withuture market open caroline high caroline: caution ahead of that labor day. in excess of 56%. traders think we could see a rate hike for the united states. we are seeing -- asia was very mixed. there seeing caution in equity markets ahead of that number. we'll be seeing 185,000 jobs added. see $185,000 -- 185,000 jobs added? .1%.ie up we'll wait and see how the dax opens. percentected a half point increase. we are seeing the euro a little bit lower, down versus the

dollar. the dollar continues to strengthen. many feel there is the likelihood of a rate hike, pushing the dollar higher. gold rebounding a little bit today. a selloff we have seen this week. gold losing its luster as we see potential for a rate hike. down 3%. oil, down 2.3% for the week. clearly concerns remain about supply concerns from wednesday. stockpiles remaining above wanted to million barrels. the bonde a look at market moves. u.s. yields continuing to trade higher. .8% -- .83%. bonds selling off ahead of the fed reserve meeting. u.s. that -- u.s. debt selling off slightly.

m&a news. a flurry of earnings as well. a drop of .25%. $2.7 billion to snap up the u.s. rival. this is all about betting on a future pipeline. battlees set of drugs to kidney failure. they are paying up for a new asset. syngenta up 2.6%. -- predator rather than pray. left.ief executive has on the back of that, we could see it become a buyer. it buyer of dupont's chemicals. liking weals, many could see consolidation in the agricultural chemicals market. richemont down 7%. jewelry, asia-pacific.

70% decline in the last first half of the year. in october, even more challenging. ines down 6% for richemont october. it will be challenging and asia-pacific. jonathan: ftse 100 in the green. we are in the red across most of europe. early days. we'll dig into their earnings later. is going to happen in today's program. first up, it is u.s. jobs day. investors down the middle on a hike in december. could a october report make or break a list off? expect a 2016 rate hike. we bring you bloomberg's exclusive interview. germany falters. a surprising drop in production. as the slowdown in china leaves its mark. ♪

it is a job stay in the usa cityet and sleepy new york . some call it the most important number in the world. some tickets to far and call it the most important ever. it matters. does it need to be good enough to give danielle the conviction -- to give janet yellen the conviction to hike the rate in december yeah, francesca, great to have you with us. >> aenough about enough? nice to be bad enough to stop them from hiking. that is our view. it is peculiar that we get down to one number. most important in the world. that is where we are. the market needs to be convened. wrong tonothing that detract the fed from hiking. jonathan: we see it is the most

important jobs number ever. we might bounce around for an hour afterwards. is itbate that happens, more about where we are versus where we are in 2008? the rest of it is structural. that capacity has been eroded? >> there's been a recognition of external development. whether it is transitory or permanent. we take the view that most of the adjustment in china is a structural. the economy is going into a lower path. that is what is happening in the energy market, especially with the competition from btus. in the united states economy, what is emerging is a clear split the between service sectors which are benefiting from fiscal stimulus, and industrial park which is doing what is happening all over the

world, sterling. jonathan: can i bring a chart up? the u.s. nonindustrial data, versus the u.s. industrial data. you see that clear divide. when you lift the lid on inflation, d.c. another story? >> absolutely. the pressures that are materializing on inflation are originating and the domestic sectors. they have prices running shy of 3%. that is about it percent of core cpi. you have the headline cpi being dragged down by energy. what we think is going to happen early next year is it will fade the energy, negative contribution. these underlying forces will take more prominence. jonathan: how drastically then? will be rebuild be going into next year? >> the market is skeptical.

the market is worried inflation is low. very fixated about oil prices. -- betweena strong the vti.ium and the bti is taken as a gauge -- wti. wti is taken as a gauge. jonathan: the bond market is a similar story to central banks. the international aspects are lower. i know that is your theory. what is the more dominant theme going into 2016. it's a deep theme -- is it the strength of the domestic economy? is it the international factors echo what happens with qe? >> you can look at the past four

hiking cycles. people have revised up as we went along. we started very conservative at the beginning of the rate cycle good we always missed. knowing where up the fed would end, until we got there. .his is going to happen the whole curve shows shift upwards on the real side. the bond premium is below. that has to do with the boj and the ecb absorbing. the question of whether we steep and the curve will be down to how much inflation expectation these essential banks will be up to deliver. jonathan: is the market leading the fed or the fed leading the market? ofh a 50-50 probability we all know saying it is 50-50. it is a coin toss and the fed

should not be hiking on acorn toss. think there is technicality's in regard to that 60%. i think we need to be above 50 years everybody -- above 50. is regressing to the flight path. -- is progressing to the flight path. in gender this view that they want to build real rates up. we are on the second cap, the market is still taking real rates need to be low. question, andnal the following segments, i'm going to be talking about europe. your view on treasuries -- is it

a similar view as well? if treasuries selloff, it is hard for core europe not to follow. the gap will remain wide, because the ecb will do more qe at the end of this year. the question is how they do qe, right? are they going to cut the deposit rate? are they going to shift qe board to credit? if they do, it will allow the bond curve to steep and more. -- >> i think the equity market is the cleanest way. jonathan: consensus estimate one is 85 k. -- consensus estimate is 185 k. -- thank you for joining us.

up next, on this program, carney's words. we bring you that exclusive. ♪

good morning. i am jonathan ferro. good morning from the city of london. this is "on the move." here are bloomberg's top stories. and suspended its dividend.

company reported a 29% drop in the third-quarter profits could record chinese exports in the global steel industry. lufthansa is facing its longest strike. the union rejected the latest offer. the union did not say which route would be affected. the process could continue until november 14th. extended -- shares at standard chartered are down this morning. that is after the london-based to -- unveiled plans illuminating 15,000 jobs and cut risky assets across asia. prepare for a hike. that was not the message at the egg of england's conference

yesterday where mark carney gave no hint of a rise before 2016. and an exclusive interview with says britainrney should get ready for a rate increase in 2016. >> when i rather have the majority of the british people thinking that rates are likely to go up in the next year? yes i would. that is prudent behavior given the progress this economy is making. given our forecast, the decision on whether or not to begin the process of raising interest rates would come as a sharper relief at the turn of the year. the year has not yet turned. we have given guidance about the path of interest rates. we have repeated so many times. of the furniture now. that is a good thing. at some point, rates are going to move. it is not today, unfortunately.

this is not going to top your news. jonathan: mark carney speaking exclusively with bloomberg's jon mikel way. next to me is steve major. you,, i don't know about but i sense a different governor carney when he sits in front of us. versus the man when he flies solo in an interview. i didn't hear 2016 in yesterday's press conference. tove: i heard you speaking the men on the street. he says make sure you save enough money. that is a prudent message. he is saying we are going to raise rates at some point in the future. it may not be immediately. , ins talking about macro terms of policy measures. he is not saying that to the memo street but to brokers. he is saying to the ordinary

people, save up. marketaying to the people maybe we will use something else. jonathan: there is a main street story here. i wonder if mainstreet is listening. if they stay with the available rate mortgage, they would've's saved a ton of money -- they would've saved a ton of money. steven: i don't know whether don't know -- i whether people with fixed mortgage are try to save money. this is prudence. jonathan: this is prudence for the market. we see the pound is strong. we said market that a lot of people said is excessively dovish. guess what he did? he endorsed the market and went after the pound. were you expecting that? steve:

i was not expecting anything. i am completely open-minded about this. and mocknions expectations can swing on its expense. -- and swing on a six pence. i'm thinking about the longer-term view in 2016. it is the same with the fed and bank of england. he is clearly tried to guide us ofard -- away from the idea looking at the actual date of liftoff. i don't know what people are expecting. it just seems the market based expectations keep getting ahead of themselves on the back of nothing. saying anddoing is as it is. i don't think he is trying to do anything. the market seems to be getting ahead of itself.

somethingk., there's very challenging and that the ecb has clearly changed its stance in the last month. given we are much more sensitive in the u.k. to what is happening in the eurozone, if the ecb has gone more dovish, how could the bank of england be going more hawkish? the draghi-carney spread? u.s. expectations don't know. that is another story. jonathan: i wonder what all of this means for you? what is it mean for the gill market? it is not about betting on a daily basis. there are some aspects of the industry that do that.

view are a more considered that rates are going to stay very low. our u.k. economist published a piece about the long-term real, natural rate. low -- it could be very much more -- much much lower than anyone is talking about. to me, that is all that matters. his knowing where you are going to is all that really matters. doing a at -- we may be good service by being calm. it is all of the jumping around that is causing the volatility. jonathan: i did not call it super thursday. someone called it super thursday. not me, steve major. ecbearly an end to the meeting. morning, center this

more german data. i want to head out to hans nichols. at look at this conversation the moment, governor carney is going to think more about what is happening in europe and less about what is going to happen with the federal reserve. these data points matter. it is been ugly data point after ugly data point in germany. hans: we look at what we've got with industrial production. they did revise august a little bit of work. we thought august was at -1.2%. but now is at -1.6%. it is an indication that there is a global slowdown that is affecting german industrial production. yesterday we got the negative read on factory orders that came in at -1.7%. the month before that it was -1.8%. and the month before that it was -1.4%. it is slowing down.

reflected in the eco-. we could potentially have some sort of slowdown when we get gdp figures later. one note on this. yesterday, there was his big boom blurt conference here in germany. no one is figured out how to factor in all of the spending and expenditures on refugee housing. what sort of stimulative effect that will have on the economy. there are a few estimates out there. i suspect a lot of economists yesterday are saying you see an overall used in output because it is fiscal stimulus you're getting on the refugee side of the equation. jonathan: hans nichols, great to have you with us. the ecb says the recovery is going fine. the germans are telling officials the slowdown could be temporary. steve: mr. carney made very

clear reference to china yesterday. .hat has to be true of germany the data is being affected by emerging markets. exports.we know industrial protection is down. the link is in the global economy there to be seen. i find it strange. the ecb and the bank of england both seem to be focused on what is happening in asia and the emerging markets. the economic data is now reflecting the concerns of the central banks. policy will be easier to take accounts of the negative impacts of the international economy. uncle core government bonds -- jonathan: core government bonds in europe. they are not coming up. spreads in europe stay where

they were. how high are they going to get? steve: this is what is going to happen. if the two-year rate in -30.ny is more than and the 10 year rate is pushing down below 50, the five year rate has been negative as well. what he supposed to do? more investors who would not have entertained the idea of buying into this level are chasing it down to 1%. now they cannot buy enough. the same people who would not touch it cannot get enough at 1.5%. you cannot make it up. the liquid assets are good to be chasing into spain. spain is a bit more complicated because you got the local elections in the general elections. jonathan: when a look at the curve,urve -- the bond

it is the most impossible to forecast what is good to happen with the bund market. steve: it depends on how you're going to forecast it. during the period when the bund yield was 2% at the beginning of last year. it went below 1% earlier this year. coinciding with when the ecb's was coming on scene. when the data was getting better in the eurozone, yields were going down. you would've thought it was all upside down. it was all about the ecb. the move down the five basic -- the move down to five basis points, that was based on the ecb. when the economy data was going the other way. the move from .05 basis points

that was happening when the economy was weakening. the inverse relationship is all about positioning ahead of the ecb. -- your viewbones . my view is that yields go down, not up. jonathan: steve major, great to have you with us. stay with us. steve mentioned data. put on your seatbelt, it is going to be a bumpy ride. was the china risk to the u.k. economy? ♪

jonathan: good morning and welcome back to on the move. i am jonathan ferro. 30 minutes into your trading day. these are how things are shaping up. the 5100 just turning into the red. the stoxx 600 down. the dax pulling back by 20 points. switch up the boards. what a week for the fx market. one dollar 879. since march.lide the euro sterling, what a move. the biggest pop since september 23rd. governor carney really leaning on euro sterling.

we are pretty much dead flat on the session. a rebound in crude this morning. 48 bucks a barrel. so many stocks stories we need to get to. let's get to a few of them with caroline hyde. caroline: check out the luxury industry. richemont pulling down the likes of lvmh. going down swatches well. -- the reason it is falling, it's warnings about a specific. missing analyst estimates. the challenge is happening in , that is continuing good october sales down 6%. they are saying it does continue to be a problematic area in hong kong and macau. clearly some concerns when it comes to some luxury exposure to the slowdown in asia. , 6.5% thisound morning. -- the hackor the

attack that happened earlier this month, the scale of the attack is much more limited than originally taught. they have been working with the police. they say it is limited to 4% of talk talk customers. 15,006 is a customers. much less than what they were concerned about. let's have a look at iag. shares up 2.5%. the reason? upping their earnings estimate. they are upping their profit outlook. a little bit of juggling at the top. iag, now he takes

the helm at british airways. back to you. jonathan: caroline hyde, thank you very much. mark carney has warned the china slowdown could cause bumping us in economies like here in the u.k.. he expects a rise in nonperforming loans as china's economy rebalance is. down the medium-term prospects for emerging markets to such an extent that it has an impact on our forecast. we see the chinese economy and our best estimate, they are slowing to 6%. the increase and private credit and aggregate credit has double to more than two times gdp over the course of the past five years. there would be an increase in performing loans. bank's would have to adjust. i would underscore the chinese banks have a very strong capital

position. i think -- i don't think chinese -- i think chinese authorities are aware of this risk and would take proper action. growth there is going to slow. it is the second biggest economy in the world. these processes are never received smoothly. we have to deal with the bump in this that comes with it. jonathan:ltas,'s -- still with us, steven major. should governor carney be worried about what is happening in china. that it come across to the credit market? steve: i thought that was very interesting. the performance of the npl's was very critical. it is quite depressingly low how little we trade with china. hopefully that will increase in

the future. that is no real mechanism connects the u.k. to china. he is telling us here about financial markets. the financial sector and how credit flows and how credit spreads. i amd not say that but saying that. i wonder if janet yellen is saying that. this says to me we are concerned about credit. that means volatility, uncertainty. jonathan: lithic of the fed. the december rate hike, you call it a data point. you really emphasize the journey. you don't think the journey is going to be a pretty one. steve: everyone wants to talk about the data and the rates. no doubt you'll be having the countdown clock. jonathan: that is another channel, steve. steve: wonderful wednesday or something, you will call it.

probably nothing will happen again. forecastingists are -- what i am saying is when you are forecasting up on europe is much more about future cash flows and not the journey. the about a 2-year note. there are for cash flows. need to count rates for for cash flows. there are 16 at the fed meeting between now and the majority of that 2-year note. eight of those meetings will be live, maybe less. about that first move. the first one is pretty important. it gives you indication of what is going to happen next. maybe they are one and done. maybe they are two and done. me not has got to tell only are they going to hike in december, but they are going to hike on the path of the dogs.

you might make a small bit of money, but not much. against the market shifting towards a rate hike. jonathan: the rate -- the -- sign steve:r he would've made back the money he lost in the previous two to three months. since august, this is been moving at a range of 50 and 80. isen that the forward increasing yield per month. you would've been lucky to make some money in one week out of eight. jonathan: the push back you must be getting on this call. the domestic economy is doing fine. steve: are you sure about that?

jonathan: is that not the push back your getting back up steve: the pushback is getting less ironically. is talking about it, so the walking the talk. notchetoric has gone up a towards a rate hike in december. i get that. the data does not seem to be verifying that. this data dependency i do not get. the u.s. gdp was 1.5%. less that one big figure than what they were saying a year ago? the inflation measures they're using is pushing up a little bit. i don't know. i am not totally convinced the rhetoric is matched by the data. you and consensus view, i -- if they hike it is good to gradual. is your view, sure maybe.

obviousf it wasn't that that they would not do it. there is this view that maybe they hike and have to reverse. he fed has done that already twice in the past five years. this could be the third time. reply forgot. -- people have forgot. about it talking happened 2013. rememberedrobably be for the year they talked about hiking rates in actually did not. jonathan: jobs guess, go. steve: i have no idea. it would be funny if it was 150, wouldn't it? jonathan: steven major, great to have you with us here at hsbc. up next, love times a grounded

again. -- lufthansa grounded. ♪

jonathan: good morning and welcome back to bloomberg tv. here are the top stories. down, a brazilian iron oil project owned -- has burst. have been killed and many more are said to be missing. it is owned by joint venture.

astrazeneca will buy that as pharma. closed in u.s. trading. astrazeneca says it will have an aggregate value of 2.7 the in dollars. europe'scome of biggest insurer -- it missed analyst estimates. in other corporate news, luxury firms under pressure off the -- and highlighted the challenges the industry faces. caroline hyde has the details. caroline: not only was it misting estimates. -- it is october that is worrying analysts. analysts thought the worst was

over. we saw the stock rout happen. we saw concerned about economic growth in asia here at adding to the woes that many luxury companies have been facing over the past three years as china has reigned in giftgiving. makes cartier joe -- richemont makes cartier jewelry. it is not getting any easier. it is october that deteriorated 6% decline in sales. check out what happened in the first half of the year. a specific down by 17%. it was hong kong, macau. these are the areas that are feeling the pressure. instead, we are seeing some growth in their independently

run boutiques. it is the wholesalers that are seeing the pain. jonathan: fascinating this morning that the warriors are using these earnings as a reader cross. that is playing out. is it that clear that this will affect everyone else as well? caroline: the entire luxury market being pulled down. feeling that asia-pacific is not going to get any better over the second half of the year. these trends have been bearing out when you look at swiss exports. when you look the exports of watches, in the third quarter, they were down 7%. that is the worst we have seen since 2011. look at what happened in september, hong kong down. the u.s. down by 18%. fx playing into that. to many people wanting travel to the united states.

instead they would rather buy them in germany where the euro has been week. is an interesting geographical mix. a lot of bills are bringing today for the october outlook for richemont. junk a caroline hyde, great work. the corporate news keeps coming through. ,ust in time for the weekend lufthansa traces its longest strike after flight attendant rejected its latest offer. cabin crews are set to walk out this afternoon. let's get more from our correspondent who will be staying granted, hans nichols. what we know about which airport will be affected specifically? hans: we know frankfurt will be affected. starting at 2:00 p.m. going into a 11:00 p.m., those affected will be the inter-european

flights. bad news for me. i will have a difficult time flying lufthansa back to berlin. they will try to keep some flights open. on saturday, the union has said they're going to strike, but they have not named the cities that will be affected. sunday, they are going to pause guys there is a school holiday. they're going to say the strikes just then they say the strikes are going to continue through november 13. they have reserved the 500 hotel rooms. they're going to be calling in additional troops trying to minimize the number of flights canceled. in 20 oh 12 -- in 2012, there was a strike. they lost on that. 1500 cancellations. this year has been the pilot strike that has affected lufthansa. 352 million euros has been affected. 9500 flights.

we are learning more. it looks like if you are flying in and out of frankfurt between 2:00 and 11:00, you may want to consider other options. jonathan? jonathan: hans, that is the travel story. this is the business story. thing justf exacerbates the move to ryanair. if i want to fly, i am not flying lufthansa. recognizingmpany is they need to trim labor costs. they need to keep them low if there were to be competitive with the ryanair's of the world. there is a larger discussion in germany why we have not seen wage increases. you look the unemployment levels, the historic levels there at. some of the breaking points come with the strikes we have had. early this year, we had deutsche bank. now we have the flight

attendants and their union calling for a strike. hans nichols stranded in frankfurt. .ext up, china charges yelling gets bullish. carney takes on the pound. we wrap up the week with the charge that matter. new york had a very busy day on wall street. it is jobs day. 185 k. to get janetugh yellen to rate hike in december? or is about enough to stop her? ♪

jonathan: good morning and welcome back to on the move. good morning from the city of london. wall street wakes up. it is jobs day. more on that in just a moment. november got off to a roaring start. here are the charts that matter. first up, december goes live. janet yellen suggest a 2015 rate hike -- rate rise is still on the table. then from bowl to bear, the shanghai composite" it percent -- including the six rate cut in the year. governor, mark carney used super thursday. he warned it would continue to

push down inflation. that was the week that was. it is job stay in the usa. 185,000.ons are the details will be out at 1:30 u.k. time. --omberg first word status first word strategists. and manus cranny. round of applause for you. questionble today, the , does it need to be good enough to give them conviction to hike in december? >> this is the most important jobs number since the last one. there is an element of truth to that. 50%, the stronger number could get us up to 70%.

if we get a weaker number, we could be down into the 30% -- the 30's and 40's again. they need to have the market buying into this before they actually lift off. yellenn: manus, if janet that there would have a running mate for a rate hike next year, -- didn't he?y mantle as he spoke to us, yes. i think you put it quite nicely -- manus: as he spoke to us, yes. i think you put it quite nicely. we are all scrabbling around. it is going to come down to wages for me, it is about credibility. i think the fed which lost a lot of credibility in september, both from the marketplace and we

saw that come through -- i am not saying because of credit -- because of credibility you have to raise rates. it will come down to the wage data and the employment rate. we know that janet yellen's pr keep by the underemployment by those people looking for more than one job. your mobility in the bond markets. the market is beginning to rise. the market is positioning itself for what 5% or 3%. itselfket is position for one and done. jonathan: the for you, richard jones. talking about the carney spread yesterday. the draghi-carney spread. was that yesterday a lean and

into a dovish december meeting -- a lean in to a dovish december meeting? richard: we were thinking if carney is very hawkish during the press conference, isn't that a tip they know the fed is going to go in december? i think you are right. he has looked at euro sterling, he said the ecb if they act aggressively, the euro sterling will be low 70. he did not want to add petro to that fire did the conspiracy thinks that is exactly what he wants us to think. macro that is what he set out to do yesterday. jonathan: jobs guesses? ? one 85 is the estimate.

which: a lot lower than that. great to have you with us. we head over to the pulse. for me and the bloomberg team, best of luck for the rest of your day. ♪

francine: penultimate jobs report. while the data keep december alive for janet yellen. manus: the new guidance from governor carney. in an interview he tells the u.k. to prepare for a rate hike in 2016. francine: europe faces the reality of a slowdown. manus: standard chartered slumps. the stock takes a hit in hong kong as fitch downgrades the bank. franc