December looks likely. Most members are on board. Market expectation show investors look to move next month. Speaking yesterday, york that president said he is looking forward to the day the fed raises rates. Begin to raise Interest Rates. That is a good thing. That is a sign that the economy is returning to health. The Federal Reserve is getting closer to achieving our mandate. Francine for more, lets bring moretti. And lets bring in simon kennedy. Thank you for joining us. Simon, lets start off with you. Expectation for a rate hike hasnt increased for two days. When we heard was a hawkish fed what we heard yesterday was a hawkish fed. Samco simon they responded in the markets. The jobs market the jobs number you saw. Francine we had inflation. December, the in feds meet the cymer 16th. The reason it is not 100 , people wonder if the fed is going to do the right thing. Now they are talking about how a rate hike would still be a mistake. They also look back a few months blink backaw the fed in september. The fed doesnt really want to go until it does. Thingsu look at the fed, 2016 rate increases will be very gradual. Simon it is about the pace of the subsequent move. They now need to backup in december if they do hike. How slowly are they going to raise that rate. Themberg news reporting jobs are ending minority are in the minority. Francine it seems a lot of investors were saying we have not gotten their communication. Do you feel youre in good hands, that janet yellen is clear in the message . On our side, the as an end strategy market to our companies. What happened in the last two or three weeks is everybody was unemploymentcause going at 5 . Ago,e same time, two weeks one of the best retailers in the u. S. Comes alex comes out cutting expectation. I think from our side, having an increase in Interest Rate now is good. It is good because at some point there is a fear of apple. If people start gearing if apple fearing that apple is mounting again. Francine the Central Bank Divergence is something that simon talks to us they in and day out. The fed looking to hike rates. Possible more qe from the ecb. It is all about currency and things which benefit at the end of the day europe. Mauro from a central bank perspective, the companys field reassured because of the determination that the ecb and draghi show a positive element. At the same time, what we can see in the banks. And our banks use the look use the liquidity. We dont see overleveraged structure that we saw in 2007. The ecb is putting into the market is used in the right way. To an extent, another positive element that we invest in midmarket companies. We see it as an lt element. Francine simon, when you look at the fed, i am not sure how much of this is priced in. December is a volatile month. It is a month of the holidays. Simon the holidays are there. It is the end of year. Books square and. The markets are liquid. There are problems along the road. You move in december, and then there is a bad jobs report in february. How they have to go in the view of some. Get that hike done with and see where you go from there. Francine morrow made a very mauro made a very good point. The fed haso say been itching hike to mature there were no asset bubbles . Simon china devalued. China suddenly slowed. Other flashpoints in the fed it recognized that and put a pause on the shift. Hard, shifting into a hard notwhere it is increasing. Is there anything that will make janet yellen move . How worried are you about asset bubbles . A lot of these negative rates were unthinkable 18 months ago. And now they are part of our daily lives. Site, we try to learn from investments. We say tore and more our investor, we try to be absolute. We try to mitigate and normalize the external effectors. One of the risks is in the furloughquity is to overleveraged structures. The willingness to say lets go for another investment. Investor, teaming up with oxford doors, we try to bring discipline teaming up with entrepreneurs, we try to bring discipline. Iseurope today what we see consolidation. Extra liquidity to increase market share. Turn extent, one of the reasons why a lot of people is looking at the ecb is inflation. What is going to happen . Is inflationor us is not spiking because we see that most of the market leaders in the market we back is using this moment to increase market share. Usually that is not done until price increases. [indiscernible] the ecb saying we need to be careful. Power weect the want to protect the power. As of today, it is achieved. The balance between 1 and 2 maybe. Qencine is look at possible from ecb, has it filter through tackle filtered through . The debate that we have been having, what has it helped tackl . Helped i think it is help at a consumer level. Paneuropean. Think the fundamental ecb hasnce that the sent. Cycles are becoming so short. In two dozen five, you had three or 45 years. Now basically at you had 3, 4, 5 years. Year. Cycle lasts a thinkmpany point level, i as well, it has worked. Francine morrow, simon, thank you so much. Heres is a look at what else is on our radar here rescued is say information found at the scene of his todays raid suggest the gang who struck last week was preparing another attack. At least two people were killed and eight more arrested as police fired 5000 rounds of an operation in paris. The suggested ringleader is not those detained. Police say they do not know yet if he is one of the dead. The Central Bank Says the record easing measures are having the intended effects and the japanese economy continues to recover moderately. Earlier, japan hosted first trading press conference in months. Talks an advanced pfizer is in advanced talks to purchase allergan. Ceo,xt, we speak to the francesco so much a. That conversation is up next. Francine the pulse. Will come back to welcome back to the pulse. Interviewg you an with italys biggest company, told investors that impairment in russia had hit profits. How does one of europes Largest Companies lets speak to francesco starace. Good to have you on the program. We will be talking about geopolitics and a second. You have a great barometer for understanding europes economy. What you see as the biggest risk . See some recovery in most of the countries which were lagging behind. The issue we face in many existeds that it between gdp growth and power consumption is weakening. Francine y . Francine why . Francesco technology is finding its way into the homes everywhere. Everything we buy is more efficient. We consume less. This link is weakening. It is a fact of life. It is not everywhere. We see and observe that. Growth in the gdp not enough or not the same growth that we have seen before. Francine how are you adapting . Impact onve an companies. Francesco utilities are Power Producers but also power distributors. They need to focus on both and not just the number one preoccupation. The idea is lets keep the lights on and improve the service. Lets digitize the networks. Lets do more with the Distribution Network we have which is he coming more important. The debate will not be like before. It should be 5050. Francine the European Commission has said that europe needs to diversify. Gas. From have you see that relationship changing . Has gas become more eu friendly . Are they going after market share . Francesco it has become a big caster in europe. Francine it has been used as a political francesco to some extent, yes. If you look around europe, what other supplies of gas do we have . Who is the friendlier of them all echo i think it is an issue that we have to address. We can depend on just one source. We should have more lng. Perhaps it is more costly but it would make a big difference. We should multiply the excesses of gas into your. Just stop at a technician stop at a calculation. We know this does not work. We need more, more diversification. Francine the terrorist attacks. A think theres going to be rapprochement of russia with the west. Depends on the west than russia. I think yes there will be. I hope there will be. I think it will happen. That we have ase tense situation between russia in Europe Russia and europe in general. I think right now it is more a detriment to europe than russia. Francine why is it so difficult . Why is it so difficult for these companies these Renewable Energy companies . Francesco i dont think it is difficult actually. I think it becomes at a certain point a limiting factor. Ist pushed us to do this over the time in the five years, enelo power five years, power has generated more investment opportunities. It can operate them. Much more than its own objectivity can afford. We have two choices, limited backing. Royal that is the main logic behind this. Francine that would mean it would be more difficult for the company to do funding. Is that in the peoples minds . Francesco it would have to go to the market and ask shareholders to increase its capital. Liveuld ourselves have to with the contradiction of putting more than 50 of our putting these things together, because we are betting so much on or no energy, we are becoming a Renewable Energy producer at large. The second observation was green power had the luxury of eating made from scratch. Luxury of being made from scratch. Ideas that cannot have elsewhere. Now we have the opportunity to change from within. Francine i was good to talk to you about that. How do you want the company to be seen . Company . Or do you want to be seen as a Renewable Energy company five years without . Thecesco i believe that is second point. A Renewable Energy company which today does not exist. You inbreed plants. Putting one plant into another and then another plant comes up. This is the case. Work when oil prices are at 40 . Will it work when oil prices are at 40 . Francesco we have not seen an impact on Renewable Energy growth because of low it low oil prices. This basically leaving off crazy up and down of commodities. Francine because it is stable. Francesco it is very stable. It is getting more competitive along the way. It is a great moment. It is a nice expectation for Renewable Energy. The pariswe have talks in a couple of weeks. Thank you for joining us. Joining us for that exclusive interview. Up next, oil briefly dropping below 40 a barrel for the First Time Since august. Why . We discussed that with our chief responded. Coming up next. Francine welcome back to the pulse. We are live on bloomberg tv. We are getting some headlines out of germany. The chancellor speak to reporters in berlin. She is saying to significant facts as heads of state look at their security situation in individual country. Angela merkel saying the current eu system is not functioning. One of her main messages is we should not link the terror attacks to refugees. She says these attacks that happened in paris were aimed at all of us. She is making a distinction come forhe seekers who economic reasons and the ones who come for political refugees. Keep an eye on angle merkel. Merkelan eye on angle of on angela merkel. This get back to oil. Oil falling to the lowest level in three months. Lets get back to oil. Oil falling to the lowest level in three months. Uas Energy Minister said that opec is confident that the market will stabilize itself. Oils bring in our bloomberg corresponded, javier blas. Pains explaining this will stabilize. Much offigured out how a supply glut there is . How much that is having an impact on oil prices . How much is it linked to the lack of demand . Javier the demand has been quite good. Demand is growing at eight Million Barrels a day. Side is good. China is not great. Italy is fantastic. Europe is doing well. The u. S. Is doing very well. The main problem is supply. It has been talking that this is going to work. Probably it is starting to work. The problem is the pain has been seeing the oil price in the u. S. , dropping below 40 a barrel. The fed is not helping. Francine you have a map. We talk about stockpiles. To really visualize it. It shows the number of oil tankers that we would need to fill the stockpiles. This is what . Hot. Is about put theif we were to stockpile into supertankers and put one supertanker after the other, the line of supertankers go from theld bloomberg headquarters to the out scales of edinburgh or glasgow. It is a huge stockpile. We would need all the tankers. If you are a small, medium company, your sink this is great for me because it means my oil is going down which means my energy and cost of production is going down. It is a good environment. The expectation on the supply side is not going to be everybody is saying ercapacity. You concerned . This is one when we started seeing the growth figures. Are you concerned that the price of oil has helped the european economy so much that if they spike up, we are in jeopardy . Or two and extent the focus has been efficiency. Working much more on the profit line. To an extent, that is healthy. It is structural and a more short economy. Increasingback and producingther way of energy more profitable. It is always there now. Francine javier, i know we dont have a crystal ball. 50 futures, is there a Technical Support . Javier i think we are approaching the bottom. Prices continue going down, we noe seen some signs that opec supply is responding to low oil prices. I can bring one example. For 11 years, production has been growing every month, year on year. September, we saw the first drop in production year on year in 11 years. Ist is a sign that shale oil in a spot to lower oil prices. The other problem for opec is when supply and demand balance we still have those lines of supertankers waiting to be consumed. That means for 2016, the rice recovery seems very unlikely. Francine that line the comes from number headquarters to edinburgh. From bloomberg headquarters to edinburgh. Here are some of our other top headlines. Most participants agreed that conditions for a rate hike have either been met or likely to be by december. That is after a strong jobs number in october. He spoke to bloomberg about european markets and an exclusive interview. European markets have been soft. Year, youre my continue to be strong. We must take a long view of your. Think about japan coverage. There will be more coverage. In europeation of 4g is less than 15 . [indiscernible] more coverage, more capacity. Pfizer is in talks to buy allergan for 380 per share. What would be the drug industrys largest ever deal. President hollande has stepped up his campaign against terror in france. Apartment of intensify the bombardment of i. S. Lets head to hans nichols who is in france. What exactly did they say . Hans the French Foreign minister is indicating that one of the bodies and they dont know how many, three was so shut up and bloody, it is difficult to make a positive identification. Was mostot it he iswe heard from warning of a potential weapon attack. That is why he is making his case. That is a part of his advocacy for police powers. At the same time, the ap is reporting that in belgium, there are six raids taking Place Associated with some of the associates of the suicide bomber that attack here in paris on friday night. , having, i have to say come in and out of paris and brussels, today seems like a return to heightened security. It is a very jumpy city. It seems like men and Police Officers with submachine guns patrolling backandforth did this is a city that is on alert but is trying to get back to commerce. Summit laterhange is going to be taking place in a couple of weeks will go on. He has commitments from 137 liters that they will be attending. Some public the restrictions public curtailed some demonstrations will be curtailed. Hollande has said he plans to accept another 30,000. He will continue and accept them. We heard from president obama saying that the 10,000 that they plan to accept will still come in. We have a bloomberg poll that says more than 50 of americans are opposed to be settling Syrian Refugees in the states because of these attacks. Sense at howa dicey and how sensitive the politics. Western European Countries are continuing to try and disassociate the link between the refugees we heard from merkel just a moment ago on this. Francine . Francine hans nichols, our correspondent in paris. The finance behind the Islamic Group is the cover story in the latest edition of business week. He is cam simpson. You are looking at not only the finances of i. S. But how organized they are. What is the most striking thing . And howtalk about oil isis gets money. They have resources so far beyond oil that it is staggering. On taxes they collect everything. Francine how . The they collected from millions of people in their territory. Cant stop them from generating money on their own territory that they controlled. They control upwards of 8 million people. It is almost impossible keeping them from collecting funds. Policymakerslt for to really make a series stands in the money machine of the islamic state. The one thing everyone focused on, the oil, where we could of made a better difference, we have seen since the paris attacks that the Obama Administration miscalculated the damage that we did a year ago during the initial airstrikes against their Oil Infrastructure by forged Million Dollars. Said we did au. S. Lot more damage than we did. Cam they were telling us a year ago that we bombed isis is Oil Infrastructure down to 100 million operation. May, a rare in ground assault against isis when they were deep into enemy territory, they got all of his records and they figured out they were dramatically wrong. Productiond isis oil not only was isis Oil Production so much higher. Now they are saying quietly after the paris terrorist attack, that isis is making 500 million a year. That is a forged Million Dollar mistranslation in favor that is a 400 million muscat chelation in favor of isis miscalculation in favor of isis. The headline maybe couldve been why are there 116 ac