mh 17.klisted after deciding to penalize russian business and companies for the first time as they threaten harsher sanctions. flights canceled. global airlines suspending trips to israel in the wake of a rocket attack one mile from tel aviv's main airport. this is what a report from the new york fed said about deutsche bank's u.s. operations. shares of germany's biggest bank apple's on the news and quarterly profit jumping 12 are sent hinting that new products are on the way.

hello. welcome to "countdown." i am mark barton. caroline hyde, what are you watching today? apple beating analyst estimates and we're seeing an improvement in profit overall. all about china. 28% growth in china, pretty phenomenal taking even tim cook by surprise. forecasts are not quite matching what anyone had expected building only about 6% to 7% in terms of sales. meanwhile, microsoft promising big in terms of cost cutting continuing. we saw profits fall for the previous quarter so nadella

really trying to redo the company. >> it's all about sports today or not. >> the commonwealth games getting underway in scotland. the leader of the scottish national party telling me in an interview yesterday that he's giving us all the signs that he is digging in on the pound. he sticks to that as plan a. scotland will keep the pound, he says even if there is a yes vote and dependent on september 18. today, we are looking ahead and we will bring you further details from that interview. he is sticking with the despite osborne,that george chancellor of the exchequer, and others say he will not be able to keep it. he has his own view. b,you can tell us what back e, and f are, his

ups. >> will this be the final meeting of unanimity for the bank of england? there have been 12 consecutive , 35 ins of no dissent total. 2011 with the last time there was a dissent with in the mpc. allvoted for the rate hike saying this will be the last meeting of love between members. charlie being has lost and not one single member has ever voted a change or overseen a change in the interest rate because we've been at record lows for so long now. >> we are really about to witness a sea change. fresh roundcing a of sanctions from europe following the downing of flight mh 17. speaking to bloomberg, the russian ambassador to the eu

accused european leaders are taking advantage of the tragedy. >> certainly, and sub cases -- cases, such instances should not be used for political gains. >> europe will unveil a list of individuals and industries to be blacklisted but vladimir chose hizov says it will hurt just as much. eu countries in the business communities will suffer from their own sanctions. this is a message that i have been getting from major european companies. russia is already feeling the squeeze. yesterday canceling at the first irst ruble off showing

-- auction in months. tomorrow is the big day and that is when we will know what the list is for sanctions on people. people and on if the threat of further sanctions that could be more interesting. they're basically saying to vladimir putin they want you to help the investigation into the downing of the plane. >> what does that mean? , many members of european parliament feeling that they have not, again, gotten with france saying they will not send the latest

weaponry they have agreed to. it's an awful lot of money. many feel they could have gone further. hermes still has overweight on the shares over there. hopefully, this will make food and step back, withdraw. >> fascinating to watch this coming out of the netherlands and the incredibly sad editorials being written about the events of mh 17, but also all of the anger being expressed about whether further sanctions should be applied to russia by parts of the dutch business community. a nation built up of traders that goes up centuries now having to talk about whether they cut act on ties with their third-largest trading partner. that is what russia represents. interesting to see the change from the foreign minister of the netherlands. now he's talking about anything

being on the table. if we did see sanctions imposed would that mean decreased investments by the like of heineken? are they thinking about that? >> unilever -- paintsre talking to the business later in the dutch have been marketing themselves as the low tax location for russian businesses but lots to discuss with regards to the dutch. let's talk about another story at the center of angst for us, the death toll infighting still trying to organize a cease-fire. u.s. airlines have now stopped flights to tel aviv because of fears of rocket attacks. our middle east editor elliott gotkine joins us with more. >> i am a few kilometers east of gaza right now seeing how businesses are getting on down

here. what actually happened was the rocket yesterday hit a house about one mile north of the airport. this is the main international airport in israel and it automatic 24-hour ban on flights from the u.s. but other airlines have followed as well, air canada, air france, lufthansa and its affiliates. british airways still seems to be flying and one other, el al. michael bloomberg, former mayor of new york, and bloomberg news owner company, is on his way to show solidarity. 2% of the gdp is royal jordanian. if your heading east from israel, a lot fly to oman and on

from jordan because of the restrictions on where israeli's can go. royal jordanian has now put a ban on flights to israel as well and that could really start to bring a lot more pressure on them in this campaign against the rocket fire in the gaza strip. now they are being impacted in terms of its economy and tourism industry. >> one of the u.s. regulators faulted for an accurate and unreliable financial reports. hans nichols joins us now from berlin. what did the bank have to say about this? they said they are committed to being the best in their class and they were working on strengthening their system but that is contrary to that the rest of the document, this december letter from the federal

bank reserve of new york that said they had not about the problems for years and had failed to fix them. that's the crucial point there. according to this document seen by "the wall street journal," they had inadequate oversight for deutsche bank, the business that used to be run by the current ceo and they have weak technology. it's a remarkable charge, the response from the market, sell. you saw the stock drop and you can almost tell exactly when it hit. here is a quote from the i want to read you just to get a sense for how strong it is. the size and breadth of the errors strongly suggest that the entire u.s. regulatory reporting structure requires wide-ranging, remedial action according to the number two at the new york fed there in new york. it also said the company had not made much progress toward the

plan. this comes on the heels of deutsche bank in january -- and that date is important -- saying they are committed to revamping their program and hiring more people, having a new policy in place. that was in january. the initial letter is december. one question we are asking today tom a wide this letter come out are-- one question we asking today, why did this come out now? let's just put -- it out there that the latter likely came out from the new york fed side. it's a december letter and now we are here in july, seven months later. why might they have done that? it could be because they did not see the type of progress they wanted to see from the bank when they sent that letter initially. the new york fed has a couple of

options. they can send a private letter. they can announce remedial action, punishment. they can ask a bank to restate its earnings. if they go to that level, going back and redoing the books, that is a remarkable breakdown between the relationships between the u.s. regulator and deutsche bank. >> hans nichols, international correspondent in berlin. still to come, forcing a compromise with more sanctions on the way. vladimir putin will have to make concessions according to one russia strategist. we speak to him live from moscow after the break. ♪

>> welcome to "countdown>> "countdown."e to >> the list of sanctions will be enlarged and this will be submitted by thursday. we have also decided that the commission will be tasked to to look at a number of potential measures in fields goods,ng defense, used

the energy sector, financial services. >> that was dutch foreign minister friends timmermans -- frans timmermans. we will speak to middle income now for more. thank you very much for joining us today. >> good morning. >> the news from brussels was quite simple, the decision to russian business people will be announced tomorrow. maybe more interestingly, the eu has threatened to restrict russia's access to capital markets and sensitive energy and defense technologies if the president does not comply with what the eu wants. capital -- if

access to capital markets was restricted, what effect would that have on russian markets and the economy? foundhink europeans have it has historically been dependent on two factors. prices and access to capital markets. the oil price remains quite stable and may be pushed higher due to various escalations. the second factor, access to capital markets, it is supposed to be much more effective. if russia is shut down from the international capital markets, the effects will be felt immediately. russian companies are hugely leveraged including gazprom.

the banking system is fairly leveraged. there's going to be a full-time liquidity crisis here in russia. ovanes, can i ask about the response from president putin? the decisions that the eu makes against access to capital markets will be the deciding factor in whether president clinton changes course on this? >> in the short term, yes. there's going to be some reaction, positive reaction, from mr. putin. i think the long-term, the problems are very far from solutions. in my view, in the short term,,

they're going to react in a way as to limit the damage, but in the long term, they do not want nato and ukraine. they want to keep crimea. be a very long sort of standoff so there will be more trouble ahead. are saying the sanctions will force president putin to compromise. what sort of compromise are we talking about here? that's exactly the question. what sort of compromise can he follow? i think a quick solution might counting fore is lateral or multilateral andtions for the future

there is going to be clarification for that, for example abstaining from eventually moving to ukraine. that will probably be a permanent solution. they can move on crimea at any time. really, mr. putin is a hostage of various factors including people in separatist regions. in the short term, he will probably, you know, influence separatists to come down for a , cease-fire, things like that. just aiew, it's short-term move unless some other troubles,. come up.ubles

you.lnes oganisian, thank beating in-benz terms of beating. coming in more than 9% expected coming in at 2.4 6 billion euro. margin of profitability improving also up 7.9% earnings versus the overall revenue for the mercedes brand. clearly this is the company pushing out new models. ink off the new s -- thn the new s sedan. adding tos will be the realm of luxury vehicles. big targets by daimler. behind the likes of bmw and audi, made by volkswagen. they aim to steal back the number one place by the end of , indecade and also generate

terms of earnings, the margin from revenue some 10%. they want earnings and profitability to be 10% of the revenue. looks as though they are well on their way. 2014, sales improve into going to increase significantly. bit of a beat with earnings and sales in line. what is the old lady of threadneedle street thinking? we will discuss what to watch out for coming up after the break. ♪

>> welcome back to "countdown." i mark barton. minutes from the july ratesetting meeting will be released in a few hours. we are looking for signs if whether they are looking closer to raising interest rates. we have had harmony for 12 months under mark carney. when i say harmony, there has been no dissent. harmony, no dissent, within the npc. two members in 2011 voted for a rate hike to battle inflation prices. for the record, they have been at a record low since march 2009. the last time they voted to raise rates was july 2000 nine

when six members voted for a hike. the message today is, will this be the last meeting of harmony? deutsche bank, goldman sachs among the investors out there saying next month there's going to be dissent. >> if it is a sign of the financial crisis, it makes sense we are talking about it this week because it looks as if we're going to get gdp figures that suggest the u.k. economy has finally picked up getting --k to levels we have seen have not seen since the beginning of the crisis. >> the statistics are slightly out of date and we will be updating how we manage gdp whether we are celebrating for any good measure, i don't know. inflation, how do we read? alreadyns the npc would have known that number was coming and many are surprised by how fast was.

was it just a one off? slowests rising at the days in five years which goes on the other side of the argument. >> more on the boe and back with microsoft profits on the other side of the break. ♪

>> welcome back. i am mark barton. let's get to jonathan ferro for the fx check. after days of minimal losses just taking higher by almost 0.1%. the big focus or the bank of england minutes. will we get a hawkish surprise? will beget the vet where someone sticks their hands up staying at -- saying it is time for a rate hike? bnp paribas putting the chances

at 40%. if the minutes and the votes fail to excite you, keep watching this one. at 1245 a.m. u.k. time, mr. mark carney will be giving a speech. these are the bloomberg headlines. the eu is threatening to restrict russian access to both capital markets and sensitive energy and defense technologies. european leaders decided to blacklist for the first time. the eu sanctions list and russia's about esther -- ambassador is warning against damaging their own economy. the impact from european businesses on the banking community and business community will not be less than that on the russian business. orderingegulators domestic airlines to suspend flights to israel as palestinian militants fire a rocket near tel

aviv's main airport. israel's transport ministers says the airport is safe and aat the suspension gives prize to terror. the bank of england releasing minutes from its july meeting later this morning. investors looking for any signs the central bank is ready to raise interest rates. the u.s. and the u.k. have seen an acceleration in job growth which could mean higher rates of by the end of 2015. >> let's move onto tech news now. we've had apple, microsoft yesterday and reporting $7.8 billion profit yesterday proving that the iphone still remains the company's bread and butter despite the competition from samsung and the like. than 35ill selling more million iphones up 13%, really strong in china in particular.

ipad on the way down but mac also supporting the profitability. this is a company you have to remember, apple -- it's a company that manages to have, and one quarter, more sales than bahrain and jordan in the economy the entire year. mac up 18%. china was really a standout tim cook himself saying he was surprised by the growth. >> it was the china mobile partnership. >> they are also rushing for other deals. far better in the emerging markets and the ipad is doing quite well in india and china as it slows down in europe. surprisingly dated five acquisitions in the last quarter as well but we can talk about microsoft as well. they have been seeing their profit fall but shares rising in the after-hours because many feeling that nadella is getting a hand on the company managing

to turn it around making 18,000 job cuts, 12,000 coming from the nokia handset. they finish the deal they bought in april. making hardware is not their bread and butter unlike the likes of apple. it's all about the software, cloud computing. reallyeling microsoft is showing growth in cloud computing in particular. they are growing for the business area in office. >> time for a pickup in the pc market which is what intel showed us as well. >> a nice theme there. we are starting to see multi-year licenses for windows, office, picking up as companies are once again investing in hardware and pcs. guestmove to our next joining us on set now. anything you just hear their

striking a chord? >> the big topic is nadella turning around microsoft. there have been some tailwinds that the pc is recovering. windows xp has been turned off. is he turning the company around? not only did he lay off the 18,000 folks but he turned off most of the shadow workforce. they hire thousands of contractors who were not really on the books and most of them will now be turned off as well. he's really making some hard decisions on the people front. on the business front, cloud is doing very well. microsoft is very happy and to be fair, satya used to run that. cloud 365, the subscription, is also doing well but it is a small percentage of overall office sales.

thee's a lot of room for company as it transitions. make no mistake, this is a big transition turning from a windows and office business to a cloud business. it sounds like they are on the right trajectory but they still have a long way to go. >> can he turn the handset business into an asset or not? that's a big, important, strategic question we will see. i'm skeptical they know how to do hardware well. one thing nokia does really well is hardware. reallyhey suffered was more on the software side so the fusion of the two makes a difference. surface sales are very disappointing. they don't really report them mainly because the numbers are so bad. we will see if the post-nokia integration era, if the next generation of handsets, services on the device side will make a big difference but i would argue the company more than anything

needs to get the cloud business working. that's the headline. >> many criticized that they have lost their innovation. i was down in cambridge a few months ago. this is a company that does think outside the box but they to being the connect scrubbed up to look through pictures of brains and hearts. the are using it with weather and ecosystems. can it reclaim that back off the likes of apple and the show itself as a forward thinking company? microsoft research is one of the best. remind you of the xerox park guys. they also spend a really high percentage of their profits on r&d, higher than average.

it is disproportionately high compared to its peers. the question is not innovation but can it take advantage of the trends and go head-to-head? microsoft is never been particularly inventive. they've taken the software to make it mainstream and they have gone head-to-head to lotus, oracle, and just build better products, winning marking share, becoming prominent. in cloud, they are a little late to the space in the competitors are much harder. amazon web servers is a market leader. it is odd when a bookseller becomes a leader. the computer software company is lagging. got much more established competition. >> speaking of the bookseller, as you demote them to -- [laughter] >> they report today and they are growing on the back of the crowd does this.

disappointingly, they do not report it as a separate line item so we do not know how that business is doing and we can only speculate. it is in with their credit card business as well as advertising services business. it all gets along 10. are they putting together the echo system around the media and really building something -- are they really building the ecosystem around the media? fire phone, fire hd, etc. that is the commentary we are looking for. >> what's the take away? most ofmber is where the changes will be. disappointing ipad sales. >> kanji, thank you. all things tech. boycotts,lk about divestment, and sanctions.

we're are live in the west bank to talk to the man protecting against actions in gaza by organizing campaigns against businesses. ♪

>> welcome back to "cao

untdown." the death toll in the fighting between hamas militants and israel continues to rise and one diplomat still trying to organize a cease-fire to end the three weeks of violence. i next guest says the most effective nonviolent way to support gaza is to organize boycotts, divestment, and sanctions against israel. cofounder of palestinian bds joins us live on sky. thank you for joining us today. >> good morning. >> how do you win support true boycotting, divestments, through sanctions against israel? from thehave learned south african apartheid movement, internal resistance to a regime of oppression cannot succeed in a globalized world without external pressure.

boycott theched a investment sanctions movement in 2005. ourt seems we have lost guest. many apologies for the slight issue with skype. oh, i think he's back. houti, sorry for interrupting you. how do you think you will achieve these boycotting, divestment, sanctions against israel? as we have learned from the south african anti-apartheid movement, which i was a part of when i went to school to new york, you cannot win against a regime of oppression that is so entrenched unless you are s.pported by external

through the external pressure added to internal resistance, our type or resistance is a nonviolent-human type th based resistance, we can boycott. >> which bodies are supporting you? which companies have been targeted so far? >> it is a consensus wall-to-wall support. youth,de unions, students, engineers, everyone supports the movement. it is a consensus. internationally, we have a huge global network. in the last few months, we have started to affect major corporations such as the british-danish security company which has lost large contracts in norway, britain, and elsewhere to the extent that the annual general meeting they promised not to renew their contract with the israel prison

system where palestinians are tortured. company also suffering billions of dollars worth of contracts. caterpillar, hp, many of the largest corporations in addition to israeli corporations because of their involvement in the occupation and violation of human rights. weeks ago, the bill and melinda gates foundation divested the $182 million investment so that the methodist church,the presbyterian as well as caterpillar. in thegest pension fund world, the norwegian, divested from two israeli companies involved in building illegal settlements in the west bank. largest tension funds, banks, companies they are having something to say about the oppression of the palestinians

and that is the most effect of non-violent means of supporting the struggle for freedom. arghouti, benjamin netanyahu has devoted pacific attention to your movement, that attention began in june last year and it certainly rose in march this year. bigotry,t stands for " dishonesty, shame." has he managed to discredit you? >> he has given us free advertisement because he sounded leaderku klux klan trying to convince. they have said it was a massacre in gaza to blame a nonviolent human rights movement as a form of a good three does that really

convince anyone. --human rights movement as a form of bigotry doesn't really convince. it is also in economic boycott in the isolation is growing. this is why benjamin netanyahu have called us a strategic threat to the regime of oppression. instead they have shifted overall responsibility from the ministry of foreign affairs to the ministry of strategic affairs which deals with strategic relations. why would a human rights movement like a nonviolent movement, be such a strategic threat to such a powerful country with hundreds of nuclear weapons because they are not designed to face such challenges. arghouti, a giver joining us today, the leader of

the boycott, the best and movement -- divestment movement. >> on the plan to keep the pound, scotland says it belongs just as much as scotland to the rest of the u.k.. we are keeping the pound. it's our currency. it does not belong to george osborne. that working group is looking at a range of options but we are keeping the pound. plano we need to work on b, c, d, e, and f? we are keeping sterling. inall of the major parties westminster have said they would not be able to vote in favor of keeping the pound. the scottish committee said no if's, no but's, no fudges, no

deals. >> these are the same people. unionists saying the same thing to each other but what we actually know according of courseardian," there will be a deal on sterling. this is just a campaign tack it. tactic.paign his new pal, people in scotland know full well that we will keep sterling because in the best interest of scotland and the rest of the united kingdom. our position is we are very happy to take a share of the liability, the liability, the but we are built up equally entitled to a proper share of the assets. depends, of course, and

having a share of the assets. among these, the bank of england because it holds one third of the u.k. guild. it is the currency we have jointly build up over several hundred years and it does not belong to george osborne. we are keeping the pound. salmoder of the s and p, nd. anyone over 16 in scotland gets to vote yes or no on the question of independence. really digging in his heels on the question of the pound despite being told by all of the that political parties they will never back any plan that says scotland can keep the pound if they do not have political banking fiscal union with the rest of the u.k.. he says they are all talking nonsense and this is all part of the campaign tack ticks. if there was to be a yes vote, they would all change their tune in westminster.

what are and say they get to have, the amount of debt taken keep theer they nuclear program, all of those things will be thrown into the mix and all up for grabs in an overarching negotiation. far be it from me to enter into a conflict or a political battle that pits david bouley and j.k. rowling. >> i would never doubt him as he's up there. he's on a pedestal. when it comes to the pound, it has not affect did the pound. weighted basis, it is the top performer. some banks are saying we could see some volatility in sterling in the coming months ahead with the referendum. have suggested he wins either way. >> coming up, have you ever

wondered what type of food the world palette prefers? that story and more in the newspaper segment up next. ♪

.> welcome back i'm caroline hyde. let's get straight to the newspapers. one hour until trading kicks off. you have a bit of all, mark. -- a bit of football.

evidencer you needed that playing in the world cup standing, to many he was the best player in the world cup moving to real madrid, the price a cool 53 million pounds. looking where to stick you in the team. >> i'm going to do the royal story. i rather like this story. theclub, the chef for kings, queens, heads of state. the irish cook said she did not want any shellfish. like beetroot. hollande hates artichoke.

the only person who still has their food tasted just in case? vladimir putin. >> the russian ambassador to the eu spoke to bloomberg. hear what he had to say. ♪

>> blacklisted after and 817. -- mh17. flights canceled. global airlines suspend trips to israel in the wake of a rocket attack. inaccurate and unreliable. that is the report from the new york fed about deutsche bank's u.s. operations. shares dropped in new york trading. and i sales. jumped quarterly profit 12%.

they hinted that new products are on the way. i am mark barton joined by anna edwards and caroline hyde. later on, we will speak to the -- he is the man that started the metro bancorp it weeks -- the metro bancorp. we speak with him. that is at 7:30 london time. apple and microsoft. >> one has profit up. the other down. in fact, many more feeling

confident. apple used to be relatively cautious. produce stiller results. third-quarter profit was up. than jordan or brain. -- ball rain. . -- bahrain. it is all about china. such another the -- satya nadella. 18,000 jobs gone. it is all the cloud computing. his older realm where he headed before, showing significant growth. >> a little bird tells me there is a certain ceremony taking

place tonight. singing.rt will be >> everyone is. the commonwealth games will be opening this weekend in scotland. they are using this to look at the economics around scotland. ofpoke to the first minister scotland, the leader of the scottish national party to ask if he is committing to taking the pound. we will have more going through the morning. he is digging his heels and saying despite all the comments coming from westminster, saying he is not going to be able to keep the pound if the scots vote forthe pound, -- independence, he says this is all part of the band door and

game -- game and banter. >> the bank of england releases minutes. of harmony?end some like an eagle song. the end of harmony. deutsche bank and others say this will be the last time that we have unanimity. as in everyone with -- happy with interest rates. record rates -- rates have been at a record low since 2009 to read the last dissent was 2011. is this the latest eagle song? the end of harmony? fresh roundcing a of sanctions from europe following the downing of flight

in may 17 -- ma17. such moments should make people -- certainly in such should not incidents be used for political games. >> europe will released -- release a list of individuals to be blacklisted. but he claimed to the measures will hurt europe just as much. and theiru -- the eu business communities will suffer as much from the sanctions. this is a mess to have been getting from european companies. >> russia is already feeling the theeze in existing --

russian finance ministry blamed to the decision on unfavorable market conditions. blacklist. restricting access to capital markets and to sensitive energy and defense technologies. that is if president putin does not comply with demands. issued demands before. they asked -- threatened to expand the blacklist. it is a threat going to come through? >> the european commission has the task of drawing up the list.

>> no arms embargo. ny ofis what men me -- ma the members of the european parliament has suggested. ledunited states once again the way. they have nowhere near as much exposure as europe does to russia. >> he said he would consider not selling the second one. we have a an interesting story at bloomberg today. it might even be too late to cancel the sale of the second one. according to a person with knowledge of the contract. the storyn is saying about a second ship is not so different to the first. the second is 75% built.

they are all finished. if it is a case of whether this is too far along, contractually, to turn around. this person from anywhere telling bloomberg it might be too late -- youhe point of sanctions is -- you have certain rules. legal need ironclad arguments to make sections stick. you need to wait for the investigation into the crash decisions on sanctions could be made. >> could take months or years. but that story to the site. and talk about another of our top headlines. the that toll in the fighting between hamas and israel. diplomats are still trying to organize a cease-fire to end three weeks of violence. stoppedlines have flights to tel aviv.

when joins us from jerusalem with more. foreignwe have is 37 airlines have canceled their flights. it is more of a suspension then cancellation. there are 20 foreign airlines flying in and out. it is u.s. and european airlines. >> what is israel saying? >> israel says what the transport minister said yesterday. insists that the airport is safe. there are many measures in place to secure civilian airline flights in and out of the year -- report. >> what impact will this have on

the broader economy? >> already be fighting has impacted on tourism. the fact that international airlines are canceling their factoradds to the scare in the decision whether to come. it is international airlines are not flying here, why should they come? people were already saying if things go back to normal in the next couple wakes, -- couple of weeks, it will take six months before tourists start to come back. it will impact the economy. will it bring it to a stand still? no. en when ackermann -- gw ackermann joining us from jerusalem. our international

correspondent hans nichols joins us from berlin. what has the bank had to say about this? >> they said they are working to strengthen their systems. the problem is it is contrary to this report. the letter sent from the new york fed. which said they knew about the problems they had. they had failed to fix them. really a remarkable letter. this is from the new york regulator. the report says, they have low-quality, inaccurate, and unreliable reviews. and we technology. when this report hit, the response from the market was swift. it is stock fell 3% in the afternoon -- it was predictable. the stock fell 3% in the afternoon. suggestsand breadth

the firm's entire u.s. reporting structure requires remedial action. whenever regulators talk about remedial action, it is an indication they are upset. they want to see some sort of action. >> talk to us about the timing. this letter was written in december, yes? inthe letter is written december. in january, deutsche bank hasn't -- has a big announcement they are going to spend more euros. when thea lag between letter was written and july, when it it became public. assuming it came from the federal reserve, it is an indication of how upset the federal reserve bank of new york is with deutsche bank. couple ofhey have a options. they can send a private letter. they can fault the company publicly.

they can do what appears to have happened. right a letter, and when no action is taken, release the letter. like deutsche bank has a lot of making up to do. this is the same business headed by -- >> thank you, hans. their international correspondent in berlin. >> coming up, how should investors be positioning themselves? our guest tells us, next. ♪

>> is about a clear commitment to ukraine. united, a democratic, european country. that was the foreign minister of ukraine speaking in brussels, explaining the reasoning behind me fresh round of sanctions.

welcome back. this is "countdown." could geopolitics be the catalyst for a correction? things are going into gaza. rolling into gaza. canmore on how investors navigate these times, william joins us live. good morning. good to see you in the flesh rather than down the line. this bite movements on the benchmark,t mark -- shruggedave largely off offensive in gaza and ukraine. will that continue to be the case? whereasis striking is previously coming years ago, one

would be very much afraid about the uncertainty related to the geopolitical developments. there is no way you could anticipate how they would unravel. markets would correct significantly. now it does not have it any impact beyond a day or two. >> why's that? is that because the markets think they do know how this one. ? -- this will unfold? >> it is a combination of some degree of complacency. they will not push it that far that it will justify getting out of risky assets. there is a short-term attitude in markets where by people want to see the opportunity and maybe the return as long as the good times last. inwing that, intercourse -- due course, times will be more

difficult. any opportunity you missed today will become a burden in the long run. >> the wrong decision right now? hermes saying this will speed up any answer to the problem's and make within withdraw from the eastern ukraine. -- and make buttermilk food and withdraw from the eastern ukraine -- and make vladimir putin withdraw from the eastern ukraine. ukraine, thenad you had iraq and gaza simultaneously happening. this tells us something. with the benefit of hindsight, at some point, people say that it was complacency. on the time being, they keep taking risks. admittedly without having any ambition of being a geopolitical

strategist, you can argue that what happened could be a trigger point. >> you keep taking risk as well. you buy bonds. you move neutral equity. why have you changed your stance ? the sentiment was too upbeat with equities. we use the sentiment indicators and the contrary it -- contrary and indicators. we were trying to see whether positive catalysts would come. if you do not have those catalysts, you are trading sideways. that is how we went to neutral. at the same time, you have to make an assessment. am i going to make more money being in t-bills? it seemed quite clear in our

view what the answer was. thank you. we will be back in a few minutes. ♪

>> time in london is 7:23. we are here with the -- let's talk about the different cycles we see in markets and the economy more generally.

that could be crucial to see -- figure out where markets are headed. others have pointed this out to us as well. you see a disconnect between the monetary cycle and the business cycle. how do we take two different cycles and try to join them into some sort of forecast? >> if you look at the low point in the cycle, say late spring, 2009 -- >> which cycle? >> the business cycle. economic activity. is say we are midway in what going to be a record-breaking cycle in terms of length. i say record-breaking because i do not see why the central bank would be so aggressive in the coming years. this went on for a long time to review look at the other side of the spectrum, the monetary cycle, which is very juvenile. you have to start tightening. have the financial market cycle,

ck market risk. this is fascinating. the business cycle is going to last for a long time. you have the monetary policy support. risk premiums should come down further. so thin are already because it has been a slow recovery. and because of the monetary injections. how do you play with that? have you address this? that is something that is creating the low volatility environment which is pushing people to look for any remaining opportunities. pockets of cheap valuations. it will lead to more leverage. >> other assets, any particular

companies that you think, yeah, this is going to go great? >> thinking about valuations, they are slowly being indicators. when they are cheap, china is cheap and russia is cheap. russia has been cheap for a long time. china as well. the news flow coming from asia as a whole is not -- not exactly subjugate upbeat about, it admittedly china doing better. >> is there one that is most important for you? >> asian exports. that is what the market is anticipating. it asia will pick up. you see some action there. >> we have to move it on. william. >> coming up on a program, we'll

speak to the ceo -- his company has exposure in russia and ukraine. we will ask how such committees are opening -- such companies are coping at the moment. ♪ >> i am mark barton.

let's go over to jonathan ferro for the effects check. trade i amthe looking at right now. 78 pence. is bankfocus for this of england minutes at 9:30 u.k. time. martin we'll is the man in focus today. will he put his hand up and say,

it is time to think about a rate hike? that will move this one lower. the problem is not many people think that is going to happen. the base case scenario is that on't. would anybody be surprised after the comments from mark carney. that man speaks at 12:45 u.k. time. it it will be interesting to see what moves the trade the most. isn't he minutes or the voice of the man himself? these are the top headlines. the yield sending to restrict access to capital markets to is threatening to restrict access to capital markets. sanctionshe widened list out tomorrow, the ambassador to the wood is warning leaders against damaging their own economies. the business community, the

banking community -- ordered thelators mystic airlines to suspend flights to israel as palestinian militants fired a rocket near the main airport in tel aviv. dust carriers also canceled services. minister says the airport is safe. and the bank of england releases minutes later this morning. investors are looking for any signs of the bank is ready to raise rates. the u.s. and u.k. have seen accelerated job growth which could mean higher rates by the end of the year. >> that was ahead of estimates.

it said it was on track to achieve its 2015 targets. let's talk to the man who runs the business in amsterdam. tom joins us. they can for join us. theyr than it estimated -- do for joining us -- thank you for joining us. better than estimated off its -- profits. currencies affecting our top line, we have been able to increase our operating profits. >> can i ask you about your plans for growth? in november, you are talking about putting production hikes in sweden, germany, and other countries. to growtill have plans in russia? all those plans unchanged?

our evenue in- russia is small. our focus has been with the victims and their relatives. those not only in the netherlands but around the world. that has been the focus of the company. everybody in the company knows somebody here in the netherlands. that is primarily our focus today. >> that seems to be the focus -- theave heard comments from management at shell. everybody in the business community reeling from the events. do you believe there will be terms of changes in the dutch trading relationships? or are you waiting for politicians to take the lead? works the dutch are very much affected. to date is a nash -- >> the dutch are very much affected.

today is a national day of mourning. i believe the dutch have the right to ask for help. about the rest of the business. what is happening in latin america. &a in down insome m that part of the world. it is that a growth opportunity? >> south america is where we are among the market leaders. brazil, argentina. we have a strong position. area for us.active the general growth of the economy's in the area has been less strong in the recent quarters. we are very well positioned to benefit from future -- >> tom, thank you very much for joining us. hner.uc talkat's switchgears and

written and lending. increased 1.9 billion pounds. that figure is up 125% from the previous. chairman and by cofounder vernon hale. thank you for joining us. we have a minutes coming out later. much to feel your business, which is growing in terms of u.k. customers and also businesses, are any of them worried about the swings of the economy? certainly don't see how rates can go down. we keep waiting for them to go up. areoperations in britain concentrated in the greater london market. london is a boom town. we hear larry little -- very

little concern about the general state of the economy. >> one of the first rate hike here in the u.k.? >> whenever i answer, you can assume that is wrong. my record -- it seems impossible that they can print this much money and rates can stay this low. >> we got a survey where they say a rate hike by december, futures telling us february next year. december-february? >> that is as good a guess as any. >> tell us how your business is growing. 125% growth. can you grow in the future? >> metro bancorp the first new start up bank in 100 years. our model says service and convenience is what it is about. we have the opportunity to build a bank from scratch. we are not burdened with the problems of the old bank. this is a model built around

service. >> what does that mean? if i go into a federal bank -- metro bank. how is it so different than other banks? >> we are have consumer and have commercial. the commercial side of the business is equally important. it is seven-day week branch banking. online, mobile and -- we have intimidated -- eliminated the stupid rules. it over the years, this is based on my american model. we have refined us into a high touch, high service business. we try to kill every stupid bank rule we can find. [laughter] >> many people say is not for want of trying. we have seen data coming from the bank of england showing lending is up but not too

smaller businesses. is it that they don't want to borrow right now? >> these are all half-truths. in our view, there is tremendous demand for credit. there is a lack of supply of credit. the major banks are being shrunk as we know. i have been overwhelmed with our response from business customers for deposit accounting. there is tremendous demand. you have these major banks that are going to have to shrink as they meet the new rules. they seem to be shrinking first in the lending areas. >> what about the competition inquiry, the potential inquiry? how could that affect you. there is talk that that is the end of free current accounts, cash machines. what could be the impact on the industry? >> is not the end of current

accounts are free atms. market,ican retail there are many separate banks. there are five here. you have a relatively closed market. the government is trying to open up the market and give consumers and businesses more choice. metro bancorp about a choice. the more choice the client has, the better. >> can you threaten the big four? tsb is another challenger bank. is it realistic we can threaten them? >> of course we can. will we get as big as lloyds or barclays over time? no. start andusinesses we readhe business -- how apple had 3% or 4% and were going to die. metro bank is that in many ways.

there has been much written about our model in many ways. it is the apple of baking. of service and convenience. it is saidit is a -- it is a cultural thing. the is that culture changing in the u.k.? >> you want a choice. we are opening new accounts and growing offices at rates i have never seen. 3-4 times the new yorker growth rates. my experience is the customer who has not had a choice, the big five are the same. the customers say to us, thank god. our job is to give them -- >> does the customer want to use online banking? is there a place in the new digital age for branches? rick santorum are? when it -- bricks and mortar? when it seems we as consumers

are moving more online. >> the customer wants the best of every channel. it is are do let josh -- is our it to deliver the4 -- online. at the branch. job is to give you the choice and let you decide every day. >> great to chat with you. thank you for coming in. the metro bank cofounder. >> he did not bring his dog. >> . -- next time. >> the second quarter profit is expected to fall. we will have details. ♪ >> welcome back to "countdown."

video games are everywhere these days. if you are a parent, you probably don't think much good can come from them. microsoft console will hopefully change her mind. -- change your mind. connect, a motion

sensing camera, was a game changer. the levels of interactions it offered disrupted the industry. while gamers were not totally convinced, in fact sales rose when it was sold without the camera, they are still researching the connect. >> you pop it down. you visually embed yourself into the skin. you can bring the scan to life. >> look at the detail in the air. that is incredible. to use model allows you this in a game. or a 3-d printer. >> you can be a game printer -- character. >> the chances of virtual reality stepping into your living room improved parade >> it does 3-d scanning. microsoft and it has found something neat connect can work

for that is more critical. >> surgeons are doing more men only -- minimally invasive surgery. >> you can look through the images, rotate them. we are investigating the use of computer vision systems to allow surgeons to navigate through those images more effectively while they are operating. theresult is decision-making process is quicker and more effective. patients are spending less time on the table. >> moving the connect into different industries could be good for microsoft. it could accelerate improvements in the technology. well gaming can sometimes feel like life and death, microsoft connect has taken it to a new level. caroline hyde, bloomberg. healthosmithkline gets a check. the third-quarter profit is

expected to fall. more, sam joins us. tell us about the share price performance of glaxo. >> good morning. it's is not been the best-performing share within the pharmaceutical world. think everyone is aware, we can see the volumes in the u.s.. the company said in the first quarter results that they were expecting a civilization. -- stabilization. we have to be careful because the volume, december the -- the samploing methodology, -- >> it is aiming to introduce two new drugs. that is taking longer than it hope. >> they are on the market.

different names in europe. they are on the market in the u.s.. they are not picking up the slack. let's say for the sake of argument that advil lost $15 million of revenue. those drugs together may have put $2 million back in the pocket. it is not picking up the slack. -- definition of a pickup is we will have to figure out as they talk. >> the consensus seems to be we can't talk about glaxo smith line without talking about china. be able to read anything in the second quarter as to how the business has been hit? >> they give us some kind of direction as to what is going on in china. , itsince i found

specifically used the word integrity. that were phrases like used by management. it brings home the message again. how difficult it is to run such a large operation and find yourself in these situations. we will see some pressures in china on this company. it is not going away. people are being investigated. eventually they will disappear. they all do. they have had issues in the u.s. these have been part of large, businesses. a businesses.m >> thank you very much for joining us. sam from bloomberg intelligence. 7:50 in london. equity markets set to open in 9.5 minutes.

what will be driving the session. ♪

," welcome back to "countdown i am mark barton. john is here for the macro theme of the day. harmony. >> harmony. is this the end of harmony?

thatnk it is significant we could get the first dissent since july, 2011. i was reading the minutes themselves from july, 2011. it is not every country story -- a recovery story, it is inflation story. this time it is different. it is about the recovery. but a recovery that is immature. we were talking about more qe. now we are talking about rate hikes. if we are going to get a hike, and they are tied by the end of the year or early next year, the votes go from 9-025-43 it would be quite a shock if -- the votes go from 9-0 to 5-4. get votes from one or two? >> if anybody is going to put their hand up, it is going to be

martin. he has been the most hawkish. whether he makes with the rest of the bank remains to be seen. there are the new members. andrew became chief economist in june. kristin started as external member in july. we have the -- who spoke intriguingly about spare capacity to read the bank -- interestingly about spare capacity. it comes down to how much slack there is in the economy the rate parts it is hard to gauge where they are standing and where they will be. i spoke to danny. he said if i was coming into the bank of england, i would be annoyed if mark carney was saying there might be a rate hike. there are new voices that have not given their opinion. >> is in their view you don't want to go against their new -- your new bus for a while? >> there's that view. >> he will be speaking in

scotland later. thank you. that will do it for the program. next. the move" is ♪

>> welcome to on the move. moments away from the start of european trading. my big focus has got to be bank of england minutes in the breakdown of the vote. be 9-0 or will someone finally put their hand up and say it's time to raise rates? hans, let's now, start with you. >> we will be looking at deutsche bank. wall street journal reported a story that the federal reserve is unhappy with their bookkeeping. the stock took a beating. we will see if it takes a

beating here in europe as well. >> i am looking at that titans. microsoft reported. apple showing its iphone is still a key product. growth in china sustaining growth that the biggest company. all eyes remain on the new product expected for september. meanwhile persuading investors he can take tough cost cuts needed to focus on growth and cloud commuting. thell be back at more of tech earnings. >> how will this be at the open? if you look at futures we are down. mark carney and another man, manus cranny just as important. >> you are too kind. two days away. let's look at these equities markets. core markets coming under a little pressure. what will the result be in terms of the response