you don't see that every day. introducing wifi pro, wifi that helps grow your business. comcast business. built for business. manus: you are welcome. this is "on the move." berlin.30 in we are counting down to the start of european trading could alongside me is caroline hyde on a mission in frankfurt. here is what we are watching, draghi's big day. what measures might the ecb president announce to aid euro area economy echo we're live in front for it -- area economy? we are live in frankfurt. investors in contain enthusiasm

in the stock -- brexit bounceback. iag warned on profits just hours after the brexit vote. how are things looking? we hear from this ceo willie walsh in london. caroline? manus.e: yes, such anticipation building. steaming hot, 29 degrees is what is expected to get in frankfurt. the question is a buzz. will we get a change to quantitative easing? a change to amount of bonds they can buy back up notably, we've all got a question on how this rejections will look like from mario draghi? is there enough risk in the system to push a move right now? manus: you've got it. is he going to be looking at the conversation that carney had with the parliamentarians yesterday thinking to himself you went hard, fast and early, can i justify that to the germans?

caroline, great morning. lots more to come from caroline in frankfurt. there is one thing on the markets. let's get his truck desk let's get across to shery ahn. -- let's get across to shery ahn. shery: apple has announced updates to the iphone and a watch. the iphone seven includes at camera upgrades, a faster processor, a longer battery life and the new water resistant design. -- the bestitched iphone ever created but others were not so enthused with shares rising less than 1%. china's imports rose last month for the fourth time since 2014. the company's exporters enjoyed a cushion from the weaker yuan. shipments fell 2.8% when measured in u.s. dollars. --rose 6% and you want terms

in you want terms. more than the government's initial reading of 0.2%. this gives the boj something to think about ahead of the closely watched a meeting later this month. at that meeting, policymakers will release their review of the central bank strategy and decide whether to increase stimulus. global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. this is bloomberg. caroline? caroline: thank you very much indeed. from temperatures building in anticipation of whether we will indeed see a move from mario draghi and the 25 members of the ecb here in frankfurt. the question of course is will projections be changed? there is a consensus that we will see a slight downgrading of 2017 outlook for growth. that is after we saw some pretty

poor numbers coming out earlier this week on monday. the slowest growth since 19 months. bankss an issue, italian is an issue and the spanish election is a key risk. is it enough of a poor situation to spark any change to quantitive easing? we know mario draghi has hinted that should be pushed past march the economists say it is happening at some point in 2016, but only 50% see it happening on this very day. 80 billion euros a month that they keep going -- even passed march 2017, how do they get their hands on those sorts of bonds when so many of them are in eligible? minus .4%. will they start to tinker with the rules that they have in

place and make it easier for themselves to buy? what reaction will they get from the germans on the back of that monetary policy and fiscal spoke -- fiscal policy? the line starting to blur. manus: they are indeed. -- do you expect the ecb to do anything but will they wait until the fed shows there had? >> i don't think they can clearly thecy, but possibility to change the p which is the key by which they allocate capital and primarily buying german bund which they are short of. 12 to 40play with the basis points. that in itself will be a huge boost. they stopped buying german bund, they would have to wrap up

buying french, italian and spanish bonds which make the interest rate in europe unified to a much lower rate. manus: there is a great sense of expectation in the markets. it is the german yield curve. this is one year ago, six month's and just over a week ago. -- the marketg really is pricing that we are going to see some kind of move. do you think it will be the rate we are seeking rather than negative rates? steen: i think it will be negative rates. what is interesting is if you look at the deflationary citation which is the major issue for germany -- the pmi is slower but everything we need for growth is slightly above where people expected to be but deflation remains the issue. look at real rates in europe, they have gone down throughout

qe. no more of the same thing, you're not going to get meansation to arise which you have to look at the other side which is more technical and nation -- technical in nature. this remains -- this is not about qe anymore. is missis doing is he allocating the capital to the market and he is making a whole area of policy -- whole markets depending on what he says. today we have the highest cross asset correlation with seen in many years which means we have nowhere to hide if you want to have a hedge portfolio, and you -- exposed on all fronts gold, silver, equity, anything. we saw manusen, showing you the german yield curve. what about the lack of

volatility in bones? lows.toxx at record these sort of ecb days, why is a volatility solo? low becausemains so the only action we have ever had is ecb and federal reserve meetings. twiceeet once a month or every month in terms of the two combined. the market is everything on they waiting for the next move from the central banks. it is pretty sad that we have this sort of set up a cousin it investment.iple of he have no ability to hedge. hedge.ave no ability to on the political front, we have no change. it is the fatigue of what goes on but i don't think we are close to that because if we take

any lesson from japan, it is the fact that -- we know japan has been doing this for many years than we have with the same result. close to zero inflation, no productivity and a country stuck on reverse. always manage to bring in a little bit of tier. we can go on for ever and ever and ever. up next, we are going to when you that rate decision. it comes at 12: footie five -- 12:45. the nuances of mario draghi and the conference. we have got you -- you know what to do. warding off the bears. further depreciation of the yuan may be hard to come by if the pboc is serious on its currency level. what is the level? we discuss. time to adapt. apple consumers will have to find a way around the iphone

seven. apple does away with the headphone jack. we have that conversation plus budget bounceback. iag warned on profit just hours after brexit. we got the ceo, willie walsh. johnson.very own guy this is bloomberg. ♪

>> welcome back to on the move.

anticipation building up. i stand outside the ecb in frankfurt. will they move today in terms of policy act of let's get up-to-date -- policy? let's get up-to-date with the rest of the news. here's shery ahn. shery: apple has announced updates to the iphone and the launch did the iphone seven line includes a camera upgrades, and faster processors, longer battery life and a new water and dust resistant design good -- design. tim cook called it the best iphone we have ever created. others were not so enthused with shares rising less than 1%. one company whose its share price has a sword following the apple event is nintendo. it announced that super mario is coming to the iphone. nintendo will release a game featuring the character in the app store. it will be the first time the popular franchise has appeared in an iphone. sony has released a new

supercharged players -- supercharged version of the playstation 4. it is designed to run a virtual reality games. the company also announced a new slimmer version of the original marks a shift in strategy with sony hoping gamers will buy a new console when the want to twice a decade. suppliers of major global brands are having to rethink how to get their product to the customer. this after the collapse of hanjin shipping which is left $14 billion of goods -- the group said on tuesday it will provide money -- $22 billion to help -- $22 million to help with supply chain disruption. manus: shery ahn, thank you. the decision comes as a debate vicegative rates -- fed

chair sammy fisher told bloomberg that they appeared to work. -- for more on the impact on the banking and insurance sector, we are joined by thomas wilson. he is the chief risk officer at allianz. negative rates are bound. here we are with the ecb perhaps considering going lower. just how much of a challenge is it for you is a risk officer in this negative rate world? you.s: manus, thank in terms of the insurance industry, there are challenges, all financial services are challenge -- are challenge to the low investment returns. there are some bright spots for those in the sector that have strong franchises. example, property and casualty.

-- offset some of the challenges of a lower investment return on the investment portfolio. caroline: how has it changed your business model? blocking in channeling, but give us a sense on new ways you have to do business in ways you have to manage risk. thomas: what you are pointing to andhe fact that the life health sector in particular is challenged. in the past, it was possible with a 4% government bond rate, a higher than that expected to turn in general on the investment portfolio was possible to operate a 2% guarantee. it covered expenses, profit margins and offered some upside for the customer. in today's environment, this business model is challenged. it is challenged because of the solvency into a new regime which makes capital requirements

volatile. theuld say in context quantitative easing, the search for yields by most investors out there is causing increased volatility and therefore increased volatility through solvency amplifying it. the real impact is on the life and health sector. it is impacting the sector and a couple of ways, first in terms of strategic asset allocation. looking for good risk return trade-offs in an otherwise barren environment. as well as a greater focus in terms of cash flow and asset liability management. new business strategies focusing on capital light products and products which are not geared toward investment in savings, which is accident and health, protection products, but also theicing and resetting guarantees to a more rational level, given the current

financial market environment. most of the impact in a low interest rate environment is having on the life side, although it is causing us to sharpen our pencil in terms of managing our core property. off point of risk view, your role is to have a broad perspective of a risk on a daily basis. that risk every day. when you look at markets at the moment, talk about volatility. volatility is repressed with equity market valuation at exceptional heights. the correlations are exceptional. do you worry about the reach for yield and the growth for bubbles? what you see? what worries you most across the asset classes? thomas: in terms of asset classes and investment strategy, we are in a very unique and unprecedented environment.

it is characterized by low rates where i would contribute the increase of the potential for asset class bubbles and to emerge two of the same quantitative easing of -- or monetary policy. this is clearly one of the top risks that keeps me awake at night. positioning the portfolio, balance sheet to achieve resilience under what i would consider to be a very volatile not blackt with a swans but white swans emerging ,n a regular basis from 2008 2016 brexit, etc., we seem to be having episodes of volatility at an increasing frequency. so positioning the balance sheet portfolio -- asset asset liability

management, these are all activities which are critical. made especially more critical due to the relative volatility as a regulatory regime imposes on capital requirements. caroline: i want to bring it to you, steam. his regulation doing its job when it comes to the inking situation -- the banking situation. -- it is depends having an impact. regulation has clearly had an impact in terms of some segments of the banking and insurance industry. parcel three, new trading rules have impacted investment banking. impactedto has clearly the life savings and retirement section -- segment and causing a fundamental review in terms of capital allocation, product, design, revenue just -- revenue generation, etc.

whether that is been effective depends on your perspective. in the insurance industry, it clearly has made firms much more -- itive manus: thomas, i am going to jump in and ask you to hold that thought. i want to bring in our ceo of sex. sacks. white desecrating resilience is perhaps one of the steen: with cross asset correlation right now. whatever happens, everything happens at the same time. yield is actively describing very much the game in town. more so if you go -- it is all about what the central banks are doing. every single asset class relation to return is based on

what the surgeon banks do and the strength of the dollar. as long as the dollar is weaker, when you have the dollar-based system, things are good. the one sort of white swan that concern me is the money market change the comes in october. october in thein u.s. another derivative of what thomas talked about. manus: thank you very much, thomas wilson for joining us. epstein jacobson stays with us -- steen jakobsen stays with us. it is ecb day. what is the potential corporate movers? we have dixon car phones warehouse. this is bloomberg. ♪

manus: 7:55 in london. 8:55 in frankfurt. airline hyde is hanging out with 29 degrees -- caroline hyde is hanging out with 29 degrees. first quarter u.k., like for like sales hit 4%. they say that brexit is not really having a major impact but they continue to see no detectable impact from brexit

thus far. southern europe sales are cracking along at a nice rate, up by 13%. it is a beautiful sunny day in london. this is bloomberg. ♪

guy: good morning. this is "on the move." i'm manus cranny. -- wet i guess we are are in the city of london. caroline, take it away with the morning brief. is draghi's big day. what measures might be ecb -- what measures might the ecb president announce? apple bet on lucky number seven. investors contain their enthusiasm as the stock barely budget. and the brexit bounceback. ieg warns on profit just hours

after the referendum, but are things looking brighter? theear from the ceo at aviation festival in london? manus: there are a couple of big themes across the market. the u.k., this is your imap on your bloomberg. italy is opening on the downside. china says, "don't mess with my currency." the pboc, in the markets. what will the ecb do in the markets today? it is ecb day. the equity markets are a little bit lower on the open. one woman who will raise the roof on what is going on in paris. >> i am going to start with u.k. gilts, manus. we are pretty much unchanged

right now, 67 basis points. that is where we were before the open. over the past couple days, it has been a bit slow to get going. do keep an eye on that. looking at the imap function, look at the sector health of the stoxx 600, we can see a mixed picture, but overall, we see more on the downside. t. stocks are down by .3%, followed by real estate, down by .1%. on the upside, though you can hardly call it an caps on, energy stocks are edging into the green, with telecoms following after that. highlighting that three stocks that had the biggest moves, i wanted to start with dixons carphone. we got these numbers at the top of the last hour. first quarter sales were a beat,

but one of the key things they said was that they saw no detectable impact of brexit. as the cfo spoke on a call with reporters, the ceo saying, dixons carphone is optimistic, despite choppy waters. so, seeing the stock have a little bit of a pop. and let's take a look at another u.k. company. the property website was called higher by analysts, up by .2%. this is at the top end of market expectations. lower,, being called rocket internet. we are waiting for it to open, but basically, it lowered the value of one of its key portfolio companies by more than 50%. anare talking about home 24, online furniture retailer. it declined by 420 million

euros. this comes one week after a rocket profit morning -- profit warning, raising new questions. guy: the index has once again defied the skeptics, becoming one of the first areas to recoup losses. this is the chart i am referring to. that moment of when the world was shaken, here we are, undone. is that stimulus, or true german engineering? >> a little bit of both. it it is remarkable that moved up. europe is underperforming, which is the real story.

we have the biggest monetary stimulus. draghi trying to help the european economy get restarted and we had negative yields in fixed incomes and 0% return on assets. it creates a feature that is very uncertain, in terms of asset return, but also on the issue of volatility and potential offsets. it is not particularly encouraging. german people deciding who will be dividing on the chancellor, and we have the french election coming up next year. for me, european stocks are underperforming, which, if you are a relative player, makes it cheap. if you are a macro guy, you have all that stimulus and nothing to show for it because inflation remains under pressure. caroline: steen, could it get

even more directly targeted? the exchange rate fund in japan has been considered by some spectators and commentators about the ecb. would draghi ever go there? >> if you shy away from the fact that right now, it is constitutionally impossible and would leave the german very angry, i have seen the notes and and theret process, would be a more direct impact on business and the ability of europe to achieved some -- to achieve some growth. again, caroline, if there has been any lesson in the last eight to nine years, it is whatever is illegal will not be illegal by this time next year. and i have to say, japan -- don't forget, as we look at this from a historic perspective, japan has always led with what

the central bankers do. inis the boj that leads everything that goes on, in terms of action. yes, theyr, i think will definitely move to something equivalent to what has been done in japan. manus: that brings me to this. this is the gjb. we read a kickback in the gjb yields. the bank of japan pulled back from the longer end of the curve. we have yields backing up in the gjb market. if the central banks are getting ready to do something else, whether that is helicopter money or purchasing foreign bonds, what is that do to the domestic bond market? on these mean you buy rallies in terms of yield?

thehe higher the rates go, better off you are as a liability manager. but it is about saturation. the bank of japan has bought 50% of jgb's. people to want to trade the market anymore because they bojot deliver what the has done. sameou continue to do thie thing in this environment, which will take the capital up, don't forget the regulatory capital causes the increase. although the steering rates from central banks continues to be predicted to be low to lower, in that actual capital price paid corporations,om

but certainly including the moneyy of regulatory tax, is much more expensive. the risk weighted capital cost in equity remains 5% in a zero interest rate environment. the task of returning to 5% to 8% is pretty high. manus: thank you very much. up next, tiem me to adapt. apple consumers will have to find a way around the iphone 7 as apple does away with the headphone jack. we have that conversation. and red alert. the fed's latest survey throws anxiety ahead of the presidential elections. what does that mean for the rate decision.

we have the ecb's rate decision at 12:45. this is bloomberg. ♪

manus: welcome back. this is "on the move." let's get you to some of the stocks with logic. -- stocks we are watching. a nice move from thomas cook. they are talking about doing a

joint venture in china. the italians are moving as well. pasche the bank of monte up over 5%. again, all eyes are on the movement as they see pascheek to anchor their investments from the kia. this is the next move from the bank of monte pasche. $900e bought a plan of million as a profit target. to pressccording reports. those are some of the stocks on the top. we have been warned recently about the challenges going thisrd, down over 3% morning. those are the individual names that are moving in the market. let's talk about china. the central bank has sent a

message to the yuan, fx boys and girls beware. the cost of borrowing the currency has jumped to 4.5%, the most expensive since february. that suggests that the pboc is intervening. we are now joined from hong kong. robin, it is good to see you. a strong signal from the pboc, domestic with our yuan. >> absolutely, manus. so, the pboc is essentially coming into the market. probably, we suspect, soaking up the supplies of the yuan off shore in an effort to remind traders that big brother is watching. what the pboc does not like, at least as far as the past couple of months are concerned, they don't like extreme moves in the currency. the currency has been advancing for the last three days or so.

they have come into the market to tell the people that, "we can intervene when we want to, so be careful where you place your bets." they brought the yuan down a bit today. there have been some depreciation speculations after the g-20 summit before the end of this month. however, what the pboc has done is killed off some of the speculation. caroline: thank you very much. breaking down the news coming out of china on the yuan. steen, let's bring it back to you. talk china. overall, you think depreciation? >> i think china needs to continue to depreciate, certainly as long as the market remains where it is in the dolla marketplace. we need a smooth transition, and

we will see an acceleration after the weakness of the yuan. they clearly do not want to be perceived to be a aligned to a currency right after the g-20. overall, the policy is to take the currency weaker. the reason is, by doing the devaluation, they create enough liquidity to service this huge amount of debt that needs to be serviced on a regular basis. manus: something has just come to mind. this message, which is "we don't want this currency," is a more a political issue? we just had the g-20. presence.a newfound they don't want to peave their buddies. they want to buddy up, play by the rules, and be part of the club. >> i don't think china perceives

that they need to buddy up with anybody. i think they perceive themselves as a strong power. but don't forget, you are buting at the dollar-yuan, we should be looking at the basket, which is continuously getting weaker. if you put up a chart with the dollar-yuan and the dollar-basket, you can see it is political in a sense. manus, it next time, to si6.80.3 we will see next year, a 10 point devaluation on the yuan. manus: i like that idea, nobody needs a buddy. let's talk about the fed next. this is ahead of the presidential election. the uncertainty is cited as up

seven times, up from two mentions in july and none in june. jitters are not as strong this time around as they were in 2012, when obama took on mitt romney. out what will happen between trump and clinton. the base talk about modest growth and it worries about the presidential. then, you have john williams, saying the u.s. is in good shape. give me your take. >> i think the fed needs to act. bothers regulation and credibility. the government is technology that keeping the risk too low is trading a bubble. it would be nice to have a little bit of room to do something if it goes wrong, but

most importantly, credibility. the fed did not even guarantee three to four hikes. we have had zero. now again, the market is failing the fed. i think now is the time they will move because they need the credibility more than anything else and they realize that is the real issue. to me, they will certainly, rhetorically, at a bare minimum, guaranty that they will move in december. but in terms of the economy, it has been 2.25% every single year since 2008. quartersst two monetary policy in the u.s. dictates that 112% of profits a re due to buy backs. they are borrowing money to buy back their own stocks.

they have crowded out investment and productivity investment, as well as new products. the product cycle of the american corporation is very old. you have, in general, a product that has not been renewed in eight years. product to some extent as well. -- it is a new design, but at the end of it, it is still the same design. manus: if it looks like a duck and >> like a duck. thank you, steen jakobsen. niorp work?s e ecbunt down to th division. we are live to frankfurt with caroline hyde later in the day. there is only one

destination on ecb and it is of course, bloomberg. ♪

manus: amazon prime is doubling the number of people it will deliver to. 4.3%.s down over we are pretty much on the session low. amazon fresh is expanding in london to 190 positions in

london, doubling since its launch. praise the food discussion. let's get out to the only market discussion anybody wants to have. caroline: temperatures are rising here in frankfurt. 29 degrees and the temperatures are rising behind me in anticipation of what will happen later today. the chief economist is here with me. thank you for joining me. we are just getting breaking news. the yield on the spanish bonds is at record lows. we are seeing unprecedented moves in the market, all down to the ecb. with the bond buying be expanded today? >> not today, but soon. we will get an announcement that we will see the bond buying program in september. >> it will be pushed back 107

trillion euros. do you have a figure in mind, or is it more a date? >> we are sticking to the volume and then extending it. will it really extend the volumes? we believe so because it is really open. so far, the policies have not really worked. 0%.ation is close to they can do what they want. growtht reason, gdp will call for this. caroline: so, will the policy of her work if it is down to globalization -- so, will the policy ever work if it is down to globalization? you actually think this is the wrong course of action, then? >> actually, this is over action. it is better to wait a little bit longer. we have a oversupply in money by

one trillion euros. there is too much money in the system. it did not work because people are not inclined to invest. caroline: is it a question of confidence or fiscal stimulus? what is the recipe if the ecb cannot do this on its own? ore from them politicians, we will move to fiscal policy. monetary policy will come to an end now. the negative rates are hurt. the bond buying program will lead to very low yields. caroline: you say monetary policy is coming to an end. i assume you mean it will continue as it can, but on get

much more creative. but it could become more efficient in terms of being able to purchase 18 billion euros in debt per month. what will happen if the ecb changes the self-imposed rules with regard to the bond buying? >> they have to loosen the rules bit, so they can change the rules. bit,that way, they will not hao stick to the current country limits, and it will open the buying program or to italy and france. then, they will have enough to buy., then, they will have enough bonds here, especially in that context. caroline: fiscal seems to be the recipe coming from stefan b

ielmeier. clearly, monetary policy is not enough. we could see fiscal policy coming to the tune next. this is bloomberg. ♪

manus: welcome back. this is "on the move." we are 30 minutes into the trading day. the dollar is down. stocks are virtually, well, they are little bit better in terms of percentage terms. but volatility is 23% below the average in the last 10 sessions of ecb meetings. up 0.25%.600 is london is up 0.5%. dax has undone all %. its losses for 2016, up .8

of oa amazonide, prime seeks to deliver. reporter: starting with one of britain's biggest tech companies, micro focus international. it is actually replacing arm holdings in ftse 100 index. 23%, thesen as much as biggest move ever, and it has hit a record high. hewlett-packard enterprise combined the stock assets in micro focus international in a deal valued at $8.8 billion. 51%hareholders will own a stake in the combined company and hp get $2.5 billion cash in

the deal. this is the largest deal of its kind announced since brexit. the micro focus shares are hitting a recordh ig high and its the biggest gainer on the stoxx 600 thomas cook has announced it is announcing a china joint v enture. it wants to make them a itstantial part of business. on the downside, the worst performer on the equity benchmark, you did mention them, manus, ocado, down 4.3% at the moment. amazon fresh is expanding to london, expanding to 190 greater london post coasts. so, ocado has really hit a session low after that amazon fresh expansion.

manus: thank you. that was the very latest on the market movers. it has been a rocky year, to say the least. the airline carrier norwegian is battling u.s. regulators over its irish operations and union representation. despite this, the airline is announcing four new routes to the states and barcelona. with that in mind, let's get to the aviation festival. bloomberg's guy johnson is t here. take it away, guy. guy: thank you, manus. it is feeling quite upbeat here. let's figure out exactly what is going on. nice to see you. against the first and obvious question is, post brexit, how is the business performing? >> it is interesting to see, of

course, the currency. volume as well. we see more and more people like to fly into the u.k. manus: the demand is up because of the lower pound. haulrms of the long operation, how is that going? in some that is going quite strongly. people have tried in the past to make long-haul low-cost work. is it working for you? >> it is. started.rs ago, we we started paris last month. we are 96% all over. and we are about to start flying into and out of barcelona. it is working. guy: it is working.

so, where do you take it next. >> we have just started in teh he u.s. we have other confidence we have to go into as well. guy: you think brexit is driving demand. yesterday, ryan o'leary said we are not going to takput them ino the u.k. do you think he is making a point, or do you think he has a reasonable rationale for doing that? >> may be demand -- maybe demand within the u.k. but i am sure the volume, the people going into the u.k., that will increase. youepends on how the way see it. guy: what is happening with the brexit any situation you just described, for the air passenger

gt. if we were to see the latter cut, wood that compensate for any concerns that exist surrounding the -- would that compensate for any concerns we see surrounding the brexit? opportunities growing in the industry. it can limit the amount of opportunity that can travel into the u.k. we actually know the deputy. guy: you are. -- you operate the dreamliner. in dealing with how this will be dealt with? >> no, we don't. there are always some

adjustments. guy: so, it will be dealt within in the normal fashion. we might have to figure out some smaller details. guy: do you think the brexit provides an opportunity for the theresa may government? there is an opportunity may become a particularly if the u.k. does not take part in the plant, to spend infrastructure elsewhere. discussing this. everybody wants to go to europe and china and the u.s. so, it is crazy not to build another runway. you should build two. guy: i will pass that on.

finally, clearly, the regulatory story, the fighting around ireland remains unresolved. give us a status update. when will you get that result? it seems like you are operating fine right now. in your passenger loading. why are we still talking about this? >> we are talking about other continents. this is about competition. they have alleged that they fly from all parts of the nation. of course, we are not idiots. actually, we fly on low

fares, and that is why they don't like us. guy: thank you. i will be joined by willie walsh, the ceo of iag. we will get his take on how this industry is performing right now, and what the brexit affect will mean for his business. this is bloomberg. ♪

manus: this is "on the move." it is 8:41 in london. the equities are trading a little bit higher. a beautiful shot there. but there to the bloomberg business flash. -- let's get to the bloomberg business flash. reporter: apple has announced updates to the iphone and the watch. it includes faster upgrade, a longer battery life, and a new water and dust resistant design. ceo tim cook called it the best iphone they have ever created, but others were not so enthused, with shares rising less than 1%. one company whose share price has soared following the apple event is nintendo. that was after it was announced that super mario would come to the iphone.

's will be the first time the popular franchise has appeared -- it will be the first time the popular franchise has appeared on the iphone. sony has released a new version of the playstation 4. it is designed to play virtual reality games. the company also announced a new, slimmer version of the ps4. the move marks a shift in strategy, with sony hoping gamers will purchase a new consul more than once or twice a decade. morerchase a new console than once or twice a decade. $14 billion worth of goods was left in the buildup to the holiday season. hanjin's group said on tuesday it will provide $92 million to deal with supply chain disruption. that is your bloomberg but the nest flash. -- that is your bloomberg

business flash. y andnine of them say bu three of them say sell. the stock trades at 418 pence. this is iag. us, it will bed tough out there. we have recouped some of the losses, but he is with our very own guy johnson in london at the aviation festival, about to have that conversation. take it away, guy. guy: thank you, manus. let's figure out exactly what is going on with the bin is. saidafter the brexit, you you had to reset your guidelines. the data coming out of the u.k. looks solid. did you jump too soon? >> we didn't.

we have got a large sterling revenue profit base. we are now translating that with a much lower rate of exchange. we had a translation impact, which was immediate and could not be reversed. we had a transaction impact. the pound has weakened against the dollar. the euro has weakened against the dollar. we have seen softening of u.k. the productivity in the lead up to the vote, as corporate try to anticipate what that meant for them. these were three immediate issues we had recognized that could not be overcome in the short-term. migrating? > rate >> no, it is actually very different. historically, we can measure

things. we don't need cancellations. there are corporate who don't understand what this changed environment means for their business, and they are trying to assess that. while they are trying to assess and understand that, they have decided not to travel. we believe this will return. the only question we have to ask ourselves is, when will that happen? the u.k. will continue to trade and u.k. citizens will continue to go abroad for their holidays. the pound is a lot weaker as a result of the devaluation that took place. guy: one way of come bu compensating would be for the u.k. government to stop authority from going down this road. michael o'leary talked about this yesterday.

would this be something you would encourage the u.k. government to do? would it compensate for the other? >> without question. this tax discourages business and investment. in taxes british people going on their holidays. it is an ufair tax and it should be scarrapped. the impact on the economy would be immediate and would be very positive. we would call on the government to abolish this tax. the spanish government said they will look at a 50% reduction. other countries have abolished these taxes and have seen an immediate positive impact on their economy, and that is what the u.k. needs to consider. u.k.should the government build new runways?

>> no, it should not because ultimately, the consumer will be paying for this, not the government. these infrastructure development are funded through airport charges. the cost at the airport's commission identified with the twick.ion for caga must demandrnment. cost-efficient, effective infrastructure. economyon't want is an getting a short-term boost by an economyings, but thesecannot afford to use structures when they are built. guy: let's talk about valuations. the numbers are still trading at

the pre-brexit discount. what are you looking at this year? >> we are always actively assessing, constantly looking for the opportunity. that is the reason we created iag, but we are not actively participating in anything at this stage. i do think we will see consolidation. we do see consolidation taking place in 2016 and if not 2016, early 2017. i think there are opportunities in the market. we are not seeing anything particularly attractive to us at the moment, but we are always looking for the right deal at the right time. guy: on markwest in. you mentioned aircrafts -- one more question. you mentioned aircrafts. reassessed toion such a degree where you are reconsidering some of the deals you have already done?

>> i think all of the manufacturers will be reassessing their demand for aircrafts. it is not just because of the post brexit impact on sterling. global gdp has softened. i don't think we will see the growth rates where they were anticipated. whetherhave to consider it is worth purchasing this new technology aircraft. this includes airlines within iag. we will look at how we will refinance, whether we lease. there are many options. guy: willie walsh, thank you. willie was mentioning their what is happening with the global economy and the global demand story. that will certainly be part of the discussion in frankfurt meets.s the ecb council

what is happening in frankfurt today, caroline? caroline: guy, we are both out on location today. you are focusing on the airline sector. and i am covering the heated environment in printer. it is 29 degrees. what will draghi do? will the change quantitive easing as soon as today? -- will he change quantitive easing as soon as today? this is bloomberg. ♪

manus: 8:53 here in london.

it is a beautiful day, but nowhere as hot year as it is in frankfurt. in as hot here as it is frankfurt. stop volatility is -- stock volatility is 23% below the average. on previous occasions when they got together to discuss what to do with volatility. that is pretty much the case. the dax is undone. of course, channeling one of the famous car brands in germany. my german is not that fluent. london is up by .4%. he likes of thomas cook is doing really well in the united kingdom. but it is germany we are focused on. ago,ear ago, six months

and just last week. this is bull curve flattening. why? because the world and every bund trader, bond trader, as opposed to the equity traders, think more will come from the european central bank. can mario draghi change that dialogue? draghi will take stage in frankfurt today. our very own caroline hyde is there for us. caroline: manus, you put it so well. you were just talking about the vstoxx there. there is no fear out there at the moment. about 23% below the average. ten meetings, we thought a policy change -- we

saw a policy change. within the last seven weeks, we have seen 10 year debt in germany, the bund move in a trading range of 1%, just 10 basis points, the lest we have seen since 1991. is this the calm before the storm? l we see changes in the way in which they buy bonds? manus: the question is, will they lower the rate at which they can buy bonds in the market? what do you think from the guests you have spoken with? >> i think they will hold off. overall, the market is still anticipating 1.5% growth for the eurozone this year. what is the push? why not wait until after the fed

goes in december? maybe that is the time to start adding to stimulus, manus. ♪

silence.breaks his his hand may be forced today. and aeuropean markets five-month high ahead of the -- the costhe data of borrowing in hong kong at a seven-year high and speculation of central bank intervention. ♪ >> welcome to the pulse.