>> global equity markets on edge as investors lose hope that the ecb can reside -- revive the eurozone. arrival, the u.k. joins the u.s. in checking passengers before they enter the country. and a political earthquake in ethics. the u.k. independence party gains its first ever elected mp and almost claimed the second. good morning, welcome viewers of

"the pulse." we are here in london. i am guy johnson. quite a week hasn't it? equities are selling off a bit after a gap us morning. everybody is trying to figure out what happens next. for thes are concerned eurozone recovery and if it is faltering. mario draghi is worried as well. speaking of washington dc, movement is needed to fight inflationary forces. people, butean delivery, price and stability. which today means lifting inflation from its excessively low levels. we will do exactly that. alarmingd some of

things last night, and my mind. he talks about how the euro will take a turn for the worst. that probably tells you everything you need to know. jon ferro, you have been talking about all morning. it's beginning to go on offer again. getting to a little bit of a point, this week is different for me. littley that we have had lips and selloff, but this week feels different. >> volatility is back. mario draghi is talking about taking more of an active role with the ecb balance sheet. admitting hugere structural problems in europe and we are back to that debate about how much the ecb can do here. yields in germany yesterday hit record lows of 0.9%. the next leg of this move could be where it gets interesting. if you continue to see the bond

market rising low growth, what if we get divergence from the periphery. what if the trades we are seeing across the eurozone this year, yields down in spain and italy. the first guest i had on, and i don't know how many months say, not just that the rally is over but we are close to the turn. that is significant. >> we are getting toward the end of the rally because it is hard to see the curve flattening from here. what that will take is a --lization that we are back after the break, talking about the eurozone. we're talking sovereignty. mario draghi has managed to keep the lid on this one and do whatever it takes. that is taken the fear of the breakup away. >> very true. did accountalberto for this. he said we will not move to

eight 2012 scenario, but what if we face is low inflation and low growth, but who has the big debt and we need to service it. it is the likes of italy. at some point that credit risk doesn't need to factor into the bond market. credits,talking about we may need to think about, will he get our money back? if you start thinking about as then maybe that is a game changer. the ecb is not going to conduct self quantitative easing and a lot of people think they will not, not only because of the legality that because of how practical and what it could do. then yeah, why wouldn't we. if there wasn't someone backing up the yield, why wouldn't that happen? there is a debate right now on that. about aan we talk

turnaround in the peripheral space. it is a big change. >> everybody thought the plan was on. and how much of those plans are pricing in qe's. that isare, then maybe a trade we need to start taking. >> you have a debate in the united states on monetary policy , talking about physical issues. down to this lack of demand. talking ario draghi 50-50 equation. if we don't side, see significant changes in these countries -- countries structurally, the problems are going to go on. and if they do they will shed politics everywhere and guess what? they are. >> i know we are talking about essex this morning. what can i say? thank you very much.

more on the story later. looking forward to the next conversation. in germany today and will meet with angela merkel. the first leg of his european countries trip. but what does it mean area -- mean. >> germany and china a very important relationship. weakening at the moment. if this relationship starts to falter and we had a problems. or theher the chinese germans wanted to falter. when he comes he brings the team and that is evidence that the fact -- of the fact that the chinese are treating this relationship seriously. entire are you the chinese and german cabinets will have a meeting today. he is several hundred is this people. there will be a meeting of business leaders in hamburg.

500 of them in fact. for china it is simple, the european union is its biggest trade partner. germany is one third of that. they are concerned about faltering growth and this is a no-brainer. in addition to more trade they want more technology, and this is increasingly a theme for the chinese and all of their trade talks. for the germans, and equally important picture, you know that last month they saw the sharpest monthly decline in exports and five years. they will be concerned about that. china is germany's second-biggest export market after the united states. to get it right and it is set to increase this year. maybe not enough to give them the kind of growth and inflation they would like to see. it is a bit of a help. >> it is interesting that germany got so tied up with russia and you look at that

alationship, the germans get market with the chinese and the chinese get the technology they want and you can see how that ultimately evolves. are they getting the tech they want? >> we of just learned that volkswagen will announce they will deepen their partnership with one of their chinese partners, called faw in china. intend to deepen their cooperation for research and development. this is the price of admission for western companies working in china. say bring your technology and we will give you our markets. is interesting to understand why that is important to volkswagen. china is by far their biggest market. deepening their relationship and sharing some of the technology is something that maybe they are

reluctant to do but really something they have to do, particularly if you think about volkswagen and their goal by 2018 which is not too far away of overtaking toyota. they can't do that without the chinese market. the >> thank you very much indeed. nexton the story in the hour. the risk, rewards and opportunities. focus, ther big selloff continues as investors lose hope that the ecb can revive the eurozone. ♪ >> we are engaged in reform and

recovery. in fact, we face the opposite concern by change. without reform, there can be no recovery. awareing this i am well of the argument that reform is better achieved in due time. find thisowever argument compelling. mario draghi speaking yesterday, saying he will do more to revive europe's economy. you can see it in evaluations right now.

should we be worried? can mario draghi deliver? i think since october 2, his disappointing performance at the press conference there will be the seachange. the previous week he was applauded because it meant more justifications for the ecb and more stimulus which would be great for italy. now he hits the equity market hard -- there are things he can do -- and he continually says, and is not just that elementary policy. all it can do is put in place conditions that make it less painful. >> i thought that press conference was really good because it was an emperors clothes moment. people haven't been asking the right questions.

and so the right question started to be asked her it >> there would be more questions asked if they have the details, nothey could be informed -- good to be him but good in terms of markets recognizing that there has to be action. reputation has been built on a lot of words and not much action. and he is done a great job, but it's time for action. -- policy that's amusing is he is adamant about the balance sheet up to 3 trillion. he should reach a deal with janet yellen, or other central bank governors around the world, by their assets temporarily -- >> the effect of that would be? >> it would have an impact on the exchange but it would show to markets that he is serious about getting the balance sheet that thererecognizes

are assets we cannot buy, but maybe take up a couple of tro's -- >> he talked in that speech at the bookings about taking more active control. there has been criticism that he is slunk that responsibility. >> banks can pay it whenever they want. >> they can take it, pay it, not pay it. concern, can i take or not take central assets? give think what you're talking about is what you mean by that, the active control? he was talking about regaining control of the balance sheets. and that is one way. one trillion more than where it is at the moment. , that'sit with tro's

not going to be much. into the asset courses are graham, it gets underway. -- growing, it gets underway. is that agreement from september of last year. you don't need any currency. the league has problems with this and that might be a list of them. >> when you talk about how to price this story, europe flattening out aggressively, as i going to continue? that comes on the assumption that mario draghi can deliver. we're talking about credit risk. >> absolutely, the credit risk public pushes them up even for -- further. it brings imt back into play

also. we now know it would never be implemented. he couldn't remember if it would be sterilized or not. he well moved on from there. the house of cards hasn't collapsed yet but the wind is growing -- blowing stronger. >> thank you for joining us. let's move on and talk about the united kingdom. the u.k. independence party winning its first elected seat in parliament. reported --ernment reporter joins us on the phone. expected thatody in terms of the implications for other parties, this was largely priced in, wasn't it? >> the results here in clanked in -- clamped in were priced in. it was still an astonishing result. almost a record swing and

british electoral politics. even though it is priced in it is still difficult to remember how hard it is for new parties to break into the british political system. none of those things should be taken away from you cap here. but the biggest surprise happened at the other end of the country. at the seat of middleton where they're having a by election. that was supposed to be a safe labor seat and in the end they held it by 617 votes. and a spot -- an astonishing ukip surge there. that mean for labor policies in advance of the election? do we start to see a conversation about the referendum? do we start talking about emigration or immigration a little bit more question mark -- more? >> one of the things they can do -- the leader has ruled out a referendum. miliband's one of ed

undoubted business friendly policies. he can say there will be no uncertainty under a labor government. you won't have to spend two years wondering if britain is in or out of the eu. it does if i win there won't be a referendum. it is highly unlikely he will go back on that though he will face pressure. it would be a u-turn shortly. you will see questions on miliband. there are questions as to whether he has the right policies. they may try to do something on immigration but it is very difficult to do that inside the eu. >> final question. we knew what would happen, what about rochester. that is the other seat that will be contested. a second mp defecting from the conservative party to ukip.

mr. reckless, how will he get on? -- if momentum is momentum exists, it is with ukip. there is a really interesting question. the tories never thought they could beat has well and clamped in. they do think they can beat reckless and rochester. they are planning a long campaign. that they will be able to grind him down. they have as mr. kaz well said repeatedly last night, been on full attack against mark reckless. it is really important to hold rochester and hold the kingdom. if you lose rochester then there whoa whole load of tory mps may be ideologically sympathetic to the u.k. and worried about their seats and small majorities who might think, this is the way to hang on. rochester, for david cameron, is where it all hangs now. >> our u.k. governor reporter,

rob hutton. about the historic day. we will get his take on what this all means. we will also talk about what we know about ukip and its economic model. will it have an impact elsewhere in policy formulation. er will change its business model and germany. eliminates driver profits which allows them to grab a ride without a license under local law. executives of the company spoke , it secondarytors listing, no final decisions have been made. it is not clear if the new idea is still being actively considered. kneeling -- nearing a

deal with the is will. -- azul. they are planning to buying many of the new narrow bodied jets. that aircraft is pretty well sold. up, the hong kong government puts plans on hold to speak with pro-democracy demonstrators. we will be live in the city with the details. ♪ >> good morning, welcome back

you are watching "the pulse." been a busy week and a busy friday. we are low and down by 0.85%. the dax over by 1% this morning. what gets me is not the direction of travel but the volatility. we are up percent one day and down 2% next. volatility is back in a big way. what can anyone do about it. german yields, they are pointing lower. a near you record low. yearis the low on a 10 over and germany.

for germany and the periphery as well. spain, italy and yields keep going lower. off the record low, zero point 67% on the 10 year. this full market, these bonds on the periphery. the pound is imminent. what could that mean? will it push people to do more? that comes up today we start thinking about the ecb and whether it can come up. penny penny traps, if the drops, and they can't, what does that mean for the bond market #and brent up 20% from a high hit in june. a bear marketn and are going deeper into a bear market. november 27, a key date in your diary. opec, watch that one. up next, containing the crisis.

the u.k. steps up security screenings for ebola at points of arrival. we will talk about that when we come back. if you can join the conversation, please do. ♪ >> accomack, you are watching

"the pulse." half past the hour and i am guy johnson. these are the top headlines. will start screening for ebola on planes that enter the country. president of the the world bank says the global response to the crisis is way behind the curve. more on this story in a few minutes. in britain, the u.k. independence party first elected

mp seat. hong kong pro-democracy protest border on the the streets today. this comes as the government begins talks hoping to end the standoff. 12:30 here in london. that is according to one of the student groups. let's get more on this angle. let's talk to david tweed, he is in hong kong. developments, we expect in the process to pick up? >> we do because we have about 2.9 kilometers of roadway. the thing is these roadways are virtually ending with some of the blockades being guarded by students. the hong kong police if they

will not go remove the blockades because they don't want to provoke the students more. but they have already been provoked because speaking to the government yesterday, he called off the talks that they were going to have, which sends the students i rate again. here in hong kong later on this evening, we expect to see more students and more demonstrators back on the street in hong kong and that will probably last quite some time into the weekend. abouthave been talking the business story over the last week or so and the impact it had on legitimate business. well,timate business as organized crime has been affected by this. whatd we have been seeing organized crime due to protect their interests. because the triad here in hong kong are very active, particularly on one part of the

island, on the callaloo side. a vice ridden this trick. their business activities right across hong kong down by 40% that fits because we know maybe they employ businesses in those areas and are seeing their business drop off as much as 80%. this explains why we have seen some triad members -- suspected members, eight were arrested a week ago because him some scuttles. that took place against the protesters. the triad accidentally are there and protecting their interests. >> you talk about the numbers and i guess they don't issue financial statements, would you speak to? but, but we did get and thought -- get in touch with a guy who identifies himself as a triad member. there are four romaine groups

and he is in one of the biggest groups. he is a strict leader and describes himself as the one who told us that business is down 40%. he is involved himself in things like running nightclubs. i nightclub in hong kong is not the same as what you would get in london. because here in hong kong, a nightclub means you might go in there and you will be introduced to prostitutes. at the same time, this is one of the areas where the triad starts to make money. along with things like shaking down people and rating minibuses, that sort of thing. story and great reporting. thank you very much. david tweed joining us from hong kong. travelers to the u.k. arriving at heathrow and the euro star terminals will now be screened for the ebola virus. very skeptical about these.

what exactly are we talking about here. >> they come online at jfk today and to the other airports next week. or getarrive at heathrow lake and you come from west africa you have to fill out a questionnaire. it will be about what kind of people you come in contact with and you may have some people ask you if they can take your temperature. this is some people question how effective this is. >> i'm assuming there is an issue here. that is probably one of the bigger issues. >> that was what they said yesterday at the government meeting. what if people haven't just come from west africa? what if they went from west africa to florida? the government doesn't have a good answer to that. a lot of people are questioning the effectiveness, but if for no other reason than that ebola is

rather's asymptomatic in the incubation. people talk about sars and how they tried to detect it in airports in hong kong and singapore and how it was not effective. and you could always just lie there in its someone said have you come from west africa? you could say no i haven't. would you want to report your mom if she just died of ebola, maybe wouldn't. but it is more than what the u.k. was doing before and that is what the government wants to be perceived as doing. this has become a public health issue. is about dealing with public panic rather than prevention. >> i think there is a fair point to that and there are a lot of scares out there. we had the foreign office yesterday saying it was looking into the case of a british individual passed away in macedonia with some symptoms that some people say are consistent. but his colic said he had been

anywhere with her at been any ebola outbreaks and if you look at that it could be a scare, the same thing we're seeing in france. community service plates. detained all of these people because there were some kids from guinea and the kids didn't have ebola. will hear a lot more scary things -- scare is -- seriously scary stories. the government talks about not being impressed. this is the point where they are doing all these things are here. that in reality what you need to be doing is a lot of things that are happening in west africa. the situation in africa is now bad. that the disease is entrenched in the capital of liberia. people according to the who, who have the virus, will die from it. the president saying that the world is way behind the curve. saying that earlier saying the response needs to rise at least

20 fold. think about the aide that these countries are getting in various forms. about $1.5 billion from the west. bank -- they have a report that says that those three economies alone, according to their worst case an oreo could lose as much as $32 billion by the end of it. >> thank you very much indeed. the stock about what is happening with commodities. dropping to his lowest price in years. the energy analyst is on the phone. here in london. haven't had to have a crystal ball to realize that maybe there is a demand to find a balanced story here. my question is, why has it taken so long for the oil market prices. >> i think they started to see that in the tangle that we have talked about before as well that the market kind of flipped into

the tangle a couple of months ago. the market was showing it and i think in terms of prices it was a bit sticky. there were a lot of political headlines and there is still a fear factor in terms of isis and russia, but now it started. and there has been a lot of macro fear driving this as well. the dollar oil trade is back on the agenda. but ultimately we don't think this is over and i think there is definitely potential for a another breakdown, even below $80. and november 27, howell opec feel about that? x this will be interesting, we have been saying this or nearly two years, it is no longer the swing producer that we know them to be, just because they have been quite vocal in saying that they are not happy with the discounts that iraq and iran have been offering to their asian customers is reduced the market share. i think for the first time in a long time it will be interesting

because we are not expecting saudi arabia to have a huge profit, which is why we are still very bearish. >> whose economics at these kind of prices, who is more critically -- where does this preferred to the margin. how does it break out question mark >> i think the general consensus would be that even though saudi arabia needs about $90 to break, we don't really i that story just because there is so much reserve. they can take about 75 to $80. the people who are hurting very badly already, are venezuela, potentially libya as well and i think the issue with these two countries as they are cash strapped so they have to offer more in the way of discounts to maintain their exports because it has become a buyers market. russia is hurting as well at these levels and another $10 from here the u.s. and canada

will start hurting as well. that, how much needs to be taken out of the market to bring us into alignment with where the demand story is. if you look at where european growth is going, you can see it around the world. what will it take and how much needs to come off. looks horrible as you said, but even asia has weakened considerably. i think you need to take off at least $1 million from the market. news is that some signs are coming around that the chinese dying is starting. it is still very early days to say whether there is actually demand improving, but on the flipside even if demand starts to pick up, and even if we take

away $1 million a day from supplies, there's so much industry. all of that when the to come back to the market first before we see any price impact. >> there is a lot -- an awful lot just skating around. what about the curve? we are still in tangled to brent through next year but the extent has have over the last three or four days. newsis slightly positive on what is a gloomy or unwanted outlook. >> thank you very much indeed. analyst fromt energy aspect. unveiled company has its new version of the s. you will hear from elon musk only come back. ♪ welcome back, you are watching

the pulse, tesla is making moves to take green energy vehicles to the mass markets. s, all will of the model zero emission electric car also features automatic safety features to prevent crashes. they spoke to us about the

latest evolution. >> i think it is important to differentiate autonomous driving , autopilot is what they have in airplanes. there are still expectations of violets. on thehe owner says pilot to make sure the autopilot is doing the right thing. thing the yet at the stage where you can go to sleep and wake up at your destination. doing is making it easier and more comfortable to drive a car, and incorporating safety features that the car will stay in its lane, automatically break and will maintain its distance to other cars, will avoid highway barriers and other obstacles -- >> but that doesn't address the question, let's say it is on

hey,ilot, if a driver says this was supposed to change lanes for me and instead a hit the barrier, i want tesla to be responsible for this. >> will be quite clear with customers that the responsibility remains with the driver. saying that the car is capable of driving in the absence of a driver. somewill be the case at point in the future, maybe five or six years from now, i think we will be able to achieve true a taunus driving we can get in the car, go to sleep and wake up at your destination, but do that you have to have fully redundant systems. that not one system breaking involves in an accident, and you have to prove that over millions of miles of driving, and then we have to prove that to the regulators. if anybody buys one of these

things you have to a piece of paper saying i will be responsible. interesting that car buying is becoming more complicated. on, the political earthquake in essex. the u.k. independence party gets its first seat in parliament. director phillip blond joins us in a few minutes time with a look at what is on the agenda. we go with our wallets and heads when we vote for ukip. maybe our hearts. that is the question will ask ourselves. ♪

>> nine minutes of the top of the hour and you are watching "the pulse." got its first elected seat to parliament. that puts a more pressure on david cameron. let's talk about the meansations for what ukip for economic policy. phillip blond is the director and joins us now. people don't often think about ukip and economic policies, but in some way we have to think about it now they have a seat in the house. when people vote for ukip as they did yesterday, are they voting with their wallets or is it all about their hearts?

are genuinelyy voting with their wallets, the guys these are the people that globalization has chewed up and spat out. increasingly in the developed western world, this is approaching half of the population and we see it in caruso and europe. these are the people who don't have the skills, who are static and best but falling dramatically who feel deeply threatened by the future, and migration and can't see a world where they will prosper. in that sense of hope for ukip is a vote against the tom and it economic force. -- dominant economic force. and it is true that it has felt the bottom half. it's great for the developing world but it is quite lethal for them. do the economic policies they have them play support that view? ukipave a top-down view of

and you can see why you would vote, but when you go to the details, does that reality match the wide story? >> you get quite an odd phenomena. like democrats being led by radical republicans. arguing for anre economic exit from the eu worried these are the economics of a madhouse. our net contributions are .4% of gdp. the trade, at the most optimistic are 1.1% of gdp to 3.3% of gdp. that is between 50 billion and 18 billion or year. if you apply a dynamic trade analysis, those figures triple. if theooking potentially united kingdom leaves the eu, and impact greater than the

economic recession we just endured. but looking at ukip's recent party conference, a effort message. trying to side with those were marginalized. or cures that public meant has to be open to small businesses and creates a world where small businesses get a greater share. or no income taxes for anybody beyond the minimum wage. it is raising the tax threshold so more people fallout. >> so it is progressive not regressive? >> it is a mixture. they want to a lemonade the inheritance tax which usually favors the wealthy. what we have -- they want to eliminate the inheritance tack -- tax which hugely favors the wealthy. morning,ng this douglas said something quite profound. he said the future isn't reheated socialism, it is

something different. now in my view, that is the future of majority politics in the west. we can no longer ignore the health of the population. economics over the last 30 years has essentially destroyed the prospects, stability and security of these people. it is not a surprise that emergent parties are trying to develop pro-poor policies. that impact policy formulation at the encumbered level. all the major parties at that level, how does it impact labor and conservatives? >> they are incredibly vulnerable to this sort of bottom up revolution. they all have their careers and the ideas were formed with dominant orthodoxy. ,e have essentially in britain

the same old office in the left-hand in the right. none of them have innovated. created a new mass majority that can be captured. this is happening across europe. in austria, the freedom party, in greece you get extremists the golden door and syria the -- so and less the incumbent parties change and recognize that their dominant economic model is broken -- >> where is the political sensor? >> the mistake most people make is thinking the political center is the difference between right and left. it isn't. it is where the majority's are. the majorities now, are a need for a desperate new economic plan. when people suffer economically, they retreat to the safety of class and ethnic city and

culture. the future in my view am a if all majority politics in the west, it is economically aggressive and socially conservative. >> we will take a break. ♪ >> doubting draghi.

investors hope the ecb can revive the eurozone. screening and airports were now check passengers who might have ebola before they enter the country. and china's premier touches down in germany. how big a story is this for the eurozone? good morning to our viewers in

europe, and good morning to those waking up in the united states, we are live from bloomberg's european headquarters. a busy day, what do we have coming up? is earthquake in essex. party wonndependence its first elected seat in parliament. let's talk about what is happening in equities of the rest of the markets this morning. go lower, aities little bit of a phase an hour after that and now we are trading at sector lows. has draghi got it together? can he do more? he is a worried man. to thespeaking basically global economic elite and this is what he had to say. >> we are accountable to the european people for delivering price stability. today that means lifting inflation from its excessively low level.

we will do exactly that. jon ferro joins me now. druggie, a lot of talk and he delivered. a lot of talk and he delivered. >> a big debate right now as to how much he can do. that debate right there is on the monetary side of things. he has a big balance sheet and wants to get it up cap you do that -- can you do that and how you do that? points the dax down 160 and everyone says it is the end of the world and then the next a stocks are up. the debate on something that is happening, when stocks are down to blame everything but one -- what is happening is a very serious debate. you look at what happened this week and you backtrack a couple of days and you think about what is happening. the fed.

start to see the fed in a different context here. it happens every time, qe ends. you forget about the federal reserve statement. the bottom line is you can't keep relying on central banks to do everything. >> what else to redo? do we reprice all these assets? rely on the fed and the ecb that is what will happen. it is not just about relying on them but believing there is more to come. there has been relief that european sovereign qb is on its way. and it has been part of the trade when we have seen spain and italy rise -- drive lower. dropme point that could and that is the kind of thing we talked about earlier this morning. bout peripheral debt.

they are talking about the lack of the carry trade that could come off the back because the pickup of the auctions has been small. going forward you have to say, the ecb have done their bit and looks like they are getting to the end of the road. >> the big question going from here, are we in a situation we have to think about peripheral as a credit story again? if you start thinking about as a credit story than they are trading well. what we are saying though is that the trajectory of growth and inflation are going one way and that will make debt difficult to manage in countries like italy. >> thank you, we will talk about this a lot later. kailash satyarthi has just been announced as the nobel peace prize winner. announced, these

names are not a surpri they are both largely on the list, the split maybe a little of a surprise, we will get more details as they come through. split vote this year on the nobel peas prize. we'll come back and give you more on that. premiereantime, china's , and the country euro trip. what else does it mean for trade elections in that u.s. and china. germany and china that is a big relationship. is putting it mildly. suddenly the chinese trying to demonstrate how important it is. when number two chapels he takes the team. he brought his entire cabinet there will be a meeting with the germany cabinet separate from his meeting with the chancellor. in addition there is a meeting of his this leaders. i've hundred 50 chinese and german business leaders in hamburg.

that is where a lot of chinese business is concentrated in germany. an easy one,s is the european union is its biggest trading partner and germany alone accounts for a third of that. china concerned about the slowdown and wants to see more trade, they also want to see in addition to that trade, more technology. or the german part, their exports fell and had their biggest monthly drop last month in nearly four years. obviously they are keen to keep this relationship working. that is the expectation, knowing forward, that exports from germany to china could increase, but let's not forget china's imports last month fell by 4%. there is a lot to talk about. both of these countries dependent. we are ready have the headlines from the germany -- from the chinese-russia energy

story. a gap that everyone thinks favors the chinese as we go into the sanctions story. aat is the relationship like between beijing and moscow? merkel is thegela liaison between the western world and president putin. she has always had the best relationship and she is the intermediary. now since germany introduced merkelns since angle a began to express her doubt about the russian president's and tensions, funny enough, the chinese are becoming the intermediaries tween the germans and the russians. and we understand that angela merkel begins to ask -- intends to ask the prime minister to convey a message to him. she may meet the russian president on friday in my lawn, but nevertheless one of the top priorities right now is bringing that conflict in the ukraine to an end.

and trying to repair trade ties. trying to find a way to get the de-escalation they want to see so they can renew their trade ties with russia. those trade ties down by 25%. year itast year, last was worth $100 billion. germany is a huge trading partner with russia. china is a baking trading art her. bigger trading partner. some ofa may pick up these deals that the germans are leaving on the table for these sanctions, but this is an important meeting on diplomatic and business fronts. >> what else is on our radar. the u.k. independence party has won its first parliamentary seat in england. one of the biggest swings in british electoral history. the u.k. will now start

screening for ebola at the main entry points to the country. president after the of the world bank's says the global response to the crisis is way behind the curve. and the winners of the nobel peace prize have just been announced. the price is being shared between malala yousafzai and kailash satyarthi. is india'syarthi children's rights activist. he is been active in the movement since the 1990's. they were selected from a list of nominees, the highest number of candidates ever. skill yousafzai is a pupil known for her rights and activism for women. capitalizes asa relations between germany and russia disintegrate and beijing moves in. can the chinese take advantage.

we'll talk about that we come back.

>> you're watching the polls, we are live on bloomberg. the hospital in spain that is treating the nurse that has ebola is saying that it is monitoring 13 people for ebola infection risk, that includes

the nurse but we knew that already. but maybe the list of people that are being monitored is starting to grow. more on that story and will bring it to you later. equities certainly being sold off fairly aggressively this morning. what the euro-dollar is doing. 1.2674 is what is trading right now. draghi's speech seem to have a significant impact. you could argue the euro-dollar is one of the areas it is had the least effect. this pair has come down quite a long way from the high one 30's to the mid-one 20's. something of a media term. are probably reacting even more. the chinese premier is visiting germany today and angela merkel

looks to export outside of europe. and those exports coming under pressure when it comes to china. are getting weaker and weaker. let's talk about how china fits into this story overall and the economic political story behind it. joins us from the european council on foreign relations. let me start with you, how much of this downgrading is going to china. >> we don't know exactly, we germany,e exports from there is a slowdown and china and that adds to the problem of germany's other main export markets. there will be a marginal effect of saying those german or -- german exports to china have held up well this

year. >> what is more important to germany right now? >> it needs both. what seems to me to happen now is you have a perfect storm or the demand from the eurozone has already slowed. demandore dependent on from beyond europe and emerging economies and the bubble from china. it is being hit twice. >> it could have an effect on eurozone. it can have a more direct effect than it can on china. how does that change the dynamic of the relationship? merkel must be looking at her options. the euro zone something she can influence. how do she think about these relationships in light of that? >> i think it's true that she can influence the eurozone more, but i think the german court makes it difficult to do some of the things that need to be done.

merkel. much harder for what is happening in china is a long-term structural shift and has no hope of shifting. there is little she can do there. a problem with that as well which is that the chinese leadership has realized that however strong growth can a dead-end. and they want to shift their economy to more consumption. bigany is one of the leaders. who loses and who wins? if china moves from reliance on investment to reliance on household consumption, the loser is the export of heavy tactile goods. germany, sweden. the winners are those that export luxury goods.

malaysia, taiwan, thailand, france, italy and germany, japan and korea that -- korea export cars. germany is in affective loser now. and china is competing and that area as well. even if you look purely at the numbers, 3% of chinese exports to germany, china is more important to germany. the politics make china even more important than the other way around. -- paradox >> the paradox for germany is that this whole thing is based on the market-technology swap. the more germany shares its technology, and the chinese has moreincreasingly demanding technology in the run-up to this meeting, and chinese officials analysts have in making the case

again, and the long-term that undermines german exports because chinese manufacturer start to compete. >> what is the duration? is that something that is this generation or next-generation question mark -- the next generation? >> it seems to me there is kind of a sliding scale where gradually it seems to be more and more sexism. china will start over the next 10 to 20 years to compete with germany. >> some people say germany should be investing more? that is not what we're seeing right now. >> there is always the need to keep your advantage and high tech and in your comparative advantages you need to work on those. and germany needs that come a that is true of every country.

interestingly enough, if you look very long-term, and now we are talking about the secular shift and generational shift, it seems the service sector will become ever more important. we can't compete. the service sector is generally not seen a something positive in a lot of countries, including germany. so they are against problems in germany. it is another issue for them. germany invested very heavily in its relationship with russia and its relationship with china. on the scale of one to 10, how good are those investments? >> the crimea crisis has illustrated how little traction germany has over russia. it seems to me that gradually over the last decade particularly in the last few years, a relationship with china has become much more important

to germany than russia. challenges, and china is aussia and rising power and russia is not. germany will struggle even more than it currently does with russia. particularly since russia's current policy is based unremitting hostility toward the west, unless it gets its way, but then it will want more. of theome back to one things we talked about at the beginning. germany will struggle to influence russia and china. germany is the dominant force --e in the eurozone, yet they are in the eurozone, you make a good point. you can have my job if you like. -- are we going to see a

differing role being played? be pointing to a less engaged germany, are the economics going to have to point to a more engaged germany? has to pursue policies which make it less export dependent and which are stimulate to the eurozone. it is not doing that now. >> when does that happen? that is the critical question. >> i am honestly not sure. you would've thought it would happen three years ago. and it has not. the german politicians seem very decisively set in their ways. exports are good and balanced budgets are good. i like balance budgets, i don't think the policy has much of an impact beyond the short-term,

that a short-term and the that certaino bad, countries should do it now. the eurozone had this need to start to save, and now the sabres need to spend and they haven't done that. need to start to spend and they haven't done that. break, ahead into quick check on the markets we are watching. germany let's talk about the dax. this is the session we have seen, a gap lower. even worse than the gap we saw at yesterday's close. the gaps are down just over 2%. model -- an abysmal day for the dax. ♪ >> you're watching "the pulse."

let's get some company news. union credit is considering strengthening its presence. the co says the bank is resuming

-- reviewing its presence outside europe and may open branches in those regions. or is said to have explored a stock exchange listing in australia. investors, that is according to people familiar. airbus is said to be nearing a deal to sell jets to be brazilian discount carrier azul. billion of aircraft to expand its fleet. the a 320 neo option. we will take a break, but up next, containing the crisis. the u.k. steps up security, screening for ebola. ♪

>> good morning. welcome back. you're watching "the pulse." we're live from london. i'm guy johnson. let me bring you top stories. mario draghi has promised to loosen monetary policy if necessary. meanwhile german finance minister warned against south qe. and the debate comes with sweeping data from the euro zone and prompted the i.m.f.

that it could slip back into recession. and douglas cars welle took seats with 67 votes and marked one of the biggest swings in british history. and 17-year-old's women's education advocate malala yousafzai and another nobel peace prize winner kailash satyarthi, have jointly won the nobel peace prize. the latter being the well known indian children's rights activist. maybe not such a surprise that they ended up being split. we'll talk about that later in the program. certainly a difficult day in the markets. let's talk to john about that. >> in a word, guy. messy. the color of the maps tell the story. red, down by 1.5% on the ftse.

the south of europe also. and down in italy. here in frankfurt look at this move on the dax. weekly x 600 is got biggest drop. if you're looking at the bond 345rb8g9, what does it all mean for the bond market. when stocks are down, you blame everything. the one big culprit is the lack of growth in the euro zone. president draghi saying he is ready to deliver the question marks. the yield on the german 10-year ust off a record low of 10.9%. talking about what happens next here in the bond market, german yields could go lower.

why not? you've still got a real yield right now, but the story on the periphery is where things get really interesting. start year at 4%. with 2% on the spanish 10-year. guy, says to me, you could almost see a divergence on what happens out here in the periphery. his call is that we're going to see a reversal of these yields. that talk becomes incredibly interesting, because if people are talking about the prospect of softening of quantitative easing, that might not happen. >> yes. back and talking about a credit story. 257 minutes from "surveillance" and we're talking with mr. tom keene. what have you got? >> what a week and what a friday and what a market response.

we have two sterling guests. david blanchflower serving with the bank of england and not only in the next hour but vincent rinehart of morgan stanley, we are thrilled to bring you blanchflower and rinehart as the imperioli meet in washington -- as the i.m.f. meet in washington. and what a shock, there as well, tim cook. he is the banker's lobbiest of the squor banks. from the substitute of -- from the institute of international finance and the elite meet to greet our peter cook will have that in our next hour through our entire hour of "surveillance." >> what are we watching? what are the keys you're going to be paying attention to? >> well, in the market the key

issue guy is oil. oil was exceptionally ugly yesterday afternoon. it will be interesting to see where brent crude and the american oil west texas intermediate but you know there's a little better tone to the bond market and higher yields ebbing off to the carnage but you wonder how stocks will perform through the three-day weekend in the united states. >> thank you very much tom keene. now travelers arriving in the united kingdom will now be screened for the ebola virus. what do these checks involve? >> well, if you arrive at heathrow and you've come from one of those countries, you will have to fill out a questionnaire and may be asked if someone can take your temperature. interestingly they said an hour

ago no one told them about this so we'll see how long it takes to really take off. euro star stations will have the same setup and this already has people asking how effective is this going to be? as you know the virus is not generally speaking very symptom atic particularly in its incubation period and how people were set up saying they were not very effective. you could always lie in the questionnaire, nevertheless the government is trying to do something and more than it's done and it's important to be seen as doing something. one of the scares still being investigated is that of a british man who has passed away in macedonia. some say he had symptoms consistent with ebola, however, his colleagues say he was nowhere near africa. >> and in spain, actually, the nursing assistant's health has

gotten better. at least it was stable. >> worse overnight. worse overnight. in addition to that, they admitted more people in the hospital to look after them. so a total of 13 people, all asymptom atic. the government led a meeting but the watch right now spain and continue nenl europe. >> let's get more details on what we know. what we don't know. let's go to talk to a professor of yourology at warrick. david evans, good morning. >> good morning. >> can we talk about screening, we have been hearing this is a virus that's asymptom atic at first. how is this in reality going to be, this screening? >> on purely scientific grounds there aren't a good reason to

introduce screening. the first period they could travel and no one would be aware they were carrying the virus but when the symptoms develop they are reasonably generic. you couldn't decide if the patient had the flu or a cold or ebola. so screening is not entirely justified. >> is this about stopping people panicking and doing crazy things? if you were to look at the history of how these kinds of situations are managed, are we looking at a pattern of an evolution that we have seen previously? >> i think there's obviously a considerable amount of media hype and concern. we've used screening in the past. we used it in the 2003 sars outbreak. i don't think there was a single case of sars identified during that screening so it

fits a pattern in so much as the tv's it is a pattern introduced but how effective it is is another story. but the government does need to be seen to be doing something, and this is one thing that should provide some comfort to the population. what it manhunt -- what it mustn't do is we shouldn't relie on it. people need to be aware. but screening as it is being outlined will not necessarily identify people who have ebola. >> we're in a situation where many western countries including our country actually have the right protocolors in place. we have the equipment and knowledge to be able to deal with this. but the problem is that's incredibly hard to communicate. >> i think that's right. a bad news story makes for better news than a good-news story. the pictures we're seeing from

west africa is truly horrific and the situation in those countries is absolutely terrible but our country has securities to handle the small cases we expect to come into the country via planes or trains as they also have in america. >> when you look at kind of the trajectory of global epidemics, what -- how are we mapping out what is happening here? s this in a world that is so interconnected? we live in the jet age. you can get anywhere in 24 hours. is this the pattern we should normally expect? >> this is increasingly the pattern we should come to expect. with travel over the last 200 years we've seen the globalization of infections through travel and it goes back a long time to the discovery of

south america and things like that. jet travel brings this home. people can get on a jet asymptom atically and spend a week or two in the country of i canly and omat then get it. so we have to attack the country of source. that has to remain the primary focus here. we need more money and focus to tack the outbreak using the methods we understand and things beneed to apply them now more so in south africa. >> can you just kind of talk about the future. if ebola was to become endemic within west africa, how does that change the game from a vireology point of view ? >> i'm not sure we can project forward that kind of scenario.

this is a disease that has a high level of pathen gists. a large number of people die from it. whether it would ever become endemic, i'm not sure. but it would have to be the west that strides money to control this especially dentalic. i think the west would then just simply have to step up and provide more and more resources. had they done so earlier, i think we wouldn't be in the situation we are now. the world health organization has made several calls for finance to support control in west africa. the numbers that are being asked for is increasing. it was $100 million and now it's a billion and i suspect it will go higher than that. but i think with that it will be controlled and not become endemic in west africa. >> thank you professor david evans joining us from the university of warrick. let's move on. up next carl icahn sends an

open letter to oopal. find out why the world's biggest country company is not big enough for this activist. and the selloff we saw earlier on the week has corroborated today. cac and ftse 100. 1.5% is where we're trading lower this morning. ♪

>> we have a very good relationship. obviously can't tell me things they cannot tell other shareholders. but yes. i do think he is a very great listener, and look, i guess -- i criticize many c.e.o.'s and boards and i do believe one of the problems in the country is the system is dysfunctional but you also do have very good c.e.o.'s. he's one of them. >> that's carl icahn speaking about tim cook and the active investor with an open letter. he says the company is dramatically undervalued. he would say that. he's got 1% of the company. we are joined good morning. i read your note this morning. i thought that's a great way of putting it.

this is a bite-sized note. >> i think it's show boating and an attempt to get the target price of 203 is extremely punchy if not outrageous. the 12-page letter contains a lot of detail about how they get to their forecast. some of their assumptions are extremely aggressive for instance an apple product we don't even know about. >> could get some of the way there. >> he has a lot of up side. >> if some of the things happen then there's up side but equally there are a number of risks associated with the ability, for example to continue to raise i.p.'s when a number of phones are available for a fraction of the iphone. >> you come from -- are you

comfortable with where the valuation is now? >> one of the things that there is to differentiate is a great company with great predicts which apple has. and we have a very neutral view on it. neither a buy or sell on it. >> i think today we get preorders in india and china. they are expected to be good. there is momentum behind this. this is going to kind of break down momentum. is this new phone actually the phone that provides that line with another fillup? the previous carnations have been very mundane evolutions. are we actually going to see a significant step forward for apple? >> no doubt this is a fantastic product cycle yet the public have been clamoring for a larger product which they did with the 6.

particularly the tablet-sized products have done very well, so we're already seeing strong premarket orders 5 million units in china and 2 million in india. i have no doubt that product is going to sell extremely well in those countries and will probably lead to a spike in numbers. >> there's a lot of cash around, isn't there? >> you talk about the fact that it's a good company executing well. at some point it's been a brilliant company executing well. what is it not doing? is the news on this new phone enough to convince us that it's a company that's getting back its mojo or is this not? you've got a lot of cash. you can throw it to the wall and see what sticks but you have to be a little bit disciplined with that. where are we? with the couple of hiccups,

it's really never lost its mojo. to make a needle move with a company that size is really tough. when you look at the apple pay product fetishes they were to do every single credit card transaction over apple pay it would add 4% to operating profits. it just doesn't move the needle. so they have to do something which binds together the ecosystem much more powerful and pulls in new potential apple customers. they have got to sell hardware is what they have to do. >> this letter, there's not a lot of innovate thinking in there. this is kind of nuts and bolts stuff. this is buy a few shares, back. do this. work a little bit harder on that. there's nothing revolutionary in that let they're tells me that apple is going to do the kind of things that you're pointing to. >> the key to me is very

simple. an existing apple iphone owner is 90% likely to buy an apple iphenomenon the next time he upgrades but apple only gets about 40% of new takers of smartphones in the high end so what they need to do is enlarge that first time smartphone buyer. >> is it about smartphones or is it about something else? >> it's about the computer device and mobile device you carry around and its ability to get more into the apple ecosystem. then maybe commanding a more growth-like valuation. >> is it always going to be the top end or the abc ones that's going to buy this stuff? >> i think it is extremely likely that they will do this. >> do i need to think about re-rating this? as we increasingly move forward

with apple, how do i think about it as a company? is it a technology company? the known your pocket is going to become a server, and eh else is going to stick to you. you've become a fashion company then. i'm trying to re-think apple and thinking about how i think about it. >> i think it's part luxury. i think it's important to see how the apple watch does they are putting it on the front of the -- china for november so it's interesting to see how that works. they are expecting 70 million iwatch sales in 2015. i think it's a combination of tech and fashion, but they have got to sell more devices to make the share work. >> thank you. we are going to take a break. back in a couple of minutes. ♪

>> welcome back. you are watching "the pulse." let's talk about the currency market. i want to talk about the euro dollar. here's why. other classes are moving at the moment. you've seen it in the bond markets over the last few days. pick up they enough, while that chart looks fairly dramatic, it isn't. 1,2670. euro has already moved.

everything else is beginning to catch up. what we should be thinking about and how these markets are going to open in the states. >> the big one for me was yesterday morning. so we have this rally. we have forgotten about it quite quickly so twheff massive swing. what i want to talk about points of concern and a lot of people are nervous about what's happening right now. >> it points to dispersian. you start valuing things differently at this point, and i think that's quite interesting as well. this doesn't feel like a risk on, risk off trade. because -- >> there's a serious debate happening in d.c. right now, questioning par i don't know dragic's ability to do just that. >> we're getting -- john, thanks very much indeed. right here on bloomberg, we're

done with "the pulse." "surveillance" is coming up next. we have some great guests. they are going to carry on the conversation. will keep carrying on the conversation. we'll see you monday.

>> this is "bloomberg surveillance." >> the kurds may run out of ammunition defending kobane. as they make an approach west

of baghdad. growth leads to sharp disagreement between the e.c.b. and germany. and here's a partial score. icahn over -- good morning, everyone. this is "bloomberg surveillance." we're live from our world headquarters in new york, it's friday, october 10. i'm tom keene. joining me olveya sterns and adam johnson and we need more. here's oliver sacks. draghi is resident in washington and pledging to ease monetary policy more if needed. the other hand the german prime minister schaeuble is at odds with him. >> there are some parallels here for europe.