>> shots fired in paris. police are confirming a rate in a northern suburb is connected to terror attacks. we are live in the french capital with the latest. >> russia comes in from the cold. obama welcomes the prospect of moscow joining the fight against islamic state. the chinese president says the economy still faces downward pressure. welcome to "countdown."

>> it is 6:00 here in london. >> we start in paris. french police have said shots the north ofed in the city in connection with the attacks on friday which left 129 people dead. you're looking at live actors from where the action is taking place this morning. >> the french newspaper reporting that two people have been killed in the operation. us from parisoins with an update. what can you tell us? >> we have to be very careful, because this large police operation is still taking place as we speak. le mond, two people have been killed but others are still barricaded inside.

this is a very highly populated paris.rhood, suburb of fareast three people so have been arrested but the operation is still underway. several french media are reporting it could be a very high-level operation targeting the mastermind of the attacks. this information is not confirmed at the moment, but if it was the mastermind of the we've been talking about him the last several days. he is 27 and was born in belgium. to be in syria. he left to syria a few years ago. he has been very present on social networks and has a high presence on facebook where he calls himself a terrorist.

2014, seen in march dragging a mutilated body behind a truck. this could be the target of this large police operation taking place in saint denis as we speak. the operation is still taking place at the moment. guy: a manhunt going on as well for those who were directly involved in the attack. we are missing a number of people from the eight that were listed and it's possible he is the ninth. what is the sense on whether he will deliver something in the next few days? 26-year-old who is under

an international arrest warrant is still at large at the moment. it's believed he was not alone in the car when he left the side of the attacks on friday night. it is believed he was with one of his others who was killed in the attacks. driver, and this is where the investigation is looking at the moment. whether there could be a ninth attacker involved in the attacks withay have been involved the cafés in the 11th district. let's turn back to the markets. ,e have a lot to think about juliet is standing by. >> good morning to you. we were seeing a pretty good session in the asian region

until those headlines came through from paris about an hour ago. you can see weakness in shanghai on the hang seng index and also taiwan and singapore. the nikkei 225 he flat. it was having an incredibly strong session but began to weaken and certainly pulled back in the last hour, closing lat there. australia's market close before we heard any of the news out of paris this afternoon. northern star close down by almost 8%. there was a fatality there early this morning. new zealand also closing higher ahead of that news out of paris. there has been a little bit of risk all sentiment coming through in the latter part of trade in asia. here we are still seeing weakness come through from oil .6%.as players down around

the miners coming under pressure, down .8% in the region but a good pickup and consumer goods today, moving higher by about .4%. casino stocks in hong kong, yesterday in macau the chief that revenue is going to be around $25 billion estimated in 2016. that's about half of 2014 and estimates.ll of 2015 as you can expect we are seeing weakness coming through in casino stocks because a lot of analysts had hoped for a turnaround in casino gambling. japannly that close in showing that we have seen investors pull back a little in that afternoon session here in asia. thank you for the update, juliet from hong kong.

challenging beijing's effort to revive the market and easier mortgage restrictions. more from nick. get to see this morning. what do today's events tell us about the condition of chinese economy and any need for more stimulus? shows is ait really split in china. the stimulus measures the government has taken in the last few months are kicking in pretty well in the big cities, beijing, shanghai, places like that, while the smaller cities in the rural areas are really struggling to catch up. when you look at those cities you see a really big supply glut . this is an issue that has faced the government for so long, property has been such a key driver of growth, feeding manufacturing and all sorts of injuries -- all sorts of industries. we are still wrestling with that supply glut that has yet to work

through the system. , do theyion will be step on the gas again for more stimulus, even though that's likely to affect the places that need it least, while they still try to focus on the smaller cities and look at ways to revive growth and clear the glut in those places in the months ahead. president has been speaking and sort of guiding lower. is that a fair reflection of reality? nick: this is the sort of contradictory message the chinese leaders have been giving for a long time. do seehand he saying we downward pressure and we will accept lower growth. change the economy to a system that is not just based on massive expansion but one where we focus on quality of both, which suggest they are willing to see a lower growth number. at the same time they say we will keep growth around the target of about 6.8%.

it makes it clear that while they are willing to tolerate some slower growth, it's a question of how low they are willing to let that go before they step on the gas again and do that expansion this type of the sortat is exactly of thing they were saying they would not do. itwill just have to see how shakes out, especially with that property data, if we see more interest rate cuts as economists expect. we will get a reading on he housing market in the u.s. octoberreleases its meeting minutes. anna: we will focus on how high rates will go and how quickly. up next the aipac meeting in the philippines.

leaders say terror cannot threaten those economies. ♪

back.welcome you are watching "countdown." fired relatedng to friday's attacks. the french newspaper reporting people have been killed in the operation. there is mixed reporting coming from the operation. two planes are traveling to washington -- to paris from washington and were diverted. russell will use its -- pressure would use its navy in syria.

president will meet in moscow and visit the white house to plan new strategy against the terrorists. pricechina's home recovery slowed, challenging beijing's effort to revise the market and ease mark -- mortgage restrictions. a retired new zealand rugby star has died just we after watching the all blacks retain the world cup. dr. say he passed away unexpectedly this morning in auckland at the age of 40. 2002s forced retired in due to a rare kidney disease. i will never forget watching ,hat man run at twickenham spectacular. he was an amazing presence

in the game. let's get back to the business agenda and go to the annual apec summit in manila where terrorism has become a major talking point. president obama said russia has inn a constructive partner talks and he welcomes russia going after islamic state. president obama: if we get a better understanding with russia about the process for bringing this syrian civil war, that obviously opens up more opportunities for coordination with respect to isil. so the two things cannot be completely separated. wait and seeing to whether in fact russia does end up devoting more tension to targets that are also targets and if it does so, that is something we want. guy: this was supposed to be a

business summit. it has become something outs. david: absolutely, in some sense it still is a business summit, but it has certainly been all about how these global leaders which are gathered here in the move forward. what is interesting is those comments we just heard from the u.s. president we also heard from the russian prime minister. it certainly confirms that and with the weekend the russian plane have certainly realigned the interests for a lot of these global powers. prime minister medvedev landed here in manila this morning and shortly after that he spoke with the press. he basically said russia can take care of the terrorists, but

a joint effort, in his words, is much better. so they can defeat the wasorists, but he also touting a little bit of assistance when it comes to the likes of the u.s. president, who came in yesterday. one of his first comments that he made was really also all about this. we heard part of what he said they came after this meeting with the philippine president. he said we have always welcomed russia in the fight against isis. he said the goal from the start with the unified effort across the world, across their allies and others against isil. >> the summit has brought tensions between the u.s. and china to the four over disputed territory in the south china sea. other conversations taking place there. what is being said? very: that was very,

interesting. he went straight from the warship that was decommissioned by the u.s., transferred to the philippines. it was also the same vessel, two years ago there was a standoff between the philippines and china. it was the very same vessel. he said the defense treaty -- he offered up to more vessels. china did not want this to come up on the agenda and sour the mood, but essentially what he said was if other countries want to bring this up, there's nothing they can do about it. that being said, it's been very eventful. , but theusiness summit comments that have come through have caught the attention of a in light ofe here, what happened in paris over the weekend. anna: thanks for joining us,

david, from manila. heard they are taking center stage at the apec summit. florence whon joins us now from dubai. thoughtsrst get your on the response we are seeing thus far. we are seeing a changing geopolitical story as a result of what has happened in paris. will, theat you french, the russians, the americans all seem to be increasingly on the same page. it?ncredible, isn't it is a moment of reckoning in international politics. it's a moment where other thing -- everything could go right or everything could go wrong. i hope that everything starts to and that the best way

forward is for russia and the united states to cooperate. we all knew and have been saying that a war like this syrian war can drag everybody into it and the crumbling of a state like syria was a very serious thing. it's very different from yemen and libya just because of the number of parties that are potentially going to be involved in this. so now there are two questions, really. there is the emergence of an international security threat and there seems to be a confluence of interests that could cause serious cooperation between the russians and the rest of the western powers that are now looking to put an in to this, and there's the question of how you put humpty dumpty back together again, and that is syria. there is discord over that and it has become polarized around the issue of whether a side --

assad leaves or stay. we are starting to see progress and i hope it continues. anna: on the second of those points, it has been a stumbling block between the u.s. and russia for some time. even they managed to find common ground are some tolerance of each other's positions on this matter, what does it mean about powers leaving the region? will they see eye to eye on what should be the future of bashar al-assad? >> they would have to with the roadmap that is being considered for election. the diaspora is a bit of a euphemism for refugees. if syrians are allowed to vote for a new president, i think , mr.through the ballot box

's position will be phased out, and that is inevitable, i think. the question is what is the modality? in --s seem there is agreement on the very important way of conducting this modality. guy: if we were to see elections taking place, in your words, putting humpty dumpty back together again, how would that change the security situation in europe? waginge are two battles here. sorts in syria and it is of spewing ballots across the world, iraq obviously. for ther is the battle hearts and minds of the disenfranchised. can potentially help

put a stop to the violence that is raging both within the region and in the west as well. but there is another battle that still needs to be thought and thatis a policy battle takes the terror out of the hearts and minds of young people who are joining isis and our entire -- inclined to go in that direction, rather than occupy themselves with things in their country. it has to do with economic progress. anna: thank you very much for joining us. we are bringing you live pictures of the saint denis is gonewhere rates have been -- ongoing overnight. we are getting some conflicting reports of what is going on but there is news coming through. we understand that men are

barricaded inside an apartment. this is near the area where we saw the suicide bombers on friday. shots have been fired, we have a significant police presence. residents are being told to stay indoors and turn their lights off. whore still unsure exactly is being targeted here. there's some suspicion that maybe one of the men involved in this is the mastermind behind the attacks that were carried out on friday. he was thought to be in syria but we now understand that he may be in the north of france, and the result of which this action is taking place. also thatnderstand schools will be closed today. guy: we've also seen to

incidents involving air france jets. let's stay with the airline been. lol is the best-performing airline over the past year. elliott joins us with more from tel aviv. is it just about the plunging oil prices, or is it about elliott: there's something more going on at stake here. if you drill down into some of about 15%s, compared with the year earlier. at the same time that pie has we have seen a stellar set of earnings from israel's flagship carrier, up from a year earlier.

quarter wasthird basically a wipeout -- a washout as a result of the war in gaza. of tourists come to this country during the jewish holidays. it's also happening at the same time that visitors to israel are even lower this year than they were last year in the wake of that gaza war. it's also reflected in the share price. the best-performing airline stock over the last four months, , next up comes a small mexican carrier and then china southern. thank you very much, elliott gotkine in tel aviv. fromup next, the latest paris where police confirmed they had been carrying out ray terrorwake of friday's

attacks. we will bring you the latest when we return here on "countdown." ♪

>> we have systems in place. ,f there is any kind of concern but i don't think we should eliminate our support for refugees. it's been a noble tradition in our country. this is not to ban people from coming. the answer is to lead to resolve the problem in syria. that is the ultimate answer and that is my focus. guy: that was u.s. republican hopeful jeb bush giving his take on the refugee crisis. it puts him completely at odds with his rival, donald trump, who said, send them all back.

anna: here are the stories you need to know this morning. guy: shots of been fired during a police raid in northern paris. it is related to friday's terror attacks. reporting newspaper that two people have been killed in the operation thus far. france hashile air confirmed that two flights were diverted due to anonymous threats made by phone. to planes were traveling paris from washington and los angeles. we understand that at least one of those planes has been cleared to restart its journey to paris. uses -- russia will use its navy to support a tax in syria. the french president will meet vladimir putin in moscow next week and didn't meet at the white house to plan a new

strategy against the terrorist. ona: let's get the latest the developing situation in paris. caroline: as you can see on this live picture of the operation is still underway in the north of paris close to the spot where one of the attacks took place on friday night. some men are still supposed be eric hated inside an apartment and according to a police source it could be alleged mastermind of the paris attacks. he is a 27-year-old born in belgium and until a few days ago he was believed to be still in syria. he apparently spent some time in the training center that was the target of some of the airstrikes

over the past few days. he was also seen in this video last year in march of 2014 where he was seen on top of a truck dragging some mutilated bodies of some muslims that he called nonbelievers. of course the operation is still underway so we have to be very careful with every piece of information that we have. according to various media sources, at least one man has been killed and three have been arrested according to local media sources. the operation is still underway and the area is under lockdown. locals have been told to stay indoors. caroline, thank you for that from paris. out what isind happening in the markets this morning. >> we are on fed watch this morning.

i can tell you that at the moment traders are pricing in a 66% probability of affect rate rise in december, up from 50% at the end of october. what we are seeing in the market is very much a reflection of that. looking at the dollar first it's hit a seven-month high against the euro. the bloomberg dollar index which tracks it against a basket of 10 major currencies has hit a record high. we got some data from the u.s. yesterday, inflation for october 0.2% but theline inflation numbers something investors are certainly focusing on. if you look at gold as well, that is carrying on the same story, trading pretty flat at the moment, edging into positive territory but still trading near its lowest level in more than five years. losing out his expectations

increase for that said rate rise. moving on to industrial metals, continuing their slide. copper is down more than 1%, the same for the sink -- the same .or zinc the london metal exchange has dropped 25% in 2015 and heading for its worst year since the financial crisis. back to you. we are continuing to monitor events taking place in the north of paris area of saint denis. you are looking at pictures of the army which has been deployed , heavy weapons being now moved into the area as you can see. an escalation in what we are seeing in the area at the moment , being put forward by the french authorities. we will see how the situation develops. some media reports

that a large explosion has been heard over the last few minutes, as yet not confirmed. been closeds have in saint denis and residents are being told to stay indoors in turn off their lights. we will continue to monitor the situation there. the tragic events in paris on friday came less than a year after the charlie hebdo massacre. we spoke to the head of a french security think tank. parist happened friday in can happen again and again. peacetime is over. it's very easy to buy a colossian a call in france today. a kalashnikov in france today.

it is like that in several different suburbs. the big game changer in the last two days is the confirmation that one of the attackers came with the immigrants. now we will face attacks in the coming months like that. we fell into our own trap. we have only one border which is the european border. so once the people are in, there is no way to send them back. minister saidme that there will be other attacks , within days or weeks. sure thatlutely things like that will happen again and will happen again very soon, for several reasons, one

being the big international conference with all the delegations coming worldwide. guy: an interesting report there. the intent that exist in france and the availability of weapons in france seems to have come together here and i think that is what the security for -- security services are focusing on at the moment and the connection between those two. that is hopefully what we will see over the next few months as we explore the issue further. guestlet's bring in our host to is with us for the next hour on the program. he said the impact on business wasconsumer sentiment relatively small we may not see much overall impact on the economy in the short term. the big question of course is

this gala the response. things are still developing the lens in terms of that you look at this through and the impact on the economy, what are you concluding from what you have seen so far? >> as you say, it's still very early and there is no economic textbook for this. you don't really know how similar one situation is to another. we learn as we go on so many of these things. what we have experienced from london and madrid is there was impact, so from that perspective, we might expect to see very little impact. as you say it is the response that matters here. there is a huge difference in response from what the u.k. did , there is no change

to police funding. yet obviously after 9/11 you saw $330 billion increase in homeland security spending over the next decade. so it very much depends on what the response into being and it's still very early to try and judge that. guy: the difference here and what happened in london was that this is the second major attack here within a year. an isolated incident. you did not see a follow-up situation. we don't know if harris is any safer today than it was before these attacks. security forces i talked to today say it is still a very live in ongoing situation. >> possibly, yes. as you say, it is a live

situation and we have to see what happens thereafter. clearly security forces are trying to mop up different elements and they are clearly concerned that something else can happen. we have heard there have been a number of attempts foiled in the last year or so. could have much more of an impact of something else -- ats, but it this stage this stage it depends from the household perspective whether or not it becomes a paradigm shift for government response remains to be seen. anna: government response is one thing and were talking about fiscal stimulus and what that might do, but what about central-bank response? to be preparing everyone that we were moving in a loosening direction anyway. perhaps it pushes them a little

further on that. >> that is a possibility. has to be at the forefront of their minds. i think mario draghi made it clear that there seems to be a and they want to return inflation to target quickly to reduce some of the impact on inflation impacts. they will certainly be looking at the response but in terms of when they meet in december, it is early to judge what reaction will be. it's unlikely to really change their decisions over the next couple of months. guy: stay with us, plenty more to talk about. we need to talk about the fed as well. anna: let's take a look at the

details. >> were talking about $143 a share cash offer, that's a 50% premium on the 20 day average price before the announcement yesterday. were talking about air liquide buying airgas in the u.s.. basically this is the biggest forisition in the industry nine years. a $10.3 billion deal with an enterprise value of $13.4 billion. the takeover would basically leapfrog itside competitors to get the top spot in north america. the airgas target gets 90% of its revenue from the u.s. and has a 25% share of the u.s. market for package as is and welding equipment. but this could do to air liquide as theing takeover

biggest industrial gas company by revenue. this deal comes after a string , some successful in some fail in previous years in the industry. a prioritys become for european industrial companies, partly to do with lower energy costs but also bloomberg intelligence has pointed out that it's a bet on commercial construction picking up. it's about industrial output in manufacturing in the u.s. as be a though that might little weak at the moment but it's a bet on future growth. in terms of what the deal means for air liquide's competitors, bloomberg intelligence again points out that airgas is the only large opportunity available in global gas and what competitors might have to do to grow is rely on smaller acquisitions. but we are talking about the biggest deal in industrial gas in nine years. guy: interesting to see a

european company making an acquisition in the united states. definitely there and we will learn more about what will happen next to the dollar. anna: coming up, more on avoiding punishment for not paying back loans. ♪

back.elcome you're looking at live pictures from saint denis just to the north of paris. there is an ongoing military operation underway. you see both the police and the military now involved. anna: some local reports had suggested that the operation had finished but the saint denis operation is still ongoing.

targeting the man who until recently had been thought to have gone to syria. this raid by police attempting to pin down terrorist in a paris flat has been ongoing in the north of paris. guy: several people are believed to be in the apartment that has been targeted at the moment. we will continue to monitor the story and bring you the latest. business owners to quietly the country to avoid punishment for defaulting on loans are the story. matthew has more. why are we seeing this happening in dubai? this is not necessarily new, is it? matthew: good morning. it is not a new phenomenon, and happened a lot in 2009 in the economy shrunk back then as a

result of the global financial crisis. now what we are seeing occurring is because checks are used as security on loans, they are used on business loans, personal loans, and people are signing undated checks that are given to the bank in the event of payment problems, the bank tries to cash the check. but defaulting on a check is still a criminal offense here. when you face the prospect of a potential default, business i run orve to say do do i stay in face of potential jail sentence. guy: can i read in anything beyond the fact that certain people are having bad loan issues, or is there something wider here? matthew: at the moment, where we are seeing this happening, these

are the people who immediately feel the brunt of the falling commodity prices, the falling real estate prices, payment issues from debt suppliers. at the moment it is isolated but the worry is, as there is the plane -- sustained weaker economic growth, that it then spreads and starts to impact larger corporate and leads to layoffs in larger corporate sectors. get laidens is you off, you have a couple of months to find another job but if you haven't found one, then you probably have to leave. it has an impact on consumption in the economy and you start to have wider ripple effects throughout the economy. problemoment while the

is not huge, it is a worrying sign that things could start to deteriorate going into next year. anna: give us an idea of how serious the situation is, we are not that kind of level right now. moment, thethe loans make up around 5% of bank loans. even if they have to start provisioning for all of these loans, it will not create the kind of systemic problem we faced in 2009. the real problem will be if it starts to ripple through and we start to see people leaving the country and defaulting on car loans, credit cards, personal loans and mortgages. then it will have more significant impacts on the banks and the detrimental impact on their profits and will also hit many other areas of the economy when consumption starts to fall.

so the outlook could start to change quite rapidly going into next year if this trend continues. anna: matthew martin joining us there with that story from dubai. let's get back to paris now where we have been hearing from the minister for energy environment in the socialist government. we are looking at live pictures of the situation in saint denis. talking about metal detectors being deployed on the french train network and saying that security will be increased on the trains in france. will continue to monitor the story as we see reporters arriving at the scene. let's put this into context. this is an ongoing operation that will be very much front and center in paris for quite some time. we areow day five, where

continuing to watch ongoing operations with the heavy police presence and the military involved as well. schools are closed. how long is the tail on this story from an economic point of view and how it will ultimately end up impacting the french economy. the french have made it clear they will do whatever it takes to put the security situation behind it but it remains an ongoing live situation at this stage. david, let's talk about something different. let's talk about the fed. we have a strong dollar at the moment. one index saying the dollar is at a record high. david: the tightening in financial conditions look like it could be the last hurdle for december. the fed has clearly suggested that it would like to get on with the start of the gradual

withdrawal of policy stimulus. the economy has picked up. there's no obvious signs of slowdown in the last thing is markets responding. on the other side of it is the dollar. the fed has to expect and will expect some tightening of the dollar is markets start pricing in the greater chance of the december rate hike. what we are seeing is the dollar rise about 1.5% higher than it was in september. that's within the order of magnitude that fed officials would find acceptable. if you see it moving back toward the 5% rise that clearly is something that depresses the outlook for inflation. seeing level, when were the movement against all currencies in this direction. anna: an official as saying that three people were killed at the

start of this saint denis police operation. one woman blew herself up with explosives. this is the latest from this ongoing operation. >> that was maybe the trigger point for the operation but now , weseeing its continuing understand that a number of people are still hold up within an apartment that is surrounded by numerous police and army that are on the ground at the moment. people are being told to stay indoors and schools will be closed. it's very much an ongoing operation and it could be the man believed to be the mastermind of the attacks on friday. that fact remains very much unconfirmed. is who they're going after in this operation but we don't know his exact whereabouts of course.

here we are back in paris with these live images from the french capital. we will take a short break here on "countdown." we will be back with the latest from paris when we return. ♪

anna: shots fired in paris. the rate happening in a northern suburb now is connected to the terror attacks on friday. officials say a woman blew herself up with explosives. we are live with the latest. guy: russia coming in from the cold. obama welcomes moscow to join the fight against the islamic state. anna: and as china's recovery slows, the president says the economy still faces downward pressure. guy: welcome to "countdown." anna: a warm welcome to the program. 7:00 here in london.

guy: we will start with what's going on in the northern parisian suburb. gunfire and explosions have been heard. the police are carrying out an operation which we now know is in connection to friday's terror attacks. woman officials say a blew herself up and that one of the targets is the suspected mastermind of friday's attack. bloomberg's caroline connaan is live. what can you tell us? caroline: this is the latest information -- a female suicide bomber blew herself up at the beginning of this operation and that is still taking place. the female suicide bomber bomber killed three people including herself, at least one passerby may have been killed according to several french media sources.

several explosions have been heard in the past half hour in the other site. the operation started three and a half hours ago at 4:30 a.m. french time. people in this northern suburb were still sleeping. locals are being told to stay inside. the target of this large police operation is the alleged mastermind of friday night's attack. a 27-year-old born in belgium, he was believed until very recently to be in syria. he is believed to have spent some time in the training center ofraqqa that was the target the french airstrikes a couple nights ago. he is also believed to have spent time in this neighborhood of brussels that has been linked

to the terrorist attacks in the past few days. last year he was seen on video truck, dragging some middle-aged bodies behind the truck. he is the target of this large operation still taking place as we speak in saint-denis. guy: we will be back with caroline throughout the program as we continue to get updates on what is happening. you that european equities look like they will open softer. markets ared german down by around 7/10 of 1%. london doesn't look quite as soft. that is the fair value number that we can look at. anna: and as investors remained focused on the geopolitical evidence ofore

european governments reevaluating security preparedness, saying they are raising their level of security alertness. intelligence says the terror of is stilltill serious. guy: let's talk about what's been happening in asia. juliette saly is standing by. jonathanuliette: good morning. we are seeing the shanghai composite down by 1% despite the comments about the overall economy from the president. big falls coming through in some of the insurers. hong kong down with an hour still to trade, weakness from the casino players, which are down almost 5%. sans china is also week after the chief executive of macau warned of further revenue slumps in the gambling city. japan's market was having a pretty solid session before we

heard news of those attacks, the operation in paris. of the best performers was up 7% on a broker upgrade, but as those headlines started to come through, we saw the yen alsoand stocks close flat, a flat finish in korea. in australia the market closed before we heard any of the developments, and we saw some ok miners werehe under pressure. if we have a look at some of the major movers in the region, we are talking about the close in shanghai -- security is up almost 3%, appointing a new chairman following the resignation of its previous chairman. the brokerage firm came under significant pressure, as worthy insurers. fell below $20hc for the first time since november, th2008.

also northern star came under pressure as well. a little more of a flat session that late afternoon trade here in asia. guy: juliette, thank you very much. they let's get to china, are recovering slowly due to a supply glut. it challenges their efforts to revive the market with interest rate cuts and easier mortgage restrictions. let's get more from our beijing bureau chief, standing by for us. good to see you. what does today's data say about the condition of the chinese economy? it shows the real problem that the chinese leadership faces, which is a step on the gas of interest rate cuts and that boosts the property sector in the big city, but those efforts are not trickling down to smaller cities. the big issue is a supply glut,

as you mentioned. the property sector has been such a key driver for growth that there is a huge buildout of apartments and houses and high-rises, and that supply glut is not cleared. what we are seeing is that it will be a key focus for the leadership in the coming months. they step on the gas and it will encourage more spending, a bigger build out of apartment buildings. it really underscores the china itwer the government has, boosts the economy and hits the but they need an entirely different set of tools for the smaller cities. guy: the president will be speaking. what has he been saying about the ongoing economic situation? is he expecting it to decline from here? the message is slightly contradictory. nick: yeah. this highlight the challenge leadership faces, and it gets

this contradictory message that they have maintained. president xi is saying that we want to manage this transition from one that is totally obsessed with hitting the growth target every year and getting the big numbers, to one that is focus on the quality of growth, the structural shift of an economy built on the back of exports and investment, to one that focuses on consumers. they will do that shift, but at the same time he is indicating that they will not tolerate growth low a certain level, 6.5%. really the question for china today that everyone is watching is how does the government maintain or navigate that contradiction. guy: nick, nice to see you. nick wadhams. anna: david page is still with us. let's pick up on that china story. we had a slightly cooler property prices number overnight, and xi speaking as well.

he was talking about how the economy is still in a reasonable range. do you think you softening his rhetoric around the economy, or do you think 6.5% is still the backstop? david: i think it is a backstop but we think it will be missed. next year we are likely to see growth below that. not meaningfully, but just a little bit. he talks about the contradiction and that is right, the short-term and medium-term. medium-term they know the need to transition, but also the risks and balances. short-term, they need to encourage more of that to pump up short-term growth. it really is a transition. when the chinese see risks to the slowdown, we will always see them rely on stimulus. there was a lot of stimulus this year, which manages growth in but it doesrm,

increase the question we half of the medium-term. guy: does the fed now thinks that understands the chinese? this is why they put off the end of the summer rate hike. david: i think it does. and what they were cleared to communicate immediately was that they saw it as a risk. they were looking at the china slowdown and thinking about forecast -- they were wondering whether or not this was the start of deeper, harder cuts. they now don't think it is. economic data doesn't suggest it. but i think also the fed was relatively surprised on talk of global conditions, because it was something relatively new, and it was what we all raised their eyebrows at. but i think it was a genuine surprise. it was because they were focused -- anna: another devaluation of the chinese currency, one banking index showing the effective exchange rate of the due oyuan

within 1% of its r.b.i. socgen talking about a 20% slide. will we see that happening again? chinese earnings -- they don't want to return -- this is all structural, not cyclical. david: and i think they will avoid that, because as the speculation grew, we saw a significant pickup and outflow from china. we saw an annualof capital outflows, which is a huge outflow. are trying to pin that and the latest data suggests it has stopped. encouraging that speculation could lead to outflow, deconstructive of what the chinese achieved. but the currency does remain very overvalued. as we move through, there is a risk we see a modest evaluation, but i think it will be very controlled. davidguy:. let's talk about theo

they are concerned about strengthening currency in the u.k.. what do you think drug he wants? -- think draghi wants? what would generate good numbers? david: the ecb is perhaps not targeting the currency in terms of driving growth, but a quick mechanism to lift inflation. you talk about the urgency of returning inflation, the only thing a central bank can really do to deliver short-term inflation is lower the currency. ,e see in move down to 106 partially because the markets are more convinced of the fed rate hike. i suspect draghi is quite happy with this level, but if you see the ecb justify a change in expectations and move in december, i think the euro is likely to go lower. next year we will be talking about parity. anna: david, thank you.

david page stays with us. let's look at the data you can see later on. guy: later we will be getting a reading of the housing market -- the main event comes at 7:00 p.m. u.k. time, the release of the said october meeting minutes. anna: battling terror -- how prepared are we to deal with the attacks like we saw in paris? we will discuss that next. ♪

guy: 8:16 in london -- welcome back. these are live pictures from the northern suburb of paris, saint-denis, in an ongoing police and military operation. a number of developments over the last hour. we understand from prosecutors that this may be targeting the man who we think may have been a ringleader of the friday attacks. anna: italy's operation linked

to the attacks on friday. up, isan blew herself what we understand from an official, at this address in paris where the rate is taking place. officials say that no police officers have been killed. there had been earlier reports that some had been injured from other agencies. things are not clear at the moment, but two were arrested during the saint-denis operation. guy: we will continue to monitor the story as we work our way through the morning. this is an ongoing operation involving both the police and the military in france. huge numbers of both in saint-denis this morning, where schools are closed in businesses remain shuttered and people have been told to stay inside their homes. anna: let's get to the annual apec summit in manila where terrorism has become a major talking point. president obama said that russia has been a constructive partner in syria talks and welcomed

russia going after the islamic state. >> if we get a better understanding with russia about the process for bringing an end to this syrian civil war, that opens up more opportunities for coordination with respect to isil. the two things can be completely separated, but we are going to wait and see whether russia does end up devoting more attention to targets that are isil targets, and if it does so, that is something we want. guy: david ingles is that the event. this was meant to be a business summit. it has probably become something else. and we understand why it has become something else. the agenda is still mainly business, and certainly the --ments that have made news

i have been walking around here and we just finished the ceo summit. it is really all about what happened on the weekend, a continuation of the conversations we had. what was different and interesting about what we heard here today was that the confirmation -- because of what happened in paris, because of the changes over in egypt, suddenly we have the interest, real lions at -- the re-alliance of global superpowers. landed, he said in his message that they welcome support. russia can do it alone but a since waron is better

has been declared on all the civilized world. and we heard that, a few moments ago what president obama had to say, he is , and the russia's role objective was from the onset a unified effort across the world against isis. see would be interesting to -- in two hours, 20 minutes from where i am, we understand that president obama and the russian prime minister are set to sit down and meet. the agenda guy has written all over it, but i wouldn't be surprised if we get to see some more related to this antiterrorism effort. guy: david ingles, thank you very much. anna: events in paris continued to dominate the diplomatic agenda, and our next guest says

we need to bring armies together when crises occur. head of european foreign policy and joins us now live from brussels -- good to have you on the program. yourou give us wha thoughts on the geopolitical situation? there seems to be a rapprochement going on, with russia -- house a price are you at the speed? >> well, the evolution on the diplomatic front are always taking place quickly now. france ratio to russia to find support against its attacks in syria, and it brings russia out of the cold, with russia being seen previously to support assad, contrary to what us-led coalitions try to achieve in syria and iraq. guy: stephen, is it possible to

put what is happening in syria and the security story in the same bucket, or do they need to be in different areas? do we need to think about them differently? if we were to see some sort of government formation there, the cease-fire, led that necessarily change the security situation in europe? >> well obviously, it would have a direct impact, seeing as how a lot of refugees arriving in europe come from syria. obviously europe and france and its partners, especially after the attack, are intended to beef up their efforts in finding not just a solution to the war in syria, but perhaps even more widely so to re-stabilize the middle east. anna: what do you make of yesterday's comments by the french government about how they wanted to invoke

various parts of the lisbon treaty to call on eu support in this operation, rather than referring to nato? was this all to do with making sure russia was not tapped out of the matter? how do you interpret these developments? >> i think it goes a long way in explaining why france opted to vote for self-defense clause embedded in the lisbon treaty. it is similar in terms of terminology to the nato self-defense clause, which has only been invoked once, after the 9/11 attacks. way,o go the european whereby francee seeks more civilian support from its allies rather than the military through nato, which could have worked russia even in syriats own efforts and thereby delayed a solution to the war in syria.

stephen, there has always been the idea that people have talked about surrounding defense spending in europe -- many countries don't hit that target. how many countries will hit that target one year from now? >> well, that's hypothetical of course, but seeing as france is already very close to that target and it is intending to beef up its defense spending as a result of the attacks, i think you will see other member states going the same direction. for now, only a handful of member states are hitting that target. my guess would be that within a year from now, there may be slightly more than a handful. anna: stephen, thank you for joining us. the head of eu foreign-policy at the center for european policy studies joining us from brussels. guy: you are looking at live

pictures from saint-denis, the northern parisian suburb, where e defind the stade t france. they have been conducting an operation for the last couple hours. mixed reports to exactly who is being targeted and what has taken place, but we understand one-woman has blown herself up. there have been injuries but the police are saying no fatalities on their side. anna: three people were killed when they raided this address in saint-denis, linked to the terror attacks on friday. a government official has told us that the operation began at 4:25 this morning near the cathedral in saint-denis where french kings have been buried. it is not only a residential suburb but also a tourist destination and various reports have suggested that the intended target of this operation is

there. three people have been killed, including the woman who blew herself up. no police have been killed. guy: it was believed that he was in northern syria, possibly in raqqa, but it now appears he may be closer to the action we saw on friday. he was believed to be the mastermind behind the attacks, effectively conceived in syria, planned in belgium, been carried out in france. that he was believed to be some distance. anna: people in the area have been told to stay inside, although now it is daytime sc hools will remain closed. we have seen arrests in germany and belgium, the danish increasing their security. we are monitoring the situation as it continues to develop. guy: as we head toward the market open, down by 6/10 of 1%

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guy: half past 8:00 in paris. you are looking at pictures from the northern parisian suburb of saint-denis, where an ongoing operation is underway. it is believed -- and this we have sources in the prosecutor's office -- that the man some people believe could be the mastermind behind friday's attacks may be holed up in an apartment there. anna: let's get an update on the when theyis ongoing started at 4:30 this morning. carillion conan joins us live -- what -- caroline conan joins us

live. caroline: the latest we have is that at least two suspects were killed during this operation. n bloomberg up up at the beginning of the operation around 4:30 a.m. in this neighborhood of saint-denis , north of paris. the operation started four hours ago. peoplet one or maybe two are still barricaded inside the apartment. even that we have confirmation that this operation is targeting the alleged mastermind of the is not confirmed quite yet that he is inside this apartment. what we know about him is that he is believed to be linked directly to the attacks, to the alleged mastermind of the attacks. hewas born in belgium and

was believed to still the in but now we have confirmation that the operation is directly targeting this terrorist. the area is still on lockdown and people have been told to stay indoors, not to go to work, not to go to school. this goals, according to the mayor of saint-denis, will remain closed. this is an area very close to the stade de france, one of the targets of the attack on friday. on aperation is happening usually very busy street and the very center of this suburb, and as you can see, heavily armed police and soldiers have been deployed in the area. anna: caroline, thank you. caroline connan. the former u.k. minister of

security joins us now on set .good morning . how long would you expect the tale of the operation of friday to be taking place? we are on day five now -- what is the trajectory? >> they are still that normal. the french government has declared, the parliament has agreed to a three month stay of emergency. will uncover the evidence, discover the plot in the conservancy. but something else is also happening, which is that given that the law is now relaxed about the way in which the police go after people, they will seek to clean up, so that we will see arrests of a large

number of suspects or people that have been involved. they will not take them into custody. anna: that is the freedom it gives them. >> that's correct. what we have just been looking at is directly linked to what was happening, what happened the other day. but i wouldn't exclude -- there are other people in that flat that aren't involved that are part of a wider network of of terrorist conspiracy. what's very remarkable is that if the head -- if the mastermind theis particular plot -- impunity with which these people were operating is remarkable. -- it'sd on the level fascinating that yesterday we got these statements that france was going to use european law,

which doesn't mean any european military action but may mean more intelligence sharing. is that nothing going on already? >> you can always increase your level of intelligence sharing, and i think there has been not as great sharing between europeans, but there is evidence in the past of authorities knowing things who failed to pass on. there is more you can do there. i think the announcement yesterday, invoking one of the eu treaty obligations, is related to what you would describe as security rather than defense. for instance, one of the concerns they must have is how to protect their borders, and under normal conditions. the state of emergency nationally will enable them to propose controls, but they need offense.

-- certainly they will be delegating provisions during that state of emergency. you need european solidarity. this is the context in which the french can appeal to their partners. it, and ie thought of can imagine other security-related measures including enhanced intelligence cooperation which will get going under this rubric. guy: i want to take you back to this three-month period, this clean up -- in france, there is this coming together of intent by those that want to perpetrate such actions and the access to weaponry, which is something you don't see in the u.k. but you do see and continental europe. how difficult is it to break that link? the availability of weapons seems to be something that marks this region is different. >> well it is certainly

different from the u.k. how different france is from other places is a different question, and i think that is another problem. how do you begin to stop the and then have the path to dispose of what may already be in the country? another part of controlling it will be to be able to go after the traffic. that is probably a much longer term operation. i think we are going to see something which is much, much than simply the state of emergency of three months. this will be a bigger operation. does have to stop changing the terms in which people cooperate. anna: we are hearing from the french government today that measures will be taken on trains metal detectors, --

>> i think this is where it is going. i think it is perfectly possible to imagine new technology on roads, too. i think we're going to see real change. this is a landmark event. guy: to that point, do we have any idea of now that the operation is underway -- do we have any idea of scale of the weapons that came up from the balkans following the war? they founded rpg. this is heavy weaponry we are talking about. >> absolutely. but i can't give you an answer. but i think that very instance gives you some idea of not only volume but also type of weaponry that may be available. i think people have been able to operate extremely freely in -- you can think of a number of ways to get into continental andope, by road or air --

even those we don't have passenger name recognition. pnr as is across the atlantic. also you can get in by any number of ports. the u.k. needs to be wary of this as well. i would expect our own controls. interested in the way the relationship between europe and russia seems to have changed? we were talking extensively about the ukraine, and all of a sudden there is a different dynamic. >> it is clearly a very important dynamic. where i think some of the points in common between russia and the west are now coming to the fore is the whole question of ut hereationship of -- b we do see the russians have a very strong influence, seeing

terrorism brought under control. there is a closing of the ranks going on, and let's hope it results in something in syria. anna: thank you for joining us. former u.k. minister of security and counterterrorism. guy: asp is reporting that three have been arrested at the saint-denis site we have been watching. , minutes away from the start of cash equity trading. we will take you through the stocks you need to be aware of that could move. ♪

anna: welcome back. 7:43 in london. live pictures of the ongoing police operation taking place in the saint-denis area of paris. we understand the number of

arrests have been made. this operation started at: 30 local time -- at 4:30 local time. an apartment was surrounded and one of the occupants blew herself up. guy: such operations were to be expected. most anticipated that we would see these kinds of raids being conducted as the french police and authorities pieced together who was responsible and where those responsible were. the surprising fact this morning is that the man that might have been the mastermind behind the attack could be the man that is being targeted today, amongst others. there was widespread belief that he was out of the country, possibly in syria. we will continue to monitor the story. if he is still in paris, that would surprise many. london, 60 minutes away from the start of the trading day. let's get to the geopolitical

concerns weighing on the futures market. what are the stocks you are watching? nejra: i am starting with the french industrial gas giant that has announced it will take over airgas, the u.s. company, the $10.3 billion deal. this is not just the biggest acquisition for them, but it is also the industry's biggest deal in. nine years. it will allow them to leapfrog its competitors to take the top bar in north america. we are talking about a $143 per share cash offer, in the depositories jumped 4% on the news. we might see this stock open higher when markets start trading at 8:00 london time. m&a, peopleh them i familiar with this agenda -- a

$42 billion takeover, which syngenta rejected. now we are hearing that monsanto is having internal discussions on the merit of a new offer. syngenta rejected a $47 billion offer from monsanto back in august. syngenta and other stocks to watch this morning. finally, air france. we have been talking about the police operation in p aris increasing tensions in the city after those awful attacks over the weekend. two air france flights, bound for paris from the u.s., were diverted. there was a bomb scare. air france is another stock to watch, as well as other airlines that were hit hard on monday after those attacks on the weekend. anna: thank you very much. guy: let's talk about the other big stories, this strengthening of the dollar.

u.s. tightening is a big deal for investors, who are expecting a rate hike in december. that tension now goes beyond that. we have the fed minutes coming up. what will the path of tightening ultimately look like, and will they signal that, and how accurately will it be received? futures indicates that the funds rate will reach around 0.7% by december, 2016. it is a bit vague. anna: let's bring in the cio at investment management. good to see you. in minutes today will focus people's attention back on where the fed goes, in the markets are increasingly expecting an increase of interest in december. but the question then turns to how quickly do rates go up after that? that seems to be the subject of much debate. >> that is the question we want to be addressing. that is the question that, for me, is about normality, the economy returning to

normal, not leading economic growth through monetary policy. i think that does become the question. marketstive is that the are very focused on short-term rate differentials between the dollar and other currencies. they could drive those currencies further apart. you have a strong block, the dollar, the pound, than the week block, -- the weak block. guy: which of those do i want to be invested in? which way do i go? to a go to the weakening eurozone, where maybe growth will pick up that i will lose money on the currency, or do i go to the u.s. where the dollar will suppress growth but pick up significant gains? >> anything more than a very short-term view, you go to the weaker currencies. if the world is normalizing, them the currency markets will

begin to not look at monetary policy quite so much. we will begin to look at trade flows and surpluses and all the advantage is with euro and japan. anna: does that mean that the strength of the dollar might well be in the run-up to the rate rise, than that similar thing with david bloom -- >> i wouldn't be surprised if you see people losing interest in the dollar. the position is in favor of a strengthening trajectory. guy: it depends on what draghi and co do. yes, the fed it may be if thening rates, but ecb carries on taking action, the level will continue to drive the euro low. we could be well below parity very soon. >> if the fed is right, druggie must be wrong. probably it is going to power some kind of global recovery in the next year or two.

you can't really argue that the eurozone is in distress. consumer spending is fine, manufacturing is weak but it seems to be a global problem. manufacturing is part of the economy. i think it is the other way around. draghi -- within three to six months -- inflations will pick you have headline inflation beginning to make the headlines. it is hard for him to continue with these currency weakening policies. at some point you get a taper. anna: the message we are hearing from the ecb, and jonathan ferro spoke to him earlier this week, not necessarily where inflation is that how long inflation expectations remain weak. the reputation of the central bank to boost inflation is called into question. >> misplaced, if you ask me. our view is that inflation will

pick up. core inflation in the eurozone, which is what they should be looking at, is already taking up and has been for several months. the trend is pretty clear. i am surprised they are continuing with such dovish language in the face of inflation trends like these. guy: it these to hit that target -- nevertheless, where is the growth going to come from? which channel of operation are they going to use to drive growth? are they relying on the u.s., or is there something we can do in europe that could propel it? >> there are two things missing in europe -- fiscal spending in the banking industry. both of those are very important drivers of growth, which have really been missing over the last few years. i don't expect the banking industry to become suddenly liberated. i think it is still going the other way. but i do think fiscal austerity reduces year on year, and

another base effect rolls off. anna: and where does that fiscal spending come from? -- thethink the french result of paris -- is that where the driver for change comes? they have talked about how security is now more important than sticking to their fiscal' -- >> fiscal spending coming through in france, and then other countries from the migrant problem, but also there is a change in tone at the political level -- it is becoming more acceptable to do fiscal stimulus. guy: where does that put me on the bonds versus equity market t argument? not wantfinitely wando to be in bonds. guy: when does that get priced in? bonds performed ok, surprisingly ok given the environment. when does it start to happen? i have been hearing this for quite some time. >> it is a supply and demand

that is difficult to tell, because it creates a forced parallel.. my guess is that it is somewhere around the six-month point. we have seen a couple times over the last 12-18 months, it is sudden when it happens and quite destabilizing. the just have to be underway. anna: thank you very much for joining us. presidentand that hollande is meeting with his cabinet, according to the palaces morning. this is the ongoing situation in paris. guy: brendan greeley is standing by in saint-denis. brandon, what can you tell us? guy, the operation is now over. we are standing where the police cordon was seconds ago. they are also letting residents out.

two residents were woken up before 4:30 by two explosions. there has been gunfire often on. we know three people have been arrested and three killed, one woman blew herself up with a suicide vest. i am standing right now 900 meters away from where the police operation was. there has been police in and out all morning, 500 meters behind me you may be able to see several military vehicles that have been doing sweeps around the neighborhood. right now as you may be able to see, residents are out and checking their phones, asking each other what happened. anna: do we know yet the fate of an who many have said was the target of this? brendan: yeah. be theuspected to mastermind behind the attacks -- but we don't know

whether he is among those who have been killed or arrested. we do know he was the target of this raid, the police have not yet said whether he was among those killed or taken into custody. guy: brendan, thank you very much. brendan greeley joining us from saint-denis. that wrap things up for us. anna: the european equity markets open in five minutes. that will do it for "countdown." the "on the move" seen will take you through the day. geopolitical concerns are back into the psychology of the ma rkets. ♪

jonathan: good morning. welcome to "on the move." i'm jonathan ferro in the city of london. moments away from the start of european trading. the dollar climbs to a seven-month high against the euro. investors await more rate hike clues. president xi says china's economy faces downward pressure. lowest since may 2009. shots fired in paris. three are killed as french authorities raid an address in a northern suburb in connection to the terror attacks on friday.

much more on that story when they come. ahead of the market open, ftse futures that little bit lower. the dollar is stronger, making more headlines. let's get your morning market open with nejra cehic. nejra: it is all about the world's two biggest economies. investors looking ahead two minutes from the fed's october meeting. at the moment, traders are pricing in a 66% possibility of a fed rate rise in november after some mixed data yesterday. the key, that inflation number from october coming in line. we've got the u.s. economy and the fed on one hand. on the other hand, there's china , with president xi jinping saying the economy faces considerable downward pressure. let's look at how the markets in europe are reacting. just opening here and it lo