We will take you to the frankfurt auto show. And anticipating apple. The worlds most valuable company is set to unveil look at be his most important Product Launch in years, the iphone x. But will the price point be too high . We will discuss it. Lets take you first of all to the frankfurt motor show. Matt miller, what are we going to be taking away . What will be the big theme . Does it involve batteries . Matt i think for the first time in years, we are seeing a major change, a major, multibilliondollar change from all the automakers globally. Volkswagen is talking about losing capex to create more electric cars, putting out orders for 50 billion worth of gear. We are hearing about cost cuts at mercedes that are going to be about 5 billion. Huge shift as this industry moves from diesel powertrains to electric powertrains, and that is all we are hearing from almost everyone we speak to. I have already spoken to a number of ceos, we will hear later from the ceo is lamborghini a bit of a dinosaur with its 12 cylinder and 10 cylinder engine . Those things might be a part of the past but we will hear from the ceo in just a little bit. Guy fascinating interview, looking forward to it. Away, about half an hour 27 minutes away, from the start of cash trading in europe. We will be watching more risk on, that seems to be the theme. Not as pronounced as we saw yesterday but this is the fair value it is a calculation showing you where equities should be opening and they should be opening around. 3 . Indon is a laggard percentage terms and it looks like it will open softer. Lets see what we are seeing around the world with the gmm. A great tool for telling you what the story looks like more broadly. ,heres the record yesterday Japanese Equities continuing to roll on, really an incredible rally in Japanese Equities. 2 , thatsup right an interesting dynamic. Lets talk about what else is happening around the world. Move this year in the japanese 10 year, trading yields up around for basis points. There was an auction that has gained momentum so that is a story to Pay Attention to. The gmm is flashing red. Lets catch up with what else we need to know with the Bloomberg Business flash. Juliette thanks. Governments plans for taking the country out of the European Union has cleared a major hurdle. In a vote after midnight london allowthe makers agree to the eu withdrawal bill to continue through parliament by 326 votes to 290 after Prime Minister theresa may promised discuss concerns before they had to vote again and to consider allowing more time for the next stage of debate on the law. In the u. S. , the people of florida are assessing the damage of the countrys second major hurricane in 15 days. They avoided the worst predictions of destruction but by one estimate the total cost of the damage dropped to 49 billion. Still, 12. 3 Million People is more than half the state population were without Services Last night. Norways Prime Minister has become the countrys first conservative party leader in three decades to be reelected. The victory was narrow as the the Opposition Labor Party had its worst Election Results in 2001 as an economic rebound and declining prospects boosted the coalition. Janet yellen met with Donald Trumps dollar daughter and advisor in july according to the public schedule. Eight days later the president told the wall street journal that she was in the running for a second term. Yellen has declined to comment on whether she would like to stay in the job most economists expect the president to pick someone else. Global news, 24 hours a day, powered by over 2700 journalists and analysts in more than 120 countries. Bloomberg. Guy thanks very much. Asian equities another leg higher, treasuries under pressure with less damage than originally feared, supporting the case of a gradually improving u. S. Economy. Now, hsbcs global had a 16 income research, the bloomberg mliv strategist. I want to start with a chart that i pulled up earlier it is the gap at the treasury market that we had a couple days back. Why hasnt it been filled . What does this tell us about the state of play . It is bearish for bond futures. People in north america usually like to fill the gaps pretty fast so the fact that it is still there could be a bearish butcator for the market when you look at asian equities it is a risk on day and obviously it could fall back into the s p 500. It is shaping up to be a bumpy start. Guy mark, we find ourselves in a position where we are wondering if you have turned the corner. Data,eeing chinese api the lead indicator telling us whats happening with global inflation. The work a look at function on my bloomberg, it has priced more in from the fed over the next 1218 months. Maybe starting to turn, will i get overexcited or is this something substantial . For now, dont get too excited. Nothing is priced in. If there is something the least bit hawkish the market has lots of room to price in changes because currently it is as though the market doesnt expected to do anything. They are assuming it will be a flat situation for the whole of next year. Guy amazing the way the pricing has moved. Remember, you can get his smart analysis from the rest of those team, mliv. Functionality worth read bring. Lets turn our attention in more detail to whats happening with the u. S. 10 year. Im not sure i can zoom in on this, but these are the candlesticks maybe just click this. Hit, 2. 0161e have on the yield, that is awful close. What have you made of Market Action . It is moving in a logical fashion, toward our forecast. I am struggling with what could for ably be a reason sustained move higher. We have had five consecutive months of downside inflation surprise. Be actually get to some point but unless we are sure we will have five consecutive months of upside i think it is difficult to look at inflation is a major risk the bond market. Then theres the rest of the world and the way qe continues to spill from one region to another. Whether it is three or four the bank of japan has basically nailed the jgb close to zero so what people are missing is the diminished stock element, not just the flow story. And int going anywhere a world where you have jgb close to zero i struggled to see how treasuries yield much more than the current level. The idea of going to 2. 5 seems as our. Bizarre. A we have unambiguous evidence that they flow from europe to asia,s. , from europe to and the g3 markets are totally locked in. It is not the only argument for low yield but i am saying i struggle with the idea just because the yields are low. Guy ok. Where do you said . The likelihood is we are not going to be much higher than that by year and. We reduce that yield forecast. It looked good in june, we were basking in the sunshine in june, because banks to central and ands, the bond went to 60 then you have a tantrum. All this talk of taper tantrum was three months ago. With the ecb locking in a negative rate according to the forward guidance, unless they change that that is what they will do so you have negative rates at the front and and it is difficult to see how it can go up dramatically. I may have missed something but all the recent evidence suggests downward pressure on inflation it has to as the euro goes up. You have had a year of upside surprise in terms of real economy data, but the ecb is going nowhere fast and the tapering is pretty much discounted every man and his dog knows it is going to calm, the question is do they do a lot upfront or do they taper . Lets just get over it, we know what is coming. Guy Steven Woolfe stick around. He is the head of fixed income research. Still to come, lamborghinis ceo will join us, talking to matt miller. That is next. This is bloomberg. Guy 14 minutes until the market open, lets talk about french politics. Demonstrations planned across france in response to the landmark labor market reforms. The countrys second Biggest Union says 180 demonstrations are planned and 4000 strike notices have been filed stop joining us from paris is caroline connan. The real question i want to ask you is are these protests significant enough that mr. Macron will in any way Pay Attention to them . He has a very strong mandate, he was expecting that there would be demonstrations, are the demonstrations big enough that he will sit up and Pay Attention or will he say this is what i was expecting and carry on . I think the demonstrations would have to be really massive for him to change because he wants to pass this reform at the end of september at the latest and to be honest, this is not expected to be a major strike paralyzing france like we have seen in the past. There will be some demonstration across the country from Oil Refineries but daily transport will only be slightly disrupted andcommuter train highspeed trains or International Trades are not expected to be disrupted and only the second Biggest Union has called to join the strike. The head of the said that this would only be a success if you had more than 200,000 people in the street. Emmanuel macron may have added fuel to the higher last where he described his opponents as the lazy and the extreme so Jeanluc Melenchon has called for the lazy to take to the streets today in france. This may have convinced some were hesitating to join the strike. Caroline connan joining us out of paris thank you. Guy steven major is still with us. If you were mario draghi, how much attention would you be paying to the structure reform story happening in france . He has for so long and on about the fact that governments need to step up and deliver structural reform, that they are were the focus of attention should be. It is true that the ecb can only do so much and maybe the mistake the market makes is to expect too much from Central Banks because it is supposed to be about finetuning. Economic growth comes from hard work and productivity. Can borrow it from the future, which is what has an happening, and people are wondering why we havent had much growth. But the point is well made and repeatedly made and i think they are quite frustrated and it is probably difficult to contain that. And its not just about the structural reform, its a supplyside reform. Spain would have been a good example. Is spain ends up taking the markets of other countries that havent reformed and the has been going on for a while. The point is well made, complicated by the fact that in the background we will have to see meaningful steps at some point. Its a lot of work to do guy macron hopefully is delivering some of that if you are draghi and you see evidence of it actually happening, do you say i can step back . You want to see meaningful and tangible steps. It is one thing to make a promise and its another thing to deliver. It needs to be seen in the data. But as analysts we are guilty of looking at all the lefthand risks, what could possibly go wrong . Maybe we need to spend some time on the right where the data has , maybe if weod spend more time on the righthand side you can expect yields to go up. Guy the market is priced to taper so i am wondering what is next in terms of how the reform story works. Lets talk about italy. We have compressed down toward germany and it has been a fairly decent move. The elections are coming. At what point to do you think this story changes . Where do you see the spread moving . That has been a pain trade for a lot of people. Half of the attribution in that is also the upward moves in bunds. We had negative yields. Have beennvestors short, which is another way of saying they have been underweight, waiting for something bad to happen. After going through the dutch and french elections, the lazy thing to do was to focus on i could go a lot further into the future then people are expecting. If you news has been pushed into the future and meanwhile investments need carry into the market of low volatility, credit spreads are compressed. For now, everything looks just fine, but if you look into the future we dont really know what will happen with the election, all i can do is tell you what i read and see in the polls. It strikes me that theres a good deal of uncertainty. People probably put this at the bottom of the list. Guy steven major, global head of fixed income research. Minutes away from the start of cash trading inequities. Up next, a look at todays movers. Credit agricole wants to focus after an announcement that we are going to be seeing a big steak being taken in the company by the saudis. That is next. This is bloomberg. Guy welcome back. Four minutes away from the start of cash trading. I want to redefine what is happening with agricole. Buying 60. 2 ngs is stake from Credit Agricole, the deal is valued at 1. 54 billion. That is exactly whats going to happen surrounding Credit Agricole. We will watch to see how it trades. The market open is coming up next. We anticipate that we will see a positive start. This is bloomberg. Guy a minute until cash opens in europe. The thing you should take on board as we set another record yesterday for the s p, we are likely to see that continuing to the european space. London a little laggard, the catch it on. 3, nymex. 3. Another pop as european equities get going. The commodities story remains relevant. , thether story to mention car sector. An interesting story to watch out for. But see how markets are opening. Around 20 seconds to go. Looks like it should be a positive story. How much longer will this risk rally carryon for . I know the market priced allotting over the weekend. A lot in over the weekend. Does it justify what we have seen . Ftse 100, trading around the 74 level, we expect that to be a little better bid this morning. We are expecting a similar story for other markets. 7413. 56 is where we are trading. 600, up initially around. 1 . The fair value pointing to. 3 of 1 . 3 , the daxcac up up. 4. Of a move upwards are we going to seeing European Equity markets . Futures, all of our european morning have been pretty meted. The Asian Session picked up from the United States and positive form and the u. S. Session was pretty strong. We saw the s p 500 closing at an alltime high, we are pricing that into the european session today. European equities opened up strongly, financials to the fore, industrial going as well. Move to be a broadbased higher in European Equity markets. Weve got those industries in positive territory as we saw in the United States. That was driven by financials and technology stocks, but everything was on the move higher. The u. S. N, start of gilt trade and the inflation data for the u. K. In focus today. To number to watch out for, point it percent, the estimation for inflation. That would come up from two point 6 over the summer. The pound the driver here. Bloomberg intelligence saying if we saw the bump up, it would be because of fuel prices. They see inflation peaking at 3 . Blog, if we see a higher print, does that send the town higher pound higher . Interesting to see if that is the reaction we get. In the pound, strength has not been the story for 2017. This puts it in the longterm perspective. Sees thehart, 2017 weakest average price against the u. S. Dollar since the early 1970s. Alan higgins about this story earlier on today, he sees positive for the pound. He sees upside potential for the pound. He says the kind of movement we have seen in 2017 is pricing in a bad brexit and if we get a transitional arrangement, it might not be quite as bad as that. That is his and analysis on the u. K. Assets right now. To theables in response vote late last night into tuesday morning, the labour party has tabled their first amendments. Will the theresa may legislation survived the Committee Stage . That is the next big questions. Anna, thank you. But stock about where the markets are in terms of the individual names. Partners group confirming guidance, the revenue numbers look pretty good. Top line looking fairly favorable for this business. Trading up 6 . Up. Trading hastings trading nicely to the upside. Lets look at where the losers come through. Let me highlight something we are seeing this morning in europe. Youve got some of the barrattn is down, trading lower. Definitely a theme in the house billing sector. We are getting inflation data out today, wages tomorrow, bank thursday. Interesting little run when it comes to the bank of england. Janet yellen and about the trump held a meeting on july 17. This according to yellens public schedule. Eight days after that, the president told the wall street journal that yellen was in the running for a second term. Janet yellen declining comment on if she would like to stay in the job and while donald trump has not said anything publicly signal he has sided against what bloomberg expects, to pick someone else. We have the implications and where the fed goes next. Steven major is still with us. Do you Pay Attention to this stuff, in terms of your thinking . Yellengot janet potentially going, fisher potentially going, a bunch of other opportunities to place replace people on the fed. How important are the people, the unknowable aspect of peoples decisionmaking in how you are thinking . Stephen unknowable and uninvestible. I guess we worry about personality shift, that is the current one which is why we focus on that. What was happening at the start of this year when i was in a our chief with economist, we floated the idea that maybe mrs. Yellen could continue and nobody around the table agreed. In fact, the reaction was quite strong the other way. I would say the probability is thenr today than it was and it was still meaningful volatility back in january. Say, it has what to to be strongly possible that there is another term. And the market has, based on my soundings at the start of the year, hugely underestimated that possibility. Uncertainty,me of cant to annuity continuity might be what you need. Guy let me point some doubt there something out there. How big shift would the man who has fought draghi every step of the way, takes the job . A robust debate and people have difference of opinion. If you take the job of chair, or president , the chair is the term they use in the u. S. The chair has to facilitate all kinds of opinion. Chair, which is a role that is called the president in the case of the federal reserve, it would have to be someone who facilitates and carries the whole committee. Im not filibustering you with the answer, i am saying nothing is out of the question. I guess people moderate their behavior as they take different roles. Im not saying yes or no, nobody knows. Youve got a screen of prices up there, why do you ask one of them . Guy, it is no, i just ask you with genuine interest because i wonder when you look at with citibank is such a factor in how markets have traded, and the person at the pinnacle at the of that signal, they may have to in their approach to policy. Nevertheless, they sit at the apex of that pyramid and Central Banks set the price of everything. Steve it is about personality and framework i know, draghis framework may be different from others. Steve the seat of the president is different. The seat of the president of bund is bank. Candidates would apply certain rules. You dont have to be a Rocket Science to work out what im talking about. If john taylor was doing it, if you were to apply a formula, some of it is easy. Just because one person has been hawkish in the past doesnt mean they will be in the future. I will give you good example of missed summers in mr. Summers and u. S. , he was a candidate known as a hawk. Since not getting that role, he has been one of the biggest revamped to has a dovish view. There is plenty of precedent of hawks being doves. It is not investable. Guy you can find out what john taylor would think, you can check on your terminal. At david looking was sitting in your chair, david bloom, yesterday. Steve i thought it was a bit warm. I sense some hot air around. Guy he was talking about the allowing fx markets the central bankers to be more cautious. Not be more cautious, to be able to very insightful that david and 15 made about fx being the new central bankers. My observation is the moving eurodollar and another currency pairs, we think about the loony, the swiss franc, the euro, the yen, they have all paid may big moves made big moves. ,efore these moved happened the paths of the rate differentials were implying moves in that direction over a multiyear. What the effects market did was look at five years worth of forwards and did it all in one week. Did it in a month, actually. Right, itection was was up front. The thesis david is proposing is quite interesting because fx is one of the least corrupted markets. We know bonds locked down and there are diminished talk issues in japan and germany. We know the fed has mitigated the term premium. We have a global term premium to deal with. Equities to some extent have been manipulated by the level of discount rates and some direct purchasing by Central Banks. Fx is one of those markets that is not corrupted and so, davids point is if Central Banks arent going to do the tightening, the fx market will do it for them and that is exactly what has happened. So it is interesting way of looking at things. His point is we have levels that are more reasonable. Guy but he is looking forward to some of the other Central Banks, other pairs that havent seen the moves coming and anticipate it is coming. Interesting, to talk about how you price stuff and what you stephen is going to stick around. We need to talk about what is happening in the u. K. Steven major, joining us from hsbc. You can watch this Program Using a number of screen options. Your bloomberg, tv , is fantastic. Not only does it give you tv, but it also gives you the sidebar that allows you to access all functionality, guest insights, what is happening in terms of breaking news, breaking data, you can pop out these charts and ask the question just a question. You can also access the ib function by ibing matt and me directly. Joined. We will be matt miller will spend a lot of time talking about the 12 in the next few minutes. He will be talking a lot about electrics, as well. How does an electric motor fit into a lamborghini . That is next, this is bloomberg. Guy welcome back, 15 minutes into the equities session. Where do we sit in terms of the markets . We are not that big. The ftse 100 trading up by. 3 . Toxx 600 by the ftse 100 pretty flat at the moment. The dax and cac are both bid, they are up by around. 2 10. 2 . Look at dividend yields at the moment and what i am getting in treasuries and i look at what i am getting elsewhere, we are getting into some crazy times in terms of the relationship between equities, what they give out in terms of yield and what i can pick out in the bond market. Steve the more valid comparison might be equity to credit, so you when you look at the height whens with the two handle, the dividends of the companies, that looks that starts to be an interesting comparison. Theyll forget, the whole world is short of rates markets. Everyone is short duration to hedge their credit thats. Bets. Theyve all got curve steepeners when the curve has been flattening and short duration to hedge the credit. What could possibly go wrong with that . Well, we might see. I dont know, but these bondequity comparisons, i dont how valid they are. Guy i only bring it up because at at t is yielding more than the greek tenure, which may say more about at t than it does about greece. Steve it is interesting to make those comparisons. I dont think it gets you anywhere because ultimately, in addition to the dividend, you want your money back. And also, you are assuming the dividend will continue to pay at the rate they are currently paying. There are a lot of assumptions. Guy what would you pay for a lamborghini . Matt miller come over to you in frankfurt. Matt thanks very much, guy. Im am here with the ceo of lamborghini. Havingoh, thank you for us. I am looking at a couple of cars i have to it may, i am in love with. But i wonder if they are also dinosaurs in a sense. 12 cylinder and 10 cylinder petrol engine. Are they going to become a thing of the past very soon . All, thesefirst of are iconic cars. They have a great value to our customers. For sure, there is no doubt the vision of the future makes us think what is next . And i do think the next step of lamborghini will be for sure diversification, but we dont have to forget this iconic car. This is the position we need to take in order to keep alive the dream that the customers want to see. Matt the poster every kid grew up with on his wall is sitting right in front of us. What is a Sales Outlook for a vehicle like this . The roadster we are looking at is a beast of a car, also very expensive. And a little late in its life, as well. What you expect from it . Far, the success 2011, it has been very strong. This kind of number will stay for the next couple of years for sure. The reason why today with the roster, we are launching the new family shows, this new we want to give to the customer back. Huricon has become the track favorite of amateurs and the when gt three racers put in the professional races. Is there another 12 cylinder car in the future for lamborghini, or is this the last one . I still believe there is potential to have a longer life and therefore we are working to see what is the next move. Is an iconic engine. What are the challenges . Regulation. Sure weto make anticipate what is most likely happening in the future, but we see still a medium longterm of life. Matt you are coming out with a new model, hopefully in december. Unveiled. L see it it has an eight cylinder engine, i believe. Is there a possibility we see hybrid powertrain on the uris . Starting today, we will start the countdown for that data. Almost double the volume of brands. Matt to about 7000 . So,ano i would say doubling the size of the company and increasing we need to make sure the new customers that come in will love the lamborghini family. This isfirst question, ari been decided. Matt is an all electric lamborghini in the lineup . Butano too early to say, an electric sports car is too early to say. Matt you have put out a study of a concept car that has electric and gasoline power, is there any chance we see that come to fruition in the near term . Stefano as soon as we have passed through the peak of the reparation, when everything will be stabilized, i think that is when we will decide if we see something connected to these solution. Matt let me ask you something about racing. We are seeing more of the urucon 3 racing. Gt how important is it to the brand . Stefano it is something our customers are in love with. We need to make sure the next step in the platform will be solid and therefore, next year for sure, Great Success all around the world, customer peak and then we will see what will be the next step. So far from what we need to invest in the different projects. But i would say stronger in the future. Much for youru so time. Stefan no minute collie, ceo of lamborghini. Having a great day, matt miller. Hard to argue with. He is trying to look serious. Hsbcs global head of fixedincome research is still with us. Matt is having a great time. They are out there talking about cars. Ive got the wrong jake here. , matthonest i didnt knows a lot more about cars than i do. The car industry is going through big change now. They are shifting power frames. Shifting from diesel to electric. Youre going to see changes in the car industry that are going to be significant, the truck industry. It is written large across so many sectors. Ares nice to take what we seeing their and factored into the market. Have you factor in the big change like that, which could be inflationary, deflationary, it is significant in terms of a really big industry. Have you factor that in your thinking . Steve i know you are not a Central Bank Governor and are not having to run the finance ministry, but you have a lot of money and how it gets invested is dependent on these big shifts. A week goes is not by without us using some kind of car analogy. Maybe that is just the men. Guy it could be. Steve because we talk about changing gears and engine size and acceleration, abouts Central Banks not being the engine of growth. Acceleration, countless examples. Colleaguesne of my on the credit side talk to me about secondhand car market. The example of diesels, what has happened there . What has happened to the valuation on secondhand diesels . Now you have the electric cars. You are pointing to autonomous cars, what happens to the people currently employed driving cars . Some of my colleagues have published work on autonomous vehicles, is this inflationary . That is what we see unless we are missing something. A seems to me we have Downside Pressure on inflation because there is certainly on wages, because it will push people out of work unless there is something else. You are trying to make some link command in frankfurt. Saying the disinflationary forces at the moment look more embedded on a daily basis and that is what i am getting at is that as you look at your target on treasuries and then what is happening in the real world around you, can you draw line . Steve it is an anecdote that feeds into a bigger story on which is not going up and therefore, core inflation is not rising and hence, we have the low we will talk about the u. K. In more detail. Question for steven major from the audience. The market has a tendency to run ahead of itself, a rate hike in the euro is far down as next year is getting discounted. A u. S. Rate hike is being considered uncertain. At one point do you think the positive rate differential enjoyed by the u. S. Dollar comes back as a factor for influencing dollar direction . Steve i was hoping you might filter the questions. Guy no i am asking them directly. Maybe something that might drive the dollar up his maybe liquidity drawdown. On rateare focused differentials and cyclical drivers, that is all very reasonable, but the forwards have been playing out a tightening of european and u. S. So thatferentials, observation around the recent development is consistent with what we are seeing. The treasury boon to spread has compressed from a multidecade wide at the start of the year. That is consistent with a stronger euro, weaker dollar. Guy steven major has to leave us. Guy the risk rally rolls on. The s p 500 rises to a record high and treasuries tumbled. Has the dollar turned corner . Vw plans tolectric, 2030. Electric vehicles by we are live at the frankfurt auto show. Plus, anticipating apple. Set to unveil what could be its most important Product Launching years, the iphone x. Good morning, welcome to the european open, imf miller at the frankfurt auto show alongside guy johnson and our European Headquarters in london. What is happening at the auto show is fascinating in terms of the big shifts we are seeing in the car sector. Change really has to have big economic implications. We are 30 minutes into the trading day. Thats talk about where we stand him markets. On markets. Up by around. 3 and as predicted, the london market acting as a laggard in this mornings market. Nevertheless, the risk rally around the world continues to roll on. And continues to trade through today, the s p hitting a fresh record yesterday. Here is sebastian salek. Hasstian the saudi prince signed a hold agreement to buy a stake in Credit Agricole. The deal is expected to close in the second half. People familiar said that Credit Agricole was considering a sale of its 31 stake in the saudi lender, in a deal that could fetch up to 2. 4 billion. A form of Deutsche Bank head of subprime lending has been accused of defrauding investors in mortgagebacked securities before the financial crisis. Alleges that the quality of loans underlying resulting in 100s of millions of dollars lost. He categorically were denies wrongdoing. Itsas agreed to sell contraceptive business for 1. 1 billion. The move comes as it works to turn the company around and reduce debt. Just yesterday, shares soared after it ended a sevenmonth search for new leader as it named carl shows a blood bank as its new ceo. Standard chartered has been called in by the markets regulator to discuss allegations of bribery. According to a person with knowledge, the Financial Authority is meeting with Standard Chartered this week on the issue. A smoke spent spokesman declined to comment. And apple holds its launch later today. Tim cook is expected to unveil three phones, including a freebie model. The event marks the 10th anniversary of its iphone. Bloomberg will be need special coverage from six clock p. M. U. K. Time. That is your bloomberg is this flash. Sebastian, thanks. I am at the frankfurt auto show, speaking with ceos of the biggest carmakers in the world. The german carmakers have been shift tohis change electric power trains from of course, diesel after the crisis that are here following dieselgate in the u. S. We have been hearing about huge cost cuts at daimler, 20 million in in vw. They told me they know dont need to make cuts to get that extra money. Very robusts financially speaking. Dont really have to worry. We have the necessary wherewithal to implement our plans. Of course, we are making investments every year. We are investing parts of our profits. We have done it in the past, we will do it in the future. We will make the money we need for those investments. Matt you still feel the need to selloff certain units if there is talk about the possibility of a sale of ducati, some heavy truck parts units, maybe an ipo . Is that all Still Necessary to this plan . Reading about this in the newspaper, sometimes i really dont understand this ongoing discussion. One of my most important tasks is to think about our Product Portfolio on an ongoing basis and ask myself if we are properly positioned for the future. This is what we do, we are relaxed about this and if and when decisions need to be taken in terms of a sale or acquisition of companies, then we will talk about it openly. Matt you did say in the press release today you plan on an electrified version of each of the 300 or so models in your portfolio. Does that mean we will see another trick ducati monster or even a super bike . Ask ducati, but volkswagen question, has learned from the past. Over the past two years, we have understood what people understand by sustainable mobility. This roadmap that we have announced and you alluded to is a self commitment and is going to be our optic going forward. Guy you have a goal for at 2025 a newer goal to have 80 electric vehicles, 50 fully electric and 30 hybrids. Going to be the infrastructure in germany, i dont see supercharger stations all over the place. Even in the u. S. , outside major urban areas, and that is a much bigger country, there is a lot of work to be done. Right and it is a legitimate a legitimate question. The world is not just germany. Have they, we dont right infrastructure and maybe the offering is bigger than the existing charging infrastructure, so over the next two years, we have to strike a balance between the Product Offering and weaken the structure. Other countries in the world, even in europe, there are lot more that have a charging stations in germany. We are a global company. Advancedo offer our systems in the entire world and that is what were going to do. Matt are there countries or regions that are further ahead in this regard . For example, in china, d. C. Quicker movement to that electrified infrastructure . That seems to be the case as things stand at the moment. If the right positions are taken, we are taking note of that. We are preparing for the situation and then we are going to offer electrified product in china when the time is right. Ceo, that was a volkswagen he didnt want to give me the scoop on whether or not he needs to sell units, which ones he wants to get rid of, but being here at the auto show, aside from the change we are seeing in powertrain, we seem to be standing before an industry in college consolidation because Everyone Wants to slim down, Everyone Wants to get focused and everybody wants to be more singularly active and less worried about so many brands and so many different products. It stands to reason that ducati could well be on the block. Guy yeah, the ducati question is interesting, i remember a designerund with who was obsessed with two will drive on motorbikes. I guess in electric power frame would allow that. But here is a question for you. How often would i need to replace my electric car . Would it be to three years now that most people replace their cars for . They wouldnt wear out as quickly, so i am wondering if that number goes up and if it goes up, can you still be in business as a carmaker if the numbers go up to say, six years . He will need half as many cars as you would potentially down the road. I think the answer to a question depends on how the carmakers put them together. You are right in an electric motor, there are far fewer parts and therefore, they take a lot longer to around. What you would want to replace is the battery so if you have carmakers that make batteries that are interchangeable, you would have to replace it less often, or the technology inside, the conductivity. If that is interchangeable, you after a place in less often. But what you are likely to see is builtin batteries, builtin infotainment systems that need to be changed out to get the new thing. That is what carmakers do now and you would expected in the future. Guy it will be interested, do you invest in the Battery Company . I dont know. This will all be an interesting question for carmakers to deal with. Dumb platformse and others get tacked on. Existential. Great stuff coming out of the auto show. Matt miller, as ever, providing the useful insights as to what is happening to a sector in huge turbulence at the moment. Bloomberg customer, you can factor this into your thinking and what we are doing right here now. Function. Antastic interactive tv, radio, event coverage. Function viahe ib the tv function or just ib matt and i direction. What we areider talking about the apple anticipation. We will preview the iphone maker. It is going to be launching its , theodel, the model x premium highend model, is the price point going to be who too high . Have we reached saturation in this market . Reallyphone market capable of taking a luxury item in the way at once would and could you consider these phones to be luxury items the way he wants what . Do consumers consider them that . We will talk about that next. The open, welcome back. 43 minutes into the session. Lets look at where we sit in the markets this morning. A little better bid. We continue a roll through starting at the beginning of the week. Quick run through the numbers. Pronounce that, but a bunch of stocks trading up strongly. Partners number recent revenue decent revenue line. Some good revenue story there. Some banking stories are looking good. The pharmaceutical sector well bid. Some of the banks, credit suisse, bnp paribas trading high. Tobacco,merican and housebuilders are definitely under pressure. Taylor wimpey down, barrett trading down 2. 4 . Get a first word news update with sebastian salek. Sebastian u. K. Government stands to take a major hurdle. In the vote after midnight, lawmakers allowed to withdraw bill to continue its progress to parliament by 300 26 votes290. That came after theresa may promised to discuss concerns before they have to vote again. The Un Security Council has approved new sanctions aimed at punishing north korea for its latest missile and nuclear test. Droppede after the u. S. Key demands to win support from russia and china. The resolution sinks to cut exports to 200 trillion barrels a year. In the u. S. , the people of florida are assessing damage of the countrys second major hurricane in 15 days. The state avoided the worst predictions of destruction after Hurricane Irma weakened for a Tropical Storm by one estimate, the total cost of damage dropped to 49 billion from 200 billion. Still, 12. 3 Million People were without Services Last night. Norways Prime Minister has become the country cautious first conservative leader to be elected in a decade. The Opposition Labor Party had its worst Election Results since 2001 as an economic rebound and decline in joblessness boosted prospects of the ruling coalition. Janet yellen met with Donald Trumps daughter and advisor in july. That is according to yellens public schedule. The president told the wall street journal yellen was in the running for a second term at the helm of the central bank. Janet yellen has declined to comment if she wants to stay at the job. Most economists expect the president to pick someone else. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Guy thanks very much. The countdown to apples biggest event in years has begun. The worlds most valuable Company Expected to unveil three new handsets today, including x that costs 1000. X isnticipation around the an indicator of how much they flagship gadget. Bloomberg will be at the unveiling at the steve jobs auditorium. The question for everyone is due customers buy in . And if they do, how much do we need to put on top of this stock that is relatively cheap on many metrics. Anna. G us, x, what do they need to do . There is been so much anticipation around this, so much leaks out ahead of time. The surprise factor becomes harder for them, but i think with this device in particular, because of the design change, they are getting rid of the home button, they have new facial recognition technology, Wireless Charging and a big one will be that price tag number they will throw on the screen after. There is the things still some anticipation for an for people to be able to see it. Guy what do analysts think about the price point . Be00 for an iphone could considered reasonable considering the amount of technology that goes into it, but are we reaching the outer limits of what consumers are prepared to pay . Adam this will be an interesting test in terms of what people will pay. Some ofght is that these phones are getting cheaper and cheaper. On the other hand, there is a lot of room at the top of the market, particularly when you think about how much people use these phones day in and day out. So apple is going to push what ofple can pay and in terms the metrics analysts are looking at, profit margin is when they are always watching that apple and if this device sells well, apples Profit Margins could go along with it. Guy do any new Services Come with it . Adam good question, i dont really know. Some will involve augmented reality, something we havent seen before in which there will be new features that the phone will overlay over what we are seeing in the real world. How those are applied with different applications will be interesting. Guy anything that will appeal to the Chinese Consumer . It is an area apple has struggled. The transport system, they are not in the mix you would expect them to be in china in terms of using a phone for that transport network. Is this a problem they will try to crack with . His phone this phone . Adam the growth there has been off a bit. I dont really buy the argument price phonemium wont do well there. I think he could do really well there because there is a certain status element there, just like in the u. S. Some of the of different applications that you the whether it is communication tools, that is going to be a tougher longterm game because it is almost like a different operating system that lays over the iphone, the way people communicate, pay for things. Some of these companies over there have been a good job of building those services on top of the iphone so apple being able to get him will be tough. Great stuff, plenty of coverage surrounding this event. Adam will be in the mix on that. Of the for live coverage apple Product Launch. 6 00 p. M. London time, 1 00 p. M. New york time. Bloomberg television and radio, and the bloomberg. Up next, we change direction and talk about what is happening the u. K. Inflation, lagging wages. We will discuss what that means for the bank of england. They meet thursday to get we get cpi data today and the bank of england lunchtime on thursday. That is next. This is bloomberg. Guy 8 53 in london. U. K. Cpi data for august due to release 9 30 london time. Move above the bank of englands target, 2 . Ce gains should learn to largely reflect fuel prices. What does this mean for the Interest Rate decision on thursday . Berlin, richard from the bloomberg mliv team. What are you looking for in the inflation number today, what is it going to tell us . Leak in the recent postreferendum. Bank was in may at 2. 9 percent. Today there is an expectation we will grind a little closer to that peak level. Two softer readings in june and july, this might rekindle thoughts that inflation has not peaked in the u. K. There might be some upside still and that will make investors nervous. Guy when you think about how the bank will react to all of this, is there any sense of a shift anytime soon . The conversation i have around the governor is, will he ever raise rates . Will the boe raise rates at any time in the distant horizon . I think as long as we have negative real wage growth, so negative inflation adjusted wage growth in the u. K. , it is going to be pretty difficult for the bank to raise rates because that dynamic is a serious headwind to the u. K. Economy. Past fewver the months, we have seen that dynamic actually have a little strength and we do have negative real wages and u. K. Until that shifts, i think the banks hands are almost tied. It will be difficult for them to raise rates even if inflation is well above target. Guy richard, thank you. Fantastic coverage as ever from our mliv team. Richard jones, bloomberg strategist from the team. Next, we will talk about shifting gears. It is the frankfurt motor show, matt miller will continue coverage. But i will hand the reigns over to Francine Lacqua and the surveillance teams. Francine will be joined by tom keene in new york a little later on. I will go to radio. Anna edwards will take you into the next hour on Bloomberg Radio and we will break the data at 9 30 a. M. A little functionality here, the screen you want is eco or weco. This is the screen you will get and this will fill in as the data comes out. That is what you want to the next half hour as we wait for the data coming through later on. Bring you our exclusive interview with mexicos finance minister. This is bloomberg. So we need tablets installed. With the menu app ready to roll. In 12 weeks. Yeah. The world of fast food is being changed by faster networks. Data, applications, customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Fast connections everywhere. Thats how you outmaneuver. And asianeuropean equities climbed after the s p 500 has an alltime high. Irma does less damage than feared. Theresa mays bill clears its first major hurdle. How it plays into the rate decision. Volkswagen revs up for an electric future. Hear our interview with the ceo. And the worlds most valuable company prepares to unveil