Good morning, everybody. Welcome. Youre watching the pulse live from bloombergs european headquarters. Were here in london. Im guy johnson. Lets get straight to our top stories. Protests in hong kong. Beijing Bank Authorities demanding that the chief executives of hong kong must now go. David, give us a sense of whats happening in hong kong right now. Well, what were seeing just today after the protesters once again blanketed the main roads into central hong kong, a lot of them have gone to work today so it seems some dispurgs of the crowd but we expect them to come back again. Tomorrow and the day after, it is a Public Holiday here in hong kong and those were the days when occupy central, one of the main organizers of this movement wanted to have their sitin. They brought it forward because the students really started protesting last friday, but what we really do expect to see tomorrow is tens of thousand s of people back on the streets here in hong kong. Remember these protests, numbers of people who have been turning up have exceeded even the wildest expectations of these protest organizers. Guy . David, are getting an understanding, do we have an understanding of what the likely response from the authorities is going to be if this escalates further . One of the most difficult things and really what we are trying do is try and work out what the response could possibly be. On s like there is in both sides leung has vowed not to resign. It looks as if beijing is supporting him. Flex to believe the the electoral process. This is exactly what the students want. The big fear here among academics, among some of the people watching these protests is that the students, the main people protesting at the moment dont quite understand the precariousness of the situation. The risk is that police here cant handle the protests and that china may decide it needs to sweep these streets clean and if it does that, it might have to bring in maybe i dont want to say it the peoples army police to actually carry that out stand they do that, there is the risk of bloodshed here on the streets of hong kong. Guy . David, looking forward to your further coverage. Thank you very much indeed. David tweed joining us from hong kong. Lets talk about the implications of this. If the protests continue, shopping districts across hong kong will be forced to close just as we get into the holidays. This is a key shopping season for the chinese. Lets talk about the Financial Impact of all of this. The protests of hong kong are having an impact already. What will that likely turn into from here . Zeman. Lk to azan alan zeman. The citys economic future, is it being threatened here . What are the prospects for usiness given the environment . I think that basically this is obviously one of the worst kinds of times that hong kong has experienced. I think basically what really happened, hong kong people are what happened on sunday, the police and students came out. At one point tried to break into the government offices. The Police Used Tear Gas and since 1967. Basically it infuriated many of the population and they actually came out to support the students in many, many cities around the world, where they have these outbreaks, the police then decided that was the wrong way to go and they backed off and they have been very, very quiet at the moment. Things have settle down. It is a holiday the next two ays. I dont expect many students and citizens to but it has become more like a if the situation deteriorates, because as you say, were heading into a holiday and the possibility with the situation is definitely there. I think people that understand hong kong know that hong kong people are quite pragmatic. And at the end of the day, the students violence is not something hong kong people are used to. It is see, the last like a festival. People coming out. Students sleeping out. Some sleeping out overnight. To ssence, it has caused stuffer last few days because many shops have closed early. Many banks have closed. In general, hong kong is very safe. Here is not a problem. If you understand the hong kong people, they have aspirations there. Their people need to be everyone will have a in 2017. There are two or three candidates that beijing has i unless the people are think Going Forward, i could go on for a while. But at the end of the day well leave it there. Thank you very much indeed for your thoughts and youre right about this remaining fairly peasm. Allan zeman. In a few minutes, well look at political strategist at socgen. Well get a take on that. In the meantime, let us move on and talk about one of the other big stories were watching. The European Union is getting ready to take a bite out of apple. They are saying they can see the recover dating back to 2003. Hans nichols joins us now. What is at stake here . That washis was a note put out earlier on, this was a sanitized version put out by the e. U. As well. What are we learning here and what are the prospects . Were learning not only what the case from the e. U. Against ireland is, and that is that they gave preferential treatment to apple in these tax treatments and didnt keep them at arms length. Were learning about their strategy Going Forward. Taxes. Back taxes is and forward taxes. They are claiming taxes from 2003 onward that they they were not on the up and up between apple and ireland. Google is another matter. Youll excuse my freudian slip. This came out last may. 2013 of what just one subis itiary of apple actually paid. They had 30 billion in revenues internationally. The taxes, total taxes, zero. There could be an effort to go back and grab a lot of those back taxes. Yesterday George Osbourne talked about the need for all Tech Companies to pay a fair amount. 3 hes talking about Companies Like apple and google. Some go to extraordinary lengths for little or no tax here. You abuse our tax system, you abuse the people. We will put a stop to it. Low taxes but low taxes that are paid. Well be waiting for the official response from the irish government. Yesterday before the ruling came out, the Irish Finance Ministry said they had abided by all relevant rules. In terms of the trouble that apple is in, do we need to put this in context . Good news, bad news. Bad news coming out of europe and good news potentially coming out of china . The china news is good because they are selling the iphone 6. If they have a tax bill going back to 2003, this was preiphone so this will have all of the iphone profits in there. That is going to be a big tax bill. Either way, the lawyers are probably going to get rich on this one. Guy . They certainly are. Hans nichols joining us from berlin. Later on, well head to dublin and speak o the c. E. O. Of the American Chamber of commerce. Look at what looks like an attack on the irish tax story from london and from brussels. Well get more on that a little bit later. Now lets talk about r. B. S. Shares rallying today. The bank said it expects to significantly outperform provisions targets for the year. Things not as bad as they thought they were. Manus cranny joins us now. What do we know . What are they telling us . Things are not as bad as we thought they were going to be. We told you we probably said around a billion pounds. We are going to significantly do better than that. The losses are not going to be quite as big. On some of these bad detains that we have put into this bad bank, they are not as bad as we thought they were. Correct. It is called the capital resolution. R. C. R. Were cracking along. Taking advantage of good markets 9 billion ut euros worth. We executed that business in a timely and orderly manner. The just a loss of 200 million youros, better than we thought it was going to be. We have to release 500 Million Pounds back. Things are Getting Better there. It is a double whammy today. Great news. Ireland. This is a great story. Not just in dublin. Im being unfair. The irish resident rble market s had a nice boost in some areas. We have less arrears in ireland. House prices are improving. Therefore, they will probably be able to release about 300 million of pounds worth of resoys. It is good news. They would record net provisions. Things are Getting Better in ireland in theory. I leave you that thought. Ok. Inside track on the geography of downtown dublin. Manus cranny. Still to come, reviving retail. How to take on the disruptors. Caroline hyde has a quick preview. Yeah, guy. Digital disruption. I feel like a broken record. Everywhere i turn here at the World Retail Congress, it is digital that, this. Mobile everywhere. Sthernl talking the talk stherm talking the talk, but are they walking the walk . How be they rate that . How are they moving to mobile . Well also talk to one of the key disruptors here. They are a new way of paying for all of your good via mobile. How are they doing it . It is all about keeping the client secret. Join me after the break. Welcome back. Youre watching the pulse. China officially embraces the euro and for the first time allows direct trading. It is quite significant. As a new era of global trade, what impact will it have in terms of hong kong . Interesting, given whats happening today with the protests taking place in that city as well. But the two stories together, maybe an interesting story working forward. Kit juckes is a global strategist and joins us now. Give me the context of today. Well, it is another milestone. Small milestone in the development of a free flow of money and capital and tradeability of chinas currency and money in and out of the country. China is the third biggest economy in the world after the euro area and the states. It will have the third most traded currency. Were going to be trading a lot more of their currency. This is going to help them play bigger role in the global economy. China and europe is certainly the biggest bilateral trade relationship. When you put it all in that context, this just keeps on opening that all up. Where does the bulk where is the biggest beneficiary of this . Were going to trade more fx, most in the world is london. At the moment, you can trade euro between dollar and euro dollar. Assuming it becomes more important currency, this will help shanghai as a Financial Center for sure. It helps beijing and may even help hong kong if they can maintain their role within china. It helps the Foreign Exchange market. Hong kong is one of the big gate ways. If you wanted to trade, there are issues of when you can trade. It was problematic. The pie is going to get bigger. It doesnt lose out but it doesnt pick up so much of the advantage it once enjoyed. It has critical in terms of skills and people who want to invest and do trade with china. There are a lot of banks and wealthy people who want to invest in chinas products and people who have m a activity to do with china sitting in hong kong. It is still a gate way in terms of where the skill seth is. Skill set is. More and more in competition with hong kong. Perhaps. I dont know. Look at whats happening with the currencies over the last few days, weeks, months. Getting more and more painful. As we look back on the last quarter, that is one of the themes that has come out of it. As the chinese currency grows in strength and dominance, does it become the the place that everybody is going to migrate to . Is it a better option than anything else . No. Chinas currency is going to be growing up. They have lower Interest Rates than they used to. The more openly traded the currency is, the less easy it is going to be benefit from. What will happen is well have a heavily traded like euro, like sterling, like dollar, like yen. Global investors in search of yield prepare to take some risk are going to be going after exotic places as they are now. It is hard to extract yields from it at the moment. The big driving trend of the last few years, they dont pay you any interest and you to go find it elsewhere. It is likely to be a safe haven currency. If things go wrong because u. S. Interest rates start to rise, they are not a loser. Thank you. Joining us from socgen. Coming up, vehicles speeding their way on to the silver screen. Welcome back. Youre watching the pulse live on bloomberg television. Were on the radio. Streaming on your tablets and phone. Of course were on bloomberg. Com. Lets go around the markets. Thanks. No big swings in the equity markets. Here were waiting for another reading of g. D. P. Ftse down. The dax pretty much flat. I want to continue to look at spanish assets now in the bond market. The 10year yield on spain 10year debt coming down by about one basis point. 2. 21 is the reading there. A fantastic story of what is going on in catalonia. There was some talk that spanish bonds and assets might catch scottish fever as catalonia looks for their own independence referendum. Spain looking to block that. My question is how much upside is left with spanish bonds with yields collapsing at the start of this year. Big move in the norwegian currency. Up 5. 5 on the news that norway will start purchasing their own currency from their oil revenue. The kronor goes higher. Look at the numbers. Kronors on norwegian again. Euro dollar. A little bit of a dip. Down 1 1010 of 1 . 10 10 of 1 . How can you resist saying nokistoki . I dont know. One of my favorite pairs. Still to come, a startup with online videos streeping to the next level. Could be an end to buffering boredom. Well speak with a c. E. O. Next. Good morning, everybody. Live from bloombergs european headquarters. I am guy johnson. These are the top headlines. Hong kong stocks fell for a second day to day. Protests continue to block roads in the city central. Index slipped to a threemonth low. Basically, demanding the resignation of rate is this going to be the Pivotal Moment for this protest . We will report on it 40. Argentina is wanting to shift control of its payments to buenos aires. A judge says the move is illegal. They face a deadline to make a 2 million payment. Being governor, keeping the rate at a percent. The country is fighting inflation in asia. In let me bring you the day that of the u. K. To show you is happening in terms of the gdp number. We have a slight provision. 9 in the second quarter. We were expecting it to be unrevised. Remain. 8. Cted to let me show you what is happening. Maybe it brings forward some of the expectations when it comes to Interest Rates. Gdp data better than anticipated. We have all been there. Interneta video as our connection struggles to cope. Elliott gotkine has more. Thanks. It is great to have you here. Do. Us what it is you how do you do away with buffering . We have developed an approach , on the client cost side, you can add additional layer of value to standard internet protocol. We break down the regular internet protocol. This is protocol that was not designed to do streaming a big option big objects. We are trying to bring it back to its origin, we are putting this software on devices and breaking down the ht to pe or internet protocol into small chunks. You mentioned the smart television, samsung is probably your most high profile customer. What kind of traction you have for your software . It is in all of their 2014 Going Forward models. S enables them to increase in the home. It was able to increase it over for 15. And ken in it can increase your speed. Samsung, what else can we expect to see . We have a customer we are announcing shortly from china, which are doing a cool device that enables you to have this like withs more tv functionality. Most people look at your company and say fine, great product, but this is a company that is going to be bought out. Is that fair to say . That is up to the market to determine. We are building on standardizing adaptive video acceleration. Most of the technology or anything out there is on the network, not on the device. If we standardize that, there is. Good opportunity theres a chance someone will want to differentiate and be exclusive. In case you are wondered, and is ic because itraff is so tall, but it is a play on having a long neck and a long tail. Thank you. Biggest names in retail talk about challenges and opportunities that face the industry. The economy, what is happening in europe, clearly at the top of their minds. It is. The u. K. Data that just broke pains that picture. That is seven quarters of straight growth. You come out here to paris and Economic Sentiment deteriorates. We are seeing stagnant, no growth. A president unable to get a grip of the deficit. Talking to some of the retailer heads, this is the conundrum they are having to deal with. They are trying to drive growth in europe. As a big player and Home Improvements and here in the u. K. Have a listen. We saw in france, quite a sharp downturn. It seems to be a bit better. Stronger thaneen we originally thought. What we are seeing is a tale of two different markets. The u. K. Generally recovers, higher employments. Still, particularly having a confidence issue. He is feeling buoyant about doing more acquisitions. Trying to say to mario draghi, drive better Monetary Policy. Take with the u. K. , with the u. S. Has done and implemented in the eurozone. Is feeling of who positive about what is happening, run us through the names. What are we getting . It is interesting. It has a certain something about you. Brands fly off the shelves no matter what you do. Ceo andd to speak to a he was painting a picture of s olid growth despite the stagnant economy. And france, they are over 20 . We have four shops in that paris. Phenomenal growth if you are looking at luxury lingerie. As the panel get kicks into gear, we will speak more about the retail and dominance of online. Area oferblown or the the future . We will be getting into that with Dominos Pizza, talking about how much of their sales are driven by the world cup and buy online. Back to you. Thank you. Looking forward to that. Turn to what is happening in the skies or not. Pilots are protesting. The big, widebodied planes are on the ground. They walked out over pensions. Here with more details, terry lundgren. We know about the strike today . It happened is the first thing to mention. There were recent cases when the strike was on and then off. This one had been on. It has been on. They will offer just over half of their services, so quite a bit has been canceled. Impassioned plea from the ceo this morning saying we saying do not , we are hereansa to carry you in the future. It goes to the heart of the operation. Of theerms of the effect strike on changing the dialogue between management and high lips, is it having an effect . They have dropped some problems, but i wonder whether progress is being made. It is interesting to look at what is in dispute. The retirement age date is they att to have if you retire 55, they will pay 60 of your salary or up to 60 of your salary until government pensions kick in. The average retirement of a pilot is 68. Is for pilots who are not even working there. Interesting to see management grappling with that. Management is beginning to run out of options. Options are beginning to run out. Both should be focusing on what they do best. He was minute he he managed to push through the changes he wanted to. Maybe not competitive with ryanair and easyjet, but low. It can be done. At this point, it seems both with theare dealing pilot union and air france today. This may happening in. Let us move on. The eu sharpens its teeth and says apples tax deals with ireland and not comply with International Standards. We will speak to the ceo of the American Chamber of commerce for ireland. We will see you after the break. Welcome back. You are watching the pulse. Right now, definitely an exciting subject. The eu says apples tax deals do not comply with International Standards and the company may need to prepare international subsidies. Ireland is such a powerful beacon. Can we talk about the direction of travel . We will talk about apple and a moment, but do you get a sense, looking at what is happening with u. S. Tech companies and what they are doing in ireland that it is going to be more and more difficult to make the Tax Advantages were . I do not. I am sick i am speaking to you from the heart of dublin, are expanding their operations. They are not here for just tax guides. The real reason they are here is for talent. All of those companies are expanding. They are hiring new talent here because of the great work being created here. Talent is a big reason for staying there. I get that as an argument. We hear that a lot here in london. There are advantages of operating in ireland. Ireland likes to be competitive when it comes to the tax story. It may not detract from the opportunities that exist there, will it become more expensive to operate out of the country . I do not think so. One thing is certain the 12 and a half percent tax rate. Even this morning, Prime Minister cameron made the comment that ireland is entitled and indeed, you are right, there is a global constitution for talent. There are many factors that help countries when the competition. One of them is tax and our nearest neighbor, the United Kingdom, he has made it clear that his conditions for the United Kingdom will be the most attractive g20 location when it comes to tax. Which is why the u. K. Has reduced its Corporate Tax rate, but when it comes to ireland, our minister for finance has said that ine has relation to that International Competition for jobs, ireland will play fair, but ireland will play to win. The chancellor made it clear yesterday that he wants american Tech Companies to play by the rules over here. I am not saying it is a zero sum game, but to a certain extent it is a zerosum game. Tax storyo and the dublin overavors other countries because of the structure it has put into place. That. K. Is going after the oh ecb looks like it is going after that as well. What are the applications of that . Making sure companies play by the roles and like u. K. , ireland based that is very transparent. I can also say that our usbased complianceake their obligations seriously as a reputational and financial obligation and invest a lot of money in people to make sure the rules are complied with. In relation to tax avoidance, ireland is one of the leaders in general comprehensive antiavoidance rule as well as specific tax antiavoidance measures and the mandatory were ordering of tax avoidance schemes. We see ourselves as best in class and that is why we are at the heart of the project that you mentioned. Project, theo that leader of the project has made it clear this is an International Problem and it requires an International Multilateral solution. It a zerosum game . The u. K. Wants to take more tax from u. S. Tech companies. The fact that the u. K. Wants meanof the high going to there is a smaller slice of the pilot for ireland . If they find a way of making this work in their able to tax and we are talking about revenue, that seems to be the line that everyone is going after. You think you will be a negative story for ireland . Do not. I do not see it as a zerosum game. I get is important that all of the entries that are playing the game, that are competing internationally do play fair. I think u. K. Is an important trading partner with ireland and that is long understood and accepted by both governments. I think the u. K. And ireland are key members of the European Union. The European Union is withiating a breakthrough the trade deals that should lead to great expansion in the trade and investment between the United States and the European Unions. A zerosume this as game. I think when you see the led byous breakthrough u. S. Companies, i think it is really positive. I will leave it. Thank you. Still to come, which country is behind the 19 billion project. We will show you where it is only come back. Welcome back. Time for the top headlines. To be the largest source of energy by. Alling costs it is the latest organization to suggest the potential of Renewable Energy and transforming the system. Has been architect chosen to design the new 19 billion sustainable air or. It will include a solar farm and a rainwater collection system. Nonmechanical ventilation and a minimal reliance on heating. The final structures is to be completed in 2015. A small Spanish Island will soon be the first Energy Independent island powered entirely by Renewable Energy. The water turbine farm was one of the last major effort the Spanish Government approved before the crisis, forced it to cost cut subsidies for Renewable Energy. Deflation, and ill , were going to talk. We are going to bring you an exclusive interview with the ceo of Dominos Pizza group. We also have an exclusive zap. View with the ceo of what will they do to counter Payment Systems . A big story at the retail meeting in paris. If you want to follow me on delightede would be to have you along for the conversation guyjohnsontv. What will it tell them . We will take a break. We will see you in a moment. Protesters are not going anywhere until hong kongs leader steps down. The bank says losses from bad loans will be lower than expected. Right looks to take a big out of apple. The eu says they can eat the recovery of dated back to 2000 and to 2003. Good morning to our viewers in europe. Good evening to those in asia. A warm welcome to those waking up in the united dates. This is the pulse. We are here in london and we have breaking news from the eurozone. 3. Ation data hitting that matches estimates. Jonathan ferro not good news for mario draghi. It is not. When you add in the core reading , a drop from. 9 and an estimate. F. 9 2. 7 and a steep drop a two year low. You wanted to if make something about food and energy playing into this week inflation number, they are not there if you look. Factoring inart the supplied change and it works its way through, we get a weaker euro. Whether this number bounces, i wonder if we are getting to the low point now. Nevertheless, the target is here. We are all the way down here. We keep having this conversation about Monetary Policy and whether the ecb should do more. You look at the unemployment rate. It is still elevated. A huge amount of spare capacity. You can see the court drop. There is a lot of spare capacity. How much can ecb do . The smallto lend to and Mediumsize Enterprises to get the employment up and to get the demand in the economy up. You see the reflection in the first auction. Isember, that auction becoming bigger and bigger for the ecb. Does he get that up by a trillion euros . There on the road this week, heading down for a meeting. The euro is falling at the moment. Yields are at the front end of the curve. The push for qe is growing. They were talking about the fact that merkel needs to stop drawing a meddling in the eurozone. It is interesting to hear. A big busng to get stop that the ecb is the germans face off and say enough is enough. Persimmon believe this is what they wanted. They wanted a weaker euro. Heads tome time, he naples in italy. That whole push for governments to push through on reforms, the italian Prime Minister talks about not compromising with the unions. How long have we been hearing him discussing and talking about reform . He is trying to deliver them now. I think naples is an appropriate place for the ecb to begin. I imagine a food is good, too. The euro continues to drop. You wonder how much further there is to go on this. If we get a pick up next month in the inflation rate, do we start popping back higher . The dory the dollar story seems to be well embedded. Cpi is low. There will be this push. The big question, and can the ecb do more . They cannot really take rates much lower from here. I was clear. We are looking for details on how big this could be. We need a reality check. An Emergency Program is being challenged at the top of the eu core. Me lets ask the question. Could they conduct sovereign qe before we get the outcome . And theyk they could may end up doing that. I think it is how much that process is undermined in needs to be in place for some time. Whether or not the out of germany to stop it and then grow, and how much the process is therefore weekend and whether they can deliver. It will be an interesting week. It certainly is. Thank you. In a few minutes, more reaction to the inflation data. In the meantime, prodemocracy protests in hong kong have issues have issued an backedum to the beijing authorities after five days of demonstrations. They say unless the chief executive resigns and his replacement is democratically elected, the civil unrest will continue. Any personnel changes would result in the existing Election Committee choosing his successor. Tens of thousands took to the streets. These remained largely peaceful. Theirlice have kept distance from the protesters. At a conference, a call for an end to the protest, but acknowledged they could last at least another week. Sung to a three month low after wiping out gains for 2014. We will continue to monitor the situation and bring you updates. We are heading into a holiday. Forould act as a catalyst further demonstrations. It could act as a catalyst for the chinese authorities to get more involved. We will wait and watch them bring you the news as it happens. European Union Getting ready to take a bite out of apple. The eu has set a 10 seat the recovery of irish aid back to apple. Hans nichols joins us now. Walk us through what is at stake. A the core of the eu charge against ireland as they did not keep the arms length runcible when negotiating a tax deal with apple. This is just the beginning of the process. Toy can go back and try recover some of the taxes that they may have been able to recuperate under normal tax laws from 2003. Hat could be billion dollars especially when you look at how apple has funneled through a lot of their profits through irish subsidiaries. Look at this one. It is the Apple Operations international. 30 billion in net income. Taxes paid. This came from a senate report. At the same time, the conservative government is talking about cracking down on Tech Companies. You have Companies Like apple and google in mind when he said this. Some Technology Companies go to extraordinary lengths to pay little or no tax year. To these companies is clear. We will put a stop to it. Low taxes, but low taxes that are paid. The finance Ministry Says the tax arrangements are on board you also hear about a case having to do with the headquarters. Also, starbucks in the netherlands. Bad news for apple potentially. We will see how this unfolds. In the short term, some good news out of china. License, theyeir made a minor security tweak on the iphones xma will be able the phone in china. Sales continue and they have been strong. Going back to the eu issue, it is part of a broader tax story. Paypalthe founders of has talked about europeans do not quite understand the anger and the reckoning that is going to come from brussels. That is true of google, microsoft as well. Microsoft have its reckoning in 1999, 2000 seems like theyre going to have to figure this out. Thank you. Hans nichols joining us on what is happening with the tech giants. Making a big pitch. They want to make it a little bit personal, which will make life interesting. Another company we are watching rbs shares up and up. The bank expects repairmens to be lower than estimated. This is money set aside when you expect to have to take losses on assets that have gone bad. Loans and other bits and pieces that banks do that ultimately have not panned out. Outperformnificantly its previous targets of around one billion pounds. Money toot put so much one side. The ceo is talking now. He says he expects a cleaner business. He says the banks have achieved substantial progress this year. Rbs does not need to provision so aggressively. Again, a little bit of money coming out of provisions available for the rest of the Balance Sheet. Still ahead, dealing with disruptors. That is the theme of the World Retail Congress in paris. Caroline has a preview. It too early to talk about pizza . Never too early to talk about pizza. The chief speaking to executive of Dominos Pizza after the break. Fors all about online pay them. 70 of their sales ordered over the internet. Mobile is where it is at. The company may have to change its name and become Dominos Pizza they also sell chicken and other sorts of exciting meal deals. We will dig into the expansion of the company and why germany and switzerland are not aching up in the same way the United Kingdom is area join me after the break. Welcome back. The euro, the single currency reacting to the date out of the region. Is the reaction. A. 3 headline read. The core number below 1. 9. And points to an interesting meeting of the ecb, which is on the road down to naples. Can. Is does this reduce any resistance fiercely scaled Asset Purchase Program in the details of which we are going to get on thursday . The details we get will focus on the abs, which the ecb has five. I do not think theres much of a surprise in that. We may get a few more indications in terms of gail, probably over a relatively long time. The ecb is keen to allow time for the assets to expand. They hope that they commit to the by, the issuance of that kind of asset will grow and they will be able to buy more of them. Rather than a six to 12 month Asset Purchase Program, it will be more like two to three years. We have seen the Exchange Rate go down. That is welcome from the perspective of the ecb. Struggling,nomy core inflation going lower, the pressure is going to rebuild on the ecb. Is this the low for inflation . Which dimension the currency, the dip in this quarter. It has been canceled. How long does that take to feed through into inflation . Normally it is great. You see it in nonenergy industrial goods prices to a degree. We will see more of that as we move into the Fourth Quarter and into next year. Stemmingme also from energy price declines. For the headline inflation rate. That would be some comfort for the more hawkish members area and they will be keen to emphasize the dynamic is now upwards. The technical factors driving inflation higher. I think the battleground will be the core inflation rate. This is already below 1 . It is coming down. The data is sensitive to domestic developments. That is important. I think the ecbs core theme has been an improvement in the economy will lead to stabilization and a pickup in service and it is not happening. The economy is weaker than they expected and i think that will last longer than they think. I think the debate within the council will be and has as it has been many times before, pushing for more aggressive policy responses. Those on the hawkish side of resisting. The ecb is biased to delivering more policy easing. He focuses on the Balance Sheet. They will have to widen the range of assets they are willing to buy. Was always said Monetary Policy acted with a lag. In terms of the way it develops now, how much time are they willing to give it before the policy starts to have an effect . Am i looking at this the wrong way . Getthey going to want to the Balance Sheet up regardless of what is happening . How do they think about that relationship . You have the right framework in mind how is the data coming in relative to expectations and how willing are they to make a change to summer we learned in september that the ecb was willing to add to its existing arsenal of Monetary Policy and the stimulus measures. It showed a higher degree of sensitivity of downward surprises. It is a very important parameter for the ecb. It has to move forward. The data continues to surprise the growth to the downside. Inflation expectations continue to drift down. The pressure will build to do more. Ecb is keent, the to buy a bit of time. It is already committed to the focus on the Exchange Rate. As we move forward, Inflation Expectations are looking less well anchored. Always a pleasure speaking with you. Eak. E going to take a br in you are watching the pulse. Time for a bloomberg exclusive. We have been talking about pizza all morning. Lets talk about pizza a little bit more. This time, with a peruvian angle. Lets go to caroline hyde. I am joined by david, the chief executive of Dominos Pizza. We are talking all things retail. Your background is across retail. You have been at tesco and walmart. In termsthe challenges of doing business as a retailer in europe, is in the economy that worries you the most, getting online . The most important thing is to satisfy your customers. Yourstand the direction customers are going. That is how you win, by satisfying your customers. We recognize customers want to order more online. You make it easier for customers to order pizza, the more pizza they will order. The other benefit of online as it makes it easy for our colleagues working in stores because instead of having to take information from the phone, they go straight to the make line. It is much more efficient and more accurate. Downne is taking something on the phone, theres always the danger that the p will be will the customer wants it. It is winning in terms of customer preference. The great news is our Online Customers spend more money than the people who call us. It is a win in every direction. Where do you see it going next year . Grown so rapidly. We are focused on the inputs of how we make it easier for customers to order online and how we show the broader range of products that we offer online. As great benefit of online you can show people meal deals, the variety of products that we sell to accompany the pizza. That is a way of deepening our relationship with the customer. We can do things like retaining last order and credit cards. It is easier for customers to buy dominoes. Are you having to get your own developers and . Websites . Rival we have a team of developers and we are growing our team of developers. On mobile first. What we recognized is over the course of the last couple of grown, butne has mobile has exploded. That is the way people want to order pizza today. We invest in our mobile site and our mobile app. About doing business you are huge in terms of franchise in the United Kingdom. How is the sentiment then . As it shifted . I am not going to comment on what the government is doing. Combinatione is a and reasons for that. Bit lower,s are a food inflation is coming down. People are finding they have a little more money in their pocket. They do not feel confident in the long of the economy. They are absolutely playing into our market price. Thank you. It has been wonderful speaking to you. We should be focused on parisian food, i should think. Thank you. , not that great, is it . Another strike at another european airline. Pilots refusing to enter the cockpit. Vehiclesout the speeding their way onto silver screens. If you want to join the conversation, we will talk to on twitter. Conversation guyjohnsontv. Welcome back. These are the top headlines. A judge has ruled that argentina is in contempt of court. The Company Wants to shift control over payments of it debt to from new york to bwest aris. The judge says the move is illegal. Argentina faces a deadline to make a 200 million payment. India has held Interest Rates for a fourth straight meeting. The rates were kept at 8 . They are fighting the fastest inflation in asia. For aong stocks have fell second day today after prodemocracy protests continue to block roads in the central part of the city. Protesters are demanding resignation of the chief executive. These are live pictures from the city. Jonathan ferro has details. I turned to mainland europe and a turn higher in stocks. The equity boards will love this picture. The number behind this picture, euro zone inflation data, the ecb may not like that. Get over here to the fx screen. A drop towards 126. We have not seen these low since september 2012. At 0. 3 percent. We expected that. When you strip out food inflation, energy inflation, that drops. Is going to rage on. Those numbers add fuel to the debate. The shortrket in term, it is about what can the ecb do to stimulate demand in the euro zone economy. The first auction did not go well. Be about the abs program, the Asset Purchase Program and how big it could possibly be. The bottom line is he wants to expand the Balance Sheet by a trillion euros. Not bigbs market is enough, everybody is asking the question when do we get sovereignty . Look at the bond market. Low off the back of the number. Down by two basis points. Very easy to start asking the question of when were going to get sovereignty qe from the ecb. It is another question when you start factoring in the politics. Kindurdle to conduct that of policy is still right appear. There are those in germany that feel we have gone too far already. More on that story on thursday. In 25 minutes, it is surveillance. What you have today . A lot to talk about. A supporter of the prodemocracy movement will join us. Many tens of thousands involved. We will look at the American Economy and touch on india. A cautious view on American Economic growth. Robert will join us. He is from invesco. We will talk about his , withitor and competitors the redemptions we are seeing out of the total return fund that him go. Also, Gerard Cassidy will join us. We will get a look at the end of the third quarter. He is on the american banks. End of the quarter and one of the big standout stories has orn the decline in the euro the strength of the euro. Concern is there amongst u. S. Corporate its that this is going to have a meaningful impact . A welltimed question. Less of a concern than most described. Stronger dollar. That does affect corporate earnings. The u. S. Is a more closed economy than a lot of europe. Nowhere near the effect in the united dates of a 160 euro. That affect on germany would be greater. Thank you. Looking forward to the show. Surveillance shortly. Protestingufthansa that they are not going to get the kind of pension benefits they want. Frankfurt is being affected. The long haul flights. We are covering this story. I am going to stop calling you an aviation or order and start calling you a striker order. Walk us through the details. The strike is happening. Bodies thatg wide are being affected. They will be able to handle a little over half of their intercontinental long haul flights. A lot of planes will be on the ground. You have a plea from the ceo this morning asking for passengers to understand. Hasnding passengers he 100,000 employees he is dealing with. A tough day for lufthansa. Air france and most dems a air france and lufthansa in the same boat. In the United States, they went through chapter 11, restructured themselves, they merged and created what we have now. The gulf carriers are coming pretty hard. You look at the challenges management is facing, absolutely in on this. I was speaking to easyjet. They added over 3000 flights in the two week. That air france was on strike. A boost for them. Terrible for air france. All those people, you might have flying easyjetr and perhaps they think this is not so bad. Front, you have pressure. In the long haul, you have the middle eastern carriers. It can be done. Iag. Ave the ceo of he pushed through big changes at both of the companies and now they have one of the lowest cost for their staff. They will not give me hints to whether theyre going 3000 flights in france. Thehe number of seats on airplanes is very high. You will say it is very busy. Some good numbers. Lets stick with the transport team. Builds bikes for some of the biggest action films and they regularly work with brad pitt, tom cruise, etc. And is a feeling you get riding on the machines. Handbuiltou are on a piece of machinery. I am at glory motor works. We build motorcycles for the motionicture it the picture industry. We are brought into a film at the beginning. We need the bike to do this. We can dolutely, that. I come back here and we figure andhow to bridge the gap make it functional and follow the design that tells the story. We did it with tom cruise. That bike folded into a suitcase and came out of the back of a spaceship. That was fun. This one, we put it back to look like a 1965 triumph for a film. We will crash in on film and put it back together. The bills are hectic. Motorcycles inve six weeks. We are fabricating the parts. We build electrical systems. We are building a prototype motorcycle that does not get a testing period. They goes into action. Action. Es into this is a typical california desert racing bike. The bad part is, it is an old machine. Whats never intended to do it does. Every time he goes out, it gets blown apart. Now, we are getting it ready to go out and break again. There is not a lot of practicality were common sense in terms of vintage motorcycles. Anyone who has worked in the business knows it is virtually impossible to do it. The restorations are what we can come home to and remember what got us involved in the first place. You have to love the engineering. Coollooking machines. Next, the mobile payment movement. Were going to move back to the World Retail Congress. Were going to debate whether cash is still king and what apple will do to the business. We will be back in just a moment. We are live many take you back to the retail work congress. It is taking place in paris. Over to you. Click thank you. I am joined by a chief executive of the zap. Make mobile payments that much easier. First of all, how will it work . Paymentis a mobile platform. Theres no need to download a new app. Embedded in zapp it. You can make payments to retailers up and down the country. App, iminute i open my am not going to have to go to whole foods, apple, any particular app. I am going into my own banking one. You are making payments using your banks app. You are used to checking balances. This is the logical next step. Retailer, when you come to make the purchase is very easynt, it for customers to use. You are saying good thing for the consumer is the details are private. Suddenly when i am buying the next top that i wanted from the store, they are not going to have my personal details. Surely the seller wants to know who i am, that i am a female, i come in on thursday, i buy this type of coffee area what is in it for the retailer if they do not have my details . Retailersger, more have their own loyalty programs. No information with the retailer. The big issues with carr Payment Systems is customers have to share their payment information. You read stories about systems getting hacked and that causes issues. No sensitive details are shared. Apple has been fantastic for mobile payments. Apple coming into the market has been great. There are still a whole vast majority of the market that will need a moment all payment solution and that is where we come in. Zapping android is where will be used more often. Mind which platform the customer wants to use. You have teamed up with a number of banks. How easy has it been to persuade the banks to listen . Retail banking has been reinvented. Having a profound effect on banking, particularly retail banking. If you own the real estate and can get your app onto a customers phone, they will be you will make more money from the customer. It is a great way for the customer to download their app on their phone. Two years old. Has mobile payment been ramping up has the trajectory been as far as you estimate it . We are at the foothill of mobile payment. Customers have to have smart phones in their pockets. We are at 70 in the u. K. Now where is retailers have the confidence to invest in systems they need to in order to accept a mobile payment. Time for mobile payments to take off. Give me a sense of the scale. It . E will we be in terms of to 20 will be made using a phone. Market, that is about 40 billion payments a year, so about 6 billion to 8 billion payments a year. How much money have you raised to get this far . It is not live yet. New payment ecosystems do not come along every day. A bigst time there was Payment Initiative like this was in the mid1980s when debit cards were launched. It takes time. Look at what we are doing. They will look for progress in the marketplace, how customers adopt, how retailers adopted. The signs are looking positive. How much have you raised . By the u. K. Ned bangs, so far, about 50 million. If i am a retailer, wine has why are u. K. Companies building up their own apps system is youre going to come in with one. The 8020 rule always applies. With theirx has done what starbucks has done with their app, they have seen the value of that. The key loyal ones will be on your app. It was great speaking with you. A little bit of a hint into the future. It goes live at the beginning of next year. Zapp is the app. We will see how quickly it wraps up. The billions by 2020. Handing it back to you in the u. K. Caroline hyde, thank you. Lets get you other news. Rallying. Willender says it outperform its previous target. It sets aside money against loans that have gone bad. They are not going bad as quickly as they thought they would. The money is coming back. An ipo at the top of the range. The value is the Largest Online fashion retailer of more than 5 million euros. The debut of rocket internet, the following day marks the comingofage of the startup industry. Coup. Also a staying with clothing retail, shares are lower today. It may need to cut its forecast if unseasonably warm weather continues. Autumn not feel like outside. It feels relatively warm. Looking at the forecast, that may change next week. Coming up, student protesters take a hard line against the government in hong kong. We will bring you the latest from the fifth day of protests. Good morning. Welcome back. You are watching the pulse. We are on the markets. Take a look at what is happening with the single currency today. The inflation data was revealed, core number below 1 . The headline number drifting down 2. 3. Down to. 30. The ecb goes on tour. How does this change the game . T added input to the downside a lot of people short of the single currency. 6 within theen 12 last few minutes. The currency markets are going to be in focus, as is the story out of hong kong. Her tests front and center. Protests front and center. Look at what is happening in the city. The next 24 hours will be interesting. This was originally the day in which the occupied protest were due to begin. They were brought forward because the momentum started earlier. Be thew was meant to epicenter. Today, the buildup into tomorrow is expected to gather pace. How will the authorities in beijing and Hong Kong Manistee situation. It will be tense. Protesters say they are not going anywhere. You wonder if they understand the magnitude of what has to happen. At the moment, the demonstrations are peaceful. Moment, everybody is keeping their distance. The police and the demonstrators are keeping their distance. Lets see what happens over the next 24 hours. We will update you. It will be an interesting story as we head into tomorrow morning. That is it for the pulse. Surveillance is up next. Follow me on twitter guyjohnsontv. Student leaders say their protest will spread if their demands are not met. For now it is quiet in hong kong. The American Economy improves. For businesses, wage growth will continue tepid. And they on litigate all signs of gross, they deleted his twitter account. Good morning everyone. Were live from our World Headquarters in new york, it is tuesday, september 30. This is long today. Theres a lot going on. Theres nothing brief about this one. Overnight, slowing growth around the world, japan industrial outlet falling unexpectedly. China manufacturing hovering just above staal speed and looking at europe, inflation, so obviously that is not what you like to see. Curiously the funches are up today. Euro, well get to that, euro plunges off some of that. Yes, it does. Chicago purchasing managers 9 45,