain who is competing with whom. It is all very secretive. Five members of the Nobel Committee in oslo. We will know in a little bit. Who is your gas . S . Your gues manus and my not on the list . And i knocked on the list . [laughter] coming up next, how do companies vwe with crisis such as the admissions scandal . We will be asking roger carr. Manus welcome back. This is the pulse, live from london. Hasvw admissions drama tarnished the reputation of the worlds number one carmaker it took billions of dollars off the value of the stock and is one of the biggest scandals in many years. Last night, the head of the carmakers u. S. Business apologized before congress, and said that they dealt with the crisis in the right way. What should other companies do in times of turmoil . I would like to ask my next guest, sir roger carr. Thank you for joining us. Blowup, winterk orn resign, the apology. A very humble vw. The correct strategy so far . Iser i think humility very important and i think transparency that follows, being clear that you have a problem to solve and working it through, is critical. They have moved in the right direction. Manus some peppered lines have come through the press. , they say that this is the Lance Armstrong of the auto industry. Could betum that it enron these are strong accusations being made. Are we at a critical moment in terms of where we go in the vw story . We are. Think in any situation like this, you need to start off with a fundamental belief and those that you were talking to that you have a business that has the right combination of performance driven issues as well as values within it. Reputation that is and you have build good quality relationships with the media, particularly over a period, and you may be treated in a more balanced and reasonable way than if you hadnt. Specific, i vw think the principle of Good Relationships based on solid reputations is very important. Manus talk me through your experience. You have dealt with a lot of people some are always out to get you. But that relationship, it takes time. How was it done best . That tallylike doing rounds. Roger whether you like it or not, it is a feature of leading organizations. It is a recognition that this type of coverage with the internet, it is very fast. You have to accept it as part of the job. You have to see it as something that is a reasonable thing to do rather than your taking. Rather than your taking. Communicating with your audience is part of running a business. Building a relationship of trust and respecting the fact that you will be there for criticism when it is valid, but if you have the trust, the reputation for being fair and reasonable and appropriate in the way you run a business, you will get a fair hearing and that is all you can hope for. Manus the other thing that came to mind lobbying. If you have a Good Relationship with the media, but also in business you need access to the thinkers and the decisionmakers and the regulators. How important is lobbying for major institutions . Roger lobbying has connotations i feel relationships is what you are seeking to build with all the audiences in which you are interacting. That may be politicians are but it ismedias certainly the customer. You have to be open and transparent and supportive. You have to always be honest and straightforward, and you have to be willing to engage in good times and bad. So that when the waters do become a little more turbulent, you are not appearing for the first time either with a regulator, a politician, or even someone on the news media channel. [laughter] you mentioned times of crisis. Bloombergs most influential had janet yellen as number one, Angela Merkel, christine lagarde. Positionsubstantial of great power, great control. Board . At help do you think the world has progressed during your professional career as we see more women go to substantial power . Does this change of the perspective . Roger it does. Edit has been helpful, the move toward having a balanced board and good diversity. It is something that has occurred. I think it has very significant figures and significant figures of power. We are seeing the benefit of it, politically and in business and board rooms all over the country. In my period of leadership, that has been something that has changed very much for the better. Manus we had a wonderful guest with one of our guests when it is a crisis, a woman will handle it better. [laughter] manus bringing women into a boardroom how does it change the dynamic . Roger it definitely changes the dynamic you have a different kind of conversation. You get balance, you get the benefit of mixed gender, different points of view. It avoids groupthink, and it brings a much better quality of discussion, and normally a much better outcome. I have been an advocate of this all of my business life. I am delighted that it has become almost standard practice. It has further to go we have got to build wind and much more deeply in organizations in executive roles. Manus sir, how do influential women respond to you when you have this discussion with them about regulation or targets . How do powerful women, smart women responded to this . Roger in terms of quotas for women . Manus yes. Roger the smartest ones recognize that it is not the answer. Women must get there on merit, which they do. They must be selected on merit and not by dictate. As a result of that, once they have the positions of authority, they will be seen to have won them fairly and squarely. That is the best way forward and it is working in the u. K. Manus it is. We have gone from 10 to 12 . What is the biggest risk of not having a woman on your board . Roger you just dont get the right kind of thinking in the boardroom. Halfing women there is not something that is an optional extra, it is something that should be mandatory. Manus sir roger carr, thank you very much for your insight. Here are some of our other top headlines this friday morning stop that flex has raised the price of its most popular streaming package in the united states. New customers will pay next three dollar a month for the plan, which lets to the viewers use it at once. Period. Ll be a grace netflix shares closed 6 higher in new york. Jeremy clarkson has given fans a first look at amazon primes new show. He tweeted a picture with a fill inskeleton crew for amazon primes new Monitoring Program has begun. Copresenters left the bbc earlier this year and signed a deal to make a program with the online streaming service. Argentina and barcelona striker lionel messi are to stand trial on three counts of tax fraud. It could theoretically carry a present sentence. They are accused of defrauding spain of more than 4. 5 million or the taxes between 2007 and 2009. Tax, tax, tax. Up next, irans reverse brain drain. At the prospect of sanctions being lifted as a result of the mass return of skilled workers . Manus welcome back. This is the pulse, live on bloomberg. The arabian at the time of the islamic revolution. But now with sanctions had to be lifted, some smell opportunity and are coming home. We have been finding out more. If you are iranian and if you speak the language and understand the culture, iran should be looked at as the biggest frontier market. We do see a significant amount of interest. These are asked bankers who gave up their jobs in london into dubai to set up capital in iran. We are a small group of 13 to 14 employees. The Market Research and private equities the postsanctions opportunities were too good to resist. If you were to compare iran with some of the other countries it is one of the more developed markets. But also this development happened between 2007 and now, which were somewhat during the period when the country was relatively isolated, not a lot of foreign investment. They want to raise money for one of irans first private equity funds, focused on foreign investment. Teeth inians cut their the west Financial Services district and are now hoping to their experience back, and what they believe will be the worlds next frontier market. What made you want to come to iran . I have been to iran before, pleasure and business. Ever since the nuclear agreement, the opportunities are rising. Arabian radiant companies can work with european companies. I dont know. I think it was a combination of my own heritage, both business prospects. And you are not concerned about any political backlash you may face from people here . It is something that is always possible, but i think the conditions are quite stable now. We are not necessarily people who shy away from anxiety. That is what we live with. Bankers,e investment that is in your dna. Similar investment firms will have sanctions removal. They will have to wait and see if they ran becomes the frontier market they are hoping for. Manus for those listening on bloomberg radio, first word is up next. For viewers, the second hour of the pulse. Directorthe managing and Portfolio Manager will talk us through the big issues of the fed minutes. We will be oking out for the all important countdown to the Nobel Peace Prize will german chancellor Angela Merkel when . These are wife pictures from the auditorium and we will be back with the announcement in under three minutes. Stay tuned. Manus take a hike. Federal reserve minutes showed a delay increase over global risk. China gets a seat on the fomc. Release rallies two and a half trillion dollars and counting. They bounced back from the worst corner since 2011. Commodities come back as oil surges back to 50 a barrel and tim says the worst could be over. Good morning and welcome to the pulse, live from london. I am jonathan ferro. Tom keene is in new york. What is on the agenda question . Tom the politics of the gop is in chaos in washington. And as you know, what a debate over whether this is the bottom for the Commodity Markets stop i would suggest Commodity Markets. Jonathan the nobel prize is not awarded to Angela Merkel, but awarded to a National Dialogue quartet. Back onto nichols with. Why the one with why they won. Rallying toies are . 5 trillion and counting. Accounts andwhat what a week. Mark that is the longest stretch of games since february. I want to show you the appetite for risk this is an index that tracks 20 emergingmarket currencies get in here close. Emergingmarket currencies are on track for their worst in six weeks in six years, rising 3. 3 . ,his is a huge turnaround registering its biggest quarterly loss in four years. The biggest laggards last year are the biggest gainers today. Fleeting could prove because according to the latest forecasts, all 23 emergingmarket currencies tracked by us are projected to weaken against the dollar because of the worsening Global Economic outlook. What a week it has been. Jonathan front and center at the commodity market one mental in particular is searching talk to me about it. Mark it is very rare in your career you get to say that a metal is rising the most ever. Zinc biggest intraday gain ever. Glencore basically announced aans to cut out think by third and it is the biggest producer, and cutting production to repair its finances, which have been devastated by slumping commodities caused by a china slowdown. Has been 12 , but dont forget that this metal has , along in five months with other commodities. Biggest increase ever. We will berton talking about pimco very shortly. Delayed raising rates last week because of concerns about china, and that decision was of course a big talking point at the imf and World Bank Annual meeting in peru, with financial leaders expressing mixed views on when the fed should press go. When an authority says we will be data dependent, are two drivers will be unemployment and inflation. What we are saying is Inflation Numbers have to be solid. We have to see them, and for the moment there is not much on that horizon. Neither on inflation nor on wages. I am very much in favor as soon as possible to allow the economy to normalize. The same for europe. , thee in a different place u. S. Is ahead of us. But lets not postpone it if a small step is the right time. Americast is that recovery is anemic. If you look past the five point whatever percent Unemployment Rate, the true Unemployment Rate , people working parttime, is well over 11 . Our expectation is pretty good that they will continue to go at some point this year. The markets dont see it like that, and i am not in the business of guessing when the next move is. What is much more important is the medium to longterm guidance. Jonathan for more, lets bring in pimcos managing director. Mike, yesterdays Federal Reserve minutes you got a house call for a rate hike in december. Is that the challenge quite significant . Mike i do think it is any more challenging than what we saw yesterday. The minutes yesterday told us largely what yellen told us in september. That they feel reasonably comfortable on the trajectory, based upon strong domestic gotnd, that they have signing off on the Employment Data and they dont quite sign off on inflation. Wasooks as though it similar to september 20 4 they are still on track but we want to see more data before we pull the trigger. Tom you are data dependent and i can understand it. In an extensive conversation yesterday with chairman bernanke, i was taken back by his uncertainty over q4. As we try to game the parlor game of mark carney and janet yellen, are we any more certain about the past, or is it just one moment forward . Mike i think we are reasonably confident that the path, as most of the central bankers have said, is policy getting tighter, or less loose. The timing, as you say, is pretty tough. Take the fed you have these two payroll numbers between now and december, which will be very important. You have the Inflation Numbers, which look quite nice. You have to see further momentum out of the laborers. If you are a policy maker, they would think about 100,000 payrolls numbers. Sure, we had a week number last time, but as long as we keep above 100,000, and ideally if the wage number were to pick up, that would give them confidence. Tom what we observed this week the Economic System linked into a struggling banking system, trying to find a new half. Thisig of a distortion is absurdly low rate . Mike clearly, no central banker wants to stay at zero. If you look at the data that both the fed in the bank of england have, on the one hand, the economist are undershooting so i think part of the reason you want to get all serious because they dont like being at zero, and they recognize that it does potentially create longterm distortions. If they get the opportunity to get away, they want to take it. That is what we are seeing at the moment. Jonathan the market has got them cornered. 39 probability of a move in december they dont want to move when the market doesnt expect it. Steve major of hsbc had a call of 1. 5 at the end of 2016 what you think when you read that and what kind of Global Economy do you need to see for that call . Mike i did raise an eyebrow. It was an interesting call, and to be fair to them, they have had very good calls before. They are projecting is a world in which inflation remains at these levels or potentially goes lower. Look at core inflation in most major markets it is stuck at 1 . Whilst we are struggling to get inflation up, we should be relatively reassured that even in places with large output gaps in europe, you are not seeing core inflation rates go further down. Jonathan my question plays into commodities. Givenmarket in 2016 the effects of Energy Prices about to drop out of the headline cpi figure the bond market is not moving on its own. Why not . Mike the bond market is worried about asymmetric risk. Obviously bankers are more challenged. When you look at bond yields at 2 , part of that is people expect the fed to get left off but they recognize that it will get harder if it doesnt. Across the whole structure, you have these two counterbalancing forces. Volatility. Ly, the same. this may be a bit away but what will equities do question mark do they have a bid because of good revenues and good earnings, even if hsbc says it is a 1. 5 environment . Mike and a 1. 5 environment by definition you are looking at relatively low growth. I suspect that is a world in which equities are probably struggling. As you have seen in the reaction to the payrolls number, you have some pretty bizarre moves. Most of the markets have reacted favorably to the weak payrolls number. They could see that in the world of monetary easing. Happens, i wonder what to the end of the year when the Federal Reserve has to communicate that they will not spend the whole year saying they will move. Is that when things shift . Mike you saw that in the september fed meeting. Pass,ried to do a dovish and the markets reacted badly. To some degree, they created this expectation by highlighting it. The truth of the matter is that it is hard to see markets completely dying out. Volatility is now in yearend. Jonathan michael stay with us. Tom keene as well. Lets get over to manus cranny with what is on our radar. Manus we kick it off with volkswagen. The u. S. Chief says that fixing all the vehicles involved in the scandal may take years, testifying before congress he said that the company did not make a corporate decision to cheat the system, but it was done by a few engineers in germany. On behalf of our company and my colleagues in germany, and be personally, i would like to offer the sincere apology, cere apology, forv use s cheating. Gen manus attending to navigate rising Commodity Prices. Last week they wiped out 6 billiooff the market value. Pentagons denied claims that missiles fired in syria landed in iraq. Their intended flight path would have taken them over northern iran and iraq. U. S. Officials say that at least four went off course. Netflix has raised the price of its most popular streaming package in the united states. New customers will pay an extra dollar per month for the plan, which lets to viewers use the subscription at once. Existing customers will be given a grace period. Netflix shares rose 6 higher in new york. Jonathan manus cranny, thank you. Coming up, is the crude crush over . Pimcos latest call for oil. Stay with us for that. Jonathan welcome to the pulse, live from london. Time jonathan ferro, alongside tom keene in new york. The worst that the collapsing Commodity Prices is probably over, according to pimco, who reckons that oil is set to gain over the next 12 months. I guess the bottom line is dont expect a major rebound. Ask then pimcos managing director, mike amey . Ise, the commodities complex a huge driver of whats happening in fixed income. I could overlay the u. S. 10 year yield with the price of oil and they track each other beautifully. I nder how your call on oil plays into this. Mike our view on oil is that you will get this is a part supply and part demand story. China has been part of the demand story. Here,look forward from our core view is that you will see some take out of capacity, if we stay around these levels. If you look at china for the next 12 months, it is hard not to believe that the six months with fairly tough. But is it will get worse than people expect . We wouldnt take that angle either. We have traveled and maybe we will see some volatility, but the worst is probably behind us. Tom let me put on my chart of the year. This inflationadjusted is the regular bloomberg commodity index, you want to debate about commodity bottom or not. Dennis gartman agrees that the markets are cleared, and said you parse a do difference between oil, industrial metals, and the softs . Do you parse them or do you look at the commodity complex as a whole . Holdsthe broad theme across the commodity complex. Zinc, copper, those guys, oil has been there. It all tells you the same story, which is that chinas slowdown takes time for capacity, and as a result of that, if you look toward the next 12 months it is tough to call the bottom, but broadly speaking tom do you assume this is a critical question mike amey, do you assume that there will be a Balance Sheet adjustment on the mining stocks to come, that there will be a massive markdown . Where can you dollar cost average know what you will see that accounting adjustment . Mike i think we are seeing the Balance Sheets glencore is the classic example. The producers are responding to that nowk i am not a commodities or equity guy, but broadly speaking if you follow our logic, the commodity price will probably stabilize and at some point, notwithstanding some volatility, you could draw obvious conclusions for commodity producers and Commodity Prices. Jonathan tied to that story is the reaction of Central Banks in europe, whether it is the ecb or the bank of england. Towards the end of the year, the expectation is they will have to do more. Do you subscribe to that theory based on what you think is going to happen . Mike we do. If you look at what is going on in europe, their key challeng e is the massive output gap. We could debate and it is a close call on december but you can see that domestic demand is holding up reasonably well. In europe, you dont have that. We would subscribe to the view that they would have to do more to try and get inflation up. Jonathan can we retest the position, the crisis of where we were in the spring and the bond market . If so, is it in germany, italy, or spain . Will i suspect that you see traders be reasonably warey, simply because the violence if you look at what is going on, tenyear bond yields have them stuck around 55, 60 basis points through the fed induced volatility. I suspect what you will see is relatively stable european bond yields, and the volatility will come out of the u. S. , where you have this uncertainty. Jonathan mike amey stays with us. Coming up, volkswagen. The next enron . We take a look at their latest speedbump. I talked to some of our dealers. They care about our customers, and i know you do as well. One of the dealers said this is on the scale of and ron and bernie made off. That is how willful it was. Jonathan welcome back to the pulse, live on bloomberg television. Im jonathan ferro. Volkswagens u. S. Chief says fixing all the vehicles involved in the omissions of scandal may take years. Testifying before congress, he said the company did not make a corporate decision to cheat the system, insisting it was done by just a few engineers in germany. Hans nichols is in berlin with more. Hans, a lot of sorrys, and apologies, but that is an important distinction he is trying to make. Hans they are trying to determine throughout the rest of the company who knew and who was in charge they Just Announced this morning that they will do an investigation on to whether or not the software in question was installed and is illegal in german cars as well. Up to this point we have only known that 8 million vehicles are affected. Yesterday what was clear is that there is not going to be an easy fix for a large percentage of the 480,000 vehicles in the state that have these devices installed. They will require actual hardware and engineering components. Heres how michael ward put it. You mentioned that roughly 500,000 cars are affected. Out of those, 430,000 cars are gen 1 vehicles, which are very early vehicles that started in 2009. Thathose cars, we believe it is a softwareonly solution and that will not be possible, because to be quite frank, if it were possible it would have been in the first place. Testifying in was lower saxony, the government and prosecutors were raiding offices and private homes in the area. Jonathan hans nichols in berlin, thank you. The 32nd final thought from mike amey. The data in germany, the corporate issues are you worried about what is happening in europes biggest economy from an economic standpoint . Mike we are reassured by the fact that pmis are holding up. Clearly we are focusing on a pretty closely, but so far pmis are reassuring. Jonathan thank you very much for joining us. . Ow much is ferrari worth they Just Launched a multibillion dollar ipo. The details after this short break. Jonathan good morning and welcome to the pulse, live from london. Ia am jonathan ferro. Manus cranny alongside me in london and tom keene in new york. Manus it is all about the fed and the reaction to the minutes. Upbeat feeling was darkened by threats from abroad. Officials felt chinas slowing growth and the threat to emerging market economies raised risks that exports would become more expensive and could create a drag on the economy. The imf and World Bank Meeting in peru. Mark carney says while the state of the u. S. Economy is important to everybody, he proclaimed independence from fed policy. Fed move isg of the not decisive for the timing of the move by the bank of england. We will determine the timing for the start of the process and Monetary Policy normalization consistent with the u. K. Manus prices have jumped at glencore. The company has already curbed copper and coal output as inempts to navigate the rout Commodity Prices per last week it went 6 million off market value. Volkswagen u. S. Chief says fixing all the vehicles involved in the scandal may take years. Michael horn says the company did not make a corporate decision to cheat the system but it was done by a few engineers. Weighed in,elbloem he spoke to Francine Lacqua app. It is about trustworthiness and it should be sorted out quickly. Industry is very strong. If growth levels in asia go to a el that willlev affect germany, given the competitiveness, im sure they can manage that. Manus everyone has an opinion on vw. The contagion effect from vw. Jonathan manus cranny, thank you. Lets head over to mark barton. Ink day 6 of the rally european markets, day eight of the rally in global stocks. Days of the game equates to 8 . That 8 equates to 3. 2 trillion dollars. Investors thinking the fed is going to raise rates, not this year but next year after minutes of the september meeting were released. So many superlatives out there. Difficult to know where it starts. The glencore resurrection continues. Long ago, glencore fell. It has rebounded. Anglo american rising. These are the biggest gainers on the ftse 100. They seek600 resources indexed, which basically means these companies plus a few more, risen for nine consecutive days. That has not happened since the year 2000. This comes after they gauge fell by 29 in the Third Quarter. Sticking with the mining theme, i had to bring up the price of zinc. Zinc has risen the most ever. The most on record. Zinc is up by over 10 . The big news was glencore announcing plans to cut production on the precious metal by a third. Glencore is the biggest producer of the metal. It is cutting Coal Production and copper production as it tries to repair its Balance Sheet, which has been decimated by the slumping Commodity Prices, which has been caused by the china slowdown. It is the worst over for commodities . Of pimco, which says the declines are largely behind us as producers scale back output. Oil rising up by 2 . It is up 10 this week. Are saying a huge sigh of relief after the fed minutes. Higher rates are not good for gold. Gold does not pay dividends like do. S and equities ive got to get onto emerging market currencies. Look at the move in the dollar against the indonesian rupee appeared bloomberg has this wonderful and tracking 20 emerging market currencies. Track for its best week in six years. This is the best performing emerging market currency this week. The dollar, down by 8 . Are the games fleeting . According to the latest analysts, currencies and are projectedts to weaken against the dollar by the First Quarter of next year because of the worsening Global Economic outlook. ,f the analysts are to believe this is not going to last. Jonathan i want to bring up a charters stock. Trading much higher. An emailed statement from the looking to kick start performance. The ceo says he has a clear sense of direction. There might be for your personnel changes. They are looking to simplify structure. Job losses are set to amount to 1000 jobs. Sanchar Standard Charter over two days. today we are up by three point 6 . I will bring you the news on later hishartered morning. 12. 4 billion dollars is the number, thats how much ferarri could be valued at when it ipos. The price range could be published as early as today. The valuation may change because of market his morning. 12. 4 billion dollars is the number, thats how much ferarr. We spoke to the owner of a controlling stake in for ari in ferarri. Ferarri is a legend. Because it is the brand,protect protect the numbers and not give more than what was needed. , like great people in it today, Sergio Marchionne. There are a lot of great men and women in the company. That company as a source of information for me. I also believe for many italians and many people around the world. You do not sell a car, you sello sell a dream. Lets get more with bloombergs italy reporter. Ferarris ipo will be priced later. Give me details. We will finally get a price for ferarri. The ipl is expected to start with a roadshow next week. People familiar with the matter told us they could get from 10 billion euros to 11 billion euros, the violation for 100 of ferarri. 10 chrysler is selling a stake. The other 80 will be sent at the beginning of next year. It is just a 10 stake of ferarri being sold. There is scarcity which is boosting the value. Team, they can1 almost do what they want and spend what they want. Are things going to change for the Formula One Team . According to chairman marchione, the Formula One Team is crucial for ferarri because of the importance to the brand. Brand is a vital part of the ipo. Just the brand itself is worth 5 billion euros. That is why Sergio Marchionne is pushing for the f1 team to be the winning team. You need a strong Formula One Team to have an Even Stronger brand. Jonathan thank you very much. We will bring you the news as it breaks. Coming up, to lima. Withine lacqua mingling the biggest names in global finance. Why they are worried about emerging markets. Back in two. The chinese authorities do not want to have a brutal evolution. They want to smith and the pace and make sure the rural to urban transitions are taking place in an orderly fashion. They are going to be restructuring the economy in ways that will entail less , less for resources thend for oil, iron ore since them that great recession, i think, is ov er. In china theres a waill a moveto take measures to to a new model. We need to be communicative. Lagarde and p. M. Speaking to Francine Lacqua. I guess some of the main worries highlighted in lima are related to debt and mishaps. That could be policy paralysis. Is that where we are heading . Francine that is where a lot of participants think we are heading. To get just an outlet advice. The imf has taught emerging markets they need to get their house in order. If they had their house in order, no matter what happens, if the fed hikes or china slows down, you will be ok. There is a realization in lima, peru that the imf might be sometimes too gloomy. The financialm crisis. Europe is growing. Probably more than most developed economies. I spoke to the head of the oecd. Policy mishaps are his main worry. We are not in bad shape. Hes not talking about a global recession. Mr. Gurria i do not see a recession in the sense of negative growth. I want to leave that very clear. What we see is a slowdown. There are a number of issues that have been the drop of oil. Which should have been a good thing for most economies. We calculated it was going to 1 plus5 and up to positive effect. Francine what happened . Mr. Gurria it added to already existing pressures. Havearly see that what we to do, having exhausted the room banks,euver of central now governments have to come in. Francine fiscal stimulation. Mr. Gurria we have been there, done that. Where trying to reduce deficit, reduce accumulated debt. You dont have a lot of room in Monetary Policy and fiscal policy, go structural. Francine weve been waiting for structural reforms. That is the problem. They do not take them. The countries all have spain, ireland, portugal what they are getting his recovery, jobs. Francine back to the initial point about corporate bonds. Undereally have been pressure. Over leveraging risks and creating defaults, that is one of the main warnings from the imf for emerging markets. If you look at the size, emerging market companies, especially linked to commodities, have ever borrowed. 3 trillion is what they have borrowed over the last 10 years, 4 times more than the previous decade. Tom when i look at lima, i love the urgency and what we heard urria, what is the immediacy at these meetings given the bombshell from hsbc yesterday. They a new mediocre or are rationalizing at a three day soiree . Francine i dont think they are rationalizing, i think they are here to try and warn. They want to ensure in lima, this is essential bank governors, policymakers and finance ministers and officials such as the imf and world bank, from this mediocre we do not go down a slippery slope. There are risks they want to highlight. So that we do not take steps that make the situation worse. Keep hearing this, will be the year where growth and steinmetz but does not get worse or if we start declining slowly, it becomes difficult for policy to respond, that is a little bit more sinister. Jonathan i want to bring mike from pimco into the conversation. We worry about emerging markets. Emerging markets are saying get on with it. What i see on the screen right now, copper up 4 , aluminum up, is that a short squeeze . Mike i think it is a reaction to the glencore news. I would be surprised if you get a big ramp up. I think it is a reaction to supply. Jonathan do you see it in fixed income and corporate debt, corporate em . Is becoming ae em single name story. You have weakness. Some companies will come under severe pressure. You can see that already. The market as a whole is very differentiated and i think that is an important factor. From the blue book to the in lima to the World Economic outlook to Financial Stability. Day isup said the other financial and security. Does pimco see any whispers of Financial Insecurity that could affect gurria, dijsselbloem, or lagarde . Mike most of the major banks have twice the amount of capital they had prelehman. Risky Balance Sheets. Theyre in a fundamentally different position to where theyve been for the last decade. Oft gives us a lot reassurance that Financial Stability looks pretty good. In peru and i im speak to policymakers, they start shifting in their seats when i ask about inflation. A clearot gotten inflation about what is driving inflation lower and when it will pick back up. Theres a global output gap keeping core inflation rates low everywhere. The one reassurance is that what we are not seeing is developed markets core inflation rates trending lower, theyve stabilized at about 1 . Its quite tough to see a big pickup in inflation. I think we should all respect the fact that if we look back to or three years ago never of none of us expected rates to be here. The fact that we do see stronger inflation, at the moment, be reassured that the deflation risk does not seem to be getting worse. Jonathan mark from pimco. 2 hours and 50 minutes until the session in europe. Ftse green. We will talk markets after the short break. Jonathan welcome back to the pulse, live on bloomberg television. Tom keene alongside me in new york. A rally in the equity market, a squeeze into commodity market. Tom i like the word squeeze there. One big cover of a trade and may be one part is a sea change as we talked to mike about. Dennis gartman yesterday was heeded, this is the bottom for commodities and you can acquire stuff. Investor david will join us on set. That photo is from when he was 19 years old at the university of wisconsin. Erro will talk about glencore and commodities. We must speak to herro about his biggest holding, credit squeeze. Russ koesterich will join us from blackwater. Jonathan the big question is where will the where were the longs stepping in with a bid when glencore was down 20 . Zinc dynamics overnight, which i really do not understand. You wonder, what does a bar of zinc lok like look like. You wonder what the Balance Sheet will look like going forward. Jonathan surveillance coming up after the short break. Sessions into the session in europe. Equity markets gaining. Ftse 100 up by. 7 . Miners leading gains. Best weeks since two thousand 19 stay tuned for the surveillance team, live from new york. \ tom we need somebody to get us to 247. Kevin mccarthy could not and has now shaken the Republican Party to its foundation. In this hour, phil mattingly, paul ryan, and the gop. Crisis over. A massive debate. Is this the commodity bottom . We speak with david haro on glencoe we speak with david herro on glencore. Good morning, everyone. This is bloomberg surveillance , live from our World Headquarters in new york. It is friday, october 9. Im tom keene. With me, vonnie quinn. Jon ferro is with us from london. Lets go to oil, above 50 per barrel. Whichever wayou look at it, that is really good. Lets go to copper at 4 and, lets call it what it is, a huge squeeze