Market. Lenltds are a go. Airbus on hier plane deliveries. Booking a charge related to its military program. Good morning, everyone. Thank goodness, its friday. Lets get straight to Economic Data points. We just got the italian june unemployment numbers. It has jumped up to 12. 7 from 12. 5 in may. Another rise. A look at youth unemployment. Thats been worrying over the last couple of year as were just emerging out of the midst of the eurozone debt crisis. Even if the Italian Economy is recovering, were not seeing that through to the labor markets. The overall jobless rate, 12. 7 . Were expecting the euro zone jobless rate. That should hold steady at just over 11 . Lets go back to earnings. Frances biggest lender by ses t asse assets, bnp paribas. Lets get out to stephane who has been speaking to the cfo. The bank posted much stronger than expected earnings in the Second Quarter. A loss of 4 billion euros last year when the bang had to pay a settlement to the u. S. Department of justice. The revenue declined. All businesses per fomed well with almost a 16 rise of the revenue at the cib division. Bnpparibas improved by 30 basis points. Operating expenses remained under control with an 11 rise in terms of outlook, the bang believes that to the cost of risk will remain stable in the second half of this year. This is what the cfo told me. Well refrain from giving forward looking outlooks. We do see that we have to see if they materialize further going forward. For the rest, were focused on executing our industrial plan. Which is very well on track, as you saw from the Second Quarter results. How do you see the evolution of cost of risk . I think cost of risk if you look at it today, its basically stable. Its in we have a an environment which should basically be profitable for that area. But, i think, lets look back at it when we see the Third Quarter results. Whats the impact of the low rate environment on your longterm results . The main thing is you have to constantly adapt yourself in the environment if youre in a lowrate environment. You have to reprisprice. We have to follow the needs. Ever continued cost reduction. And low cost of risk. That is basically the bottom line drivers for our growth going forward. Second top gainer. Up 3. 2 . Still in the Banking Sector. We had earnings from the Investment Bank due to the Strong Performance of investment. Banking, we have more earnings to come in the french fnl segment next week. Elsewhere, a 5 rice for natixis. Driven by strength in the Asset Management business. Revenues and Private Banking sector rose oobt 19 . The stock is up by around 2. 7 . Shares in spanish bank Banco Popular in line with forecasts. Revenue declined 18 in the first half. Lets get back to the uk. Lloyds first half earnings were less than expected. Profit came in at 1. 2 billion pounds at 38 rise on the same period last year. Lloyds says it will look to return capital by oneup dividends and share up buy backs. Lets talk to hendry dixon. More money set aside is a disappoint. Absolutely. I think some changes that the registry is thinking about. I think theres something for everyone in the numbers. I think maybe if you take the ppi claim as something of an exception, i think we have seen a welcome return to Revenue Growth as well. Youre seeing it across the uk Banking Sector. Thats important. If we put the sector in the context of the three in trouble in the crisis. They were house builders, real estate, and banks. House builders and real estate are at precrisis levels. The banking is not. I think were starting to see welcome signs of Revenue Growth and capital build. Theres a reasonable amount of money to be made. With lloyds, its always been about the dividend. Its been reduced by 10 over the course of the year. Now, a small dividend. That was probably a little bit lower than the market expected. Do you think that investors will cling on to the hopes of more dividends, more share buybacks . I think so. The capital build is the recurring theme. Typically, banks today are half as leveraged as they were precrisis. I think thats what were fighting for. 75cent pound ratios in a twoyear view. They could be doing over 10 p earnings in two years. If you put that on a 5 yield, youre looking at a 1 pound a share price. That sounds outlandish. This looks like the one materially mispriced sector. Mixed price action at rbs and lloyds over the last couple of months. What is the case for the banks . Are they becoming well capitalized or is the prospect of the bank of england raising rates . I think the ballpark to me is threepronged. The starting point valuation is an enticing one. You combine that with a Capital Position continuing to build. Companies that are deemed half as risky as they were previe cr. A modest rise in rates. The inherent earnings in revenue potential is significant. Until two or three angles, really. The optimistic outlook that we see here for banks. How do you think the slippage of oil prices will affect the banks . I think that we could see maybe barclays maybe that one had an active energy underw underwriting business. Its clear they realize debt holders arent going to go away anytime soon. Theyre superior to the pp hofp holders. As i said, immediate number term. The caped cuts should be a high number. That is probably opportunity. Top pick in the Banking Sector . I think it would have to be rbs. We continue to think it will look a lot like lloyds in two years time. I think investors need to be patient. I think in two years time, we wont believe how perceptions have changed on the Banking Sector. They may not be the most horrendous thing in the world. Henry sticks with us. Interesting comments coming from the greek Prime Minister. He said that the greek government never had a grex implant. He says the government had to prepare a contingency plan. The greek government never had a grexit plan. He authorized the finance minister to form a team to prepare for an emergency. We were obliged to prepare for an opportunity for greece to leave the euro zone. What a sharp turn in his tonality. More earnings for you. Loreal has delivered the strongest sails growth in 20 years in the first half with currency being the major driver. Like for like sales came in slightly belower expectations. The Cosmetics Company is bullish in the second half. Airbus, a 6 rise in the first half operating profit. That offsetting challenges with the a400 and military aircraft, which is already billions behind schedule after a test flight crash in may. Now, the worlds second largest retailer, carrefour has beat expectations for the first half of 2015. The Company Makes about 73 of sales in europe. Consolidation in brazil january food business also helping them to a first half profit of 726 Million Euros. Finally, arcelomittal. The largest producer of steel benefiting from currency swings to deliver a met profit of 179 million in the Second Quarter compared to 52 million a year ago. Let get more on the story. Take it away. So lets have a look at airbus. That was one of the most important announcements made this morning. Net profit of 732 Million Euros in the Second Quarter. Airbus bookd a chart of 219 Million Euros oofr a military plane crashed in the south of spain two months ago in a test flight. Sales grew by 16 in the quarter, stronger than expected. Thanks to the high level of deliveries for commercial aircraft. Theyre expecting a commercial momentum across the port foal youre yo for t portfolio. The air bus 380 is confident in terms of delivery for this year. He said the program would break even even with deliveries below 30 units per year for the superjumbo. Besides that, no decision made with the lowfuel version. He indicated that airbus aims to double the production of the new 350 next year. Thats the new aircraft made of co composite materials. The phew military aircraft 800 m is years behind schedule and final cost will be much higher than expected. Probably 8 billion euros over the original budgets. That is raising the break even point for the program. For now, airbus has secured 174 orders for this type of aircraft. And, without any additional order, it will lose money on the program. But, of course, on the long term, it might be able to get some more orders for that military aircraft. Seema, carolin, back to you. Lets look at european markets. The last trading day of the month. In todays trade, not a lot of movement. Were down 0. 03 . Its been an interesting morning given the plethora of earnings reports we have been getting. A great way to look at the health of the european economy. If we break out the trade, the ftse is up by 100 points. The eurozone inflation number is coming out. It chou it could change the story. The focus is on the micro, less on the macro. That shows you the focus. When you look at currenciecurree euro continues to trade in the narrow range. At 1. 09 against the u. S. Dollar. When it komts to Economic Data out of the u. S. At this point, science still pointing to a september rate hike. That reinforcing the bullish view behind the u. S. Dollar. Usd trading at 124 against the japanese yen. Fear of deflation back on the table with the selloff in the Commodity Prices. Look at brent crude right now. How low will oil go . That is the big question. Resulting in a loot of the commoditybacked currencies trading lower. Wti crude at 48 right now. Spot gold got noting a bid given the high uncertainty around china. Why hasnt gold got an bid . A big question this month. Spot gold at 1082. Down just about 5. The weakening data out of china not helping the bulls around copper. A down day for corps. Down about 0. 5 . We have a lot of cool stuff coming up on the show. Making the taste buds pop. Find out why popcorn could be set to take over traditional snax. Also, were going to talk about google. Heres why. Google glass makes a comeback. We reveal how it could be making an appearance in your work place. And soul cycle files for an ipo. Has it got the stam thina to go distance . And youre looking at live pictures of the International Olympic committee preparing to vote on the 2022 winter games. China and kazakhstan are in the running. And beijing is expected to come out as the favorite. The former soviet union state is trailing behind a little bit. But keep in mind, beijing has already hosted the summer games back in 2008. Actually, four european cities have pulled out for political or financial reasons. So its either beijing or almanti. In the meantime, heres a lock how markets have been trading this month. Lets focus on the asia trade. Thats been capturing the attention of global investors. If we start with the shanghai composite. Red arrows across the screen. Losing about 14 in the month of july. This concern as to whether the central bank can really stimulate the chinese economy. If we stick with this, look at the shenzhen in july. Similar story here. Also down a similar amount by around 14 . If we take a look at the hang seng, the index of mainland countries on the hong kong exchange. Referred to as the hshare market. Around 6 . Still a down month for the hang seng index. A quick look at the japanese nikkei. Widespread concerns about what weakening china means for the rest of asia. Thats resulted in volatility in the asian trade. For the month of july, the nikkei gaining about 1. 7 . On that note, lets look at things in asia. Lets take stock off the absolute volatilitvolatility. We were in the thick of it in july in the china markets. As you eloquently pointed out. Were down more than 1 this friday. Were down 10 for the week. As you pointed out, down 14. 3 for the month. That constituted the biggest monthly decline in in nearly six years. That gives you a sense of the scale of the volatility that we have been witnessing over the course of the month of july. I would say that its probably going to continue simply because the market is still in this process after leveraging. Theres still a lot of margin debt out there in the system that has to be really wound down from the system until we see a degree of real lasting equilibrium in the market. I wanted to focus on the outperformers. The jakarta is being called a technical rebound. Over here, in singapore, the benchmark here down by 1. 5 at this juncture. The chodty trader noble has been weighing down the index. Uob, the Second Quarter report card was not a great deal to write home about. We saw q2 income falling to the weakest level, lowest level in seven quarters. Elsewhere, the numbers consolidated the picture out here in asia. I hasten to add next week, we have the risk event. The nonform payrolls. If we see a constructive number, that could feed into the dollar. We could see a further asian currency depreciation in this part of the world. That could filter through into the stock market. Thats the risk. Thats where we stand. Back to you. Thank you so much. Want to show you how the european core markets did in the month of july. One word really was volatility. We had the greek crisis to contend with. After we found a solution, rally. The xetra dax 2. 7 change. The ftse has been dragged down. The change is still high. About 2. 24 . The earnings picture doesnt look great. Henry dixon is with us to discuss. When i look at the sector map, energy, by far, the worst performing sector on both sides of the atlantic. A lot of that doing with the drop in oil prices. You look at refining margins, lowcost producers continue the ramp up production. And the u. S. Producers kicking up their drilling as well. The highest level since 2013. How are these date pa points impacting the way you look at gas . I dont want to add to the chorus that is incredibly negative on them. I think theyre now grasping the selfhelp that they can engender. I think the cuts are significant. And in many ways, the demand picture is always so difficult to analyze. You can analyze the supply side. The little weeks to in supply can have dramatic medium turn effects. Analysts are in a huge hurry to downgrade the medium. I think thats the wrong way to think about it. Its still a sector were not exposed to. We put over our lens of cash flow. And strong starting balance sheet, were disappointed with the opportunities presented to us. We acknowledge that is not groundbreaking comment. We constantly challenge ourselves in how we can see better plans. Its not easy at the moment. Were seeing a blood bath in the copper trade. Would you invest in companies with the least Commodity Exposure . Is that the best way to navigate . You look at the minors. Not enough to make a numerous investment. Youre starting to see some healing process in regard to the supply side. Copper is not probably the i think your worry list is iron, then copper. You could see constraints kicking in in places like gold. Its not easy. It is far from easy at the moment to make money in that sector. How do you feel about cyclicals . Now, most of the Investment Banks are expecting the euro dollar to go back to parity. I think the momentum on both sides of the pond has had the most significant force down event. I think we need to be a little bit careful if you look into the rate outlook. The sectors typically run ahead of themselves. History corroborates it as rates start to normalize. Clearly the earnings picture might be fine. You tend to make most money and lose most money in equities on the rerating and the derating. Luxury stocks quite interesting. A number of really, really good reports from the likes of the french. Thats really the euro weakness. Thats masked some of the underlying weakness. Weaker demand in china and other emerging markets. Are you worried that in the euro doesnt come down by as much the earnings will look bad . A huge shift here in regards tost dm. I think we have to think about that. With regards to ewe roe, we acknowledge its very weak on the perks and power parity basis. Its tough to see how the euro doesnt weaken a little bit from here. That story can play nicely into those hands. Okay . Henry, a pleasure. Thanks for joining us. Henry dixon, fund manager at glg. Still to come on worldwide exchange, weighing out the option. Should the russian bank cut or hike . We preview the decision after this short break. European equities post gains for the month amid a wrath of solid earnings. The biggest monthly loss since 2009 pch trading remains volatile. French banks bounce back. A benefit from a stronger dollar. The Second Quarter was very strong. We ended with almost 2. 6 billion. If you look at growth, it basically double digit growth on the top line and bottom line. The iraq demand for steel. The metals producer lowering the forecast for the chinese market. Engines with go. Airbus profits defend. The french planemaker booking a charge related to its military program. A relatively muted trade in todays trade as you see the xetra dax holding on to the line. Same for the stse. The cac working with better than expected earnings. This, of course, as Commodity Prices continue to fall. And in the currency market, the dollar strengthening yesterday. The gdp print was so so. Good enough to confirm the view that the fed is going raise rates at some point this year. The euro dollar below the 110 handle. In a half hour, we get the cpi numbers for the month of july. The yen is trying to reach the 125 handle. A lot of people wonder whether that can happen because, kuroda said he doesnt see why we should see further yen weakness. In the last half hour, the greek Prime Minister said his government never had plans to leave the euro but he was obliged to plan just in case. He authorized the finance many ster to put together an emergency plan. It comes as greeces ruling party backs a plan by tsipras to hold an Emergency Party come frens. Tsipras addressed ideas to further austerity. He said he had made difficult decisions to keep the country stable. And a new spanner in the work. The