Anna a very warm welcome to bloomberg daybreak european open. I am anna edwards. Manus i am manus cranny. A little pieces of breaking news little pieces of breaking news. You are watching for a little bit anna crowe anna i am watching for orange. Manus we have numbers first of all it when it comes to fed, the numbers are rising. Donald trump promises he wants to increase spending on defense by 2 , getting everybody on board. Over 6 billion euros. They confirmed the 2017 target. That is the thing we have been seeing during this earnings season. 330 336s for million euros. Heir orders arising they are coming in that 10. 6 billion euros. Anna lets talk about what is going on in the auto space. Something. Orting the Second Quarter operating profit. That was below the estimate of 1. 54. The korean auto manufacturer, the net income of well below the estimate. Something to explore as to why this business not living up to the estimates, the sales number. We have left irish. Manus we were talking about what to break. Ebitda ahead of what the market was looking for. Global recovery. The imf talking about growth. The biggest summit makers in the world to deliver the 2017 guidance, operating comes in at 1. 7. There is a new ceo come to the helm. He comes out of switzerland. That is the best thing to ever eholcim. O lafarg anna a little ahead of the estimate of 38. 1. The revenue number coming in ahead of estimates. 184 million. Guidance on the Third Quarter sales growth and going into the numbers, that was going to be key. Thirdquarter sales guidance. This is Second Quarter, considered a little backward looking. When they stick to the 10 operating margin target what we are seeing, they have given us the sales growth of 9 in the Third Quarter. Look out for more details. How will they speak about the automotive sector, this is been an area where in the First Quarter they disappointed. The stage was set. They need to deliver a better performance. Manus on the net sales for the Second Quarter, they did come below where the market was for the Second Quarter. He came in just a shade below on the sales. Lets get into the risk radar, because where when for the Federal Reserve, waiting to see what they might say in terms of the Balance Sheet. That is what the market is focused on. The word which shows was neutral. If you look in the vick the vix. , volatilityo this close below 10 for a stretch of nine days in a row. The fed is causing a flatlining at the moment on volatility at anna it feels like the calm before the storm. Volatility. Anna it feels like the calm before the storm. We filled up some the moves in the commodity market. The asian equity session a little flat but some of the commodities of related companies have been doing better because what we are seeing in copper. London, set its biggest increase since november. U. S. Inventory retreating a little bit. That pushed the price up by more than 1 in this hour. Manus a quick line on syngenta. We just had a little bit of a release from them. Up 6. 9 billion, the Second Quarter. Income ofion in a net 928 billion 928 million. Strong savings are on track. That is the message they are giving to the market. This whole area along with the food area is really under pressure from those activist investors. Productivity on track. Anna in the midst of m a, as we know. Lets get to juliette saly. Juliette anna, thank you. Donald trump said he may real point janet yellen to a second term. In an interview with the wall street journal, he indicated that white house aide, gary cohn is a top contender for the position. Yellen has declined to comment about her future at the fed beyond stating her intention to serve out her current term expires next year. U. S. Senate has rejected Mitch McconnellsHealth Care Proposal that came at the start of several days of debate with no clear idea of what obamacare replacement plan will ultimately be asked to pass. The house rebuked President Donald TrumpWhose Campaign is being investigating by this is am from bank should be flexible and considering the u. S. And europe by normalizing monetary policy. The bank of japan may leave itself without room for policy responses in the event of another financial crisis. Policymakersy said need to continue monetary stimulus as soon as possible. Dollar desks lowerthanexpected gains in. Onsumer at the same time, the bank of australia chief philip lowe reiterated that the move to remove stimulus has no automatic indication for the Central Banks policy. Just as we did not move in lockstep with other Central Banks is monetary stimulus was being delivered, we dont need to move when some of the stimulus is removed. Juliette global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. You can find more stories on the bloomberg at top. A little bit of a mixed session here in asia. You do have the nikkei a little bit stronger, up. 5 , back above that 20,000 point level. Energy players rallying it we have seen the copper players in australia and hong kong and china doing very well. You have asx 200 up 1 . Kospi up by. 4 . The stocks we have been watching, the Property Developer hitting a record high, this after it indicated its profit is set to triple. Shipping is at a 19 month high after optimism for its shipping rates. Caterpillar one of the leading indicators were better than expected. Seven group operates caterpillar and australia and china, up by 10. 4 . Being onlycpi data the trims mean when you take out seasonal factors coming in at 1. 8 , below expectations. His band desk this band is where our be able to see inflation. This blue line is the official cash rate this is at a record low. If this white line doesnt pick up into that inflation band, it is unlikely that the rba is want to Start Talking about increasing Interest Rates down under. Manus thank you very much. A u. S. Health care proposal to replace obamacare has been rejected by the senate. The vote against a modified version against mcconnells plan comes at the start of several days of debate. Anna Jodi Schneider joins us. Good to have you on the program. John mccain helped secure the debate with a 51 to 50 vote but things did not go so well after that. They opened desk at this book to enable them to start talk they opened this vote to enable themselves to Start Talking and what happened next . Back to a mccain came very emotional chamber. It was quite a moment in the chamber. They needed a tiebreaker to even get to this debate on the bill. Once they voted on the bill, that particular version, which was the majority leaders version was voted down. They have to debate and move on to another version. Mitch mcconnell has said he wants a vote this week. It is really unclear what the path forward is, what the bill will look like and whether they will get the votes. The only have a republican majority in the chamber. No democrats. Susan collins, a republican, is likely to vote against it. Their margins are very slim and even if they do get it through, they will have to reconcile with the house bill which is very different. Jody, what is the latest with Donald Trumps plan for his attorney general. His attorney general, Jeff Sessions . Jodi the president in a press conference with the lebanese Prime Minister criticized his own attorney general saying that he was very disappointed in him for recusing himself in the investigation into russian meddling in the election, and when asked whether he would keep in on, he said he didnt know. Time would tell. T is unclear what will happen with the sessions has said he wants to continue to serve, but it is an awkward situation and very unusual to have a sitting president criticizing his sitting attorney general. It has not been known to be done. One would think that something is going to happen at some point, but the president has said has not said whether he will fire him or not p anna we will see how that him or not. Anna we will see how that relationship lays out. Trump says he will maintain janet yellen as fed chair. He wants rates to stay low. Manus he also indicated that the white house is also white alsos staff gary cohn is a candidate. We have talked about janet yellen been reappointed. Welcome, by the way. Yellen being reappointed, i dont know whether he noticed. He said she is a low Interest Rate fed governor. I would like to see that and she is a low rate person. The last eight years needed low rates, but the date the debate is , yellen. What difference would it make . We wouldnt really know. At the end of the day, we expected an epidemic an academic press. You will have to see what happens. Would janet yellen want to stay on in that role . Having raise rates, and a solid normalization of the Balance Sheet process. It is all unclear it anna fairly unclear. Saying letsorting all e down, just lets lets all calm down. The fed is giving us the latest Interest Rate decision on the Balance Sheet and the plan. The survey of economists suggest that we are expecting very little today. In september we expected timetable around the Balance Sheet. Is that your expectation . David broadly, yes. Our colleagues in the u. S. Expect the rates to go up and said timber. And perhaps december in september. Perhaps december, the data for the u. S. Were generally. Difficult to raise rates in december. Normalizing the Balance Sheet is a very uncertain process. Most Central Banks think about this whole issue, cut rates to a level. Among to wait having a normalization i want to wait having a normalization process. Manus lets talk about that, because what we put together this is for our viewers out there. You wonder what i do you wonder what i do. Rattling on. [laughter]. E have to give a shout out the tv 40. 100 basis points and climbing. You see this is the other side of the coin which is get on with it, Federal Reserve. Be more aggressive. There you go. We are at 1. 52 . That takes you back to the highs of 2007. There is validity in saying, get on with it. David theres truth in that. It may well be the case. Where p risley crisis where previously there was crisis. There is an argument that gigi get rates back to the norm normal back to the new normal there is no argument that you should get rates back to the new normal. Much. Think you very i saw an interesting story on the bloomberg. Fed, throws a little volatility. Those in the markets want to see that. And your world, how does volatility factor in . Some suggesting, if you added a little bit of volatility, that would be good. Works. T sure how that david it is interesting going into the winter months. The ecb has been tried to save money. One of the stories is youve got the ecb and the bank of japan printing money and very low Interest Rates. The fed is slowly trying to further the exit phase. The bank of england is on hold but at some point wants to raise that defied that cut since last august yet this very divergent trend. The ecb will probably taper. Interest rates more globally. Anna will discuss later in the program. David owen, staying with us on bloomberg. Manus we will bring you that u. S. Federal reserve policy decision live on bloomberg television. Anna coming up, the boj Deputy Governor says worst endless is needed to achieve its inflation target p it will focus on japan and go around the world target. We will go around japan we will go around the world. This is bloomberg. Manus it is on 1 20 in the afternoon in hong kong. The hang seng rises. Caterpillar had a nice upgrade to its numbers. A lot of industrial stocks rising in equity markets. As get it business flash lets get to business flash with juliette saly. Juliette hewlettpackard enterprises is said to be on shortlist become the next ceo of uber akoni two people familiar. Uber according to people familiar. Its new the name leader by Early September as it tries to steer costs during a turbulent period. Going to people familiar with the maker. Ae Japanese Company has built 5 stake in the massachusettsbased Technology Robotics firm. Irobot has a market value of 2. 4 billion. That is your Bloomberg Business flash. Anna earlier this morning, the bank of japan Deputy Governor spoke to Business Leaders in japan. He said the centralbank needs to continue monetary stimulus to achieve its inflationary target as soon as possible. Manus a few other lives as he talked about this 2 target as being crucial. 2 cpi data. Price pressures to rise and the second half of the projected period. Clearly, the messages coming from the boj this morning. David owen is still with us. Avid, your thoughts on japan they have been there and done that in terms of trying to stimulate the economy. Deputy governor given us some thoughts on white wages have not increased. He put some of that down on why wages have not increased. He put some in a down to waiting on the fed. The go all of these Central Banks grappling with the effects of david all of the Central Banks grappling with the effects people have to keep real Interest Rates very negative. That means inflationary expectations at the anchored close to target. That is why they keep referencing 2 . At the end of the day, they want wages to pick up. The same is true here in europe and also in the u. S. Is abese other risk popularity is waning. Jpmorgan said we estimate the ball ability the viability of the abe may administration does it prove a risk factor to abenomics . Of the day, ifnd we dont get major traction in japan, what do Central Banks do . They have always tried everything. Jackson hole coming in august. Much more focused on other measures to stimulate growth. Fiscal policy starts to reform. All necessary to boost growth more globally. Anna we are so far into this, the great extreme intention. The great experimentation concerning to other actors and what they can do. Talking about systemax what they are doing. The rba talking about Central Banks and what they are doing. The rba hiking the aussie. He probably wanted to move a little lower on that. The comments we heard from the Deputy Governor. This is an academic thought whether you have to follow. We have a divergence at the moment. David absolutely. Every country has its own issues. Australia is very different from the u. S. This does confuse markets. Markets like to have things moving. Divergent trends are going to be no centralbank was to get rates at that high. Even the u. S. Has been struggling to raise rates. This is a long way from 2007. E have never been here before manus we started these conversations about policy divergence, leave the bank of japan to one side. We start these conversations by changing policy. The next conversation is there is a higher terminal rate to be had. David if we can get normal gdp growth in these countries much higher. The striking thing about the post financial crisis world is the weakness of investment globally. In part manus mi to preemptive in saying that is the am i to preemptive in saying that is the next step . David when can they really do it . The bank of england was hoping to raise rates and obviously they cut rates. It is difficult for any centralbank. Anna i saw President Trump was saying yesterday, measures are not coming soon. We have that part of the jigsaw to add in as well. You. Owen, thank manus liquidity in the function of the bond market are not very low. When you look at what the bank of japan has been doing in terms of keeping hold of the bond market. We will talk about europe up next. Anna welcome back, everybody. Theo, the dollar against yen again with 111 handle. A little changed as we wait for the feds Rate Decision a little bit later. Keeping on the auto section is were looking at numbers out of daimler. They will comment or not on the alleged competitive behavior in the sector. They have been talking to authorities already. Manus we are waiting for the number and where they are. They are going to have a special meeting as well as the w p it with some crucial headlines on the french side. They see the european car market up about 3 . Russia and let america will grow about 5 . And latin america will grow about 5 . This raises the Market Forecast for europe, latin america and for russia. If you think about the warning shots coming from the bank of england, about how much were spending here in terms of the car financing. Anna we get numbers from nine miller just from daimler and they dont look from daimler and they dont look great. Side, 1. 2he revenue billion. That is just a im sorry, 41. 2 billion. Second quarter revenue, that is pretty much back in line. Ebit comes in. We are seeing whether they will confirm in regard to the meeting. The whole industry is plagued. There is the net income number, 2. 5 one billion. In terms of outlook, 2017, they see Significant Growth. They have gone for a much sportier lineup. They are trying to get ahead of the emissions scandal. Cars, theyreel are going to spend 220 Million Pounds euros, excuse me on making that fix. Mercedesbenz, 2. 4 billion. Anna lets take a broader look at the markets early