Sanofis cl has been removed. Zeli, great to have you. This was rumored to have happen. There was a rumor that something was cooking. Today they decided to fire him. How significant is this . Someis is a company that analysts have said was not investable, Chris Viehbacher made it investable. Putting aside their while yesterday, had relative to its market since the ceo came into place. A thirdbest. Right. Doing something id never heard a complaint outside about Chris Viehbacher. The boardr from what has said and the media commentary and the press release that they did not get on. There were discussions that had not been cleared with the board, etc. What next . Come out of this looking good . The board cannot come out of this looking good. It does not look great. They are going to say theyve been saying theyre going to stick with the same strategies. A board is going to look for a ceo. One wasl say the last too much of a maverick, did the things without consulting us. Forho would want to work the sport . If they are saying the strategy is what it is, which will want to do that . They are looking for a caretaker. Someone to execute. That is one way of looking at it. Two we have any names . It is too soon. Listen to the room or milla little. To the rumor mill a little. On investable is sanofi uninvestable . There is a vacuum at the top. Uncertainty about who the ceo is. Will they stick to the strategy, etc. How is the Company Going to deal with the pressure of diabetes and the pricing pressures in the u. S. Pharmaceutical companies employ smart people. They need to have these kinds of guys. A such a thing happened to Media Company you would be talking about people locking the door. Does that happen at pharmaceutical companies . I do not have data but i think not. It is possible that some of the key elements, vicki operators within the business who were allied with Chris Viehbacher, he brought in, might follow him elsewhere or decide this sounds to concern for me. I will do something. There are a number of biotech companies. That is possible. I think it is not as acute as you would have expected if this was a tech company. Thank you. European research at bloomberg intelligence. Deutsche bank has swung to a 94 million euro loss in the Third Quarter. On litigation charges. Germanys lender set aside almost 900 Million Euros. Hansng us with more is nichols. Lets start with numbers. 94 billion euros in the thirdquarter loss. Compared to what they had last year this quarter, 40 one million gain. It is not all bad news. Their pretax profit was up 200 66 Million Euros. Compared to around 12 mean euro before. On the markets trading and equity trading, they did better. Bank andine on equity trading, they did better. They have the idea that they will have another 1. 1 billion litigation charge. When you look at fixed income commodities, this is where a lot. F banks have bread and butter Deutsche Bank is no different. They came in at 1. 4 billion, date 1. 8 billion the previous quarter. Lets compare Deutsche Bank to competitors. Staggering. Are strate america, five. 6 billion dollars. Goldman sachs, just shy of 200 million. At 1. 13 billion. They are talking to authorities about settling the libor charge. We still do not know about the currency manipulation charge. That is the biggest uncertainty. What about Management Changes . Musical chairs. They have posed someone from goldman sachs. There is a goldman banker, he was at goldman for about a year. A germany he was at utility company. A lot of financial experience. Replacing stefan krause. Krause will stay on as an advisor. They are expanding the board, nine members strong. With one bank pledges from another it tells you something. They are looking for talent and for a change. Very much. U hans nichols. Another update from Bloomberg International correspondent hans nichols in the next hour. The man. There is a bromance. There is. Air france profits fell by 61 in the Third Quarter. The company was recently rocked by a labor dispute causing a pilot strike. Lets go to Caroline Connan in paris. General are under pressure. Air france is a story of strikes. A 14 day strike that happened in september, that cost 330 Million Euros of operating profit for the group in the Third Quarter. Year, the airline is expecting that the strike will cost 500 Million Euros. They are going to accelerate cost catching and put in place a new plan. ,arlier this month, the ceo hasac, has said the strike cost one year of their restructuring plan. With klm, the group is a expected to have positive earnings. Into account take klm, air france will be losing money for the sixth consecutive year. Walk me through the events that face air france. What happens in the next quarter . What is the ongoing story . The main concern is how will bookings be affected for the fourth quarter. Whether the strike has affected the bookings and also psychologically the customers of air franceklm. The second fear is also the impact of the sluggish economy in europe. You have fears about the Ebola Outbreak. The cfl is saying the Ebola Outbreak is not having a significant impact. There has been a decline towards some eastern and western africa destinations for air france. In the longterm is about competition from local carriers, where the strikes started in the first place. Some people from the unions of pilots are saying that you can born a local carrier but it is hard to become one. Thank you. Caroline connan from paris on air france. And unmanned commercial rocket carrying supplies to the International Space station has exploded. It did sell six seconds from taking off in virginia. Shares in the Company Operating the rocket fell by 17 after the explosion. The company says it will hold a federal investigation into what went wrong with the 200 million spacecraft. Thet the end of keeley expected today. The latest wave of asset purchases began in 2012. He said has bought three the billion ofght 3 assets. The next question is when it will raise Interest Rates. Say they willies not raise objections over any member nations 2015 budget after italy and france made a lastminute adjustments. Will reduce its deficit and italy will cut 3. 5 billion euros from spending. Pemex state owned lure oil giants to mexico . Oiling up mexicos industry. Mexicos largest company. Welcome back. As a real prices fall, mexico preparing to open its Energy Industry for oil investment. For more, we are joined in a bloomberg first interview by emilio lozoya, the ceo of state owned Mexican Oil Company pemex. Thank you for joining us on the pulse. On falling oile prices. Does the low price meeting your production plans will have to be delayed . Especially deepwater. Thank you, it is a pleasure to be here with you. Oil prices are important to us. Any major oil company. In the context of the reform process we have embarked on in mexico, the shortterm impact of prices will not divert us from taking longterm decisions. Developmentosts of is around 22 per barrel. Our projects are profitable at current levels, as we speak. Therefore, developing Shallow Water or onshore fields continues to be our plan. Including, as well as you have mentioned, deep water projects at current levels. Are stemming from Energy Reform and look interesting. We will pursue them. Good morning. It is guy johnson as well. What is your expectation Going Forward for the oil price . It seems to have caught many by surprise, the drop we have seen recently. Didnt catch you by surprise and what do you expect from here . Is an important participant in the market. Weve been monitoring the price. We are in the business for the long term. As i was mentioning, the projections of the oil price will not divert us from taking this longterm decision. Our view is that demand will take up. Asia will continue to grow. Showsice of oil over time probably a plateau at higher levels. Market volatility stems from other parts of the world. We will be looking at this with cautious. Give me a sense. Youve had a tough time recently. Straight reported 8 quarterly losses and in the Third Quarter you have a loss of more than 4 billion. How are you maintaining operations with such massive losses . Is taxed heavily under the oil regime. Approved inntly mexico Energy Reform that fully transforms the system for the oil industry. Pemex will face, starting in 2015, a lower tax rate. Therefore, our ebitda and other financial indicators will look very different. If you look at pemex from an ebitda standpoint, we have one of the strongest ebitda margins in the industry. What really effects pemex today are the heavy taxes that the government imposes on pemex. Reform addresses these challenges. By lowering the tax rate and allowing for the first time in for privateof pemex companies to come invest along with pemex. Aat you will end up with is situation where private capital together with pemex will increase investments in the country, production will go up. But with lower taxes. Therefore, pemexs finances will be strengthened considerably. Wendy do you expect those losses to end . You suggest you will have two other quarters of losses and thats it. Of a course of next year and 2016, as a result of the new investments from private capital along with pemex, we will be able to increase production and hydrocarbon reserves more quickly. Therefore these losses will be reversed progressively over the course of next year. When are we going to see the big sign . Focus on . You his technical ability do you need . Pemex has a very broad and diversified hydrocarbonbased. Wehave onshore fields and have mature fields. We have light crude, heavy crude , shallow letter. As you asked as well, we have important reserves in deep water. Our variety of players is big. Weve been talking to various Oil Companies on every segment of the value chain. Not only upstream, midstream and downstream. It is a transformation for the company. Company would undermine the speaking about one company would undermine the big interest mexico is facing. We expect to partner on 10 blocks. Many of thete in bidding rounds that the government will be putting out for concourse over 2015. Pemex knows those fields very well. We have unique infrastructure we can offer to partners. We are very enthusiastic about this reform process. It is a transformational moment for the company. Technology and the right type of financing structures to monetize those assets quickly. In a world where we seem to have a demand problem with oil. It is obviously a supply problem as well. Does the world need more mexican oil right now . We seem to have a lot of it. Opec continues to pump aggressively. We have shell out of the u. S. And canada. We have shale out of the u. S. And canada. The oil industry is putting in singapore. How do you fit into the supply story . Is the large we will not see this overnight. Incremental production mexico participant will supply, those barrels will come progressively in the coming years. Lookeality is that if you at the world economy, with a young population in some Asian Countries and the demandside does not concern pemex at all. We believe demand will pick up. The in the mediumterm or however you define that. Very complex process that the International Companies and National Committees are facing. They are becoming more complex. Thosest associated with products that we are facing will at some point be translated into the price. I am sure i speak for other large oil and death companies, needs to look at projects in the long term. Thank you so much. Milio lozoya, ceo of pemex decision day at the Federal Reserve. Qe it the exit of is it the exit of qe . When do we get a first rate hike for the fed. Some would like it sooner. That is the discussion. We will be having it in a moment. Welcome back. Lets get you up to speed with some of the Asset Classes on the move. Equity markets in mainland europe pushing higher. The big mover on the ftse in london. The u. K. Clothing retailer, missed across the board. Downgrading forecasts for profit. They are blaming the weather. And peoplee weather are not buying jackets, etc. Krone, updy norwegian by. 7 . Unemployment up to 3. 7 . Markets, treasury yields. The yield on treasury slightly lower ahead is a big fed announcement and the likelihood qe will end. What does that mean, we will talk about it in two minutes. Pulse,me back to the live from bloombergs European Headquarters in london. Im francine lacqua. Im guy johnson. Leaders willnion not raise objections over any member nations 20 15 budget. After france and italy made lastminute adjustments. France will reduce its deficit and italy will cut spending. North Korean Leader kim jong un is said to have executed Senior Party Officials on charges from grasp to from graft to watching south korean dramas. Kim had his uncle killed last year. The fed will release its october meeting minutes. The latest wave of asset purchases began in september 2012. Places investor focus on the Central Banks next big move, when it will raise Interest Rates. Lets bring in Jonathan Ferro and Bloomberg Economist david powell. We are done with qe, the debate has moved on. We are done with qe3. Qe4 might be further down the road. The debate now is when do they start, if and when they start raising rates. Wille debate and the focus be on the statement. Considerable time, what it means. We are not going to get janet yellen telling us. Threat of communication needs to be refined. Further communication needs to be refined. Loaded. Line is it is interpreted by the markets to mean we are dovish. If you take it away, it means we are hawkish. Know if that is what they intended when the line was put there. They seem terrified of changing it for that reason. Bullard, hesames not a Voting Member but he was clear that maybe qe should be extended and possibly taken out in december. We are not normalizing yet, we are not ready. You are right in the sense that we are not done yet. People expect us to likely, it is the most scenario. There is some room for surprise. Bullard as opposed. Even the latest highly unlikely, there is another option that they say we are going to taper but not 15 billion. We will taper by 10 million and leave a little bit until september. Fiveyear break evens. 1. 54 . Years, two. 31 . Is there an inflation start we need to worry about in the states that will protect us from an Interest Rate hike . Deflation is the reason alert has been opposed to full tapering and looking at a shortterm inflation expectation. That is his argument for holding. Inflation provides a reason for being dovish. This is oil prices. Weve been undershooting inflation because oil prices, which is out of their control im not sure it is oil prices. Most major Central Banks are below their target on inflation. Inflationand headline are at 1. 7 . Even if you strip out oil prices you have the same readings on inflation. It is not entirely and oil story. There a big contributor. , if you look at the eurozone headline is 0. 3 and the core is higher. Wages . Wage growth is not there. Demand is not where they like it to be. Were going to talk about the the fed is maintaining a Balance Sheet of 4 billion. The ecb would love that. There is no exit plan yet. They are still going to be maintaining a large Balance Sheet. The issue is that he had the issue is that you have had the Federal Reserve with its mandate, price stability, jobs, the third wheel has been targeting asset prices and theyve been targeting asset prices. Ofre was a whole point qualitative easing, to push asset prices up and pushed yields down. To push you into riskier places. The third wheel, does that disappear . If you have been so entrenched into a policy to target asset prices, losing you pull back wouldnt you pull back . The fed has been terrified. That is because of market volatility. Qe can stay on hold, jim said that without a decline in Economic Data on the jobsite or a decline in inflation. That was off the back of market volatility. You cannot argue that they should ignore market volatility. This is one of the things they should be looking at. That is the point. The consequences, especially if the market volatility on the rest of the world, is significant. They are not worried about the rest of the world. Should they be if you had the emerging markets knocking on your door. It is something that should be thinking about. It is not the mandate. The ecb is not mandated to be worried about there is growth in the mandate. Your point needs to be taken tangentially. What essential to the fed thinking plastering the job story looks stable, the growth story is what is central to the feds thinking . The job story looks stable. What will delay the rate hike . The things they are looking at is inflation and unemployment. In the u. S. , unemployment has dropped to 5. 9 . The key worry is inflation. It is under the de facto target of 2 . Areation expectations declining. That is the case for the dots. The International Star is not asng to play on their minds much as some might think. Should the