Tensions and the impact of the restructuring makes this a big results call. The ceo joins us this hour. The performance of its stateside business will be watched as if he does numbers hit we will be joined by the ceo for the details. Welcome to bloomberg daybreak europe. Lets get to the numbers on the bloomberg. The red headline is the group is cutting its profit forecast and considering selling units. That is something we will look at later. To 1. 2 billion euros but it is cutting its studyingrecast and offers to sell some businesses, cutting the profit outlook for the fiscal year. Germanys slowdown pushing thyssenkrupp into a crisis. The units with no clear future cant keep burning money. It is studying options to sell businesses including elevators. We will speak to the thyssenkrupp shortly after 6 30 u. K. Time. Manus lets talk about a little bit of the drug manufacturing side on mark. Weve got the Second Quarter adjusted eps, so this is what weve got for you. Euros, a comfortable beat on the care unit sales, 1. 7 billion on the material side of the business. 580 9 million, a little lighter than the estimate we had come through on merck. It is much broader a company than pharma. Confirming their outlook for the rest of this year so that is one thing coming through in terms of guidance we had. Red headline coming through from siemens. We will talk to the merck cfo later in programming at 7 30 a. M. Buy are in the business to vascular for 1. 1 billion, a Robotics Firm with 1. 1 billion deal they are in the market to do. 4. 28ice of the offer at last7 above corindus closing price. Tracy alloway said there is a new opening time for the s p 500. It has gone 5 15 in dubai, the new time. How is it looking . Nejra futures are looking positive and that seems to be fueled by the pboc fixing on the yuan putting positivity. On the front foot but the bond market is telling an interesting story, the 33 yield on a 2. 26 handle. 10year down and basis point. Or theyying we could are ready to think about negative yields reaching the u. S. It would mean an easing cycle by butfed and perhaps more qe, joining the chorus of those calling for lower yields and a possibility of negative yields in the u. S. Jpmorgan has already done that. Manus the quicksand of negative yield. Lets talk about the single biggest story we were poised at 5 15 when i walked in here in dubai. The moment when the fixing was stronger than anticipated. It is beyond seven for the First Time Since 2008 but the message from the pboc, if there was any doubt in your mind, they want you to breathe easy. They are seeking to stabilize the market. Four are they . This is a different message from the pboc. By the choosing stability over volatility . Do they want to stop the risk of capital flight . That is anyones guess. Will market intervention, the central banker of oil come in and do something more aggressive in terms of cutting production . The aussie dollar is there. There is a shocker for you. Aussie dollar is bid on the back of the yuan. Have a look at nikole. Nickel. There were rumors that indonesia would stop the exports of nickel ore. You have to have a smelter in indonesia to export. That is the new regulation. No change at the moment. Nejra joining us for the hour is the multiasset portfolio manager, great to have you with us. Facinged about jpmorgan a quick stamp quicksand scenario and pimco ready to think about negative yields. Do you want to join the bond bulls or do you look for returns elsewhere . I think you look at the bond market. On a midto longterm investment, there are plenty of to invest butces i have been wrong over the past six months. 30 year negative, behold german bond market is negative. U. S. Treasuries could go down from here but in the longterm, governments and policymakers will want to drive some growth in the marketplace. Manus and that reach for yield as we get older is going to push us in a load of different directions. What do you make of the yuan fixing this morning . They want us to rest easy, a slightly stronger fixing, but are you convinced . Chinese is clear the want us to believe they can control the currency so it is odd the u. S. Are calling the chinese currency manipulators. But is exactly what you do they do have the ability to fix that pick. The market wants a strong u. S. Dollar and if you are pegging your currency to the u. S. Dollar, you are getting less competitive with the asian complex. They are becoming less competitive just like the u. S. Is complaining about being less competitive with china, the chinese are becoming less competitive with their competitors. If you look at that, the yuan has been strong. Manus lets see where volatility in the currency takes us. Investmentat newton im is with us for the rest of the hour. Juliette saly broadens your horizons from singapore. Juliette it really is about the stronger than expected fix from the pboc. Analysts seeing this as calling ingmarket, calm markets. We had a good trade data lifting sentiment. Exports at 3. 3 in july and imports slowing better than expected, the csi 300 up after the lunch break. Good and looking japanese stocks higher for the first time in five sessions. The yen, fairly steady after the yuan move, 106. 2. Australian and indian stocks also looking good and a lot of money going into chipmakers. At some of the other currency moves because the yuan fix has flowed through into the region but we are also awaiting the bank of philippines rate decision. Had Second Quarter gdp coming in weaker than expected. You could see a move more than the quarter rate cut they are expecting. The peso is up. 1 . The korean won getting a lift our japan eased the export ban on korea and of a won moving higher against the dollar. Inis having its best gain three weeks and the aussie dollar recovering from the 10 year low we saw yesterday, up. 2 against the dollar. A lot of moves in fx and equities on the back of the yuan fix. Manus we will be watching that like hawks over the next few weeks to make sure the stability holds or not. Thanks for the roundup. Lets talk about a deck of, Second Quarter remaining on track to deliver targeted incremental savings of over 70 Million Euros in 2019. Revenue came in at 5. 9 billion euros, they are the worlds biggest recruiter and have been targeting highgrowth Margin Expansion and a shift to profitable new markets but an economic slowdown in germany and france has threatened the strategy. Europe accounts 54 of overall sales. Unfavorable market conditions, weak Business Sentiment in the region has weighed on peers, including ronstadt. Lets get health check on the economy of europe and beyond. The ceo joins us to discuss the numbers from zurich. Always great to have you with us. Recession meet her for europe and the risk in the Global Expansion at the moment. Good morning, and like you were mentioning, we have delivered strong execution of our strategy reflected in all figures in the Second Quarter. Another structural margin improvement, this is the Fourth Quarter of margin improvement. Coming to your question regarding how economies are hasloping, you see europe slightly decelerated. It was in the Second Quarter at 5 . We see lower growth in most of the markets except algeria iberia but in the Second Quarter the deceleration in europe is there. America,ook at north still good. Activities were increased 9 and especiallyd growth withpan or northern japan 12 trading data adjusted. This is the overall picture. We fill continued weakness in the automotive sectors and manufacturing, especially in many european economies. Nejra great to speak with you this morning. One of the questions we ask as we see the downturn in Global Manufacturing is how much this is feeding through the services. What impact are you seeing on hiring in the Services Sector that can give you a sense of the outlook for that sector for the rest of the year . Alain what we seeing regarding the deceleration, it is not really linked to the services. It is linked to all services, especially in the manufacturing and automotive. Outside these two sectors, either the deceleration is very limited or there is no deceleration. It is focused on automotive and manufacturing. Up yourlain, i opened report and im scouring it quickly. Im looking at Gross Margins year on year. Temporary is less, perm is less, others have gone to zero. Where are you feeling the most aggressive margin compression . Explain these numbers to me. Alain i read the report a different way because it is the Fourth Quarter in a row that we are able to increase our growth the increasing growth margin is based on two strategies we are driving. Pricinge are working on and extracting the right value from the contract with customers and we have been successful. In this quarter, we have 40 basis point margin increase. This is regarding the pricing and again, the mix is about developing approaching new services with highvalue. Remember last year, we announced the acquisition of General Assembly in the u. S. , which is a up scaling andn rescaling and that activity is in high demand and that kind of activity is high value for us. Thats how we are pushing this gross margin positive Development Order after quarter. Quarter after quarter. Nejra you also talked about the fact that north america was still a fairly good market. I wonder what your outlook is for the rest of the year, particularly with the expectation of an increasing trend tensions trade tensions between the u. S. And china. Alain this is clear that overall in the world and especially in europe and in the u. S. , you have uncertainty and with this uncertainty you have volatility. Regarding the u. S. At this stage, we dont see any negative impact of the trade war. I would say on the contrary, when you look at hall permanent recruitment activities, we are quarter in the second havet means the Companies Still trust in the future and are continuing to hire and , rather than to work with temporary staff, they are going more and more for permanent recruitment. With the limited visibility we dont seee market, we any kind of disruption going forward. We spoke on the ninth of august last year and he said to me in the u. K. , they are backfiring. 18 months back hiring. They start hiring and that is what we see in our figures. Here we are a year on, hard brexit risk is rising. What can you tell me in the u. K. As angst is growing . Alain it is clear there is a high level of uncertainty in the u. K. , that we still need clarity and we dont have clarity. After this kind of rebound we have seen, especially in permanent recruitment, because the Companies Start at some point a higher again, we see everyone has frozen additional recruitment. It is reflected in the figures in the temporary staffing but also in the permanent recruitment. People are now expecting clarity. Nejra thank you for joining us from zurich. Alain dehaze, ceo of adecco group. Lets get a first word news with roulers. D pakistan downgraded diplomatic relations with india. Islamabad said it will take the matter to the United Nations and the army will remain vigilant. Indias Foreign Ministry didnt respond for comment. Time may be up for italys populist coalition. The deputy premier is hinting he could pull the plug if partners dont yield to demands. His call for tax cuts and investments is a dip hot investments. Rome could face early elections. Hasnt endorsed an expansion of background checks in the wake of two fatal shootings in the weekend. There is no political appetite to renew a ban on military style is all right. Political leaders in ohio and texas say new gun laws must be considered following the mass shootings. Global news 24 hours a day, onair and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Manus thank you very much. Annabelle droulers in hong kong. Coming up, slashing its profit forecast after seeing its market cap cut in half during the past 12 months. The crisis facing the industrial giant deepens. It could even lose its place in the mighty dax. Not a bad time to speak exclusively to the ceo. That is next. This is bloomberg. Manus this is bloomberg daybreak europe. Nejra lets get a check on the markets. Sother fixing on the yuan you see some strength. Csi 300 strongly bid and the aussie bouncing back after hitting a 10 year low yesterday on rate cuts following the decision from the rbnz. Manus we will talk more about oil later but saudi arabia wont tolerate a continued decline in prices. Gain. Tures managing a we closed above the 100 Day Moving Average and a record low set in the 30 year paper yesterday as there was a fast and furious reach for yield. We will talk about pimcos call for negative rates may be in the u. S. The top story is dollaryuan, yuan strengthening after a fix strongerthanexpected. The pbocs reference rate is than sevend weaker for the First Time Since 2008. Atstarted with paul flood newton. When we look at the volatility in the yuan, do you think the market will take another punch at it . If they really wanted to send a strong resetting, we would have seen a subset the number on the fixing today. Paul i think thats right. Back at thek trade negotiations, you are halfway through the trade tweetedion and trump some fairly negative commentary on the chinese not coming to the table and china says we have bullets in our gun too. Of re was some type this is much more tactical around trade negotiations but also the fact we are looking at a strong currency in the global context while they are pegging against the u. S. Dollar, the currencyseen a strong over the past six months, making china less competitive with those around them. Nejra Global Markets arent tenterhooks as we watch the refixing. How much lower could we go on the yuan from here . You probably stay through seven until we start to see better economic data. The chinese are trying to pressure the u. S. The chinese are trying to delay until postelection because that puts them in a better situation perhaps to get a better trade deal with a different administration. The one thing i heard ubs say yesterday when he joined our program was dont panic. Look for big carry trades in emerging markets. Tie those thoughts together for me. A, if we dont panic, where do you hold your nerve and the you step into these stocks on a drawdown . Paul weve been thinking much longer term and being strategic because you cant wake up every morning and turn your portfolio over depending what is happening on tweets or some shortterm move. We are trying to find structural growth areas. Example of that. We are moving away from the Combustion Engine and that will increase the demand for nickel. If you want to increase the supply of nickel in the market, there is a shortage in the longterm of highgrade nickel and you have to have a higher price to support that and make sure miners come to the table and expand the supply of nickel. Nejra youve got the long nickel call for a specific reason but in terms of other metals, what is your take given how close they are to the chinese economy . Paul the chinese are moving away from on infrastructure spend to one that is more directed toward the consumer. Like thearticularly whole commodities space but nickel is one of those areas we think there is good reason to be positive. Nejra paul flood from Newton Investment stays with us. Coming up, we will speak to the adidas ceo as the sports giant has seen a 50 jump this year and releases secondquarter earnings shortly. Dont miss that interview after 7 30 london time. Manus i suppose it depends. Soont be interviewing him, we will talk about elevators. I cant wait to find out what thyssenkrupps elevator business is worth. At comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. There is reward. Beyond work and life. Who else could he be . There is the moment. Beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. Take your business beyond. Manus bloomberg daybreak europe. Im manus cranny in dubai. Nejra im nejra cehic in london. Great have you with us. The r. B. I. Delivered the unconventional unexpected 35 basis point rate cut. It has been the reaction in markets since the decision . The moves in yields were interesting. They backed up after a bit. Andj good morning to you 35 basis points may be giving participants more than anticipated and a normal reaction might have been a cool is positionedrket for dovish commentary and the was two points, 50 basis points would have an leading participants to believe the next cut wont be 25 but lower. Two, they mentioned they recalibrated their approach going ahead. Maybe the market is making too much of that but it seems to be the case and even today, the 10year is at 6. 37 higher than yesterday. Manus thank you very much. Good day to you. China set the fixing at a stronger level. Has it soothes the market . There is a bit of retouch on the s p 500. Annmarie in asia, we are seeing equities moved to the upside, in the green after the stronger fixing of the yuan. Out of china. The csi 300 up more than 1 as well as the south korea kospi outperforming as tensions ease. Between south korea and japan. We are seeing a rally across. Currencies from malaysia to south africa. Sovereign bonds, we are seeing them rally, some with real yields continuing to lower and it has been a brutal 48 hours for the likes of iron ore and oil. Iron ore is above 90 a ton. Below 58 aat 3 , barrel but given the week it is had, we are seeing a bid. I want to focus on that this morning because there seems to be some phone calls about opec plus and its members. And bloomberg scoop overnight saying according to saudi officials, the saudis will not tolerate the price slump we have seen. Brent has been trading sub 60 a barrel and on a weekly basis, having its worst drop this week since december. Talking about the fact the saudis will consider all options on the table to stem the route. One option to me would be to cut deeper and before 2020 comes around. She can imagine these guys on the phone together, she imagin