Good morning and welcome to countdown. Im Jonathan Ferro. And i am caroline hyde. Airbus dominated the first day of the show, a 21 billion dollars sales blitz. The deals gave airbus an early lead. Could boeing fight back with more deal announcements today . Edwards is onna the ground with more. Day two,ou expect on and i . Airbus to see you, jon. Netted 24 21 billion of orders on day one. Theyre also stealing the headlines by talking about the nore efficient version of a older model aircraft. Will others be joining that list of buyers today . That is one thing we are watching. Could be boeing stay in the sun . Thele familiar with situation are telling us that we need to watch the Leasing Companies today. Particular, could there be 9 billion worth of orders from a aviation. R and boc Leasing Company also is one to watch today. Could that be a buyer . Leasing very much in the bit as he headed into day two of the Farnborough International air show. Yesterday we saw a spectacular flying display. It featured everything from vintage biplanes to the a350. The red arrows were here and also the euro fighter. A very noisy display, obviously. You might hear some of it in the background during the next interview. Started asking him about overcapacity in the industry. Lufthansa and air france, we both know our warning on profits. What was his take on that overcapacity debates . We are desperate for capacity with the 787 delay of over three years. And now the 350 is making a huge impact in Qatar Airways expansion plan. Air france and lufthansa are talkingngs about patching up their problem and not industrywide. It is their problem. Theyre not keeping the costs under control. This is not the case with carriers in the gulf. Our costs are well in control. Qatar airways. Om lufthansa and air france have to blame some of the middle Eastern Airlines for the level of capacity were seeing on some of those longhaul routes. Qatar is not is saying is not a problem. He says their spaces are not competitive. Hasays that Qatar Airways an under capacity problems because of delays. Why are they not taking delivery of the superjumbo . It seems to be a bit of a mystery. I asked him what was holding back the deliverys. We have issues with the 8380. I would not like to say it in front of the camera. I would prefer if you asked the same question of airbus. Are you angry with airbus . Im very angry because it is making an impact in our expansion plan. Can you tell us any more . Something like that. He is very angry. He did go on to say that in general terms, his relations with both airbus and boeing are very good, to use his words. When we watching today . A big role by the Leasing Companies. Could be boeing stated today . Boeings day today . Im going to have my Running Shoes on. We will be talking to ge engines. We have an interview with airbus, plenty to discuss with them about what is happening here carried also the euro, could they start selling airplanes in anything other than dollars . That is a topic of conversation. Caroline, you have been having conversations about that recently. The score and air asia as well. Ecorp and air asia as well. The onevery similar to behind us, john and caroline. I am afraid it is not that big. Back to you. Anna edwards, you have made my morning. I am such a happy man now. Bring it into the studio and i will place it on the bloomberg terminal on my desk. Thank you very much. Maning about euros, another that is talking about the euro is mario draghi. He is testifying on ecb policy and the euro zone economy. His message to legislators was pretty clear. The new round of cheap money should stimulate bank lending. Incentives in strong for banks to expand their lending beyond original plans. Both banks with a recent record of positive lending and those that have been deleveraging. , the measures adopted last month have already provided additional Monetary Policy accommodation. More about this. We are now joined by bank of new. Ork mellon currency strategist what you take away from the statement that mario draghi was making yesterday . Hes truly trying to get across the idea that money is meant to be going into lending, but we have seen such tightening in maybef the sovereign the money is really going into sovereign debt. I think lending has been a problem throughout this last two or three years, it is the other side of the equation, it is demand for loans. It really is that simple. The eurozone is still in such a dire state that is lacking momentum. It has a risk of faltering right now. That is a great concern, especially weak german data lately. It is very difficult for firms to throw caution to the wind and demand a large amount of cash to invest with. It is a chicken and exit to a ecb mario draghi finds the in. He says hes hoping demand will pick up. When he does, he wants to bridget. To bridge it. Theres going to be a lot less than what there was last time around. That is actually one of the things that i think is going to drive the euro lower later in the year, because it has lost its appeal. People are buying sovereign debt because italian and spanish yields have been so high. Now there is talk that it will turn into a funding currency. That would be great for the euro, because thats what it needs. The other side unique to side of the equation against the dollar. How much can we expect that the dollar side will help the euro start to lower . Will we start to see janet yellen turning more hawkish . She has rather spoiled things because everyone was looking forward to her testimony. She said even if all these headwinds go, it will require a lot of monetary accommodation going forward. It is unfortunate that the two has not changed. The spark was lit last year when they talk about tapering. They keep those pointing that time. It really is the case of watch and wait. Should we have been expecting this dollar to rally for the last two years and it has not happened. Is she going to introduce some form of tightening today . What do you expect . , the tapering will continue but the problem of putting your hand up and saying right, i will start tightening or raising Interest Rates, look what happened to the bank of england. That is what she is trying to avert. Rates, itnterest becomes ingrained in the economy. Threshold. S the when you start raising Interest Rates after that long. , it will be very painful when it comes along. I think she wants to make sure the economy is Strong Enough to absorb that currency first and who knows when that will be. It is a big concern. Neil, stay with us. Lets talk a little about the u. K. In inflation data as well. Now, it has been a weeklong conflict between israel and gaza. It could come to an end in the next hour even. Egypt has proposed a ceasefire to begin at 7 00 a. M. London time. Israeli leaders are discussing the plan. Our middle east editor Elliott Gotkine is in tel aviv. How likely is this ceasefire within 15 minutes time . Good morning. The Israeli Security cabinet is meeting as we speak. The newspaper here has reported that netanyahu is minded to accept egyptian ceasefire proposal. He doesnt people to the right callingnd his cabinet for tougher response against hamas. The thirdlargest faction has said that we can demolish hamas. That, they probably were not put a ceasefire proposal if he didnt think he would win it very to the israelis are well aware that they dont want to be seen to be the ones that are to be blamed for the continuation of this weeklong conflict. Perspective, they have they reject the ceasefire proposal, but they will wait and see what the Political Leadership says. Have a couple of good for the gander wins, but civilian casualties are mounting in gaza which helped some depict israel as the aggressor. Hamas is also well aware that it could of sympathy from around the world for the current conflict, they dont want to lose being seen to be the ones that turned down the ceasefire proposal. Ones possible that we get in 45 minutes time or so, but theres no guarantee, caroline. Cairo, kerry heading to how important is this for the inches egyptian new president as well . It is very interesting, caroline. Have a statesman who has carried out a coup against democratically elected mohamed morsi. Now he will be seen as the goto guy for the u. S. And also improved standing in the arab rocher ahe helps ceasefire. William hague steps down as Prime MinisterDavid Cameron revamps his cabinet. We will look at the strategy behind the shuffle. Time for todays company news. Citigroup agreed to pay 7 billion in fines and consumer relief to settle a mortgage bond probe. They allegedly misrepresented the quality of mortgagebacked bonds for the 2008 financial crisis. But it also reported secondquarter profit that beat analystsestimates. Barclays reported a decline in the number of u. S. Shares. That was during the week that it was sued by new york for allegedly lying to customers. 190 7 million shares were traded according to data from the financing financial industry samsung and bmw have expanded a supply deal to make batteries for the german carmakers future electric vehicles. The deal is worth ilions of euros. The agreement with him w helps samsung as it seeks a larger share of growing demand for rechargeable power cells in electric cars. Im caroline hyde. Im Jonathan Ferro. Cameronsrn to david shakeup. Lets talk about the breakdown of who goes where first. This is a big reshuffle. It comes 10 months before this countrys next general election on may 7. That is indicative of why this is happening. Theres a sense that this cabinet is out of touch ,iddleaged man, too many men and so the idea is we will see generational switch. We will see younger ministers, more women and we will see fresher, more Diverse Group of people in there. People leaving, ken clarke is one. He was a minister without portfolio. S a real representative hes a character. He is 72 and has been in and out of for 25 years. He is around for a very long time. Not exactly a scalp. Way thingssensed the are going and before anyone came after him and said he decided he was going to resign and write about. Hes been around so long that it is a perfect example of the generational switch theyre looking for. William hague also out. , but nonetheless, houston in and out of for the last 20 years. He was a leader in opposition, wasnt he . He was. This gives cameron and opportunity to bring in new people with the foreign secretarys job. It will perhaps be taken by another member of the cabinet. At least you get here is an opportunity to get people up and shipped over. But he is a big one. Who takes his job . Hammond, who is currently defense secretary will get the job. You do get this opportunity to backfill for the defense secretarys job. Lots of the jobs. This is really an ull, ifheboard c you would. Hes one of the few ministers that are out there on the record saying that unless brussels is written back more of its powers, then i would vote against the eu. That is interesting that we have not just a generational switch but hardening of the line ahead of a referendum on eu membership. We will get more to come. This all cannot yesterday evening. Morning, today in almost all certainty we will get some of these new ministers coming through the front door of number theto symbolically fill airwaves today with these new faces as Prime Minister can say look, i havent been seen theme. You yesterday, not all of them, but you inside the house of commons so you have to go through the embarrassment of walking back and forth from number 10 with all the cameras. Is amazing, when he was first made leader he said i will have 30 women. Getlly he started to through the door. A little too late maybe. Normally when you reshuffle reviewed about 2. 5 years in. This is interesting and uncommon to do just 10 months before the general election. A lot of people say that is because they think this will be close and maybe it will make different. More on that later today show. Biggest news this week a welcome from janet yellen. Unemployment data out tomorrow. Inflation data out today. Neil miller will be with us after the break. Im caroline hyde. Joined by Jonathan Ferro. New, lets talk about the u. K. Today we get inflation data. Midnight. A is out at it is pretty poor. It surprised many analysts. What is your feeling, we still great guns for the u. K. Economy . The cbi did as well has been interrupted by some very big increases. It tends to have a ripple effect. I think it takes a few months really before the bank of england and analysts really know what is happening. We know that unemployment has been coming down and in comes up instantly moving higher. That is been one of the biggest drivers of the economy going forward. Is moving in a nice steady fashion. Now that we are on it one way stop all the way to bank hike. It is really matter what happens. Remaking slowdown, but we would have to cease of the rebate to stop that journey, right . Think youre right. Theres a diode effect when it comes to sterling. Weak data does not have an impact. They carry on buying it. That is a problem the bank of england have a moment. That is why is trying to keep some restraint on the whole rate hike for the tour. Assume you do start to raise Interest Rates. Re is not a lot of time theres a big move higher, tentatively speaking. They will have to contend with that. How much is actually a strong pound concern for the british economy . , we are trying to inflate is that much of a concern . Is a good point. It is not had as much of an impact as people expected to, but it is the last thing we need right now. If you start raising Interest Rates, people are living on Interest Rates. Last thing you want is any Service Interruption to the recovery going forward. You need all the strength you can get on all fronts. Would be ae destabilizing force, i think. What did you make of governor carneys introduction. Tore is some uncertainty rates. We made a hike. Did you do the right thing . He did introduce the notion a process. Is it was a good thing to do. As i see it, he still retains a diverse message. I think you will continue to roll it out until he feels he has to change. When is the first hike . Give us your call. I think theres a good chance it will be the Second Quarter or possibly beyond. Second quarter, you people are thinking this year. Is the bigthis year call. Well be back after the break in about 30 seconds time. Into his settles pre2008 mortgage bond business for 7 billion. What does it mean for wall street . We will have more after the break. Welcome back to count on. It is time to head out to manus cranny for your fx check. Virtually flat lining through the asian session. On theon, were waiting cpi data that will come at 9 30 london time. Does that give carney and the mps the ability to deny the need for higher rates . Consumer prices estimated at 1. 6 . That would be a pretty long run below target. Sterling is going to be the focus of the later in the day. The minutes from the rba reserve bank of australia. Lining. Re or less flat traders are actually beginning to think about what happens next with rates. , difficultrest rates to adjust to the impact of fiscal consolidation. You have Goldman Sachs is the only outlying bank that says get ready for a rate cut from the rba by september. John, back to you. The top headlines from bloomberg. U. S. Secretary of state john kerry heads to cairo. Israeli leaders are set to discuss an egyptian proposal for a ceasefire to end the weeklong conflict in gaza today. The heavy fighting between israel and hamas militants has left at least 170 people dead. Both sides are seriously considering the proposal. Several rockets hit the International Airport at libya leaving 25 people injured. Rival militants have been fighting for control of the airports since sunday. All fights in and out of the airport have been canceled. Mario draghi has appeared before the European Parliament to testify on ecb policy. Speaking in strasburg, he resisted rumors that he was going to step down from the ecb. All the rumors to the contrary coming from some interested parties, perhaps, are unfounded. Job. Meone wants drug use there is no change at the boj. Earlier, the bank said theyre keeping its records in place. They also reaffirmed their forecast that inflation will meet its 2 target in the next two years. Data out of beijing today. China released the latest figures for credit growth. For more, were joined by david inglis live from hong kong. Money, moret more than people expected. Theres a lot more new money, right . Look at those set of numbers for june. They did step in, loosening the grip of the lung credit on sport growth. All of these measures, all were clearly higher than estimated. Much higher than compared to the previous one. When you look to china, you look at m2 money supply, 14. 7 . That is the biggest increase since august of last year. Look at bank lending, local currency loans, 175 billion in one month. Thats 34 billion compared to may. Loans plus other forms of credit, 317 billion, 90 billion more at if you compare it to may. The big one tomorrow is Second Quarter gdp. Beijing releases that tomorrow morning in asia. Also, more stimulus from local governments seemingly taking matters into their own hands here. We are getting reports that several of these provinces in china have at least outlined with a plan on spending. That is putting it lightly when you look at their jurisdictions because these are big enough to be countries in themselves. 300 50 billion. Would use in your screen, it is the province in red. Bottom isblue at the cuong she. Is unclear whether they will get this money. Whether it is new money or whether it is one that has been budgeted already. Ubs says it is very hard to decipher at this point whether or not this is money that is been budgeted. To put this into context, the two provinces i mentioned, those are the target growth rates for the year, 8. 5 percent and 8 . The first one there has the slowest growth in china in the First