hsbc's manufacturing data in the second largest economy comes in better than expected. the focus now shifts to europe. german manufacturing data is due out. french data is dropping in 10 seconds. by 33s are indeed lower points here in london. on the dax, 0.44%. look at unilever, big mess. market doesn't like it. futures down across the board. >> we are starting to see that fear about the economy hitting the companies. we are digging into all of that. we have chinese manufacturing picking up slightly, better than expected. it for october at 50.4. that was better than expected for china. the labor market helping offset that slowdown in the housing market. what about europe, the u.s.? we have french numbers breaking now. down across the board.

we have france off by 0.5%, ftse off by more than 0.5% as well. france, you will see it falling to 47.3. contraction in france. we are expecting manufacturing to contract in germany as well. we are expecting the eurozone to see the first contraction in manufacturing for more than a year. in the united states, it is all rosy. plenty of growth in u.s. manufacturing. let's have a look at how the fx markets are doing. the new zealand dollar is trading lower, falling the most in three weeks. inflation at the bottom end of their target range. on the up, it is the dollar. pimco and big investing groups are saying it is a no-brainer, by the dollar. they say everyone is going to be buying u.s. treasuries.

if you are an international investor, the only security is the u.s. treasury. they are getting out of italy, getting out of spain, getting out of germany. that is why pimco says it is a no-brainer to buy the dollar. the germans, spaniards are putting their money into u.s. treasuries. we will be looking at all the stocks of little bit later. caroline, i am going to bring you the details of that french data this morning. miss, miss, miss. at 47.3.ring pmi services pmi at 48.1. we were looking for 48.3. the composite comes in at 48. we were looking for 48.7. that is lower of across the board, that is contraction territory. look out for the german numbers in 28 minutes. the other big story is tesco.

is earnings report shows it worse than we thought. first-half profit was overstated by 263 million pounds. the chairman is preparing to step down. joining us is sandra bernstein. bruno covers european food retail. before that, the supply chain director for tesco asia. the stock is down about 4% as we speak. 263 million overstatement, more than expected. the chairman is on his way out. do i think it could have been worse? >> it could have been worse. it is a big missed opportunity. you look at accounting, there are still many more questions open that haven't been answered. bolder. have been way he could have said, i am ready

to cut the final dividend. it feels like they have written that statement rather than the ceo getting the necessary strategy. >> is it too early to kitchen sink this? >> some amount of kitchen sinking clearly has happened. he can't just make it up in a few weeks. in terms of the direction, reassuring investors he has the right approach, he could have been bolder. >> the early morning move this 6%,ing, down by over investors are not liking the numbers they are seeing. what next? do they scrap the dividend entirely? it has already been cut by 75%. >> that is the missed opportunity. they already cut into it by 75%. clear on how bold

you are willing to go. it is too light. the questions will be very intense. similar on the accounting issues. butw people being suspended what about the senior-level people? these senior people don't really manage their own invoice. culprits, who the is the culprit on the supply side? there are so many questions. >> let's try and move it forward a little bit. before today, stocks were down. how much lower does this stock have to go? >> i think it is priced in. today's share price, investors have already concluded it is in his worst days. , they have really is lowered the scales already. u.k. can't make 1.7% trading

margin. so much depends on what they will do. the strategy was so bad for so many years. the longer he waits, the more people will just run away from this stock. >> finally, the christmas trading period. you have worked at tesco. how much time do you spend on planning the christmas trading period? >> you almost spend the entire year. at least with a 6-7-8 months preparation. the only excuse for not being very bold today. this christmas operation is extremely challenging. if he made major announcements now, he has operational chaos. he just wants to run the plans that were put in place before hand. let's hope it all comes together. beht now, i think it will

run as an operation rather than a commercial strategy. >> finally, were you surprised by anything that came out this morning? >> disappointed rather than surprised. happy there wasn't any more bad news. the chairman is stepping down. there are probably five or six things we could have had in terms of progress. >> baby steps. bruno, thank you very much for joining us. as we head to the break, one check this morning. foxton's, a profit warning at foxton's morning on a sharp slowdown in the london property sector. foxton's down 18%. ♪

flex i am jonathan ferro in london. this is "on the move."

8:10 here in london. carriers are feeling the effects of historic strikes. for her oil prices and the evil outbreak. let's get some insight. lower oil prices and the evil outbreak. let's insight. cracks -- >> the home [indiscernible] >> where are we with the timeline?

it has been reported that you are trying to get the foreign carrier permit approved. how much longer do you think that will take? >> it is a long time overdue. that shouldhing prevent us from getting this. it toward theet end of this year. youf you don't get it, are beginning to develop some alternative plans? have -- we can fly as much as we want to into the u.s. need that european air in order to fly into asia and south africa. we can't fly east and west if we don't get that approval.

needed, note it is to fly into the u.s. >> talk to me about the oil price. talk to me about your hedging strategy. youmuch or how exposed are to a lower oil price? philosophy is, we don't hedge on high oil prices. [indiscernible] so when the oil price is falling like it is now, then we are starting to hedge. position with the current oil prices. the norwegian krone has come under a lot of pressure recently. is that offsetting any of the benefit you are seeing in the lower oil prices? >> [indiscernible]

we have benefit in other ways. we are a stronger competitor against others. >> talk to me about the industry right now. ryanair bought a lot of planes. easyjet has done much of the same. can you compete in this space right now? compete really well. in london, we utilize easyjet as an operator to our long-haul network. it is very good for passengers as well. attractive andry

higher volumes. one should also take into [indiscernible] >> just a final question. travel stocks in general have come under a lot of pressure in the last month or so. a lot of fear around the ebola outbreak. do you think that is overdone? >> we haven't seen much of that here. it will not have that much affect in the future either. ok, thank you very much for joining us this morning. kjos.s jornbjorn

we are getting data from all across europe this morning. first is german pmi followed by eurozone bmi. at 9:30, we get u.k. retail sales. lloyds, both and lower. we will have details on all those stories. we are back in two. ♪

>> welcome back. nearly 20 minutes into today's trading session, equities lower on across the board. ftse 100 down by 75 points. the dax down by 1%. disappointing data out of france. german pmi in about 10 minutes time. for now, let's get over to caroline hyde. >> i am afraid it is red across the board. i am kicking off with tesco. many called it higher on the back of those numbers we got today. profit was slightly better than expected. still down 41%. like for like sales have been slightly better than feared. they were down 5.5%. it seems the exit of the chairman is not enough to give any clarity for any feeling that this is an out and out change. we don't get any idea of what the full-year profit will be. many analysts wanted to see

that. from thatd clarity overstated profit. 263 million pounds more than expected. culprits and we still don't know what will happen to the eight executives who have been asked to move aside while that investigation is ongoing. tesco, currently the worst performer on the ftse 100. unilever also trading lower, 3.5%. maker of dove soap. emerging markets not looking so pretty. it gets more than half of its sales from the likes of india and indonesia. they are seeing slowing sales there and the worst sales numbers for unilever on a quarterly basis in five years. that stock on the way down. i finish with foxtons. check that number out. down 18%.

since they sold shares back in 2013. down the most ever. how the mighty fall. we were talking about the property bubble. it seems to be crashing back down. they say the slowdown has got to be contained. you have a mismatch in terms of what people are willing to sell at and what people are willing to pay at. mortgage is also a little bit harder to come by and political and economic certainty in the haven of u.k. property. they say there is a stark slowdown. back to you. >> what a turnaround. unbelievable. a big beat this morning for credit suites. shares lower a touch. we are down 0.4%. how much can you read into that?

markets editor manus cranny has more on the results from the bank's headquarters in zurich. you just spoke to ceo brady dougan. is he a happy man? >> he is a lot more relaxed. carnage passed away. suisse,ook at credit they have passed the worst of their litigation. the numbers are good, volumes are up, transactions are up. this is a ceo trying to keep everybody happy. just looking at private banking and wealth management. b doing cracking lee well. much better. wealth management had a disappointing quarter. wealth management, 943 million swiss francs. not earning enough. it is about margin, margin, margin. you can have all the millions in the world but you need clients

to trade. the ib is doing well and that is keeping people happy. getting the balance right is a big issue for brady dougan. he did say he was interested in small acquisitions. not big blockbusters. volatility is a good thing. they can't carry inventory anymore. liquidity is also an issue. backtracking,to this man is an investment banker to the core. i couldn't even pin him down. have a listen. >> we have different parts of the world in different modes in terms of growth and perspective growth. i think we are going to continue to have a very uneven global environment for some time. the different countries, the different interest rate regimes. i think we do believe that we are going to continue to see growth in the markets and i do think we will see some normalization in interest rates.

the question is how long that is going to take. i think the view is that that is looking like a fairly distant -- >> you have been around a while. you have got to give me something. >> i think it is hard to tell. the last few weeks was a bit of an overreaction to fears on growth. i think we do continue to be pretty constructive about the economic backdrop around the world. i think that will overtime filter through. bit of anere was a overreaction but we will see. >> the pension fund is safe. overreaction. that is according to brady dougan. you can pick up in his conversation a little later on, he said there is liquidity around but it can't carry inventory. it means less volatility. that is good. there is other new areas of liquidity apart the banks.

that was the most insightful piece of the conversation. less worried about liquidity. that balances the loss of the investment bank. back to you. >> i think it is fascinating, this story. you sat down with them and six months ago and you listen to some people calling for brady dougan to step down. tell me about the atmosphere in the room. is this man calm, optimistic? >> i think he is a ceo that was in much better form than many occasions. there is a different atmosphere. let's be blunt. you have a product. the product works, the product sells. you trim back the staff, you have the inventory. you have a little bit of volatility. csfb is the core of what

trading is. the product works. milk it. if there are less people to go to and they want to come to you, take them. it won't last forever. there are structural problems in investment banking but if you get volatility back, you are not running too much risk and you manage to pick up on those moments where things are good, great. if you need to review the business at a later juncture, that is called efficiency of capital allocation. the atmosphere was good. brady dougan was in good form. the team around him, very comfortable. i enjoyed the conversation. >> thank you very much. big beat at credit suisse. down 0.2%. the market in general is lower. the ftse down by over 1%.

after the break, we will get the latest german pmi readings. look out for that. you are looking for 49.5 on manufacturing. we will bring you that next. ♪

>> welcome back to "on the move ." it is time to get straight to that german data. atman manufacturing comes in 51.8. we were looking for 49.5. services pmi is a mess. 54.8. we were looking for 55. the composite is a beat at 54.3. we were looking for 53.6. decent numbers across the board. the composite is a beat. you compare this to what is happening in france, it is a miss across the board.

contraction, in 47.3. --vices in construction, the in contraction, the composite in contraction. germany was going to start struggling, you don't see it in those numbers. quick check in on the euro, euro-dollar trading lower. now, a nice little pop off the back of that beat on the german composite. can we stay lower on the day? let's get straight out to my colleague in berlin. hans nichols, decent german data. ofl that get rid of any those concerns that people have right now? >> no, because it is just one month. if we see multiple months, and we get gdp in about three months , the composite figure is not only a beat but it is higher than it was last month. same with manufacturing which

was negative last month. in some ways, these numbers bring us back three or four months ago when germany seemed to be really expanding, when the rest of its neighbors were showing signs of slowdown. last month, we had the bad number for germany. there was a little bit of concern that germany couldn't hold out, couldn't whether the rest of the european storm. this number may give an indication or some confidence that germany is doing strong. you put it on the back of the daimler numbers. daimler had a strong beat. maybe the manufacturing sector here in germany is weathering the storm and will emerge won't see a we technical recession when we get gdp numbers in november. it could show negative growth. >> thanks very much for that. i want to bring in some investor perspective with rick lacaille.

he helps manage $2.5 trillion of assets. great to have you here. there is so much talk about germany falling into recession. eight is only one month but does that soften some of the concerns you might have had? >> if germany is weak, we have a very big problem in europe. we have a number of different data points. china wasn't as bad as people thought. we have a weak euro that is going to help the eurozone. we have a week oil price. the last quarter gdp could be a that will continue to weigh on investor sentiment. thisat is the time lag for lower oil price, this weaker euro, to start feeding through to the german manufacturing sector? will really happen

when you have management commentary on third quarter results. more of a forward-looking statement. they are slow burning issues. that turns out to be permanent, that is a significant change in terms of potential for consumption and profitability. one data point, a whole series of weak data points from germany. i don't think anyone is popping champagne. data concerns the trajectory that france is on and it is not a good one. >> the pressure is building in france politically because of that week data. it is very hard to see what the catalyst is for france. france isn't in a recession. it is not a sharp fall off.

it is never really bad but it is just week. >> it is a slow grind all of the time. i think what is interesting the last couple of months is this conversation of germany sliding into recession and somehow changing course on the physical side of things area -- side of things. angela merkel has a very high approval rating. that could change course. >> there may be no need to do that. takenk the idea they will strong fiscal action might be a little misplaced as well. reforms are a very slow process. it is slow burning like a lot of things. there may be more about minimum wage in germany and whether labor gets a larger slice of the pie. n equivalenta beneficial effect.

that can have a positive effect on the periphery. >> talk to me about last week. at one point, people were talking about swinging up, down. thinking this was an opportunity to get back in? >> we didn't buy equities last week. we were watching it like everyone else. volatility had been low. it went up much higher than we thought. we had been in euphoria mode for 14 straight weeks this year. almost the crisis mode within six or eight weeks. we have seen some extraordinary changes. we don't trade on the short term on the back of those very rapid moves. >> how are you set for the next 12 months? >> we are risk on. in some portfolios, we use

volatility as a tool. we use the fix or the equivalent in portfolios. but we are not allowed to do that in too many portfolios. we still see equities as offering reasonable value. we see the macroeconomic environment as ok. we have a lack of hard landing in china. reasonably good growth in the u.s. look sustainable. europe is a little bit of a weak spot. debate overa huge fiscal policy and monetary policy at the european central bank. a rumor, a whisper, any speculation? >> i think credit easing has been a very effective tool. the policy has worked in keeping spreads very tight, which is essential to get business moving again. there are legal and

constitutional challenges that are still being worked out. morewe would like to see activity in terms of quantitative easing in europe. would like to see the triple whammy of structural reform, fiscal expansion, as well as qe. as investors, we are not optimistic that we are going to see that triple whammy. >> what kind of sense is there around monetary policy at the moment? the new room has been effective. they want to expand the balance sheet i trillion euros. can they do it? political construct, not a technocratic construct. the questions are still very much in the forefront. implacablere is an

sense that reform needs to take place before you let the purse strings open anymore. reform in the periphery primarily. i don't think that is going to change. the notion that we are in a deflationary period and we have to take stronger action, i don't think is well recognized in germany. i think there is an alternative hypothesis in germany that this is patchy. thatave some countries have a little internal devaluation that needs to take place to regain competitiveness. >> what does this mean for sovereign debt? i have heard some great calls this week. einhorn saying it is time to short french debt. would you stay away from it because you think the rally is done? perspective, it is good to think about the divergence. it is already coming when you have u.s. treasuries looking like a relatively high yield

compared to others around the world. 2015 will be a further year of divergence. on what is happening within the periphery, it may be a mistake. it is too binary. some of those position taking opportunities are interesting but the politics are too unpredictable. >> when you look at the market, the spanish option disappointed. money thatulative has been going against greek debt and spanish debt starting to sit these auctions out now? >> you have seen spreads in other areas become more attractive. they will look at other things like u.s. high-yield. the u.s. economy is looking like it is on a sustainable path. there has been a correction. maybe there are opportunities that are more visible than some

of these politically entangled opportunities in europe. do i start to worry about the more illiquid markets in the high-yield space? think the liquidity premium, you may not be rewarded for. visibility of the corporate sector is more attractive than the potential lack of visibility within the sovereign market. >> lacks question -- last question, the next 12 months? >> i think it is a risk encore. last you had said that week, it would have been a huge call. thanks very much for joining us this morning. let's check in on shares of daimler. profit up 21% but the shares are not showing it. we have more on the report from berlin. another stock taking a hit, tesco. the story of that is even worse

than we thought. we have more on tesco's troubles later this hour. stay with us. ♪

i am jonathan ferro live from

london. this is "on the move." the hsbc china manufacturing pmi data rose in october. the reading jumped to 50.4. the reading comes after chinese growth data swelled to its fullest level in five years. the u.k. independence party is on track to gain its second seat in parliament next month. a new poll shows mark reckless has 43% of the vote in his southeast england district. the eu plan to set rules to break up some of the 30 biggest banks is at risk of being scaled back. according to a document obtained by bloomberg, italy submitted a list of options for overhauling the bid. italy hopes the rotating presidency of the eu will have

10 other countries challenge the proposed rules. with company news, daimler posted a 21% increase in profit last quarter. part byn large deliveries of one of the top-of-the-line models. hans nichols joins us now with more. a man that drives mercedes. >> they are top of the line. class goes for over a million dollars and it is the s class where sales have doubled. the stock is down just about 1%. not sure what that had to do with these earnings results which looked pretty good. they beat analyst estimates. operating profit up 21%. that brings us to almost 2.7 9 billion euros. it was around 2.5 billion euros last year. crucially, profit margin is

8.5%. they are close to getting to their goal of 10%. said, ourat the ceo strategy is paying off. we look to the future with optimism beyond the full year. is toal for 2014 significantly increase operating margin. that is up from 7.9 billion euros last year. these are remarkably good numbers. mercedes is on track. they are gaining speed and profit margins are improving. >> give me an update on the race that matters in germany, the race would clean -- the race between mercedes and audi. who is in pole position right now? >> bmw still has the lead. mercedes is still in third place. here is the interesting thing. in september, mercedes overtook audi. that is just for september sales.

mercedes is about 13% up this year. bmw is around 9%. audi is in the middle. mercedes seems to have the momentum. i am going to give you one figure about china. the number of dealerships, the number of sales, last year they sold 250,000 vehicles in china. this year, they are expecting to sell 300,000. a remarkable story. models and more dealerships open in china, china is going to be one of the engines for growth. >> great work, enjoy the drive home. thank you very much. "the pulse" is coming at the top of the hour. i am joined by guy johnson for a preview. >> at the top of the hour, we get pmi numbers. you talk about it earlier.

horrible french number and much better than expected german number. you are looking at a story where one of the best selling books is about the disaster that the economy is. there is an amazing battle shaping up. commentary between those two, just breathtaking in political terms. we will talk about that and what is happening in the corporate sector. bad news from a number of corners. tesco, you talked about that. unilever, probably even more interesting than that. fascinating. you can link tesco and unilever. and then the foxtons story. is about the eurozone slowdown, i am struggling with that. i listened to a bunch of hedge funds and private equity managers. they are all down on next year for the u.k. they are taking what happened in

scotland and the economic slowdown and extrapolating it into the wider u.k. with the potential for a vote at the general election next year. really fascinating stuff. it is going to be an interesting couple of hours. and we are talking about the fiscal cliff. >> amazing. i am looking at the share price over the year. they have already taken some big punishment. today was not a big surprise. the story behind it, big story. as we had to break, let's check in on tesco shares. the company unveils their earnings this morning. they shed light on a massive private -- profit overstatement. stock is down by 5%. the chairman is out. they give us know forward guidance for the rest of the year because of limited

visibility. this is the damage done year to date, down almost 50%. they haven't even kitchen sink it yet. we may not get that until next year. for more on that story, stay with us. ♪

>> welcome back to "on the move ." here are some companies on the move this morning.

profit at credit suisse more than doubled in the third quarter. second-biggest bank posted a net income of more than a billion dollars, beating analyst estimates. set to announce 9000 job cuts next week. the bank will outline the layoffs next tuesday when it releases third-quarter results. the moves come as more customers shift to online banking. foxtons shares have taken a big hit, down more than 15% after the company said it expects full-year earnings to fall and a significant drop in transactions. also bad news for crisis-ridden tesco. a big fall in the first half sales. caroline hyde joins us now with more. there is so much noise, so much

news this morning. what are we hanging onto? why ask the key is the overstatement of profit is worse than expected. it is in excess of 263 million pounds. not getting any clarity in full-year guidance. many analysts have been hoping that we get some sort of clarity. culprits, what will happen to those executives that are moved aside while the investigation is ongoing, no clarity there. no clarity on full-year guidance. we saw trading profit down 41%. we are getting a redesign of strategy by dave lewis, the ceo. but what strategy? the silver lining, we are getting a clean slate in terms of management. we are going to get a new chairman.

also, some silver lining if you are looking at the numbers area they are not as bad as expected. 5.5% drop in like for like sales, thought to be worse. you are seeing investors and analysts struggling. >> a lot of people see this as a missed opportunity. stock down by about 5%. we will bring you more on that story over the next two hours. let's look at european equity markets. lower across the board, down by about 1%. we are off session lows. ftse 100 down 0.7%. the dax almost flat. german pmi better than expected. some concern about the french pmi number. that dip in the euro is off the back of disappointing french data. plenty to discuss.

that is it for "on the move." talk about to disappointing french data, you can follow me on twitter. ♪

>> tesco's chairman checks out. this as the supermarket confirmed that its profit overstatement is bigger than expected. >> we anticipated a slowdown but not this much. as words of unilever's ceo asia takes a big bite out of the numbers. expecting profits to drop on a sharp slowdown in the london market. gooor