anna: the worst slump in seven weighinghina exports on asia, sending the yuan to a six-year low. fomc members listen to janet yellen regarding holding rates, but supporters say it was a close call and hike is needed relatively soon.and wells fargo ceo public outcryto over the fake accounts scandal. ♪ a very warm welcome to

bloomberg daybreak: europe. we follow the sound. and we every named our flagship show. manus: i am manus cranny. two issues to deal with, but china -- good china's january trump everything? it could come back on the risk issue.exports live . what we put together, anna, capital flight from china. #4242. 2015, that has abated somewhat. but the drop in the yuan the question we must ask, ourselves, this is portrayed data. six-year lows. the timing all adds up to a rather heady cocktail for the last three trading months of the year. anna: concern about chinese trade, global trade really moving around the markets today.next week we get gdp number from china. focus on that, didn't really

take a 6.7% for third quarter in a row? some people pointing to the weakness in the chinese export to the u.k., and europe during the brexit conclusion. but you can find those all over the markets if you really search for them. let's have a look at the risk radar and bring you up to date come a asian equities under pressure. hong kong is a weak spot. concern about the trade. u.s. futures looking weak. and the minutes from the federal reserve reinforcing expectations we would see a rate hike in september. manus: absolutely. was there friction or was the fed divided? discord, as you can imagine that sort of parent asked. keep an eye on dollar-yen. the very risk-off. -month high.bank of japan survey inflation.s c 2% kuroda must be delighted. anna: 10 year treasury yield

still at 7114%. down a little, despite the interest rate hike relatively soon. remember, we were at the highest yesterday since june, coming up a fairly high level. nymex crude dropping below 50, 80.. we move the roadshow that is oil from istanbul to vienna, where the action takes place. we look forward to a technical exchange between russia. manus: a technical exchange. let us see what venezuela and the iraqis, with. lettuce go to rosalind chin with the first word news. china's: anna, manus, exports dropped the most since february, as the market remains tepid, adding to yen's six-year low. imports broncos below expectations indecent. wells fargo ceo john stumpf has stepped down, bowing to public ey outcry.

the world's most valuable bank had profits given in part by cost selling, at the center of the scandal. chief operating officer tim sloan will become ceo. wells fargo shares gained in after-hours trading. the president says the u.k. departure from the european union will not destroy the country's close ties with the trading bloc. telling bloomberg's mark barton, they will remain united. >> i suppose it will be for you to decide if it is a softer hard brexit, but i would assume the connections will remain very close. rosalind: the u.k. housing market strengthened in september, after the shock inflicted by the brexit vote faded, and sales continued. that is according to the royal institute of surveyors, who says value continues to climb, the priciest real estate in the country.

chiefl speak i economist today. and the thailand government is warning to ignore rumors about health licking. they cut short a provincial trip to bangkok, preparing for a audience with the crown prince. they should rely on official announcements concern over the mark. has bond weakening. global news 24 hours a day powered by 2600 journalists and analysts in 120 countries. you can find more stories on the bloomberg at top . i am rosalind chin. this is bloomberg. anna: thank you very much, roslyn. the hang seng in hong kong under pressure. chinese trade data. juliette saly has the details for us. juliette: anna, that is right very sluggish export data out of china really play havoc with asian markets today.

we have been seen earlier in the section a bit more upside than we see in the moment. the regional index actually on track to post the worst loss in a month. we are seeing that wheat export data, closing down. the mining stocks already under session.earlier in the as you said, quite a lot of weakness coming in hong kong. four sessions of losses on the hang seng, down over 1%. we have been coming through the forecast of grades, saying the second half will not be as worse .as they initially indicated and we are seeing energy players coming under pressure as well. in shanghai, pretty flat in late trade. the weaker, and nikkei also in the red, despite starting the day quite strongly in the black. this is as we service you begin gain more traction against the dollar. and as when to show you quickly thai bot.

this is what we have been focusing on. you see the 30 day chart, down 2% against the u.s. dollar. today's movement still seemed weaker by about 1/10 the 1%. and also of course playing into equities over the concern of the health of the king. manus: juliette saly with the latest on the market. u.s. central bankers debated the merit of raising interest rates last month. and they decided a close call. anna: several members say a height is needed "soon." for more, bloomberg's eric filed this report from inside the federal reserve. eric: of federal reserve itching to raise rates? not quite. but the minutes of the last meeting show policymakers even more divided over when and why to move off the current quarter point benchmark. we already knew three of the voting members on the federal open market committee dissented at the last meeting.

they wanted to raise rates in december cannot wait any longer. what the minutes tell us is why. these voting members of the president of the boston comic in the city, and cleveland feds believes on employment is artificially low. they believe inflation could flare at any time, forcing the fed do crank rates higher choking off the recovery. i have supported some of the officials who judged it prudent to wait longer acknowledged it was a close call. if anything, that strengthened the case for a december rate increase, which of course is what is pricing into the bond market right now. but it is probably not enough to put november the second into play. you might ask, what would it take for the fed to raise rates six days before a federal election? . more than what we have right w. bloomberg at the federal reserve. alex, joining us now is

global strategist at j.p. morgan asset management. the propensity for rate hike six days before an election seems low. but is it to the bond market. yields have risen. the composite bloomberg treasury index, rising every single day this month my question to you is this. , by the way jpmorgan client survey, 10 year government bond yields, 1.74%. the fed move by 25 basis points versus china, what move does the treasury market want? alex: this moves more than china does, about listening to what the fed officials will be saying. they seem very divided camp. you look at the fed minutes and you see that you have one group that seems to be wanting to get on and raise rates, get out of this low for longer world we have entered into. and another group that wants to wait and see the hot white inflation before they pull the trigger on another interest rate hike. what i was reading in the

minutes, my first thought was this is about as hawkish as a dovish fed could get before pulling the trigger on interest-rate hike. i think they're are laying the groundwork for a december rate hike. they have been doing that really throughout august, september coming out this month as well. they're trying to the market, get the interest rate expectations up poster to 70%, where it is easier for them to pull the trigger when markets are pricing this in. leaving it to late in the day. anna: we all consider a hawkish sounding dovish fed on our morning coffee. let us throw the details on participation rates. alex, that is really janet yellen's areas of focus. that is her thing. that is what she keeps pointing to. and does the other side of the debate have an answer to that? i mean, the participation rate has been climbing. alex: they see that the u.s. economy is a little bit better,

dusting off the cvs, thinking of my friend and get a job, midi i can, too. more people sitting on the sidelines and we anticipated, meeting there is more flex. and that rate these to come down, before he actually reach the point of full employment that the fed is looking for. but ultimately, you look at inflation and unemployment trending lower, inflation soaring to pick up and you can see that with the rise of inflation expectations as well, and you say actually, the two mandates that the fed targets, looks like at least on the way. probably time, and i would hope the u.s. economy is strong enough to stomach the 25 basis point increase. manus: the reason why i ask you at the start, what moves the bond market more, china or the fed, you very squarely went down on the side of federal reserve. but if you look at some of the comments, it is about a participation of global financial conditions. they have improved in recent

months. and near-term risks to the economic outlook are roughly balanced. but i put it to you, sir, china will spoil the whole party, given the data that i know can be talked in more detail, but this seems to be more concern of a global issue as well. alex: that was a problem up with them off, if we go back 12 months when they had the potential for a september rate hike.and the markets , was very volatile and they set away from the rate hike. this is a sort of third mandate the fed has put into the mix, is to really add to the list. anna: just to keep the world happy. alex:: and keep us busy. whether or not we have calm global markets. at the moment, we do. which allows the fed to think about raising cut the market around them seems fairly -- manus: is donald trump the spoiler? looks like he is going full speed ahead, in terms of who

he brings in. is he the spoiler potentially? alex: as much as the fed would say we would never let politics dictate our decisions, we are politically -- unaffiliated and agnostic, i think if you get a donald trump president, not affected would be a donald trump resident it would be the market that.lity off the back of which would mean the fed with a actually a december rate hike within move off the table. anna: you are not influenced by politics, that is something a lot of central banks would say, but to increase rates just days before a major political event would be -- alex: especially one as contentious as we are entering to. anna: alex dryden stays with us. manus: newsday ahead, we're going to get german inflation data. quizzed byon will be foreign policy, the parliament's

foreign affairs committee. anna: we get initial figures for jobless claims out of the united states.more clues on the job market. manus: coming up on daybreak, morgan stanley wins the top underwriter role on snapchat's ipo.could a listing come as soon as march? anna: there is no respite for yuan. we are in hong kong proposal look. rejoicells fargo shares as the expanded trade its levels. stumpf steps down. more on this ahead. this is bloomberg. ♪

anna: welcome back everybody. daybreak europe. over in hong kong, the sun is shining, hang seng down 1%. let's get to the bloomberg business flash rosalind chin. rosalind: well, the u.s.

government has banned royal bank of scotland from retirement funds. the decision will have little impact on the business, but that could send a signal to other banks and hedge funds with criminal records. rbs representatives could not be reached for comment and the labor department not respond to requests. unicredit will boost capital by selling an additional 20% in the online banking. the biggest lender is set to raise about 550 million euros in the 35% remaining holding will be locked up for a year. and snapchat has chasing bankers, with the social media ipo for twitter. morgan stanley and goldman sachs will lead the listings, which may happen as early as march. early lenders from j.p. morgan and credit suisse, can file ipo documents confidentially.

a spokesperson for snapchat declined to comment. and that is your bloomberg business flash. manus: thank you very much. china's exports grown the most since february. dropping 10% from a year earlier, all according to the customs administration. let us get straight to our chief asia correspondent. enda, your take on the data. reading,etty soft by all accounts. reminding of the challenges, after a few months of stability, we are a big fall from some of the biggest markets in europe, in the u.s., and of course the employer side as well. that is interesting. because china's imports were the last component for a global manufacturing chain, and that signals perhaps that the order book are weaker. and what we are seeing in september, but perhaps a signal

that we will not see any kind of big turnaround over the coming months either. so pretty soft outlook for the china trade story right now. anna: is the weakness in the currency we are seeing, the weakness in the chinese yuan, is that helping? enda: it is interesting because you have thought that the weaker currency would be helping them. but it just goes to show you this is much about global demand as it is exchange rates. we have seen this in japan as well of course, the weaker yen did not turn things around overnight from the manufacturing sector. and china is doing the same thing. it is about the tepid recovery that is continuing in europe, the weakness in demand in the u.s.. and those are external factors that china has no control over. but it was, at the very least, tempting chinese of 30's to weaken, even substantially further to have any meaningful effect. manus: let us cut through it, what does it mean for the yuan?

we tested. what is it me next? enda: coming back into focus, i think most interests coming -- watch the fed. we had those minutes suggesting a rate could come. and we have expectations of the fed rate hike by the end of the year, that would put a different pressure on the yuan. the capital flow story has subdued, but it has not gone away completely. and the week trade numbers, you have to say that the stars seem to be alive for yuan weakness over the near-term. but it is never simple. they do not want to weaken too much because they don't want to trigger a big burst of capital outflow from the country either. but at the moment, manus, looking for weaker outlook. anna: thank you very much, enda curran there. let's get back to alex dryden from j.p. morgan. yuan weakness looking like the,

as they try to stimulate little more export.but they don't want to risk capital outflows . what are your expectations? alex: the issue for investors, and they get very nervous when we start seeing the currency weakened, their issue really for investors, we know the direction that currently travels. we know it is going down. or how long it will take to get there. and that is what makes investors quite nervous. we woke up one day and saw the currency seeing the material devaluation rapidly overnight, or this sort of gradual story that is going up? ultimately, this is a chinese challenge. this is actually the current depreciation in the long-term will be a good thing. this is china taking a step towards them at your economy, where it is trying to get them close. this is a step towards the direction. forward in the basket. anna: more floating these days?

imf, is getting closer. alex: they have moved from the u.s. dollar to a broader basket of currency.and eventually they will let go of the rate .that is a positive development of a long-term. manus: when you look at the china story, you have a holiday in the middle of it. so certainly something. this is china's relationship with the rest of the world, u.s., japan, south korea. the flow of trade. this is the global risk. i'm sorry to bang on about it, but this could potentially be the spoiler. that china growth, the global economy really begins to stutter. that is something that is a risk. alex: do i think that risk is imminent? not particularly. there are concerns. and i look at the list about china, short-term or the currency, but the medium-term you look at chinese debt for example, longer-term bigger

picture being the chinese growth story. there is a long list of concern for investors. the thing i take comfort from is those list of concerns that investors have are identical to the list of concerns that policymakers have. they're trying to fix the chinese economy and move in the right direction. gradually over time there will be hiccups. , times with against to sputter. but the general trend is to try make the economy into a more mature beat. anna: looking at the debt level in china concerned about them,, you are not focus because of the denomination of that debt. gdp. is about 150% of that is a big number. but that is 150% of gdp, but a lot of it is denominated in domestic currency, which gives the flexibility. that can make lots of big trades them actively. the eurozone debt crisis, when greece was inflating, that greek debt when only default but it

was sitting on french and german balance sheets the same is not. for china. the contagion is limited. manus: the one thing that we look at, for our bloomberg viewers, this goes back to the essence of capital outflows. it has abated somewhat. what caught my eye was the actual purchases of chinese sovereign debt is hitting a record. so it all goes back to the oil, ultimately these capital outflows may well be standing because of -- alex: agreed. what you are starting to see is a degree of support for the currency. the thing that makes investors nervous is this idea that suddenly, we will wake up and see a sudden devaluation in the currency. at the moment, i look at the data and go yes, there is a potential for further weakness in the currency. but we could go lower in the next quarter as well, but

alternately not looking at that saying we're going to see a crash in the currency. of holding old china, showing the middle class is spending more on consumer goods. a lot of that is selling manufacturing stuff, that they get put into other products. what clues are you looking for for how well the new china model is actually doing? alex: looking at things like the increase, the number of households in the middle income bracket for example.the amount of spending they do on consumer luxury goods, things like cars and iphones. the stuff they see in the west and they want to have as the emerging middle class. china may be the second biggest economy in the world, but if you break it down by gdp per capita it is just as rich as gabon in africa.which gives you the idea of growth. that is exciting. anna: my favorite. alex dryden from j.p. morgan

asset management stays with us. manus: coming up, brexit means brexit, or does it?the plans to push it through without parliamentary consent. that begins today. this is bloomberg. ♪

anna: welcome back. this is daybreak: europe. a live shot of tokyo, dollar against the yen, a bit more risk appetite in the session. nervousness around the chinese export data it seems. a new edition of daybreak is no available on your bloomberg and mobile. let us take a look at some of top stories that made it into today's edition. manus, you like the story they have gone with. manus: it is a very interesting one. what is it? as she correctly pointed out are we there yet, the backseat of the car? r? anna: fed up with waiting.

manus: the september minutes show the last months decision to hold rates was as they call it, a close call. several thing that a height is needed relatively soon. brexit's next story is high court challenge. a judge will hear arguments against theresa may's assertion that she does not need parliament's approval to trigger article 50. this is all about the timing of article 50. meanwhile, lawmakers approved the right to examine the negotiating strategy for brexit talks begin. so far, she has not promised to vote, just saying that monetary and will be able to have their say. manus: looking at volatility on dollar sterling, during that debate, when david day was the hard brexiter rhetoric on the floor.that is when the volatility returned to sterling and we saw a drop finally. finally, looking at supermarket operators, narrowly beating

sales. they rose by 1.2%.that was in the third quarter . anna: we must turn to the yen. right now, we have this data out of china.throw the risk radar . china's export data the most down, already near a six-year low. some people asking questions about the global trade story. amongst all of that we have weakness in the asia-pacific section and we have people seeking haven in the japanese currency. manus: this is the personification of risk-off. yen appreciated against all 60 major currencies. this will give heart to mr. kuroda at the bank of japan. haslinda pansy 2% inflation in one year. larry longrisk off before, that inflation data came out. anna: we have the fed minutes. 1.74% on the 10 year yield in

the treasury market. coming up little bit, despite the minutes were talking a interest rate increase relatively soon. 49.74, downfocus, by 9/10 of 1% on u.s. stockpiles increasing. the oil roadshow moves from is then ball to be enough. and if you like the exchange of views we have between russia and opec members is the 29th of october. a technical exchange in vienna we are told. now, let us get back to manus. manus: london's high court is going to decide when brexit can actually mean brexit. with a legal challenge getting underway in the u.k., a judge will consider whether prime minister theresa may can actually trigger article 50, beginning the formal process of the u.k.' withdrawals from the eu.

and this of course would all be without the approval of parliament. anna: for more, our legal affairs correspondent is here. alex dryden from j.p. morgan is still here. patrick, welcome to the program. why.us an idea of who and this is different from the debate in parliament yesterday, all about timing. : patrick the investment startup, you get the sense -- they say they want to debate, an act of parliament before theresa may triggers article 50, which raises all kind of eu law. manus: patrick, when it comes down to it, it is interesting. tuesday night was the motion putting forward to go to the floor. yesterday, theresa may back down. she did not amend parliament. look, you are not going to stand my negotiating tactics,

etc. she does not want that. what exactly is at stake? patrick: is hard to understate, really. a vote would mean it could be held up. it is the weak conservative position, because they are pulling stronger it would be perfect the possible in the house of lords and commons to be slowed or blocked altogether, even though that is unlikely because they are unelected. but theresa may staring down attorney general jeremy wright today, which does show how seriously they are taking it. anna: the complainers are taking it seriously. on their site for they are relying on such a very english sense of history, but they are relying on laws the quebec to 1688 to make this count against the government. patrick: which shows you how serious it will be overturned. i spoke with -- if the government lost, it would be chaos.

that in parliament, i spoke to robert thomas, professor of law at manchester university, he said that in that circumstance, we would basically not just the meltdown of the government, but potentially the whole constitutional and local system. anna: alex, how serious are markets taking this? not likely to happen? making a judgment and that is why the pound is fairly stable this morning? alex: this court case has been coming for a while now. and as you see the moves in the pound in recent weeks, markets are not really relying on changing the course of brexit vote.you see the pound dropping to lowest levels against the dollar's since the early 80's. you are through to get the sense that markets are really starting to accept that we are going to take a turn towards hard brexit, regardless of the hurdles to keep popping up. we will get to that in a bit more. manus: patrick, thank you so much. bloomberg's legal affairs reporters.

let us finish the conversation with alex dryden and j.p. morgan asset management. there is a whole sort of you in the market out there, that the bank of england's next step is probably stymied. you have a data on one side, the collapse in the pound on the other. where are we in that debate at j.p. morgan in terms of u.k. asset,s? how much exposure across the asset classes in the u.k.? large-capftse 100 space, also recovering commodities. ftse 100 has 20% weighting on commodities making it the largest, in the developed market universe. that is a good way to play this rebound that we can see continuing next year. the currency is in immediate markup on earnings, where they were last year over 100 euros,, ¥10 $100.

those drivers are very strong tailwind for the large-cap space. that.e not change we say the ftse 100 over more genetically exposed. anna: what is your expectation around the bank of england? last time they cut they signaled they were, minded to cut again and that has been the conversation for a long time. looking at producer prices going up, seeing tesco and unilever sliding over price increasing, u.s. are somehow long as inflation under control for in the u.k.? are you convinced the next move for the bank of england will be policy? alex: at the moment, the weaker pound and the rebound and oil will see fruit to the headline inflation. what they can work out inflation will be in 2017. --y can be ranging from potentially, the question is a lot of that is transitory.

is that inflation just there because how the rebound in the numbers in the currency set. anna: the same with the bank of england looks to high inflation and i crisis -- alex: looking through low inflation, the question is why we have seen the move and a lot of long-term inflation expectations in recent weeks is concerns over whether or not that balance and temporary inflation leads to consumers and businesses anchoring inflation expectations at a higher rate inflation. demanding wage increases, that then feed into long-term inflation. that is what we are really starting to cb priced and on things like five year break evens. personally, i do not buy that. i think in the u.k. in a brexit scenario it takes quite a bold employee to walk into a office and demand a pay raise, when you have temporary jobs in oil and currency. manus: i will write that down for the end of year review. alex: just a reference.

[laughter] manus: mark carney is saying the dissipation, have a look at this. carney's qe effect really begin to fade. these are of course borrowing costs to u.k. corporate's. we reverse all of the decline from the rate cut period, and rebounding. if inflation is on its way, as you suggest, potentially bandwidth, 2.3, i'm being generous to you, where next for corporate bond yieldss? the glories fading. alex: i think of mark carney is looking at the start, he will say this is not what we are hoping for. we need to keep borrowing costs low. and i don't think you will see the action from the bank of england by the end of the year. there is still some economic data since brexit, that has been surprisingly strong. and that has meant that the expectations for another bank of england action has waned slightly. however the cost of borrowing is

not what the central bank will be after. i wonder if mark carney try to talk it back down again, the college over in europe and the ability to talk to the market to get race to go down. anna: it is interesting when we did see the conversation go down, i went through yesterday, speaking at an event, he was writing me that during the financial crisis and it took until the first quarter of 2010 before consumers really said there is some been going on and reacted. alex, thank you very much. alex dryden state with is on daybreak. manus: let us get back to breaking. john stumpf is stepped down following accusations of the tough sales target stroke employees to open accounts for customers did not request them. anna: chief operating officer tim sloan will become ceo. caroline hyde has all the details you need to know. a very good morning to you. with the pressure on john stumpf , espn terry gou to time after time on this.

caroline: he has indeed. the public backlash which is not and, so we had to retire two years earlier than planned, the age of 65, as chairman and ceo. it is about a month since the storm engulfed wells fargo, perch,as not off the top . now taken over by jpmorgan remember, $185 million fine was later the door related to these aggressive sales tactics, that meant that some employees it was arguing, opening credit accounts, debit cards. even fake e-mail addresses were being made up to sign of customers for online banking, who had not requested these new products. 2.6 million dollars is how much they were compensating customers for, but 5300 lower level employees are gone, and now the top man himself. it seems as if the key question is will this public outcry continue.

, it is notable that the shareprice really has tumbled 12% since september 8. manus: caroline, the question everyone will ask is, he is gone, will management change? enough to quell concerns? this was quite deep rooted within wells fargo. caroline: and going on for years, it is alleged. and is tim sloan the right man for the job? . chief operating officer longview the most like the successor of the chief executive, john stumpf , who just a down. but he was cfo since 2011, a right-hand man. wholesale baker. but since november, he has been chief operating officer, overseeing key divisions such as the retail banking, where this whole debacle has emanated from. many feel that the is the right man. he understands the bank.

the question is how much has the bank been painted? how much will it lose business, something the bloomberg intelligence is questioning this morning. anna: caroline, thank you very much. breaking news a little bit, bring every up-to-date with that, numbers look better than estimated. manus: this is a record for taiwan semiconductor's. third-quarter income at $96.8 billion. that beats the estimate. and the one thing that caught my eye in here, capitalist manager coming is slightly above $9.5 billion. one industry that is maybe thinking about spending a few more dollars. third-quarter gross margins at 50.7, the estimate was 51.5. anna: we keep seeing that. coming up on the program, the sky is the limit. the u.k. reports third-quarter earnings. but his takeover talk back on? we discuss.

marmites a potential shortage? we will talk about the brexit fallout. and the marmite shortage. anna: several officials say a rate hike is the quite soon. more on that is ahead. this is bloomberg. ♪

anna: welcome back. this is daybreak europe. looking at a live shot of new york. futures down by 7/10 of 1% at the start of the trading day. we will keep an eye on that as we go to the program. let us to the bloomberg business flash. there is rosalind chin. rosalind: anna, the u.s. government has find royal bank of scotland for managing 401(k) plans and other retirement funds.

that could send a signal to other banks and hedge funds with records. rbs revisited is cannot be reached for comment and the labor department did not immediately respond to requests. unicredit will boost capital by selling an additional 20% take in the online bank. the biggest lender set to raise about 550 million euros in the bank sale. the remaining 35% holding will be locked up for a year. a wide selection of unilever products ranging from mayonnaise to ben & jerry's ice cream and tesco. banished from rising price in the wake of brexit vote. tesco says they are having availability issues and will have it resolved soon. unilever declined to comment. snapchat has pushed ahead with the biggest social media ipo since twitter, that is according

to people familiar with the matter. morgan stanley and goldman sachs will lead the listing, which may happen as early as march. other lenders from j.p. morgan help.edit suisse will the company now known as snap, inc. can file confidentially because revenue is below $1 million. and shipping jumped in seoul, and receivership, stop selling core as is his week. shares netted 14% at one point. the court had initially said it would to dispose of the container line, but was considering a piece by piece sale. rival emergence have indicated interest. that is your bloomberg business flash. manus: thank you very much. editions, the impact of brexit, they hit the tape 7:00 a.m. u.k. time. anna: this is european telecom

intelligence. and alex dryden is still on set. great to see you this morning. what do we expect from sky this quarter? manus suggested there could be a number of things in the mix. currency, to do with the pan-european businesses, give us the lowdown? guest: sky, for the first time, given guidance of revenue this year, the range of five to 7% growth. this quarter we will see the first signs, if directly able to achieve that guidance, if they were able to give dividends. if you look at the particulars, the markets in the u.k., brexit has been the talk. but we do not expect a significant impact currently in this bond moment on the business.and in italy , the economic situation has been really bad. and because it was owned by the media, there will be struggle. ,e may see increasing fines

taking saw that down his back. manus: in terms of what they pay for champion, being what they receive, what we have for our viewers is the change in complex that is guy. #4244. is showing that consolidation in italy and germany, taking all of those businesses back in. the depreciation of the pound is not there yet. but what the propensity, around his levels going? moment, european operations account for the percent of revenue, but when you look at the bottom line it is almost as little as 5%. so the contribution on the profits from the european operation is very little, at this, point so depreciation has definitely impacted the topline growth, which we will see this quarter. , but in terms of the profits it will have little impact.

if you look at also the cost side there is a completely different picture. it is denominated in euros, so that means that as it takes place, there is a higher interest expense.and that has been the focus of federal agencies, as the credit outlook has been changed recently to negative. anna: alex, looking at u.k. corporates, the kind you want exposure to a the moment, of course you talk about buying the bigger ones, the ones that are a proxy for equity markets recovering, that sort of thing. they benefit from currency as well. what about the domestic side? we will have to separate those out, to those that have pricing power and can pass it straight on to consumers and those that do not,. alex: have a mechanism to pass this on to the consumer, that will help soften the blow. but essentially, this exposure

to the domestic economy we still feel that despite the fact the u.k. economy had a decent third quarter, actually brexit is a lot like an anchor on this sort of tanker, if you like it will take some time for the full ship to come to stop. you will not feel the full effects of brexit and 2018. so if you're looking at consumer domestic markets, i find it hard to get optimistic on that area. anna: thank you for joining us. manus: let us continue the conversation about earnings with alex. alex, we had alcoa delivered numbers. down by nearly 2%. i went and did investigation. have a look in this. this is the flow of money into the msci usa. and the money is absolutely flooding in, the most ever. so it is a question of -- how we understand that is the question of defining quality stocks?

what is that telling you when you see that wall of money going into quality? look at that and think this people not wanting to pull out of u.s. equity markets, not so bearish they think they want to put the money in the mattress.they still want to participate in the upside in u.s. equity markets. there is a limited opportunity set outside of that. what they want to do is have a little bit of downside protection in their portfolio, going into the u.s. election, going to march of next year when we hit the u.s. debt ceiling, and the potential volatility that that triggers. so they want the upside participation and a bit of downside protection, tilting towards quality makes a lot of sense to me. anna: how does that fit with the earnings season that lies ahead of us? we kind of get it in earnest. tomorrow we have a number of financial sticking center stage, but more broadly the earnings center for you, how excited are you?

alex: i struggled to get excited about u.s. earnings season.it seems to me between bad and very bad. but we won't we are seeing is the full on headwind, the falling oil price, and the rising u.s. dollar. and has eased somewhat. manus: how concerned you about the dollar? we have 25 conference calls, 15 mention the dollar.are they telling us a load of jack and making excuses? does the dollar really matter? : alex about 50% of revenue in the s&p 500 comes from overseas. so the dollar does matter. however, the dollar has been an excuse that a lot of them have been using for many quarters now. and i look at it and say actually, i do not see much more appreciation of side of the dollar going forward. so i think that headwind continues going to the 2017. anna: we will have to do the same analysis as brexit in this particular learning theme.

maybe not this one, wants to come. , alex dryden global market strategist at j.p. morgan. manus: up next, it was a close call. that is the language from the fed. we will dig a little bit deeper. this is bloomberg. ♪

manus: china's exports fall. most fomc members listen to janet yellen's case to hold rates. several supporters say it was a close call anti-is needed relatively soon -- and a hike is needed relatively soon. wells fargo see y'all -- ceo responds to the scandal. ♪

manus: welcome to bloomberg daybreak europe. i'm an edwards. welcome to the program. it is 7:00 which means we are getting earnings from a few european corporates. manus: when you think about unilever you think about all of your products. dove antiperspirant, ben & jerry's, underlying sales at 3.2%. that beats estimates of 2.8%. this is quite a big beat. 3.2% on the underlying sales. nearly two thirds of the revenue comes from emerging markets. quarter, let's double check that. we have it to their at 3.2%. as soon asthe --

we get that we will get that to you. this is the third revenue quarters. the revenue comes in and it below the estimate of 13.5. track.perations on the overarching statement from them in terms of their outlet. billion, of like 5%. 100,000 new customers joined in the first quarter. this is the first quarter where sky, the european company, is not telling them the rate at which people left the company. an important metric for investors. they do longer are going to provide that information. a copy that could see a boost from the weakness of the pound. when you translate to those euro

revenues back into pounds with the 16% drop in the pound against the euro, that looks quite nice in a pound cents. they've been adding product, combining product tv service skyqueuekype to -- competitivesing the against the likes of -- largest shareholder is murdoch 20th century fox. whether fox may decide to buy this because of the weakness in the pound. the highest first customer growth in four years. manus: emerging market growth in 7.2%quarter sales grew by

with prices up by 5.5%. that is good news for them. a run the acquisition trail as well. building up that home care and personal care. with unilever. there is a shortage of unilever products on tesco shelves because unilever wanted to try to pass on the drop in the price. ¥175 it are updating -- billion. 47.9 billion. domestic unit closed -- uniclothes sulfite 2.8% global. , just aheadutlook of estimate sales forecasts. market was looking for ¥1.92 trillion.

we are going to be weaker at the top of the european trading day. down by having percent. april is about performer. the pound is down by three pence .03%.e -- manus: that is the state of your breaking news and markets. the first word news for us. roslyn. exports dropped the most. belows will also expectations in september. wells fargo ceo and chairman john stumpf has stepped down over fake accounts which were opened by his employees for customers. he helped build the firm is the world's most valuable bank. the strategy at the center of the scandal.

tim sloan will become ceo. wells fargo. crisis president says the u.k. to from the european union will not destroy the country's close ties with the trading block. him theident told country will remain anchored in europe. >> i suppose it is for you to decide whether it's will be a soft or hard brexit you i would assume that the connection will remain very close. market housing strengthened. according to the royal institution, which says values continue to decline in central london. home to the priciest legal estate in the country. anna: the thai government is urging people to ignore the help

of the king. ship to bangkok. he says the public should rely on official announcements for updates. global news 24 hours a day powered by more than 2600 journalists and analysts in more , you can findries more stories on the bloomberg. this is bloomberg. anna: breaking news on the ipo front. we covered that story about ipo. we have another u.k. company decided not to ipo. dia fluid systems is a .anufacturing auto-parts they decided not to proceed with their ipo. manus: proclivity for risk is dropping.

fed, it wasave the a close call. the china data, the question for markets is, does a potential china slowdown hike by the fed? >> it seems that it does today. we are seeing that slightest export data. the regional index training at one month low with hong kong stocks trading at their lowest level in six weeks. been an upside coming through in shanghai. just closing higher by 2/10 of 1%. have look pastrs this data and bought into the market. we have seen that big surge coming through and elizabeth of upside in samsung.

we saw the yen strengthened against the dollar. affectingn materials the closing down by 7/10 of 1%. one other markets to look at is the fit thailand down 2%. it is all over 10% since the start of 2016. markets await an update on the health of the thai king. anna: the latest fed minutes show the debt that the arguments rate hike. manus: they reveal support from those on the movement. move before the year and. >> i think the market is right in pricing a december hike somewhere between two third and three quarters i think that is the right probability.

wise enough tires -- why is it not hire? --ere's a lot of fluids the. fluidity. aberdeen asset management oversees $402.9 billion. vicki so much for joining us. was with surprise you on the fed story? do not be surprised by a move in december would you? \>> note surprises in terms of the minutes overnight and the expectation is there could be some movement in december. depends on what happens in the end. --basic it get defensive do you -- they say get offensive, do you? >> people generally don't know what is going to happen.

it is changing on a month-to-month basis. anna: when you look at the chinese export data -- perhaps the fed has been very focused on international matters. things have become more domestic that they are not have to worry about china. now we get this week data in china on exports. does this now enter the mindset that the fed is a reason if you're looking for one? >> we seem to be stuck in the slow growth rate environment. anna: two other actors have to step up? lifting how much heavy needs to be done now? >> there is increasingly evidence you're seeing the central bank is moving toward some port of the school stimulus most definitely. great drume is this

banging saying inflation is coming down, 10 year government bonds. from a bond perspective, from a market perspective, i doubt the melity -- the grinch in doesn't know we are going to make it back to 2% this year. problem. the i would not pretend to be an expert on bonds. we watch this with interest. anna: we were talking about another ipo being pulled. have you sensed the private equity are not as keen as they were? >> that's ties in with some of this debate around brexit and issues.

there are excuses for not doing things and that is probably the real issue. we are an unknown unknown territory. why should you take some of these quantum leaps? business, we hear a great deal about the uncertainty that is coming towards us. equity, the currencies aren't of pressure, the u.s. is in recovery mode, china big? . how did all of those facets playoff for you and your work? >> people are cautious about what is happening to the stock markets. you're obviously seeing a significant depletion in currency. there is a whole range of moving parts. we are in new territory in many senses and it is difficult to

know exactly what the future looks like. manus: our international private equity businesses interested in spending their dollars on u.k. denominated assets? >> you would think so yes. but have you seen that, no not to date. i think people are generally unsure about the impact of exit -- brexit. in the short-term it has been significant recovery but now we are in the issues of debating the types of things. they will have an effect. we need to watch on a week to week basis. manus: have you rank it, what are the biggest risks? > we>. -- we are in uncharted

territory in many respects. the long-term effects of that we do not know. anna: as you mentioned, we are hanging on every word that comes out. in terms of brexit. what do you make of the latest moves by theresa may? could be a game changer? if they're just going to talk about that it does not change much. >> if it does not get a vote, if they are talking about it what has changed, not much. anna: we will look for clarity on whether they get that about. figuring much -- thank you very much. juliet: the u.s. government has the decision will

have little impact on the business but that could send a signal to other banks and hedge funds with criminal records. the labor department did not immediately respond to requests. unicredit will boost its capital by filling an additional 20% of its data in online thanks. it is set to raise 500 million euros. its training 35% holding will be locked up for one year. a wide selection of union labor on its ranging from mayonnaise to ben & jerry's to venice from tesco's online store. a standoff between britain's supermarket change over rising prices in staples on the brexit.. issuesly experiencing and hope to have them results in -- resolved soon.

\ record earnings. net income rose to $3 billion in september, basing estimate. demand for the newest apple device production --boosted production orders. the biggest social media ipo since twitter. sachs stanley and goldman will lead to the listing as early as march. the company now known as snap file revenuecan privately. anna: that you so much. to madridy takes her as he meets with the acting prime minister. manus: has long been a favorite destination who will be eagerly

awaiting clarity from the prime minister on their future. joining us to discuss this, maria. what can we expect from miss may today? >> theresa may, a private meeting. there will be no press conference. implications of brexit on the surfaces of both. there are very significant community that live here and are retired here. going to talk about pensions, health care, veto restrictions, and so on there's when it comesue to foreign policy. spain's land for gibraltar?

lots of members of the ruling party in the u.k. are keen to give their support to britain keeping gibraltar, but this is a clear topic of conversation when they meet. spainis no secret that has always had territorial ambitions in gibraltar. people for the most part saying gibraltar belongs to spain. we need to bear in mind that this is an acting government. the situation is unclear what in terms of politics. the acting foreign minister coming out strong words that brexit have provided a great opportunity for spain to get into gibraltar. he sees it as a choice, they stay with the u.k. and they give leave, orey the -- they cut a deal to stay within the union. that is the idea spain has

pitched. manus: what is this about? this about trying to charge lavoie?- charm >> think we need to bear things in mind in the context that spain has not been vocal about this a tougher or softer way. have kept on the sidelines because there is no -- they do not have the authority to say much. is he goes toward the end the month. what is going to happen to citizens that live in both sides because the population is significant. they really wants to know what

is going to happen when it comes to health care. a hot topic of conversation as you can imagine. thank you very much. joining us from madrid. after the shock inflated by the brexit phot faded. there is a sources of properties for sale. values continue to decline under the crisis to real estate in the country. manus: simon rubin some. the shock and all is gone. the collapse has come, the demand and supply dictates the pressing of this market at the moment. is that a fair take on this report? >> pound itself is an interesting play on demand because that is certainly picking up remains under pressure. we compound may be encouraging

overseas interest to we heard stories there are buyers around. looking to take advantage of the week currency, do some deals as of the weakness in the market in the prime and of central london. demandely, supply and driving the market. anna: is that anecdotal? the dollar earnings coming in and taking up robert e. lee partly -- property partly inspired? >> we talked to some of our members in that area they will tell you about certain investors who are looking at that end of the market. i do not think it is hard to put numbers on that, but there is certainly a sense there are opportunities there. think about where the pound was a give-and-go. you think about the currency. the opportunity to take advantage of the natural pricing environment you you could probably be looking to get into the market for 30% down than 18

months ago. we, in here are property. has that slowed? is it a nervousness about brexit? is there any information out there in the survey in regards to what is causing the lack of supply? >> the supply issue is an ongoing issue and is not a brexit related story. the brexit related stories will come out in a couple of weeks when me have our commercial properties. that'll get to the heart of what investors are saying. supply, this has been coming through since 2014. a small blip around the turn of the year we have been told instructions are falling on a month by month basis. i would say it is a legacy of the under billed post financial crisis. we had a lack of supply.

that's slowly begins to recover. the new vibe that came into the markets posted the gsc. the investment community overseas or domestic. he tends to hold onto stock. they turn it away. they put it away. change on demand, supply, both come together and as a result you are not eating the supply flow in the way it was previously. live in yourt to day template you get to divine what is going to help and hinder this economy. i try to be nice to everybody that comes on here. on a good today. wonder, what should or

could he to that can assist of this market and in a way in terms of housing? >> it certainly could be reviewed and at the margin it might actually provide support for the broader agenda of the government. i know you have talked about this, you had to move away from a focus on homeownership. we recognize it is a good thing but it is not the only tenure we should be focusing on in terms of delivery. the general delivery of housing -- therned by wells discussion we have been having for the new governments very short term in power. it has already set a different agenda. at much moreoking

off-site construction which will help speed up delivery. anna: re: going to take a step change in housebuilding in this country? blamed many time for high prices of housing. that's going to change? >> i think we will see an increase in supply whether it is thehe magnitude to address step for the affordability crisis remains to be seen but i think we are moving in the right direction. manus: that is nearly as for today. a softer market opening, the fed is definitely one of the top issues in the market. china data really crushed these markets. anna: concerned is certainly not the right word, december the

work functions still show a 67% chance of a rate hike. bloomberg markets european open is not. this is bloomberg.

>> welcome to bloomberg markets where we bring in the first trade of the day. i'm guy johnson. the fed divided. minutes later the groundwork for a 2017 hike. in december, who will be the consensus? old engines sputter, chinese exports dropped by the most in seven years. pressure builds.