francine: deutsche bank's troubles. we take you through the latest with germany's biggest lender. brexit downdraft. easyjet shares tumble. the airliner faces headwinds coming weaker pound post-brexit. the fight to flach. a ruling is expected on whether fracking 10 resume and u.k. five years after -- can resume in u.k. five years after fracking stopped. ♪ francine: a warm welcome to "the pulse."

live from bloomberg's european headquarters. i am anna edwards. let's look where we are on the markets. a data check shows you some of the key moves. european stocks not making enormous headwinds, up by just a fraction. the dollar against the again. we have a a move -- we have a move of .2%. an eighth day drop for the yen, the longest run. a lot of the moves we are seeing in the markets are driven by ongoing calls for the red test for the fed rate hike in december. -- for the fed rate hike in december. it was the oil price that was driving the asia session around. -- down by 6.9%. this could the latest news out of norway, headlines coming through from their budgets.

they're giving out details of that. in a way budget forecast 2017 underlying cpi inflation at 2.1%. they are also talking about the surveyed unemployment number being 4.6%. we have a great story on different ways of measuring unemployment over in norway. they are talking about their expectations for oil prices. budget forecast 2017 oil price at four to 25 norwegian krone. they see that -- at 425 norwegian krone. a broader context is just how stimulus is. the norwegian government was to be to the government and we have seen a recovery in oil prices which means they don't do quite so much stimulus for the economy. we were talking about the structural budget deficit as oil money spending will increase to 225 billion.

we are expecting increase in that number. let's leave the norway story and returned to the oil seen. let's get to bloomberg first word news. >> deutsche bank which has been indicted for colluding to conceal the italian lenders losses. -- transaction and others this according to an audit commission. in addition to -- the german lender adjusted the accounting of 27 trades and 27 -- 2013. a spokesman for the lender says there is no connection between these trades and the italian bank. goldman sachs retirement plan is pulling $300 million from omega advisors. according to a person with knowledge.

cooperman has been accused of insider trading which eased denied -- which he denies. it is the second time this year that goldman sachs has cut ties with a former employee. the u.k. chancellor will meet with wall street executives today. he will tell representatives from banks he wants a brexit deal that secures good access to european market -- european markets. the trip comes from amount to concerns that leaving the eu could prompt banks to move jobs out of the u.k. you can watch our interview with philip hammond later today on bloomberg. norway is adding to record spending of its oil revenue next year as the government withdraws cash from sovereign wealth funds. the government is boosting its touctural oil budget deficit

225 point 6 billion krone next year, equal to 3% of the funds according to budget documents. hurricane matthew is heading for the u.s. south east where it is expected to batter the coastline. potential losses are seen as high as $15 billion. the national hurricane center describes it matthew which is battered cuba, haiti and the bahamas is a category three storm with power the u.s. has not seen for a decade. global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. karlsson.kus this is bloomberg. anna: thank you very much. index is flat this morning as investments continue to weigh our store yesterday that the ecb will start to wind down the bond purchases for the conclusion of

it qe program. we get the accounts of the european central banks september meeting which will be watched for hints on a mario draghi's thinking. let's welcome my next guest. he is funny about bonnie. that she is fatty about bonnie. pony -- far be about fabio balboni. had some detail around how they might decide to exit. we surprised at the moves of market. indicatione was no they were going to exit anytime soon. they had little choice but to beyondtheir qb program march 2017. exit --rmal they how

how the exit. you want to be sure you're ready to exit. when you look at the data, the latest confession for next year is lower than when the ecb expanded it qe march. where down to 1.2. shirley, there's going to be a peek a little bit higher. above 1.5. we don't see any sort of .mminent threat from an ecb perspective, they -- --ike the market to do

anna: yesterday as that story ran, we heard from the ecb that the government counsel was talking about. fabio: there is a very little information. draghi was hard in terms of the last meeting and said this is not discussed. we might get detail of which could be interesting for the market in terms of timing of those committed that a been set up to discuss the technical discussions. we don't know whether it will be ready to report. whether we might have to wait until december. we could get a little bit of flavor. anna: any sense will get information? how long will we have to wait to

find out where the ecb will go next? they set up a committee. they want to find new ways or least review what they have been doing. any sense that there is appetite for buying new stuff? he was asked about that. the path ofgo down least political resistance. the capital keys is too early to talk about it. the bank will do little tweaks, maybe by more of the bonds. if they could -- if they see the constraint it could go by financial corporate's. we think that for now, it might just stick to doing the least possible thing and get into september 2017. in terms of accounts, it is unlikely we get more details of their. forecast which

shows inflation is off track. anyway, it is more depending on where the committees have completed the work. anna: fabio balboni joining us. stay with the pulse. plenty still to come including brexit turbulence. easyjet reports its first rapid drop since 2009. we will bring you the details and the latest on the u.k. departure. .obs day in the usa we preview tomorrow's employment numbers. what it could mean for the data dependent fed. the fight to frack. a ruling is expected today on whether they can hydraulically fracture -- the fracking bands across the continent. this is bloomberg. ♪

anna: welcome back. this is "the pulse." i am anna edwards in for francine lacqua. easyjet's annual profits have fallen for the first time since 2009 is a state of terror attacks clips them off. the airline says the decline of the pound following britain's vote to quit the european union

inflated its foreign currency costs. shares have fallen to a two-year low and are down more than 7%. samsung electronics shares have hit a fresh high after calls from activist investor paul elliott singer for the company to restructure and organize. he wants a firm to separate into an operating company and holding company to enlist the former on the u.s. exchange. a special dividend and improve governments by adding two independent board members. he is arguing that would make samsung electronics more transparent. -- after reports on the technology -- says google does not have plans to make of it. apple is unlikely to see -- unlikely to be interested. google was said to be working on a financial advisor on an offer. a representative for google declined to comment. that is your bloomberg business

flash. anna: let's get more on the easyjet story. the company's profit has fallen for the third time since 2009 as the state of terror attacks hit demand. the falling pound -- let's bring -- fabio balboni is still with us. chris, let's come to you. how much of the profit decline is down to brexit. only one of the many headaches that they have to face. chris: there is a basket of issues. they started the year with terror spree having a huge impact across various fronts. they have been trying to move past cases like egypt and places like north africa. brexit follows on. the profitlion of are to -- they

understand million pounds below where they thought they would be nine months ago. -- they are 250 million pounds below where they thought they would be nine months ago. there is a lot of brexit pain still stored up for them, in terms of the pound and the impact on the -- anna: fabiola, do you have any good+++

what are your expectations for the pound and its weakening trajectory? .." -- fabio: think the pound could fall further. where looking for the 120 by the end of the year. some of the news we got from the local front looked like we are heading toward a harder version of an exit. it makes it more risky. we see more sensitive and all of this process. we see some reformation. where likely to see more weakening of the pound going further. anna: that a call it harder, the car cleaner. euphemism for perhaps the same thing. what about the growth plan? i pulled at this chart. basket ofjpmorgan what the call brexit sensitive stocks. they haven't done all that bad. where in this phony brexit period at dismal -- we are in this phony brexit period at this moment. which is featured in the index and underperforms the index. exposed.ey are clearly adamant they are going to press on with their own with plans. they're adding 8% more capacity here. -- capacity year.

anna: used a great line that they believe the cream rises to the top. even though things are tough, easyjet bleeds in their own story. chris: their growth plan isn't predicated on m&a or the collapse of carriers. that would help. it did say they are actively targeting potential -- people who might -- which are in dire straits. we will certainly be here in a years time. anna: chris, thank you very much. that continues to be under pressure this morning falling in what is a fairly flat overall market. that was chris jasper. us onbalboni stays with the program. we will be talking more about brexit in the u.k. government economic plans. here onammond will be

bloomberg from 3:00 p.m. london time. up next, more deutsche drama. this is bloomberg.

anna: welcome back. this is "the pulse." concerns about the complexity of deutsche bank. the german bank mr. marx that's

--marked dozens of trades mismarked dozens of trades according to an audit commission by germany's regulators. shares are trading up in frankfurt. some more on deutsche bank and the health of the european banks . let's talk to have you about tony. -- let's talk to fabio balboni. posed by of threat tuc -- do you see posed by weakness in the european sector? maybe they should've been more reform their? or action should've been taken and then they could be actively stimulating growth in the eurozone economy? fabio: it is a complex issue here. sometime they tell us they're not worried about the profitability of the banks. sometimes they say they worry the equity prices with bank

lenders. it is clear regardless what the ecb is saying, the legacy rate policies helps banks. but equally those who got two thirds of the lending on the viable rates, like the one in the periphery. there remains an issue. there are some legacy issues like the nonperforming loans which have not been resolved and are much more difficult to address. what we see is corporate in the eurozone are heavily reliant on direct bank lending. despite draghi telling us that the monetary transmission has never worked better in the eurozone, the reality is when we see the new production of loans that is been falling this year. it is clearly not true. banks can i get the money to the real economy is a -- economy because some of the regulation is getting tougher. -- wemmon deposit in sure don't see much more progress

ahead and all of these issues. anna: what provides the next leg up in the stimulus? their questions on how long central banks can keep doing what they are doing? we'll get updates on that in the future. many people including mario draghi call for more fiscal stimulus. isn't that likely? where is that going to come in? five." -- fabio: we have to get -- italy has already told us -- germany might spend $15 billion more next year. we're not looking at fiscal expansion across the eurozone. cap be realistic what we are talking about. that is one reason we can afford to the monetary policy because of the huge help it is giving countries to give it more of the fiscal funds.

anna: what about the ecb's efforts to get corporate to buy more by bringing these interest rates down to low i buying corporate bonds. -- low by buying corporate bonds. fabio: we would say very little because what you see is there is huge competition among the banks, among investors to lend too big eurozone firms. those that can borrow at very low rates. it doesn't trickle down to the rest of the economy. there is very little the ecb can do to help those companies, potentially -- they can only buy investment-grade corporate's. we see quite difficult in terms of getting that monetary transmission down to the real economy. anna: we started talking about the difficulties faced by the

german banking sector. the italian banking sector faces problems. we have the geopolitical risks and italy. give us your thoughts heading toward the referendum on the fourth of december. what would a no vote mean for the leadership? fab." -- fabio: it remains a big deal, the referendum. the referendum itself is reform which we quite like. we think it helps in creating more stable government in the future to be able to keep italy and the reform path which is crucial because this is a country where productivity is very low. -- theivity is below reforms are quite good. growth prospect -- we could have a quite negative reaction you are mentioning the banks. they are likely to be affected by the situation of uncertainty

at anna: five io, thank you for getting into it with me. fabio balboni from hsbc global. stay with all's. that's stay with the pulse. we look at the jobs data out of the u.s.. this is bloomberg. ♪

,l

anna: a very well -- a very warm welcome back to "the pulse." i am anna edwards. we're waiting for news out of the u.k. energy sector whilst we wait for that -- let's talk about what is coming up in your headlines. bloomberg first word news with markus karlsson. >> think you very much. deutsche bank which is been indicted with collusion to conceal the italian lenders losses. to an auditng

commissioned by the german regulator. in addition to -- the german lender adjusted -- 103 similar deals. saidkesman for the lender there is no connection between these traits in the case of the italian bank. goldman sachs retirement plan is pulling $300 million from liam cooperman's firm. cooperman has been accused of insider trading which he denies. it is the second time this year that goldman has cut ties with a former employee who has run into troubles with u.s. authorities. in august, the bank told money from the firm over bribery in africa. philip hammond will meet with wall street executives today. he will tell executives from banks he wants a brexit deal that secures good access to

european markets for financial services companies. pronto the eu could banks to move jobs and operations out of the u.k. you can watch our sitdown interview with philip hammond later today. norway is adding to record spending of its all revenue -- oil revenue next year. recovery amid a slump in the nation's petroleum industry. the governor destiny government two 225 .6 -- billion krone next year. that is according to documents obtained by bloomberg. hurricane matthew is heading for the u.s. southeast where it is expected to that are the coastline and threaten electricity to more than one million people. losses are seen as high as $15 billion.

matthew has already battered threend 80 as a category life-threatening storm with power the u.s. has not seen for at least a decade. global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. i am markus karlsson. this is bloomberg. anna: thank you very much. let's focus in on the u.s. right now. tomorrow we get key jobs data from the economy. former fed chairman alan greenspan told bloomberg radio they cannot stay so low for much longer. >> rates cannot sit down at this desk to be suppressed abnormally and i think they will start to move reasonably soon. holding independently of central bank policy. anna: let's welcome edmund shing. studio. us now in the

edmund, a very good morning to you. slow?ng can they stay the not for much longer according to alan greenspan. edmund: if you talk about the fed, they are caught between a rock and hard place. they want to keep the economic expansion for as long -- expansion going for as long as they can. that means moderating growth. rates credit below. they need to raise rates because when the next recession comes as it inevitably will, you cannot avoid recession forever. afraid no one has found the secret sauce just yet. you can drop rates in response to recession to cut short a recession. they do need to raise rates but i think they will raise rates slowly. anna: breaking to our comes viewersiefly to bring

up to speed with what we're hearing from germany. angela merkel it's speaking at an industry event saying she sees room for modest tax relief in germany. she also citing brexit headwinds for the german economy. these are live pictures coming to us from berlin. a lot of sentiment coming out of angela merkel. she is at the bdi conference. there was no comment then on deutsche bank. i'm sure it will be interesting -- interested if she makes anymore comments. will keep monitoring those. edmund, let's get back to the conversation about the united states. the nudge concept talking about how the fed is putting it in autopilot. is that how you see them? what breaks them out of the autopilot echo edmund: -- autopilot? admin code not very much.

-- edmund: not very much. if we just pulled back and look at the data, the data on under -- on underemployment found that 9.7%. if we look at the last two , a percent and 7%. we're still -- 8% and 7%. we are still a long way away. wage inflation should become a serious problem, and that should guide them. until we see serious signs of wage inflation there is no reason to go forward. the labor participation rate is at record lows. a lot of people are not bothering to look for a job. anna: there's still some fed capacity. that is what janet yellen has been telling us. edmund: if it -- anyone else's, she would know.

she knows the situation. anna: she will be honing in on the jobs report. suggested, the participation rate in the wages. the 150 toyou're in , anywhereo 200 range in that range will be just fine. the probability of a rate hike, 62% for december i look out into next year and we get into the 70%. how many fed hikes do you think you're going to see next year? do you think the market in the fed are on the same page? the fed brought down the expectations of rate hikes a little bit. edmund: i think the fed is a little optimistic. the fed our little bit

optimistic. equally the market might be a little bit too sanguine. let's say our medium projection is somewhere around 25 basis points every year. , oneate hike in december next year and one in 2018. investors are going into bond proxies. not many rednecks hikes from the fed, does that trade continue? edmund: -- not many rate hikes from the fed, does that trade continue? edmund: when bonds go up and yields go down, utility does pretty well. the utilities have done fantastically well this year. bond yields are rising. i would say that trade has been done. i would argue there is plenty of scoop for real assets. real estate is still an excellent place to be both in

the u.s. and europe. secondly, infrastructure, because as we talked to germany, the u.k. as well, there is going to be infrastructure spending, austerity shackles have been thrown off. we need to spend more. infrastructure is not great. look at the trade. anna: and the structure is there. it is may be going to be the buffer for 2017. that is the u.s. side of things. you mentioned in the structure in both contexts. need balboni was saying we -- in europe next year. by european standards it is going to be an increase in fiscal spending. would you go along with that? edmund: i think there is plenty of scope. germany is running a surplus.

thirdly, the interest cost of the german government of the borrowing money has come down dramatically. -- now it is 14. with german bond yields at zero, that leaves nothing. the ecb is saving money by dragging bond yields down and keeping them low. they should be of the use that money for infrastructure. anna: angela merkel did say there's room for modest tax relief in germany. she also said the german export expertise is always going to be tied to innovation. social justice, monetary and climate have challenges. these challenges still lie ahead. head ofhing, global strategy at b.n.p. paribas, thank you very much for being with us. the fight for frack.

will -- we will discuss the applications -- the implications. on surveillance, will take a look at the markets -- we will take a look at the markets. travel towe will germany's biggest lender with an audit showing which a bank miss mark transactions. the former ceo of hsbc joins us to talk about the health of the industry in europe. he has already been talking about the pound. this is bloomberg. ♪

anna: welcome back to the pulse. fracking in the u.k. has come to an end. the government has said it is allowed for hydraulic to extract guest after the process called malt just caused small earthquakes. .e're joined by kelly gilblom more on energy markets in the oil markets, how your glass is our chief energy correspondent joining us here -- javier blas is here. we have a full team around the desk. kelly, let's come to you. let's get your reaction to this news that is just broken that quadrille a has been allowed to frack in northern england.

his that the expectation? -- was that the expectation? kelly: a lot of back-and-forth. what we have seen is conventional gas supply in the united kingdom decline quite a lot. there's effort to understand what the short gas resort space in the u.k. anna: this is going be watched by other companies? kelly: absolutely. there's a lot of countries that have bans on fracking. if cuadrilla is able to drill these, we may see a revisit on some of these bands across europe. anna: how much potential this technology has the u.k. a lot of questions environmentally. amounts of the potential that lies underneath

the u.k. and other parts of europe, this would be crucial because we will get some answers. javier: the answers may not be as good as is expected. there is a positive development for the industry, they are going to be of the drill here in the united kingdom. we have seen elsewhere the main obstacle for the development of the shale industry has not been opposition from government, it has been the geology is not nearly as good as in the other places we are seeing a big development in the shale industry. the united states is one. now we are seeing it in argentina. it is a test case but it will decide now to the government opposition has been removed. it could be geology that could be the biggest obstacle. anna: political objections have been overcome in the u.k. the u.k. government has allowed this in northern england.

kelly: there are a lot of bands where france it is banned, and the netherlands it is banned. in 2011, thereer were too small earthquakes that were caused by fracking in the u.k. you did see a very strong fear reaction going across europe. anna: edmund, do we look broadly at the energy markets? the big story coming out of algeria on what we finally saw from opec coming together in a way that many people did not expect. what is your strategy around oil assets at the moment? edmund: avoid [laughter] . from the u.k. perspective, -- they don't want to be beholden to the russians or norwegians. it makes sense they allow production to replace and becoming more replace of. investor, what is the

interest in natural gas today, pretty low. .il, i am not a big believer they are not going to stick to any quotas they set. they will tend to cheat in time. even if they prevent -- they begin to stick -- we know there's going to be leakage. -- that demand which inevitably will weigh on global children develop meant. anna: harve are that's harvey year, i'm not good -- have year, i am not good use the same words that edmund use. we want again are looking to comply with levels of production. we knew in the past they do not always comply. thiso we -- do we believe cap is going to fit? -- how the."redits i give credence to opec --

they need to relate the market because they need higher oil prices. i have less confidence will be in agreement that opec as cheap and of the past. saudi arabia can deliver -- that is a key question is if for the next few months, are the saudi's prepared to endure the pain of being the only one who cut in a significant way? they feel they needed to do it because the oil market is going to be oversupplied and saudi arabia has clearly indicated that it cannot have had $40 oil. the market -- opec has yet to cut. barrel onith the $50 wti, that may be reversed. here in europe, it remains oversupplied.

much.thank you all very javier blas, thank you for joining us. thank you kelly for joining us as well and edmund shing joining us from bnp hermann. that's b.n.p. paribas. -- b.n.p. paribas. as a merkel is still speaking here. -- angela merkel is still speaking here. movement inom of time for full access to the market. around that word "full." we will see where philip hammond has gone. this is bloomberg. >> we can make much more shaping globalization. if we keep on the sidelines and see -- and leave the field to others.

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anna: welcome back to "the pulse." i am anna edwards. here is markus karlsson. >> easyjet's annual profit has fallen for the first time since 2009 as the state of terror demand.hurt the decline of the pound following britain's vote to quit the european union inflated its going currency costs. shares have fallen to a three-year low. twitter plunged in extended

that googlereports doesn't have plans to make a bid. it also said that apple is unlikely to be interested. said to begoogle was working with a financial advisor on a potential offer. suisse has agreed to pay $19 million -- you do not adequately disclose -- to reclassify assets and his private bank. it said more than $1 billion of a private wealth client assets were relabeled in 2011 as being manus by the bank which generally generate higher fees. --mer ceo agreed to pay former ceo agreed to pay a penalty. that is your bloomberg business flash. anna. anna: markus karlsson with the as is flash. samsung electronics closed at a

record high after pulsing or called for the company to be split into. two -- split in two. -- for more, let's speak to our bureau chief, peter paid joins us now. what is singer aiming for with the changes he is proposing? this is a conflict business. peter: it is a major conglomerate with cross holdings. singer is looking to increase transparency and increase shareholder value. they have had a career discounting because of the inability to figure out who owns what. he will make that more clear for investors. anna: it is a big business. incident inlatest

the united states, how significant is that proving to be for samsung. be prettycould significant. we're not sure if the note 7 smartphone -- on a southwest flight was indeed the 7.lacement for the new note samsung have to call 21 5 million of them because of a better issue that would cause it to overheat, smoke and sometimes catch fire. this one was a replacement for that. if it was indeed that, and it is confirmed, it would say there was a systemic problem with the smartphone and replacing it with a new battery is not going to solve this issue. it could be a major blow to samsung's image. anna: peter, thank you very much. peter: -- peter paid joining us.

the francine lacqua and what tom keene -- and tom keene are in washington today. by hsbcl be joined former ceo. lots going on. this is bloomberg ♪.

markets brace for the friday job's report. and treasuries extend losses. bank -- we take you through the latest as shares climb for the sick straight day. and we are live in washington, d.c.. we speak with christine lagarde later today. this is "bloomberg surveillance." i am here with tom keene. a lot of the focusthis is "bloog