Stocks rapid rise is justified. Good morning. Less than half an hour away from the european open. Lets take it to the terminal and show you what is happening. Where do we think we will be opening with the european equities . W. E. I. , click futures. 3 10 of 1 higher this morning. That seems to be the picture across europe, except for the dax, which looks like it will be something of a laggard. Lets take you now to the gmm and show you whats going on. This is what we need to show you. You should probably take away the bloomberg dollar index, up. Which, the of japanese yen, hong kong dollar, new zealand dollar, australian dollar, all down. You are seeing some movement in the bond market. Japanese 10 year is up. Up 5. 6 lk apparently this morning. Take of that what you will. Juliette saly is here. Juliette the bank of england has found enough bonds to meet its weekly target. Yesterday the bank of england posted 1. 1 billion pounds of gilt, coming after they fell shuort of the target. Cisco systems is reportedly cutting up to 15,000 jobs. Willding to crn, they announce the layoffs in the next few weeks. Cisco has been shifting toward softwarebased networking products which requires workers of different skill sets. The ceo declined to comment. Japanese shares climbed on thin volume during wednesdays trade. Exporters gained as the yen halted its advance. Its the second time this year the japanese currency rose above that level. Global news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. This is bloomberg. , thank you. E than the fomc releases minutes from its july meeting later today, coming off hawkish to some officials, as investors look for more evidence that the fed may be ready to move. Havee last 24 hours, two suggested that the september meeting is a live one, and while the market remains skeptical of a fed hike this year, it has risen above 50 for the First Time Since brexit. To be honest, that number needs to be near 90 for ta price in. We have a Senior Investment manager with us. Good morning. The market doesnt believe people like dudley when they say the september meeting is live. The frustration at the fed must be absolutely enormous. Maybe they dont want to raise rates, but there must be the desire to get some twoway risk. If they turn around and say we pull the trigger, the market is way out of position. I think thats right. Investors are still pretty dovish, but most of the data season some kind of activity over the next six months or so. I think investors should be conscious about Interest Rates. Guy why are they not . They really arent. We have a december meeting on the probability function that we have on the bloomberg, i think its 51. That number needs to be 90 to show any kind of conviction in the market. The market is basically ignoring the fed. It doesnt believe, and you can understand why, because of the track record. They have to come to it difficult decision to a difficult decision. We saw that at the end of last year and with brexit. I think investors have a lot of uncertainty, and they are probably expecting that the fed will tend toward the cautious side. That is what history has said. Guy investors have been moving into emerging markets, in bonds and inequities. And in equities. If you go back to the beginning of the year, investors were worried about three things. What was going on in china, the potential for the u. S. Raising Interest Rates more aggressively, and what was happening with brexit. In terms of emerging markets, they have all moved in their favor. Brexit has driven money into emerging markets. China has stabilized as a result of the stimulus. That, in turn has stabilized Commodity Prices. And it pushes back the expectations for rate rises, which is a favorable backdrop. Even if the fed looks to raise rates faster, i dont think it destabilizes the other legs. Guy are we in the process of effectively lowering where we keep the terminal rate . We are having all kinds of conversations out in san francisco, making this point that we are in a different world, and we should abandon the inflation target. There is no inflation in the u. S. Economy right now. Pushing for that 2 target is maybe not the way we should proceed. Rates are likely to be lower. Were living in a different paradigm. Absolutely. And we are seeing discussions around all sorts of things that people werent even talking about a year ago. Helicopter money, money being conned directly into the economy. These things are starting to move onto mainstream discussion, falling into the u. S. President ial debates. Yes, we are certainly in a different world. The expectations of where longterm rates will end up are different. Perhaps we have to think about the lower terminal rate. But i still think the direction is likely to be up. Guy weve got jackson hole coming up. Its an academic exercise, but nevertheless it provides guidance as to where policy is likely to move. What is the message we are likely to get from janet yellen . At the central bankers still believe that i think central bankers believe that higher Interest Rates are a positive. They would like to see rates higher. I think they believe it would stabilize the Banking System, which is at the heart of the financial system. That is what has been driving the ambition to get the rates higher. When you listen to what mark carney has been saying in the u. K. , his thinking has been more around the stability and profitability of the Banking System than inflation when it comes to looking to maintain rates at a positive level. I think that is floating into the thinking as well. Its about the financial system. Guy i take on board your argument about the financial system, and look at whats happening in the eurozone to appreciate the effects. Nevertheless, this upward bias that exists seems to be being eroded. This desire i dont know what normalized means anymore rates, it seems to be becoming part of the conversation. Isyou think that upward bias going to be eroded significantly Going Forward . Are we in a world where it will stay terribly low for a terribly long time . We talked about lower for longer for a while, but it seems the duration i expect is being extended duration aspect is being extended. One of the risks is higherlevel inflations, or inflationary environment that spiral out of control. That would have been a concern in 2008, 2009. It was a huge bear on prospects of gold. We just havent seen those inflationary pressures. The risks in the system have been starting to receipt because the money multiplier has effectively collapsed. If something happens, which we dont anticipate today, that changes the dynamic, it will bring it back to the table. But at the moment Central Banks will say they dont see any reflation. So we can talk about helicopter money, almost anything, and doesnt seem to make any difference. But maybe that environment will persist forever. What changes . Who knows . But things will come along. Guy lets talk about one factor that could change it, a moment contributing to this inflationary talk, oil. It is halting its advanced after four days of gains. Yousef gallo has more from dubai. Give us a sense of the story. Yousef let me break it down. Several variables are feeding into this equation. That fourday streak, 12 in gains now, brent trading within 15 sense of 49 per barrel. Weekly u. S. Gasoline stockpiles expanded. We havent seen seasonal levels like this in two decades. Wti, we ares for 11 above the 100 day moving average. We are looking forward to numbers from the eia to give us a better sense of u. S. Inventory. A Bloomberg Survey is suggesting that there is going to be an increase of 950,000 barrels per week, and we also have more comments from the likes of sex bank and citigroup about the upcoming informal meeting in algiers, and they dont think that anything is going to come of it in terms of an actual production freeze. Guy thank you very much. Yousef gamal eldin. Ben, do you get any sense from the oil market . Any hints that we will see upward prices . Even then, the inflationary impact a few years down the road wont be that great. I think thats right. I think the shift wont make much difference to inflation. When you combine that with the shift in cable, then maybe that does start to drive inflation. Maybe we throw it into that in the last piece of data. But certainly moving to 60 wont be big. Guy maybe we are getting something. We will talk about that later. That ritchie will stay with us. Coming up, weve got to talk about sterling. Most forecasters see more room to fall, the one billionaire says the pounds decline has been overdone. Then we will be watching admirals ceo, a fascinating conversation. Take a look at where they are anticipating shares to go. The markets got this one wrong. Aen merkel hits the road, series of crises on her Approval Rating as she has the campaign trail. Those stories and many more, coming up on on the move. This is bloomberg. Guy 44 minutes past the hour. Welcome back. That is new york, not quite waking up. Another hot day, the market expected to take up just a little bit. Lets catch you up on what you need to know, with juliette saly. Juliette guy, thank you. Secondquartert profits at 65 to the legal costs. Said net income fell to 391 million euros. Once one of the Worlds Largest banks, abn amro was transformed under state ownership into a consumer lender. Carlsberg has supported firsthalf profits that missed analyst estimates. Interest,nings before taxes, and items folde and the ceo will be on surveillance today. Shares have slumped in hong kong after he reported firsthalf profit that missed analyst estimates. Asias Biggest International airlines saying net income fell to 45. 5 million usd from hedging fuels, which match the gains of carrying more passengers. Atir ceo will be a guest 10 15 a. M. Billionaire Hedge Fund OwnerPaul Tudor Jones is said to have dismissed about 50 of his workforce. According to people with knowledge of the matter, the employees affected range from underperforming Money Managers to support staff. This comes as they see more than 2 billion in investor withdrawals. That is your Bloomberg Business flash. Guy thank you. So, has sterling found a bottom . While medium forecasts have the pound falling further by the end of the year, one investor thinks it may be oversold. We spoke to wilbur ross. A personal basis, i bought some sterling. Currencyspeculate in in the fund; the fund is always hedged back to dollars, because our investors gave us dollars and we want to give them dollars back. But on a personal basis, it may be getting overdone i dont quite agree with george soros. Guy so which side of the fence ben ritchie said on . Thats a difficult decision. I think wilbur ross is someone i respect a lot, and we certainly see him as a shrewd value investor. I think his opinion certainly carries weight. Guy in terms of how you see the world post brexit, what is the post brexit period being like . Has been a pretty extraordinary period of time. We are talking, and of june, who would have thought that the ftse rallied as much as that has . Veryw the government flexible for a long. With time. We saw the collapse of currency and yet investors have shrugged most of it off. Even some of the domestic stocks, which did take a beating, have managed to recover quite a lot of their losses. It has been quite a remarkable period. Guy what effect do you think the qe will have . I think the extension of the isi program is they q qe already priced in. We have seen yields tying in further on corporate bonds. That has come into market expectations. And we have seen the currency we can as well in anticipation. I think the actual effect going forth is probably limited. Guy inflation picks up in the u. K. . What effect will it have . Exhibit a is from yesterdays data, the ppi numbers, the precursor to the cpi, maybe. And we are seeing ppi start to pick up. The Producer Prices are starting to rise. I think what you see there is the recovery in Commodity Prices feeding through. I think it will take some time for the decline in sterling and the tick up we have seen an oil to get to u. K. Inflation. But i think it would be wise to expect inflation to increase, given the backdrop. Guy when it shows the Brexit Effect, and your point is well made about Commodity Prices picking up, todays labor market data was such a lagging indicator that you wont be able to get much brexit news away from it. What do you think that will come through, and when it arrives, what do you think it will do . I dont think it will be that dramatic. I dont think companies are sitting there making radical decisions. That is not what we are seeing. I think they are sitting and waiting, maybe postponing Capital Investment, but probably continuing with maintenance. Probably not rushing out to higher swaths of new people. They probably arent going to moonshot, but it is very much a business as usual approach. I would expect to see a general softening rather than some dramatic fall off the class. Guy more from ben in a minute. Coming up, we are minutes away from the markets. We will take a look at the potential corporate movers in todays trading. Carls bear out on numbers. Well talk about admiral as well. Those stories coming up. This is bloomberg. Guy 7 53 in london, h 53 in lets get you and the stocks we need to Pay Attention to. Markets called a little bit higher. Admiral. The stock has been on quite a tear, a little softer this morning. There seems to be some consternation today; we will talk about that. The admiral ceo will be joining us. David stevens will be coming up after 8 00 a. M. Carlsberg also called up. At the moment the indicators are that the stock probably open down 3 . We will see where we go with that. The danish brewer is certainly feeling the effects the currency story. Its had a difficult story over the last few years. It is very exposed to whats happening in the east, and that continues to have an effect. Lets talk about the reporting season. At the end of the reporting season, ben ritchie is still with us. What are we left on the table for the next half of a year . What have we learned this time at how much anticipation is there Going Forward . I think theres quite a lot of anticipation. The first half was quite difficult, but dont worry, we will pull it out of the bag in the second half. Thats quite a lot of expectation hanging on performance. They do we believe Economic Outlook isnt great right now. You can cut costs for a long time. P l is becoming an increasing struggle. What is going on . I think it is pointing towards sectors were Capital Investment has been lagging, such as energy or mining, and saying it is bottom. Some of the Defense Companies have said, actually, we will see higher Government Spending in the second half; dont worry. Then we have seen other companies pointing to costcutting plans and saying, dont worry, at the end of the day we will come through. Quite a lot of shares came off quite significantly, and investors said, its not a fullblown profit warning, that we are still quite cautious about whether you can deliver that, like pearson. Guy we will carry on the conversation when the stocks open. Ben ritchie will stay with us, from aberdeen. Coming up, the market open. We think we will see a mildly positive open. Four minutes away. This is bloomberg. Guy welcome. Im guy johnson at london. Were moments away from the start of european trading. Here is her morning brief. Death to the fed. Pleading that the markets price in the possibility of a hike this year. Will investors listen . U. K. Job stay. A snapshot of the post brexit jobs market. The u. K. Takes investors on a ride. Well talk to the new ceo, David Stevens. Is that jump in the stoxx justified, and what should we read into todays line in the companys report . Lets talk about where markets are. 22nd away from the open, anticipating a mildly positive start. We sold off into the close yesterday. Lets show you everything things are going to go here at the open. Ftse 100, dax, cac, all poised to open. When we show you whats happening. This was the selloff into yesterdays close. Lets assume in. The ftse rising a touch, not by much. A mildly positive start to the day, up less than 1 10 of 1 . We will see the continental markets fell in the same way. Cac is proving to be an outperform or, rising more than ftse. Lets get the details with elliott gotkine. Nejra elliott the stoxx 600 up, and other Industry Groups gaining. Materials and parts of information technology. Semiconductors are the ones that are declining, semiconductors and Semiconductor Equipment in terms of stocks that most Industry Groups are gaining. Again,nds are trading you can see that borrowing costs and thettle bit lower, yield is a little bit lower this morning. Yesterday we saw the yield rising, and what a difference a week makes in the bond buying program. Yesterday it struggled to buy and now investors are falling over themselves to sell and push the yields higher. That is what we saw yesterday given that we were touching those record lows in terms of field just last week. We can see the yields are lower, perhaps some of that money going back into bonds following yesterdays fall in bond prices. Guy thank you. Elliott gotkine with the market open for equity markets and gilt. Lets talk about one u. K. Company, admiral. Higher waiting for the stock to open to get you a price on what is happening. The company has seen a rise in firsthalf earnings, which provides a report of 139 million pounds, now for 186 million. Revenue is also up and the dividend has been raised. There is a line people are paying attention to, the solvency line. The admiral ceo David Stevens joins us. The market seems to have set up and Pay Attention. Whats going on . We still have a very strong what w