it is decision date for the ecb. we will discuss the future of quantitative easing as he has already done with his counsel. this is bloomberg. ♪ matt: welcome back to "bloomberg markets: european open." mario draghi opened a debate with his counsel about the future path of stimulus yesterday. it was presented with the werening council -- they presented with various scenarios for winding down asset purchases according to people familiar with that meeting. inserting the discussion, the ecb president followed through on a july pledge to start talks in the fall. a formal announcement on the next debt may not, in today's press conference implements next october. joining us down the line from amsterdam is the senior eurozone economist for ing. let me first ask you what you are looking forward to hearing. what you are especially on the lookout for from the ecb today. obviously, it is going to be about what he is going to announce. more so, what he is not going to say. he has to bank meetings left. that would be a huge cli

matt: the ecb leaves stimulus settings unchanged. >> the euro is rising despite the ecb. matt: president trump gets rid a and delays a dac l on the debt ceiling.

i have a chart for the ecb. pricing in euro upside, euro-dollar one year risk reversal, saying the market positioning for euro strength, regardless of what mario draghi actually says later. optiont of one week call on dollar relative to put most expensive in a month. we also have data from the euro zone economy breaking as we just came to a are the euro area , unrevisedwing 0.6% from the estimate growing 2.3% in the second quarter year on year, a little above the estimate. mario draghi finally opened the future path of stimulus. according to those familiar with the path, he prevented officials with various scenarios for winding down asset purchases ahead of the decision. that spring and a chief european economist at ubs. seems to berket positioning for a little bit of ecb and tilt from the mario draghi. is that what we are going to get? >> i think so. we don't expect any firm decision on tapering today. we think this will be delayed until the 26th of october. the reason is the strength of the euro, the appreciat

the ecb is still exploring qe options. and the white house is said to be considering six candidates for fed chair. we begin with the big issue. president draghi urges patience as the economy continues to outperform. >> it is hard to talk down your currency when fundamentals are improving. >> the currency has been a headwind, but we believe we are justified by the domestic strength of the economy. the reason why are not too concerned yet by the euro is it seems to be an exogenous shock. it is a manifestation of the confidence of the eurozone and their policy. >> the eurozone is now growing as much as the united states. and so, i don't know if you change monetary policy if it affects it much. i think the euro is correcting for a changing growth rates that is now reestablished in the eurozone. he is trying to tight rope between not announcing a tapering decision ahead of the governing council, he really didn't have a lot of leverage with his words. jonathan: joining me here is the head of global bonds and chief investment str

the ecb is still exploring qe options. the white house is said to be considering six candidates for the fed chair. the big issue, president draghi urges patience as the economy continues to outperform. >> it is hard to talk down your currency when fundamentals are improving. >> the currency has found a headwind, but we believe we are justified >> by >> the domestic strength of the economy. the reason they are not too concerned by the euro is it exogenous shock. it is a manifestation of the confidence of the eurozone and their policy. >> the eurozone is now growing as much as the united states. i don't know if you change monetary policy if it affects that much. i don't know if the euro is now affecting the changing growth rates now established by the euro. announcing some sort of tapering the decision ahead of the governing council. he did not have a lot of room to move. jonathan: joining me is robert tipp, chief investment strategist at pgim limited, also eric stein from eaton vance, and trey parker at highland capital man

maybe some formal guidance as to how the ecb -- sorry -- how the ecb sees its own policy the coming months. the real news is supposed to come when he speaks, because then he is going to give his flavor of the discussion and say when they have arrived and what sort of exit they will have from the extraordinary stimulus. lisa: thank you so much for that , i'll us on --alessandro speciale covers special banks for us from frankfurt. investors will be watching closely, hunting for clues about purchasingof programs. also in focus, the euro, higher for a fourth day after hitting a two and a half year high just last week. joining us from london, the head valentin masearch, rinov, and jeff allen. much to you expect mario draghi to come out and make a statement about how strong the is ais in that this concern for the ongoing recovery in the european economy? valentin marinov: i do expect -- good morning, i expect them to be front and center of the press conference. even if mario draghi is reluctant, there will be questions about the strength of the euro and, indeed, over the aggressive euro apprecia

do we see an end date from the ecb? >> i think the ecb will not give an end date. they will bring us down to 40 in the first half of 2018, 40 billion per month. then see how that works. they'll gradually bring it down. i wouldn't be surprised that we still have qe being done into 2019 also remember, they'll continue to reinvest all the maturities the bigger maturity block starts in 2019. it could fit nicely that you finish tapering almost in 2017 a bit into '19 and then maturities pick up to keep that yield lower. >> all right reinvestment pretty important too. >> yes >> thank you very much for that. david zahn from franklin templeton. >>> decision time, we'll bring you the latest from the ecb. expect analysis and market reaction starting at 13:30 cet with the decision at 13:45 cet. >>> during the show, we'll have an interview with the managing director of lazard, that's jorjorg jorg asmussen and we'll bring you live coverage of mario draghi's press conference from 14:30 cet. see you in two . >>> hello. welcome back to "street signs. i'm carolin roth these are your

turning attention to the ecb meeting, according to the bloomberg economist, ecb president mario draghi will express concern over the single the. he will not -- single currency. x-rays are saying he will not announce a change -- experts are saying he will not announce a change. lifeng us now is our market strategist richard jones. try the tackle the sensitive issue, which is the euro? richard: the most important thing to focus on if we have to get the staff forecasts updated through september. the last one we had in june, it of course euro, they had their expectations for the euro to be $109 nextis year and year. the euro has increased quite sharply since then. it will be interesting to see what they say about inflation, whether the strength of the euro downorced them to ratchet their inflation forecast with is year, next year, and 2019. i think that will probably set the tone for what mario draghi has to say about currency. it might come up in the queue a but iut i suspect -- q&a, suspect it will be in the updated market forecast, mark. paul the question i asked dobson, your buddy come

the ecb does not talk about the currency specifically. how will he talk it down without talking about it specifically? it's very clever andy is a market man and he knows how to manipulate markets and he might indicate not necessarily the level but the pace, to try and keep a lid on things. if he doesn't say anything, it is a green light for it to go up. thank you. and he will be coming back with this great story about disru pters will be coming back with this great story about disrupters in the tech sector going into traditional banking. and from software to space, we are also going to be talking about another disru pter, but we are also going to be talking about another disrupter, but that is to do with it. mark shuttleworth will talk about being a tech disruptor and space explorer. you're with business live from bbc news. let's talk music. we have it all in the show today. space, music, money, everything! britain's music industry continues its strong performance with a big rise in exports in 2016. trade body the bpi says exports were up

stokes ecb, following the arrest of ben sto kes o n ecb, following the arrest of ben stokes on monday in bristol. more on that on the bbc sport website. you can keep up to date with the rugby league world cup and the everton match later on. that is all for now. more on bbc news throughout the evening.

what do we expect out of the ecb from mario draghi? >> i think the markets are very much looking forward to some statements about the timing of tapering. recent statements that we have had indicated they might be looking to postpone the decision until december, when it is actually the end of the program anyway. the problem then is that until then, the markets could remain stable, because they keep on pumping this liquidity in. people have to adjust their positions in about 10 or 12 trading days, before the end of the calendar year. the other significant thing we will be looking at, this is a big surprise at jackson hole, there was no mention made of the currency. shery: the euro strength? >> yes, the euro strength. and i think this will have global repercussions, because if you look at the rally in the asia-pacific region for example, it has all been about the euro-dollar. since februarysomething of 2016, between the regional equity markets and the euro-dollar. what is really significant is since may, the correlation has picked up but

that is a problem for the ecb. the euro now is close to its long—term equilibrium, but it has overshot the data. if draghi cannot persuade markets that they have the policy tools to meet that inflation target, there is the risk the euro will strengthen much more, dragging the ecb further away from the inflation target. so although he does not want to be seen as directly intervening in the market, today he has to acknowledge that the strong euro suggests risks to the inflation outlook, which they have to address. we will be watching very closely. thank you for coming in. we'll make sure we update due later today as we get news from the decision and the press c0 nfe re nce get news from the decision and the press conference that follows, conducted by mario draghi. we are also in the us, where nearly 100 people a day die from opioid drug overdoses. most addicts start with legally prescribed medicines for conditions like chronic pain. now a canadian drug company is developing a way of treating these conditions using

qe ecb plan to unwind the program. we know the next step by the ecb will be step to tighten its monetary policy. that is more important than anything. and we see some change, would rather be prepared. that isat expectation tied to monetary policy, do you think that could withstand in inflationkness figures or at least below target inflation? while the eurozone recovery seems to gain momentum, inflation in the eurozone is not where the ecb wants it to be. >> no, but it is not only the case in europe. is an u.s., there inflationary dynamic, and we are already operating at full employment. there is a similar issue in japan to which has a much lower unemployment rate than we have in europe. i was in switzerland last week, a country that is probably the most competitive in the world. -- not generating inflation or wage growth. it is a global issue, more than just in europe. i would like to remind that since two months, we have a stable core inflation. at this stage, there is already a victory, in my mind. oils not dependent

i think in terms of the ecb, there is clearly more uncertainty around the ecb. people are expecting preparation for an october announcement, but your own reporters today have been suggesting unnamed sources are going to be pushing that to december, which i think would be potentially a surprising and potentially even risky move to leave it so late. in terms of the fed, despite the weak payrolls report, if you step back from that, i don't think there's nothing in that -- i don't think there is anything in that report that stops the fed from announcing it is going to start shrinking its balance sheet in october. i think if it didn't make that announcement, i think that would be bad for risk assets. i think people will start thinking, what does the fed know, or what is the fed concerned about that we do not know about? tom: price down, yield up. is that one of the risks here, that we see finally yields higher? and prices lower? andrew: i think we could see yields higher. the challenge with the u.s. treasury market specifically is it is the only safe haven in the wor

the markets are torn between data news and ecb. as the august overshoot economy added fewer jobs than expected last month, just 156,000, as unappointed rose to 4.4%. joining us now is gary cohn, directoreconomic counsel. how do you interpret the number today, are we back to normal in the jobs market, or is this the beginning of a weaker cycle? >> before i get started, i just want to reach out to everyone in louisiana and texas and remind all of your viewers of the tragedy they are still going through, remind everyone that we at the white house are not forgetting about them, we are laser focused on what is happening. data, it is part of the natural growth we are seeing in the economy. we had a gdp number of 3% this week, jobs number that is still very good. if i would've told you at inauguration day we would be at 3% gdp and 4.4% unemployment, you would have said those are great numbers. overall, we are very pleased with where we are in the economy, in the cycle. we know there is a lot more upside and the president is focused on tha

i think in terms of the ecb, there is clearly more uncertainty around the ecb. people are expecting preparation for an october announcement, but your own reporters today have been suggesting unnamed sources are going to be pushing that to december, which i think would be potentially a surprising and potentially even risky move to leave it so late. in terms of the fed, despite the weak payrolls report, if you step back from that, i don't think there is anything in the report that stops the fed from announcing it is going to start shrinking its balance >> we should really have high yields as a result. there we going to get to point where the real yields are in issue? will we see inflation rise against that nominal yield and give you a lower real yield? skewed towards where inflation given breakeven's are currently priced. given the u.s. economy and global economy, china and emerging markets support higher real yields then we have at this particular junction. some extent it is a disappointment of the trade around trump reflation and some geopolitical risk. conundru

what do we expect out of the ecb om mario draghi? guest: i think we will have some statement about the timing of tapering. the recent statements say they may be willing to postpone this statement until december, the end of the program anyway. the problem then is that until then, the markets could remain stable because they keep on pumping this liquidity in. people have to adjust their positions in something like 10 or 12 trading days before the end of the current calendar year. the other significant thing we will be looking at -- and this was the big surprise -- was that there was no mention made of the currency. the euro strength. this, i think, is going to have global repercussions. if we look at the rally in the asia-pacific region, it has all been about the euro-dollar. there has been something like 19.3% correlation between the regional equity market and euro-dollar. what is significant is since may come of a has actually picked up, but on the other side. as the euro has gone up, the equity market has fallen, while asian equitie

canada,ision later from and the ecb. still with us is andrew chorlton, schroder investment management. lisa abramowicz of bloomberg gadfly, and david riley in a london that will forever be changed, with bluebay asset management. i want to talk about how important -- in crisis, guys like you and andrew, the fixed income people are out front of equities. how important is fixed income lowerch with the new 2?cing of mithet what is going to happen with fixed income research? david: it is a good question. we don't know the answer to what is going to happen to research into fixed income for brokers. right now, we and many others are going for a protest of assessing what is available for toearch, how we're going absorb those costs, what it means in terms of our clients, but fundamentally what we have been doing and reflects our basis as a house is strengthening and building our in-house research capabilities. one thing about fixed income capabilities when dealing with macro, a lot of that information is public good, it is out th

ecb decision day. mario draghi delivers central-bank policy statement as investors look for clues on the future of qe. anna: early on with puerto rico. worst -- theg the most expensive storm in u.s. history. manus: you're welcome to daybreak europe, our flagship morning show. breaking,a few lines we are waiting for the corporate earnings. july industrial. a rise of .51%. you have a stagnation in terms of output. the estimate was for a rise of one 5%. factory orders signal a weaker spent -- weaker expansion. inflation was unchanged. in june it jumped 1.1%. anna: the eye of the category movedurricane has northward and this is the national hurricane center with an update on where it is heading. [inaudible] another occupation is around geopolitics. goodness saying that russia sees the desire to ease the situation. shinzo been hearing from abe and all of them gathered in vladivostok for this event. he went on to say that it is impossible to scare north korea. have them trying to come up with the way forward

. >> the ecb governing council currently meeting in frankfurt. they are expected to finalize a decision on interest rates in an hour. some big names like the deutsche bank ceo calling for rates to rise. it's a decision on when and how to be winding down the central bank's bond buying program, known as quantitative easing. the program has been pumping tens of billions of euros per month into the european banking system for years. by purchasing debt from banks and governments. some predicting the ecb will once again put off that decisions until october. i asked if he thinks that will be the case. >> first of all, there is no need for the ecb to delay it for that long. if you look at the strength of the eurozone come in has improved. the patient is no longer in the hospital, so the ecb can pull the plug. only four months left before the program ends. reticent, theybe will have to make a decision. >> markets are keeping a close eye on all of that. how are things looking today? in positiveindex territory, despite the banking sector losing some ground.

welcome back to london >> lovely to be here >> a day before the ecb. >> yes i couldn't have picked a better time for the markets everybody is back from their holidays perhaps everybody will come out of this complacency and a pick up in action >> come on, you're only here because you want to benefit from the weaker pound >> i've been rumbled, but i will try to keep the shopping in moderation >> good to have you here looking forward to have you on the show today and a little more this week and last week. let's look at the markets. >> why not >> the stoxx 600 is off 0.2% if today is another day of losses, you're looking at three days of losses banks have been under the weather a bit. that's because we get the ecb meeting tomorrow, there's been prospect of a later than expected tapering. that would hurt the prospects for the banks. let's look at the indices one by one. a bit of a mixed picture ftse 100 off 0.3%. home builders are off. we'll get to that in a second. the xetra dax is off by 10 points german factory orders contracted in july but much weaker than feared ftse mib is eking out

it is the ecb and the boj. jonathan: we can basically show the consensus that the federal reserve has of the overall stimulus pie. that is decreasing as the ecb and think of japan have increased stimulus. that is slowly rolling over. it is not the market does not care, but it is as great points out the ecb is giving them cover. colin: i think the ecb is giving them a lot of cover. i think the balance central banks around the world have on their balance sheet is significant. ton dropping 4.5 trillion 2.5 trillion over the timeframe the fed is talking about, i could see why investors are relatively call about it. janet yellen give herself room that if this is not done well, the fed may just stop and decide they will go ahead and stop the case of bringing the balance sheet down. priya: you brought up policy mistakes, i wonder how much of that is priced into the reaction. the fact that the market thinks this might be a policy mistake, a lot of clients tell me no more hikes, maybe one more, and if you really think t

it wasn't just about the ecb today. sweden's central bank to fight defiededictions -- bank some predictions. a strong kroner hurting its efforts to stabilize inflation. this is the euro against the kroner. it is inverse. the kroner is falling. the euro is rising. the kroner is down by about 0.3% today. a chance they will remove stimulus earlier, then the swedish economy grows faster than the rest of western europe. by 3%, theres down biggest drop since last year. the chairman of the french investment firm since 2009 will step down at the end of the year as part of a management overhaul. no successor was named. under his tenure, shares plus dividends have risen by 25% versus 13% for his peers. julie: let's get back to that big story of the day. you were talking about that decision from the european central bank and the press conference. the ecb keeping rates steady, as president mario draghi says he is watching the euro's gain very closely. president draghi: the recent volatility in the exchange rate represents a source

that in the 24 hours after the ecb. i think this comes down to the fact that there is a different element this time around when it comes to tightening, and that is the quantitative sinopec thing. as the central banks are exiting, they want to make sure they don't have to come back and start buying bonds again. nameare laying out the will not hike rates at the same pace that we would have expected in the past. is a muche quantity more important thing today for central banks than the level of rights. jonathan: a lot of people would point out to me that the reason the euro is doing better is the structural reallocation for euro dominated assets. and that is the story, why aren't stocks outperforming? james: it depends on which currency you look at, european stocks in terms of dollars have done phenomenally well, up 18%. one of the reasons european stocks struggled a bit in local currency terms is the fact that the euro has been strengthening. we estimate for every 10% rally in the euro knocks about 4% off of european earni

that job morning -- vonnie: how closely is the ecb watching u.s. data and what will it and the markets have thought about today's jobs data and whether the rate hike of december is looking likely? >> if currency as an important part of the objective function, you are looking at the u.s. economy important. we had a miss on non-cop payroll data, there is a risk that the market is underestimating the fed hike. those are risk factors and not a central scenario. the ecb, its from will be more effective if the u.s. economy does better. mark: where is value in the fixed income and credit space right now? >> g4 interest rates, i do not see much value. rates shock has reduced . we are trading ranges that are narrow. i do not see strong value in duration and credit, focusing on ig is like a government bond. they are no longer showing credit risk. as long as the cycle continues, there is still value in that segment of the credit market. mark: fixed income, em credit, good start to the year, geopolitical issues have not flared up and investors calm about what

for now, it is a reiteration of how seriously the ecb are taking this. the european football has come to an end for the week but it finished on a high for arsenal, they made it two wins from two in the europa league. arsene wenger‘s side were in belarus — where they beat bate borisov 4—2, despite missing a number of their big names, as nick parrott reports. arsene wenger gave his younger players the chance to make a name for themselves against bate borisov but it was his stall wars who combines to give arsenal an early lead. jacques rogge are setting up theo walcott but they had lostjust once in their last 12 european home matches, but their form once in their last 12 european home matches, but theirform deserted them, much to theo walcott‘s delight. the youngsters got into the act with this first goal for arsenal, and while everything was going be away when they went forward , going be away when they went forward, the poor defending was contagious. arsenal's might might have been even easier had this resulted in a red card. while the referee did

the ecb is the central part of this. as long as the ecb continues to buy bunds and rates remain low in germany, given the fungibility of assets globally, i believe the long end of the u.s. curve will remain well bid. those are basically in line based on the analysis that we run on curves. the real question for the u.s. long end is what the ecb does, do they stop buying bunds? we think they will start toward the end of the year, at least fewer of them. 2.50 on the 10-year is possible. but if rates go up, you can global risky asset volatility, high yield, what do people do? they go and buy risk-free assets, treasuries. so that will be an automatic governing mechanism to keep yields lower than a lot of people fear. vonnie: what does that do to the u.s. dollar then? >> great question. with respect to the dollar, the short and is more important than long end. look at the two yada yada, which is more related to fed policy, we see rates have risen to about 1.50. they have been steadily on the increase. 10 year comes down, the c

colin: i think the ecb is giving them a lot of cover. clearly, the balance that the central banks across the globe have on their balance sheets is significant. even dropping 4.5 trillion to 2.5 trillion over the timeframe the fed is talking about, i could see why investors are relatively calm about it. also, i think yellen clearly gave herself room such as this is not done well, the fed may just stop and decide they will go ahead and stop the case of bringing the balance sheet down. priya: you brought up policy mistakes, i wonder how much of that is priced into the new reaction. the fact that the market thinks this might be a policy mistake, there are a lot of clients tell me no more hikes, maybe one more, that is it. and if you really think the hiking cycle is over, then portfolio runoff must continue. i think to your point is the view that this is the unwind of the smallest ever unwind, i -- therefore the market doesn't price it in. i think the policy mistake issue is on the markets mind. jonathan: something else i've been thinking abo

stokes ecb, following the arrest of ben sto kes o n ecb, following the arrest of ben stokes on monday in bristol. more on that on the bbc sport website. you can keep up to date with the rugby league world cup and the everton match later on. that is all for now. more on bbc news throughout the evening. some news coming in from the midlands. we are hearing about a light aircraft crash. this is in a field. west midlands ambulance service and warwickshire fire and ‘s are also there. apparently two men we re are also there. apparently two men were travelling in the aircraft and they are reported to have suffered serious burns which are potentially life threatening. they have been taken to hospital in birmingham. the air accident investigation branch have been informed. that is a light aircraft crash. it sees case review has found that the murder of a teenage girl by a fellow resident at a care home was preve nta ble. fellow resident at a care home was preventable. the victim was struggled —— the victim was strangled. the care home specialised in caring for people with asperger‘s sy

having said that, this did not start with ecb policies. actually since the 1980's, we have compression of interest rate margins and have seen interest rates going down, so banks had a lot of time to prepare. but our business models are geared towards interest rate income, which means, you are more heavily affected by a low interest rate environment than others. it depends at the end of the day how long this very low interest rate level will maintain. we are expecting each and every bank whether in germany, europe, or elsewhere is adjusting to which ever interest rate level there is. david: when we talk about consolidation in the german banking system, it is not just in germany. there is also foreign investment interest. you have hna from china investing in deutsche bank, maybe allianz. i know you can't comment on individual banks, but is there concern of foreign investment into the german banking system? >> no, in principle, there is no worry about that sort of investment. we are an open economy. we will look to each investor, be they germ

i looked at the ecb's code of conduct. the ecb is committed to maintaining the highest standards and conduct. put that in connection with the video which allegedly shows ben stokes outside the bristol nightclub. next point, of course, 24 hours ago, stokes named in the ashes squad. so can he possibly in the light of all this go to australia? here is what former england captain michael vaughan thinks? well, for stokes it would be devastating. he stated what he did was wrong. he knows he is in the wrong. it is important to the team. stokes offers expertise with the bat and the ball and the field. i don't give england any chance in australia without ben stokes. that's the cricketing value that everybody knows. there is the ethical image if england did go to australia with stokes. that has to be an issue and there is the practicality. you know what it is like and the scrutiny that all england players will get. stokes joe wilson, stokesjoe wilson, our correspondent at lord's. we will be back withjoe. it is an international break

to get -- and of roma for the ecb -- an umbrella to get back to 10% for the ecb. some of that interest margin, the existing loans, and marches under pressure. david: how patient are you as an investor? emma slater they will handle their balance sheets problem. they are not even thinking about raising heights works. david bianco: we are tactically cautious on the banks and the europe for october. six months ago, we got structurally bullish on european banks and we lived with that kind of tough call, how to grit your teeth on eu as banks 2012 through -- on european banks 2012 through 2016. over the next few years and i think the u.s. and europe will avoid a recession and i think european banks will go well. david: is that a call on u.s. bank doing domestic work and stepping out of the big money trading facility? some of the: largest banks in the u.s., substantial capital markets and advisory businesses and we think it is an area where the earnings, there's a lot competition. we think the earnings will be good cushions and sources of profits for the rest of the cycle

the ecb has to reflect that. earlier on, mario draghi did suggest that they were more confident about the fact that current inflation was where it was. the most recent strength of the euro will upset this upward growth protection. guy: it is financial conditions. >> and more expectations. guy: european stocks are fading but there is a direct currency translation affect. you can see outflows of money coming out from banks. us,ll stick around with there is plenty more around. breaking the brexit deadlock. after the third round of negotiations. more on that story next. this is bloomberg. ♪ guy: welcome back. britain is seeking brexit talks after the third round of negotiations and in stalemate. this comes after the u.k. brexit secretary suggesting a divorce bill was nonsense and wrong. is still withs us. abelle, pound positioning suggests that it is priced into sterling. the party conference is coming up, then we have the big leaders summit coming up. they will make a decision on whether progress is being made in

that's just next month at the ecb. start the policy of purchasing fewer bonds not what the fed is doing it, #btv for 65 shows you where the headline inflation rate at one point expect to go up. the core rate is down 1.2. still pretty far from that, just under 2%. are they can't be on guard the paper starts? if mario draghi sticks to his guns, he made still be on his feet. >> that's certainly a risk, absolutely. ecb to begin the tapering process in january, and ultimately begin to lift interest rates in june. at the same time. , the other side of the equation, what is the fed going to do? they probably have another one or two interest rate hikes, one interest rate hike is largely priced in at this stage. in terms of relative monetary policy, we are still in an environment where even if the ecb does begin to taper asset purchases in january, it's still an environment conducive of the further euro strength versus the u.s. dollar. >> one of the interesting things we saw was the turn of the the afc, the, first to make it in

the ecb have said the 1% euro appreciation is worth 5/10 of their view on inflation. it has a relatively small amount in terms of the trade weighted -- it is anis it important issue and if draghi and the ecb council want to use it as an excuse, they will. guy: tom: -- scott thiel, at blackrock. these are 21 suppliers to the big oem's in the aerospace sector, airbus and boeing. let's bring in benedict from berlin on this, managing editor for global business. what does this mean for the oem's? airbus and boeing? get a mucht means we bigger company in the u.s., much bigger on the supply side. the supply industry is still fragmented. a lot of small players. what it means is it gives them a lot more half, they get a lot more bargaining power. airbus and boeing are two companies that have been doing a lot in terms of their programs, particularly on the single aisle side. size in this industry is key. is gaining that with rockwell. they get components they didn't have. what rockwell had bought in aerospace, -- uts will still -- now be in the seats business. guy: could this f

it is up against the meeting with the ecb. haven assets today. theee yields decline across space. 10 year yields are all lower today. the un security council meeting is underway. hasi haley said the u.s. kicked the can down the road it long enough or it south korea says they are planning an international missile loss. this comes after the regime carried out its sixth the most powerful nuclear detonation so far. south korea has suspended flights. the test site is at the virtual target. says the threats cut off the -- is unacceptable. china is north korea's biggest trade partner. an aidnuchin wants package with an increase in the debt limit. congress they need to raise the debt ceiling i the end of the month. the duchess is suffering from morning sick this and has canceled her engagements today. they have two other children. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. mark: thank you. this is two days after donald trump asked for eight ilion dollars in aid. greg abbott

the ecb's in blue. they are trying to get to the purple line. the japanese in yellow are very far away, which is one reason they are finding it hard to believe kuroda. guy: absolutely. markets are opening in europe. i do not think we will see much. this is where the ftse 100 is trading right now. the pound, probably the biggest conjuring factor with what is happening with the british inexperience topic six 600 in positive territory. happening with the british. the stoxx 600 in positive territory. manus: normalization is a beautiful thing. you have asia just a little bit lower, but these european stocks, you know, they are taking everything in their stride, and that is essentially reserve, theral european central bank, and less so for the bank of england. we are waiting for the consumer confidence number. a 16 year high. quid pro quo, people would say kiwi is working. european equity markets just a little softer in financials and industrials down by .8%. come with me on a journey. what does it potentially mean for the equity story in germany? her

george, i would ask the depot rate of the ecb is -40. we have an ecb talking about pulling back, pulling back on qe, as well. yet, bund yields have not really moved. george: they are pulling back on qe, but not necessarily on their rates. you are looking at a relative value. you are right, negative seven basis points doesn't make sense, but it does when -40 basis points is your alternative. from a relative perspective, it makes sense. but an absolute perspective it does not. i do think that at some point you get through quantitative easing, then you address rates, and at that point, that is where you see a significant move. jonathan: is that something that will necessarily happen in the next several months when the ecb finally communicates what is coming next? george: i think it is more a 2019 story. i think the 2018 will be more removing qe. they are setting the path for that. they will be picking up the pace in 2018, and 2019 they will start addressing rates. they will go into that very slowly. jonathan: matt, when you look at credit,

having said that, this did not start with ecb policies. since the 1980's, we have compression of interest rate margins and have seen interest rates going down, so banks had a lot of time to prepare. our business models are geared towards interest rate income, so you are more heavily affected by a low interest rate environment than others. it depends at the end of the day how long this very low interest rate level will maintain. we are expecting each and every bank whether in germany, europe, or elsewhere, adjusting to which ever interest rate level there is. david: when we talk about consolidation in the german banking system, it is not just in german banking, there is also foreign investment interest. you have hna from china investing in deutsche bank, maybe allianz. i know you can't comment on individual banks, but is there concern of foreign investment into the german banking system? andreas: in principle, there is no worry. we are an open economy. we will look to each investor, be it german or international and do a proper check. if we

i think polish monetary policy is an easier situation than the ecb. we expect hikes, but only late next year. >> do you see bubbles being created? i look at bubbles north of poland and south of poland i don't know if there's a warsaw housing bubble, i would imagine there is >> theoretical but also practical perspective, the whole cdp has changed. you and me living in big cities in europe, you are probably exposed to bigger inflation than the official cpi index it makes rate setting very difficult. >> all right we will leave it there real pleasure getting an update. i'm glad to see poland is making a good fest of it. >> thank you >> let's look at those u.s. futures. they looked good about 20 minutes ago. they're all right. not shooting the lights out, but four negative days on the dow, but very small compared with the enormous rally we've been seeing look out for tax announcements out of the u.s. and the durable goods. european markets looking in fine fashion. that's it for today's show i'm steve sedgwick, coming up next is "worldwide exchange. most am