anna: the unreliable market settles them. a new reporting schedule from the bank of england's mark carney. the rate decision, minutes, and forecast released on the same day. the canal opens it's a billion-dollar extension. can the new route service fortune among global shipping slump? in german sportswear giant reports its earnings as it acquires a fitness app maker. will it help it chased down rivals? we bring you the numbers.

a warm welcome to the program -- you are watching "countdown." i'm anna edwards. we are waiting for several earnings this morning from the mining sector, and earnings from merck, the german drugmaker -- the oldest of europe's drug companies. we will be speaking with the merck cfo later. we will talk about how they are rebalancing the business, trying to make up for the fact that their multiple sclerosis drug is increasingly under pressure. you will talk about m&a in the pharmacy sector, and the value they can derive from their partnerships. they are trying to revive fortunes using partnerships such as though with pfizer.

we will talk to him about that. the share prices are doing too badly. a couple big interviews we need to tell you about this morning -- we will get a gauge of the mining sector and commodities from a couple business chiefs. i will be speaking to mark bristow in his first interview of the morning at 7:00 london time, and jon ferro will be speaking to -- in his first interview of the morning around 8:40 u.k. time. plenty to watch out for here on count "countdown." it will be interesting when we talked to mark bristow about what he takes the price of gold we need to see that will work for the sector. a few months ago, he talked about how if another $50 phil from the price that would make the industry toast.

since then we have lost more than $50. we will talk to him about that. we are just getting the numbers from merck, from the pharmaceutical business in germany. total revenue coming in at $3.2 billion, in line with estimates. their earnings before interest, excluding various items has come in just ahead of estimates that 899 million euros. net income came in at 343 million euros, eps ahead of estimates. some decent earnings in their second quarter. we will get back to that a little bit later. markets are lower in today's sessions with eastern emerging markets feeling the heat of a possible fed rate hike in september. that's the whole story -- that's not the whole story, with a different story coming out in japan. let's get to david ingles in japan. david? david: a very good morning to you, anna, from asia.

we do have two separate stories here playing out quite clearly, when you look at this map of the equities the session. every single market, india and japan lower. we started out ok, but once you had hong kong and china open up that is when things started to become clear what the trading scene would be. we are just getting out of bond prices. yields are on their way up again, fairly well anchored expectations. the fed may move, and that is playing out across the market. we are seeing money flowing out. southeast asians are currently getting hammered, getting multiyear lows. they haven't been seen since the asian financial crisis, 18 years ago. japan -- let me focus on that. earnings are seeing a week rise.

the nikkei dropped 6/10 of 1%. we are basically headed for the highest close, if things and say the way they are since 2007 basically since the global financial crisis. that is the topix index for you. a few points above 1800. a few things -- australia is being sold off right now. amz saying it has to raise money , so there is speculation given these new requirement of the financial regulator that other banks may follow suit. that's the story so far in asia back to you. anna: thank you very much. david ingles joining us from hong kong with the latest. it has been a choppy session over in asia.

today has been called super thursday -- for the first time the u.k. bank is to released of interest rate decision, it's minutes, and it's inflation report all at once. it's part of mark carney's push for more transparency. let's head over to england, to nerjra. nejra, take us through what's happening later on today. nejra: what a big, itan exciting day -- there's never been a day like it for any central bank. what the bank of england has done before is release rate decisions and the minutes a few weeks later, that would explain the decision in more detail than the inflation report somewhere in between. today, all those three pieces of data are going to come out at the same time, at noon london time. than investors, the public,

journalists will have 45 minutes to digest that before mark carney delivers a press conference at 12:45. this is part of his push for greater transparency, and we have been building up to this moment, as mark carney said saying that the time for tighter monetary policy is approaching. that is what we are waiting for today. anna: as investors get ready for what seems to be a working lunch, what are the key things to look out for? nejra: it will be a lot to digest -- a day lucia data. there are some things to look out for -- the vote of the monetary policy committee in the minute. the nine members will have to see whether we get any dissenters voting for a rate rise. so far this year everyone has you voted unanimously to keep

it at a record low, but economists we surveyed -- the great majority say there could be as many as four dissenters. the number and who they are, that will be key. then investors will be looking closely at the inflation report particularly medium-term forecasts, two and three years and also with the bank of england says about wage growth in the u.k. in may, wage growth was fastest in five years, and that is a key thing in talking about the labor market. finally, we will be looking for mark carney's press conference the nuances in what he says. when the data is released at 12:00 in that 45 minutes between that and the press conference, he might be able to tweak his message. we are likely to see quite a bit of volatility around that release at 12:00. at the moment, the market is

expecting a rate increase in may. anna: nejra joining us from outside the bank of england. we will be covering their announcement in news conference starting from 12:00 midday u.k. time. we will have all of that for you first thing. stay with us for the start of all of that. that brings is nicely on to our twitter question. with a trifecta of data due, a trinity of data releases, has the "unreliable boyfriend" mark carney decided to settle down? #superthursday #boe. part of the argument for introducing this change is a better communication strategy with investigators.

or transparency -- is that going to be the result of this? let's move on. as well hollande and vladimir putin are to be amongst the vips in egypt as the country celebrates the opening of the new canal. it has taken just one year to complete extension and the government hopes it will bring billions of dollars into the depressed economy. guy johnson is in cairo in joins us on the phone. good morning. what is being unveiled today? guy: hi, anna. it's a second lane for the suez canal. it has been around for about 150 years, and about a year ago, the president decided he was going to try and double the amount of traffic going down it. we had 72 kilometers of the second line a two-way highway of the suez canal. it has taken around a year to complete and at one point, 80% of the worlds dredging machines were here in egypt.

now whether or not we see doubled in number of ships actually using the canal in the future remains an open question. the government has some very demanding expectations of what this canal deliver, but with china slowing down, question marks our surrounding the numbers. security is incredibly tight. the canal borders this and -- so security is incredibly tight, which is why we are still in cairo, trying to get access to the site. president morsi was overthrown back in 2013, and ever since then, they have been fighting in the sinai. the government is really building up to this opening and hoping it will solve a lot of the problems that they face economically and politically. anna: the logistics and security concerns are making things tricky. they are calling it a gift to the world -- is it a political

story for egypt or a political n economic one? guy: i think it's a bit of both. it is a military government whipping up a great deal of fervor surrounding the canal. back in 1956 when the president nationalized it under the british and the french and sparked the suez crisis, ever since it has been a huge potent symbol for the egyptian people. i think it probably works as a way of securing the government, generating popular support. but this is an economy that has been incredibly depressed and has been over the last few years. he certainly needs, the president, some economic wents, and he's hoping -- some economic winds, and he's hoping to create an industrial zone around it which will create hundreds of thousands of jobs.

again, the question marks surrounding the economic numbers definitely exist. there is a long way to go between opening the canal and delivering it for the people here in egypt. they needed some sort of economic growth they need something to happen, and they hope that this will be the spark. anna: thank you very much. guy johnson on his way to the suez canal. 13 minutes past 6:00. coming up on "countdown" tesla was down as much as 9% in extended trading after cutting its full-year sales forecast so what is troubling the car company? ♪

anna: welcome back. it 60 minutes past 6:00 here in london. here are the stories you need to know this morning. the bank of england will announce its august interest rate decision together with minutes of the meeting and the

quarterly economic forecast. this is the first time the central bank has scheduled a simultaneous publication of all three of these data component. mark carney believes this will make the decision making process more transparent, accountable, and predictable. aviation investigators say the debris that washed up on reunion island is missing from the malaysian airline plane. is the first physical evidence found. the malaysian prime minister made the announcement, validating there is that it crashed in the indian ocean in march of last year. >> it release the uncertainty -- and releases the uncertainty for the families. however tragic and painful but at least it brings certainty to the families and loved ones of the 239 people on board.

they have our deepest sympathies and prayers. anna: where capital management has been purchased for $5.6 billion. the holding amounts to seven and a half percent of the company. the wall street journal reports that they have to grow faster and cut costs. egypt is showing off its $8 billion suez canal expansion, which offers an additional lane, along path of the vital shipping channel. the project has been completed to years ahead of schedule on the orders of the president. here's a look at the expansion. ♪ >> it's one of the most important trade routes in the world. 150 years after it first opened, it is expanding.

back in the 19th century, the suez canal took 10 years to build, thousands of workers lost their lives and the link allowed ships to travel between europe and asia without navigating around africa, saving time and money. about 8% of the worlds cargo passes through the canal according to the egyptian state. the suez canal authority says the expansion will help capacity but it hasn't said how it will recoup the $8 billion is spent. perhaps an even bigger problem, shipping has dropped to percent since the global financial crisis. according to analysts, global trade volume would need to rise by 9% per year to reach its traffic goal. anna: let's get more on that story. our next guest says the suez canal is still hugely important and pension funds.

is is tony foster. thank you very much for joining us. let's start with the basics -- you take issue with some of the stats in that report, in terms of the troubles that face the shipping industry. how tough is it been? tony: it varies per sector. the shipping industry as many markets, and they all have their cycles. one of the most misunderstood charts is the one that you often show, the baltic index. anna: i have it sitting right next to me. tony: the issue with the baltic index is that it describes what happened yesterday in the stock market. it doesn't describe anything to do with long-term activity, and it doesn't show you that global trade is essentially always increasing. and if trade is always increasing, you always need more ships to service the trade. anna: but the price of that -- it may betony: the price may be

different but the volume is the key factor. if trade is always increasing you always need more ships and the suez canal, in theory, will have more activity. anna: we have 35 years on the baltic index. not a good gauge, really. tony: not a gauge of returns. anna: egypt is calling this extension to the suez canal, two-way traffic, they are calling it a gift to the world -- is it a gift that the world asked for? tony: i'm not sure the world asked for it, but it is possible that the world may needed over time, given the expansion that we just talked about. the question of the suez canal is really related to its charges. if you have a ship that is going east-west or west-east, you can either go through the canal or you can go the long way around around africa. that is quite a cost. it simply a question of how much they charge. anna: it's a measure of how much

-- they must keep in mind the different insurance indications. at the time that we were seeing a number of pirate attacks on the coast of somalia, some shipping companies were taking the longe ro route. how much of an issue is that still? tony: it remains an issue in the says that ships traveling southbound do take security measures, and they are very expensive. you're talking six-figure sums anyway for a single passage, in addition to your normal suez canal charges. it's quite a big number. anna: what about the various parts of the shipping complex right now? the types of ships and various sectors? where are you investing -- where do you see the best return? tony: it's a question of technicality. shipping markets are highly cyclical. therefore the best place to

invest is where prices are low and prices are most low in the d ry boat business. anna: are you interested in the oil sector at all? that easy the changing nature of oil production impacting the bigger players? tony: impacting their genetically, both in terms of the future outlook for crude oil and the future outlook for lng, and the interaction between the two. the lng is due to come out in the next 10-15 years, that's absolutely enormous. but at the moment, you'd lose your ship. you have to balance that out. anna: are you buying ships at the moment with interest rates so low? tony: yes. anna: you are. tony: we are. anna: thank you very much. tony foster. tesla fell as much as 9% in trading after the carmaker act off it's forecast. caroline hyde is here with more. good morning.

caroline: the luxury electric carmaker is disappointing, not only in terms of the full-year forecast but also the production they are going to be ramping up. let's dig into the numbers. this is what really got the share price hammered yesterday in after-hours trade -- the four-year sales target will no longer be 55,000 per year, but 50000 per year fo rth r the model s and x. 5000 -- what is that? it's not a big deal, but it did raise eyebrows about the longer-term ramp-up. when you are looking at the run rate for next year, 2016 production not only you be producing 6000 per week -- elon musk is saying that we don't want to set too high expectations we want to feel

like winning is waiting. he said, we could committed 2000 production per week is aspirational he achievable? yes. do we wanted to be? no. they are reeling back expectations. notably, he left the door open for more money to be raised. this is a company that burns through cash. he's investing not only in the cars, but you remember that bigger area? is takes investment. $159 million in the last quarter, or even more. at the moment they are satisfied. they said he wouldn't overrule that she wants to leave the door open, basically. let's look at the stresses -- why these production issues? it's all about the new model, th eme model x. there are supply concerns coming in about the suv. they will begin delivering in september.

the supply concern here is that it will go on sale in september but it's very difficult to make. overall, this is the most difficult car to make in the world, they believe. the issue is that it not only affects the model x, but if there is any concern, it also hits the model s, the one i have artie been selling. the key challenges they say are the seats, the second row seats, but they are on track to deliver by september. let's focus on the positive -- this is elon musk, a great thinker, the great idea maker, and he is still optimistic. they say they are lowering the bar but they are still confident that they will make half a million cars by 2020. five years ago they only made 600 cars per year and now they say they make 600 cars in three days. they will be cash flow positive by 2016, the gigafactory online,

and competition. anna: thank you caroline hyde. when we come back, how are they doing in chasing down nike and other rivals. ♪

anna: welcome back you're watching "countdown." it is 6:30 in london. there are the stories you need to know. egypt opens its new suez canal extension today. the $8.2 billion operation has been completed two years ahead of schedule. it's the first of a series of megaprojects announced by the president to transform the country. the bank of england will announce its august interest rate decision together with announcing the minutes of the discussion and quarterly economic forecast. if the first time the bank has

scheduled a simultaneous publication of all three elements. mark carney believes this will make the bank of england's decision-making process more transparent, accountable, and predictable. we are getting earnings coming through from adidas, the german powerhouse in the sporting arena, concerning their forecast. we are waiting for the numbers -- i have a chart behind me of adidas share price over the last five years. you can see the tough challenge they face over the five-year period. one of the focuses for the company is what they can do about the unit that has been under pressure. they are trying to catch up with some rivals on the u.s. side also a big issue. we are waiting for more details to come through. second-quarter numbers or do any moment. we have hans nichols waiting in the wing. hans, good to see you. take us through what we are expecting. hans: well in terms of the numbers, one of the things --

last quarter they had those world cup sales, so second quarter of 2014 at strong numbers. they also have to contend with the big exposure to russia. that may be offset by the strong dollar. the challenge, the golfer adidas -- they lay this out in their most recent strategy -- to increase market share. the problem is they're up against nike. if you look at 2014-2015, they have lost market share just a little bit. that is one of their challenges. their strategy is to focus on six different cities trendsetting cities, push forward their -- new york, shanghai, etc.. not, however, berlin -- it's hard for me to imagine why a german company wouldn't make berlin he trendsetting city. they also want to get into basketball. there are reports that james

harden, of the houston rockets they consider a $200 million deal. it would be a 13-year contract. you get any sponsorship battles that cost a lot of money in that can drive up sales -- that is their goal. we will see how far they are. ann? a? anna: we have gross margin coming in at 48.3%, just below the estimate. the revenue number is coming in at 3.9 one billion euros, just ahead of estimates. missed the estimates it seems. just last night they acquired a really interesting mobile app. they are taking a leaf out of other business sectors, buying into these fitness apps. hans: this one is called runtastic. a bonnet it for 220 million euros. they are a little late to the game -- nike is big and watches and apps but under armour

really get that adidas's challenges. they want to go after that. under armour is challenging them from the bottom and they last year went on a shopping spree for apps and bought $560 million worth of fitness apps. is the challenge -- are they going to the issue where company, and apparel company? one quick note on adidas -- a newspaper is reporting that within two years, you can get adidas shoes for you on site. spoke shoes. anna: that sounds very advanced. i did it give you and i thought of this morning's transaction to buy runtastic. they say gives them the opportunity to get a highly engaged athlete user base. hans: superior.

anna: i'm very modest, obviously. thank you very much. let's talk more about the bank of england. our next guest says today's inflation report is likely to signal more tightening in the markets expect as the next rate hike approaches. he's the head of rate strategy, lawrence martin. lawrence, great to see you. ask for coming in. when are you expecting a hike? there's not a great deal of conviction when you look at percentages. lawrence: the percentage has been growing over the past 24 hours. we think the most likely time is february. obviously, governor carney mentioned that the turn of the year would be the time he would think it was right. so rather like in the u.s., we

know that the market has tended to take a very dovish you of when the stock might fall -- a very dovish asview of when the stock might fall. we will have to see what they come up with from all these different ways of communication. anna: a trifecta is due at high noon. we have been flagged by the unreliable boyfriend in the past. he got this me because the markets were a little bit confused by what he meant sometimes. now we get this trinity of releases on one day. the idea is that you can get a more consistent, easy to understand -- is this the end of the unreliable boyfriend? lawrence: i think they probably did inc.think that, but we had a softening of the economy. central bankers -- yes, it would be helpful, and obviously this is one reason the bunch the information -- it would be

helpful if we had one clear, consistent message, rather than a drip of nuance. anna: tell us what you think we will see in the minutes in terms of voting behavior. there has been a lot of talk about how many dissenters we might see. lawrence: the market thinks too that they will vote for a hike. the question is how many more and who? if there is another one, it would be interesting to see if it's david miles, is about to leave the mpc. that's less significant going forward than someone who wants to stay on. there may be another, i suppose but i think more than four would be a shock. anna: are you prepared for shock, given the different nature? this is something quite unprecedented for the central bank to release all this information in such a real-time way. particularly the minutes of the

meeting that has only just happened. lawrence: that's not a role you would envy. i think -- look, it is a new way of doing it, but it's not like what they're communicating with change very much. for me, one of the more interesting questions will be from the minutes, not just the number of dissoidents, what really happens is that the bulk of people will presumably change their mind at the same meeting. i think what will be interesting in addition to the number of people, is what of the is the tone? how close are they? anna: we had an interesting conversation yesterday at this desk talking about whether cover for the fed would be something that the bank of england would like, even though they say they have to manage the

u.k. economy based on the data that's in front of them. if they see the fed move in september, witnessed the market reaction, that plays into what the bank of england does? lawrence: for the bank of england, may, before the u.k. market definitely. we saw that before as we got the big selloff in anticipation over the u.s. rate hike which turned out to be a bit previous. the front-end of the u.k. -- very strongly as well. i think that shows you how connected the markets think the two are, even though they are really not waiting on each other. anna: thank you very much. lawrence stays with us. you can weigh in on this conversation on twitter. today's question of the day -- as the unreliable boyfriend mark carney decided to settle down? you can find me on twitter

@annaedwards. it's a slightly unfair label that he was given by many in the media. anyway, that's our question. what difference does it make to your day, this super thursday? egypt is reopening, extending the suez canal with the multibillion-dollar makeover another global trade route is gaining attention. we will tell you about the world's longest railway. stay tuned. ♪

anna: welcome back. 6:43 in london. here are the stories you need to now. dita second quarter revenues the estimates, sales came in at 3.91 billion euros. london's ctf is to be put up for

sale. the us-based global infrastructure partners have decided to sell the airport. they say it could fetch as more uch is 2 billion pounds. barack obama took on credits of the iran nuclear deal as he sought to bolster. congressional support for the deal. in a speech he said that it is publicly supported by every country in the world except for israel. >> israel is not just the best choice among alternatives this is the strongest nonproliferation agreement ever negotiated. and because this is such a strong deal every nation in the world that have commented publicly, with the exception of the israeli government, has expressed support. anna: on the day that egypt

reopens the suez canal with the multibillion-dollar makeover another global trade route is getting attention. the world's longest railway is opening new opportunities between western europe and china, and it is satisfying the chinese appetite for global taste. >> all the board the silk rail. this trade links it to the iberian peninsula and it carries the very best of europe. as william shakespeare said sharing is the most famed bottle. today it travels all the way to china. spanish wine and olive oil are also among the products tested for wealthy consumers in china. >> we offer these products are popularized spanish culture in spanish cuisine. after they arrive in china, we find agents to help us distribute them to raise their image. >> the european trade link is

key for china in its economic development. previously, the only regular route service ran only as far as germany. is longer link cements china's largest trading partner outside the eu. the journey is almost 13,000 kilometers across eight countries. it takes between 18 and 21 days 10 days and shipping time saved, and poses less security issues than going by see. >> the route passes of extremely sensitive areas, such the straits of malacca. china depends on stability, and it's these places of destabilization that will have a negative impact. >> the trade-off is the price. it's estimated that putting a container on the train costs around $5,000 more than taking it by sea. some might say that is a small price to pay for spanish sunshine in the bottle. anna: traders have never been

more convinced of a september rate hike by the federal reserve. the chances of an interest rate increase have reached 52% in yesterday's trading session, after just 38% two days earlier. what fueled the change of heart? i'm joined by lawrence matkin. lawrence, let's continue our conversation about global rates. what fueled the change of heart? comments by dennis lockhart? lawrence: we had a couple press articles, but more importantly we have the event -- payrolls. seeing as the fed has told us, they are data dependent and we are data dependent. if you think back to the first rate hike of 2004 but really sparked it was a surprisingly strong payroll number. that surprisingly strong payroll number was nearly 100 base points in two years in the run-up to the rate hike.

i don't think anyone's expecting that kind of size of reaction. i don't think anyone was expecting that strong the payroll number. payrolls unpr are unpredictable and they have been dovish in their expectation. i think they are pricing a bigger chance. anna: and into the next question in two parts, if you could -- what are you expecting right now from the fed in terms of when they move, and how strong or weak a payroll number would you need to see to change that view? lawrence: our expectation is december. earlier in the year was september, but then the soften -- i guess -- consensus is what 225? above 275, that in september when come very much into play again. around the current level, i think -- the pricing around

september looks right, but i would say this. think about 2004. what happened was after the payrolls number, by the time of the hike, the fed had prepared everyone. when you speak to investors about expectations, there is a massive diversity of opinion on when the fed will go. some say september, some not at all but ahead of your first left off after more than five years, you really need more consensus in the market than the fed has. if they do need to go in september they really need to start talking to us and making sure that everybody understands what's going to happen. anna: is my question completely serious? is a right to focus on the payrolls number or is it some other element that is the missing piece in the jigsaw? lawrence: no -- i mean, it's not the only part of the jigsaw but it is a big part. anna: not something in wages

for example, that might be more the story? lawrence: as you know the labor market is more than just payrolls. we get have wages -- we had eci wages this week, that a strong number. there's also the question of the inflation expectations, what's going on in commodities is important. as i said, a part of the jigsaw but not the sole part. anna: you don't think the market is ready for september? lawrence: not only that, but if you look along for september, what we see is an extremely shallow trajectory. anna: lawrence, thank you very much. stay with us -- we are getting breaking news. the fertilizer sector. caroline hyde has the details. caroline: all about fertilizer at the moment. this is a u.s. and the dutch company potentially merging.

breaking news that cs industries, the largest u.s. producer of fertilizer could be very close to merging with a dutch rival. these companies confirmed that they were in initial talks. i will show you what the share price reaction was. we saw that earlier in the month, a spike up as we heard that oci could be considering a merger with its u.s. rival. clearly the market reaction has been factored in. these companies are in the value of $20 billion combined. we understand that we could have higher earnings this week whether or not the deal will be announced. nassau solaris, -- back to you. anna: let's take a look at the top stories on bloomberg.com. tim coulter joins us. good morning.

we love emerging markets -- tim: it's interesting to think about. 14 years we started talking about bricks so this is a reality check on where we are. it's interesting think about how far we've come. all of the games, or much of the games, have evaporated. you think about what's happening in russia, in china, in brazil how much interest is there really in bricks? you guys called it a slow motion train wreck. anna: you're interested in emerging markets, lawrence? lawrence: yes, but i wouldn't call it that. think about how the investment universe has expanded over the past few years. i guess part of it is because all monetary policy and the core market in the u.s. -- if you have kiwi, if you lock interest rate at zero, of course you encourage you to go elsewhere. but i don't think it's just

that. it's not unusual for emerging markets to suffer a setback at the beginning of a fed hike. it'sthe question is how serious it would be. part of the reason the fed is being so cautious about moving so carefully, is to protect -- not just the local markets, but global markets, against adverse shocks. yeah, as i said the clients i speak to g10 rates used to be -- now i feel like i am a dinosaur as they expanded to other markets. anna: the story is specifically around stocks, the of emerging-market stocks falling against developed markets. sticking with the emerging markets -- china has an interesting reporting around whether things get better or worse in the stock market. tim: it's funny -- we read the

other day about how the chinese stock market should be in macau and not shanghai. someone who called the top of the market the chinese stocks probably have another 15%, 60% decline. it's anybody's guess. anna: a real market, the chinese stock market? lawrence: this is the thing that -- i'm not a stocks person, i don't claim to understand the stock market very well, but i think at current levels the chinese stock market is up about 16% year on year. i guess if it falls another 15% to could still be up 50%. what am i trying to say -- i'm trying to say that if you pick an arbitrary point or an all-time high, you see a very different story. i don't want to diminish the significance of a sharp asset selloff. that could be bad for all kinds

of reasons, obviously to do with confidence and so on. but on the year on year basis, it still looking pretty firm to me. anna: tesla -- that's another story. tim tell us about the problems they're having. tim: well they do love their design there don't they? it has come back to bite them. last night they said the middle seat has becoming problematic in the had to reduce their delivery forecast. the stock hasn't been doing terribly well it's down 6% in aftermarket trading. a setback for elon musk. anna: have you ever driven a tesla? tim: i haven't. i'm looking forward to it. anna: there very prevalent in amsterdam. lawrence: all the taxis at the airport. tim: i think the electric car revolution is going to come more quickly than we think. anna: you offset the

environmental damage from your flight by taking the electric car to the airport. tim, thank you very much. tim coulter joining us from bloomberg business. lawrence, thank you, as well. we will talk about saudi arabia planning a $27 billion bond issue according to various reports. we will get more later on in the program in terms of where that leaves the commodities story the oil story. if the 6:56 here in london and we will take a short break. when we come back, we will get numbers from the energy sector in particular from the gold-mining space, and from rio tinto. we will be speaking to the chief executive of both those businesses. it will be interesting in the gold conversation to talk to mark bristow about how low old pricing can go in still be sustainable. he was recently talking about how he lost $50 off the price of gold in the industry would be toast. we will ask him what he thinks

now. we will take a short break. ♪

anna: the unreliable boyfriend settles down. markets ready for super thursday. the bank of england's mark carney. forecast all released on the same day. it's $8 billion extension. it will return egypt's fortune around. we go live to the waterway. we get results from rio tinto and ran gold. putting the spotlight on mining and gold. ♪ welcome back "on the move." , you are watching -- welcome

back, you are watching "on the move." two elements breaking this hour. let's get to caroline. she's got a early bringing news from germany. caroline: this is factory orders coming in much stronger than expected in germany. up 2%. get in here and have a look at the reaction to the euro. we're seeing it up against the dollar. trading up north of 3%. a positive reaction coming in from the fact we are seeing factory orders. up 2%. previous months there have been down. this is far exceeding the estimates. there is your market reaction. clearly liking the fight that the euro -- clearly liking the fact that the euro is spiking high. anna: for some string data out

of germany, let's get to the outlook in the mining sector. numbers three from rand gold. they are telling us that the sales came in. that looks to be in line. profits in the second quarter 52.6 million. just a touch above where they were last year. gold production also higher than last year. 300,000 ounces. the cost of production per ounce, $684, against 701. the eps numbers looks to be broadly in line. mark bristol joins us. mark thanks for coming in.

how is business? mark: this is an last quarter was good. relative to everyone else. -- business in the last quarter was good. relative to everyone else. our production is up slightly. profits up slightly, earnings up about 8%. a good solid performance. the market that has a got -- the market that has a lot of weakness. anna: let's look about production. what is driving that? mark: i think it is us pushing the suppliers to drop their process. a lot of our consumers related to commodity process. their oil process is lower. just sharpening the pencils

because things are tougher. anna: let's talk about how tough they are. some time ago, you said another $50 off the gold price and this industry is toast. now we are more than $50 lower. now it's $1084. marco i believe it's took -- mark: i believe it's toast. if you look at the data, it is an unsustainable situation. the industry has continued to live in hope for a higher gold price to bail it out. randy gold -- rand gold is one of the few companies that is set its long-term goal at $1000. -- that has set its long-term goal at $1000. it requires reengineering of our

business. the challenges you've got the demand to service the debt. hoping that one day the gold price will go up. anna: brixton? you seem to be -- what breaks and then? you seem to be in that cut -- you seem to be in that type of cycle? mark: the banks are pregnant with the debt. that is a difficult decision. what breaks it, the money industry has to be more disciplined. what we are doing is over supplying the market with unprofitable product, like gold. many other of the metals industries. anna: who feels the pain?

does everybody cut back a little bit? nobody wants to be the first to cut back. mark: there has been the game of kick and play. right now, up until very recently, all of the analysts have been saying we will get through it. now people are looking for who is going to tip-off in the cycle. it is able or bust industry. right now we are in the latter. anna: are you playing chicken? you're trying to hang in there. mark: the key difference with us and our peers is we have always said a long-term thousand dollars goal -- long-term $1000 goal. we didn't cut capital.

we are one of the few gold companies that have never impaired, because we have been disciplined and not gotten seduced by the higher gold process desk gold prices. this is a cyclical business. -- gold prices. this is a cyclical business. seduction, we are not big on seduction. opportunity, yes. we have been looking for the last three quarters, the challenge is to get to a point where sellers are selling the assets, because they have to not because they want to raise cash. anna: you will only find real distress. any signs of when you might be ramping up in m&a?

mark: there have been big statements from the big guys. you got to wait a while, because everyone holds on to their quality assets in times like this. anna: when does the gold price turnaround? mark: i don't think i can forecast that. what i can tell you is the industry is unprofitable at these prices. anna: thanks for joining us. mark bristow, joining us from rand gold. the country celebrates the opening of an extension of the suez canal. it is taken one year to complete. the government hopes it brings billions of dollars into the depressed economy. guy johnson is there and he joins us over the phone. what exactly is going to be unveiled at? guy: a second lane of the suez canal. 150 years after the first lane was open.

they say they done it in a year. it will allow two-way traffic through the suez canal. it will increase the number of ships that are able to transit. it will reduce the time it takes to transit the canal. a huge investment by egypt going into this. we are still waiting to get access to the area. it has been locked down by the military. cyanide is to the east of the canal. it is a huge day -- cyasinai is to the east of the canal. it is a huge day for egypt. anna: they describe this as a gift to the world. what is the story? is it economic? guy: as ever, it is probably both. not clearly -- now clearly, the

president is looking for a political when. -- a political win. the economy is incredibly depressed. ever since 1956, the president nationalized it under the british and the france -- british and the french. he is using it to try and lift the egyptian people. hoping this is going to bring in huge amounts from around the world. hundreds of thousands of jobs for the egyptian people. this is an economy that has been flat on its back. certainly, the government and the people are hoping the markets turnaround in that story. they've got very big aspirations , whether or not global trade actually match those

aspirations, that remains to be seen. anna: give us an idea of the security challenges, doing business in this part of the world? i was on to someone earlier, he was telling us about the money rental fees that insurance costs. -- about the monumental fees that insurance costs. guy: this is a country that has been in a military lockdown. there have been seared -- there has been seriousg.as a result, there's been a huge security sweep. there is still a threat to shipping, as a result of that. you've got to come around some pretty difficult shipping lanes to get in here. pirates season has been decreasing, but nevertheless has been a problem. with low fuel prices, a lot of ships are taking the view that

it is actually easier to go around the cape. to go all the way around africa to get to the markets. it is not the optimist extort that the egyptian story is talking about here. it is going to be interesting if the chinese economy continues to slow down, it is going to make things difficult. anna: guy, thank you very much. guy johnson joining us in cairo. 12 minutes past seven in london. an update on what is happening in the currency market. this chart shows you what is happening with the euro. 109.26 is where we are trading.

that seems to be fairly euro positive. let's take a short break here on countdown. coming up after the short break, he has been called the unreliable boyfriend. but his mark carney going to go steady. -- but his mark carney going to go steady? ♪

anna: welcome back. 16 minutes past 7:00 here in london. here are the stories you need to know. the bank of england will announce the interest rates decisions. this is the first time the central bank has scheduled a publication of those three elements. mark carney believes this will make the bank of england decision-making process more transparent. egypt opens its new extension to the suez canal today. the $8.2 billion expansion has been completed to hear -- two years ahead of schedule.

one company watching the new suez canal is mask. the ceo joins us now. he is on the line from cairo. the to have you on the program. thanks for joining us. the egyptian government caused this its "get to the world." -- calls this it's "gift to the world." >> the shipping community has been looking forward to the expansion of the canal. to have a reliable, safe canal that will save the future of world trade. this is a very positive -- this is very positive for trade. anna: how will this impact container rates when items are

shipped from asia into europe? will this have an impact on container rates? >> i don't think you'll see a direct impact on rates in that sense, but the canal has been facilitating trade between asia and the middle east for more than a century. i think that in itself is facilitating role trade -- facilitating world trade. it is a much-needed expansion for both growth and future development of trade. anna: both you and the guests previously seem to be talking about how this was needed in the long-term. in the short term, we're talking about an industry with overcapacity. isn't this going to have a negative impact in terms of container rates in the sector? clause: we don't perceive that.

we see the bigger ships that are transiting today will need the canal expansion and improved facility. i don't think you can translate that directly into whether it has an impact on cost of trade. it will certainly improve the efficiency for shipping lines. anna: how do you weigh up the use of this shipping channel versus the longer routes you can take? in recent years, we saw increased piracy. that seems to have gone away a little bit. how do you way up using this channel? callaus: i think the suez canal is key to the trade, especially between europe and the east.

the way as an industry and the government's backing has been competent -- the piracy issue -- it is not affected trade from passing through the canal. between asia africa and the east coast. anna: has it been quite an achievement to have gotten this done within a year? callaus: i think egypt deserves great credit. taking the project within a year by a surprise that that was doable. i think they deserve a lot of credit. we are very happy to see that development. anna: thank you for joining us.

the ceo of mask drilling. we are getting numbers coming through from the mining business rio tinto. underlying profits for the first half of the year. ahead of the estimates. $2.5 billion. that is something that might please investors. they are giving details of their sales, they're talking about their dividend of 107.5 cents. 4.4 billion u.s. dollars. just like we have seen in the oiling and see, the mining industry is saying cutting back -- is seeing cutbacks. bloomberg will talk to the ceo of rio tinto about those numbers. his first interview of the day.

that is coming up around 8:40 u.k. time crucial watching for anyone interested in the commodity sector. finally here, today has been served up as super thursday. it is the first time the bank of england has released its decision on rates. mark carney's push for more transparency. give us details on the checklist of things to look out for. marriage: -- neraj: the interest rate decisions. their economic forecast. mark carney will give a press conference for 45 minutes later. : 45 with more details expanding

the decision. things to watch out for. were going to be looking to see -- if anybody votes for a rate rise. something that has not happened yet. we're not looking carefully at what the bank of england says about medium-term inflation. also about wage growth. finally, investors are going to be looking at details, listening to carney carefully to see what he has to say about external factors, like greece. the impact of that on the u.k. economy. investors have been pricing in for a little while now. they have been pricing in a rate rise. the pound has been strengthening in anticipation of tighter policy. this is what mark carney is

going to have to be careful about, what he said today. we are likely to see a lot of pound volatility. back to you. anna: a tight rate. joining us now, ceo the largest peer-to-peer lender. >> rate setter is the largest in the -- largest in the u.k.. you have the nine rates on nbc the official process. we have hundreds of thousands of investors setting their own rates. anna: are you trying -- are you trying to cut out the bank of england for the process? >> you got the bank of england. the people's rate, the rate of which normal people are investing. anna: what can you tell us to

expect from super thursday? when are we going to start to see left off? >> our main benchmark is our monthly rate. it is traded 2.5%. that's accommodation of expectation or demand. on the borrowing side and the small business. anna: small business versus consumer. how do you want that change? >> 30% small business. 7% that's 70% consumer. -- 70% consumer. and broking area of banking. clinical how big -- anna: how big can the lending seen become? >> i don't know if i can put a

number on it. it makes a lot of sense. you're cutting out a lot of unnecessary processes. as of the exchange is growing people are gaining competence -- gaining confidence. anna: syntax, you have recently been traveling in asia. >> we work on this recent delegation with the prime minister. london and the u.k. is at the top of semtech. what can we show you? what is been interesting, they could probably skip a generation. they haven't built out the banking of the cheshire. and they might not need to hear it anna: thank you -- need to. anna: take you for joining us. coming up on countdown, after the break, a look at the mining

and gold markets. stay with us for that. ♪

♪ ♪ ♪ get excited for the 1989 world tour with exclusive behind the scenes footage all of taylor swift's music videos interviews, and more. xfinity is the destination for all things taylor swift.

anna: welcome back. you're watching countdown. here are the stories you need to know. adidas second quarter estimates. it confirmed its forecast. tesla got its full forecast that the coming age to deliver 35,000 cars this year. ceo also says the company is facing challenges with him pieces on the model ex. share cells and after our trading.

-- 51 $6 billion stake. the holding amounts to 7%. the wall street journal reported that they have to grow revenues faster. we are just a half hour away from the start of european equity trading. caroline hyde will tell us what to watch on the market. caroline: looking ahead at the open. looks like it could be a down day. we saw a session over the united states yesterday. the united states with the employment data, disappointing. the biggest growth in 10 years. clearly the session over there. here, have a little look at where futures are approaching. stocks down by 4/10 of a percent. if you're looking at futures, 5100 up by half of a percentage

point today. dax trading down by .4%. the bond market, there are significant sales today. french for cost coming down. they are at 1%. with got france coming to the market selling bonds. the eight year, 10 year. the spanish bonds looking to be selling debt. yields coming down today. they could be selling up to 5 billion euros worth of debt. we are coming off of that spike. german orders up 2%. estimates -- it is outside of the eurozone where demand is coming for factory orders. clearly, not great signs of you

grow -- great signs of growth. back to you. anna: what to look up for at the start of the equity trading day. adidas justin. they reported their earnings earlier. the company struggled to match demand. hans nichols is standing by with details over in berlin. not sure which of these running shoes you're wearing hans. the high bar they have set for themselves. hans: their set a high bar because it was set by the market. it was an income miss only just a million euros. they came in at 3.91. the bigger news i suspect is the market -- adidas has hired an investment bank to look at their

trouble. when you look at the revenue after currency the ducted, you see just why it is a problem. their sales up a percent. reebok up 6%. the tailor-made unit up -- the tailor-made unit down 26%. adidas has its challenges. they want to increase their market share in the united states. they want to take it to the industry leader. when you look at the market share, they are going down year on year. they are looking -- they are using -- they are losing market share. they have a strategy. the strategy is a city strategy. not berlin? we'll have our own beef with that later.

hire some big stars and big sponsorships. jane cardin, there talking to him about a $20 million contract over 13 years. -- about a $200 million contract over 13 years. he played basketball at arizona state. what division is arizona state in? anna: i have no idea. not really understanding the question, hans. you've really jarred me. hans: the answer is the pac-12. it is the west coast conference for sports. everyone knows the best team is university of washington. we will not get into sports though. one other note on what is happening with this purchase that adidas has announced. run test it, it is a nap.

they get 70 million users out of this. this shows to what extent that is companies are trying to get into the app game. adidas is playing catch-up with under armour. lester, under armour spent -- last year, under armour spent for a nap -- four in ator an app. anna: i have difficulty maintaining signals. this is about adidas trying to leverage highly engaged athletes, such as yourself. hans: i'm glad you mentioned that for our viewers. i will let you brag for me. back to you. anna: that is unbecoming. hans nichols, thank you. market open here in europe.

let's get more analysis. bending, portfolio manager for the european equity team. thank you for joining us. we talked about earnings. we talked about earnings for the last couple of weeks. but it in perspective. hasn't been a good one? >> i think depending on whose numbers you look at, i think it has been the best run we have had since 2009, 2010. two thirds to three quarters 75% of companies -- you're looking at earnings being able to make teams for the safed. anna: they are focusing on europe, aren't they? a you're talking about with your clients. riccardo: you have three big tailwinds for european markets. you've had this massive currency

business as well. the euro-dollar was 1.35 a year ago. it is 1.10 now. it is coming through to the numbers. you got the oil price. europe, a big energy importer. " do you invest around -- anna: do you invest around that oil story? producers are coming under pressure. how do you invest around that? ricarcardo: the whole commodity universe is important. that ties in with the china growth story energy globally. it is one of the key variables for most companies. anna: when you're looking at the

commodity prices do you come down on the side of chinese weakness in demand? but that is not the whole story we need to think about too much supply. the putting on the conclusion what is your invest in strategy? riccardo: i think commodities is a classic example. demand has had a big influence. beyond that, i think the industry has a tendency of over investing. finding it has the capacity that's what we have there is demand is coming through, but too much capacity. in works with a lag. -- it works with a lag.

anna: how sustainable this earnings picture is for europe, what can we take from that? riccardo: we will have to wait and see. if you look at the numbers coming through, you'll see what the u.s. has done i think momentum has play. if you look at where the multiples are in europe, and where the earnings have been i think we could see this progression continued for the next six to 12 months. anna: the impact on the euro. riccardo: it is certainly not a hindrance. i think it needs to stay at 1.10, 1.15. the european economy to keep going. gdp numbers, investor

confidence, even household has been going up for the first time in four years. all of these variables slowly coming through at the same time does make a difference. anna: it doesn't sound like you are buying into any type of bearish interpretation of the growth story. we look at china and do you say that is not connected to the global growth story? riccardo: if you want to find bearish puts, you cannot is find them. china equity markets -- china emerging markets -- there's always something to be negative about. at this point, i think the positives outweigh the negatives. anna: could this come back to haunt us with political tension? riccardo: i think this is the

gift that keeps on giving. i think people criticize the authorities increase because they kicked the can down the road. it buys his time did in the meantime, economies pick up. -- advise us time. in the meantime, economies pick up. if it means kicking the can for three or four years, and giving the greek economy time, then so be it. anna: thank you, good to see you. think for joining us. -- thanks for joining us. the time here in london is 7:42. we'll take a break here on the program. we'll have more on the drug industry. the number from merck. we will break down those numbers

with the cfo. he will be joining us on the phone to a little bit later in the program.

anna: welcome back. you're watching "countdown." here are the stories you need to know. the bank of england will announce its august interest rate decision. corley economic forecast. this is the first time the central bank has scheduled a simultaneous -- mark carney believes this make the decision making process more accountable and predictable. aviation investigators say the wash up is from the missing plane. as the first physical evidence from the plane that venice 70 months ago. the prime minister made the announcement that the plane crashed in the indian ocean in march 2014.

>> it is my goal that this confirmation however traffic and painful, will at least bring certainty for the families and loved ones of the 239 people on board. they have a deeper sympathy -- they have our deeper sympathies and prayers. anna: the world's second-biggest mining company, rio tinto, prices -- let's get some analysis from these numbers. where it reported by -- where joined by -- how is the price is affected the earnings? 43% had something to do with that. jesse: rio tinto but a number.

-- $3.6 billion versus the first half of last year. underlying earnings down 43%. a pretty strong correlation. anna: houthis compared to estimates? -- how does it compare to estimates? jesse: on bloomberg consensus numbers, they were looking at 2.5. it came in at 2.9. going forward, the outlook is pretty bearish. anna: let's talk about the outlook. bearish, you say. they are blowing their guide -- there guide. jesse: they've used it as a guide on the market.

oil supply is still an issue for them. not a problem for rio tinto because it is making good money. that will supply could come to an end -- anna: this appears to be a feature of their reporting season. we get mining companies telling us that things have become tougher. no company wants to be the one to cut back first. jessica oh -- jesse: especially when they're still making money. and a: -- anna: when we're expecting them? jesse: pretty significant decline. they've got significant marketing operation. we're waiting to see how the marketing business performs.

bancorp has been able to make fairly healthy profits even in a down market. it'll be in sync to see if they would have been able to stand up. anna: thank you for joining us. the latest on the mining sector. 7:50 in london. merck posted second-quarter earnings this morning. it beat estimates. let's get more from the cfo of the business. where joined now by marcus kuhnert. the numbers look to be ahead of estimates. you're keeping your guides the same for 2015. what weighed in on that decision. marcus: good morning. we have seen second-quarter 2015 with organic sales growth and tech and all of our businesses.

what we have seen in the first half, we expect this to weaken over the next month. the operating environment of the business is sound. we reiterate our guidance that we have given in may on the sales and on ebitda. anna: how have you been doing on the balance of the markets? more than half of the company's earnings are going to come from the life sciences, materials area. how much of that will come from that area of the business? marcus: we have two important strategies going forward. the successful integration of sigma orders -- sigma orders.

food delivery. secondly, we have promising pipeline and our pharma business . we will concentrate on developing our efforts on this pipeline to success on the market. anna: d have enough and your pipeline? -- do you have enough in your pipeline? marcus: i think we have a pretty attractive pipeline, which is filled in the earlier stages. we have a good pipeline management. however, for the next two years, we will face strong competition in our mature products. we plan to fully compensate with good growth development and our

other franchises, and in the emerging markets. from 2017 onwards, we should see successes from the products which are currently in the pipeline. this is expected to accelerate topline growth significantly. anna: how much do you see that accelerating the topline growth? marcus: it is too early to publish concrete numbers, but for example we put big hopes behind our and to pdo one -- behind our -- to name one example when it comes to market which will make a significant difference. anna: we have seen quite a deal of frenzy. is this something that your business is going to continue? marcus: not at the moment. as you know, we are in front of

closing sigma-aldrich which is the biggest acquisition in our history. once we have paid the purchase price, we've got more than 12 billion. an important priority over the next two to three years is quick leveraging. that means bigger acquisitions are not on our agenda. anna: no more m&a in the next two to three years. marcus: i would say no more sizable m&a. anna: an important disclaimer. any partnerships is that the future? marcus: it is an attractive model. we are screening our opportunities. we will give an update once we have news to tell. anna: thank you very much. marcus, a good place to leave the conversation. the cfo of the german drugs

business merck. as we had to break, let's have a look at what is happening on the currency market. a picture of the euro. the euro against the dollar. we have germany -- we have german factory orders. they came in. we've retreated little bit. 10908, that is where we are trading currently. that is where the equities are heading. a picture at what is going in the european equities market. watch out for all of those businesses that have reported. we will leave you with jon and the team.

jonathan: good morning and welcome to "on the move." we are moments away from the start of european trading let's go straight to the morning brief. mark carney talks about rate decision at midday. mining tough times reports of a 43% want after iron ore prices collapsed. i will speak to the ceo in 40 minutes. a fine of robust growth despite concerns of greek futures.

it is called super thursday in london. it is not so super for the commuters. let's go to caroline hyde. caroline: we are expecting equity markets to go trade lower today, not much enthusiasm ahead of what is super, mega, whatever you want to call it. you will get a flurry of data. whether it is the economic forecast. the u.s. has been central bank focused. the united states trying to read the data. it is the strongest in a