francine: we round up big week for the world's central banks. tellsent erdogan bloomberg that turkey's central bank should continue to drive rates lower. our exclusive interview. what have we learned about how and when the u.k. will leave the e.u. we speak to the cofounder of lansdowne. welcome to "the pulse" live in london. i'm francine lacqua.

where just getting breaking news out of the eurozone. september manufacturing, pmi rising a little bit more than forecast. if you break it down, it is september, so it is the first measurement. manufacturing better than expected. services pmi actually worse than expected. 52.1, a pmi falling to 5 forecast of2.8. -- forecast at 52.8. in germany we had contrasting data over the last couple weeks. let's have a look at the impact on the euro. there you go. 64.o-british pound, 86.0 not that much new. economists -- are trying to figure out where this is coming

from from the services side. we bring our weekly show, brexit , what's next, with conversations around the u.k.'s vote to leave the e.u. we speak to stephen lansdown, lansdown.ded any key brexit supporter. first, as quickly check on the markets. markets, i would say the rebound touch.ring out a dollar halting some of the gains. it is all about the central bank and the volatility up. we will have plenty more on the markets. let's get the first word news. yahoo! says the personal details of half a billion people were stolen in a 2014 hack. the company says the attacker was a "state sponsored after" and the stolen information may

include names, phone numbers and dates of birth and security questions and answers. users are being contacted and their counsel security. the revelation comes ahead of verizon's acquisition of yahoo!'s website access. deutsche bank's finances are raising concern a low profitability and mounting legal costs. social democrats discussed it at a close session. this comes after the u.s. sought $14 billion to settle claims related to the sale of mortgage backed securities. european central bank president mario draghi says central banks need to act when they see systemic risk. at the conference in frankfurt, draghi also said policymakers must remain vigilant. >> macro prudential policy is still in its formative years. and policymakers are understandably cautious about deploying novel instruments, but when we see systemic risk, we

should act. greater risk arises from in action. an oklahoma police officer has been charged in connection with the fatal shooting of an unarmed black man last week. shelbyfficer betty is charged with first-degree manslaughter. shelby claimed he did not obey her command and she fired -- he fired when she reached into the carpet police footage shows mr. crutcher rocking away with his hands in the air. the philippines says that it will carry the full force of law -- the announcement from the environment secretary reinforces the government's tough message in a showdown in the tough nickel producer that bases mass suspensions. nickel is the best-performing commodity so far this quarter, as concern that the audit will disrupt shipments boosted prices. global news 24 hours a day

powered by 2600 journalists in more than 120 countries. this is bloomberg. toncine: cheap money is here stay, at least for a little while longer. that was the key take away from the week of central-bank decisions in which the fed held fire and the boj tweak its policy mix. let's welcome our guest this morning. simon, great to have you on the program. what a week we have had. it is all about currencies and central banks. we thought they were diversion. oh, no, it is all about convergence. simon: that has probably been the story of the year, not just a week. come back to the start of the year when the fed was supposed to hike rates four times. the central banks are going to be aggressively easing policy. now there is a situation where, yeah, the fed wil probablyl cut. francine: is there a chance they

cut? is that a freudian slip? simon: that is the smallest chance. that is dependent on what the markets do between now and december. quite clearly, with markets wait hey currently are supported by the bond markets that something could go wrong. you can't discount the idea -- francine: so, let's look at the dots. but they are looking at the markets. is that all they are looking at? if you look at the economy, it is stronger, they should have hiked. simon: in fairness, the data has started to moderate but i would argue over the course of the last few months the number one thing to focus on has been the markets. over the course of the last year is one of the reasons we have gotten ourselves into so much trouble is that markets have been overly focused, central banks have been overly focused

on supporting markets whenever i worrys been -- so, do the fact that we have a fed that over the course of the last couple years has been overtly concerned about markets? yes, absolutely. francine: was communication one from the fed? they could have played it a different way. they could have sounded a lot more hawkish than a did. did they do that on purpose? simon: they could have done but frankly, communication over the last three years has become quite confused. i think we get far too much romut governance, f central banks. i wish the google back to the greenspan days. -- i wish we could go back to the greenspan days. lessnk we should have communications. i think the dots just confuses

the issues. but what did we learn from the dots? into 2017,rt looking they are becoming more cautious because we have gone from four rate hikes to two rate hikes. so, we end up with one rate hike or none at all. francine: are you expecting none? simon: i believe there is a risk. i do believe this is a fed -- and central bags are concerned about markets and overly focused marketets th --ere is a risk on the horizon. 2he risk is that we have $1 trillion of paper trading and negative territory. the only two reasons you want becauser is a, you think there is going to be deflation or b, you think there is a risk they will buy it off you. .he greater fool is the boj

ofe you reach the limits that policy, once they cannot buy any more assets, you have a fundamental issue because that $12 trillion of negative cannot stay - i think if you look at the data it's starting to slow down. should they have given them a hike early? yes, probably only to give themselves a little more space to play with as you start to see the markets and things slow down. they have thin margins to play with. francine: should they have consulted with boj before? it seems like governor kuroda's decision with tweaking. simon: this is a story that keeps coming back time and time again. should they consult? you go back to the ecb in jan uary 2014, there was a huge amount of criticism. the things that came

up at the time was that had to be discussed. i'm assuming in fairness that the bank of japan must've had a pretty decent idea that the fed wasn't going to do anything. maybe not the dot plots. that is not the fed doing nothing. it is straightforward. i think the fed was going to stay despite what the japs -- the most likely thing was to summer. the issue, i suspect was that yes, the boj was tweaking. francine: we'll talk more about boj. bnyief currency strategist at . plenty coming up, including why erdogan does not care of turkey is cut to junk. we talk about the recent coup attemtp. mpt. the bull market in bonds about

to turn according to alan greenspan. and why brexit is good for britain. we speak to stephen lansdown, coming up in our weekly show, brexit, what's next. this is bloomberg. ♪

francine: i'm francine lacqua. let's give straight to some corporate news.

nejra: the billionaire founder and majority shareholder of u.k. retailer sports direct has taken over as its chief executive. after hecomes resigned yesterday. the company has come under criticism for the way it treats its workers. says the personal details of half a billion people were stolen in a 2014 hack. the company says the attacker "as "a state-sponsored actor and the information may include names, phone numbers and passwords and security questions. users are being contacted their account security. the revelation comes ahead of verizon's planned acquisition of yahoos web assets. facebook says it has been giving advertising an inflated matrix in the average time users spend watching a video. it has 1.7 users and has seen

the popularity of video fuel revenue growth. the error has been notifying advertisers. shares fell in extended trading. that is the business flash. francine: the turkish lira is down 40%. in the wake of the attempted coup, turkey's president faces renewed pressure. we sat down with president erdogan. he asked them about the economy and if he is happy with the lower currency. there has not been the kind of explosion in the currency that some people were expecting. even afgter the coup attempt. be hope is that it shouldb lower. it is not at the level desired, were expecting it to crash, they did not get the result they wanted. if we preserve the stability and

if the turkish currency gets a bit more valuable, i believe in turkey, growth and economy. let me elaborate. within the first six months, the growth rate in turkey is satisfactory, 3.8%q. this is much better than the primary economies of the european union. 29key has grown pretty much quarters. we have never experienced negative growth for the last 20 nine quarters. this is a very important indicator because we have fiscal discipline all the time. there is stability and there is confidence in the markets to which we have attached great significance. we are protecting stability and have protected the confidence. of fiscaly the rule discipline. that is why investors did not get scared. though we are not always at the desired level, we are still

strong, 3.8% on an average basis in the aftermath of the failed coup. francine: you can catch more of that interview throughout the day on bloomberg. he talks about turkey's credit rating and the coup that happened over the summer. let's get to our guest. so, when you look at the turkish president, it's unlikely that obama would ever really talk about dollar weakness or for that matter, theresa may. simon: it was a fascinating interview. in particular, the way he was talking about the markets reaction. it's extremely comfortable about what the turkish lira does. and making the, to have not seen the crash on the back of the coup. what is interesting is that he is pacing that as a measure of the strength of the turkish economy. his strength, absolutely. as the leader. says is an argument that

there is far more reflection of the market environment that developed over the last three years because one of the things you have seen is the market not reacting to anything political or of a geopolitical -- francine: why? even brexit. it was very short-lived. simon: even with brexit, you could argue that they came down to the same key history. it is about monetary policy. it is about the fact that monetary policy in the developed world is that such extreme levels, the negative deposit rates, that the search for yield is so extreme that it blanks out everything paid you look at the biggest moves you have seen, for example, the biggest volatility moves you have seen and the euro over the course of the last 2.5 years and all have been monetary policy related. all but two have been ecb related. this is a world where that search for yield means that you

focus, you focus on yield. consent. out real think about december, last year, two russian jets were shot down. thecine: i you saying that market is not as sophisticated as it used to be because of central bank action? we are in a binary market? simon: what i'm saying is that the search for yield become so extreme and so forced that people do not have the option to worry about those things. they have to ignore it and search for yield. francine: what happened to the turkish lira or any high yielding currency? furtherhe fed hikes than expected, i would expect to see a huge downward move taking place in emerging markets. francine: temper tantrum?

simon: absolutely. i actually think moore concerning would be if the ecb were to say we can't do anymore in terms of bond markets. fed hiking rates, it would be a shock, but at least the direction. unable to goo be any further, that would be the big issue. francine: how would that impact emerging markets? simon: then, all of a sudden, you are seeing yields in the developed world start to head higher. those yields in the developing world no longer look at attractive. given the fact that has been the prime dubbing force -- that the brazilian real in the first half of this year despite political issues. that was down to yield. you have aynamic and major problem, not just in the developed world but in emerging markets as well. that would be the point where mr. erdogan would start to has some issues. francine: thank you so much.

up next, the former fed chair alan greenspan says the bond rally is unsustainable and it is only a matter of time before long-term rates go up. this is bloomberg. ♪

to think of this type

of bond market in terms of its price-earnings ratio. if this were a stock market indicator we would all be running for cover. i thinik this tells you there is a speculative element involved in this market which is, cannot persist. francine: former federal reserve chairman alan greenspan speaking on bloomberg there. simon derek is with me this morning. bonds, youok at agree with what alan greenspan thinks. simon: i'm slightly shocked. having spent most of my -- d efying what he had to say in our journey had been part and parcel causing some of the i ssues. 35 years into this bond market rally. there have only been two moves in the bond markets, the u.s. bond markets in my entire life. but here we are. that, seems clear to me again, it is come back to this

point that there is this artificiality in global monetary policy. for driving the search yield. when you argue it is a clinton or driven by that desperate -- it's simply artificial. at some point it must come to an end. whether it is today, tomorrow or next year, who knows? we all recognize there is an artificiality there. or the that is the boj ecb, who knows? francine: and the timeline? simon: who knows? as with all bubbles, it is a question of when ultimately it pops. the one thing you do know is that there is ultimately one set of buyers. drivingicialb buyers this. when they find themselves no longer able to deal with this of

they start to talk tpaering, that is when it starts to become an issue -- when they start to talk tapering. taperes the ecb purchases without causing a major unrest within global markets? francine: it was a news conference about nine months ago when he announced in the first thing if you bore asking is, how do you get back from this? yet?e not close to there simon: did seem to be a few stories floating around this week -- i don't know. think about what the fed itself is doing. think about how they went about tapering. they took a year and a half to get, six to nine months to get to the start of the tapering program. that wasthe unrest cost and think about how much more extreme the policy followed

by the ecb is. how much further out of they going to have to stark about tapering? francine: thank you so much. next, we bring your our weekly whwt'ats'it, > next? ♪

francine: welcome to our weekly brexit. every friday we have analysis and conversations that will make you smarter about what next for britain. let's get you than the u.k. if brexit curbs trade, according to a study published today. about 5.8 million jobs are linked to trade with britain. while only 3.6 british posts are dependent on exports. global investment banks are planning for london's loss of euro clearing after brexit. they said executives expect

france and germany to win the fight over the clearing of $570 billion of euro derivatives and are making plans for the follow. executives, including unilever's ceo, are dismissing warnings from the u.k. their companies will suffer. company representatives say talented mobile and banks on the continent will step in to pick up the business. global news 24 hours a day powered by 2600 journalists and analysts in more than 120 countries. this is bloomberg. francine: thank you so much. my next has cofounded a 6 financialund ftse 100 services committee which describes itself as the uk's number one investment supermarket. in the city of bristol he has created hundreds of jobs and is a passionate supporter of britain leaving the european union. welcome. thank you so much for being

here. how did it pan out? you wanted brexit, but you were surprised when it happened. >> like most people going to bed closed, youe polls thought it was going to be a remains out. and wake up the following morning and it is a brexit vote. surprise that it happened. francine: are you suppressive what happened next? markets have recovered. the politicians that really campaign for brexit are not in charge. there was no plan b. >> that is one of the issues at the moment, who is going to negotiate on behalf of britain? the conservative government did a great job once they got over the shock of the result and once they realized they had been dean. beaten. had been theresa may has led the case so she has appointed boris

johnson to the panel. all we are waiting for is some concrete proposals as to what is going to happen, what they are going to be campaigning for. it's frustrating for the press and everybody else, but i do hope they invoke article 50 in january not march. francine: i imagine it is frustrating for a ceo because you have to make investment decisions. you don't really know what is happening next. i'm not frustrated. you should be if you do not know what is going on for the next two years in your country. >> we know there is going to be an exit. in is a question of what is negotiated. what they seem to be doing is getting feedback from various parties both in europe and in the states tto form a view as to how to take it forward. francine: will it hurt your company? >> no, it will not hurt hargreaves lansdowne. it's businesses in the u.k.

investment will still be required by u.k. residents. we have and seeing what is happening in the pn ensions markets. francine: not even if a downturn happens? >> that affects, the value have got there. in general terms of business and people require investment advice being able to do deals and so on, it should not really affect the business. francine: i did a chart for you. do you like this? this is the overall chart. this is the brexit vote. and this is where we are at now. what has been happening? this impacts your profitability. >> what that affects is the uncertainty that is around. probably where the peaks are, then somebody will come out with a comment that is negative. sterling, it had an immediate

effect. francine: where people say they are to export more, travel more, it'll boost consumption. and now what? now they are worried about what? >> uncertainty. that is what is causing that. i see the reports, and i -- i think most people are just using brexit as an excuse not to do something. i think there is an inactivity caused by it. uncertainty is not good for us. people in business, we need to fight for business going forward -- we need to look at new markets. francine: how do you see brexit playing out? you are hoping january or march? to trickle article 50. case is for a soft brexit or a hard brexit. do you think we will get a hard brexit? >> i do not think a hard brexit

means that. i was listening to boris johnson. comments.ith his we want to trade with europe. that is what we voted for in 1975 was to be part of that trade bloc. made ke trade easier between the european countries. i think is what we still want to do. francine: i understand this is the u.k. position. but i was in -- that's what they want. it takes two to tango. if the other party says it will impose tariffs, it will not be a great help to you. >> some people will win. some people will lose. we will have to wait and see. the most important thing to come out of the brexit vote is that power is restored to westminster. we don't pass the power to your cats -- bureaucrats in brussels. francine: to be fair, they were remainders. so it's very difficult at the

moment. it only has been two or three months for people to say, i was wrong. they fear that legislation, that europe will still impacts this country. without having a seat at the table when you speak to people on the commission, they say we do not understand because britain had such a great deal. they were blocking everything. they had the best deal out of everyone. s who have us suffer the devastation coming the other way and the red tape that has been dragging our business is done for so many years, it has been a big sigh of relief. that is all slight braking free. francine: do you think you will be more competitive? >> that is what the world needs. it needs competitive companies and international services. again, you've got the european banks have sport -- passporting in the u.k. it is a balancing act. i don't think banks in the u.k. will suffer that much in europe or vice versa. that status quo will remain.

it is a sensible outcome. the real factor is that the legislation that applies, as long as our regulation is top drawer, which it is, sometimes it can be over the top, our regulations are good. why shouldn't you trade? and trade will happen. francine: i guess one of the concerns is that you have countries looking inwards more. you see with donald trump. you see it with some of the rise of the right in certain european countries, in france. and podemos and these kinds of parties. is it not likely that the european market tries to close its quarters with u.k.? in two years, what kind of agreement you think the u.k. will have with the e.u.? >> eye thing from the u.k.'s perspective, -- i think from the u.k. perspective, there will be controlled migration. i do not think we will stop

people coming to work here. francine: the work permit or visas. >> that is the way to do it. no country wants people coming into the country live off their benefit system. that is the thing we are trying to stop. francine: od you h -- do you have foreign workers in your company? have you said, i am ready for them to -- to pay 2 million to have them have visas? >> do we have people working -- i'm talking about bristol sport and the company we are building in bristol. problems and that is one of the problems i worry about with the exit, we had 600 jobs we were advertising for. we've managed to fill 570 of those, but it isn't hard to do that. francine: why? >> the on a planet rate in the u.k. is coming down. we need to employ people.

these people may come from the european market. we do need people to do these jobs. francine: do you think it will be more spencer for you long-term -- more expensive for you long-term? you needon in charge, to make a decision before the negotiations start. >> it's no different than decisions being made over many years at different times. sometimes there's wage pressure. therefore if you have to pay more to get your staff, it may be one of them, it may not be. we want hard-working staff, staff who are keen to drive the business forward. you have to be prepared to pay for those. francine: the cofounder of hargreaves lansdowne. plenty coming up, including the stock rebound peters out and oil retreats. we bring you the market news to watch. then the timeline to trigger article 50. theresa may and boris johnson

publicly clash. e.u.pple versus the tim cook is confident he will win the court case over taxes. we speak to the irish foreign minister about taxes. this is bloomberg. ♪

francine: european stocks lower.

let's head to the bloomberg for your asset check. mark: coming off the biggest gain in three weeks. we are on track for the first weekly gain in three. the biggest rise since mid-july. the latest on outflows from the european stocks, equities saw $1.8 billion of outflows. weekmarked a record 33rd of outflows according to bank of america. ck. big decline, lumbe the drug maker says it's alzheimer's therapy -- missed its main and secondary goals in the final stage study. the therapy is unlikely to get fda approval. conceded one of his more promising late stage pipeline products and accounted for 30 danish kroner of market valuation. shares getting absolutely hammered today.

onshares falling the most record. the pharmasset accompanies behind one of the best selling treatments for opioid treatment was sued by 36 states claiming it ripped off consumers. the medication used to treat addiction to heroin and prescription painkillers. on the upside are a number of u.k. home builders. reiterating its ratings on its major peers. it's raise the price targets across the sector. u.k. house builders 2016 trading is holding up well, prompting an upgrade of estimates partly reversing cuts made in the wake of the brexit vote. it expects a sector profit to fall next year as housing prices fall 2.5%. now it sees less of the volume

drop at 5% versus the previous expectation of 10%. still expects mild economic slow down. not a hard landing. how the home builders have recovered from that post-brexit lows wel off those 40% saw in june. francine: mark barton with your asset check. my guest is the cofounder of the 6 billion pound ftse 100 financial services company hargreaves lansdown. and a majority shareholder of bristol rugby. he's with me on "the pulse" today. it is a great chat we had on brexit. great to have your perspective and how you try to deal with everything. your biggest read is still attracting talent from europe to fulfill some of the positions you advertise for. >> attracting talent from anywhere, really.

the majority of our people live within two miles of the place. some of the people have moved into the area. every business needs to be able to find good employees. and whether they come from europe are from the uk's does not really matter as long as they are good. francine: away from brexit, we have headwinds in terms of currencies. ise populism.r we talk about trade. malaise orut something symptomatic in our society that people may be worse off than 20, 30 years ago. what worries you? >> nothing worries me. i think people need to focus on what today is a not look back and worry about what everybody else is saying. there are plenty of opportunities. we are showing this in bristol with the stadium built we are doing and the developed around it. we invested 50 million pounds in revamping the stadium.

i think what you're going to seeing inside bristol which has been a deprived area in the past is new businesses coming in. francine: how do you attract those businesses? >> they can see what is happening with the stadium and that becomes a destination in its own right. other business is going around it, the retailers and the food shops and so on, because people are going there. people are going there for rugby and football and concerts and conferences. we are doing a big conference center within the stadium, so we 1000 people. we have all the breakout rooms. and i think that will allow us to attract people in. when other businesses come to visit the area, they can see how good it is. the most important thing is that the people they serve is us, will benefit from the business we bring in. francine: if we were to think bigger, does the u.k. need to cut tax rates to a level similar like ireland to face a possible

downturn from brexit? with that the ideal is it rusty? -- is it risky. >> i think that tax rates are far too high. george osborne was proposing a cut before he was deposed. that is down 15% which would be low by all status. then you have national insurance. and -- a businessgain, as leader, what do you want? >> personally, i would love to see national insurance be reduced. if not taken away altogether. i think it is a tax on employment because that would allow employers to employ people without that extra 13% they have to pay on top of the payroll. francine: at least it is not very exposed in terms of well-being. >> not if you manage the budget correctly. we then get into public spending. we have a massive civil service which needs cutting. a morerphed into

expensive commodity. do we need all these departments? but that's what happens in any society, in any business. you grow and sometimes you have to cut back and grow again. francine: is there a country that you think gets it right? one could argue that the u.k. is pretty streamlined and slim compared to a lot of other countries. ultra criticalg of the u.k., and can i point is somebody we should be as an example? no, we are britain. that is what we voted for. we want to be masters of our destiny. we want to make her own decisions. we need to make trade agreements with the u.s. over china. francine: one of donald trump wins in the u.s.? do think it will be more difficult for the u.k. to negotiated trade agreement? hethe noises he's making, applauses for the brexit vote. francine: because it plays on

his message, which is mainly fear. >> yeah, it is looking after yourself. i suppose and the way that is what we are saying we should be doing. but i think is a country, we've always looked to the world and -- where we can. we fought in world war ii goodness knows what. we are not isolationists. francine: if everyone except herself, you do not have trade agreements, right? it's simple math. >> the point is, if you're looking after yourself, you're going to want to trade. going back to the european question, we want to trade with europe. if i want to trade with france, i need to fall, apply by their rules. if i do not like their rules, i go and find somewhere else. that is business. we are competitive. what you're seeing with the city, and what the banks are saying, is -- it's easy not to change. but they are going to have to

change in their going to have to find out what is the better way to change. once they have done that, i'm sure they will do very well. francine: thank you carry much for joining us today. as boris johnson says article 50 is likely to be triggered next week, has he offered much-needed clarity or further muddy waters? this is bloomberg. ♪

francine: lets preview

tomorrow's leadership result from the u.k. opposition labour party. great to have you on the program, as always. are we any wiser about when article 50 will be triggered? >> what we all suspect it has been confirmed, it will be triggered early next year. that's the aim. he revealed this with an interview yesterday. francine: the prime minister theresa may seem to suggest thanks, boris, leave decisions to me on brexit. >> theresa may is keen to keep control of the situation have no one step out of line. this rumor about it being early next year has been fed by a number of factors. the fact that french elections are coming up and there is a certain amount of uncertainty and there is a lot of pressure to have this happen sooner rather than later. if you wait till the french election you have another six months to go. francine: we do not really know

what kind of brexit we are looking at. >> what i thought was interesting about johnson's comments yesterday as he's adjusted my take less than two years once article 50 is invoked. that would suggests we are more likely to go for a hard brexit. if you have a categorical the attachment from the e.u., then, the process is somewhat faster. francine: than we have labour party leadership contest. will jeremy corbyn still be at the top? >> yes, jeremy corbyn is almost certain to win tomorrow. you never know what is going to happen. but certainly all the predictions are for him to have an overwhelming, a bigger mandate than he had before. francine: amazing. thank you so much. "surveillance is up next. tom keene will join me from new york. we will have a conversation with the blackrock strategist. later in the program, we also d'sak to islands -- irelan

finance minister, talking brexit and apple. tom keene making its way to set. it's "surveillance." the market's center stage. this is bloomberg. ♪

♪ >> markets caused for breath after this week's stock ponds and commodities. a big week for the world central banks. president erdogan tells bloomberg that turkey central banks should continue to drive rates lower. brexit opportunities, how will ireland whether the shock? we have an exclusive interview. i am frenzy in london. they sent me over so that we are