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tv   Countdown  Bloomberg  October 8, 2015 1:00am-3:01am EDT

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anna: deutsche bank warning -- europe's biggest investment bank says it could cut or lemonade its annual dividend. volkswagen in the hot seat, telling lawmakers today that they knew of omission problems as early as spring 2014. there is no shame in waiting. that is the message from lima. we bring you key interviews with voices matter, including christine lagarde. thatxpectation policymakers will keep rates at the record below.
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♪ good morning, welcome to countdown. i am caroline hyde. i will bring you immediately what we are missing in terms of training trade this morning. can seetle bit we currently at the moment, we seeing the shanghai composite up more than 3% in current trading. of course, perhaps not as exuberant as many were expecting. member, since mainland stocks have been close, the hang seng has gone up 11%. why not the flurry to face significant catch ups? stocks,comes to chinese the all country world index is up for six straight days. we saw it up in the biggest rally since 2011 on the all country word index. we are certainly seeing risk
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aversion, pointing lower. i want to get straight to hong kong now, as we know, the markets open. let's get up to shery ahn in hong kong. a little less risk appetite looking at japan. shery: good morning. a bit of a mixed picture in asia, but at least the chinese markets coming back rising. they are catching up to the global rally. we had investors speculating that there may be more steps by the government here in order to boost the economy. seng downd, the hang 7/10 of a percent. stocks are vulnerable to some profits, even the recent gains. between gainsing and losses today after that data showing that we are seeing one of the biggest slumps and machine orders in august.
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it dropped 3.5%. they were expected to rise that much. week,0 of a percent this it is gaining 3/10 of a percent. despite some energy players seeing some downward pressure. the australian dollar as well as the kiwi dollar, they are falling today. a reversing that the weeklong rally that we have seen for both currencies, the aussie dollar is rising half a percent. remember the aussie and the kiwi have been the best performers among 10 developed nations, after commodity prices recovered leslie. risingnese currency is to a two-month high, that is after the government fixed and changed it by 1.7%. it is currently weakening slightly, back to you caroline.
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caroline: thank you very much, indeed. is ain hong kong and that market update. here is the rest of what you have to keep your eye on. it is a big day with announcements from the ecb and the fed. first up, we get a rate decision any minute from the bank of england. then at 12:30, the european central bank releases its account from the september meeting. we last but no way least, get the minutes from the federal reserve's. . a little bit outdated potentially since the very poor job report that cannot last week. what will we see in terms of what janet yellen and the rest of the federal reserve feel about a rate hike as soon as this year? let's talk corporate, banking -- the biggest investment bank in europe. they are bracing for the biggest quarterly loss in a decade. deutsche bank could stop
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dividends, after ranking the two largest divisions down. ryan chilcote is here with the details. walk us through this. where are these write-downs coming down? times what it was four or five years ago. $5.8 billion from the investment, a right down in goodwill, being set aside additional legal fees and provisions for more. hit,ividend getting hugely last year it was $.75. deutsche bank has paid a dividend since 1957. the last time they cut the dividend was 2008. yesterday, the ceo said we will either cut or eliminate the dividend altogether. $.75 a share is whether the last you. finally, the ceo said if we are going to take eight write-down,
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we will have to dig into the dividend, then we are going to have to have some pain ourselves. saying that basically compensation is going to go down this year. he said he wants to write a fair balance between what share our holds are having to take. shareholders and the employees her. trying to clean the slate to a certain extent. but we have seen a massive reaction in the united states. ryan: new arc was down as much as 6.7%. but this is definitely -- deutsche bank definitely to be watch this morning. a huge reaction in new york shares. has been inohn power as the ceo, shares have been down about 7.5%. what he is trying to do, you alluded to this, try to clean the slate. quite possibly set himself up
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for good comparatives going forward. this year will a good compared to last. the only came in in july, and that is compared to last year. that is what he is gambling on you. what they are saying effectively is that the investment bank is worth a lot less than they were booking it at. the postbank he said in a memo yesterday, when that was acquired, it was booked at more than the value of the net assets. and of course, one problem is bank has, like most have had, the legal costs keep coming in at a higher rate. it is being aggressive in setting aside more money for that. caroline: it looks like they cannot catch a break right now. thank you very much, everything with deutsche bank with ryan chilcote. we're sticking in germany and the corporate woes. the head of volkswagen, the head of u.s. division, he said he knew there were problems with
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diesel emissions for 18 months. it may affect the size of the fine the epa will levy on the german automaker. now let's get to berlin. our international correspondent hans nichols has more. what did the top u.s. executive actually know, when did he know it more importantly? hans: caroline, you are getting all involved in the watergate terminology. what did you know, when did he know it? not quite the same level. but what we do have is michael moore, head of the u.s. division, he was made aware in the spring of 2014 of a possible emissions noncompliance issue. here is what he will tell lawmakers j. testimony came less than. he said later in 2014, i was informed that the technical teams had a specific plan for remedies to bring the vehicles into compliance and they were engaged with the agencies about the process. the spokesman said later in the
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afternoon yesterday that he did not know that the device was installed on the volkswagen diesel engine. the software -- that is the thing that is in question. just as importantly today, we will also hear from the epa. and they are going to indicate that the potential finds that volkswagen could face want to be directly proportional to the kind of economic benefit that they gained by selling these engine. they will say that the agency attends to assess the economic benefit of noncompliance and pursue appropriate penalties. they are inspected look at how much economic and environmental damage there was, as well. how much pollution, the overall cost of that. and we look at some figures out there, for the economic benefit to volkswagen, one class action lawyer saying it was a $2 billion economic benefit. from a class action lawsuit, that seems to be on the high
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end. they have a lot of interest in high bawling this. it may not be the eye-popping figures. but remember, this is just one area -- this is the epa fine. another announcement says it is $7,000 per vehicle which was the economic benefit. one quick note on the u.s. side, volkswagen has decided not to even certify their 2016 vehicles. they are pulling out of the market. wow, sticking with volkswagen in the u.s., there might be even more lack of transparency going on. because injury reporting regularities, that seems to be being highlighted now. what we know about those numbers, they remain resolutely low for volkswagen. hans: one way to put it, caroline. than thes lower industry average. this is a report put out at the financial consultancy group. they look at all of the injury and death reporting across all the 11 major brands in the u.s.
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volkswagen is the lowest. i have not said anything if they will reinstate, but honda has their reporting. volkswagen came in lower than honda. the number is just a little quirky, we will see if there's much more to that. caroline: we will see how the shares reacted, how they perform on this latest set of news. thank you very much indeed, hans. plenty more coming up, including why the fed should wait. the imf director urges the u.s. central bank to hold back on the rate hike. >> i do not agree. the fed needs to do what is right when it is right. when you look at the united states, in terms of wage and price inflation, you will see that the conditions are there now for the fed to increase interest rates. in fact, our recommendation is
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for the fed to wait until there are tangible signs that inflation is really rising to the objective. caroline: we will have plenty more from that imf and world bank meeting. managingwith the imf director, christine lagarde. after an hour later, we speak with the world bank president jim yong kim. p.m., we speak with the eu commissioner for economic affairs. that is at 7 p.m. we are on the ground in lima. >> i have been very clear. i think that there is no reason to raise rates until you see the w whites of inflation's eyes. i'd look at the data. i look and don't see it as close
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to the horizon. treasury former secretary makes it very clear. we will discuss inflation, coming up next. ♪
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caroline: welcome back. 6:15 in london. here are the top stories you need to know this morning. deutsche bank is bracing for its worst results in at least a decade. the biggest investment bank in europe expects a 6.2 billion euro loss in the third quarter, after writing down the biggest section. they are boosting litigation reserves and say they may cut or even scrap the dividend this year. upnese mainland stocks are after holiday. shanghai composite is headed for its steepest advance in four weeks. it comes after $.29 in the first
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quarter. volkswagen's top u.s. official will tell us that he was aware of the emissions in 2014. he was alerted after the publication of west virginia university's study that found that diesel models admitted far more during driving conditions than allowed during federal standards. now earlier, we heard from the imf director of market. his message to the u.s. federal reserve, there is no shame in waiting to hike rates. for the latest minutes released today, former treasury secretary larry summers has said that holding off on a rate rise is exactly the right thing to do. larry: i have been very clear. reason that there is no to raise rates. until you see the whites of
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inflation's eye. i look at the data out there. i do not see inflation as close to the horizon. i think we have to be focused on making sure that we're doing everything we can to grow this economy. i talked before about public investment. there is also a lot we can do to spur private investment. i think government does the to recognize that confidence is the cheapest form of stimulus. wages are not going up because the power is with the employers. there are basically more people looking then there are jobs. so the power is with employers. they do not have to pay more. i don't see how you can look at third-quarter growth forecasts that are running at about 1.5% . that is pretty close to stall spped. eed. and when you slow down, it is not good what happens next.
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caroline: on the back of that, we continue to monitor the fed's mom movement. and we went for the european bank. whitesuss inflation, the of inflation's eye. that is what larry summers want to see. we are nowhere near to seeing any inflation. you have zero in the u.k. and eurozone. in zero in the u.s.. you think we are obsessed at the moment? >> that is definitely the case at this point in time. that is correct. you have low or no inflation, that is a commodity story. if you look at core inflation, a more important indicator, it is still under 1% for most countries. i think the main point to remember is that you have had the worst recession in 80 years, since the great depression. but you did not really see deflation. monetary policy was able to keep
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it positive, below the target. but it is still positive. it is why we do think that over the next couple of years, we will be stuck in low inflation targets. but on a more medium-term horizon, i think people need to look at a wider range of options -- going back to target is the most likely outcome. caroline: before we get into the factors driving the outcome, you agree with larry summers that we need to see central banks remain easy. we need to see the boe hold. we need to see the fed wait. we do still have deflation in the u.s. hur: our view has always been that they have to be cautious. and in fact, one of the big risks is the mistake that they do hike too quickly. as the economy slows down very sharply, the biggest view to go back to target is the fact that the economy could fall back into some sort of recession.
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from here, you only have inflation at 1% core inflation. it makes it much harder for fiscal policy to really boost inflation. so it is a big risk. we have always expected very gradual, very modest -- it is only 1%. so much lower than the 5.5% we saw during the last tightening cycle. clearly, that is a view we are taking. the central bank will learn from policy mistakes. we will learn from the fact that you have to keep monetary policy accommodating in the absence of fiscal policy to push inflation back to its target. caroline: for the moment, you see four different factors driving inflation. give, china, investment, us a sense of where you see china for example? how will that drive us going forward? inflationary an
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force, there is a capacity in china over the next couple of years. we will see investment having slow down. it rise, and as a result, you will see the impact. you have had a very minor devaluation, but it is small. that is this inflationary. they have lots of ammunition to stabilize the economy. the fiscal policies are being used. we also expect more of our custom through, and in the absence of that, you could see the economy to continue to stabilize. from there on, dividing support to the global story. basis, ormedium-term china, we do expect that as you move to more consumption-based economy, you are going to see the savings rate -- and china really is the biggest global saver in the world, about 7% of global savings come from china -- that is going to start coming
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down. corporate savings will be hit. the government will invest more. it will come down, and be more confident as they get social security to go and consume, rather than to save money. caroline: again, that should be more inflationary. been great having you our senior global economist, thank you very much indeed. when will the fed hike? crisis? heading for a those are questions we are asking ourselves. in we put jose to the test lima. jose: i don't think the china is in for a financial crisis anytime soon. that is certainly not part of our scenario. , is about 25% of gdp. and it needs to engage in a process of leveraging.
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and do this at a time where growth is slowing, naturally. there are more and more firms which are in a weaker position because the possibility of coming down, and the debts are a capacity that are lower. all of the leveraging will in thealso some default corporate, the exit of some rival firms and banishment to have significant structural formula lows may emerge. >> the officials do not manage this risk greg, is that the number one disaster scenario? e: we think the authorities are aware of what is at stake. therefore, they are already on top of the banks making them more provisional. so that they can get ready for what is coming, which would be an increase in nonperforming stock.
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strengthen andto the nonperforming lows down the road. >> how concerned are you about the fed hike? the famous window, we keep talking about? jose: the window was not there. strategyagree with the in the fed. they need to do what is right when it is right. if you look at the united states, and price inflation, you do not see the conditions are there now for the fed to increase interest rates. in fact, my recommendation is for the fed to wait until there are tangible signs that inflation is really rising towards the objective. >> which could be in a year> ? jose; i do not know. it could be sooner. it is data-dependent. what i am telling you is that last time in september, not
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raising rates, i thought it was right. caroline: coming up on countdown, hot money -- chasing headlines. the global head of commodity researchers take on oil. >> this is a repeat of what happened last spring, chasing usdlines where we had very data last week. at the end of the week, we had a recount that said it was bullish. and the market responded. if that goes down, production will follow immediately. and we should have learned from last bring that that doesn't happen. caroline: banking on what is moving the markets, that is coming up next. ♪ ♪
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(ee-e-e-oh-mum-oh-weh) (hush my darling...) (don't fear my darling...) (the lion sleeps tonight.) (hush my darling...) man snoring (don't fear my darling...) (the lion sleeps tonight.) woman snoring take the roar out of snore. yet another innovation only at a sleep number store.
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welcome back, it is 6:30 here in london. stories ise top morning. deutsche bank is bracing for its worst result in at least a decade. europe's biggest investment bank is expecting a loss in the third quarter, after writing down the value of its two biggest division. the company is keeping litigation reserves, saying it may cut or even scrap this year's dividend. chinese mainland stocks are up at the markets were shut for the week-long holiday. the shanghai composite is
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reaching the highest in three weeks. 29% in the third quarter. volkswagen's top u.s. official will tell lawmakers it was first made aware of the emissions problem in 2014. michael horn will say he was alerted after the publication of a west virginia university study that found it admitted far more pollution and driving then allowed in federal standards. as a were just saying, chinese equities are trading a bit higher today, after a week-long holiday -- the golden week. the man who predicted china's boom and bust, he says investors should use this time to sell. standing by with the details, why this particular stock outlet? sell into high, rather than buying dips. that is according to the man who correctly called china's stock
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market boom and bust over the past year. i will tell you in a second wife. but first, let me show you the shanghai composite over the last year. recently, what happened is that it turned positive on chinese stock. in september of last year, we saw the shanghai composite double through to its peak on june 12. and in a bloomberg tv, no less, on june 16, he predicted a notable crash in chinese stocks. then saw the composite dropped about 40% to a low on august the sixth read since then, we have seen it come up. using volatility come down to. but he is still saying to sell, why? drop,e despite the 40% the shanghai composite index is still above its long-term average. it's valuation is above average. he also says that government efforts will drain market liquidity and dropping volumes
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-- equity volumes -- just that they lack faith in a rebound. what he is saying is waiting for this to drop another 18%. at this point, 2500, for you should buy. but caroline, he is actually standing somewhat on his own with this. the average estimate from eight other strategists, compiled by bloomberg, implied a 12% rally by the end of the. caroline: which one to listen to? a mergerwith china, they're expected to be revealed this week. and it will be seeing to business rivals joining f orces. deal, itan strike a will be set to divide china's most promising internet businesses. julie chen joins us now from hong kong. why would the two mas be willing to work together, when actually renemies.from th
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julie: practicality does trump things. if you look at the market share that they actually occupy, 15% and 30%, combine them and you have a monopoly. we just got news that the companies have announced this this is putting a lot of pressure on the third largest competitor. which is also operating in the same sector. and that company has promised to invest more than $3 billion over the next three years. caroline: we will see. but there is a tightening in china. the cash flow -- how has that affected these companies trying to raise cash at the moment? the likes of jack ma, they have deep pockets. otherthat is one of the factors that might have caused this merger.
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if you look at the companies, they are all pretty much in the late stages of funding rate of. there has been some tightening in the market now, investors are becoming more cautious and putting money into businesses that don't have a clear revenue model. they will see dollars coming in. and that is why makes more sense for companies, these two companies, to merge particularly. if you look at alibaba earlier this year, they also merged or ed portfolios. inch is competing with uber china and globally. caroline: joining forces. lulu chen in hong kong. now, a big day for central-bank waters of a. we will get minutes from the european central bank and the federal reserve. but first, the bank of england. and that is the october rate decision coming up midday u.k. time. let's get analysis now from
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economist at chief bloomberg intelligence. and let us introduce our guest host, anne richards. welcome to you both. jaime, talk to us about the three central banks in focus. to a certain extent, start with the federal reserve being old hat, what we actually learn? jaime: for the u.s., people will be looking for any sign. and whether that matches with what janet yellen comments. it is a few weeks old, you have a lot happened since then. the bank of england is in watch, they will be getting a fresh reading. i will be looking to them for estimates as to what they see the impact of emerging market slowdowns are on the u.k. caroline: anne i want to bring
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you in. maybe even some more tones coming from mark carney. it has been a bit of an outlier, a bit quieter and more cautious. anne: it is interesting, you have the sense that mark carney is more interested in the internal dynamics within the u.k. focusing much more on that, and perhaps he has had more of a hawkish tone than the fed in some sense. if you read the news of the language, whether he can still do that within this broader context, surly the market is not really looking for a rise for many months in the u.k. but the distance between the action and the rhetoric -- view?ne: when is your jaime: i completely agree on this hawkish carney. if you are him and you say the emerging market impacts will be
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.1 of gdp, and you see the expectations out as far as they are, i think you might expect more. caroline: we have had the imf and world bank meeting in lima. a lot of focus on the emerging markets and the slowdown effect we are having in developed countries. jaime, first of all, what are the ramifications? u.k. is less exposed in germany. jaime: i think mark carney said it kind of quickly in parliament, he said that 3% of chinese growth, if it is curative, you get .1% of u.k. growth. that is borne out in the imf forecast, as well. it is more of the euro as a whole, and we will see how it pans out. caroline: is the u.s. essentially getting too worried
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about china and the emerging markets? much coldlittle too water being thrown on china, in particular. anne: when i read the stuff from the imf, i thought, my goodness, they must've slashed china since april. have not changed. they're exactly the same. what they have changed is the downgraded u.k. numbers, japanese numbers. and some emerging markets like brazil, south africa, some of the more commodity and oil market. but if you read the headlines, it seems perverse. in aggregate, from what they're looking at next year, the market growth is still running at twice the level. so it seems to me it is really simplistic to say there is an emerging market problem that is contaminating the developed world. the numbers do not bear that out. caroline: should we be hiking rates sooner, rather than later? is there an issue at the
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moment, even negative territory in the u.s., should we start to see rate hikes? soon anne: it is very clear we are talking about bringing inflation back into the system, as opposed to conventional monetary policy that says you cut rates when you are trying to reinflate the system. i think this shows we are at the limits of what conventional monetary policy and economics can tell us at this point in time. we are in the slightly strange new world. i see no reason why we would want to change the price of money. and in the u.s., you see considerable tightening to other mechanisms other than interest rates already this year. that seems to me we are as tight as we need to be for now. caroline: would you agree, jaime? where are you seeing these numbers going? and when should we start to see a reaction from the central bank focusing on that, rather than the cold winds blow from the
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emerging markets? jaime: i am not sure the discussion will change. we will see inflation come up quite fast. these are projected for the monthly inflation numbers, 2.1% by the end of the year. people suddenly think, hang on for a minute, is below target. it never really went away. and i think the tone of the discussion will change a lot. and when inflation is rising, it is a lot easier to convince people that a rate hike is necessary and is coming. i think as mark carney said - - caroline: commodities have not really stayed much overvalued. what is pushing the inflation rate backup? time; last year, the comparison was simple basis. once people realize the rates
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will come through, it will change. to gete: jamie, great your perspective. we will be sticking with an ne richards, sticking with us to talk much more about all of the central banks we are eyeing up this evening. coming up, more central bankers. but this time, south africa -- we look at the emerging markets. front and center of his mind, we get his take on the hike. and how it might play out in emerging market. >> and replacing of south african assets, and what we have capital have been flowing not just out of emerging markets, it is flowing out of emerging market funds. outlook is one of
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growth. caroline: we will be looking at that after the break. keep with us. ♪
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caroline: welcome back, it is 6:46 in london. here are the top stories you need to know this morning. deutsche bank is bracing for its worst results in at least a decade. europe's biggest investment bank expects a 6.2 billion euro loss in the third quarter, after writing down the value of its two biggest division. they're facing litigation reserves, and say make cut or scrap is years dividend. chinese mainland stocks are up after the markets were closed for a weeklong holiday. index tumbled the 29% in the third quarter. seen september
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numbers jump by 21%, and this time last year. the airline says the comparison was affected by the strike in 2014. chiefs world's finance are gathered in lima, peru for a summit. it is around the timing of the fed rate hike. we caught up with the governor of the south african reserve bank. unsurprisingly, the fed was at the forefront of his concerns, too. -- it iscommentated by complicated by what the effect is going to do and when. we seem to know it will have some impact on the fed hike. the question is when it will take place? and how does it affect emerging economies, in particular, a
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country like south africa? we have channels through which we think about the impact. firstly, a repricing of south african assets. this is mainly through the exchange rate market. and what we have seen is that is flowing not out of emerging markets, it is flowing out of emerging market funds. iny have managed forecasts outflow. and the second is growth. the fed hikes rates because the u.s. economy is strong. that is good for the global economy. and emerging markets will surely benefit. >> if they delay, it makes your job little bit easier. you think it makes them delay or you want the uncertainty? >> the uncertainty is not good for anyone. the fed making the first
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everyone will still ask, will they continue? or will they be on hold? one thing that is clear is that we will continue to have global development. >> the revised your forecast down for appropriate how did that impact your interest rate cycle? >> we target inflation. so what we have to look at is what the forecast for inflation is, and we will be out of the first quarter of the year. in both quarters, we are not concerned. because the reason we are out of targets in both quarters is because of assets. the first quarter of this year, inflation was low. the third quarter of this year, we predict inflation will be low. of thekeeps us out target.
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the aspects we have identified one being the threat which is dependent on what is coming out of the fed. but in the case of south africa, exchange rates are impacted by the commodity cycle. commodity prices -- south africa is a country that has this global realignment of exchange rates, in particular, exchange rates of commodities. >> where you see the run going? that the level is determined by the process of demand and supply in the foreign exchange markets. concern ist is of whether the depreciation put itself into domestic inflation, or whether it comes up shocking. effect, wend round
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would have to deal with the consequences. >> you are in a very difficult situation. when will you be able to determine if the end of weakening is here? >> we do not target exchange rates. >> i know -- >> there is another aspect that you bring to the picture. this time around, it coincided with the low end price. it plays a mitigating factor, why inflation in south africa is concerning. there are other pressures. will beother dilemma that you have slow growth and you still have inflation as if you are a commodity importer. because a boom commodity prices are low. if you're a commodity exporter,
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it will combine with the weakening of the exchange rate. and that would take the pressure off. the souththat was africa bank reserve officer. the predicament of central bankers, we have temp from, joining anne richards, you are talking closer to home. the bank of england. : looking at the bank of england, showing the chart. what i thought was smart about it is that it shows the many problems that they face. one of them is the volatility that we are seeing, and mark carney has been talking about how it can impact to this. it shows how the bank of america index, which looks at volatility it wasties, currencies, the highest since 2012. that is a big thing they have to
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deal with. another thing, real wage growth -- 10 months of rising in the u.k. how they face all this? inflation is the zero. caroline: you have been looking, anne, feeling that it is the bank of england admitting to some of the headwinds they are facing in the economy. at the moment, is the market right the thing that 2017 is when we will see the first rate hike? anne: i think we have to see how the inflation numbers pan out if we go into next year. but what you're seeing is a bit of a challenge to the view that some people have. central banks have been focusing on asset prices, not enough on the real economy. if you focus on the real economy, ask what are the drivers, they are very limited. you cannot see if you look at what the real economy is doing, and really compelling reason, to shift the price from where it is today. to me, that is a challenge. they're worried about volatility, you are right.
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there were to asset prices. but they should be worried more about the transition mechanisms in the economy. why aren't the large investment economies investing more? borrowing more to invest rather than buybacks? i think there are some big questions to that, about are we giving the central banks the right mandate? are they focusing on the things that matter to the real economy, as opposed to just asset prices? tim: when you look at manufacturing pmi, they are turning lower. the economy is probably not going in the right rectum. it is not really working. anne: there are a few things going on that might change a dynamic going into next year. the rise in the minimum wage. the trends we are seeing a not just the middle wage but what they call a living wage, which is little more. this desire to get companies to
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pay more to the lower end of the staff, rather than the staff having to rely on benefit systems and tax breaks coming back. the taxpayers subsidizing some of those wage of bills and services, and it might be that we start to see that coming through more strongly going into next year. which might give more of a compelling reason. but i don't we see it yet. caroline: we will have plenty of coverage on the terminal throughout the day. i think we even have a live blog of the bank of england starting today. from our economies in the economics department. and we will be on and of course speaking much more about central-bank policy with anne richards going forward. and german issues as well. beingche bank brai embroiled as well. coming up next, double trouble for germany. as we were saying, with deutsche
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and volkswagen in question, we go to hans nichols in berlin for the latest crisis in the economy. stay tuned. we are back after short break. and i want to bring you a beautiful morning here in london. the city of london. stay tuned, we are back after this very short break. ♪ ♪
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anna: europe's biggest investment bank sees a third-quarter loss of 6.2 billion euros, as it tries to eliminate annual dividends. vw is in the hot seat. the carmaker's top official in the u.s. will warn lawmakers that he knew of emissions problems as early as spring, 2014. there is no shame in waiting. that is the message of the imf and world bank as they meet in lima. we bring you key interviews with the voices that matter, including christine lagarde. the bank of england prepares for its october a decision. the expectation is that policymakers will keep rates at
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a record low. welcome back to "countdown." let's bring you the breaking news out of germany this morning. poor numbers. nejra has the latest. nejra: yet more disappointing data, this time trade data. surpluses came in at 15.3 billion euros. this is a decrease from the record trade surplus that they had in july, of 25 billion euros. the trade surplus has come down. also exports for august have fallen 5.2% in the month. before that we had seen an increase in exports, and this time economists had been expecting a drop of .9%, so much
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worse than expected. comes in after other disappointing data we have had from germany, an unexpected drop in industrial output and factory orders earlier this week. all this is posing a big question over the strength of europe's biggest economy. it looks like that drag from china, its biggest trade partner outside europe, the drag from emerging markets in general, could be having an impact on geany's trade on its exports. let's have a quick look and see whether the euro is reacting. i willring up the chart. the euro strengthening earlier but, no, it is still up. we did see a drop after that industrial output data yesterday. less a trade surplus for august from july, and a bigger drop than expected in exports. anna: it is all headlines in germany today.
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deutsche bank has the worst numbers seen in a decade and the vw scandal continuing -- the dax can't catch a break. let's check in on futures and where we are expecting t numbers to open. a down day in germany, the dax just a negative territory at the moment. we are seeing a little more green on the screen for the ftse 100, but clearly we are expecting a bit of a pull downward. a significant move in deutsche bank yesterday, and therefore we are+++
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and u. trading slumped on the adr. that could drag the dax lower and futures are showing that this morning. let's take it back to china, because china stoc did rise, resuming a bit of an upwar trajectory after theeeklong holiday. share trading is not qte as golden as could be expected for the rest of asia. and when you are seeing the likes the shanghai composite playincatch-up, 3% rally wa't quite as much as we we expecting. shery ahn has more from hong kong. shery: definitely it is falling behind investors' expectations. the shanghai composite is ring more than 3%. it is a bit of a mixedicture in asia today. indexgional benchrk over theirst time this week, halting six days of gains. the nikkei fell % after data owed that sheowners fell in august. we also have the cosbyindex, but it managed to and 6/10 of 1% higher. the asx 200 finished 2/10 of a percent higher despite downward pressure on energy players.
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ing 3.2%, one more hour to go for training. hung thing index falling -- hans falling.x let's take a look at some of the big movers in asia as some markets are closing. japan, storage at more than 7.5% after they announced the first half operating profit rose 11%. another stock plunging more than 8.5%. also gaining. these shares are still trading right now in china. the real estate gained more than ers and shanghai
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-- these automakers are rising today after china cut by half the purchase tax on vehicles with engines 1.6 litere smaller. back to you. caroline: thank you very much. china andcations of the slowdown has been waiting on the data here in europe. we just had that breaking german data, worse than expected. but let's check out what week are expecting for the rest of the day. boe, ecb, the fed. boe up first. half an hour later you get the european central bank releasing its account of its september meeting. and last but by no means least, minutes from the u.s. federal reserve at 7:00 p.m. of whether it was more
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hike.ust a glimmer of we are expecting a little more clarity. what do you take from that? europe's biggest investment bank -- let's bring into germany. it is bracing for its biggest quarterly loss in at least a decade. deutsche bank could scrap its dividends after reading down the value of its largest divisions. ryan chilcote is here with the details. ryan, walk us through what we are expecting. 6.2 billion euros is a sizable loss, the most in a decade. ryan: this is the first real cryan andto what john how he views the investment bank. worseillion write-down, than what he took when he came in and ran deutsche bank and
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in 2012. $7 billion net loss. this is a big write-down. the second is the dividend will get hit. he announced they could cut or eliminate the dividend altogether and that is a big deal. last year the 2014 dividend payout was $.75. early summer next year, it's not clear what shareholders will get, if anything. the third takeaway -- the bankers were told, your bonuses? those might get cut. the ceos saying if we are going to have shareholders take a hit, then you have to share the pain. caroline: i want to bring in and richards. -- in anne richards. an interesting trend. should the employees return?
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anne: there is an increasing narrative going around -- hang on, why should shareholders take variable compensation? that is a shift -- that has not been something that was overt in previous cycles. but you have seen that really coming into play in the last couple years, and i think the deutsche bank one is bang in the middle. but then it puts them in a really competitive bind. the morgan stanleys, goldman sachs, they will be dialing those bankers today, the ones they know can bring in the deals. it puts them in a difficult, competitive situation. difficultryan, competitive situations for shareholders as well. people are really analyzing -- the share plummeted in abr. -- in adr. yesterday inthat
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extended trading and we are seeing indications that they will fall today in germany, perhaps with the dax. we shall see. if you look at the share price for deutsche bank ever since the current ceo turnover, they are down 8.3%. i guess i wouldn't want to have owned either of them. bankings outperforming sector, one that is on a downward trajectory. caroline: ryan chilcote, thank you. let's stick on germany and head out to volkswagen. will telland that vw a congressional committee in washington today that he knew there was a problem ahead of the vw u.s. news. the admission may affect the ultimate sign that the environmental protection -- hans nichols has
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more. what to the top u.s. executives know? operator knew that in the spring of 2014 a possible admissions noncompliance. here's what he will tell the congressional committee in just a few hours. "i was informed that technical teams have a specific plan to bring the vehicles into compliance, engaged with the agencies about that process >." a volkswagen spokesman says he didn't know the software was installed. today, we will hear from the epa on how they may assess damages. what they may look at is the economic benefit that volkswagen dieselsy having that weren't up to par. economic assess
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benefit from noncompliance and pursue appropriate penalty. volkswagen will not be trying to certify in 2016 their diesel engines, essentially pulling back, if not pulling out of the u.s. market. hans, you are a man in germany. give us your take of the german export numbers, slumping the most since 2009. that was of the midst of the financial crisis. hans: is numbers are bad. these are august trade surplus numbers and they came in much worse than expected. the exports are down 5.2%. the july numbers were incredible, so we went from the trade imbalance of 25 billion to 15 billion, and those july numbers were so good. but for everyone wondering just how and when germany is going to be affected by the global economic slowdown, we didn't see greece make an impact in the
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second quarter gdp. now we may see the effects of greece uncertainty in july. importantly, what is happening in china with the slow down and the auto sales. remember, these numbers don't include the volkswagen effects we have seen in september. one final note -- if you look at deutsche bank not paying bonuses, what is happening in the auto sector, i have an assignment for you. dealershipto an audi somewhere in frankfurt when bonus seasons are paid and see if you can find any deutsche banker trying to buy an audi. it is a story on so many fronts, volkswagen, deutsche bank, the german economy. caroline: yeah. maybe even bmw could be hit. hans nichols in berlin, thank you. let's bring back and richards. -- anne richards -- how worried
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are you? anne: you must think mrs. merkel wakes up and thinks what will go wrong next. germany is the powerhouse of europe, germany is what helps lift the european economy as a whole after the 2008-2009 crisis. we are starting to see one company after another get itself into difficulties. i think it is really tough. this is an supposed to be happening. all those business school students out there in german but i think there is a feeling that if a company you deal withnd it in the right way, you can end up in a stronger situation. although the story about volkswagen knowing what was going on for a bit longer than we thought was the case, that might dent this.
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but the key now is how they deal with the situation that they are in. all the vehicle recalls they will do next year -- they have a plan in place. it is probably very prudent that they step back from the u.s. market this year because they know there will be class-action lawsuits coming down the line. better not to sell. it sounds to me like having been a bit blind at the wheel on this for a while, now they are really kicking into action a plan to force it out. i think that is necessary, but as you say, we don't know who else will be affected. bmw, the other manufacturers? there are so many components that go into these cars. there is quite long chain and there are multiple products sold across multiple different lines. i think there's more to come on this. caroline: stay out of german not as? to always,ave always, always do your legwork and work out the price of the risk. i wouldn't give it a blanket
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absolutely not. they are high-quality products. that proceed with caution definitely. caroline: wonderful having you on. we always enjoy your views. thank you very much. hope to have you back soon. anne richards. caing up on "countdown
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caroline: welcome back. dawn is breaking in london. 7:19 here. here are the stories you need to know this morning. --man exports are expected
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german exports unexpectedly slumped. foreign sales declined 5.2% in august. economists expected a fall of .9%. it is yet another sign that europe's largest economy is susceptible to risk from weakening global trade. deutsche bank is bracing for its worst result in a decade. investors expect a 6.2 billion euro loss of the third quarter after writing down the value of its dividends. they are also boosting litigation reserves and say they may cut this year's dividend. officialn's top u.s. will tell congress that he was aware of the admissions problem in 2014. he will say he was alerted to a study which found that diesel models of the passat admitted far more pollution under actual driving conditions that allowed
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under admiral emission standards. back to central banks. we will get minutes from the european central bank today, and the federal reserve. the first outcomes the u.k., the bank of england with its october rate decision. let's get some analysis from the chief european economist at bloomberg, and also with us is jeremy cook. there are a myriad of things to look at today, is u.k. the top of your priority? >> it is. ithink we will disagree but think this is the most important one because it is fresh. it tells you a little bit about what happened, but the u.k. will provide the freshest take on data. caroline: and the fresh take, jeremy, could be a little more dovish, concerned about global growth? jeremy: if you looked at the statement from the september meeting, it really didn't take
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into account what happened over the course of august, the yuan devaluation, the market moves. it is going to maybe raise a couple red flags. you will have to say that the broad trend of the statement is going to be slightly more dovish. the voting record will state that the overall details will be dovish. caroline: they have been trying to talk in slightly dovish terms, perhaps writing and more hawkish terms. mark carney has been in a balancing act. will get aerhaps we little more idea of what the applications could be of mobile growth. but before he actually talked down the exposure. carney said if you have a 3% slowdown in china, you get .3 growth off u.k. growth. a very small fact.
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-- a very small effect. they have become a bit looser. the market expectations for rates are so far off into the future -- caroline: 2017 now. jamie: but if you are carney, you may think about doing something about it. caroline: interesting. tell us about the pay book when it comes to the federal reserve. how much are you paying attention to the fed minutes? the appalling labor data we had on friday -- jeremy: i don't think they really differed too much in the statement we got. whatust have to look at the fed fund probability pricing -- 8%, 10%? the october meeting had been completely discounted.
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i think there is too much to look at in the statement. i think the ecb statement is a lot more interesting. caroline: ecb, you expect? jeremy: i think we may start to see some chatter about cutting the lower bounds of interest. caroline: not qe? jeremy: we may see both. once thel brink federal reserve at the moment -- everyone is waiting to see. it has only worsened. but i think the hawks on the european side of things will sit there and say -- we don't have to pre-commit to anything around extension of qe the on september, 2016, but i think there is a possibility that through the impact, we will have an interest rate cut that will be a lot more beneficial to the european economy. caroline: do you agree, jamie?
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jamie: more broadly, we aren't expect any changes before the end of the year. i don't see the incentive to do it. is probably worth waiting to see what happens. therenutes themselves, will be a bit more discussion of the impact of low oil prices. but that doesn't really tell you anything. i am not expecting too much from the minutes but we will see. when we: your view on will start to see movement from the u.s. federal reserve? -- the marketng probability is not even factoring in a rate hike this year. we understood that janet yellen does have her sights on 2015. jamie: there is still a very big disconnected what economists think will happen and what markets think. that is largely because
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economists focus more on measures of slack. the fact is that inflation will start to pick up, and very soon. u.k.'s he just will see 1% by january. that is a fairly sharp -- i expect to discussions to change. caroline: and the bank of england has been pushed out to 2017. is that the market just focusing far too much on the location? jeremy: i think it is a bit of an overreaction to the news about emerging markets. it is a lot less that people would normally expect and i think we have overreaction.i'm still happy with my q2 expectations. i don't think we will see too much change over the next couple weeks. caroline: been great having you. thank you.
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coming up on "countdown," trouble brewing on all fronts for germany. deutsche bank and volkswagen face murky future is in german exports slump the most since 2009. ♪
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caroline: 7:30 here in london. let's have a check-in on the top stories you need to know. german exports unexpectedly slumped fo the most since the 2009 recession. economists had expected a fall of just .9%. it is yet another find that europe's largest economy is vulnerable to risk from weakening global trade. deutsche is bracing for its worst result in at least a decade. biggest investment bank expects a 6.2 billion euro loss in the third quarter after writing down the value.of dividends it is also boosting
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boosting --o volkswagen's top u.s. officials will tell lawmakers that he was made aware of the emissions problem in spring of 2014. he was alerted after a west virginia university studies that models in that it far more pollution under driving conditions than allowed under federal admissions tests. let's have a look on how the german corporate stories are weighing on futures. we are expecting a next to lower open. we are expecting the dax to move about 1/10 of 1% lower. the cac faring not quite so badly. deutsche bank is being called out up to 10%. the adr fell significantly yesterday. could be a substantial selloff in yet another dax heavyweight.
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we had a four-day rally. let's talk more about vw now, because there is a triple threat for germany, europe's biggest economy posting week data three days in a row. deutsche bank posted a major loss and vw headwind continues. our international correspondent is. on standby in berlin -- is on standby in berlin. is it a crisis? hans: we now have four days of negative data. if you count that pmi revision, which revised downward, still above 50 but a little troubling. than we got factory orders on tuesday down 1.8%. yesterday we got industrial production down 1.2%. both of those are august numbers . today we get the current account surplus and traded balance, exports down, sales down 5.2%.
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current account surplus is down, which is quite low for germany. trade imbalance at 15 billion. unless you think the biggest problem in the global economy is germany's traded balance, which sometimes you do hear that, unless you think that is the biggest problem, these are very disappointing numbers. throughout most of the first half of this year going into the summer, everyone has been looking to germany as an engine for growth inside the eurozone. yes, we had some positive numbers out of greece for the second quarter. a lot of that could have been capital goods expenditures are consumer goods. but we haven't seen as a pan-european recovery. france's flat and now germany looks like it may be flatlining. these are preliminary data, and in some way the preliminary data and the fact that it is a lagging indicator should give us more concern, because none of these numbers are factoring in what's happened at volkswagen this month.
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that is not only a psychological blow but a real economic output blow as well. caroline: it certainly is. the refugeeet, crisis is still on hand. how is angela merkel responding to her internal party critics right now, that she is letting into many refugees? she: you know, last night doubled down and almost started a new media frenzy. she gave a speech in strasburg and had those meetings, and what she is saying is that she will not accept a refugee cap. there have been calls on that from her sister party, even from within her own party. can germany withstand what is now expected to be, according to an internal document, 1.5 million asylum applications this year? for member the number was 400,000, than 800,000. merkel is insisting that we can do this and she keeps writing we can make it happen.
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she told mp's yesterday that insisting that the german economy -- and importantly, german society -- can withstand this, and that she has a former easterner knows what it is like to live behind walls, live on the other side of the fence. she doesn't want to see more fences in europe. caroline: hans nichols. thank you very much. germany andre on deutsche bank, europe's biggest investment bank bracing for its biggest quarterly loss in at least a decade. the comfort is standing by in frankfurt. nick, how bad is it is deutsche bank does indeed have to strap its dividends? it is the first time in a while. nick: yeah. when we ran the numbers -- it
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looks like this is the first time since post-world war ii reconstruction of germany. that gives you an idea of how drastic a measure that would be. that looks like the deutsche bank stock is pointed down today, on the back of that news. but the silver lining for some might be -- it is an initial negative, that this would help them address the issue of their capital ratios. caroline: capital ratios and capital strength, but to some extent, many people feel it is time to get a clean slate. what does it tell us about his own view of the bank? nick: yeah. i think the real issue is that we see the investment bank isn't a living up to the company's expectations so far. capital is -- it is consuming too much capital. we also have a hint as to their washua bank, which they have
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a 20% stake in. they are saying they could sell it. to raise capital, they may sell this stake. caroline: much to be done. you have stakes in china, capital ratios being analyzed. do you think all of this bad iss being brought out now, it a kitchen sink? will we then see people look forward on deutsche bank's future, and give john kline a more clean slate? nick: so -- it it is tempting to think so. but we have very clear statements in memos published by the bank saying that litigation will continue to be a burden. they took a 1.2 billion euro litigation charge in the last quarter. that is coming on a regular basis. large charges happening for the coming quarters. we are long way from being able to signal an all clear. the hard work has only started.
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he has to come out and show how we can sustainably drive cost down. a lot of investors are hoping for a net cost reduction. we will see how his future does indeed turn out. in the meantime, thank you. nicholas comfort. let's focus more on the corporate stories of the day. joining us is robert smithson. thank you for coming in -- a wealth of corporate news. give us your sense on corporate germany at the moment. is the dax -- you can't do much of a break. richard: there certainly has been some bad news in the last week. what is interesting is that if you take a slightly longer-term
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picture and the look at earnings estimate for the dax, they have risen about 10%. it is interesting -- we see all this big corporate data, for what analysts are expecting in terms of 2015 is slowly rising. some of that is simply a consequence of the weaker euro, but at least some of it as consequence of the domestic demand in germany, and we'll have a tendency to overly fixate on external things. it remains quite strong, and we are seeing the german consumer, which has long been a week part, coming for. caroline: so don't go trying to sell out of the dax entirely. the what do you think about the banking situation, the fact that we are now not only focusing on bonuses being cut, but indeed the dividends being slashed? is this a strong statement? can we start to see this being replicated by other lenders? how much more is to come? germany,just thinking
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i guess deutsche bank -- they are a bit of an odd beast by the standards of european banks. they really is the only sing if eurozonecant investment bank. they maintain ambitions to fight toe to toe with goldman sachs and morgan stanley, and all that means in terms of the amount of capital. almost everyone else, whether it is french lenders are u.k. lenders, retreat from investment banking because it is so capital-intensive. theuld think that this is new chief executive taking a closer look and saying, actually, are we better off being the german bank, or do we want to maintain this ambition of being a global player? they are selling post back,
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which is another story altogether. that there isubt a look in terms of what does deutsche bank want to look like on the far side of his reign? he is looking at a more concentrated bank, one that looks like corporate germany of theone, moving out more capital intensive or difficult areas. caroline: you have to also look at the german data coming out, the export slump. i know you are saying earnings forecast is picking up, but should we be worried by the amount -- it seems that germany's impos exposure is pinned to china. richard: germany does have the biggest exposure of any developed market. if you compare it to the u.k., exports to china in the u.k. are about .7% of gdp, north of 4% in germany. germany is significantly more exposed.
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but we do have to remember that there are second-order effect. the slowdown in china means lower commodity prices across the world. the impact of that on economies, developed economies, particularly big, resource importing economies, could be larger than the impacts of reduced exports. i would also caution slightly about overly fixating on one month's numbers. august was quite a long time ago, and it is by far the quietest month of the year for corporate activity. we had a very volatile numbers in the past, but i wouldn't overly fixate on these. caroline: a little more optimistic than the market. richard: a little bit. caroline: thank you very much. we will be talking much more about all the central banks numbers. minutes aplenty, decisions coming.
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we will also be sticking with our main theme -- trouble for germany. as corporate giants deutsche bank and volkswagen face murky futures, german numbers of slump in the midst of a recession. what it means for the market open. ♪
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caroline:; 46 in london. here are the stories you need to know. german exports unexpectedly slumped the most since the 2009 recession. foreign sales declined five point 2% in august from the previous month. economists had expected a fall of just .9%, yet another sign that europe's largest economy is vulnerable to risk from weakening global trade. bracing for its worst result in at least a decade. their biggest investment bank expects a six point 2 billion
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euro loss in the third quarter after writing down the value of its two biggest divisions. they are also boosting litigation reserves and say they may cut or even ignore your -- the dividends. will tell congress that he was first made aware of and omissions problem in spring, 2014. he was alerted after a west virginia university study that models admitted far more pollution under actual driving conditions then stated. the openvving up to this morning -- let's get a look at what stocks we should be looking at -- nara churches with us. germany.on nejra: absolutely. some analysts are calling the stock as much as 10% lower at the open and this is after europe's biggest investment
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banks quarterly loss in a decade. it also might take no dividend this year, a division that stood since germany's postwar reconstruction. deutsche bank is writing down the value of its two biggest divisions and boosting reserves of legal costs. we got all this in a disclosure late yesterday. -- this isg ahead the world's biggest sugar refiner and they are reporting the decline in first-half profits, some calling it slightly lower at the open, and i will be keeping an eye on volkswagen. this stock has had a three-day rally but what we heard is that the u.s. ceo of the companies said he was made aware of the possible admissions cheating. this came out in a testimony to be presented to a committee of
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the u.s. house of representatives later today -- keep an eye on that. a trio of german stocks to keep an eye on -- thank you. watch -- a big day for central bank watchers. the announcement from the boe, ecb, and the fed. first we get minutes from the bank of england at midday u.k. time. 12:30, the ecb releases its account of the september meeting , and then we will get meetings from the u.s. federal reserve. let's dig deeper into what to isect -- still with us robert smithson. thanks for sticking around. you have an interesting take. fallhought the market was too focused on an earlier rate hike.
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robert: was interesting is a level of inflationary pressures inside the united dates. tended to see inflation rise as economies hit capacity, and that is what the bank of england or the ecb worries about -- they worry about inflationary pressures coming up against their natural bounds. in the united states right now, we see a lot more labor slack than the headline number might suggest. right now it is 5.1%, among the lowest in the world. but the labor market participation rate in the u.s. has dramatically declined since 1999. in particular in the post-global financial crisis period. context, if you look at the years before the financial crisis and say what level of employment what i would if it was 5.1% -- i
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expect about 63% 64% of all americans to be employed. the actual numbers 59%. interesting is that is very much an american phenomenon. if you look at europe, the number of people, the proportion of people employed has risen since the beginning of the eurozone, which is rather counterintuitive. but it does suggest that there is a lot more slack, a lot of discouraged workers. ininal data point -- weight 1.8%, and if you look at annual wage growth, that is the second lowest number in 25 years, which is not suggest that there is any significant inflationary pressures in the u.s. caroline: so no rate hike this year? robert: very likely.
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a funde: so you are manager -- where are you adding at the moment? it will probably add more in the ecb potentially -- where the eurozone should be putting our money's worth? robert: the first thing to remember is economies are for more domestic than people think. -- eurozoneis countries growth rates are going to be changing and domestic savings ratios. investment levels are running well below across the eurozone, despite very low levels of interest rates right now. that as youion is see the leveraging come to an end in countries like spain, that will kick through into higher economic growth, which is
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already happening in ireland. you have -- the number was close to 7% gdp growth. we are beginning to see it in spain, and i suspect a number of other periphery countries. caroline: go long retainer? robert: consumer is quite an interesting sacked -- the egg,em is that there are structural changes going on in those industries. i'm sure all of us being amazon customers -- hi speed is a less important place to do your shopping now. nevertheless, there are opportunities to make money. and property and retail and even outside germany in the banking sector. caroline: interesting. thank you very much. it has been great having you on. robert smithson, telling you to potentially get into property purchasing. a few minutes ahead of european equity market open, futures are
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playing a mixed game. jon ferro is here -- what are you watching? i know central banks are your thing. jonathan: at the open we will be watching one thing -- deutsche bank stock. if you are an investor, you are bracing for impact. is unveiling the biggest quarterly loss for the firm in at least a decade. we surprised by how big the kitchen sink is? maybe. we have a lot to talk about, and not just deutsche bank, but the sector as well. that we have to talk about german data. the triple threat. factory orders, industrial production, no german exports plunging over 5%. is it to prelature to start talking about a slowdown? this data is from two months ago -- we need to catch up and think about what is happening in europe's biggest economy, and whether china will take a bite out of it. caroline: meanwhile, dax futures
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are just down 2/10 of 1%. it doesn't look like the deutsche bank will drag you down. jonathan: you have to talk about that particular index. this is the deutsche bank story, not a german dax story. the rest of europe should be worried as well if the data in germany continues to soften. caroline: we will be giving more from you in under five minutes. jonathan ferro. stay with bloomberg for more on that market open. jon takes the helm, but we will have much more through the day on the imf and world bank meeting in lima. francine lacqua is speaking to christine lagarde. stay tuned. ♪
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jonathan: good morning and welcome to "on the move." just moments away from the start of european trading. it's a bank races ceo john cryan confirms the firms biggest loss in decades. china bites. german exports -- europe's biggest economy shows further signs of weakness. decision time. mark carney is in the hot seat as we await the latest decision. investors are searching. ahead of the open, 20 seconds away. futures dead flat. is data in germany that
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telling one side of the story. everyone wants to know how does deutsche bank open. caroline: perfect storm brewing in germany. the data is lower. the corporate stories are becoming gloomy. week, it waslding up. the mainland was closed. a little bit of risk aversion. equities trade lower here it cap trading flat this morning. we did see slight higher points yesterday. maybe a little bit of ketchup in the u.s. we are having a look at the euro. haven't bunched much in terms of german data. exports


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