Good morning. Thank you for joining us today. Lets get you up to speed with the latest ephone numbers that are crossing. It gives us a snapshot of the Business Economy in german. German Current Conditions index is at 110. 1 in july, versus the consensus which was sitting lower than this at 109. 7. Number coming out better than expected on that rate. In terms of what were seeing elsewhere on the other numbers, the german Expectations Index of 102. 4 in july, this is versus what the market was expecting at 102. 5. So this number coming in a little lower on that side. Just on the local expectations. Elsewhere, no revisions to the june indices. Lets dive into this and get the earnings reaction. The euro dollar tracking firmer today and ticked a little higher as well. 132. 19 is what were looking at. Joining us on the phone from munich is a researcher at ifo and annette joining us on the line from frankfurt for instant reaction too. Give us a sense of the key standout points. We have seen an improvement in the Business Climate indicator. In total, the conditions in the German Economy remain fair. We see manufacturing relatively strong and also the Retail Sector which has been not so strong in the past is picking up. So the Business Climate index coming in at 106. 2, slightly higher than consensus today. Does this suggest that german business is willing to spend coming up to the election, because you also think that even though the conditions across europe might be improving slightly, there may be political caution coming up. Well, there is some caution coming up, but at the end, i think nobody expects in the Business World a big surprise. I think companies are maybe a bit reluctant now to pick to spend in Capital Investment as much as they should and could, but for next year we see relatively strong increase in Capital Investment. Ge arnot, this is annette. Where does the optimism come from . Is that the eurozone sees a little the bottoming out and is overshadowing the chinese weakness . What are companies saying in germany . Well, in germany, first, the construction sector is in a strong upswing. It is different than we had the past years. The consumer is also spending more. Unemployment is relatively low. So domestic demand in total is buoyant and export is find something weakness in china is still doing fine and also todays figures show the expectations are in a positive mood. We have a balance, which is significantly higher than we had in previous months. Thank you very much for the instant analysis. Gernot nerb and annette joining us as well. You can see from the heat map, the tone that is playing out on markets today, we have a lot of red on the charts. Markets are very much on the back foot this morning as they digest some of the earnings. And the German Market is one tracking a little weaker today, not exactly helping out the rest of the benchmark index across europe. You can see currently were up about a quarter of 1 . And lets just move on to some individual indices and you see where the concentration is being felt. Were dissecting those ifo numbers and just the climate playing out across germany. It hasnt done anything for the German Market today. Dax still tracking where it was before the numbers came out, down. 6 . The ftse has also been softer today in the uk, down. 4 . The ibex has been putting in a fairly decent performance, a bunch of earnings coming up too from the spanish market today. And the unemployment numbers showed a little improvement at the margins. Enough to get the index into the green today. The cac, though, in france, is tracking a little weaker down almost. 2 . All this comes on the back of strength on the numbers that we saw yesterday. Modest gains across the european indices. As we look across on debt markets, we have got prices for paper pushing lower, which lifted the yield on trades, on bonds close to 1. 7 . Tenyear portuguese yield is below 6. 5 . Pressure really came off earlier this week when we saw the political parties, the Ruling Coalition reach an agreement. We have got the tenyear treasuries, 2. 60 . And slightly firmer on gilts, 4. 2 . Waiting for gdp numbers to come out for the Second Quarter shortly and this trade could move around. Lets dive into the euro trade on the back of the ifo numbers. We have been fairly supported as we track around the onemonth highs we saw yesterday and sill hovering around the levels of 132. Dollar yen rates still tracking close to the 100 level. Slightly on the back foot this morning for the dollar trade. The u. S. Dollar is firmer to other trades out there. The Australian Dollar being one of them. Just lost more mileage on this trade, backing away from the. 92 handle. 91 cents is what were looking at. And the sterling trade is a little firmer. So some confidence before the numbers come out. Lets get a picture of the globe and to asia. Red on the boards today. Down. 6 in china. Lets get to li sixuan in singapore for more. A tepid session in asia today. Ch markets under pressure, but losses are in fact capped by optimism on beijings measures. It comes two days after the 7 growth comments and yesterdays pmi data showed a further slowdown in chinas manufacturing floor. Nothing massive, but the muni version includes three asecreta asecretaaspects. Railway stocks and industries that are facing with overcompact issues like cement and steelmakers, they reacted very positively to the supportive measures. Earnings news also very much in play. Japans canon tumbled over 5 after cutting its 2013 profit forecast by 10 . And Lg Electronics down 2. 4 after reporting weaker than expected q2 profit. And a quick check on australia miners. They pulled back after the strong winning streak in recent sessions. Also tracking weaker commodity prices. Back to you, karen. Thank you very much for that, sixuan, well check in with you later on. We can show you instant reaction, fragrancemake r givaudan jumped up. Ranstad holdings, we saw the unemployment numbers come out of spain, this is a company that is very much in the staffing business. It is a dutch company. It said today it had a 73 rise in the Second Quarter profit. The result is due to low operating costs in the share price. One of the best performers across the European Space today, 5. 8 . Basf is right in the bottom of the dax. The company missed Second Quarter expectations and warned that achieving the fouryear earnings target looks to be like a significant challenge at this point, hence the reason were seeing the share prices under pressure today. And Credit Suisse has seen its share price drop as well. The Company ReportedSecond Quarter net profit of over 1 billion swiss franks, compared to 788 million franks for the same period a year ago. Carolyn is on the ground in zurich. Nice to see you this morning. I want to dive into the reaction, because ive got a broker report saying that the Wealth Management performance was a positive surprise. So why is the share price under pressure today . Lets just put this into perspective. Shares in Credit Suisse rallied since the beginning of the year, up 30 , versus the overall market, the smi, up only 16 . What were seeing today is a little bit of profit taking given that numbers were good, but no major positive surprises. But as i said, numbers were strong. Youve got analysts like citi pointing out capital was strong, inflows were better than expected, and the margin picture is improving as well. Overall, net income jumped by 33 . Investment banking profits actually doubled from a year ago. That was on the back of better than expected trading in both the fixed income unit, but also in terms of equities. I spoke to brady doogen, the ceo of Credit Suisse and here is how he felt about the numbers. It was a strong result for us in the Second Quarter, even given particularly in context of the volatility in the market. A billion five in pretax, up from a year go. Over a billion in net income and that was a 10 return in equity. And in particular, first half, we made close to 2. 4 billion in net income and 13 operating return on equity. So very strong returns overall. Clearly as you say, in june, given the transition in Interest Rates, clearly markets became more volatile, a little more unsettled. That impacted the business, but the business. So the Second Quarter is done. And what about the outlook for the rest of the year in that we are going to be seeing an increase in rates, we are going to potentially be seeing more volatility down the road over the second half of the year. I asked brady dugan about this, and he said were confident were going to be able to deal with the rate increases pretty well. Having said that, of course, there could be some losses on the bond holdings. On the other hand, for the Private Banking business, it means a nice boost to the net income. We have to wait to see what the net net effect on the overall business really is. But Credit Suisse says it is in a good position to deal with all the challenges. Carolyn, thank you very much for bringing us the latest there. Much appreciated. Joining us is Portfolio Manager at glen diven king asset management. We have seen the reaction, negative on the share price today. But there have been some positive comments the way brokers do it because of the Wealth Management performance. What was your instant fear . Im surprised by the direction of the market. Overall, i think one year ago no one would have expected such a good result. And well balanced result across different area of the business. And it is clearly a strong bank and a difficult environment. So compared to french or german or spanish bank, i think theyre doing very, very well. I was noticing too some of the contrary around the stock suggests could start paying the dividend fully in cash. That would be a surprise and a positive one for investors. Given the capital and everything, im not too sure they could start right away to distribute dividend, even though the result is strong, i think being one of the most conservative regulator, because, you know, in terms of gdp, the banking business is very large compared to the gdp of the country. I think it might be difficult for them to start it distribute increasing dividend. Can you get a clear read on what is playing out on earnings season. If you look at the market yesterday, we had highs across stock markets. Saw positive reaction to the pmis. Today, as we come through the trading session, we have got a negative reaction to earnings. It seems as though were on a bit of a seesaw here in europe. Well, it is a bit like an economic number in for the economy. We had very, very difficult to see a clear trend, i think. Some very positive results, negative results. One day is very yesterday was very different from today. So it is difficult right now, we still dont have a clear picture in terms of earnings. And, second, you have to keep in mind after a good expectation builder and it is very difficult to for the market to stay at level where expectation is too high. You could see some stock the best probably the one where the expectation is the lowest. Youre looking at a couple of stocks in particular. The Oil Exploration side. What stands at here and what are your expectations . Within the the oil price is doing quite well. It is holding up. Within the oil industry, where the money is made, since quite some time we think that most of the money is going away from the Oil Expression company itself. It is going more towards engineering. Today technique reported strong result across the board with very, i think, record high book. And therefore we think that within the oil industry, the engineering, we make most of the margin. The ceo from technique was saying no meaningful decline, sees strong cap growth in 2014. This suggests an appetite for investment out there in the sector. It is surprising. We have seen some project, whatever it is in gulf of mexico and australia, postponed because of high cost or because of higher risk. But this year very, very strong, robust from a large client. I think the demand for the services they provided, it is still growing. There is a clear differentiation between the Oil Services Sector and what were seeing in other mining services. The two are very far apart at this point, arent they . In terms of margin, in terms of growth, it is very different, yes. Thank you very much for that. Well have further discussion about some of the earnings out there today. Portfolio manager at Glen Devon King asset management. Lets move on to other earnings but state side. Facebooks Second Quarter profits beat forecasts as revenues rose better than expected 53 . Facebook has 1. 15 billion active monthly users. Thats up 21 interest a year ago. The Ceo Mark Zuckerberg is playing down concerns that teenage users are losing interest in the site, noting the number of teens in states has been steady over the past year. Facebook shares have soared 17 in after hours trade. You can see in germany, currently also tracking a little higher on market as well. We want to know are you still liking facebook . Or are you turning to other social networks . If you want to join the conversation, get in touch by email at worldwide cnbc. Com, cnbcwex or direct to me cnbckaren. Still to come on todays show, Spanish Banks swing back to profit as unemployment ticks lower for first time in two years. Well head live to madrid for analysis. Also, we check in on the british economy, with preliminary q2 gdp as consumer giant unilever sheds light on the global consumer. Our interview with the groups ceo is coming up. General motors set to report after rival ford beat the street. More good news, we get a report from detroit. Eunice yoon will join us live from beijing. I want to make things more secure. Whirring ] [ dog barks ] i want to treat more dogs. Our Business Needs more cases. [ male announcer ] where do you want to take your business . I need help selling art. [ male announcer ] from broadband to web hosting to mobile apps, Small Business solutions from at t have the security you need to get you there. Call us. We can show you how at t solutions can help you do what you do. Even better. A Train Derailment in spain killed at least 77 people and left over 100 injured. Government officials believe the crash was an accident, and Prime MinisterMariano Rajoy is set to visit the site. The crash happened on the eve of the citys famous christian celebrations when thousands of pilgrims mark the festival of st. James. Spanish unemployment dropped for the first time in two years in the Second Quarter according to fresh data. Lets get out to stephane in madrid. The numbers are still terrible, but at least it is an improvement. Absolutely, 26. 26 for the Unemployment Rate in the Second Quarter. This is still one of the highest one in europe, but it was much better than a 27. 2 we saw in the First Quarter of this year. This is due partly to the strong tourism activity in spain, this sector accounts for nearly 10 of the spanish gdp and created a lot of jobs in the last three months. The question mark is about the sustainability of this improvement. Tourism, of course, is a seasonal activity and a lot of jobs have been created recently, unlikely to last until the end of this year. This spanish economy remains in recession, that is also a big question mark and impossible to create some jobs on the longterm without significant economic growth. On that point, well have an update next week with the publication, the first estimate of the spanish gdp for the Second Quarter. The bank of spain believes the gdp was nearly flat on the quarter, down only 0. 1 , but, again it wont be enough to create jobs on the longterm. Thats the reason why economies believe that the situation is not going to improve significantly on the longterm. Economies believe the Unemployment Rate will increase again in spain to the end of the year and will hit 28. 7 next year. Stephane, you have a busy morning looking at those numbers. On the earnings front, a whole bunch of reports to pour through. Yeah, we have good news, first from telefonica, facing increasing competition in this country, and revenues from latin america, which traditionally upset the weak performance in europe were actually weaker on the quarter. For that reason, telefonica posted 8 decline. But that was broadly in line with expectations. The net profit despite 1 contraction was stronger than expected. Telefonica also confirmed its plan to reduce its debt level to 47 billion euros to the end of the year. The debt level has been already reduced to 50 billions in the first half of this year, the company confirmed this morning the recent acquisition of aplus in germany will not impact its debt level. We had earnings in the banking sector. A record loss of 19. 2 billion euros, while it was profitable in the first half of this year, 200 million euros. Why . Well, you have to wait until tonight. We have an exclusive interhave with the cfo of the bank in europe in closing bell. The cfo. Over to you. 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