, a $21us beats boeing billion sales blitz. we are live at the world's biggest air show with its co. -- ceo. software ag shares slide on a profit warning. israel accepts the cease-fire, but hamas rejects the initiative. we are live from tel aviv. welcome to "the pulse" live from

bloomberg's headquarters in london. we begin with the world's biggest air show. airbus dominated the first-day. the deals gave airbus an early lead. could boeing be on the fight back for more announcements today. todayy expect from them -- what can we expect from them today? is it a banner waving dealmaking day? >> it could be to some extent. there will be something of a fight back from boeing. we can expect to see some big deals at boeing, in particular, with leasing companies. look out for boc aviation. valued in more than

$9 billion. that is something on our radar. as cnbc is the company we have in our focus. we could see deals from both. show in termshe of the numbers yesterday and with the announcement offering a new engine margin on an older aircraft. he is certainly one of the things we have been talking about here at the air show. overcapacity is also a big scene. they have announced the markets they have issues.

he thought it was really just a european legacy of carrier issues. that was what he thought was the problem for those types of businesses. know you have been waiting to see him, but no news yet. no update on whether it will be here or not. >> i know you will search high and low. comes, you will bring alive. talk to me about the conversations he will have to day. -- you will have today. >> absolutely. we will be talking to airbus. the coo of airbus.

we'll be asking all about the -350.t news on the a minister --inance that will be an interesting type of currency. they have been doing 3-d manufacturing. that is something we would like to talk to them about and using the industrial internet. and then we will talk to some leasing businesses later on in the day. leasing companies that are going to be at the center of some of these big announcements, we suspect. it'll be great to be here on the arizona cycle. a big conversation is coming up, one of the highlights of my

morning so far. i got to talk to the lead singer of iron maiden. he is also an angel investor. pilot and he'll be flying later on during the week. it is a very eclectic air show. we look forward to hearing what he had to say. tech tuesday. they're planning the biggest --nd of job cuts and five he in five years. hans nichols joins me now. give me a sense of the scale of these layouts. >> 5800 was what microsoft laid

off in 2009. that was about a fifth of their workforce. they have absorbed 30,000 from nokia. the overall number, the number of positions, is going to be lower -- higher than 57,000. the percentage is lower. statementhis missing july 10 and he talked about the importance of cloud computing and mobile devices. that is clearly the direction they're going in. to reading -- some of them will be at the xbox division. it is headquartered in reading

in the united kingdom. could be some job cuts. where trying to find out where these cuts are and how deep they will be. software ag, this is a stock this is a colossal trade. >> a massive trade, rippling throughout the market right now. we had it this morning before the market even opened. the profit warning was dismal. one of the biggest drops in their history. it is an indication of just how volatile things are right now and how quickly things can turn on a little bit of news. we saw something similar about two months ago when lufthansa

issued their traffic warning. time whenle volatile there is hard news. >> let's keep an eye on software ag. let's turn our attention to the middle east. israeli cabinet has approved a cease-fire proposed by egypt. let's go to our middle east editor. i am looking at the news. i understand from your latest updates is that there is no question about hamas excepting this. >> what we have heard from a spokesman approved a cease-fire proposed by is ceae we reach an agreement is rejected.

--ecting the cease-fire that there have been three rockets firing into israel over the last one or two hours since israel enacted the cease-fire. unclear as to exactly what is going to happen. when i was here in 2012, and there was a conflict between wasel and hamas, it it sporadic fire. it would seem to suggest that to startnot ready firing rockets. >> let's talk about the context

of this cease-fire. john kerry is on his way, as we understand. what would this do for egypt. i have lost -- egypt was -- manage to broker the last cease-fire between them. .here is no love lost between he does seem to be wanting to get back involved. the change would change his perspective. he is now in as the man who orchestrated this coup against mohamed morsi.

the man who resided over the it would change and to be more of a statesman. -- as a person who is trying to prevent the israels from gonda being . radar? wese is on our have been speaking to the president of catalonia. he wants scotland to vote in favor of independence as it would help catalonia a bit too bit.-- separate a little if that happens, it would be

[inaudible] the development of the negotiations between with the european union. in order to keep scotland at the reunion. >> one of the biggest losers on the stoxx 600 this morning. threaten to seek immediate repayment of at least 100 youth pictures. that is not jean-claude himself. to --ers deciding whether

some politicians are against his nomination. will it be a close call? things, don't lie on you're going to read. details ahead. ♪

>> we will maintain a high degree of monetary policy. we will keep the key ecb interest rates at current levels for an extended. of time. -- period of time. we stand ready to take action if thessary to further address period of low inflation. >> that is mario draghi testifying before the european parliament. move beyondeady to its current efforts? our next guest says the central bank is using smoke and mirrors to put off qe. great to haves you with us. smoke and mirrors from the ecb. >> the biggest thing that he has

in his favor is that asset prices have not moved up significantly. as the prices have moved significantly in advance of him doing anything, that works tremendously in his favor because he keeps talking about it. when they do do it, they will expand their balance sheet at some point, they do not have to launch the program from the outset. >> this initiative of targeted lending, we will not be able to get your hands on this money. why would any bank want to buy sovereign bonds? being anvision this as constructive force, targeted

lending they will do with the banks? >> they have to focus on the flow. the issue with the balance of payments worked in both directions. faster credit growth in parts of the economy and more ecb easing can weaken the balance of payments. that could lead to a weaker euros over time. if they ease very aggressively and flows in the financial court increase dramatically, that could put upward pressure on the europe. you these imbalances building in parts of the economy. you haven't balances building in spain. buildingve imbalances in spain. that puts them in a difficult position. i do not think they want to be in this position three years

down the road where they are faced with a bubble. , he kept say yesterday reiterating of mark carney in the financial confidence. >> there are all sorts of moving parts. the exchange rate factor, the credit flow factor, the normal things that we were concentrating too heavily on. flied out gdp growth. -- flat out gdp growth. the secret to getting out of crisis is to inflate bubbles. central banks do not have it

choice but to lowball bulls. bash central banks do not have the choice. >> anna, you have a special guest. >> thank you very much. joining me with the airbus coo. great to see you. a beautiful day for day to. -- day 2. what will success look like? what do you hope to achieve? easily.1000 orders the market we're looking at is over 4000 aircraft. i would like to have between 50 and 100 orders for this airplane. >> urd have 25 -- you already

have 25 with the leasing company. we will him more about that this week. asia, they have been harassing you for what they call a killer aircraft. i am guessing you think the low cost airlines will take this one on. >> this is going to be a good aircraft in terms of economics. lower fuelring 14% burn per trip. 25% capital it with funds. >> help me with the comparison between the dreamliner. it is going to be competitive on price. but he looked at the list prices , are we comparing the wrong things?

has a stripped-down airplane on their website. like.paring like with i make -- how big can the chinese market get? >> very big. , not just then neil. altogether, over 200 and china. livelyad a very conversation with the ceo of qat ar airlines. what exactly is holding it up? >> i believe a lot of it is cosmetics. every airline is entitled to go

through his brand-new vehicle and make sure it meets the standards. the standards are very, very high. >> we have had a lot of conversation in france about the use of the euro in international trade. any thoughts about whether the europium play a bigger role in international trade. easyjet, lufthansa can buy their aircraft in europe. we believe this'll become another reserve currency just like the u.s. dollar. now we offer it to any airline if you would like to. when it came out, it it was at 119. >> thank you so much for joining

us. we will let you get somewhere with more air conditioning. thank you very much. the words of the airbus coo. the euros to strong and that is one of the biggest problems. let's get back to the other big theme. are.g to decide where we -- let's talk about janet yellen. you are looking tired already. the new yorker says, a very dovish town. are we going to have to stick with lower rates? >> she will not move away from

this dovish position at all. >> managing the transition from not. two things like forward guidance and liquidity withdraw. the first rate hike is the main obstacle she has to overcome. i would like to look at things from a currency perspective. cover on thewill dovish side as long as they can so the transition is a smooth one and then the question is, how rapidly did they miss the equality. they think they are trapped, to a degree. look at what happened to the housing market. there were sizable implications from the tapering announcement. the conditions the fed is trying

to prevent with monetary stimulus are being caused by the exit from the monetary stimulus. it leaves them trapped to a degree. they will have to manage liquidity withdrawal phase. the risk is that a large bitidity gets diluted a because what they will try to do , it will offset with that and it may keep the longer end of the curve very flat. the actual impact of the liquidity tightening is deleted somewhat -- diluted somewhat. the dollar will struggle to gain significant upside. >> not great news for mario draghi. u.k. dated to come just after the break. cameron's cabinet reshuffle.

william hague is out. who is going to fill his boots? ♪

♪ ." welcome back to "the pulse inflation data it in the united kingdom, june inflation rises to 1.9%. of estimate was for rise 1.6%. let's have a look. saint -- think like a brick. -- sank like a break.

, that comes in at two percent. buster in terms of the inflation data. list take a quick look at the currency reaction. big move in cable as well. that is a big surprise. many people expected to see inflation, if anything was going to be asked after the number, does the bank of england need to do anything? what is left? look at the quick euros-dollar for you. unchanged on the day. extremeaghi said this

-- exchange rate is a risk to the recovery. if after day for much of europe. largely unchanged. around one percent. 600, the biggest declining industry group. the banks, everybody talking about the banking sector to. the parent company, the reports began they were making bond payments. you have a down day across much of the eurozone. , does she stay on message? >> lovely. let's get immediate reaction.

that is just breathing. that is a big move. >> the core number is the one you want to pay attention to. that keeps the notion of a rate hike before the end of this year firmly on the table. the main point, the value of sterling matters immensely in the policymaking process. it does under carney. you need to consider that the u.k. is a small economy with its own exchange rate. the exchange rate needs to be managed. if you look at the balance of payments. of the other countries around the globe and the other economies around the globe that

have financial sectors as large as the uk's. singapore, hong kong, switzerland, all three of those companies have a currency arrangement of some sort. >> when you talk about carney, a great deal of debate. i am interested to know what you think. that is a good thing, isn't it? communicating at all. he is a master hedger. it is a hedging strategy and the goal is to get market rates to get the exchange rate moving. that will make the tightening cycle less severe for the

domestic economy. they could control market forces with rhetoric and expectations and keep themselves hedged. the start of the cycle and the cycle itself does not have to be as aggressive. >> we spent a lot of time accessing prices. approvals. mortgage i want you to go beyond the mortgage. what is happening in the rest of the economy? >> a lot of people like to say that housing is not driving growth. housing does not need to drive growth in order to be central to growth. look at the proposal of the index of services.

they are very highly correlated. once one of those things starts performing strongly, the rest of -- economy can only become if for policy setting knocks out housing significantly, he could put that into reverse. it could send shudders through the whole economy. >> you have a piece of your notes that say [inaudible] -- this is amate global perspective of are you looking at the world at the moment? you do excessive monetary --

there is a cost to that. it comes at a cost of lower real interest rates and a weaker currency. ifyou look at the eurozone the ecb had been stimulated as aggressively, they would have a weak currency, too. me and wel stay with will talk about what you do for your day job. let's move the agenda on. politics seems to be on the forefront. dave -- david cameron is shaking up the government. promote women and he wants new faces in the country.

>> that was not terribly expected. this is a big reshuffle, 10 months before a general election in this country that is supposed to come in may. the president wants to shake things up. faces in the cabinet, he wants more women in the cabinet. the perception that they would were out of touch. that is too big departures to mention. minister.ecame a he is resigned and said he did not want to make pigs ears of it. another big departure is the foreign secretary william hague.

this guy addressed the conservative party as a 16-year-old in 1977. extraordinary. he had the exact same diction he has today. we have seen this morning walking into 10 downing street in front of the cameras. highers. secretary for the environment. we are 10 months from the general election. david cameron has been perceived as not being inclusive enough. he is trying to correct that. >> one of the other big criticisms is that these are iteer politicians in nara,

is from the upper echelons of society. >> i will pick out one other trend. of defense post secretary. if you had to think about something behind it, i he is perceived to be more about eurosceptic. philip hammond said that if -- he would've voted against britain being in the european union. we have a general election and

wave a possible referendum and it is all about refreshing the cadres, but also trying to get more in touch with the core support for the conservative party in this country and that includes things like trying to make sure this does not look like an old boys club and reaching out to the more eurosceptic apart of the conservative party. you somel show pictures. they will live in the memories of lots of people. the german football team has just arrived. it is the fourth time germany has one. won.s

stay with us. ♪

>> welcome back. live pictures, the german football team has just arrived. it is a hero's welcome. 1-0 win for germany.

the fourth time they have one this tournament. it was mailed by the news conference. wall-to-wall coverage. parade thatory live high oning to the hog. they must have a sniff of that trophy. we will keep you abreast of that. stephen, thank you live high on the hog. they must have a for thing with us this hour. you analyze currencies and you make some pretty big calls. >> you have a view on your account. the canadian dollar is going to struggle. ashink i can get back a sigh

148 150. 148 or 150.s i think ultimately, they will get to appoint where they are referencing the currency in the states. they are trying to prevent depreciation of the economy. >> hasn't carried more weight than other central banks? >> it would. holdout of all of the major central banks. that would be big when it happens. i think it will happen. they will get their eventually.

>> your new target -- i did not think you will move very much at all. look atly, you should target levels. >> you have city -- an interesting take on clones. .ollar content >> norway is a bubble economy. the sizes so significant, is outlined the budget surplus in all of that grips fund into the economy. looking at the nonenergy trade deficit, which is very doorway, they the

are going to be very wary about it. deflates nfc will sector of the economy diminishes important, they will not grow. i do not agree that you should be a buyer of that currency. >> thank you so much for coming in this morning. we have covered a lot of ground, as usual. nfc will sector of the economy diminishes important, they will notlet's bg interview from the world's largest air show. delays.ked about the -- i would notes like to say this in front of the camera.

>> are you quite angry. this is making an impact. >> can you tell us anymore? something to do with the interior. look something like that. oft is the cio of -- the co qatar airways speaking with anna edwards. talked amongst the fighters, the jumbo jets, small companies are trying to snatch a piece of the aerospace market. among them is a u.k. amongst the jumbo jets, small company, a flying car. you cannot resist but to have a look. ♪ buggy andn on road then you can stop, flip your switch. and then drive forward.

something in the region. this is a project to show our engineering capabilities. we are evaluating the target market that we want to use. what better things to be doing than flying around in a car? it is very james bond. >> we will stay with the car theme because bmw is betting big

>> welcome back. live pictures in berlin. the german football team has just arrived, has beaten argentina. back in berlin. it is a hero's welcome, isn't it? 747, lufthansa plane buzzed the brandenburg gate a bit ago.

it is a remarkable scene and there will be a lot of celebration here in germany. -- of berlin is going to be you could not get out of the metro. this is a city that starts their partying early. >> let's shift gears because the party is going to run and run. talk about bmw, they will invest billions in electric car batteries. >> this is a massive bet on electric batteries. i-3 and i-8,e -- when you think of those two vehicles, they need batteries. this is a deal with samsung. they jumped on the news this morning, talking about a

multibillion-dollar contract. models fromtional i bmw. additional electric or hybrid vehicles from bmw. another front to compete on the battle of who is going to be number one. you can get around town awfully fast and you don't have to stop for gas. imagine it will be ears. to elon musk's give me a sense of the scale of this order. >> it is hard to say. it is dependent on how well they sell. if those cars fly off the assembly line, they will need batteries. samsung and bmw have an arrangement.

when you look at the future growth of the electrical vehicle, it could go from five all the way up to 5 million vehicles. it is a remarkable by the numbers. this is clearly a growth market. >> we will leave it there. nichols live in berlin. listen onof you who bloomberg radio, first word is up next. for our viewers here, the second hour of "the pulse." ge'll hear from the ceo of aviation. brics are having their global convention. are they waning importance?

♪

israel accepts a cease-fire. hostilities continue. hamas needs to consider the proposal. -- after airbus beats boeing. tech tuesday. software ag shares slide. microsoft plans the biggest job cuts in five years. a very good morning to our

viewers in europe. good evening to those of you in asia. welcome to the u.s. viewers. i am manus cranny. we are live at bloomberg's european headquarters. let's kick it off with some breaking news in terms of confidence coming from germany. there is a little bit of a lack of it. expectations. that comes in below estimates at 27.1. the market estimate was 28.2. that is a little bit of a disappointment. nightdraghi spoke last about policy. euro-dollar dropping on the back of that. it had done most of its move prior to the data. expectations, msiss. a weeklong conflict between israel and gaza between militants and israel. the cabinet and israel has

approved a cease-fire proposed by egypt. let's talk to elliott got kine. and hamas says they are considering what the details are of this pack. pact. >> hamas seem to have rejected it on the grounds they were not party to it. that hamasten word is considering the truth. if you look at the twitter feed there have been 11 sirens that have sounded in various towns since israel declared a cease-fire. in 2012, when there was the last

conflict and after the cease-fire, there was sporadic firing of rockets, and israel responding to particularly where the rocket fire came from. it would not be imaginable -- unimaginable for some kind of cease-fire to remain in place. >> john kerry is on his way to cairo. back into theypt world stage as the broker of peace in the region, especially between, and israel. what would it mean for the egyptian prime minister? reviled for what many people saw as a coup. muslimacked by the brotherhood. the president has been crushing wasrotherhood after morsi

ejected from office and since coming to power about a month ago. he is returning to this traditional role. it was the egyptian proposal that came out late last night, which seems to have galvanized both sides and pushed a resident -- israelis to accept both sides and may push hamas to do so as well. they are seen as the go to guys when it comes to issues of israel and the palestinians. would do wonders for his reputation. not necessarily very high following the crackdown on the muslim brotherhood in egypt. >> as that develops, i am sure we will talk to you throughout the rest of the show. let's talk central banks, the bank of england governor, mark carney, testifying in front of the house of commons treasury

committee. he's going to talk about the financial stability report in the housing caps in market. we will maybe come back to that. mario draghi, he was speaking yesterday. to testify on ecb policy. his message was clear. a new round of cheap money lending.imulate bank >> we built in strong incentives for banks to extend lending beyond regional plans. both the banks and those that have been deleveraging. overall, the measures adopted last month have provided additional monetary policy accommodation. >> those were the words of wisdom from mario draghi. jon ferro joins me now. you have spoken to more people

than i have. that was a dovish mario draghi. going to bes were his last line of defense and stead he will stay in the job. there was some talk that he was getting frustrated in frankfurt. and he has source brushed them aside. the big thing off the back of the ecb measures as we have a banks.for the you have cheap funding. what are you going to do with them? a lot of people would be sent to: say they will do what they did those co-years ago. >> he will not get a return on equity. >> two years ago, you could get six or 7%. now, you cannot. the other side, if there's going to be used for bank lending,

there has to be demand. right now, there is not. picks up in the second half of this year, but that is not guaranteed. elsewhere, you need some fundamental demand. isthe assumption is there 400 billion on offer. that will ultimately get into the economy, be loaned out to companies and households. after twoo happen years. if they do not, they have to hand a money back. >> they have a little bit of time. most people would like to see the banks lend. you see the fragmentation that mario draghi talks about. a spanish or italian company is just as viable at a -- as a

german company. >> what about the euro? conversation and it went along the lines of try as you might, it is a hard struggle for mario draghi to get the euro lower because ultimately, asset flow into europe. >> of this has exacerbated the flow. you have made european assets look more attractive. sitting down last week moves the goalposts. say to see the euro go much lower it needs to come on other side of the trade. dollar andstronger for that you need a more hawkish janet yellen. >> let's talk about carney. talking about leverage ratio. he has gone in front of the committee to talk about the measures he took to quell the

lending that is going on in the u.k. in the housing market. then inflation data that we saw, it is encroaching on -- i am reflecting back on what galop had -- gallow had to say. it is not good news for the bank of england. eating roaches on their target. upside. an on one side, the hawks will be emboldened. they will have all of their boxes. for the doves, is this going to change the game for them? probably not. butas a very big surprise, they can cling to the fact that we have been below 2% since 2005. the other problem, wages. they have not been growing for the bank of england to turn around and say let's hike rates.

you look at the fact that the house prices are north of 10.5%. is a lot. when he sits in front of a lawmakers and says we have theyduced new measures, can only be 15% of your new mortgage lending -- >> mortgages over 500,000 would be capped at or .5 times the earning. >> the proportion of mortgage lending is below that number anyway. he is making the right noise. it does not change the game. we did a survey this week. the first rate hike, would it come this year? in three economists said yes. i imagine a lot of people will change their view on that. they know the votes make him throw off the back of this. >> we will leave it there. staying in the u.k., the prime

minister is shaking up the government. is seeking to promote women. new faces within the party. lookinglcote has been at the changes. the defense secretary most over into william hague's position. a bit of a shock that hague went. >> this is a big shakeup. clearly, the prime minister, all political observers say, wants to change the look of his cabinet. he wants younger people and women in the cabinet. he wants to get away from the old boy appearance. these are a group of people that are out of touch. we have some of those going, for example, ken clark. everybody in britain knows him. he joined the government as a minister for the first time in 1972.

he is a feature of british politics. hague. william the first time he addressed the conservative party -- 1977. perspective,icans he speaks with that same diction today. nicky morgan is coming in. she is going to be education secretary. also coming in, liz truss. she will continue. it is not just about that. the prime minister is delivering the news. all of that is coming on twitter. he wants to be in touch and appear that way. >> we are going to leave it there. ryan chilcote with the political changes in the united kingdom.

boeing.eats it grabbed nearly $21 billion. that was yesterday's news. today it is about leasing. we are live at the biggest show for airplanes. stay with us. ♪

>> welcome to "the pulse."

you up to speed with some breaking news from the world possibly guest airshow. aviation capital has ordered planes from airbus. anna edwards joins us from farnborough. day two, kicking off with a good start. let's deal with the news from smbc. they have placed an order with airbus. they are the number three leasing business. they placed an order for 115 a320's. smbc says this is the largest aircraft order ever placed by a leasing company. theirs substantial on

part. a real vote of confidence for airbus. we saw the announcement of the a330. it is a vote of confidence for the trend towards new engine options on existing aircraft. that is something that airbus has been working on for a long time. that brings in another company. we spoke to ge. to many ofe engines the planes. they have been talking about what they are doing in this arena. they have been talking about incremental innovation. to the ceo of ge aviation. this is what he has to say about the trend towards more energy efficiency from engines. >> it depends on the value that each one of the new engines and airplanes can bring to the marketplace.

customers tell us whether a new airplane or a re-engine is required. you are seeing both. our engine, the cfm, has experienced tremendous success. we have over 700 engines in the order book. sorry. am it is a very successful engine. , it has been remarkably well accepted in the marketplace. we have over 1600 of those engines on order, as we speak. both models work. it depends on the value each model brings to the customer. they make a decision. >> that was the management at ge aviation talking about incremental innovation. he talked about the role of 3-d printing. they have announced a new

production facility for 3-d printing. they are talking about the industrial internet. when you put it on an industrial scale, you can assemble all kinds of information and inform customers about the performance of the aircraft. a fascinating conversation. you mentioned that the orders from smbc. we also had orders from alc. they are for boeing. they are getting 27. there's something in it for boeing today. a lot of headlines around airbus on day one and date two. -- day two. >> do we know where airbus might make more deals? what might we get? have had another deal. airbus, we spoke to them earlier. were talking about a range of issues, including the a380.

is delayed. the ceo has been vocal in his criticism of airbus. thee is a problem with design of the interior. airbus is telling me that maybe he was being particular. they want to deliver what the customer wants, so they are working on doing that. maybe the french finance minister was visiting -- there is a possibility to do these deals in euros. play ak the euro will bigger role as a reserve currency of the next 20 years or so. orders.chasing those we will see you back in the office soon. anna edwards at the farnborough show. we are going to talk about flying cars. this is not "back to the future." this is not the delorean with

michael j fox in a. -- in it. ampanies are trying to snatch piece of the aerospace budget. amongst them, a u.k. company trying to sell a paragliding car. take a look. it is an on road buggy and you can flip the switch, take your glider out, lie on the ground, clip it in, drive forward, the glider comes up, accelerate, and off you go. there is no set cost, but something in the region of about 80,000 pounds. at this point, it is a project to show engineering capabilities. moment, it is just that. we are evaluating the target market. we had a lot of interest from the military.

doingetter thing to be with their time than flying around in a car. it is very james bond. >> so very james bond. that could get me home from work more quickly. one currency and focus. it is the sterling. inflation data. highest in five months. it rocked up. 1.7139. level encroaching on the traders are betting when will the first hike come in the united kingdom. who will descend first and when will they dissent? that is the debate. ♪

>> a back. you are looking at big three euphoria -- looking at victory euphoria in berlin. germany coming home with the world cup trophy. what a reception those boys are going to get when they get back. hans nichols is in berlin. what a lucky man. give me a sense of the air of victory. >> i cannot get under the gate because police have closed it off. oft could mean capacity 250,000 -- it started at about

630 this morning. a lot of people, a big celebration. i am sure there is some beer that will be consumed. >> make sure you get a stein. try to stay away from it for the rest of the program. billions to be invested in electric car batteries. areon lithium batteries going to be a $20 million market. inc. a new agreement with bmw inked a new agreement with samsung. it is going to be a big market. you need batteries. 30% to 40% of the cost are batteries. better news for samsung. the sunshine and the

euphoria. hans nichols in berlin. still to come, microsoft reboots the biggest job cuts in five years to be coming this week. we give you the details after the break. ♪

>> welcome back. we are live from european headquarters in london. here is the bloomberg top headlines. u.k. inflation accelerated more than forecast. the fastest pace since january. consumer prices rose 1.9% up from 1.5% in may. ukraine's government says russian forces may have shot down an airplane. ukrainian defense and minister said the plane was shot down by a powerful weapon review sleep

not used by separatists. hasisraeli if cabinet accepted a cease-fire proposed by egypt. hamas said it had not agreed to the plan, but now one of the leaders has said the group is considering truce proposals. let's turn our attention to tech. microsoft planning the biggest round of job cuts in nearly five years. they look to slim down and integrate the nokia handset business they bought. let's bring back hans nichols. the euphoria of the world cup and now we are talking about job cuts. they did inwhat 2009 in the middle of the recession. 5800 job cuts. 5%the time, that was about of microsoft's the global workforce. our reporter in redmond is

talking about north of 5800 cuts. the workforce is up to 127,000. that is after they have absorbed 30,000 from nokia. it could mean cuts in marketing departments like the xbox, global marketing departments. it could be job cuts in europe for this reshuffle. nadella's of satya reorganization. he had the mission statement on july 10. at that time, he wanted to focus on cloud computing and mobile devices. apparently, he wants a leaner workforce to do it. much of these cuts are down to bringing the nokia business into the fold? >> some of it will be nokia. they made a lot of handsets. the other part of this, they are

trying to stream what they do on the engineering side. idea, the one theory out there, instead of having engineers in the cloud program and send the testing part somewhere else, programmers will test their own product to see if they can fix and find the bugs. that means fewer jobs. we will see how that news develops. time,minutes "surveillance" takes to the airwaves. tom, it is a big day for the banks. tois going to come down fixing commodities. >> goldman sachs. before that, jpmorgan reporting earnings. from wells good news fargo. wells fargo, may be the front-runner runner of the bank. citigroup, they're bonded is much better than

anybody in the street expected. you roll into that optimism. in our market yesterday. jpmorgan at 7:00 a.m. goldman sachs at 7:30. before that, christopher croissant he -- christopher g risanti will join us. we will also look at washington politics. phil mattingly, our washington correspondent will join us in new york as the white house confronts a busy summer. not only immigration, but also , with theza, ukraine ukraine plane going down, and also with iraq. >> we have big themes coming through. bottom of the fixed

interest market? is it too early to call in terms of everybody has pulled out? this could be the bottom of the fixed income market? >> i do not see reporting on that. when you go cross asset classes, it is unprecedented in. there is a lot of mystery to that interview. i would suggest what i saw yesterday. a terrific correlation between asset classes. the equity markets are up. it yields are up. a terrific risk on a trade. gold came down. a correlation between the four asset classes. >> enjoy the show. we look forward to getting those reports. with the leaders of five countries, embarking on a $150 billion deal to reclaim the top

spot on the world stage in terms of their positioning. they are showcasing a new currency reserve. in brazil. ryan chilcote is with me. they have the details. let's kick it off with you. what did the bricks want? role inwant a bigger running the world. for years, conversation has been role innting a bigger the security council. if it were not for russia and china, it would be a u.s. dominated world. they want a bigger role at the imf and the world bank. what this is about is we should work together to help prevent harassment of countries that do not agree with the foreign policy of the united states. he said, it is a russian

position that the imf is to politicize. theine should be getting money it should beginning. we were talking about this a week ago. one of the possible ways that russia could be punished next is if the funding could be pulled from russia. they're setting up these two get more of ao -- a say in how macroeconomics are done. >> they have got to raise their voice, but not in an isolated gathering. it has to be within these other structures where there is resistance to have them participate fully. >> i agree with you. emerging markets are

underrepresented. they need to work on that. i welcome the moves, but it has to be done in the context of the -- that we're working on. the imf is doing a good job. is gathering momentum and needs to be respected. >> that is a strong message from putin to his allies. they must be frustrated. had they squandered their opportunity? the growth rates is much less than expected over the past five years. >> if you look at the brakes, two of them are facing headwinds. we have been talking a lot about russia here. not for the right reasons. for the wrong reasons. geopolitical backdrop. we have been challenging. i would like to see russia fix in dealing with the

situations next-door. n do not want this to be a escape of the reality of these issues. >> they're going to announce the development bank. have not said where it will be located. establish the to bank, the currency reserve fund, how effective will that be? aitics are saying this is waste of time. >> i am skeptical. operating banks already. with managed to boost those countries, it will be a success. implementation and tensions, the proof is going to be in the pudding. my first reaction, i am skeptical for now. divides within the acronym.

we have elections. these are big changes structurally within the group. >> two clear camps within the brickx. india and china doing much better. turned into panic about china. china is back. india, fantastic election results. let's move onto brazil. i am not sure we're going to get the whole is sean marks it impact out of the election in brazil the way we had it in india. got bric., we with southt brics africa added. >> it is almost unfair to think

about emerging markets in terms of brick. you have to look beyond the central europe, mexico. if i had to flag a flagship bricry, it would not be a country. it would be mexico. >> thank you. on brics.on let's take you back to the world's the biggest air show. in edwards is at farnborough. she has a special ceo standing by her. anna, take it away. thatam very pleased to say the ceo joins us.

thank you for joining us. he has announced a really big order. put it into perspective, the size of this order for you as a business and the leasing industry. >> thank you for taking the time to talk to me. we ordered 115 aircraft. 20. a3 it is a big statement about the role of the aircraft industry in -- and i think it is a significant, tree -- a significant commentary. >> this seems to be gathering pace. but new engine options on existing aircraft. is this a trend that appears to stay? >> i think so. it is a lot less risk. you look at some of the big

programs. there is a lot of risk and that. a reengineer, there is less to risk. it is also good for aircraft owners. this is not revolutionary. we have a big customer base. this is just another step. it is something that is just building up. it works from the manufacturers and the owners. >> what about the leasing companies taking a big role in the -- >> i think it is less about the cycle than the trend. when i started in this business, you're seeing a long-term trend where aircraft , people are

financially strong. they can manage and move assets. airlines are like the hotel operating model. hotel operators do not own the buildings they have hotels and. not --s are increasingly the airlines that they are flying. ownership is for people like us, who has the financial strength. >> that is an interesting comparison. where will you be putting the aircrafts? where are the growth opportunities for your business? -- asst of all, there is people get wealthier, they travel more. asia, south america, a lot of the planes go there. we have taken a lot of planes from airbus over the last 10 years. think you will continue to see that trend. there is a lot of replacement of

airplanes. particularly in the more mature markets. those airplanes are retired. they will need new aircraft. things one of the great about aircrafts and leasing business. overcapacity see in the same way that lufthansa has. >> it is a different model. aircraft leasing terms have a more steady state rather than the actual airlines. things one of the great is it is a long-term business. we are buying aircraft for the next 10 years, to make sure that we have a consistent supply of assets and consistent growth for our business. >> thank you for joining us.

the ceo telling us about the big order they place with airbus. the excitement is building. you have been mentioning that s35 has been cleared for takeoff. that will be exciting, if not deafening. back to you. >> we have been waiting for that. a great couple of days coverage. break, let's bring you live pictures. berlin.l, sunny, packed the german football team is arriving back. they be argentina 1-0. it is the fourth time they have one as a unified country. stunning berlin.

goetze comes home to a hero's welcome. ♪

>> welcome back. i will update you where things are trading right now. >> losses on the periphery. guess which industry is the biggest faller?

the banking industry. concerns about the euro zone banking system. hang it over to this week area that is the equity outlook for you. a quicklook at sterling. a pop higher in the pound. one pound buys you one dollar 7135 -- 1.7135. expecting about 1.6%. for many people, that is the last box for the first rate hike from the bank of england. is that too premature? does that turn the doves on the mpc? time will tell. we did a survey yesterday. that showed one in three economists expected rate hikes this year. is it a game changer? look at the data. we will be back in two minutes." ♪

>> let's give you a cricket check on the currency. john brought you up to date on the sterling. have a look at the other big hair. the euro dollar is declining. the expectation index in germany the out lower than market estimated. that is taking a shine off the euro. 1.3598. possibly returning to june lows.

570, 1.3575. jon ferro is here. on a more serious note, elliott gotkine. markets first.he john, two days of testimony. yellenery clear message -- it is very clear janet yellen is a dovish and unlikely to change. >> it would take a significant amount for her to change her view on the economy. when you see the euro dollar and mario draghi talking about exchange rate, just tuesday to europe for a moment, in a sense, they need the dollar to rally for the euro to go lower. they need jannette yellen -- janet yellen to turn a little more hawkish. a lot of presidents cite

pressure that she is calling noise. today it is about her listening to the noise more carefully. since you came -- since she came into the job, she has been dovish and stayed dovish. yellen has a tough job to do exiting and how they do that and the language they use. >> how they communicated. to elliott.on what is the latest between israel and hamas and the egyptian brokered cease-fire? has accepted it. hamas is considering it. seconds,st couple of the air raid sirens have been sounding. a rocket was fired in the north a short while ago.

no injuries reported. rockets are still coming out of gaza. this did not necessarily sound the death mail for a cease-fire. -- after cease-fires, you have sporadic firing. hamas says it is considering it. we will see if they choose to accept it. if they do not, prime minister hamasahu will have to hit harder. elliott, the world is watching as john kerry is on his way to egypt. elliott, thank you very much. jon ferro, thank you as well. up next, tom keene with "surveillance." that is in a couple of seconds. that is it from me. we will be back tomorrow

morning. you can follow me on twitter. we have had some comments from mark carney. movers.market sterling is higher on the inflation data. ♪

>> this is "bloomberg surveillance." >> israel accepts a cease-fire. reports of rockets fired from the gaza strip towards israel. jpmorgan and goldman sachs

report earnings. -- tradingl training profits be. lyft take on the big yellow taxi industry. this is "bloomberg surveillance." we are live from our world headquarters in new york. i am tom keene. joining me, scarlet fu and adam johnson. a busy morning. adam, what do we have? accelerates toon the fastest rate since january. the doj is hoping -- >> it really moved the sterling. >> it spiked on that news. in japan, it is more of the same. they will expand the balance sheet by ¥7 trillion. data, 8:30, retail sales.