Rate hike is to live. R. B. I. Or at the its governor patel first decision remembers well that every member of the reserved banks has a vote as well. Were going to take you live to mumbai could were less than half an hour away from the european open. The fair value tech elation on my bloomberg told a fairly flat open here in europe, up less than. 1 across the pc. Deutsche, im looking at the trade day trade versus the close on friday. On trade gate, deutsche is going to open up around 1 . Lets take you around the world and show you what is happening. The yen versus the dollar. The dollar is up. A bit of a ketchup move for the australian bond market a bit of a catch up move for the australian bond market. We will talk about the rba later. You are seeing a dyson move a decent move in the end. Lets get everybody caught up. Here is the bloomberg first word news with Juliette Saly. Juliette thank you. The cleveland fed president Loretta Mester says there is a case for the u. S. To raise rates. She is one of three fomc officials who wanted a hike last month. Mr. Repeated her views that the feds november meeting should be considered live even though it is days away from the u. S. President ial election. The fed should be looking ahead and not just waiting. I want to be consisting consistent with our Committee Case in. With our communication. If we wait until you see the inflation get back to your goal, then there is a higher potential that we are going to have to raise Interest Rate on a steeper path. When fed and other policy makers have done that, it doesnt turn out to be a good outcome. Juliette us Chiles Central Bank has kept its cash rate unchanged at 1. 5 Australias Central Bank has kept its cash rate unchanged at 1. 5 . The economy is going in and above the average pace. They announced an ipo that raised 2 billion. It plans to sell 11 million new millionnd another 5. 5 to be sold by samsung electronics. The company will engage the demand on october 26 with an ipo price to be announced the following day. Donald trump claims he billion the use he brilliantly used the tax codes that only he can understand and reform. He reported a 916 million loss in 1995. A figure so large he may not of legally been required to pay income taxes for two decades. Hillary clinton referenced this in a speech yesterday saying what kind of genius loses 1 billion in a single year . As a businessman and though state developer, i have legally used the tax laws to my benefit. And to the benefit of my company, my investors and my employers. Brilliantlyhave used those laws. Global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. Saly. Uliette this is bloomberg. Guy juliette, nice to see you. The British Government will not financial fixing Services Companies in its brexit negotiations. They say the Prime Minister has dismissed a key business demand for a deal with the eu to help ease the transition out of the block. The Pound Holding near three decade lows. After theresa may says she will begin the process of leaving the eu by the end of march. Lets welcome our guest, neil dwane. Good morning. Talking about frexit real estate . About frankfurt real estate . So good int think think you can buy frankfurt real estate for different reasons. I dont think you should do it because all the Goldman Sachs people are going to be moving out of their moving out there. Caroline what happens . Are you convinced the Financial Services hub will be in existence . Neil our analysis of what is going down would suggest we are going to be equivalent by the time we have left, in which case it is hard argument for europe to say despite the fact we are opening their laws, we cannot have the passporting and other rights that that equivalents would give us as a trading partner with the european union. Guy that sounds really rational. 1 really rational. [laughter] that you haveief to make the u. K. Suffer and one of the easiest ways is by denying passporting. Neil i can see that. At the moment, we do have that irrational motive politics, but we will see how the italians get on with their referendum. We have three big elections next year. The politics and politicians could change. Maybe it will not be irrational behaviors in a years time. One has to hope that in the end, economic sense and wisdom will prevail. Caroline oneill, what about the sense of the neil, what about the british pound . Neil there was surprised that the brexit decision which your short josh which rush josh which are chart shows. Think i expected the day we triggered to see the type of move we had yesterday and the type of headlines we had overnight. I wouldve said that sterling in our opinion looks fairly valued, so that doesnt mean it cannot get cheaper. Fundamentally, it doesnt need to get a lot weaker. The argument about overseas exporters and our competition is overstated. Many of the big exporters have big this is his overseas to meet closer to their clients. The translation of earnings will be better because of sterling. Our export competitiveness is going to be automatically uplifted by the weakness in sterling. To be dramatically uplifted by the weakness in sterling. Guy we have an incredibly to where it has been. Neil watching you guys last week, i think we are seeing that manufacturing is doing better than we all feared after the holidays. There is an element of momentum inside the Global Economy which many of us thought with the elections it seems to be ok. They could be because china is ok. Guy you sound optimistic. Neil i think i am positive. There are a lot of difficult things going on. Most of the audience has to put money to work. There are opportunities. Guy stay with us. Plenty of discussions with neil. His november live . Loretta mester thanks so. A case thanks so. A case for a hike. Should rising populism rising populism is a threat. We are going to speak to the chief economist and it back on the markets, Deutsche Bank is trading after yesterdays holiday in germany. It close higher at this point. This is bloomberg. Caroline welcome back to on the move. A slightly jury frankfurt as we have all eyes in anticipation of how the two bank will open today. Of how Deutsche Bank will open today. You. Tte caroline, thank pimco says too many Fund Managers are getting their hedges wrong and undermining pension returns. The firm says many managers are using uniform currency protection for each asset class while ignoring opportunities to benefit from the way some Exchange Rates correlate with riskier assets. Pimcoays it is using says it is using a currency by currency approach. Abb says it will keep its division inc. Continue the transfer mission. It has been calling for the firm to offset business. Abb announced it will buy back 3 billion of shares over the next two years. Ericsson could announce it is setting between 3000 to 4000 jobs as soon as today. The struggling maker of Wireless Networking equipment is trying to cut costs. Ericsson has informed this wish the swedish government about his plan. Netflix rose to its highest since may under speculation it could be a takeover target. Rumors have linked netflix the disney, although analysts say little chance of a deal. Netflix declined to comment. That is your Bloomberg Business flash. Guy cleveland fed president , Loretta Mester says the us economy is right for a rate hike. The u. S. Economy is right for a rate hike. There is a compelling case for moving the rate up gradually, taking another step in that path. You want tothink curtail the expansion, not at all. The first half of the year, growth was around 1 . I think we are going to see a rebound in the second half. Around 3 in the second half which is about 2 for the year. We are going to be growing over the next two years. Inflation expectations are anchored. The Economic Conditions are such we are going to be going back to our 2 goal. As i said in september, the case was compelling to take another step on the gradual path. If the data comes in as we anticipate, consistent with our thatast, i would expect the case would remain compelling. We are going to look at all of the data that comes in between now and november, as we do all the time. We like to look at all of the incoming information. You are right, if the data comes in as consistent with what we have been seeing, then yes, i would think it would still remain compelling. We will see when we get to the meeting. We are an apolitical institution. Politics do not come into our decision. We look at the economy. We set policy based on the economic outlook. Guy independent central banking. Bill dudley is advising caution over a hike noting concerns that the risk for recession is increasing. Bloomberge you to my and show you what is happening in terms of the probabilities that are implied as a result of where the market is. 60. 9 , the probability of a hike in december. Do you agree with that . Probably not. I dont think there is a chance. The top cios were 5050. We reflect pretty much as a company the bipolar relationship. The fed speeches, everyone who says we think we should be raising rates is another one saying it is too early. Rings are too uncertain. You have things are too uncertain. You have been talking about this for three years and they have not done anything yet. They give volatility to the marketplace which makes us more uncertain. Dollar. talking of the is it the dollar that feeds into this viewpoint . Is it the Global Growth story . I generally think when you stand back and look at Global Growth at around 3 , prethe finance of crisis, that wouldve been called a recession. We have to accept the fact that we are trying to rebalance. The world is a world the world is a low growth place. The dollar is somewhere where it will continue to take the strain. The japanese juncker control will lead 10 year the yield curve control l lead leave 10 year any longterm bond money will find the u. S. Treasury market positive. Guy is a japanese money going to the u. S. Or to europe . This is being skewed by the money market changes. We are waiting to see what kind of effect we are going to see. The cost of dollar has gone up. Buy be teepees . Tps . I buy b this reflectsl the fact that there is a normal leverage inside the mobile financial system. The eurozone the Global Financial system. I thinke crisis that reflects a technical issue inside the Financial Markets that anything you are i looking at in terms of the attractiveness of u. S. Assets. Guy were talking to the brexit lows. We have a 127 handle on what is the cable rate. I will show you what is happening with the euro sterling. Is this conservative Party Politics . Is there anything more meaningful going on . The market is testing whether you see the next big line the sand. Thats big line in the sand. Big line in the sand. Remember, you to interviewed former people than i do, that the markets are all about omentum. All abouthort momentum. Everyone is short. In september, i found sterling pound, the Economic Situation was much better than we had hoped for. Yet the bank of england deciding to cut rates. Of turbulenceriod that mr. Hammond was talking about. The u. K. Economy is doing just fine. Caroline what about euro pound. Euro pound . Give us a sense of where the weakness is going to come in . The eurozone doesnt look too pretty. Risk caroline, there is a that the euro weakens in the next 12 months because of the Political Behavior and the fact that it is highly likely that we do get more extensions of quantitative easing from the ecb. At the eurook against the dollar, because i think that is the currency that is of most interest. We think at 105, it is clear that the Federal Reserve is quite angry if the euro is that week. We tend to think around 110, 112. All of the big export machines in germany are functioning well at the level. Caroline export machines functioning well, neil. Staying with us. We are looking ahead to the stocks to watch. One behind me, Deutsche Bank. We will see how that opens up. German trading looks 20 bounce on the open. Well have it looks to bounce on the open. We will have it ahead. This is bloomberg. Guy welcome back. We are approaching the market open here in europe. 53 in frankfurt lets talk about what is happening with sterling. We have been popping lower again. We are taking another leg up. Asia, another calm session for the british pound. We are taking out those lows. We are down to the 127 level. A bit of a background on what we are saying, the function on your bloomberg. We are on an intraday. Intraday period. Caroline. Caroline it seems historical what is happening with the british pound. Theresa may taking to the radio taken to the radio. Germany,cular stock in behind me, Deutsche Bank. Will we see the stock rebound after we saw it in the trade on friday on the higher side in germany . It was a holiday yesterday in germany. So much momentum building into the doj. Will we see a deal done as executive test executives of Deutsche Bank head over to a few meetings with the department of justice. We will see if any sort of deal is struck. Job losses coming from ericsson as well. Guy thank you, caroline. Me. Dwane next to what the think of stocks right now . Else, thereanything is no alternative. Equities, opean neil for european stocks, your connect these are not quite that punchy. Yields,e looking for which i think a lot of investors are, otherwise we tended feel asia and europe and emerging markets are offering earnings growth. Guy the market open is coming up next. This is bloomberg. Guy good morning and welcome. You are watching on the move. Imed am here in london. Caroline hyde is over in franklin. Caroline has your morning brief. Caroline it is bad news for banks again. Senior figures in theresa mays government says the Prime Minister will not prioritize Financial Services in the brexit negotiations. The pound dropped to a 31 year low. Loretta mester says the fmoc meeting is still live despite being so close to the election. How high will the word be by the end of the week . At the r. B. I. Every member of the tank now gets a vote. We are live in mumbai. Value on the bloomberg pointing to a recently positive opening except for the dax which is playing catchup. White languages the ftse 100. There is the blue line which is the cac. Thedax is opening and so is tax. Cac. What is mooney what is moving . Manus it is the pound that is moving. I have the bloomberg card the sterling index. This is the brexit vote. Where do we go next . We are the weakest since 2004. Have a look at cable. We are trading at levels not seen since 1995. 90 on sterling and 122 is the next level for the pound. Sterling rose in terms of reserve currency status trumping the yen. Will that continue . Our guest said no. If you are a sterling investor, the cap is good news. If you are a dollar investor, you really want to own sterling. There is no doubt about it, there is more of a risk on proclivity this morning. I am talking about Deutsche Bank. We are opening we are waiting for the opening flash. Energy is up. This is what is moving all of the break evens around the world. The break evens in the u. S. With the fed that is moving higher. Could that be part of the justification for Loretta Mester . European markets are opening. We are keeping an eye on abb. They are under duress from one of their active investors. They are keeping the power grid. A 3 billion buyback is what they are talking about. Could there be 3000 or about 4000 jobs to go . Ericssons a look at stock price. There you go. 1. 18. Have a look at reiner. They carry 10. 8 million passengers. A year ago they carried 9. 5. Take a look at the reiner stock price. Recent guidance, they expect on 10 or 12 inl of 2017. Six months sterling takes another beating. Stocks have a little bit of a reprieve in the opening flashes this morning. Caroline tune in if you want to catch manus cranny talking to us throughout the market moves. I am talking about Deutsche Bank which is down about 0. 5 after we saw it all slightly on the adr in american trading. Can a deal be done with the department of justice . What does that mean . Has Deutsche Bank got further to drop . Is already a cheap Share Trading on less than three times a book value. The many Equity Investors have shown that they think the prospects for the bank look uncertain and murky. What i would say given the initial concerns focused around this department of justice find is we still have to think about the four or five other european banks that are vulnerable. It shows you how long the recovery from the Global Economic crisis will take. Much is som there is so outstanding litigation. They also need to make sure they have a Business Model that investors will find attractive. Europe, theyll in roles the bail in rules have changed. At the moment, all three of Deutsche Banks businesses or the it is the Bank Investment bank, they are failing to do that. I would say as an investor that you can find other investments that are covering their cost and delivering returns in this uncertain world. Say that we watch with interest what Deutsche Bank has to say and for our clients we are very careful about the counterparty risks. This is symptomatic of the difficulties we have seen in your zone banking in general and we still have those four