Sachs leverage finance conference with a number of exclusive interviews, including the banks chief european economist and the cfo of europes telecom giant. Youre watching worldwide exchange, bringing you Business News from around the globe. And were just getting news out of italy. Rates came in at 12. 3 for all in july. It was 12. 6 and its expected to stay at 12. 6 . It came in lower than expected at 12. 3 . The youth Unemployment Rate hit a new record high of 44. 2 in august. So the overall rate is falling, but the youth Unemployment Rate going up. Were getting some data on the health of the german labor market. The seasonally adjusted jobless rate falls to 2. 8 million. German september jobless unadjusted rate was at 2. 65 . Slightly lower. But the adjusted rate was 6. 7 . Obviously, a lot of focus on germany. It can rely on growth, were talking about the biggest economy in europe. A lot of questions or concerns around what further sanctions in russia will do to germany. Absolutely. And on that topic on sanctions on russia, which economy do you think is the worst performing thus far . Ive given you a massive clue already. Is it germany . It is not germany. Its ukraine. That makes sense. And the best performing . In europe . I believe it was ireland. Not ard cooing to my data. It was poland. And the best trading economy overall was argentina. It would have been a bold move to go into that ahead of last month, but were recapping all of the most likely moves with one trading session left in the quarter. Well be taking a look back in the month and the quarter later on in the show. Meanwhile, today, thousands of prodemocracy protesterses remain camped out in the Central District as their standoff continues for a third day. The crowds continue to swell here in the Main Business district of hong kong. And the banners that you see above reflect the sentiment here on the ground. The baern behind me says do you hear the people sing . This is a play off the angts of less miserables. Its been translated into chinese. Another baper says, i want true universal suffering. Where a kind of impact is this on hong kong because of these protests . Its been quite significant. For the second day in a row, financial institutions, banks have asked employees to work in seattle offices or possible work from home. We tail shops, many of them have been closed here and in other areas of hopping Congress Like kosway bay as well as to the central. That is a huge blow to the retail states because we have coming up on golden weeks, a major holiday, and the retail shops are counting on mainland visitors to do their shopping. Tomorrow, weapons, is national day. Thats to celebrate the founding of the peoples republic of china. You can bet that the protesters here will certainly want to make a statement on that day. Back to you. Thank you. Now out to eunice yoon who is live in beijing. Whats the response on beijing so far on protests in hong kong . Well, so far, were seeing that the beijing authorities are becoming much more aggressive in the way they present the information to the public. Our conversation right now is being completely blacked out. Thefb blacking out not only our network, but other foreign broadcasters, as well. Hopefully you guys are running some video right now so you can see what happens. Basically what happens is that you see our normal programming and then suddenly its going to be completely blacked out. Thats what most Chinese People are seeing because the government wants to be able to control the conversation on state media today, the focus of the description of the hong kong protests has been mainly about the cost to the city. A lot of the stories in the press here have been how difficult its been for School Children because the schools have been closed or the offices have been severely inconvenienced, that the markets of hong kong have been damaged and that sentiment overall has been hurt and that this could potentially be even more damaging to the reputation of the city. So thats been the basic tone of the conversation because beijing really is very concerned about this challenge that theyre facing in hong kong. A massive protests and they have very difficult choices in front of them. One would be to back down. And if they were to do that, what that would mean. Could that mean that it would embolden copycat protests in other parts of china or could it potentially make them appear weak . The other option, of course, is one that a lot of people are worried about, but still think is a rather remote possibility. That would be some type of crackdown. So at this stage, people dont think thats going to happen as of yet, but as paulene was mentioned, as well, it is national taem day tomorrow and were seeing a lot of protesters digging in their heels. The counterargument of all this is a real question as to whether or not beijing authorities would want to crack down on a day thats supposed to be about national unity. If that is the memory that they would want on october 1st. Eunice, thank you very much for that. Head to the cnbc website for a live blog on the latest developments, particularly as that National Holiday starts tomorrow. The numbers are expected to swell. You can take part in our online poll. Were asking, does hong kong still matter to china inspect long on to cnbc and have your stay. Morning star is cutting its rating on Pimcos Total Return Fund b following the departure of bill gross on friday. Pimcos ceo and cio will be on street signs today. Youre not going to want to miss it coming up at 2 00 p. M. Eastern. A lot of focus still on pimco, the treasury market after that abrupt leave from bill gross. What will that do to the markets Going Forward . A lot of firms are expecting outflows from the pimco fund given the departure. Absolutely. Its been a big hit. There was a big move in the Treasury Department on friday. And as well as the u. S. Bond market, european high yield bonds at this stage, a slight rebound from the summer selloff held by easing tensions and un conventional policy measures. Where do we go from here . Carolin joins us now from the Goldman Sachs leverage conference. Hi. Exciting to be here. Its the Fourth Annual leverage conference and it gathers up to 500 investors, up to 30 issuers and, of course, the experts from Goldman Sachs. Let me get to one of them, dennis coleman. Thank you so much for talking to us today. Weve seen huge issuance in europe and hue yields this year. If we look at the first half volume set of records with more than 150 billion. Does that mean that this conference is the biggest interest just yet . Absolutely. Weve been doing this conference for four years now. When we started, the market was in the first stage of initial recover. People expected there to be a need for incremental recovery creation. Over the years, weve seen even more interest from both our issuing and investor client. Dennis, lets talk about the el fapt in the room. Its almost october. That means bond buying by the fed is almost over. Tightening cant be too far away. One thing is for sure. Issues and investors will have to prepare themselves for higher rates. How are they doing that . How jittery are they . Sure. This has been extremely well signaled by policymakers for quite some time. Both issuers and investors have been preparing themselves. From an issuer perspective, over the last couple of years, one of the large catalysts for them going out and raising all this capital is an expectation that Interest Rates cannot remain as low as theyve been forever and as a consequence, theyve been accessing those markets. From an investor perspective, they manage these portfolios. Theyre taking that into account as they make their Investment Decisions now and as they look forward. Dennis, once tightening comes, do you think that issuance will simply fall off a cliff . What are thecati catioindicatio youre getting . Issuance falling off a cliff is not going to happen. Those instruments have maturities. When they mature, they need to be refinanced. Interest rates move around and are likely to rise, i think given the global expectations, i think there may be a revised capital for issuers going out to security their funding. But i dont think were going to see a precipitous falloff. Overall, the sweet spot isnt over just yet. We have a couple months to go . Definitely. If you think about it and step back, think about investors globally, asset allocation, they need equity exposure, they want to have fixed income exposure and i think theres a meaningful place in investor fort fellow these days. Clearly, i think there will be a place for that in most investors portfolio. Theres been a big shift from bank capital to Institutional Capital and you said before this is a secular shift. That obviously creates a lot of liquidity in the market. In terms of the Investor Base which is brought out as a result of that, tin Investor Base, do they fully understand the risks associated to those leverage deals . Sure. Lets talk about the shift for one second. You step back from a policymaker perspective and as general participants in the european economy, increased credit creation is clearly a positive. Thats helped propel us out of the crisis. Given the state of most of our commercial banks at the time being, having the onset of institutionally provided capital has been in a very welcome form of credit creation and i think something thats been supported by issues alike and the consequence of what weve seen as a result of those objectives. What does your pipeline look like . Reasonably good right now. We have a consequence of different type of transactions looking to come to market. We have a number of clients still looking to term out their capital structures, put more duration in their business and lock in fixed rate cost of capital, given the low rates right now. Then there are also other clients that are a bit more offensively minded and looking to security capital now that can grow their business. They can make investments in Capital Expenditures or go ahead and make acquisitions to grow their business. There are a couple of Different Reasons why issuers are entering the market right now, but those would be some of them. Dennis, appreciate your time today. That was dennis coleman. It seems as though the sweet spot isnt over just yet. Thanks for that, carolin. Lets have a look at equity markets here in europe so far today. A bit of strength up about 0. 2 . Its quite odd that weve got this strength today. Overnight in asia, there were declines, hong kong leading the way with those protests. Weve had a bit of data out this morning, italian unemployment slightly better than expected. The german Unemployment Rate jobless number slightly higher than expected. Not positive data. Looking forward to the ecb meeting on thursday, expecting perhaps more easing. The ftse 100 is down just below flat. Germany is off 0. 1 . France is off about 0. 5 and italy off a similar amount. Lets look at individual stocks. Rbs shares have rallied, up nearly 4 after the statebacked lender that has expected losses from bad loans to be significantly history than previous forecast. The bank said it will release 800 Million Pounds to have a lot on bad loans. A different story, alas, for a similar amount. Rbs is up 4 which has slumped to the bottom of the index. This after the warning it will lower its index unusually warm weather continues. Shares off italia off 0. 9 . Lufthansa, another strike today as a dispute over benefits continues. Annette joins us from frankfurt with the latest. Yes. Departing from frankfurt, the rest of the flights are departing with pilots coming from management. So lufthansa management is struggling to keep the operations ongoing. Its really seeing the opposition of the pilots union to management plans to scrap early Retirement Benefits for new pilots who are going to join the company. So bottom line is this is the fifth day of industrial action for lufthansa this year and that is, of course, holing for the reputation and also fm damage to the company. But so far, the management is very strong in its understanding that they cant budge a mill mighter here. They need to insist on getting those early Retirement Benefits for new pilots joining the company out of the way because they are too koes costly looking at the competition. Talking about competition, they are coming from airlines for lufthansa. That is why management will stay stay flat and the pilots in the future because there is not a lot of movement between both parties. Is for today, most people are flying some other destination because they have a special night plan in place and perhaps might take flights to munich where theres no strike action. Back to you. Thank you very much, annette. Lets move on to the bond market now. U. S. Treasury yields, the 2. 5 . Perhaps getting a bit of strength amid the hong kong proactivities. Gilt around 2. 5 and the tenyear german bund just under 1 . Forex and the u. S. Dollar has taken a bit of a breather for once. We will be reviewing what it has done over the last few kooers days after the break. Seema, whats up after the break, as well . We have a big show coming up after disappointing guidance for walgroons next month. We speak to one analyst with a buy on the stock. And are european slackers with low expectations . We discuss the latest controversial comments coming. Plus, plenty more to come from the Goldman Sachs leverage finance conference. After the break, we get more from this thursdays ecb meeting and cohead of the economic theme. This is a burrito made with chocolate, soybeans, and apricots. What kind of chef comes up with this . A chef working with ibm watson, on the cloud. Ingredients are just data. Watson turns big data into new ideas. And not just for food. Watson is working with doctors and bankers to help transform their industries. Today theres a new way to work. And its made with ibm. Welcome back. The European Commission has findings over irish tax deals with apple. The document is part of a wider tax avoidance probe into several other multi nationals. Apple has been operating in ireland since 19830. Did company has invested over 100 million in the last several years and it is the largest employer. Were just getting more flashes through on this story. The commission has polled ireland that, quote, unlawful aid may be recovered. Thats suggesting that apple might give back some of the money its received. Developing story there. Well bring you more when we get it. I think this could potentially lead to the Irish Government recovering tax money from apple. I think thats the big question as you just pointed out. Interestingly enough, its carrying over 100 billion of cash on its books. Most of it is overseas. When its increased its Capital Allocation program, when it offered its dividend and buyback program, rather than use the cash on its books, it issued bonds. It has so much tax on the books, but it went to the bonds. Now, recap of some of the data weve had utah of europe earlier, italys youth unemployment hit a record high in august. The overall jobless rate in the country full to 12. 3 versus 12. 6 in july. In germany, the jobless rate held steady at 6. 7 in october. This as german retail sales posted the highest rise in three years in august. Some key aprilan data well bring you in around ten minutes, the final read of Second Quarter gdp. At 1 1 00, its eurozone unemployment figures and the flash estimate, the fall to 0. 3 from 0. 4 in august. And inflation figures are forthcoming just ahead of the ecb decision this thursday. Could another bank force them to take action . I asked him if he expected mario draghi to unleash qe. Thats whats on the cards. Im not sure whether its going to be qe. But there will be announcements, the covered ones which are meant to afford liquidated conditions in europe. Do you think it needs to go lower to help the exporters . No one should favor the currency because it is retaliated. But yes, i would welcome some further space from stoppinger currency funds. And well join carolin again now at the Goldman Sachs conference. Thank you so much for that. Leveraged loans and high yields bonds, lets focus on the big data point. That is obviously the cpi number for the month of september. Im now joined by the chief european economist at Goldman Sachs. Hugh, thank you for your time. You initially expected a 2. 2 print. Youve revised that up. Why . I think what we saw yesterday from germany and spain was a little stronger than we anticipated. Nonetheless, we expect inflation to remain weak. Even though i think the september number on our forecast is probably the nadia. As we see last years unexpectedly and quite significantly weak number from october, we expect the annual headline inflation rate a little bit drift up towards the end of the career. Hugh, a lot of people are 1kr567ing their heads. Its five years after the financial crisis, almost two years after the end of the eurozone debt crisis. But still, were seeing very, very sluggish growth. While the u. S. , theyre growth at 4. 6 in the Second Quarter. What has gone wrong in the eurozone . Well, i think the impact of the second crisis in europe, the sovereign crisis on confidence was significant. And i think its important the to keep in mind that this second crisis was, you know, more of a european crisis. Although no doubt it had a impact in the u. S. , but it has led to more weakness in confidence and ultimately activity. In addition to that, and this is where the ecbs attention is currently focused, we have this fragmentation of Financial Markets in europe, particularly in the banking sector. And the process of healing that fragmentation which mr. Draghi initially did now more than two years ago with his famous whatever it takes statement. I think that process of he