guy: welcome. you are watching "on the move." we are counting a down to the european open. i am guy johnson alongside caroline hyde. this is what we are watching. curve control. the boj bails out the banks but at least -- believes the market is -- but leaves the market wondering if there is more to come? the possibility of surprise lurks as investors brace for the latest decision from the federal reserve. will you remember the 21st night of september?

discuss ceo joins us to next week's election the banks -- next week's u.s. election debates. caroline: digging in to how these events are heading the economy, their hitting the futures market. we are surging in europe. up 2.7%. what a momentous move we saw, the highest since june 1. currently, where up north of my percent. almost a percentage point higher. guy: let's talk about what the gmm until -- gmm is telling us. we talked about what the futures is showing. you can see that at the far end of the screen. as caroline said, the nikkei up -- it is dealing with that flat curve and the impact that has been having on the financials which seems to have been the main take away. the japanese yen is lower down

.8% trading at 102.52. front end of the japanese curve under pressure. this kind of steepening idea that may or may not work. we will talk about that. certainly being talked about but look you can see futures in europe looking like they are going to be pretty positive. european equities are going to be surging higher. let's get you caught up. here's the bloomberg first word news with tom mackenzie. tom: thanks guy. will slumpxury homes in value in the wake of the brexit vote according to -- prices will drop my percent this year, the most since 2008 compared to the 0% forecast made in october. uncertainty surrounding began whens -- that higher sales taxes were introduced last year. the new york bombing suspect has

been charged with a blast in manhattan and new jersey. the fbi has revealed he was investigated in 2014 following a domestic incident. authorities say they have not discovered a link between rahami and any terrorist groups, or any former resident of brazil is the face criminal charges after -- former president of result is to face criminal charges after a judge -- in july he was indicted on separate charges on attending to obstruct justice. global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. this is bloomberg. guy: thank you very much. live, thee you to top financial -- the fantastic function on your bloomberg.

the news conference out in tokyo . governor kuroda is speaking, outlining what was delivered today and what will come in the future. he is saying boj will set short and long-term rates. this as we look to the steeper curve which has had a dramatic impact on the financial about in japan this morning. -- financial bout in japan this morning. we will continue as we work our way through this over the next hour. the function you want to have up on your bloomberg as we continue to monitor this and we watch what is happening with the markets. let's turn our attention on what we can expect on the rest of the press announcement. david ingles joins us to break down what we have learned. david, give us the skinny. i think if you want to use a cocktail analogy.

the boj refrain from adding potency to the cocktail they added a limit twist. a move to expand stainless, they didn't. they kept the asset purchase program unchanged. they kept the policy rate unchanged. as you mentioned earlier, the real take away from this is they are now shifting from the rigid target of expanding the money supply being here in japan to something that enables them to control the side effects of this negative interest rate policy that they have been pursuing. they want to exert control over means theyurve which want to prevent the yield curve from flattening. when that announcement was made earlier, you saw japanese speaking stocks on a tear. japanese stocks on a

tear. they kept the policy rate unchanged and they came out and said there may -- they're committed to maintaining a steeper yield curve. caroline: we are seeing the boj saying they will conduct policy in a flexible manner. let's ability needed -- flexibility needed. they may be coming to the end of their tether when it comes to monetary policy. they were trying to work out what actually worked. right. it is a long document, so the results are published on the boj website. it is a massive pdf file. trying to go through the details but we are talking 61 pages here it -- 61 pages. i am sure you guys are looking at interest of what is going on. expect the boj governors to take

questions. it was a signal that they are going to be flexible without coming out and saying they are moving the goalposts again. the gist of the policy review is that it works, it managed to bring down borrowing costs across the credit spectrum in japan. let's see where we go from here. guy: thank you very much indeed. david ingles joining us in tokyo . you're looking at live pictures coming from within the bank of japan as we listen to governor kuroda delivering his press conference, the latest on our their options for easing? from aet our thoughts guest who joins us out of hong kong in asia. ken peng. put me through what we learned today. it seems the policy is delivering.

the boj is comfortable with where policy is. once the steeper -- it once a steeper yield curve. is he capable of delivering -- is it capable of delivering a steeper yield curve? ken: that is a question we will find out over the next two years. they havehave done is turned from a defined conservation plan, which is the 86 trillion per year of purchases, to a defined benefit plan which is a benefit plan -- when this is happening in the short-term, it is positive for risks, because it lists the total -- it removes the total amount of purchases, they lose the cap from that. market is thinking of that as positive. in regards to banks, this reduces the long-term investment and this is positive for them.

it is positive for the equity risk appetite. ,f you want to go broader turning into a defined benefit situation might be attractive for the ecb. if you want to let your imagination run wild. for the global risk futures, this is a positive development. caroline: kuroda saying the option for more easing to be taken up sooner, so as you say, essentially making quantitative easing going on for longer. give us a sense of why we are seeing such a reaction in the bond market back of they want to keep 10 year yields what -- bond market? they want to keep 10 year yields where they are. not to gon: this is back to where we were a few months ago when it was negative.

i think the bond market still is probably a source of great risk. the trouble with defined-benefit plans is what if you cannot afford to meet those benefits in the future echo the boj -- in the future? the boj owns 55%. by the time -- what if the market was to sell of more gigi --s, are they willing to go more gigi beas, are they willing to go 90%? there is a limit to what the boj can do. this is not a blank check. question.e ask you a when will the boj in your mind hit the 2% inflation target? mind, i don't think they will. they might be able to hit it for a few months or a quarter to, but on a sustainable basis, like what they have put into the target today, i don't think they

are able to do that. demand is notm is blowing enough to achieve that. -- demand is not growing enough to achieve that. caroline: ken, what about later today? where in the middle of a sandwich of central-bank policy -- we are in the middle of a sandwich of central-bank policy? ken: the fed is interesting. we had a boj move that propped up the u.s. dollar. that moved up in u.s. dollar may be taken away in the fed comes forecast --the feds the fed upon forecast is going to show fewer than three hikes next year, and a lower terminal rate for the fed fund.

basically a narrow window for ultimates and smaller terminal rate. the reason for them to be hawkish is not really immediate urgency. it could come if we have further positive data over the next months. no big surprise in the election. that will set up for december. they don't need to make that into a certainty now. guy: ken, thank you for speaking to us. ken peng. caroline: coming up, one down and want to go. we wait for the second moment of truth in the market today after the boj decision. martin sorrellto to get his views on banks and the upcoming election. we are back in tokyo to bring

you all the breaking news from the boj and governor kuroda's has conference is running right now. this is bloomberg. ♪

guy: let me take you back to tokyo and the press conference that is being delivered by governor kuroda offering questions from reporters now. the latest on whether or not we are going to see further cuts into negative territory by the boj.

governor kuroda emphasizing the boj's movement to ease until inflation is over 2%. element ofn the time that 2% inflation target diluted this morning. governor kuroda indicating he would act to see -- the market questioning whether it will be his at all. let's get another take on all of this. we are seeing the market moving sharply. we have seen financials moving. moby -- jonow, john mawby. jon: i think it is another element in central banks trying to work their way out of the current malaise that the global economy is in. japan further down the monetary policy experiment than most of their other global competitors.

it is another element throwing more at the problem. --oline: you say their notes the senior notes that the boj is the bellwether where people look to for sentiment in terms of how monetary policy is working, and indeed some of the experiments they are using. what can you tell us about central-bank policy going forward? jon: i think the whole monetary policy environment today is one big experiment. roadoj is further down the than most of the other central yield deeper into qe and curve control. i think it is a bellwether. sharp -- an a sharply higher yen and a lower stock market. time will tell whether yield curve control opening up the inflation targeting and also

dealing with around the balance sheet. they have left all of the policy on the table as well. down the line that have not ruled anything out, further negative risk or more curve control. guy: why will a curve steep and if there is no inflation? jon: that is a good question. qe andthe elements of the various experiment to monetary policy methods being --ertaken is to inflict inflict away the debt piles. a world where you have largely deflationary headwinds are very , it is difficult to break the savings mentality. they are trying everything they

can. negative rates are a big issue and steeper curves are needed to bank -- to help bank profitability. it is about trying to control inflation expectation and actually enact what they believe will engender future growth. caroline: we've got a commitment , a desperate attempt to get that expectation up to the 2% level. where hang from krone -- we are hearing from krone saying -- will we get 2% in the next five years? jon: i think five years out, who knows what sorts of other methods may be employed to information out to that type of timeline? the fed's inflation target as

well and whether in changing the inflation target, moving it higher would make a difference to inflation expectation in the on the view on bond markets inequities? -- markets and equities? i don't think saying that they are going to target and inflation above -- target and inflation above 2% does anything. the policy actions, all the central bank's are taking, we have seen from the fed in recent months,nd the last 18 it is an experiment. it is a wait and see. it will keep doing, using more policy tools and creating more policy tools. we will see what impact that has a markets. it is thee saying

steepness of the curve. it has been steepening up. if you are mario draghi, do you think you'll own some of that? jon: you see inflation exported from japan. it is a risk in terms of the currencies or in terms of trying to mitigate some of the adverse consequences of these extraordinary monetary policy measures that we have had in place. guy: portfolio manager, john moby, -- jon mawby is going to stay with us. caroline: up next, looking at the potential corporate movers in today's trading. a keen eye on the banks after the boj. job,s getting another beating estimates. bloomberg.s, this is ♪

caroline: 7:54 in london. that means we are moments away from the open. what stocks should you be looking out for? the surgeon japan and the bank of destin back of the japan looking to tense of the yields. keep an eye on one particular bank, the spanish stock -- numbers looking pretty strong.

they are in line with expectations overall but there was a beat. the company is seeing an 8% growth overall and operating profits. sales of 13%. -- sales up 13%. keep an eye on abb as well, one of the biggest companies. they are divesting on the cable business could rise up to 2% or 3%. guy: looking for to see a that stock opens. the stock opened -- the market open format is the way. let's talk about airbus. his base in moving to lose up to paris. he is going to be the chief operating officer. he is going to do that plus he is going to be in charge of this wholesale review, the restructuring that is going to be take place that is going to deal with the cost overruns and what is happening with it a 380.

let's about kuroda. the boj is not getting close. over the next few weeks i expect on that story. this is bloomberg. ♪

guy: welcome. we are here in the city of london. i'm alongside caroline hyde in berlin. we are moments away from the start of european trading. caroline has your morning brief. caroline: guy, it is current control. banks, butls of the leaves the market wondering if there is more to come. governor corona is speaking now. earth, wind, and fire. investors brace for the latest decision from the federal reserve. the 21st night of september. and soros on the trump.

the next week's u.s. election debates and if the global economy -- european markets are called higher. guy: 10 seconds away from the open, expecting a positive start , financials firmly in focus. let's show you what's happening. a little selloff in the auction process yesterday, and now let's see how far the markets go this morning as things light up. london is beginning to climb, showing us what's happening. the cac is also climbing fairly sharply as well. let's show you what is happening here -- this is the breakdown on the sector basis -- energy, ip, consumer financials leading this morning, the entire wheel is green. financials are leading the charge as we push higher, definitely up in japan and

europe. let's break it down on a regional basis. the stoxx 600, spain doing very well. here's nejra cehic. nejra: we have been seeing yields take higher in japan where we saw the yield go above zero for the first time since march. it looks like it is the same picture in the uk's. we are about to basis points higher on that two-year yield, so we were at 82 basis points at the open -- let me take you to the imap and show you what's happening in terms of the stoxx 600. we can only try of the best performers, no surprise after we saw banks and insurers perform the best after that talk about controlling the yield curve and the shift focusing to the boj policy.

energy stocks closely following financials, up almost .9% as we are seeing crude oil jumped today, both wti and brent. laggards are real estate, but still up 3/10 of 1%, very much a green across the board. a look at some stocks i am keeping an eye on, individual movers. -- this here with tech is up 1.1%, the world against clothing retailer. this is a company prioritizing on linux pension over store openings, so sales increased 13% during the first weeks of the third quarter and the company will also start turkish online sales for all brands in october, the stock again in over 1% at the open. one,moving onto the next

it looks like we are going to show you -- your we go, up 4.6%. what we got from this company is that it had been looking for a -- but now2016 down it is targeting 480 million euros. it also said organic growth is above the 5% objective in july and august and it is well on track for a 2020 target. the stock again on that. finally i want to show you this -- selling the high-voltage cable system business for an enterprise value of $934 million. this is a decision that will scale down the size -- this wes engineering power transmission business is under pressure, up .8%. guy: we have some individual stock stories this morning but

the one on the move is the financials -- we saw them out in japan and now in europe. the price for the financials sector within the stoxx 600, santander, barclays, socgen, the whole range of financials, some north of 3% to this morning. i suspect some of this is due to positioning. let's get our guests take on this, and good morning. nervous ore a little is this just a blip? >> i think generally banks are being forced to deliver business models, getting stronger in terms of profitability and pressure from negative interest rates.

but generally from the regulatory point of view banks are getting less risky. reducedsheets are being and the riskiness of those balance sheets has very much been reduced. banks are essentially moving away from the growth style business model and back to a utility like business model. i think what we have seen in japan this morning is an explicit admission by corona and the boj that negative interest rates and some of the other extraordinary monetary policy bankses are negative for and business models. what you are seeing is a little bit of positioning and a read through from the bank of japan to what mario draghi and the ecb might be thinking about going forward. caroline: does indeed ecb have to do this? right now we are seeing yields

in japan go above zero, yields in germany also going above zero. era that isell an more positive to the banks, even if we don't see the ecb pick up the ball and start to twist? >> potentially. longerhink a little bit and look back to the various measures of monetary policies that have been since the great financial crisis, it's very much a me first model of the central banks. i think maybe we have seen the first explicit admission that negative interest rates in particular are not positive for the banks and in particular not positive for the transmission mechanisms. this kind of deals with that -- nejra: it does.

bloomberg intelligence did a great piece on the challenges of being able to stephen the yield curve and what this chart is showing japanese banks in white, that pop higher at the end of the chart and then you have the msci u.s. bank in blue. basically banks stocks and indexes in japan, the u.s. have all declined since late august, when global longer-term yields started to rise. this shows you the uncertainty over whether the boj steepening the yield curve would lead to an increase in earnings. with the steepening in the yield curve driven by an economic recovery the associated higher demand for money would likely lead to higher earnings for isks but what they point out that a central bank reduced steepening and may act to dampen

investment, which would short-circuit and economic recovery. a big question as to the longer-term impact in the viability of this change we have seen today. caroline: that's great. that's what was interesting coming from the ecb at the previous press conference, saying that angst need to stop blaming central-bank policy and that interest hasn't been affected. is it more a question of fiscal stimulus, corona saying we want government and structural forms with the boj as well? >> i think the next step has to be fiscal stimulus. central banks are fairly nearly everything they have and has produced very anemic growth and inflation. i think the next at has to be fiscal stimulus, particularly if you continue to see the extraordinary monetary policy measures that global central banks grow at market and produce

similar anemic outcomes. guy: this is where the european and japanese stories go different. in some ways it will be easier for abe to deliver fiscal stimulus then europe. germany is dead set against it yet some of the southern countries would like to see a significant loosening of the rules. at that transition will be harder in europe than it could be elsewhere. >> at least you have had an explicit admission in europe that there is no -- that the central bank is politicized. still underey are the pretense that it is not. if you have an economy that has approaching 100% gdp it is difficult for a central bank to be a political. guy: there have been questions

asked about that in the united states and in the u.k. he will stay with us. up next, tokyo drift. doj policy framework shifting. we will break down the central bank later. then, politics, policy, and the pound. theill get several takes on boe and brexit. and then we will look ahead to the other, most important event of the day. more on the fed decision. this is bloomberg. ♪

caroline: 13 minutes into your trading day, welcome back to on the move. barclays,surging -- santander, ing, leading the charge. we are seeing a significant pop on the bank of japan on the longer and of the curb. is a company that helps manage your cloud computing insecurities, it gets upgraded by kepler. on the downside you be soft is the worst performer and the reason is selling convertible bonds which means an equity injection should they ever convert. they say growth is costing too much in terms of sales. that's a snapshot of the market -- let's get out to the first word news with tom mackenzie.

tom: thanks. london's luxury homes will slump in value this we're in the wake of the brexit vote. that's according to property companies which save prices will drop 9% this year, the most since 2008. they predict uncertainty surrounding negotiations to quit the eu which will accelerate decline. suspect has bombing been charged in manhattan and in new jersey -- the fbi has revealed he was investigated in 2014 from a domestic incident but authorities of say they haven't discovered a link between him and any terrorist groups or evidence of any accomplices. wells fargo stock rose yesterday after the ceo's grilling at capitol hill.

he faced senate banking committee members that demanded that he face consequences for letting employees open millions of unless authorized customer accounts. they say it may leave the bank with the reputational scar but one from which it can recover. resigned,en't you haven't returned a nickel of your personal earnings, you haven't fired a single senior executive. your definition of accountable is to push the blame to your low-level employees who don't have the money for a fancy pr firm to defend themselves. it's got wes leadership. >> i accept full responsibility for all unethical sales practices in our retail banking business, and i am fully committed to fixing this issue, strengthening our culture, and taking the necessary actions to restore our customers trust. tom: global news, 24 hours a

day, powered by over 2600 journalists and analysts in more than 120 countries. this is bloomberg. guy: thank you very much. european equities are up 1.45%. governor corona you can -- you can thank governor corona. let's get back to david ingles. david, we have been listening to the questions, the answers. break down what we have learned. david: rate. -- right. was they cameo out with more action -- they are adding more measures. of they also stopped short explicitly expanding stimulus. when it comes to etf, that is why we saw the topix index outperformed the day-to-day. -- outperform the nikkei today.

the second point, they kept rates unchanged at -10 basis points which is why we saw the banks in tokyo surge at the close. herenk the key take away is that it is shifting away from this rigid target in terms of expanding a monetary base. means isly what this that they want to stop the yield curve from flattening and they want to target a steeper yield curve and that is how it is coming across to a lot of analysts. caroline: curve it like corona. loving it. thank you very much. still outside the bank of japan for us. let's get back to the portfolio manager, john morgan. where yourdig into view is in terms of asset classes. we are looking at a pop in yields, japanese debt, german

debt. you are a man who focuses on long bonds and credit. what do you do in this environment? i personally have been very positive from the banking sector. i have felt it has been undervalued on the credit side. i think if you have to look at bond markets more widely, we need to see exactly how markets take in the medium-term. corona's extra measures, obviously he hasn't scrapped the previous framework and that could have further repercussions for yield curve steepness and it could also have repercussions for banking sector profit ability. guy: the insurance sector as well? >> insurance is interesting. it's an area where i have seen particular value but also reasonable caution because there

are negative interest rates and the potential for asset liability mismatches that tends to create problems. caroline: give us a sense of the other opportunities. you have been talking about assets being mispriced by the confusion that central banks haven't checked into the market. are there any other keepsakes where you think there's an opportunity? >> we have seen outperformance in investment grids and in terms of various buying programs in both the uk and in europe. issues ass other yields dropped to what could be unsustainable levels and leverage starts to rise and a lot of those corporate's, particularly when you start to

see slight miss allocations of capital, such as m&a selling bonds in the primary markets -- they can raise questions as to the medium-term viability of those business models. guy: it seems like donald trump is talking about that story as well. he will stay with us. caroline: up next, stay with us. we will be getting the latest on fixed income, and why the fed has totally confused the investment community. the will be digging into that, next. ♪

caroline: welcome back. 22 minutes and the trading day. let's get the final thoughts from our guest, fixed income portfolio manager. i want to dig into the next big central-bank, 7:00 p.m. in the united kingdom. you say they are totally confusing the investment community -- will they confuse us more by raising rates today? >> i think it is less with the policy action is and is more to do with the language that comes after in the statement. increase willnt be very positive for markets if the overriding languages --, but no rate increase with confused language or moderately hawkish

language may push the rate rise to december will create more volatility -- more volatility for markets. guy: when you look at what the fed is doing and what the asset class is, we have seen low treasury yields. we have financial markets essentially rewarding companies for buying back their own stock. you talk about this distortion -- kennedy come back to normality? in theory this is part of the exit strategy. >> they don't have an exit strategy. like the majority of the world economy they are making it up as they go along and they are trying to softly and gently get markets to a place where they are comfortable with rate rises. i think they are worried about what's coming in 18 months.

they want to have room. i think they don't want to go immediately negative into a recessionary environment. a few small rate rises will give them room to cut it down the line but that's what's confusing about the policy. is it prudent policy to raise rates because you potentially think you can cut them in six months time? there's a huge degree of uncertainty. that companiesay using this cheap money to help them buy back their own stock -- are they leveraging too much, particularly when they look at m&a? are you being forced into the high yields and risky assets? >> no, i think one of the unintended consequences -- or the intended consequence maybe -- of kiwi and other monetary

policy measures is to push people down the risk curve. if you think about where we are globally, you get roughly the same on a high-yield credit that you do on a savings account. thats one of the things kiwi is designed to do. , i try and my view in today'sh -- environment it is very easy. down andt year were then selloff to over 1%. you tend to find a lot of this in some asset classes particularly as yields get more compressed. prudentyou have to be in terms of how you look at different sectors and one of the fears is that you are seeing

more and more leverage on corporate balance sheets as they issue debt to buy back stock. guy: thank you very much. this is bloomberg. ♪

caroline: welcome back. 30 minutes into your trading day and every single industry group on the stoxx 600 is trading higher. higherks are performing as things go higher in japan. outperform or has got to be the cac at 1.3% -- let's dig into those individual stock stories with nejra cehic. nejra: you are highlighting the banks -- it's that curve control from the bank of japan that drove banking stocks higher end is driving them higher on the stoxx 600 and europe as well. thanks are the out performers and if you look at the stoxx 600 bank index, pretty much every stock is pointing higher with

the best performers highlighted. banking of other places, a note from hsbc saying that the market may be to bearish and now may be the time to turn positive as signs increase that proposals be diluted. barclays, ing. we are seeing a move higher across the board in banks today. finally i wanted to highlight you with soft entertainment, one of the worst performers on the stoxx 600. it's a french videogame maker trying to fend off the advances that plans to sell 400 million euros of convertible bonds to finance product development. the bonds are convertible into shares after five years and the

proceeds may be used for those possible acquisitions. guy: thanks. the bank of japan has shifted aftervereign yield curve negative interest rate policy was introduced and many were confused. now with the delivery of yet another policy acronym with curve control we are forced to ask if they have reached the diminishing return point if we weren't already there. the first question to martin sorrell is can you say quantitive easing with curve control three times fast? but do you understand central bank policy and but it's tried to deliver? >> probably aiming at the wrong target. guy: you are the ceo of a large company -- you are in the mix. they are trying to stimulate the global economy. interview, you were

talking about the critical issue -- they are focused on the short-term and long-term, so how do you revise the animal spirit? that is what the bank of japan is doing today but i doubt it will revive the animal spirit. i will get japan for all the policy shifts and changes and the rest of it goes on and on. all credit to them for trying again -- if at first didn't succeed. -- if you think about what could be done, clearly repatriation -- whatever wins the election in america. but whoever wins has the opportunity to encourage repatriation and offshore cash

policies in some deal to create employment and drive infrastructure investment in the u.s. inould favor strongly a rise -- a tapering of long-term gains. i think the incentives to invest are not there. if you look at the s&p 500, in five of the last six quarters, you think about it as one company but it has bought back backstock, and if you went to win that ratio was running we don't get the same data -- what i like is the share buyback and the dividend from the ftse 100 on a half yearly baseless. but the payout ratio has gone from 60% 70%. the average payout ratio a 70%. guy: so cute is doing more harm

than good? encouraging the run behavior? >> i was in singapore over the weekend and the statistic i always use for ceo longevity was and they have now worked it out as 4.5 years which is even more dramatic. you have technological disruption, zero-based budgeting , and then you have the activist investors who couldn't encourage to 60 billion companies to come together. the pressure is on the cmo's and cto's. the irony is that with all this emphasis on corporate governance

and select committee's, the structures that are good from a corporate governor's point of view are not the structures that encourage people to focus on the long-term. sector,k at the media this company is a private company, but if you look at empire, thatbal the roberts family -- it's not a question of democracy not working, it means that locking asthe corporate structure -- long as the lunatics don't take charge of the asylum you are all right. the point is that shareholding structures have tended to encourage much more long-term thinking. if i showed you the graph as of investment as a proportion of gdp in the u.s. over the last 20 to 30 years it is shocking. it's a straight downward shift.

but it's not meaningful. caroline: what about overspending on the ground? japan, whatlin and are the company is doing on the ground, in your perspective? are they spending on marketing? do they have the willingness to invest or is it a slowing economy until we see fiscal action? >> well if you look at first half numbers, which were well received, the organic growth was revenues andfor well over 3% for net sales. growth by acquisition is another 3% to 4%. but the organic growth rate was 3% to 4% whether you are looking at revenues are net sales. that is not bad but it's not great. i would like to see worldwide gdp instead of stuck in the -- we are% to 3.5%

early in the projection cycle. i would like to see worldwide gdp up another 100 basis point. we'll the boj positive -- it has to be something more fundamental , and we have been playing with monetary policy since late 2008. it has stabilized things but it has not given the kick. in running our business i have to say that we aren't going to change our approach. it will continue to be a grind. -- i think it's unrealistic to believe that it is going to change. if you plan your business -- and our clients are no different -- they are planning increases in advertising spending at around gdp rates. skewed despite the fact that we have a very strong asia-pacific business.

we have no crossed $5 billion in revenues out of asia-pacific including associates. wepite the strength of that are over indexed on the u.s. and western europe where relatively the growth has been coming. the violence between the brits has shifted, although in the long-term we are still raging bulls. guy: the animal spirit. you will stay with us. the wpp sepia. we won't get a take on the u.s. election. a big day in the united states. brexit obviously not to be ignored. martin sorrell is staying with us. this is bloomberg. ♪

caroline: welcome back. 42 minutes into your trading day -- let's get you caught up with the bloomberg business/. tom: thanks. first-half earnings reported that beat analyst estimates -- the owner of the brand set operating profit increased 8% in the six months through july. that is as the world's biggest clothing retailer prioritized online expansion over store opening. the ceo of europe's largest airline says it is examining a range of options for entering the low cost long-haul travel market. that theold bloomberg

company can no longer ignore the emerging threat from a range of contenders. ourselves protected pricext year and the oil is increasing, which means that the economy is getting better ,nd we can get more business and there is not only the throwback but we can also have -- because of the increase of oil. it hascrosoft says authorized the buyback of an additional $40 billion of stock on top of an existing $40 billion repurchase program which it plans to finish by the end of the year. they have also raised their quarterly dividend by 8.3% to $.39 per share. microsoft stock has jumped

30% in the past year. chinese investors are seeking to buy ac milan, which has provided a false bank report during the initial negotiation. people with knowledge of the matter said investors offered papers on what appeared to be the banks stationary but the bank says it hadn't issued any such document. in a statement the chinese consortium says it does not confirm it has ever sent such a document and remains committed on the closing of the deal. that's your bloomberg business flash. guy: coming up, the first one-on-one debate between hillary clinton and donald trump, as both candidates have their respective controversies. joining us now is the ceo of the world's largest ad agency, martin sorrell.

people are definitely going to tune in. what are they going to hear? >> goodness knows. we will have to see. logical, welle a prepared, well documented, factually-based series of arguments, i'm sure stop donald trump, everything will be terrific and wonderful and i and the great deal guy and i can work out deals with the chinese and the russians. it will very much be what we have seen before and it will be interesting to see how they interact and collide and how she deals with the issues, whether it's birther is, health or immigration. you and i were talking before -- with what happened in the remain campaign, the issues were about the economy, sovereign see, and immigration. immigration was at the forefront and in fact donald trump -- i

remembered seeing his post mexican speech when he went down he camehe president -- back and the whole of that speech was about immigration. his basic proposition -- if you are a marginal white voter in proposition,basic which is not irrational, is that illegal immigration is wrong. that appeals to that marginal vote. turnout will be critical, because of those people who didn't vote turnout the election is about 53% of all voters voting and 66% of registered voters voting. the turnout in america is as critical as it is here and we saw in the brexit felt -- younger voters didn't turn out.

despite the fact that the university ran that campaign to get undergraduates to come out and vote only 40% of graduates -- the young didn't come out, and it was their future that was at stake. in america it will be very much the same. if trump can get out people who don't usually vote, all that stuff about the less educated, less sophisticated voters and what hillary clinton unfortunately called the deplorables, unsatisfactory to say the least in terms of terminology, alienated more than a generated vote, it's going to be tight. if you look at the polls, they are tightening. i still think at the end of the but i wasy will win wrong on remain and i could be wrong again. caroline: does this change where you split your business?

the business decisions you are making in the run-up of the political risk -- >> well, brexit has changed. we have a board meeting in berlin in october and we have already up to the rate of investment acquisitions in brussels,n france, in and we will continue to do so. french, the german, the italian, the spanish markets -- they are for out of the top 10 markets and we will continue to emphasize them. brussels, in concerns like any other british company, concerned about losing influence that the eu and in continental europe and therefore we are upping our focus on it. paradoxically, what it means is that despite the fact that post

brexit, if brexit does mean brexit, ultimately we are going to focus more on the next level -- but as we have done historically it means we are upping the emphasis on continental europe. in terms of jobs that wpp it's more likely to come from those four main markets then it is the q k that doesn't mean that the uk will not continue to be important and we won't continue to grow, but it does mean that the relative importance will have changed. with trump, you don't know what you will get. maybe he will turn out like reagan, he will nominate a collective of strong people, the ability too get things done -- although when reagan left office the deficit was considerably wider than when he took the office. it's very difficult to project.

, his emotional platform is not logical. hillary moved to the left in order to deal with bernie sanders and to take the primary election. a general election is different but she hasn't seemed to shift the center. many people believe she will, so from a business point of view it won't be quite as bad as some people think it may be, but again, a little bit of an balance,uantity -- on business of probably be in favor of hillary but when you get ceos on their own and you look at some of the policies that hillary is threatening in various sectors, pharmaceuticals , banking, whatever. i think in her heart of hearts they worry about what regulatory and restrictive policies might come in. guy: we will all be tuning in on

monday night. >> i will as well, blurry eyed on tuesday morning. guy: thank you. the ceo of wpp, martin sorrell. up next, one down, want to go. the martin of truth for markets today. we are live in new york with what to expect from the fed. bloomberg this is bloomberg. ♪

caroline: welcome back. 54 minutes into your trading

day. an hour or so after the boj made the decision -- the yen is back to base. of course it weakened off the back of those moves -- we haven't seen notable changes or lack thereof, the shift in focus from the bank of japan. they want more flexibility, to control the shape of the yield curve. yields are currently moving back in terms of the yield on the boj and keep an eye on the yen. guy: amazing, isn't it? the market looking through this pretty quickly. whenwill look like later, we get it delivered from the federal reserve? that's the next central-bank decision. the boj focusing on curve control, but the federal reserve decision at 7:00 p.m. -- what will it deliver? expectations are subdued. we aren't expecting much, just a 20% chance of a hike. jon ferro has decided to get up early. he is excited about today. he has got one to go, a long day

ahead of him, but he is fully caffeinated. what are they saying? jonathan: non-decision, federal confusion,: what you want. is draw ahave to do distinction between the short-term debate and a long-term debate, and the short-term debate we have seen over the last several years is went to move by 25 basis points -- do you do it now, in december? that is where you have zero consent over the federal -- zero consensus. where you have consensus is this long-term rate that will be longer for lower and if they can draw the distinction between a debate in the short term in the long term i think they can make things clearer but things aren't clear now at all. of you have seen is the fed take a hit to the credibility over the last couple months and the conversations are revolving around that -- look to the dot plot that was there this time last year.

they saw a rates this time last year around 1.4%. we are nowhere near that and that is why the fed has no credibility. every time it updates the forecast they mark the market. and when they do that they have a problem. thatine: is quite often where the boj goes others follow. we heard from yellen's team, some of them talking about inflation and today we get that -- do you think there will be any talk about in nation? jonathan: we heard that at jackson hole. my point, and i am quite cynical, if you can't hear 2%, what makes you think they will overshoot? it has taken several hours to work it out. the boj has done pretty much nothing. they have just rested up to say they have done something. guy: jon ferro is going to run around the corner, get into the radio booth --

maybe double caffeine this morning is required. extensive coverage of the fed coming up. those are all the details this is bloomberg. ♪

mark: that japan estimate -- japan sits his focus to steepening the yield curve. eliminating the negative. banks rallied if corona sidesteps a deeper -- if corona sidesteps a deeper cut. the odds of a hike phase investors look to the -- to thicken the rate debate. ♪ mark: welcome to the pulse. i am mark barton. get the reaction to the boj