Report. A warm welcome. A positive start. That is how president Vladimir Putin described as meetings. They met yesterday to broker a political resolution to the conflict on the eastern border. Ouran speak on the phone to correspondent. Was there any tangible outcome from the talks . Ched late intotret the night. Meeting we had closed doors and it lasted two hours. Arehows that both sides able to talk to each other. There was no major breakthrough. Were able that they to discuss some kind of start of a resolution. Both sides agreed to continue talking and both sides say that peaceful resolution is needed but we have heard that many times before. Actualo not have any details for this political resolution. Step will be that the militarys of both countries will begin consultations to install a more effective order control of the border between duquesne ukraine and russia. That is the only tangible result of yesterdays talks. And there may be more meetings but this in the future there is no certainty. What is the latest from the Eastern Ukraine conflict zone . Poroshenko and Vladimir Putin shook hands. Handshake iseem a able to stop a war. They are painting quite a grim picture. Fighting is still going on in several places. There wereent says the government said several russian soldiers have taken up positions in the region. And are directly involved in the fighting. Fact vladimir in putin confirmed that some russian soldiers had been captured in ukraine. He sought to downplay the incident and said that it was a group of soldiers who helped to patrol the frontier and simply got lost. That is pretty much the situation currently in the eastern part of ukraine. Thank you for talking to us. Putinon the phone from minsk in belarus. Rex lets turn our attention to france. The new government was approved yesterday by president hollande. The critics are saying that the new cabinet is unlikely to havee policies that stunted the economys growth. What are the changes here, lets talk about the personalities at play. About theot it is three troublemakers who define the current policies. The biggest change the economy minister. He is 36, very young, and he is a former banker. He is the new economy minister and hel replace thetiated the buyouts of nutrition unit of pfizer. Month before president hollande was elected. He already knew him since 2005. He was very close to him and he was active in the leftwing parties already. Month before president hollande was elected. But he knewand his vice secy he wasa key role and plan. Chitect of the his theuturn and opposite. Other key changes are for culture. She was in charge of the mens rights and she will become the first other key changes are for culture. Woman to be Education Minister in france. The lets talk about consequences of these changes. There is still that open one, the debate between austerity and the need for some latitude for businesses and some structural change. What is the feeling in terms of policy implications. The signal that president hollande will maintain the line of economy policies which include 50 billion euros of [indiscernible] which is 2017. [indiscernible] at least what they call austerity of the Prime Minister. Only 291 seats where the majority is 289 so the government will have to look for a very broad support in order to pass their Economic Reforms in the next big one is the budget. The budget will be discussed in the coming weeks in september. The priority will be to revive french growth which has been stuck and zero for the past two quarters. Thanks for the update. Lets move on. Suppliers are prepared to [indiscernible] there are new products expected to come from apple. That is right. We know that september 9 is the date that everyone is expecting the larger iphones to come out, not just one but two larger iphones. We know that ipads, the standard ipad and the ipad mini are coming out but the thing about this new device is it will be the largest ever and the first time in almost two years that apple is coming out with a new iteration of a product. What we have been saying is that there are updates to existing products and there is a subcategory so that is a big step for apple. About business customers and trying to tap into any trend in an increase in business spending, is that what we are going to see happening from here . Is very much about business. You consider the consumer market. There is not a lot of call forgst consumers but business scenarios that are business presentations or road warriors trying to sell products or for things like video. The array of Different Things you can do with the larger ipad is out there but what we have seen recently in the last few months is the deal that apple has made with ibm to jointly work on various kind of corporate focused products. And so that is something that ceo tim cook has said very clearly that corporate is an important area for the company. If you look at the wider pc is no growth and it is weakened consumer. The only area where they have been seeing strength is corporate. Corporate teams to be a strategy that apple wants to follow. I imagine some of the companies that you follow in and around taipei, some of the suppliers will be interested. Who are the winners and losers going to be for the sector . Traininglook at shared after the report, one of the major suppliers in korea, lg display all doing quite well in trading today in asia. To twoyear highs on some of the stocks. The big thing there is for the lcd industry. The main areas where they try and sell more of their lcd panels and tvs. Computers are not doing that well globally. There are smartphones but is six times more surface area. If you have a device that is larger still that is good news for anyone who is in the business of selling out who is selling the displays to the market. That is a lot more output than they could get from their product. Thanks for joining us. Joining us from taipei. Reforms and less regulation. What do you euro zone economy thes molly t to speak to when we speak to the chief economist after the break. Is said to winal European Union approval to buy ugo. Give thease would ritchie global Liberty Global new customers in the netherlands. Unrest in ukraine poses a Security Threat rather than just a gas supply issue. He spoke to blumberg in an exclusive interview. Is prudent and stocking just in case. It is the largest. Roblem in a larger country [indiscernible] announcing plans to invest 500 million in partnership with a chinese manufacturer. Francois hollande unveiled his economy. Thank you for joining us today. A new cabinet has been announced in france. Whole event represent the beginnings of further antiausterity body emerging within europe be they politicians or other parties . A realization that structural reform is necessary. At the k seemed time obviously growth and mario draghi made it clear in his speech that fiscal policy can play a role in supporting the eurozone. In france there is a recognition that things do need change. Reforms. Structural there seem to be some calls from parts of the french establishment for germany and german consumers to do more in terms of fiscal stimulus. Is that conversation going to gain any ground . I hope so. You look at the budget positions , germany is in a strong position to relax policy. Germany should be spending more. The other thing which is key for the eu more generally, the effects of the u. K. On the fringe is creating a Single Market of services because that is the growth area. That is driving the recovery in germany and france has been woefully lacking in some sector activity. Everybody talks about structural reform and we need to what is it [indiscernible] he reckoned structural reform would add to growth. What do the french need to do that represents real change. Making labor cheaper is a huge issue in terms of how much it costs to employ labor. Taxes. Ducing what i would highlight is the long burn. We saw in the u. K. That reform plus. Actor in the 80 the same was true in germany. In the 90s kicked off plus. We had a few days to mull over Mario Draghis jackson hole speech. Looking beyond expectations you do not believe it would be a big deal, do you if they implemented this. Rex i think if they had done it it would have been different. The decision was to acquire the banks and that is a result issue but did not stop the eurozone falling back into recession. Q he would the recession be helpful. Qe would if he continues to be dovish the market discounts qe. It helps france and helps germany. You will stay with us and we will pick that up. We want to know whether you think the euro is the solution. Welcome back. Went to the break the one thing we touched upon is europe and mario draghi and his inflation. The japanese saw the decline of their currency is being the panacea, the answer to mark isng and we had saying be careful what you wish for because it did not transform the japanese economy. Is the lower euro panacea for growth . Weak sales inry haveack drop is you do not a strong economy. That is one issue. The other thing about the is thee which is key eurozone is incredibly open. And a Lower Exchange rate would be hugely helpful. This is a bit like the funding for lending scheme in the u. K. Are you hope hopefully it will bear fruit . Talks rst of the two it is about the periphery carry trade buying their own sovereign bonds. Next year it is more interesting. German companies will find it easy to get funding from banks. And is one of the lessons also. Rich company you can get funding very cheaply. You may not want it but you will be given it. They get a kicker back from the bundesbank for lending in this way. They will be benefiting as well. Focused on the effects on germany. It will take time. The other big event is the referendum and the measure of anticipated all until the. Is there an element of complacency about this because opinion polls show it is for the a. Markets. Lly forex there are different views. Also the opinion polls are still suggesting a fairly close result. And who knows, some have done incredibly well so we will have to watch the opinion polls to see whether support grows. It would not surprise me if we have more impacts on u. K. Financial markets. You said who is the blog and what are they watching . What are the nuances . Will some investors follow this closely. This was slightly biased. Thanks for joining us. We will take a short break. We will talk about china telecom. News is the big announcement overnight. A bloomberg exclusive. We will tell you the details next. Welcome back. A. M. London time. Lets kick it off with the eurodollar. We have or less decided to go with cable. Got the dollar sterling 165. 48. 65 it will be point 165. Volatility has been dropping. Will the bears win and move dollar sterling lower . Lets have a look at the euro dollar euro sterling. During up for a much bigger move that broke a 50 day. Point 7936. Is said talks putin with his ukrainian counterpart were positive. He met in minsk. Poroshenko said russia and other Block Partners have a strategy andattle the Ukrainian Army prorussian levels rebels. A case for independence has not been made. The group set uncertainty surrounds a number of issues including currency, regulation, tax, and pension. Include douglas flint. And the cooperative thanks ceo. Israel and thomas have agreed to an egyptian brokered ceasefire plan to end the conflict in gaza. Thousands of palestinians poured into the streets. Some firing weapons and shouting along with thomas. Under the deal Border Crossing between gaza and israel has been opened, while fishing zones off the coast have been extended. The peace between hamas and israel, we can speak on the phone to our reporter in jerusalem. Tell us details of this peace accord. The immediate steps that are going to happen of course as we have a ceasefire and rocket attacks from gaza and israeli retaliatory airstrikes and that has held, it has been quiet since the accord went into effect. Israel agrees they will ease up on some of the Border Crossings that it has with gaza. Areexact the tales of that still sketchy and will have to be worked out. Egypt will open the Border Crossing and israel will extend the fishing limits from three to six miles of the maritime fishing limit. A lot of issues that have not been resolved. The opening of the gaza aaron seaport or hamas disarming under super Bad International supervision. Expectations, do people think that this ceasefire will hold . In the short term, i think so. There is a general sense that first of all both sides are fairly exhausted by this eight weeks of fighting. Hamas in the last week suffered some big lows, some of it some Senior Leaders were killed by israeli airstrikes and israel suffered several thousand soldiers killed. The worst military loss for israel since the war. Break. Des want this looking over the long term there is skepticism that this agreement will hold in the longterm. Will this provide relief for the israeli economy which is has been affected by the conflict and it is thought the central bank will cut Interest Rates again. That is right. It definitely had an impact on the economy which was already in a slowdown mode and there was concern in the last Second Quarter, concern it could go into contraction in the third quarter. The Tourism Sector will need time to bounce back. The israeli economy has shown itself pretty resilient. It usually has been able to bounce back in one or two quarters of the most from previous conflicts. So probably definitely will shave some Percentage Points off growth this year but well have to see if it has any effect be on that. Thank you. Bloombergs Israel Bureau chief. Lets turn to china. And statecontrolled china telecom. They reported firsthalf revenue up 55. 3 . It is a lucrative market for the domestic players in the Foreign Companies including tech giants such as apple and sang some samsung. A little bit more on the market analyst. Lets talk about china. One of the big edict coming from you have got to reduce your marketing spend in subsidies and that is the big implication across the entire market. It does. We should start with framing the reforming issue. One of the concerns is sharing wireless towers. I think these the first initial signs the government is concerned about returns on incremental investment. One of the key issues you highlighted is subscriber growth has been strong because of those levels and the valid question for investors as subsidy levels get cut act, are they going to be able said to sustain the same kind of growth especially since we are in the early stages of a 4g transition. Transitionioned the process. With this kind of pressure , does from the regulator that hold back the rollout on 4g, does that put china on the back step as a center, as a leader in terms of telecoms . You could argue it might. What i have to say is confusing having reviewed the market is re are conflict three conflict in trajectories. Marketve been losing share to domestic players. The magic price point is 1000 renminbi. It is not clear to us if cuts in subsidies are going to be offset by things like three minutes free minutes are up free data systems. That tends to work on lower end onns or hot it works higher end plans. What does the chinese customer want . You mentioned the price point. What drives the chinese customer, do they evolve from voice to text . They have the big demand for data, dont they . They do have a big man but at the moment data consumption is quite low on a relative basis. Using 200are megabytes a month. To 500 or 1000 in other markets. In hong kong it is closer to 3000. Data services are viewed as being too expensive. China is similar to korea and japan. Price cuts will be part of the challenge. The second is most customers are not willing to pay up for content and that does present some challenges. Video structure is not working well in terms of usage or on the Business Model in terms of advertising revenues. I want to get your response, we have this berg story that apple are going to go for a larger screen, a larger ipad in terms of size. They are scaling up the size of the iphone, a great deal of debate. Market, of the chinese is that going to be a plus, if that is the road that apple are going, bigger screens, the ipad. What is your take on the story . We do not cover apples i cannot comment on the stop per se. In terms of the current handsets, theres a lot of largeformat Devices Available in china. I would say that makes a bigger difference when video usage takes off given the relatively limited video usage it may not be as important. If you look at it based on market data 20 of handsets are 4s. If apple wants to expand they need to get rice points down as opposed to a larger screen. Apple does not have the same kind of content tie and in markets like china. Customers do not pay for content and the itunes store is on a limited basis so there are challenges in terms of growing the market. Larger screen to make a bigger difference in developed markets where content is key and videos are a bigger driver of traffic. You. Ank we will take a short break. Russias biggest sailmaker reports results this morning. We take a look at whether the company is taking a hit from the sanctions against russia. Stay with the program. Preparing forre the larger ipad. Apple has been trying to shake up the ipad line. Consumers are moving to smartphones with larger screens. Chinas two biggest carrental companies are planning to ipo according to people familiar with the matter. It will raise 600 million this year. China auto rentals are seeking asey to expand their fleet growth and Leisure Travel spurs the use of rental cars in china. The value is at 10 billion according to a person with knowledge of the matter. Snapchat is the third morse most popular app among adults. The funding would value snapchat at more than three times what facebook paid for the start up last year. Russias biggest steel maker reports firsthalf numbers. The simultaneous weakness of the russian ruble may have helped boost profits even as Political Tension worried investors. Here with more is caroline hyde. Go