Explosion overnight impacted operations out of the biggest u. S. Refinery. Ukraine accuses moscow of fresh incursions after russia may have had a major u. S. Bank in retaliation for sanctions. Announcer youre watching Worldwide Exchange, bringing you Business News from around the globe. Good morning, everyone. Yes, welcome to Worldwide Exchange. At the top of the show, i want to bring you some breaking news regarding the eurozone. Some interesting Economic Data points. The eurozone july annual growth, 1. 8 versus a reuters poll of 1. 5 , according to the ecb. That seems to be ticking up. Again, up 0. 1 on year versus the four count, over 1. 5 . We also have annual growth loans to the private sector. It is but that was to be expect theed, negative 1. 6 versus a reuters poll of 1. 5 . So that number is a little bit worse than forecast. Again, this is the data coming from the ecb this morning. Lets get some instant reaction to these numbers. David marsh is director and cofounder of the Financial Institution reform and richard is with us, as well. Gentlemen, good morning to you. Good morning. David, let me kick things off with you. What do you make of the data . Its a little contradictory in terms of the avenue and dire directory were taking. How worried are you . I dont think its contradictory at all. We are head towards a japanese style deflation. But at least its improving data. Dont throw your hats up in the air too much on this. This is a onemonth slumber. To me, the big picture is europe is slacking in the difficult place and pity, the growth in the credits, its not growth at all. Its a contraction. Thats been going on for a number of years. Clearly, at the center of all this is germany. Germany is being hit on two sides. Global uncertainty in the east, sanctions, while some of its biggest trading partners, france, which has traditionally been number one is in a terrible mess. Germany is headed for a crunch period. And i would imagine that she will be reaching into her glove box or her hat box and bringing out some tax cuts. Spending increases in areas like infrastructure. I know for a fact that is something that they are seriously considering. Its interesting you mentioned domestic demand. What you didnt mention is qe. Even if we do get qe from the ecb which at this point is by no means certain it wouldnt help the german economy. We did get some qe, which is more of a structure move to improve the environment, for the whole of europe because less dependent on the banks and more dependent on the capital markets. The ecb has been kicking it around for a year, and they will do something about that, without a doubt. Believe me, this will not make much difference. The big scale qe, buying up masses and euros, thats a long, long way down the line. They may acquiesce in that and he will not resign over this, but it will not make a great deal of difference because it wont by shock and awe. Richard, are you as much of a pessimist this morning . Longterm for europe, i would entirely agree with david. The Government Finance position is generally very weak, although not that it happens in germany itself. Certainly i think the longer term aspect is troubling, without a doubt. You still want to be invested in equities. Were going to talk much more about that call later on in the show. Richard sampson, champion private investments. Plenty more key data due on both sides of the atlantic. The u. S. Reports include weekly unemployment claims and the second reading of Second Quarter gdp. Pending home sales round up at 15 00 cet. The battle for vivendis brazilian unit is heating up. The first one, Telecom Italia, its cash and share offer values the Broadband Company at 7 billion euros and gives the french firm a 15 stake in itself and a broader stake in tim brasil. Meanwhile, telefonica values it at 7. 45 billion euros. Vivendi gets a 12 stake in the new group with the option to buy sake in Telecom Italia. Why is the unit so important to european players . The need to have a real deep presence. And so if you cant get it in brazil, it strengths their presence for the future. That would suddenly unlock growth for them. It is preparing them to be sure out their presence in that market so that in the future, if this becomes more converged, they wouldnt suddenly be out there on a lead struggling. Richard, what do we make of the Telecom Sector right now . Weve seeing a huge wave of consolidation. Is it a sign of desperation or a sign of growth 12347. Its a sign of standard industry consolidation based on the lack of growth, if you like, in general. If youre a company, you have a stronger balance street or strong cash flows in the case of the telcos. You need to find way toes boost your shareholders over time and one of those ways is to provide weve seen a lot of that already in Verizon Wireless and a lot of talk about at t and vodafone, for example. These kind of moves are what you would expect at this stage of the cycle. Corporate Balance Sheets do remain strong. To what extent can this continue, though . Its been extending for quite a while. This year really is the first time weve seen good evidence of that, based on successful or unsuccessful, of course. Corporate Balance Sheets are strong and at the moment, kms are not investing that in cap ex. David, quick comment . I think m a particularly in the Banking Industry will be a big thing next year. You have the aqr at the end of this year. You have a very good set of pretty well ordered Balance Sheets. This is going be and i think cross border m a is going to be a big thing. Im waiting, though, for the really big german cross border banking. Im not sure were going to be seeing that. This is just one story thats not going to happen, i think. Coming up on the show, we speak to one analyst who says the world may be at the door of the s p 500 after a year and a half of solid accuracies. And apple syncs their watches on reports it will unveil the i watch on september 9th, the same day as the iphone 6. And what should madure do as a gracing system is put on the plate . And a cyber attack on jpmorg jpmorgan, a company that spends 400 million a year protecting its i. T. Infrastructure. Lets get back to some of the data points we had out this morning. Want to take a look at the german jobless numbers. It actually ticked up slightly in the month of august. The rate was steady at 6. 7 . German unemployment posting a small but unexpected increase in august. We were expecting a job of around 5,000. So the news isnt great for germany at this point in time as david has pointed out before. We have spanish cpi this morning. Spanish deflation down by 0. 5 . But we were expecting a reading of 0. 6 on negative 0 of 6 . So maybe that was a slight improvement in terms of deflationary trends. Lets get some commentary on this. Theyre going to be kooep key for the ecb. Wait a second, maybe not. The ecb is looking at the medium term forecast, arent they . Theyre not looking at todays number. If youre german, youre right right to have a low inflation rate. To say they should be having inflation above the european monetary unit average, i. E. , above 2 if thats what were trying to get to as the evening as a whole. That would cause some unrest. They need to get it up a bit. That is the task facing the german constituency at the bundes bank. He knows of his heart of heart they have to be 4 had . To get at that impossible dead lock at the moment. It has to be that their inflation rate has to be lower than they would like it to be. They wont call it quantitative easing in europe because they dont like to upset the germans. But the key is that they are flooding liquidity and theyre going to do so for a long time. Lets face it, this is a position weve never been in before in terms of an experimental policy which has been going on for a very long period of time the. I know were looking at some ways of exiting that policy in one or two parts of the anglosaxon world particularly. But this is going to continue for a long time in europe and in japan. What exactly does that mean for equity in bonds . Equities. We had an extraordinarily good year last year for equities. Going forward, we can see some positive flow eks. All right. David, richard, thank you so much. Youre going to stick around a little bit longer. One hour into the trading session, lower on the stoxx europe 600 by 0. 5 . There is uncertainty as to whether well get further steps from the ecb as has been speculating about them the last couple of trading sessions. These are the pictures across the markets. Down by 0. 8 . The ftse 100 sdoun by 0. 25 . A lot of focus still on the telco sector as we just discussed. The ftse mib is down by 1 . In the bond markets, more of the same, essentially. We saw treasuries rallying yesterday and that is driven by the rally that we see in eurozone debt markets. The tenyear bund yield, cpi numbers will be absolutely key. The tenyear treasury yield at 2. 34 . Volumes still pretty low in the treasury markets and we saw some monthend positioning, too, as a longer end of the curve. The tenyear italian yield oh, it just went away. I cant tell you the yield right now. Forex markets, we are seeing a bump high he in the Euro Exchange rate. Essentially, the u. S. Dollar has been rising steadily over the last six weeks or so. So were seeing some temporary weakness akos cording to some out there. Cable is at 1. 6595. Lets get to corporate news. Kwountace has posted its steepest loss as a company today. The struggling Australian Airline reported a statutory loss after tax for 2014. The stock rose on a surprisingly positive outlook as qantas revealed a Restructuring Program earlier this year including plans for 5,000 job cuts. Speaking in sydney, the ceo was optimistic about the road ahead. You still have more to do, but we have come through the worst and we have a clear evidence of a brighter future. As i said, we anticipate a Rapid Improvement in the groups Financial Performance in Financial Year 2015. And subject to control, we expect to deliver a number of profits before tax in the first half of this year. And still ahead on the show, well have more on the earnings with an analyst that says qantas could be the worst in australias history. In the second sector, nearly 6,000 jobs could be hanging in the balance here in Second Quarter earnings. Theyre due to be released at 111 30 cet this morning. Adam has more. The recent tragedies of growth, the mysterious disappearance of mh270 and the mh17 being shot down has brought another governmentled rescue plan. But the flights cannot alone be blamed on these recent disasters alone. The chart bhield me speaks for itself demonstrating the Malaysian Airlines history, at least from a financial standpoint, tends to be very turbulent. But after years of mismanagement, its taken a huge financial toss and now its shares are worth significantly less than it used to be. A look back all the way until 1994 when the malaysian government decided it might be a great idea to bring in a strategic private investors who was politically collected. He bought a 32 stake in the carrier. Now, back in 1994, it was trading around 350 to 4 ringet. And he took a loss. Years of mismanagement, equipping Asian Financial crisis when we saw stock markets in the region and share prices crash, that led to another engineered government rescue plan to save the airlines. They brought back the stake at exactly the same price. 8 ringets per share. At the time, shares were trading around 3768. Since then, mas has gone through a number of restructuring plan. The vehicle controlled by the ministry, the carrier continued to lose money. This is how much its lost over the course of the last three years. The recent twin disasters has amplified its financial difficulties. The latest quarterly result illustrated after mh370 in the First Quarter, its losses more than doubled compared to a year ago. So it looks like today we get these numbers, theyre going to be facing a record loss. But all the analyst thats i manage to contact said its going to be very hard to pinpoint an exact number. Back to you. And still to come on the show, is bigger better for the new iphone model . We look at rumors about what the much awaited iphone 6 will actually look like. Stay tuned. [ woman ] the cadillac summer collection is here. [ male announcer ] during the cadillac summers best event, lease this 2014 ats for around 299 a month. Hurry in this exceptional offer ends soon. Welcome back to the show. Weve had numbers breaking from c nook. 211. 6 million versus 1 98. 1 a year ago. Half year oil and gas sales, 117. 6 billion, up 5. 7 . I also want to bring you the latest. 68. 1 billion yuan versus the net profit of 33. 1 billion yuan. This is according to the reuters. It felt slightly for petrochina in terms of Second Quarter profit. The judge ruling apples reputation as an innovator has proven extremely robust despite the patent infringement. Apple is set to unveil the iwatch on september 9th the same day its expected to reveal the iphone 6. It would be thought the company would show off the watch at a separate event. This will likely include Apples Health kit and fitness platform. What can we expect from iphone 6 . Josh hit the streets to find out. Weve all read the rumors by now about whats going to be in that new iphone. One rumor, of course, is size. But do shoppers and consumers really want a bigger phone . Not too big, but a bit bigger. I dont want a tablet on my ear. I want to be able to fit it in my pocket. It might be a bit too big. A bigger iphone could mean a bigger price tag, so we asked shoppers are they willing to pay more for a new iphone. No, im not willing to take pore more. They need to take the prices down that they already have. I wouldnt mind paying more up front if i didnt have to pay too much up front. 299. I dont want to spend too much. I really dont. Well see if appear california make all those consumers happy. Its important the company does. Remember, the iphone still does generate over 50 of apples revenue. Josh lipton, cnbc, pal alto, california. So i guess the big question is, which are you looking more forward to, the iphone or i watch . Is bigger really better . Join the conversation here on Worldwide Exchange. Worldwide cnbc. Com, cnbc white sox. French president hollande says inflation is too high. This after the countrys unemployment hit a new record yesterday. Weve been asking Business Leaders their views on the French Economy and what reforms are needed following the government reshuffle. We are glowing spain, 21 . We are growth nearly 18 . We are growing 10 all over europe. We are growing 5 in the u. S. But we are not growing france. In france, we are flat. So if we get ahead 9 to 12 months for the economy, it is good news for france. It is to increase the freedom to the country. So this freedom is too much centralized. So we have to stop so giving so this is the roots for all the company. So one size doesnt fit all. And everything which can help the Companies Find their own ways and especially they will force in something for lows and regulations sometimes is a bit too strict. But we have to address this. We are talking about structural. This has been addressed yesterday. This is in certain all flavor rigid regulations. So we have to address those. We have to mistake it easier. Stephane is at the meadow conference just outside of paris and has been speaking to those executives. Stephane, its the message that im getting from all of these executives is that there is still a very long road ahead for france, isnt there . But at the same time, carolin, the government is working hard to reveal its relationship with the Business Community as this confronts the Prime Minister insisted on the upcoming production for companies. 40 billion euros in tax reduction, but not only it paves the way for future reforms, including reforms of the labor market. And these comments have been echoed this morning by an interview from the new economy minister. In the french news magazine, the new economic minister says that the government would be ready to make the labor market more flexible in terms of working time, which means that they could change or even cancel the 55hour working scheme in france that was implemented in the year 2000 by a socialist government. This is something Business Leaders have been asking for for a lot of years. Almost since the beginning. The problem is that unions are not ready to the government scrapping this emblem attic loan from the specialist government the. And they have announced this morning that they would offer such a position for the government. It shows in france, if you have an initiative to reform the labor market, the economy, its extremely difficult to implement it because as soon as you talk about changing reduce, unions, others option that decision. Good point, stephane. Thank you so much for that. Still to come on the show, turkish leader adawan gets sworn in today. We discuss after this short break. Dont go away. Announcer youre watching Worldwide Exchange, bringing you Business News from around the globe. Welcome to Worldwide Exchange. Im carolin roth and these are your headlines from around the world. An incentive for action falls further into deflation in august. Investors now eyeing germanys reading for a hint on whether the ecb will add next week. Telefonica raises the stakes in the battle for vivendi. Deepening its offer for gdp. Bp says the situation at whiting is under control after an explosion last night impacted operations at its biggest u. S. Refinery. The fbi saying russia may have had major u. S. Banks in retaleation for sanctiones. Lets have