♪ moves it bank of japan to goals as a keep to its monetary policy unchanged. s third-quarter estimates beat projections. they announce a share buyback. credit sweeps this evening from authorities over the relationship with people named in the fifa corruption scandal. guy: welcome, i'm guy johnson. anna: welcome to the program, the second hour of the program. , the get to breaking news

consolidated airlines group includes iberia, and british airlines. those numbers are coming to right now. revenue seems to have beaten estimates. they see a full-year outlook in terms of the operating profit in a different range. lingus and that is something that happened six month or so they mend -- managed to do that. really what has been boosting these airlines over the summer has been partly some bad weather but essentially many of these european airlines have done pretty well over the summer operating profit tripling in air france -- strong numbers coming from other airlines. that will set the bar fairly high this morning. we are getting an update, but the number seems to be at ahead

of estimates. more details no doubt to follow. we already heard about the dividend. it -- ae given us and dividend policy into the future. guy: consolidation brings benefits. >> it will be a messy one for rbs. we're seeing costs coming in for the u.k. lender. 840 milliontune of pounds. pounds ofhe billion restructuring costs. that is coming in well below last year's figure. especially in terms of adjusted operating profit, that is less than half of the figure last year. they are improving in some areas , they are raising the cost reduction target.

there also raising overall financial stability, which is their core ratio. that is now a 12.7%. that is up from 12.3%. they are managing to boost the net income year on year. a messying this will be set of numbers coming from rbs as they indeed consolidate citizens group that they have been ipoing and selling off of that. need to see some softness in the revenue, and of course this is all about when we will see more money being set ppi, that miss sold payment protection service. they will say costs will remain high. the city net interest income is down. down 183 million, the

money they are getting in from thepositives seems to be -- number they're getting from lending seems to not be weighing up much the amount they have to pay out for deposits at the moment. net income not faring so well, and their overall down for basis points -- four basis points. restructuring costs are remaining five. guy: caroline on the rbs numbers, thank you. let's take a look at the numbers we had today, they are flat on the year on year numbers. nonetheless not a great the number. down from the previous figures as will particularly for the month of august. it could be better, i think. what do you think? anna: always the solution to a number of ills, let's get to some other figures. group reporting numbers this

morning. let's see what they have to say, we will delve into those right now. it, let'slking about get them because cameron will stop. a production boost which seems to be supported their overall earnings. there seeing the third quarter and tax depreciation coming in at $1.2 billion. the net income also beating analysts estimates, far ahead of the number many were expecting. production is getting higher. up from what the market was expecting. production is driving higher, if you dig into upstream earnings, because of the sinking oil price that is down. upstream, production, you are

seeing that it down 22%. marketing down 65%, operating performance also lower, but the full-year guidance and protection has 8 -- faction has a big in -- production has a big increase. this is a company that is managing to boost production while oil prices slump and manages to see a beat when it comes to earnings. except that earnings are still falling when it comes to profits. anna: caroline, thank you very much. guy: a quick look at how the european markets could open up. much to write home about, a lot of numbers coming home with this is the number you need to .4% the dow s&p. a lot of numbers to digest, a be

a market of stocks rather than the stock market. anna: we have some other stories to cover including what is happening in asia. let's talk about the pboc, they're saying the shanghai free trade is going to trial. the yuan capital convertibility they said it will expand across use all according to a plan to promote financial opening, they're using this as a trial area. yvonne man has the details on what is been happening in the asian trading session. d morning, a mixed picture, but the ending on a good friday. at governor just to speaking his press conference right now talking about staying put on policy. they did delay that's 2% inflation target by six months. is it a big reason was the oil

prices, and the low energy prices they said that it was a big culprit in why inflation expectations have not changed much. they said that could exclude fresh food energies. rises,e seeing long-term and inflation is picking up. energy prices are really dragging down cpi. he also said no specific culprit at this meeting, and they don't see that there are limits to any further action. kuroda saying he will add more easing without hesitation if necessary. so, easing wise we might see more of it. dollar/yen is back to strength right now, but it is now down -- you mentioned the chinese equities. we are ending things in the red. shanghai reversing some of the

gains we saw earlier. prevention this policy -- we mentioned this policy, they pulled the plug on this and now residents can have two children if need be. instant -- infant formula also rising as well. want to end earnings wise on banks. the bank of china actually saw a profit plunge. we also saw the construction bank in line with our earnings. petrochina falling to a record profit plunge. anna: thank you. the pace of change in china, is it beginning to pick up a little bit? is that a good thing, how is it a bad thing? bhuna: the basic change is

beginning to pick up, it was no doubt about that. on capital convertibility in particular, i think they will be quite slow. it will allow more money to come in rather than leave in a big way. they have already eased restrictions. away, what has been happening in the last six months is tremendous pressure on chinese reserves. they have fallen, so you lost 600 billion in a matter of six months. i don't think this is the time when china will completely open up the capital economy. they could see some money coming in, i think it will allow the opening up of the treasury market very modestly. will becomee, it convertible when the money is coming in. don't think it will allow it to leave entirely. --: this really is just bhuna: it really is.

i don't than the capital convertibility will go, i think it will be delayed. itcould be five years before is complete the convertible because they want to keep control of their cost of capital. we have seen this money exit, 600 billion gone, but nothing has happened to the money market. that is central to the chinese growth model. you cannot have what is happening in brazil, or turkey, when the currency comes under pressure, you see interest rates going up. not so in china, why? it is a closed capital economy. they need to retain that. they want to move in a different direction over a long. of -- long period of time, but they will dip that toe in the water. --a: interesting, and me maybe faster in some things and slower in others. quite big news out

of china over the last for the four hours on the one child policy and the relaxation of the policy. were you a skeptic? bhuna: it does make a difference. by the year 2035, china's population could increase by 200 million because of this change. it does mean output in china will not completely collapse. potential output is broken down into connectivity, and into labor, china's labor had begun to decline. this will not have an impact in the near term because a lot of china's population has become urban. fertility rates are lower in any case. this is a countrywide phenomenon, so i think this is make a difference. your overall population goes up by two under million, then that does make a difference. million.d 41 -- 240

i think we will have to think again. guy: is it just baby formula? bhanu: i think it could do quite well. in the medium-term, it is a consumer staple. it is the telecom trade, the internet trade. it could be very different. anna: the government of china now thinks the 6.5% -- that 6.3% is the new backstop at least that is the idea that are floating at the moment ahead of any formal target setting. this that way they think they need to get to at a minimum? say going down is now off the table. where do you see the chinese growth story heading? 6% in the will go sub-

future. in the near term, the reality is the success in china -- even if you do conduct infrastructure, the big part of the success is real estate. that is why it will continue to come down, and drag down. it is massive linkages to the rest of the economy. it could impact retail sales, i think in the next 2-3 years china could grow at sub-6%. that should not surprise anyone. anna: thank you so much was spending time with us this morning. we will talk about rbs next, but i need to bring you some news. lookfo is speaking, there -- they're working hard to bring their plan forward.

a lot has been a complex in a period of time. ♪

anna: welcome back, hear the stories you need to know this morning. this could policy unchanged. they think the fiscal targets can be hit on the second half of 2016. says they wrote about 12%. the also approve a one billion euros share buyback and will increase production. guy: authorities are investigating fifa, they focus on whether the bank allowed suspicious or otherwise improper transactions or failed to observe money-laundering in relation to their dealing with

the governing body. anna: let's get a breaking news, guy mentioned it earlier. the u.s. of avoiding a debt default is congress passes a two-year fiscal plan. this coming through in the very early hours of friday in the united states. to the president, a stamp and signature. he used 42 plans for the health care bill, i don't know how many he will do this time. these are the things that come into my head. anna: the agreement ending a month of turmoil that house republicans in particular -- we would get more into that. guy: the world bank of scotland has fallen as it continues to shrink. some good news, some bad news. the capital numbers are starting to look quite interesting. >> that the jump to about 4%

this time. but they finished, this jump up which will be the best level among u.k. banks. however, they're continuing to dispose of things me investment bank that they have made a profit of half of what they did last are. rbsc making very good progress against targets. they are trying to shrink their bank down to be very u.k. focused. did not take charge for a pain of protection insurance this time. million they took 500 and warned the same about to come in the third quarter. the results look better at first glance -- anna: we got into that story will stop they could begetting close to the end of it. stephen: we are getting close to the end of it, but some court

cases could reopen it and cause more pain to the banks. a conduct litigation charge in the third quarter, is this just an execution story? fasten: this is about how they can wind down the front of the bank and the assets does not want anymore and become more like lloyd's, more u.k. focused. wilson it does this -- whilst it does tyhhis there will be job loss. 2017 things to charter look brighter. the government sold the initial bunch of shares, but there is been no indication when the next one will come. --a: money for the taxpayer more you have, the

more it looks like a real price. morris, thanken you very much. u.k. to german banks. the challenge faced by deutsche bank was highlighted yesterday with the lender scaling back operations and cutting 9000 jobs after reporting the biggest quarterly loss in more than a decade. guy: he finished the day down 6.9%, the biggest drop in two months. for more the strategy be joined our new guest will going to deutsche bank. do investors understand what john prine is doing? >> good morning, i think that is a very important question. if this all into context, it is an exceptional six months for them really starting in april with the settlement, and the

first launch of the strategy it is been a stormy shareholder meeting. 40% voted against management. had anagement board overhaul earlier this month. today announced he tells of a strategy that it already been decided. in thek they are moving right direction. without the look of the new management board. we like the different approach. they understood what you were saying, he was delivering some really tough messages. probably not what investors had hoped to hear. anna: when you look at that where does this sit in comparison to other european banks? many banks are talking but reshaping their investment banking, and reducing their investment and doing sense of

the reorganization. can they all be doing this the same time? in that context, are you happy with what they're doing? hans: maybe that explains part of the disappointment. looking at the complexity, taking on a course, the one surprising thing was the message about it and infrastructure. he basically said it is not quite fit for purpose. what they're doing is different from creditors that are saying they're not paying a dividend. are things really all about execution, not at all about presenting exciting new strategy? been decided before april them was announced more or less already. --: how long stay be given

should he be given? hans: the targets are set for 2018. he was key in saying 2016 and 2017 will not be particularly pretty, they're trying to do more -- guy: they will let him do that, they are on board with him and convinced he's doing the right thing. anna: the share prices -- it's did not look great, but the investors where representing are willing to give then taking years, stock at that. . looking for market share in other places, now it is looking for profitability, is that what this is really about? hans: it is really about shrinking the bank and focusing on the business where it is strongest from investment banking. it is not dissimilar from what other banks have it done.

clearly, it starts on a different starting point. it is more difficult for other of the competitors. anna: some u.s. banks will pick up some market share if they're willing to step into these places with the other banks are pulling away from. guy: back to that point, what is deutsche bank now? hans: it is going towards being a slimmed-down universe. it could be less global in their ambitions than they have been in the past. i think that is fair to say. goals,u talk about bracket banks, do you think they can be a slimmed-down universal bank? it some time, and see how they get on. lots ofram -- there are other positive things what investors probably have not understood, including the

changes of the management board. overhauled, and they have significant new experiences. anna: thank you so much. joining us are hermes equity ownership services. ♪

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what. you don't have a desk bed? don't be left in the dark. get proactive alerts 24/7. comcast business. built for business. ♪ -- 7:30 in7:13 london. anna: the bank of japan kept the policy unchanged. now is that it's 2% inflation target being hit on the second half of 2016. the bank of japan governor saying right now he does not see them buying -- becoming difficult. he is having his press conference right now. the u.s. avoided a catastrophic debt the default, they increase andding on domestic prices amongst house republicans.

the president should sign it. anna: authorities investigating fifa in switzerland and the u.s.. there investigating whether the bank allowed improper transactions. or failed to observe money-laundering laws in their dealings with the football governing body. you some market analysis, lechery what is happening with the dollar/yen. the governor indicating he is seeing it possible to buy more, is that having an impact? we saw this, sense that we retraced that spike, we are now trading not quite at levels -- a be a little bit lower than when they first started giving us news this morning. let's get some of the details, let's roll this one through. positivewe would get a over here and european equities -- let me pop my finger into the

screen. london looks like it will be of the lipid of a lag , up by0.3%. anna: we have had a number of earnings breaking this morning. stronger-than-expected sales, caroline hyde has been taking a closer look. might be useful when you trying to pull off one of the biggest the deals in history that your numbers look pretty ok. they do look pretty good, trying for $106 billion. organic volume, that is stripping up foreign-currency -- it beat analysts estimates. in the volume of beer being drunk, they sell budweiser, mexico drinking much

more than previous. latin america as well, that is just one area. the north a latin america it really is an area of outperformance across the board. they are now saying this is helping, we so again it revenues up some 7.9%. therefore, they say going forward we will actually beat inflation. inflation andbove our overall profitability. that is better than previously forecast that. it looks like it is pretty iffy looking at anheuser-busch overall. they're facing some headwinds. be a look for china, they said the industry will not be growing for china. the rest of the industry, but the industry is struggling as the consumer faces a few headwinds in china. meanwhile, certain brands of anheuser-busch are not faring

well, this is why they have been piling in to craft beers. they bought up some in united states, because bud light -- the value brands in particular have not been doing so well in the united states. premium is doing well, wanting to buy more expensive beer. but the value brands have been faring slightly poorer. brazil is a big problem, because it is a take area for them. brazil continues to face inflation, and a week consumer. anything, the cfo is picking up today saying there working hard to formalize that offer for miller. the formal deadline has been shore up thery to shareholders. they need to get them on board. we understand there have been flights to south africa. that ision concerns,

where we have see -- this is why the share prices is not at 44 pounds, what the offer had been agreed on. many are worried about the competition issues in the united states. most out of the, the big unknown is china. anna: caroline, thank you very much. has wrappedr kuroda up over the last few minutes. he said quite a few things i think are quite interesting. he does not see limit in terms of fuller -- further policy easing. could we see further action? what will happen to the 2% patient target -- inflation target? what is the big take away? >> well, first of all i want to point out that the decision to stand pat, we think this is the shortest monetary board meeting

in more th a decade. -- it doesn'tat mean there won't be action taken in the future, but it doesn't mean they did not spend time today deciding what to do. i think that is pretty meaningful. we had about 8% of our economists surveyed saying january with the next likely date for action to be taken. i expect the 44 percent that wrongly said they would see action today you will see those people shifting their forecast into early next year. everything is open, that is what the message was today. that was not consistent with what we heard from the market. they were saying they could own 50% by midway through 2016. that is a problem. if we look at the way the market has reacted to all of

that it initially saw weekend, then strengthened, and we had a period of swinging around. does that tell us anything? is the market on the right page? very excitinga day. we had this report in the evening edition talking about the extra budget. it is saying the government is standing ready to spend more than ¥3 trillion on the economy if it decides that the gdp figures are weaker than expected. pushed the dollar back up against the yen. lookinghink people are ahead to what the government will do. mr. kuroda mentioned

wages, that is a key word. adamant that japanese businesses need to start paying back. we're just getting ready to start the annual wage negotiations. those begin early next year and we could see some things banded about with what companies are prepared to do. guy: he dodged the question about the fed, how significant is fed policy in terms of boj? brian: it is very important. we are lots of reasons, one of them is that japan this not want to be seen engineering a week yen, that is very dangerous both locally and internationally. but the fed is standing by, there is reason to believe the fed will take action. benefit ofet the

that effect without taking any sort of political risk this time around. in that sense, the fed is hanging out there possibly lifting rates later this year. it is a big help japan in terms of the currency. anna: brian, thank you for a much. guy: right, we are 20 minutes until the top of the upper. plenty still going on, we try to figure out the european markets will open and how the others are being affected. the head of the european fixed income joins us now. nice to see you. what do you make of the boj this morning? agree the morning, i fedeased likelihood of a increase in december accounted for waiting for that news along with more data.

i think, to some degree, they are similar than the ecb in signaling we're and heightened awareness. there was so much uncertainty in the market, what is happening in commodities, oil prices, wages, they can make sense to take the time. out prettyd aggressively, they wanted to be preemptive. now they are in a data collection phase. message from today, the fact that did not do any more easing does not tell us whether or not they will in the future. they may still do it after the fed in january. michael: if you look at it, they were a five -- revised and stressed there is no limit. i think the arrest the clown -- crown. -- they are still preparing the

crown. they might need to do less. guy: how does the curve get affected by all this? you have to say we almost getting used to it. partsholding significant about various securities -- the ecb holding up a lot of securities in less liquid markets. in terms of what the free flow, maybe that is you and more. but it is aers, very liquid market. i think they can spend a slightly higher percentage. anna: we are in an interesting phase archway? we of the -- aren't we? , if the ecbt look

goes in one direction and the boj goats and another? michael: december could be very interesting. we have a 50% probability that the fed will tighten in december and the ecb will ease in december. that will be very interesting. actually, i think it makes a lot of sense on the fed aside, before the fed was stressing they are data dependent. they also tried to provide some guidance first in september, which than they had to push back for good reason because there were a lot of surprises in the market. now, they are much more open and saying each meeting will tell you the variables. it without you inflation expectations, and the international environment. if that allows us to move forward, we would like to move. this is the spread of the

wideand germany -- how does that trading get given the policy? are there limits to how wide that can get? how do those things fits together? michael: if you look at those charts, many people of asked me in the past if there is a spike, is the u.s. not terribly cheap? really, because i'm one side b of the apology -- policy divergence. -- because on one side we have the policy divergence. i would argue that threat is probably around, i would not say they're good fundamental reasons which explain that. anna: thank you, the head of

fixed income. guy: a busy day, but the stilted, from banks, particular could stocks ahead to watch. it is a market of stocks today, a lot of corporate news to digest. ♪

anna: welcome back. here the stories you need to know this morning. guy: the bank of japan kept policy unchanged. he said the inflation target could be hit on the second half of 2016. it will be interesting to see what the fed does next. anna: airbus said profits rose. they also approved a one billion euro share buyback and will increase production. there are inquiries to those investigating fifa, saying

the bank had improper transactions or failed to observe money-laundering laws. anna: we are close to the start of the european trading day. watch.mes to caroline: one you just outlined, could have a 5% again this morning after they beat analysts estimates. higher aircraft deliveries, and interestingly, they're boosting production on the workhorse of the sky. month.l make 60 a beo, the share buyback will sweet music to investors in years. -- investor's ears. bnp, itlose eye on

could rise this morning as they beat on profit gaining -- for once they getting some positive news out of the bank. it is up 14%, they are hellish --bullish on their investment banking welll market activity as is a strength. this is sounding very positive from the french carmaker. confirming the higher margins outlook, but to get to this -- european car markets could go higher than they had expected. they see 8% growth in the european market. the domestic market also looking brighter. they raise that forecast to 5% growth in france. brazil, france, russia, looking painful because of the foreign currency in particular. that is hurting the revenue. high regulatory cost is also an

area that they flagged. dieselgate will also push up costs there. caroline, thank you very much. it does not sound like much, upping that aircraft production, but the people i talked to said it is a massive the deal. the supply chain will be colossal. anna: it could have a big impact on the share prices. michael, in the last few moments we have some data out of france -- consumer spending seems to be up 2.6%. the ppi numbers are coming out 6%, were 2.1% the previous month, does that worry you? draghi isbviously, very alert of these not only

that but also inflation expectation. yesterdayer side, german inflation came in quite a bit higher than expected. for the near time, at least, -- guy: i assume you thought it looked a good value at the moment. inflation, you price where talking with the 30 year in the u.s.. we can show you that -- this is the 30 year break even rates where we see inflation 30 years out. you think this looks cheap? i think you inflation markets are quite pessimistic in the sense that it is quite obvious stock inflation -- it is not quite clear that an economy with a strengthening labor market basically has an inflation break even rate which is near the low of the previous year. see how low that is

on a longer-term perspective. that the market is slightly over doing the pessimism. i probably think the fed thinks the same. do you think we get a clearer picture as we turn the corner into the new year? greasy oil price, the central bank, "visibility around prices? michael: i think the current face is still very much dominated by the effects of the falling oil prices. once oil prices stabilize you inflation converging, i think the market will realize that some of those expectations are a bit overdone. is there a danger because be of low principle that they it becomes --and

the low inflation becomes a stickier and we thought it might. a very: that is important to discussion. we see different reactions, the ecb talks a lot about that. increased, itghi was on the back of the five-year inflation expectations. 2%, anduite a bit below he did that quite seriously. mention inflation expectations is one of the factors they watched, but they seemed to be slightly more relaxed. anna: did we learn anything from japan? i think that probably explains why the ecb wants them to be so preemptive compared to the reaction of the bank of japan. the ecb is more play committed. mmitted.o the likelihood is high that they will act.

it will be an interesting environment. it has been an interesting month for equity markets. anna: we are just minutes away from the start of equity trade. jonathan ferro is here. what will he be watching this morning? jonathan: the fallout of the bank of japan as it does nothing and keeps the stimulus unchanged. i think an important signal this morning was the inflation forecast, pushing that back but sitting tight on policy. and will remain patient hold off doing more. actually they will wait and see when inflation gets back to targets. what does that mean for the market? we will do that. china drops its one child policy. we will discuss the market up october. wrap it is been a monster month.

has been a great month, what is interesting about the people seem to be dollar because 50 the chinese milk trade front and center. it is not all black and white. only you can link chinese one child policy with a rugby, well done. i did not even see that one coming. keep an eye on some names as we start, airbus is one of them. see oney day, we will monday. ♪

jonathan: good morning and welcome to "on the move." moments away from the start of european trading. the boj sticks to its view that current policy can't boost prices. theyen strengthened. china drops its one child policy. a monster month. european stocks forced to close out the months of october with its biggest mother gains since since- motnth of gains july.

ftse futures up 20 points. let's get straight to the market open. caroline: we end the month on a high. we have seen 8% gains, the best in six years p at best since 2009 4 a month. -- for a month. we were up towards the open on the equity markets. bake of japan -- bank of japan not adding to stimulus. adding to stimulus. continuing would add to the ecb. they have been hinting they would do more work come december. that belief we could see more cheap money for longer. as the ecb promises more bond buying. but basically flat with the cac up .2% this morning. where opening with a little bit of a risk appetite. copper