Im Caroline Hyde. As we were just saying, we are getting breaking numbers from allianz. Just to run you through some of the numbers, the outlook is confirmed on the upper end of the range. This is the number one european insurer, confirmed its fouryear forecast. Of 2e getting net income billion euros, ahead of analyst estimates. The operating profit came in at 2. 84 billion. We are looking at property and Casualty Insurance at 11. 8 billion euros. We will get much more on these breaking numbers with hans nichols. It looks as though the insurance side of things, hans, is missing a combined ratio, that we are seeing better than expected numbers from a revenue perspective. Hans yeah. This that income is a big beat. It is coming in north of 2 billion euros. On that front it is a big beat. When you look at whats happening in insurance, there havent been many natural asasters, so they could have little upside, although it looks like the insurance number is down on the property and casualty. Life insurance is dealing with low Interest Rates and that could be weighing on it. What we dont have from these numbers yet is just what net outgrowths from pemco have been. Is there still a gross effect . When you look at the last quarter, bill gross announced he was leaving is a temper, 2014. 2014. September, the net profit declined 14 . In the good old days, they got about 25 , caroline, of their mco,income from pe which had a much smaller percentage. It drew a lot of income not much higher in terms of casualty. Those are some of the numbers we will be looking at. The stock is up 12 , but overall, the insurance index is up 22 . This is a company in transition. They are still dealing with the departure of bill gross. We want to see what the total outflows were for the last quarter, then we will have a better sense of what the effect is. Caroline thank you very much, hans nichols in berlin. Do indeedws at pimco continues and we will bring those figures to you. We will also be speaking later in the show to the cfo of allianz about these numbers. 7 15 u. K. Time. Lets get an update on how asia has been trading before the jobs report. Lets get out to david ingles in hong kong. David, it has not been a great week if you are looking across the border. David it certainly has not. We were poised for a weekly decline the third weekly decline. Nothing is really happening we are seeing equities trade down, yields next. Kiwiapanese yen, the dollar, all these currencies across southeast asia, absolutely nothing is happening. We are basically flat across the board. A Holding Pattern ahead of the jobs report. That comes out later on tonight. Though, thatid, will may determine what happens for the rest of august into september. A lot of the emerging markets here malaysia, for example, the philippines and thailand have a lot of these financial markets, expectations that they will get a better rate hike. The data points are very important. I want to mention that we are is comingout boj out with their latest policy directions no big fireworks. They are seeing it improving gradually. They will keep easing until they maintain the inflation target of 2 . That is where they see inflation for now. Another central bank that came out with an assessment the rba long story short, they lowered their growth tax. They put a more slightly positive spin on it and pushed back the timetable for the upswing. A fewn that market their, banks trading. We are down 7 , resuming trade friday. Yesterday, share placement, theme,ts, still the same where you have a lot of them trading lower on expectations. 2 . Ghai is up it has been a topsyturvy week, as usual. One thing i want to note for the Chinese Market they are expecting more support their. Sources are saying that regulators are reviewing applications for placement. They are easing up on restrictions for fundraising but they arent easing up on interventions. Obviously that is good news. Hang seng is up 1 . Most numbers were flat across the board, yields are mixed. Caroline david ingles, thank you very much. The emerging markets have been selling off for the past month, and today they were down by 8 10 of a percent, the lowest in two years. All of that is linked to trading ahead of the u. S. Data. Lets get to nejra. You have much more on this move in emerging markets. Nejra thats right. The selloff continues we are seeing this not just in emerging markets stocks but also in bonds and currencies. The overriding big picture is, of course, speculation that a rate rise from the head is imminent. Yesterday, we had data showing that filings for u. S. Employment benefits were at a four decade low, that boosted the case for a rate increase from the fed. But then there are also reasons that are different in each region. The ruble has fallen to its lowest level since february. A lot of this is because of declining oil prices. If you look at the brazilian real, that has been pushed down by a growing political scandal and a shift by the central bank to refrain from raising rates. 2015 is down 26 in that is the most in the world. Fell toysian ringgit its lowest since 1998. This is about concern that foreignexchange reserves have dropped to their lowest level since 2008. Finally, we have to talk about the msci. This is an equity index that is rebounding a little bit today after it fell to its lowest levels since 2013. Caroline fantastic roundup. Thats something, for the real to be the worstperforming in the world. Not fund payrolls are due at 1 30 p. M. U. K. Time, and investors will be searching for the meaning in the numbers ahead of septembers fomc meeting. Julie hyman has more on what we can expect. Not be super thursday, but the u. S. Has key friday, thea on nexttolast jobs report before the Federal Reserve meets in september. Economists we survey withcted 225,000 job gain the Unemployment Rate Holding Steady at 5. 3 . As long as job growth remains roughly on trend with an average growth of around 200,000, economists predict the Federal Reserve will raise rates this year, perhaps as early as september. For the fed, security calls in the case of show me why i shouldnt as opposed to what i should. One reason why the fed shouldnt raise rates could be the wage growth indicators in that employment report. Economists forecast average Hourly Earnings will rise. 2 month over month. Said growths have in pay is the one missing factor that would help push inflation up to their 2 target rate. Last week there was a negative sign for wages the employment cost index, which measures hourly pay and annual salary, rose in the Second Quarter at the slowest pace on record. We will see if that rate picked up in july. The jobs data released by the u. S. Congress department is due out at a 30 a. M. In washington, d. C. , and i will be there to bring you the numbers. Back to you. Caroline loving with that guy did with the sign. Pictures, and it leaves us nicely onto our twitter question of the day. What is your forecast for todays nonfarm payrolls number . Bloombergsus here on is it will be 225,000 jobs added. That would be a Third Straight month that we see in excess of 200,000 jobs added in the united date. The United States. Will that add fuel to the fire of a rate rise as soon as september . Many of that is being placed and having its ramifications across the board, see what it is doing to the emerging markets, pushing them lower. You might be coming to an end when it comes to the u. S. Pushing the dollar higher. After the break, we will look at yesterdays big announcement from the bank of england. Super thursday, stay with us. Caroline welcome back to count countdown. Here are th some of the top stories need to know. The bank of japan has held for bolstering monetary stimulus as the governor seeks to spur inflation. The boj will continue to expand it at a pace of ¥80 trillion, according to people familiar with the matter. Republican president ial hopefuls have faced their first test in the road to the white house. Front runner donald trump upended the race with controversial comments. Him forls attacked refusing to pledge support for whoever wins the Party Nomination for the white house. Australias central bank has indicated that the jobless rate has peaked, pushing back the forecast by a year. The rba says it expects average Economic Growth between 2 and 3 next year, down from 2. 5 to 3. 5 . Lets talk more about those u. S. Jobs numbers do later today. At the United States Unemployment Rate, at a sevenyear low. Some commentators say that the picture is not so rosy if you look at the rate of employment, the number of people in work. The basic story the fed would be raising rates because its concerned the economy is growing too fast, with an issue of inflation, and its hard to fit with the economy that we are seeing. If we look at the Unemployment Rate 5. 3 is not bad but if you flip it over and look at employment, something that many of us have been talking about, we are nowhere near recovered from the employment rates we saw before the downturn. Caroline on that note, its a great time to introduce our guest, the securities executive director who is here for the next 45 minutes take you for being here. Out is theeck u. S. Economy ready for a rate rise . It is certainly bracing itself for one, but is it ready . Brendan well, we see the labor market normalize, Monetary Policy is still with a huge Monetary Base, so, yes, the economy is ready for normalization. The big puzzle here is that weve had abnormal policy for so long that average prices around the world are very high, inflated, and the question is going back to the normal Monetary Policy does it introduce a dangerous deflation . Caroline weve already started to see the ramifications in the commodities market. A lot of this has supplyside issues, as well, but do you move couldat sort of we see when it comes to equities, u. S. Equities, Global Equities . Are we expecting a 50 slump . Brendan its a very dangerous stage of the disease. If you study this over history, and there is a long history now, you get to late phase work asset price temperatures are rising in some markets, scorchingly high still in many markets. Some are already collapsing. Caroline in china, for example how much do you think thats related to the fear that the fed will raise rates . Brendan its all part of the story, but its not all related to that. In many areas, there have been huge stories, a large amount of chasing yield. Would inflate of their own accord. We are getting a mixture of some natural deflation, very highpriced asset markets such as commodities or currencies, particularly emergingmarket currencies. Still, in other areas, the music goes on. I think the big puzzle for investors, and for everyone involved in the global economy, is how near are we to that final stage, where we transition into everything falling . In particular, one has to look at markets like highyield credit, and some areas of the u. S. Equity market. Caroline with us that happen . When does that recalibration happen . Do we have to see a rate increase first before we start to see money pulled out . Brendan you dont have to see a rate increase. I can give you a historical example dating back to the 1930s, where you had asset price deflation suddenly occurring, even without any rising Interest Rates. We have seen a lot of asset pricing in various parts of the world you mentioned china. Caroline how does this speed in, also, to whats happening in other Central Banks . The bank of japan is not moving today. Will they have to move come october . Will they have to somehow inflate their own economy . We have such differing moves across Central Banks around the world. Brendan the bank of japan is doing a very aggressive form of qe, of monetary experimentation. They just havent decided to make it even more aggressive. The big puzzle here we are now six years on, 84 or five, from when bernanke set out the rationale for his monetary experimentation to produce a stronger than normal economic recovery. Particularlynow, with the revisions that came out with gdp data, that this has been the slowest economic recovery ever from the great recession. You would have thought the lesson from this that everyone would be taking is qb monetary experimentation doesnt work. We are seeing that in japan. Japan qe policy has not worked. The monetary description has not produced a strong recovery. You would think japan would be moving on to this is working, we really have to double down on the third arrow, which is genuine economic reform. Theink the key question is new unpopularity of the government, seen all the opinion polls, shifting the dynamic in japan towards an alternative policy. More reality in terms of economic reform rather than his monetary shift. Caroline we are sticking with the fema centralbank policy, and sticking with mitsubishi director brendan. Lets turn our attention to not only the fed and the central bank, because yesterday marked the first super thursday at the bank of england, when inflation, expectation, meeting minutes, and Interest Rate decision were announced all in one go. Here are some of the highlights from governor mark carney. At his meeting yesterday, they voted by a majority to maintain bank rates at. 5 . They voted unanimously to maintain, and it reaffirmed expectations of when bank rate rises occurred, it it can be expected to be limited and gradual. Nearterm outlook for inflation is muted. The falls and Energy Prices over the past few months will continue to bear down on inflation, at least until the middle of next year. A range of measures suggest that mediumterm Inflation Expectations main will anchored. Remain well anchored. Sterling has depreciated 3. 5 since may and 20 since its trough in march of 2013. The drag on import prices will continue to push down on inflation for some time to come, posing a Downside Risk to its nearterm path in particular. As the u. K. Expansion progresses, speculation about the precise timing of the first move and bank rates is increasing. This is understandable, as another welcome sign of an economy returning to normal. The likely timing of the first Bank Rate Increase is drawing closer. Timing of thexact first move cannot be predicted in advance. Rather moving music, but lets talk about the numbers with jamie. Jamie, it was such a fascinating super thursday because all in one go the market interpreted it as pretty dovish. One person calling for a rate rise, but it sounded pretty hawkish. Jamie i think they miss the point. The 81 split is not too important. Its going to be 72 soon enough anyway. Much more important is the communication itself. It, despite the dow revisions in the shortterm, you still have inflation at two 1 above target. Demand at thes end of the forecast. These are all very hawkish signals, implying that even though markets are expecting an Interest Rate hike, it is possibly still not enough. Caroline did you feel that this was misinterpreted . Brendan i found very much the question going into the meeting is mr. Carney ready to raise rates or waiting for the u. S. To go first, or is there some wire discretionary gap . Say, i was inclined to think the second. That mr. Carney is not ready to pull the trigger as soon as the fed he goes theres more of a specific u. K. Context which may lead to a higher rate. But it is not something that will be automatically happening. Caroline jamie, what about higher Interest Rates . When should we be bracing ourselves . The market still thinks may are they right . Jamie i think it will be a bit sooner than that. The bank of england is very clear that it is data dependent, and our view inhouse is that wages will prompt that decision around february. I think it has very little to do with the u. S. Decision itself. Domestic u. K. Issues will continue to be the case. Caroline will the u. S. Go first . Will the fed have pulled the trigger by the end of the year . Brendan the other question i would mention here which didnt figure enough is sterling. I can imagine a definite scenario here where u. K. Trade balance continues to deteriorate, maybe quite sharply. We are no longer getting the big foreign inflows. So sterling could begin falling quite sharply. That could change, bring Interest Rates forward. Looking at the canadian dollar, we have the puzzle of the currency collapsing, the bank cutting Interest Rates that would have been an interesting question. Caroline always about lessons learned. Jamie, thank you very much. Always giving us great insight. Brendan stays with us. Coming up, the candidates for the republican nomination are lined up for their first of eight. Heres a taste. This election cannot be a resume competition. Its important to the qualified, but if this election is a resume competition, then Hillary Clinton will be the next president because she has been in office longer than anyone else. Heres what the selection better be about this election better be about the future, not the past. It better be about the issues we are facing today, not the issues we once faced. Caroline welcome back to count countdown. Here are some of the stories need to knows morning. Inital one is a exclusive talks to acquire Health Care Finance unit. Negotiations are still underway, and a deal could move through. It is among the operations the ceo shrinks the company. Europes biggest insurer allianz Beat Estimates with secondquarter profits. It was helped by earnings in the Property Casualty division. It says it will get the upper end of the range of the outlook. Viacom plunged the most in almost seven years after posting thirdquarter sales that missed estimates. Sales dropped 11 to over 3 billion. It marks the companys fourth straight decline in u. S. Advertising sales. Viacom is the owner of mtv, nickelodeon, and comedy central. The bank of japan kept Monetary Policy unchanged. The governor is betting on a rebound in the economy. It will keep pumping into the economy each year, aiming to end a 15 year state of deflation. Brian fowler is in tokyo with more. Where does this leave us in terms of the policy outlook . Is the next move likely to be a loosening or a tightening . Many are feeling october could be where we see more stimulus. Brian yes. Where does that leave us, indeed . Keep in mind that this decision was not unanimous. The one board member who dissented proposed the tapering its stimulus, but that is not going to happen. What they7 economists expect, and more than half of them did expect further easing. October 30 would be the most likely date. Others said it might not happen until january. I think most of the party you can see this in the bond market as well is flattening. Brian fowler in tokyo, thank you very much. Some insight into the bank of japan. Fivehile, its been fiv months until the first president ial contest in iowa. Last night, the contenders lined up in front of the cameras in cleveland for their first debate. Billionaire Businessman Donald Trump managed to get the first in the last words in. Here he is on the subject of immigration from mexico. Wall, and to build a it has to be built quickly, and i dont mind having a big, beautiful door in that wall so that people can come into this country legally. But we need to build a wall. We need to keep illegals out. Caroline controversial as ever. Former White House Correspondent hans nichols has come to these shores to report for us in berlin. Hans, i want to get your expertise. Donald trump refused to rule out running as an independent if the republicans didnt pick him. Thats quite a threat, isnt it . Not to back whoever might take the nomination . Hans caroline, i cant remember the last time the candidate had been on stage and hasnt agreed to support the eventual nominee. This is becoming a trunk show. Its also becoming an increasingly bigger problem for the republican party. The Establishment Party that is clearly hungry to return to office, and they have donald trump saying these crazy things that will prevent them from appealing to swing voters. Once again, you played one click and we will play another. Mr. Trump continued with his antiimmigration message. To our leaders, are stupid. The Mexican Government is much smarter, much sharper, much more coming, and they sent the bad ones over because they dont want to pay for them, they dont want to take care of them. Why should they win the stupid leaders of the United States will do it for them . That is whats happening whether you like it or not. Hans caroline, you hear those cheers. What hes doing is hes tapping into a very real anger within the republican party, may be the broader public, about whats happening in terms of immigration. Whichever candidate is best able to tap into that anger and d tap into it will be in a good position. Perhaps the bigger story is that no real mistakes were made. Whenever you are watching this debate you are waiting for some moment where a mistake is made. That didnt happen. Jeb bush, considered to be the front runner, didnt really make any headway but no mistakes. There was a tense back and forth between senator rand paul and governor christie. Aside from that, though, this was a debate about donald trump. A lot of the candidates did try to turn fire on Hillary Clinton. Marco rubio, john kasich both getting good reviews. Theasich is a home statsich is a homesick favorite. Pleasanton marco rubio. This cannot be a resume competition. Its important to be qualified, but if it is a resume competition and Hillary Clinton will be the next president because she has been in office longer than anyone else. Here is what the selection better be about. It better be about the future, not the past. It better be about the issues we are facing today, on the issues he wants faced. Caroline, this is not going to end anytime soon there are a lot of debates heading into it. You know im envious of the u. K. System where elections are so tight. We have months of this ahead. We will make a road trip of this, going to iowa. I will take it to the iowa state fair. You always have to see the butter cow. A giant cow made of butter. Our editors will pay for it all and we will do a little light reporting on the side. [laughter] that. Ne im all over bringing it back to Foreign Affairs, this is something that came up quite a bit. In some ways, a lot of the Foreign Affairs of stuff was about al qaeda and isis, and to some extent whats happening south of the border in terms of immigration. Dinglot of ways, you cant these candidates for not getting too granular on the Foreign Affairs issues. Nature yes, it was a twohour debate, but there were 10 people on the stage. What they were trying to do was have a quotable moment, take a shot at trump. The next debate becomes more interesting because everyone now knows what donald trump is like as a debater. He is a known quantity. That may make things easier, mr. Trump is a pretty unpredictable businessman. In some ways, hes not going away anytime soon. All these candidates have to calibrate their response to his debating demeanor. Caroline certainly when you see him holding 21 of the vote, hans nichols, thank you very much. In mitsubishi executive director brendan. Were talking about Foreign Affairs, mexico, but what about business and Monetary Policy . What are the ramifications of the Republican Debate have on the u. S. Economy . Brendan there was a big missing subject with the Federal Reserve. If we think about the last republican president ial debate, i remember the first issue was mr. Gingrich saying that he would fire mr. Bernanke day one. This time around, you would think given the amount of Congressional Republican interest there is in reforming the Federal Reserve and the amount of damage that this great monetary experiment has done, this would have been a big topic what do we do about the Federal Reserve, about janet yellen . What is the future of the United States . But it didnt come up, although it is quite a keen topic. Caroline spell out damage for us, he could thats a relatively controversial point. Posediew is that its asset bubbles and things that will have com brendan the overall monetary experiment hasnt it works in terms of strong economic expansion. In addition to that, weve got so much danger now in the general Economic Situation because of these high asset prices and a whole range of areas which may suddenly come down. As we speak, who knows whether in the next few weeks we will get an emerging market crisis corrupting from brazil or turkey . Quite a bigave impact on the Global Economic prospect. Caroline we spoke about japan earlier and you said we need to focus on the third arrow, we shouldnt be depending on qe. Will what should the ecb be doing . Stimulus is clearly whats been helping the european economy in terms of bond buying. The ecb has been whats helped give breathing time to the spanish economy to stop the reforms. Brendan yes and no. The other side of that argument is that the super low yields in spain and italy as a result of the dragging policy are actually holding back economic reform, because why would governments go forward and make difficult decisions when they can find low rates . Of course in germany, which in many ways is benefiting from the low Interest Rates and terms of the real estate sector which is very bubbly, there are also questions as to how stable all of that is, and whether its stirring up problems in the future. Caroline the can say that the wrong tactic was deployed, but we are in this situation how do they unravel this, then . How does the u. S. , the u. K. Look to raise Interest Rates do this steadily so that we dont have a massive selloff . Brendan in my central scenario, the present central bankers are not going to end their own experiment. As this goes on we may see small Interest Rate rises in the u. S. But most likely, we will see some sort of asset price drop, and asset price deflation that will end the cycle. The big issue then comes when all of this ends up in tiers, is there enough political momentum, is there a political current that can drive a fundamental reform of monetary systems. Caroline investors are listening to you and wringing their hands. When you are traveling to clients, you give this hypothesis how are investors interpreting it . Our investors deciding how they should act . Brendan they have to take some clearly, they are not going to get the day on which the asset price deflation takes place, but you have to position their portfolios where they have considerable insurance against the asset price deflation coming. In the most aggressive positions, they may take short equities are highyield credit, and they would do very well when the market turns. But that is a very tiny issue and they can gain from studying economic history and what happened in previous asset crisis deflations. S. Caroline he will be sticking with us. Now lets take it back to a corporate feel. U. S. Media shares retreated for a second day yesterday and the biggest of the twoday selloff since 2008. Companies from viacom to fox to disney saw share prices sink on a fresh round of disappointing earnings. Were standing by with the details. There were quite a few losers here. Nejra absolutely. You will see them in the second disappointing results from disney after the close on tuesday, really sparking this today selloff. It spread to other television and publishing companies, from cbs to 21st century fox to viacom, showing the impact of shrinking ad sales. Also the fact that profits were propped up i stock buybacks. These stocks are all hit by that in the s p 500 media index actually dropped 8. 2 in two days. Thats the biggest slump since 2008. That drop actually erased all of the gains of this year for a group that, previous to that, had posted profits of 33 since 2009. Not only were media stocks high performing stocks, until tuesday, a were the bestperforming of the u. S. Bull market, even better than technology and biotech. Cap, butllion market in the past two days, that value has started evaporating. Almost 50 billion in value erased from just five stops in two days over disney, time warner, fox, cbs, and comcast. Five, dropped 14 on tuesday alone, the biggest drop since october, 2008. Caroline how the mighty fall. Lets have a quick check up on whats happening in europe. Breaking news from telecom italia. Profits falling on a 399 million euro collision. This means we are seeing their firsthalf net income falling 95 , coming in at just a tiny 29 Million Euros. Sinksile, their revenue 3. 3 on an organic basis, coming in just over 10 billion euros. There does seem to be a significant provision they are taking. We need to dig in to this particular statement as to what the provision is all about. They have been taking a 400 million euro provision on matters including antitrust and restructuring. Thats telecom italia. Coming up, we will take a look at some of our other top stories, this time from the sporting world, including why the World Biggest ball organizers is seeing competitors. Caroline welcome back, its a 6 48 here in london. Here are some of the top stories he did know. The u. S. Jobs report is out later today at 1 30 p. M. U. K. Time. Employers are projected to have added 225,000 jobs in july. The data comes as Federal Reserve policymakers stress the importance of the job market in terms of raising rates. The bank of japan has held off from bolstering monetary stimulus as the governor bets on the rebound in the worlds thirdbiggest economy. The boj will continue to expand rates. The Australias Central Bank is indicated at the jobless rate has peaked. Growththey pushed back upswings. The average Economic Growth will be down. About time we got to some sport, eh . The fourth8, afc was tier of the english football, beginning on a minor 17 points. Now just seven years later, the team is in the premier league for the first time in its history. We spoke to the man who wrote the check for 100,000 pounds to save the club. Having agreed that i was on the administration, we didnt expect them to be going on so long. We are not connected to with the likes of manchester united. They are an elite group. What we have to do, and i said this in the press conference earlier, the best that we can possibly be. It beingt see anything other than continually committed. Never say never. Hes i wouldnt say media shy, its just a conscious decision to have a low profile. That i can take the media pressure. Because it is not in front of the cameras day in, day out isnt to say he doesnt have fans or interest. The last 18 months ive been working on a collaboration with an nls club, which will hopefully announce in the nottoodistant future. It was no coincidence that we went over to philadelphia to be hosted. There is a great synergy between the two clubs. They have a very young manager, a great academy, great training facilities, a great desire to push up the league. It was the start of what i hope will be a very strong relationship. Caroline great, great story. Meanwhile on a slightly more negative story, a scandal broke out earlier this week after publication was leaked alleging numbers of athletes that won metals while doping. Electronic sports arent exempt. After a professional video gamer admitted to performanceenhancing drugs, the worlds biggest esport Organizer Says they will begin drug testing at their next event. Cheating will be an ongoing problem for every sport. We had a case where a player claimed that his team gave him an amphetamine to boost his performance. This is one of the most serious issues weve ever faced as an esports organizer where we have to immediately act. We dont think we have the tools in place. We went to the National Antidoping agency in germany, the world antidoping agency. We will begin drug testing at the end of august at our first event in germany, and our plan there is to have a comprehensive set of policies so we can take them worldwide across all international events. Caroline it seems to tainted many a sport. Lets bring in the mitsubishi executive director, and also tim coulter to look at our top stories welcome to the show, tim. You have an amazing story. Tim its great to see its good for sports, but its amazing to see a tiny club like this getting a premiership. The story gives a lot of context around how big this club is relative to others. Seats, 11,000 people versus 75,000. Caroline and a huge pickup and money that they will get just why being pushed into the premier league. Tim thats exactly right, and its a big part of the story. They will obviously get a lot more revenue from being in a premiership, so what are they going to do with all the money . Caroline they could invested in prime real estate here in london. [laughter] what about a story youve got on the insanity of London Property . Tim it is. It is in many ways a remarkable story. People are being priced out. They are even looking at hackney in shortage. Caroline my neck of the woods, no talk to us, brendan, about whats happening in real estate in the u. K. This is something the Monetary Policy should look at. Brendan i think its probably a global story, that we are seeing several global hotspots around the world, in San Francisco in particular, vancouver and toronto, where we are seeing the results of these monetary policies. A tremendous amount of money around the world looking for a home, and highend real estate is the place to go. U. K. , whethere the bank of england has focused on this as a policy objective in terms of Interest Rates, although it may have to use some attentional controls. Caroline lastly, theres a great story, tim, on wearable technology. Well know the bracelets, but this is something else. This is internally. Tim yes. The near fielde communication chips implanted in their rest. Their wrist. You can use it to open the door, sweat into the office. Caroline why not on your phone . You need to embed it . When you feel it necessitates a sense of ease . Brendan no, absolutely not. Caroline im all for wearable tech. But im not sure about this. Tim its an interesting point people are using is now, employers, to monitor their employeeshealth and health and wellbeing. If you have a fit that you can get cheaper insurance rates. Caroline tim coulter, thank you very much. U. S. Chieftsubishi of securities. Coming up next, we get earnings from allied irish bank can n they get back to private ownership . We will be speaking to the chief executive. eeeeohmumohweh hush my darling. dont fear my darling. the lion sleeps tonight. hush my darling. man snoring dont fear my darling. the lion sleeps tonight. woman snoring take the roar out of snore. Yet another innovation only at a sleep number store. And we look at whether the labor market will show further signs of improvement. The bank of japan refrain from adding more monetary stimulus. Irelands biggest state bank allied irish reports earnings. Bailout,billion euro we bring you the news as they break and speak to the chief executive. Countdown, i am Caroline Hyde. Lets get some breaking news on data from germany. This is just a german, june, Industrial Production data. Falling 1. 4 . It has fallen very short of expectations there. A drop of 1. 4 . This is europes biggest economy and perhaps a little bit of a sign that the recovery in the eurozone is not as stable or strong as some might think. Seeing a huge reaction at the moment so investors perhaps are not as concerned about this for now. But as i say Industrial Production in germany is down 1. 4 . Caroline keep an eye on the reaction. Just in yet up on my screen because yesterday german factory orders really pushed the euro higher. Reaction. Ing that the euro is trading lower this morning after that breaking news. Getting breaking results from allied irish banks. We will speak to the chief executive in just a moment but pretax profit is basically three times where it stood last year. Of course were unwinding those provisions they had against bad loans. They had gains from disposals and other items of 100 Million Euros and the loans are continuing to fall. They are going to be cutting their variablerate mortgages october the first and overall their Net Interest Margin also climbs year on year to 1. 92 . They say the results include prospects for successful share sales. Lets talk to the chief executive now. Byrne. In, bernard you have taken the helm back in may and you say that these numbers show things are more hopeful. Sale . Ou expect that share guest the encouraging thing is they show the progress we have made. Great. Lion estimate is but underlying performance supported by strong lending growth and an improvement on the impaired loans. All of that means we are wellpositioned to start returning capital to the state. Also we can deliver benefits to customers by reducing our standard variable rate for the third time as you mentioned. In the position to do this now based on the position of the business. Talkine there is also the about the simplification of your capital structure. Abouteference shares are 3. 5 billion euros worth that could be converted into equity. How are those discussions going with the regulator the discussions are going well. As you say that is an important step that needs to take place in terms of positioning that so investors can understand exactly what they would be buying into but it shows today that we can support quite a variation of that capital structure. Some of the shares will be converted into equity but some of them can be redeemed and thats because we are in the position to start living on quite quickly. We are seeing right backs as you mentioned. This is a positive step of just over half a billion euros. Is this a scheme that will continue . Guest i think we are in that early phase of the cycle with a good news is that the economy is performing stronger than we anticipated when those provisions were made so you are seeing some of the benefits coming through for the economy and just working with customers and getting through difficult loans. So i certainly expect that type of trend to continue. Varyxact equality will depending on individual outcomes but it will be something with us for the next six to 12 months. Caroline where on your list of priorities does this come. Anddoes the Property Market real estate exposure that you have how is that performing . Trend is theward Irish Economy continues to improve . Guest i think the commercial Real Estate Market has performed strongly but it has also come down from 13 billion to 80 billion. We are really beginning to get through this quite quickly. We have over 9 billion provisions against us. That strong Property Market and getting through each case is allowing us to see positive outcomes. Months i think2 you will seek meaningful progress on that and a proper realization of the balance sheet. Caroline so you are taking to the helm and you have been at the bank since 2010 but what are your Top Priorities for allied irish bank at the moment . What is the direction you want to be taking that will set you apart. And your investment rating. The key thing for the bank is to make sure with position ourselves to return the capital to the station. 21 billion worth of capital was invested and we need to make sure the bank has a strong profile. Wet is the key priority and are doing that in terms of the growth rates we are seeing on lending and very strong market positions. And making sure we deliver a bank that is very customer focused. It is turning the bank around and delivering against the customer need. Our costs are down 6 again. We delivered over 400 million in cost savings since we started. Get the bank efficient, make it possible. Here in the u. K. K we saw rbs start to go back. Are they going back sooner rather than later . Guest i dont think the state was to be in a position where it is owning a bank as a longterm asset. In the longterm the future for the bank is in private ownership. It also makes sense for the business in separating itself from the political ownership. Most people leave it is the right thing to do but we knew to get the bank back to profitability to enable it to happen and now it is time for the government to realize its investment. Caroline we wish you all the very best for repairing the bank at that moment. Now, lets get an update on how asia has been training before the jobs report. But what to david ingles in hong kong. It has been a downward week. How is it ending . David as you can see we are just two minutes past 8 00 in the afternoon here. For now nothing is really happening. We are seeing a bit of a down leg with moche most of these equity markets. There on the bottom of your screen, that index has actually trended lower. We are down more or less about 10 . Volume to civic as you would expect are quite low. Its not surprising given the fact that the jobs report for the rest of august into september whether or not money continues to pullout of the emerging markets and asia, it is just one data point. Said that was happening as far as equity markets. Perhaps my the few standouts are looking at right now. Today and that banks are lower today. Not a bad day for the Chinese Market. We basically have expectations of these speculations in the market that the government might or has started easing some of these restrictions when it comes to private placement. , a sources are telling us they have began to review applications for private placement. Its a bright spot and it is a start but at least it is something of an easing. When it comes to these interventions, you seen them do quite well today. Lets look at the fx markets. Not a lot happening but let me give you the levels from the majors. Inflation targets but in the meantime expect the inflation rate. Aussie dollar with a bit of a fight. Following rba the simple key message they are pushing back this timetable for this upswing in their growth cycle. Thiser flat session for one. We are waiting here and asia. I love the way you held those fx numbers about. David ingles live in hong kong. Lets see how all of this is affecting the emerging markets. We can get a broader scope on what is been happening in russia and brazil. It is having an impact from potential fed hiking. We are seeing all Asset Classes affected from bonds to currencies. What this selloff is about largely is speculation that a rate rise from the fed is imminent. Yesterday, jobless claims hovering near lows. On friday it is expected to show that employers added 225,000 workers to payroll last month. All adding to that speculation of a right rise from the fed. If we look at currencies what we have seen is that the ruble is rebounding at the moment. It did fall to its lowest since february. A lot of that is down as well to falling oil prices. Brazil real has been inclining political scandal but also the shift by the central bank to refrain from raising rates. Six days of declines with the real down 26 this year. Thats the most in the world. Currency at its lowest since 1998. Msci look at the emergingmarket index that is an equity index. That fell to its lowest since 2013. Today that is picking up a little bit. Pairing a weekly drop. Little rebound today happening because Energy Shares are climbing, as we see a bit of a rebound in crude prices. Also because speculation is growing that china will take more measures to stem a market route. Caroline now of course, it is job stay if you did not know. Payrolls are due at 1 30 p. M. U. K. Time. Investors will be searching for the meaning and the numbers. More on what we can expect. The next jobs report before the Federal Reserve meets in september. The surveys predict on average a gain of 225,000 jobs last month. The Unemployment Rate Holding Steady at 5. 3 . Economists predict the Federal Reserve will raise rates this year. Fed, Td Securities calls it a case of show me why i shouldnt as opposed to what i should. One reason why the fed shouldnt could be the wage growth indicators. Ride 2. 5 nings will month over month. They said growth in pay is the one missing factor that would help push inflation up to their 2 break. Employment cost index which measures both hourly pay an annual salary throws in the Second Quarter. The jobs data released by the u. S. Congress department do at 8 30 a. M. In washington dc and i will be there to bring you the numbers. Caroline this brings us nicely to the twitter question of the day. What is your forecast for the nonfrom payroll number. Let me know. I am at Caroline Hyde tv. From allianzngs earlier. After the break we take a social look at the numbers with the companys cfo. Caroline welcome back to countdown. Here so the stories you should be reading this morning. The u. S. Jobs report is out later today. To a 25,000 jobs in july. Ofwill stress the importance the jobs market in terms of raising rates. Corona bets on a rebound in the third biggest economy. The boj will continue to expand the Monetary Base at an annual pace of ¥80 trillion. Insurer beatest estimates for secondquarter profits. Earnings from the property division. Its earlierk to estimates. Im very pleased to say that joining us live from munich is the alliance cfo ally ends cfo allianz cfo. It seems it is a bright spot up from 39 . How much of that was helped by the Firemen Fund Insurance company. It increased profit by around 200 Million Euros. The 10. 8 is a true increase of our increased confidence. Caroline your upgrading your outlook. How much do you feel that potentially we could see warmer wind coming from high Interest Rates. At the moment you have seen revenue held back by ongoing Interest Rate interest in europe. Is there something youre factoring in . The Interest Rates are just back to the level we had just before december. They are still absolutely in line with the expectation. The higher Interest Rate really improve the earnings. Caroline tell us about the Asset Management part of the business. Pimco has continued to see outflows. But 29 billion euros is a lot to see flow out of your pimco funds. Is this still the bill gross effect . Have overcome we the effect and we are now in the tactical or strategic reallocation of moneys by our customers. July looks even much better. We have a very low single digit number outflow of around 3 billion which is a very small number compared to the very to the previous six months. Which is a lot of money to collect to break even. Products,k at the pimco is launching, compared to the success of their income fund, its one of the best in the industry and has very strong inflows. Very strong positioning in the bond house estimates. You expect netdo inflow . Think there is still a and i think wey are right on track were all hoping and planning for and that we may get closer to break even in the Third Quarter and then work from there. Allianzr asset manager Global Asset Managers booked 7 billion inflows in the Second Quarter and is doing very well. Have clients been seeking . You talk of a this being more of a strategic reallocation. What are they seeking for an the moment if they are looking for globalds allianz investors . Pimco we seek that good inflows from europe and asia. Allianz Global Investors and maybe european inflows. It is very much for investor targets why that it is a strategic decision is the pension need and it still goes very long into the bond market. You can invest in take a lot of risk and hopefully a lot of money. It depends very much on their own positioning and capital. How much of a beneficial quarter has the weekly euro been . Guest the euro contributed when you compared it to a year ago, around 200 Million Euros, that is the bottom line. Caroline will discontinue . Will this continue . What is your outlook . When could we see it start to change, in your opinion . Year at ahave set the of 1. 20uro ratio as a euro reporting company we are still . 10 on the positive side. There are probably more people lost on this than gained on it. We stay way from this. Many have voiced the warnings of with a very low the ecb still continuing to buy bonds. Think it is the right cause of action to have these low Interest Rates . Well, i think the ecb certainly has success and stabilizing the economy in europe that im not sure if germany is really benefiting from it. Plenty of supply for loans in the market. So the ecb efforts are certainly not adding anything additional. Caroline sir . Im afraid we will have to leave it there. Thank you very much indeed for your time. Welcome back and is now 7 30 here in london and here are some of the top stories. The u. S. Jobs report is out later today at 1 30 p. M. U. K. Time. The data comes as a Federal Reserve policymakers stress the importance of the job market. Australias central bank has indicated that the jobless rate has peaked. That push back forecast the growth up swing by a year and they expect average Economic Growth between 2 and 3 next year. Plunged the most in almost seven years after posting thirdquarter sales that missed estimates. The results mark the companys fourth straight decline in u. S. Advertising sales. Viacom is the owner of mtv, nickelodeon and comedy central. The bank of japan kept the Monetary Policy unchanged. Or central bank is keeping pumping that money into the economy each year. Brian fowler is in tokyo. There does this leave us in terms of the policy outlook . We will have comments from mr. Kuroda in just a few minutes. We will see what he says. The smart money is saying that more easing is in the works and that the market yield curves have been flattening and economists that we asked said that they expect more buying of etf and jgbs. Maybe not until january year but some point in the next six months. Corona seemsernor to be backing the fact that he can reach that target at 2 inflation. Is there a sense that you are escaping deflation . It is kind of a good news, bad news situation. If you look at any measure of cpi they are all in positive territory. All in positive territory. That is even with Energy Prices where they are. Wti at more than 100 a barrel when yuriko and less than half that now. Believes we one will hit 2 buy a year for now. I think even mr. Kuroda really doesnt believe that even though he will never say that. If he cannot reach the 2 inflation target will he ever people to step back from stimulus . That is the milliondollar question. Everyone else in the world is tapering and japan will never get there. We did a poll of economists on that question and 5 surprised us and said they thought tapering could start as early as midyear next year. 7 said 2018 would be the earliest. 25 said not in the foreseeable future. It is way out. Caroline we are still seeing 124. 81. At what is your sense at the yens level . Is it where the boj wanted to be . Will is one that the boj never tell us in any explicit terms but in our sense both from reading the tea leaves and in off record meetings we have had is that the dollar is somewhere 124 and 126 are comfortable for the boj. The small to Mediumsized Companies which are not getting the benefits of the weekend employee a lot of people in this country. Limit. There is a were pretty much there. Caroline theyre talking about a Virtuous Cycle currently happening in japan. What would it likely do . The most likely scenario would see an increase. In that pace of jgb purchases. The boj officials tell us they are quick to point out that the boj, or holds 20 of the market, or did as of april this year, compares with the bank of england which at one point had 40 of the boj bond market. They believe if they to do it there is room for further bond buying. Caroline while that pressure is ongoing with governor corona, he is still sticking to his view that you will reach inflation of 2 by the first half of 2016. Lets see how emerging markets are trading ahead of the u. S. Jobs data today. Been a bit of a downward trajectory. Emerging markets are really being punished by a stronger u. S. Economy. Has happened is we have seen this selloff in stocks, currencies and bonds and emerging markets. What has been supporting that speculation and some of the data joblesshad, yesterday claims were shown to be near for decades. We get that allimportant jobs data. All of that fueling that speculation of a fed rate rise. Thats rebounding oil prices helping that but it did fall to its lowest since february before that. Drivenan real has been down by the ongoing political scandal. This currency is down 26 this year. The most in the world. If we look at the malaysian ringgit, falling to its worst since 1998. Currencies are still being punished. I emergingat the mnc market index, it did fall to its lowest in two years. Its pretty much a flat right now. What pushed it slightly higher today speculation growing that china is going to take more measures to stem the market route. Caroline thank you for breaking that down for us. Lets take a little bit more of a corporate view now. Lets break down these results. Dora, we are speaking to the chief executive earlier and it is struggling in terms of profit. What do the results tell us about where aib is heading . I think we need to take a step back here and consider what a basket case aig was. This one needed a 20 billion euro bailout from the irish government. With the improvement in the economy things are improving at aib and we are seeing profits back over one billion. The reduction in bad loans and the mortgage book improved. There are significant legacy problems within the banks. Theyre coming down and they are still significant that having said that it does look like they put the banks on course to move back into private hands. Their performance has been helped by the fundamentals of the Irish Economy. What does it tell us about how the Irish Economy is doing . Know is the Irish Economy is the fastestgrowing in the eurozone. Clearly we are seeing an increase in the jobs numbers. Back upment has prices again about 10 year on year. In terms of where this gets back into private ownership the thernment has talked about senate selling a stake a soon as november but that looks unlikely. A lot will be determined by the elect oriole timetables. Keen to get some money back so we could see some kind of deal on the back of improving the Irish Economy. Caroline thank you very much indeed. Lets take it back to what is arguably thought to be the most important piece of data in the world. The u. S. Jobs number the unemployment is currently at a sevenyear low but some commentator say it is not so rosy. If you instead look at the number of employment. The number of people working. Fed could be raising rates ostensibly because it is concerned the economy is going to fast and we have an issue of inflation. It is hard to pit with the economy we are seeing. If we look at the Unemployment Rate, five point 3 is not bad but if you look at the employment rate something that many of us have been talking about, we have nowhere near recovered to the employment rates we saw before the downturn. Caroline lets introduce our next guest. Thank you very much for joining us today. On if to get your view the u. S. Economy has recovered in us for an Interest Rate rise. Is it ready . We think so. Growth has disappointed a little bit at the start of the year but is now beginning to rebound to we generally have to accept that the new normal is quite a lot lower than where it has been before the financial crisis. Reduction in the unemployment growth and wage growth as well. Inflation is coming through and that is beginning to worry the fed. Caroline september or december . We think september at the moment but it will largely hint on the data today. Caroline talk to us therefore about the ramifications as an investor. We had brendan byrd on earlier talking about the hazard he feels from quantitative easing and if we have asset bubbles. Do we have asset bubbles and will happen to the emerging markets . Ofthere will be some kind asset bubbles but nowhere near as stream as we have seen in the past. They are very small at this stage and the risk is that the longer Monetary Policy remains this loose or this long and the greater chance these bubbles continue to inflate. Become more difficult to deflate. What are central bankers having to take into their minds eye as they do it in an orderly fashion . We understand there will be small rate rises but is the market comfortable with that yet . Are they hearing what mark carney and janet yellen are trying to tell them . If anything they are more sanguine. Theyre getting excited about the fact that Interest Rates are going up. Be on markets seem to board at this stage and they recognize the strength of the economy coming back. Perhaps a bit of a difference between the different sized markets. Caroline if we are looking at the commodity spectrum as well, we are seeing significant bear markets for copper this week and oil still near sixmonth lows how much is the u. S. Policy feeding into that or is it a supplydemand issue . U. S. Policies are certainly not helping but it looks like it is a combination of oversupply and lack of demand. He is now being scaled back leading to a lack of demand for the raw materials. This is going to carry on for quite some time. The peak in u. S. Interest rates which we are years away from seeing. Caroline likely to see further falls and commodities . We think so. At least potentially even staying at these low levels for a long time. You will beknow sticking with us but if yesterday marked the first super thursday at the bank of england. They were announced all in one go. Some of those numbers from ginny murray at bloomberg intelligence. It was an interesting moment. We saw a big moves in the pound and bonds and equities spike higher. It seemed everyone thought this was very dovish. With a right . Were they right . In my opinion no. It was a split and a surprise relative to what most economists thought. I think it is fairly arbitrary. We know that they will be following quite soon. What really matters is content of the inflation report. Look at that and it was relatively hawkish. You had inflation at two point 1 with repeated references to excess demand. Monetaryrequire extra enticing and not less. Caroline do you agree that and feel that the market interpreted this as too dovish . I think the market miss took where the bank of england was at as an institution. They felt that the empty seat had moved ahead and now we see less coming out of places like greece theyre willing to start voting for those ray kite rate hikes but the content is becoming more hawkish as we move forward. Caroline jamie, and your opinion, when will Interest Rate rises occur . They have been very clear they are data dependent and that means theyre looking at labor costs. Looking at how wages are involving. Its the only game in town thinking about inflation a couple years down. We think we will seat wage growth and that will prompt the rates. His or even a risk it will happen in november. February is our official forecast at the moment but the falling Commodity Prices really does put that at risk now. When we are updating inflation models were looking at inflation mum 1 for next year. Our concern is that the bank of england could struggle to communicate white it should be raising rates. As a result committee looking at may as a more realistic. Caroline thank you very much indeed. In the senior european economist, you will be staying with us for the time being. Countdown we have a further look at the United States. I wanted to get your opinion on where will we see the job numbers later today . What is your forecast . 240 5000 jobshat will be added for the month of july. Back after this short break. Caroline welcome back to countdown. Here are the stories to know this morning. The u. S. Jobs report is out later today at 1 30 p. M. U. K. Time. Are expected to have added 225,000 jobs in july. The data comes as Federal Reserve policymakers stress the importance of jobs markets because of raising rates. Europes biggest insurer allianz beat Second Quarter profits. Allianz stuck to its four year outlook saying it would be at the upper end of the range. Viacom plunged the most in almost seven years. Sales dropped by 11 to just over 3 billion. The companysrked fourth straight decline in u. S. Advertising sales. Viacom is the owner of mtv, nickelodeon and comedy central. Lets bring it back closer to home. Lets talk about that unexpected drop in german Industrial Production this morning. Lets talk more about the economic picture in europes economies. Still with me are the european economist. Yesterday we saw a phenomenal move in terms of german factory production. They are down on Industrial Production in germany, how much should we be looking at this data . It tells us a couple things. The leading indicator is that pmis surveys have been optimistic. They have been climbing and climbing at suggesting that eurozone growth could be running at about 2 year on year. When we get to q2 numbers it looks like it may have contracted even. Quite a noticeable slowdown in Industrial Production. We know that retail sales have been very strong. We could get a bit of an uplift but it does look like it will be a pretty weak quarter all around for germany. Only spain and we have already had the flash estimates for spain looks like it is really outperforming. Caroline how much should we worry about the spanish economy . Could this be the next Political Risk in the euro . It has been the big question for most of the year. Where are we going to see political contagions spread from greece to other nations. Year, thent this candidate was leading the polls in spain. Since the economy has started to pick up and sent we have seen the disaster of the Greek Economy and what syriza has done there, the candidate has fallen back to about third place in the opinion poll in spain. Still a very important election but it looks like he will not be having such an impact their. Thanks for helping us see what to look out on the European Data and if there is any Political Risk to come from contagion. We are just a few minutes ahead of the European Equity market open. Jonathan, what is your eye on . Jon this job stay is the most important ever. The most important since the last one and before the next one. It is important because it is the penultimate report before the september Federal Reserve decision. Expected to come in at about 225,000. More importantly, keeping that average just above 200,000 for 2015 and keeping the Federal Reserve course for the first interestrate hike since 2006. After that we will talk on the route talk about the route on the nasdaq yesterday. The worst they in two months. Traditional media stocks sinking that index. Consumers cutting the cord and we will talk about that today. 8 40 tremendous amount of political noise coming from those republican primary debates. We will bring you some of the political news. The iranian deal the agreement. One leading democrat voicing his concerns and why he may not agree to it. That is the news. Caroline we look forward to it. I know you will be putting your thoughts out on where we will see jobs numbers. 225,000 is the consensus. Have a little look at where futures are trading. We are seeing a pretty mixed outlook. Euro stock 60 basically flat. Please stay tuned. Jonathan good morning, happy friday, and welcome to on the move. Moments away from the start of european trading. Jobs day in the usa and ultimate labor remark before the september meeting. Will the fed be on course for a rate hike . Fromank of japan refrains adding more stimulus. Sink the stocks nasdaq. Traditional media is deepen them read deep in the red. Not just that, we break down that not so super thursday. Futures unchanged, and tax futures lower dax futures lower. Caroline we are expecting a flat open. All eyes on the u. S. 225,000 are how many jobs are expected to be added. This is why we see the emerging markets selloff. Could increasey their rates. Until 1 30 and see p. M. We did a disappointing numbers coming out of germany
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