threatens these airstrikes. >> summer trading is going well with higher prices helping to boost that profit. no mention of geopolitical concerns. a bit of a surprise for me. >> that's the big focus. treasury yields go lower. equities go lower as well. the dax down by over one percent. what does this mean for the open? >> we are going to change direction. we are going to look at the bond market. this is perhaps the most important. it is going to bond markets.

end,u take it to the short what people do when they are in the most risk-averse position. we are going negative on bond yields from germany. that just really solidifies the desire to be in these markets. have we become immune to markets slight dip mode. it is not a radical dip. you are seeing airlines under pressure. the whole issue with regards to europe is escalating. the whole issue with regard to travel is escalating. you can question the validity. let me take you back to europe. oil prices rising as well. we will have a look at the vix index a little later.

germany.oing on in pimco saying -- they are saying they have slowed. that is a little bit of good news. at some of theok numbers. i think what is fastening is they didn't mention russia. missed. itter sales does not do enough to trump what they are seeing from the revenue .eclined from russia they make tires. revenues are down. that is a critical issue.

let's look at the dax. then you will begin to understand what i mean. if you look at it the quarter percent rise, it shows you a bumping up of trends. that's the story. you like flat shoes with bubbles. not a lot of people do. seeing a number of stocks downgrade. if i talk long enough i will get the very last page. bank of america has their stock down. are the three big stocks on the move.

money coming into the end. this is dollar declining. money going into the yen. back to you. >> a lower open for us. joining us for a little .erspective is the cio welcome to the show. equities lowered. and long on equities. get this great rotation. it hasn't happened. should i still stay with this trade? >> the great rotation hasn't happened. it is also true we didn't anticipate as good a trend. it is not particularly surprising we have seen flatter markets. we are in summer. they are easily disturbed.

there has been a lot to worry about. perhaps not too surprising they have come under pressure. perhaps more surprising is how much willingness there is to put money in government bonds. >> what is going to happen? is this something i have to wait for? something i have to be more patient for to deliver returns? how long is it going to take? >> i wish i could tell you. i think the answer is we need some more perspective. we need some more geopolitical events so people can take a look at what are underlying trends. a little bit of hesitation. gdpave those stressful u.s.

figures for the first quarter. . strong rebound there is a little bit of sentiment about how strong the sentiment is. that is one thing that has reduced the support for equities and allowed them to react strongly to the geopolitical happenings at the moment. >> i look at some of the data out of the euro zone. it seems to be getting week. german data hasn't been great. are you concerned about growth here in europe, and you look at he u.k. is this another false storm? >> i don't dig it is a false storm. i think people have to tune in that growth rates are going to be on average lower than they were. i think it is the markets adapting to that. if you're averaging lower growth rates overall, there is a natural variation around the

average. below, it feels much less comfortable. it does matter. i think the markets are going to be more nervous about those dips. >> the chinese data was booming. are youup 14.5%. comforted or concerned about the data itself? >> data is by its nature, very erratic. chinese export figures are very erratic. the numbers coming out of china have been reassuring. it has been slowing down. it looks like that is slowing -- coming to an end. probably underlying growth is a little less.

>> you stay with us. we will be talking geopolitics and iraq. we will be back into. -- in two.

>> welcome back. we are streaming online. quick check on

markets. equities open lower this morning. the dax has been severely punished over the last few trading sessions. if you are looking elsewhere at yields at, treasury lowes for 2014. oil goes higher. dollar yen, lower dollar-yen by a half of one percent. dollar yen lower this morning. man asked a lot about geopolitics was mario draghi. attentionpaid close to president mario draghi's inments on a sharp spike geopolitical risk. world youlook at the

see geopolitical risks have increased all over the world. iraq, syria,over libya. geopolitical risks are higher than they were a few months ago. it will have a greater impact than they have. >> let's stick with that. u.s. president barack obama has the airstrikes track civilians -- oil prices up. impact wen the market are joined by an analyst. we will start with you. oil has been on news. that 90% of the oil is

produced in southern iraq. >> i think most of the oil production is in southern iraq. that is not necessarily under threat. we are not going to see a number of production lost. been a longer-term story about the future supply growth and whether it can deliver. >> what you are seeing is a lot of hype lines. >> act in march the main pipeline through turkey was bombed. we have already lost those supplies. in terms of incremental loss there is not that much left in the north to go.

>> when we talk about political risk, mario draghi can see that we don't know how to assess this yet. how on earth do they accommodate risk?is deal political pay so much attention because there is uncertainty. how much momentum does the world economy have? withstand will it geopolitical risk? a less positive one geopolitical risk could slow things down. >> let's talk about serviceable capacity. where is it? let's talk about serviceable spare capacity. ?here does it come from

>> that's a good point. talks about unexpected ability to meet increases. need -- we have probably got one million or 2 million barrels. if not a lot of spare capacity actually see. >> you said this was an obstacle to growth. we didn't have the u.s. oil boom. we see it up by one or two percent. 10 europe really take higher energy prices?

this is that inflation if we get it. news.t would be very bad it rather depends on how much they move for. the thing about oil prices is how weak they have been. actually oil prices have been very dull. that's why there are new supply lines coming through. it's having a big impact on the market. >> has oil been on snooze? is it about supply? it has beent is

able to offset the weakness of libya and else where. oil has been very flat. demand hasn't really picked up sustainably and strongly. i think we have seen more movement in time spread. also the long-term. that's the story of the concerns that have arisen about iraq's growth potential. potentially sanctions hitting the ability of foreign companies to invest. i think the question is not so but the short-term supply later this decade. >> you think it is going to take five or 10 years to play out? >> i think it affects the ability to explore arctic oil reserves and what happens if decline starts to cut in into overall production levels. >> what i want is to talk about

politics. is this something that is going to last? or do you see isis going to the south? >> i think that is an outside case. instability seems to be the new normal for iraq. the divisions are very deep-seated. draghi quickly, mario sounded confident we were going to get a pickup in demand for credit at the back end of this year and the timing to increase supply of credit was spot on. do you share that? to have anonditions impact, there has got to be fornd for that credit. supply sides improving there has to be a demand. what is not obvious is building a momentum and there will be it is stillredit.

key economies like italy and meaninghich are under the economy and the eurozone. >> thank you for joining us. coming up, travel catches a tailwind reporting stronger bookings. with geopolitical tensions, will they hold? we will be back in two minutes time.

everyday you get to announce the 21% increase in profit. i think the billion-dollar reduction in debt over 12 months. >> that was the rio tinto executive. he also discussed long-term plans with the company. will at least be here until the end of 2015. fornd that it's a decision the board. we have got a lot of high-caliber boys and girls on my executive team. i say, i am here as long or as short as it takes.

speed's bring you up to with some companies on the move. one of them is caroline hyde. they missed estimates. reported sales down 8.3% in 31 weeks to august third. the company reported 56.2 million euros profit. net losses were bigger than expected in the second quarter. the lender stepped up the loan provision as italy bounced back into recession. reimbursete mainly to taxpayers. fund says it will lift malaysian airlines. a 12.5% premium in shares they do not already own. this will be the first stage for the carrier after two major losses this year.

reportedng group bookings up. can the travel companies good fortunes hold up through the winter. like winter is voting pretty well. what is fascinating is it has exposure to russia. not one mention. the only issue they do mention is emerging market's maybe hit. there is a serious mention of the fact that latinos are down by two percent in the main state his nose. bey say overall it could because of tensions in egypt but also potentially unrest in russia. the number of customers declining a little in the summer season. the profits are up 21%, helped by the number they are able to push up and the prices they

charge. it's all about these package deals. everyone is going to greece and i beat the -- it be said -- and ibiza. they have one they launched to jamaica. generally they have got average prices on the rise. they have got more people on the rise. most of the holidays have been sold through online delivery. they are on a good trajectory for winter. overall i should read into the fact that sales are a bit lower, particularly in france. in the u.k. they are seeing a pickup. they are seeing numbers growing. even germany down two percent. they are suddenly seeing a ramp-up in recent weeks.

they promised a strong summer. this should not be a surprise. perhaps that's why shares are not doing that well. maybe that's why shares are not doing that well. >> is it a story about high-end rhenium vacation? >> i think they are your more generic holidays, you're mass-market appeal. a unique to give you package holiday. you can get your hotel. you know what you are getting. i don't think this is the luxury end of holiday. it is about those who wants to to getvy online and want the best deal possible. they are cashing in on the mass-market. what they think is fox -- what i think is fascinating is they have joint ventures in russia and ukraine.

not one mention throughout the state. >> not a single mention. we talk about one company that is struggling. telekom. we will be back with that in a few minutes time. .

>> welcome back to "on the move." i'm jonathan ferro. what we have for you 30 minutes into the trading day is a lower trading day. check in out on the back. dax an inch over 1%. the the dax taking the pain. geopolitical risk is one thing. what's happening in iraq is another. russia, the situation in russia and ukraine really hurting german eck philadelphia >> thanks for that. you have the dax and the paris markets in correction territory.

a couple of individual names ust to keep an eye on. tires. adding some 50 million euros. they still miss their profit numbers by nearly 25%. almost 20% of their business comes from russia. that is really killing these umbers this morning. tod's, revenue, earnings, sales missed. italy is where spain for this company. over 50% of their sales come from domestic italy. if you take italy out of the equation, the rest of the business is not doing too badly. deutsche bank says a hold. down to 9 euros. 70 of america, down there

from 75. you can see the stock trading at 77. finally, i thought i would show you something bucking the trend. allions. -- allianz. profits rise by 11%. health and life insurance doing nicely. also have a small asset management business called pimco. issues. a few hey have been slowed down. >> president obama has authorized air strikes against militants in iraq. he said they would happen if they threatened u.s. personnel in the kurdish city.

they also dropped splice to those threatened by the fighters. iraq ly in this week when cried to the world there is no one coming to help. today america is coming to help. we're consulting with other countries and the nations who have called for action to address this humanitarian crisis. >> israel says a cease-fire with hamas forces in gaza was violates hours before it was due to expire. after negotiations failed to reach a long-term deal. the recent conflict has left more han 1,800 palestinians and 60 israelis dead. ebola has been called an international public health emergency. these are live pictures from geneva. the w.h.o. said a coordinated international response deemed essential to stop the spread of

the disease. china's trade surplus at a record in july as growth accelerated and imports fell. overseas shipments surged 14.5%. according to that data, exports to the e.u. jumped 17% in july for the year earlier. now let's move it along. more news out of the telecom sector. telecom italia seeking a deal with vivendi. european business correspondent caroline hyde has more. another deal on the horizon? >> interesting one. a bit of a tussle over who ozies up with vivendi. it appears that telecom italia at the current time is pursuing an alliance with vivendi.

it could mean they end up taking a big stake in the italian carrier. how they will take that stake is either in exchange. remember that brazilian unit telefonica has its eye on, g.d.p., will it overall not take a stake, and telefonica italia take cash or raise funds itself. we understand that the chief executive and vivendi chairman have been chatting about all of this. all the time, telefonica has put out a bid for g.b.t., the brazilian unit. that is where internet presence is growing. that is why telefonica italia is working to potentially cozy up. why do they want in with vive endi? it wants its content. it wants to be able to keep on

growing in italy. it also wants to get in with brazil as well. why does vive endy want anything with -- vive endi want anything italia? h telefonica it can remotely still have exposure to telecoms in agenda gets its contact into a new market that pushes itself in further into italy. i does seem to work strategicically for telefonica and vivendi. will they be a little bit you recollected? they might have made this effort knowing about the talks between the italian rival and vivendi. the plot does thicken. it seems to be a tussle with what gets in with vivendi, whatever happens. they might still end up with a

stake in tell come italia. it is all very interlinked. i think the key takeaway here is at the moment we could see vivendi taking a rather large stake in tell come italia going forward. >> forget strategy. this is europe. when we talk about europe and european carriers, the big concern is regulations. >> we'll have to hear from the regulators coming out but it would appear to me vivendi doesn't have particular allegiances so far. it shouldn't be too much of a problem. >> thank you very much, caroline hyde. after the breaking we're going to talk turkey. they prepare for their first ever direct presidential election this weekend. will we see the same kind of market rally that we did in march after local elections? we'll discuss that next. stay tuned.

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>> welcome back. this is "on the move." we're going to talk politics now. turkey. turkey prepares for elections this sunday. but it is presidential elections and for the first time in the nation's history, the people will vote. we look at how he is cementing his political aspirations. >> if you want an idea of his

ambitions, you could do worse than looking here. every day trucks and building equipment shovel earth making way for turkey's newest airport. it will be one of the biggest airports in the world. one of three major infrastructure projects planned by the turkish government for the turkish sen ten yell elebrations. >> this government needs infrastructure projects because with the help of infrastructure projects, turkey's g.d.p. growth accelerates. that's what was the case in the last 10 years and that will be the case in the next 10 years with this third airport, third bridge, crazy can alproject, you name it. there will be many projects worth $200 billion. >> but not everyone is happy. the villagers here must make way for the airport said they have

been offered a price for their land well below market value. no one will speak out on camera saying they are afraid of repercussions. last summer, a wave of -- erupted across the country. a soundoff over the future led to policeman armed with tear gas and water canons. claiming it was a menace to society, they tried to silence online criticism by banning youtube and twitter. we'll see where the ambitions will give him the presidency and give him five more years in power. >> for more on that closely watched election, let's talk to the managing partner at i tan bull economy and a -- istanbul economy and a former diplomat as well. 12 months ago, we saw riots, the

people of turkey many of which questioning the legitimacy of this man's government and now we're talking about about him being the president of the country. what has changed in the last year. >> well, not much really. because even a year ago when all of these protests were happening, it was on the part of a significant part of turkish population that protested against erdogan. he had the support of a large majority. and he to this day continues to enjoy that support though he is the likely candidate to win this presidential race. >> let's talk about policy off the back of that win if he does indeed become the president. he has been in a sweet spot between europe and the middle east. at one point he was turning towards europe and then seemed to turn away. do we expect him to continue in that direction? >> not anymore really.

because indeed in the initial years of the erdogan government, there was an effort to diversify turkey's relations away from europe and to benefit from the arab spring. ow given the ill-fated developments in many of those countries, turkey is looking at that region rather as a security challenge more than trying to establish economic partnerships. so now the trend is definitely to try to re-establish a better working relationship with europe and the united states and to stave off the securities that are now becoming very clear in the region. >> we should talk about erdogan from a european perspective and the way he has governed this country. if he talks to a lot of of the turkish people they will deliver grothse. that solidified it.

legend mized his rule. that going forward, is that something that undermines him? >> surely. one of the strong assets of erdogan and his government in the past decade has been the economy performance. in nominal terms at least, per capita g.d.p. has quadrupled in a decade. the government also invested eavily in social programs. health coverage and so on. that has been a strong point of this government. however, going forward, turkey is very likely to enter a different economic conjecture. this one where the high growth rates of the past will not be repeated. probably a protracted episode of low growth and this is very

likely going forward to impact negatively on the government. not so much erdogan because he will be moving to the presidency. he will then have a five-year stint no matter what. o some extent it will be affected and that is going to be a bigger challenge for the next government and whoever is going lead the next government. my question for you, we have tension on the gaza strip and incredible tension in northern iraq and this is all very close to turkey. how does mr. erdogan approach this? does he team one europe or separate himself from the issues? >> he cannot anymore because of the security risks to turkey. to have developments in northern iraq. jihaddists s of the refugee outflows.

that is going to be possibly the first porn policy issue that president erdogan will need to tackle and there is every intention to try to manage this in collaboration with turkey's western partners in the u.s. >> thank you very much for joining us this morning. "the pulse" is coming up at the top of the hour. joinsurney -- guy johnson furs a look ahead. >> the stories that are running around at the moment all have a direct impact into what we're doing here. we're going to be talking to a norwegian farmer. norway on a percentage of good exported to russia is this -- more than any other country in europe as a result of what we're

seeing here. that is the geopolitical story. you look at the oil story. what's happening there? oil prices are up. that's going to be a story moving forward from here. we are just hearing how turkey is going to approach it. if you basf and you are a company trying to run your business, how are you going to be affected by that? we're going to get a take on what the likely trajectory is here. interesting that russia is trying to reduce its dependence on western food at a time when the west is trying to reduce its dependence on russian gas. all of those stories, we're going to talk about that and try to figure out if you were a company especially boss running a business and trying to strategic livically plan, how do you figure this out? >> it is something we need the talk about as well. look at what's going on in northern iraq.

look at what obama has done estimony stopping at genocide. mr. putin is doing something very similar in the ukraine. >> it is a very difficult balancing act. i don't have the answer to that. >> interesting. >> precisely. two very, very strong forces facing each other down trying to figure out what to do. there are many scenarios that we're facing now. look at what's happening in syria. in iraq, in the gaza strip. look at all of these stories, it is about balancing the prevention of genocide, the the on story versus -- extension of diplomacy and war and where the boundaries lie. i think that is all very relevant today but where we are on the spectrum in each of these different theaters is very different. the way the west is going the play is different.

fighting russia is different to fighting ai sis. -- isis. >> here are come companies on the move. news corp. report earnings that missed estimates the first time. like many struggling company they split from rupert murdoch's stoxx entertainment one year ago. softbank owns sprint. they planned to bid for t mobile earlier this week. some of japan's biggest exporter hamstring are in survival mode. ussia has an import ban. dairy produce halted all production lines making products

for russia. coming up, what is no burn's secret to international success? a friendly push by robert deniro. manus cranny sits down with the man at the top. don't miss it. that is next.

>> welcome back to "on the move."

i'm jonathan ferro in london. the japanese have been enjoying sushi for a long time. manus cranny spoke to the mastermind behind a sushi business that spans five continents. >> sushi, a traditional japanese food with an international appeal. in the west, few are as associated with it as this man, nmp obu. -- nobu. going from chef to entrepreneur, he opened his own brand of restaurant in new york 20 years ago. backed by hollywood a-list business partner. >> when was the moment you said robert deniro and you went i trust him. raupt and he my talked about working together with partnerships. the first time he offered to me,

i said no thank you, i cannot do it. then after four years, he asked me again. of course he is a big star. now i can trust him because partnerships is about trust each others. he understands my philosophies. >> that gave birth to an international business. 32 restaurants in 28 different cities. but it hasn't all been easy. sometimes i open my estaurant in alaska. maybe i didn't give up. also always i have to try my best. >> overcoming this set back not only did he go on to become a celebrity sushi master but also a las vegas hotel owner. >> so deniro asked me to -- nobu. why we not do like a nobu hotel.

it comes from him. >> what happens in vegas doesn't necessarily stay in vegas. >> so the second one is cominging this year. in saudi arabia. end of the year there is going to be the miami -- >> looks like for nobu, the greatest skill has been turning raw fish into raw success. >> thank you, manus cranny. go online for the bits they cut out of that. i assure you, it is worth watching. if you are looking at the markets we are lower. the dax is lower 1%. back in early june, it reached 10,000 points. all of that happy talk from the e.c.b. two months later off 10%. lower bond yields, lower stocks is risk aversion. you see an oil pump -- as well as obama authorizes air strikes in iraq. no air strikes yet. that is what is ruling sentiment now.

"the pulse" with guy johnson is next. ♪

>> back in iraq, u.s. air strike authorization shakes global markets. ebola outbreak. the world health organization declares an emergency. italy misses a step. prime minister renzi trice to get the economy back on track with constitutional reform. e'll be live in milan. it is 9:00 in london. welcome. you're watching "the pulse" from our euro