The moment, cac 40 down, ftse off by just under 2 10 of 1 , still waiting for the dax to open. We are not seeing that optimism we were seeing in the markets yesterday at the moment. I want to show you the main stocks we are watching, starting with siemens. Fourthquarter profit was a beat, and what we heard is that the company will raise the dividend, also announcing its second Share Buyback since the ceo took the helm two years ago, as he expects no broken 2016 Profit Margins. Rollsroyce we arent seeing in move yet, but profit this year will be at the lower end of the range than forecast because of additional headwinds in the aerospace and marine market. Sharply weaker demand is forecast. Finally, burberry this was a profit the firsthalf after the company had been cutting cost, because the challenge it has been facing mainly in china. That led it to have this profit warning last month, shares dropping the most in three years. We see them up a bit today on that beat and the news about the cost cuts. Manus thank you very much. Thats whats happening on the markets. Whats happening in todays show . The siemens ceo doubles down. Europes biggest Engineering Company in tha announces a buyb. Cuts toerry beat cost offset slow Revenue Growth at the luxury goods maker. And details from draghi we hear from the ecb president in just under 30 minutes. Lets turn our attention to the top story siemens has raised the dividend and announced a 3 billion euros Share Buyback plan. That came as they beat estimates. Earlier, we spoke to the ceo, and here is what his take on the earnings was. Let the market decide on whether this is true or not and we will see about the share price, where the markets his is the t shareholders and not so much the management. If it was the management, we delivered what we promised. We have been one of the very few companies in the states who has been keeping their guidance, their initial guidance, all the deteriorating economic environments. I think it has done well but the shareholders will decide. Manus hugs nichols is standing by in berlin. Hans, when you listen to joe kaiser, what was your take . It wasnt racy with the u. S. Recovery, . Was it hans no. He clearly wasnt banking that much on the recovery, although they are saying their orders will be better next year even though they expect revenue to be flat. The main take away for me was that he was looking for the market to validates this. I just saw it was up almost 2 . Not sure if that has changed in the last 20 seconds i have been talking to you, that they are getting some sort of validation from the market. They do, though, have Profit Margins in the 10 range. Joe kaiser wants to make his company more profitable, compete with ge and abb,. And abb, and that has been a challenge. They have talked about more efficiency, so we heard a very confident ceo, but who overall, aside from that Dividend Increase and the stock buyback, when you look at actual sales, their profit margin is basically in the middling phase. Manus han thank you very muchs,. Hans, thank you very much. I want to bring our viewers breaking news from china. Everybody perplexed about the reality. This is about new loans from the Banking System to the market. 513. 6 billiont yuan. The estimate was 800 billion yuan. Aggregate financing 476. 7 billion yuan. The estimate was for over one trillion. Whatever way you break these numbers down, they are the reality of the rebalancing in china. It is about the real reality of whats going on, and that will be one of the drivers within china. The peoples bank of china they are reiterating that new the aggregate financing comes in way below even that lowest estimate of 476 billion. Eye on how then market interprets that data. The rest of the day whats in play . Mario draghi is that to take central stage of the European Parliament. Investors will be looking for clues as to whether the ecb is its Stimulus Program as the fed is expected to hike rates. It would mark the First Time Since 1994 when there was a Monetary Policy divergence. Back then, what was happening . Where were you . Janet yellen was teaching in the university, mario draghi was a civil servant. Urother the ecb nor the e existed. The benchmark rate was set by germany. The fed boosted its benchmark rate while the bundestag cut. So will we return to the 1990s . The better man to answer that question. Welcome. F ubs lets get into what we were doing in the 1990s. Time,having a ripping learning how to trade commodities. Bonds markets is what i traded aggressively. This is a fascinating period in terms of our interpretation of where we go. It will dictate the dollar, on flattening in the yield market. Your take will we diverge . Well, the economies are diverging. Averagedded last month, earnings increasing the highest since the crisis. The feds hands are somewhat tied. Markets are pricing in a definite rate hike in december, and interestingly, the decision by the fed to increase Interest Rates perhaps also that will tie the hands of the ecb. Ld where the currency, the euro dollar is weakening on the fed ishere of acting because the u. S. Economy is stronger and you have additional demand from what europe is producing it is not exactly a set of circumstances which indicates the ecb should go further. Manus everybody is speculating what the ecb will do, whether it is more negative Interest Rates and going beyond government bonds you sound slightly hesitant in terms of the aggressiveness. Simon if they are to extend qe, and wextend think they will, but against the backdrop of the fed, the case for further qe is more questionable. Manus i broke some headlines on new loans growth, significantly below of the estimates were. Ironically, it was china that caused a frenzy in the late summer and over the third quarter, and many people said that frenzy has a base and would allow the Federal Reserve to get off zero. That kind is new data, financing data, any initial response . Simon well it is well below expectations, but i look at the weekend traded, 10 , a huge fall under expectations, acted 2008 levels in terms of growth. The chinesen economy is slowing. You have a random data points like retail sales that bucks the trend, but broadly, that has been disappointing. We had an interesting dinner last night a bunch of clients and some of the best Hedge Fund Investors from across the world. Lots of great debate about a whole range of issues, making one real confusion about what the key policy goal of the current leadership in china is. Is it about growth . Is it about reform . Cracking down on corruption . Manus causing them to press the positron on their investments . Doesnt stop them from making investments . Simon at the moment, they are not making investments percent. Manus simon, you are with me for the next 30 minutes. Lets talk rollsroyce. 17. 77 , 548. 5. That is quite a dramatic fall, rollsroyce warning of 2016 had eadwinds ahead. More after the break. Manus these are your top stories. That profitsays will be at the lower end of the range forecast. The engine and turbine maker also sees sharply weaker demand for next year, after what it calls additional had in the aerospace and marine markets. Shares have fallen by over 15 this day. The Australian Dollar jumping after unemployment fell below 6 . The company is adding 59,000 jobs in october, almost four times the estimate. Australiae bank of does not need to further cut its already record low Interest Rates. Traders shouldnd bet that the Federal Reserve will meet its goals for quicker inflation. The breakeven rate has rebounded from a sixyear low in ittember, and they say should keep climbing before stabilizing. Measure of newt credit fell in october. It is adding to evidence that Six Central BankInterest Rate cuts in a year have inspired substantial pickup. Lets get straight to our beijing bureau chief. Set of bad data what is your take away . Here well, the big issue is how much of a mess this was. The survey was for over one trillion yuan, so when you miss by half, that is a pretty big sign that analysts, economists, people involved in the surveys are misjudging the direction of the economy or overestimating how healthy it is. This clearly shows that there is a lot of caution and anxiety about extending new loans. Broadly, six Interest Rate cuts in a year and the numbers have not really rebounded. That really tells you something about the government, the fact that these efforts to stimulate the economy just arent working, and they may need to do more. Manus in terms of the ability to do more, we have seen six rate cuts in the past 12 months. Some reserve requirement cuts. And many move on the currency. What is the feeling of what they do next . Obviously they want to get into this special drawing rights from the irs. Imf. Is a fiscal, monetary . What are your analysts telling you . Manus well, nick well, the big one is the Interest Rates. Globally, chinas Interest Rate is currently at a benchmark of 4. 25 . There is a lot they can do their. What they are worried about is that old line that Warren Buffett gave when you throw too much money from helicopters, at some point you will see adverse effects. The question is if they really step on the gas, are they going to be creating a monster or creating problems that they can solve later on . What they are hoping to do is to tap the accelerator, take little stimulus numbers, but really over slamming it down and stimulating the economy and flooding it with new money. That is the tension we are seeing right now. Manus nick, thank you very much. We know what to do with the extra money spend it on alibaba. Simon is still with me. Simon, you and i touched on the data, and i asked to is that stopping investors give me the feedback on that. I think it is fascinating what you said to me in the break. Simon first of all, there is confusion about what the prime directive of the leadership is. I think that is echoed in the comments incremental stimulus, adverse reform, crackdown on corruption what is the focus . The second was prevalent last night a common view of further commentr currency depreciation. There are people who believe we will see a 10 appreciation post inclusion. There, perversely, there was a remember, thew last time they did a oneoff depreciation, and another one off, and another, it was always 3 lower. Thats not going to change the move with respect to the chinese economy. Conversely, a significant could move with respect to competitiveness and help boost exports. Manus that kind of move would be quite antieverything the imf would want them to do. Simon in terms of greater flexibility and in terms of greater convertibility obviou s it is not great, if you have a start depreciation. I should clarify manus its simon much more modest 4 appreciation, but a very prevalent view. Manus the ramifications of that kind of move, and i know compliance will be all over both parties that is a feedback loop. There is real money at play. The ramifications of all of this in terms of emerging markets are we at the beginning of the third leg lower . Simon i dont think so. We have been under emerging markets for an extended period of time, responding to economic growth, earnings growth, disappointment with respect to policy and reforms in the emerging markets. We have taken that position off and valuations got to the point, where on a riskadjusted basis we cant warrant using a limited risk budget. It is not to say we think things are rosy, but valuations have reached structural levels. Manus you are staying with me for the next part of the show. Simon smiles from ubs. Because weloomberg, will be going live to the European Parliament briefing from mario draghi. He will be taking questions on ecb Monetary Policy. This is one of the speeches that takes them back to 2012 when he was in london, do whatever it takes to save the euro. First up, a quick chat about rollsroyce. The main stocks you want to watch. Stay with us. Manus this is on the move. Rollsroyce is getting hammered this morning, down 19 in London Trading after issuing a profit warning for 2016. Nejra has the details. This is certainly a big warning from rollsroyce. Nejra absolutely, and the stock has been battered, down as much as 22 . This is after it said that profit this year would be at the forecast of the range, by the company as it raises additional headwind in the aerospace and marine markets. Marine markets have been challenged because of Lower Oil Prices. It also said it will have sharply weaker demand for 2016, and that next years earnings will be hit by 650 Million Pounds worth of headwinds. Has beenfter the ceo reviewing the businesses. He is taking over in july and said he will reintroduce a wide ranging Restructuring Program to try and deliver savings as high as 200 Million Pounds a year. It is really the profit warning that has been hitting the stock today. Details of that plan to simplify will come later this month on november 24. On the other hand, we have had burberry earnings as well firsthalf profit was actually a beat. This was largely on cost cuts rather than improving sales. We have seen the shares move higher, up about 1 at the moment, as 2. 5 today. The big challenge for burberry still remains china, 30 of its revenue comes from chinese consumers. The problem is they are now shopping more in japan, more in europe to benefit from weaker currency. Manus thanks for wrapping those stocks up. Simon is still with us. A proper warning from rollsroyce, burberry talking about the migrant luxury travel. Ab inbev, the deal is underway. M a lets cover that. Give me your perspective on m a in these markets. Simon hedge funds are creating Interest Rates from our clients. There is a focus their. There. It is definitely something we find attractive. It isnt just how large the overall poll of m a is, year to date, comparing with a record. How big these deals have been. Wen point, the example had 54 deals more than that and we have had eight mega 50 billion plus steals. This is huge. What it is leading to is extended, widen spreads 10 on average across the board. Us we will get you ahead anything previewing that . Any big thought for 2016 . Simon we cant run a year ahead [laughter] simon we thought he will have more of the same. With Global Growth relatively new to this, equities being the asset class disu jour. Manus up next, mario draghi is going to speak. Manus climate manus cranny in london, im manus cranny in london, and this is on the move. We are waiting for mario draghi to speak at the European Parliament. Starting inower, two big stories. You have repsol with the Quarterly Earnings miss on the back of oil prices. Nejra was telling you about rollsroyce and what is taking ast market really down, 17 they profit warn. That does very little to balance the dividend and buyback. The declinecks on lets switch it up and have a look at the Foreign Exchange exposures. Everything really dominated by the dollar, which had some slippage yesterday, and the aussie dollar is cranking it up. Unemployment rates unexpectedly fell in october. By 58,000 the estimate was for 15,000. Traders are cutting back their bets that the aussies will raise rates. Eurodollar is at 107. 41. We are waiting to see what mario draghi has got to say. Hasnt been taken yet from the ecb on what to do next month. Eurosterling the pound has been d strengthening through the week, job figures the lowest since 2008. A bit of a shift coming through. Making a little more hawkish. Is obviously the clear issue we want to keep an eye on. The Downside Risks are clearly visible in terms of whats going on. Lets actually go to ryan now. Manus. Eah, we have been looking at the numbers for sab miller that came out earlier today. The shares are active here in london. The interesting one, primarily because of ab inbev and sab miller being the target of that acquisition, the biggest ever in the brewing industry. You can see this in the share price today we are ok. If you strip out the half billion dollar currency hit that sab miller is going to take, the pretax profit was up for 5 globally for sab miller, and in particular one of the things ab inbev will be reassured by is that growth in africa was up 11 . Lets not forget that one of the reasons ab inbev is so interested is because they want to expand their footprint in africa, and 11 growth gives you an indication of the promise of africa as a place for investing. Other than that, the profit margin will be a little bit of concern to both investors and ab inbev. It took a little bit of a hit at 23 , whereas if you look at operating margin for ab inbev, where they are costcutting rottweilers, it is well above 30 . If they do get the Regulatory Approvals over the next nine months, then maybe they can take care of that problem themselves. Manus thank you. Lets bring you some of the headlines coming from mario draghi. He is addressing the parliament eurodollar is moving at 107. 17. Mario draghi says a couple key lines, which are certainly worth keeping an eye on. He says that the economic downsides are clearly visible. Inflation dynamics have somewhat weakened. These are statements that he is making in the parliament in brussels. Eurodollar spiked lower on these lets just have a look at the eurodollar oneday trade. 107. 21 is where we are mario draghi said recovery is progressing moderately, and that inflation has signs of core core inflation has signs of sustained turnaround. A very clear line in terms of the economic growth. The ecb will reexamine the degree of accommodation in december. We have heard that line before. I was saying last night that in the f