anna: the fed warned there are risks to running a high pressure economy. barclays bullish best. the bank says european stocks are a by in 2016 with or without a fed move. class a streaming success. netflix shares jumped 20%. the company has beat wall street estimates. ♪ a very warm welcome to

"daybreak: europe" our flagship morning show. manus: let us start with the bond markets. club.e have is the zero it expansive -- it expanded aggressively. what we have seen is a total amount of negative want yields has dropped. the biggest drop -- it may not look that tremendous but is it the beginning of a bigger backlash? we have cpi dropping by 13% in the month of september. japan is 51% of the overall negative bond. anna: big inflation is a big focus. we have had the new zealand number and we will get the u.k. number. let us show you the risk radar. we are picking up on the bond theme again. we have the 30 year treasury 2.54 andd their at

yields are going higher in line with the graphic that we showed you. the decrease in negative yielding club. 1.50 up bye wti at zero point 6%. it was down by 0.8% yesterday. the 50 day moving average, i am reliably informed goes above the 100 moving day average. manus: you could possibly get up to $55. the aussie dollar is rising and the new zealand dollar -- you have the cpi numbers in new zealand reducing the betting that you will get a rate cut from the new zealand central bank. probability of a cuts is down from monday. we will talk about the aussie a little later on. i know anna stays up late studying methodological gold.

we have the first set of minutes from the new rba governor. let us get more details. barclays share -- barclays says investors should purchase european stocks regardless of the fed's actions in the next three months. the overall picture is very supportive of stock markets. australia's central banks has prospects for maintaining growth are reasonable as he had went for minors start to ease according to the central bank's minutes. one of the new governors inflation is to start but the rba chief underscores the flexibility available in the central banks inflation target. >> we have never thought our job

was to keep the rate of inflation between 2% to 3% all of the time given the uncertainties and the world. it is neither possible nor desirable. donald trump's wife defended her husband in separate interviews on monday. the former model blaming the media and the clinton campaign for negative stories about her effort to shift the narrative. appeal to voters to focus on issues other than the sexual misconduct allegations. she also told anderson cooper -- do not feel sorry for me. signaled's ceo has that he expects hillary clinton to become the next president of the u.s. commenteen the lines was fairly predictive. he is one of the few heads of large banks to publicly air his

opinion about the election. told the group that -- i hope the next president, that she reaches across the aisle. economist says it will take five or six years to reestablish trade deals with fellow european countries once it has left the european union. leaving the block will require it to submit its own schedule of terrorists. at that point, any of the other members can flag issues forcing efforts that could take years to resolve. global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . it is easy as that. i am angie lau. this is bloomberg. manus: thank you for that

roundup. juliette saly is standing by. it is all about the aussie and the key way. how is that playing out in terms of the equity story? pretty positive except for what we are seeing coming through from the new zealand market. --.s closing down by as you were mentioning, the rba is paring back the expectations of another great cut sending the kiwi higher. we have seen high-yielding stocks in new zealand dumped today. a positive session across asia. volumes are still low. many investors unwilling to take too much risk ahead of the presidential debate on wednesday. we have seen that rebound in the oil price help out some of the crew players in australia and you are seeing a strong rally coming through in hong kong. bestang seng up by 1%, the performer in the asia pac

region. at its highest level in two weeks. we are seeing developers leading the game. the other story of the day is casinoeback in the stacks. they were hit hard on monday on the arrest of crown employees in china. you are seeing a little bit of closing up byey 2% but it felt by almost 40% on monday. galaxy entertainment in hong kong leading the rally in stocks there. the luxury retailer has announced that its store sales across greater china is down by about 22%-30% over the second order. dollarg in on the kiwi -- it is the best performer out of the majors against the dollar. following the mixed data from the u.s.. up by about 0.7%. weakness in kiwi stocks, though a strong qb dollar. down the dollar index is

by 0.2%. thank you juliette saly from hong kong. the federal reserve stanley fischer warned of risks to running a high pressure economy. manus: fisher says he sees -- to pushigh-volume unemployment ever lower and higher inflation. a little tell you secret. we are very close to the target, our targets, the target we and the fed face. we have two, maximum sustainable employment at about 5% unemployment we are close to that number. the other is 2% inflation. core inflation at the moment of the pce is 1.7%. to 2%. very close trouble inin deep

our monetary policy at the moment. fit of terrible pessimism were to hit the economy, we might find ourselves in deep trouble but we are not there. i would be very reluctant to raise the interest rate target, the inflation target at this moment because i find the logic of -- you cannot get to 2% so you are raising the target to 3%. anna: joining us now is christine scholz. -- christian scholz. close to targets is what we were hearing from fisher. a little bit of a diverted from the fed between fisher and janet yellen and how hot they think it is appropriate to run the economy. >> we are at a crucial juncture

at the fed. the last meeting and at the minutes that there is a hot debate going on. the key discussion point at the moment is more on the .nemployment there is unemployment and we need the best measure of a slackened economy. people are pointing to the participation rate. people who were not in the employment figure are now returning to the labor market. there is perhaps more slack and wage growth will not pick up and inflation will not pick up more either. even though you may be raising rates in the short-term, you would do that at a very slow pace. he went on in that about the and talked four factors holding the american economy back. we had those on a charge. demographics,ty,

along with a number of other facets. we are splitting hairs at the fed. he would argue that we are of ang over a nth percentage. >> i think that is something that we see globally. monetary policy is to steer the towards theconomy inflation target and a cam be very powerful and has been and in some cases it may be reaching its limits. but there is also a big role to play for governments. the short-term stabilization sense like fiscal expansion or contraction but over the longer term, the structural reforms. we have been talking about this for ages in europe. but they are also necessary in the u.s. fact thatpoint to the the government needs to address

this in terms of structural reforms. have elections. hopefully, the next administration will be able to do even more than the previous one. anna: many are asking depending on the results, whether we might actually see a government that is able to act more than this last administration. what would you suggest that they need to do? your colleagues at citigroup suggest that they need to do to improve the prospects? >> the main thing is the entitlement reform. it has been pushed out. in 2011, we had the big debates about the debt ceiling and there were signs that there could be a fix for the longer-term entitlement reforms and pension reforms. that was pushed out into the future. it has not been son -- it has not been done since. a sweep on either side could really open up the wave for such

reforms. however, a sweep still looks like an unlikely result. it is still quite possible that with some tinkering, we will not get that fundamental reform that would be necessary. manus: we started with the show talking about the bond yields in the u.s. getting roped -- getting drubbed. this is the global family of negative yielding debt and it has dropped by 13% in september. what does that say to you? does it say that the world of the bond market are perhaps concerned about inflation or perhaps concerned about central banks' commitments? >> you have these ominous hawkish signs out of japan, going for yield targeting. and in europe, we have talked about tapering as well.

the fed may be hiking rates again in december. inflation is on an uptrend. because the inflationary pressures are getting stronger but oil effects are rising -- are dropping out. it feels like the trend is towards higher yields, hire central bank rate and that maybe one of the reflections but we have to keep in mind that because there are no underlying inflationary pressures, the move will be slow. if it leads to any kind of recession and there are many reasons to believe that there could be recessions on the horizon, then clearly central banks would once again clearly stepped on the pedal again and then this chart may quickly go the other way. sound ominous to talk about recessions. looking at the oil prices, around $50.

this seems a enough to put a little more inflation back into the system. we have been talking about the decline in the negative yielding club in part driven by inflation expectations and the oil prices being higher. is that why you are nervous about recession? price, unless it were to really spike, is not necessarily the reason for a recession. if it were to drop again and we had emerging markets in trouble and global trade in trouble that would be a bigger risk for recession. there are mainly political risks out there, the u.s. one.ical election being it could throw it back into trouble. brexit of course is a big topic which so far has been relatively the nine. but we have to be more worried about the outcome of that. there are plenty of risks out there.

i am not saying they will materialize but if they do, central banks could quickly put things into motion. you andhristian, thank you will stay with us. anna: looking ahead, it is a busy day for inflation numbers. we get u.k. inflation for september at 9:30 a.m. and two hours later, we get the earnings from blackrock. manus: followed an hour later by goldman sachs numbers and we get inflation data out on the u.s. anna: after wall street closes, we have numbers from yahoo!. coming up. manus: the rba forecast reasonable growth as the mining headwinds are seen waning. anna: netflix, shares soar. crushing slow down fears. of the trade. we ask a former trade negotiator how british diplomats should negotiate new deals post-brexit. this is bloomberg. ♪

anna: a live shot of tokyo for you this afternoon. japan, and itr in is 6:19 a.m. here in london. a little movement this morning in the u.s. dollar. mark swartz, the asia-pacific chairman of goldman an advisor to the firm. he has worked for the firm for 27 years. he will become a senior director. goldman sachs will release their afternoon.is ibm has said profit margins shrank for the fourth quarter in a row missing analysts estimates. operating growth, profit margin was 40%, down 2.1 percentage

points from the same timeframe earlier. is changing to more subscription-based software and cloud services. netflix shares surge after signedng their service up 3.5 7 million subscribers in the first quarter quelling investor concerns about slowing group -- slowing growth. the ceo also told shareholders at the company has hit shows and it will become more profitable in the next year. charlie shock has said he is resigning from the san francisco based firm to be closer to the family on the east coast of the u.s. emily is a former american express president and was a white house official under ronald reagan. slipped in's shares trading after the surprise announcement. bsf says to employees have died

and two are still missing following an explosion at the chemical makers biggest plant in germany. another six people were seriously injured. that follows a fire at a supply lab that led to a series of blasts where they have their headquarters and largest and you factoring hub. that is your bloomberg business flash. ruslan, thank you very much. australia central banks as the profits for maintaining growth are reasonable and the headwinds that miners have been facing begin to ease. anna: that is according to central bank minutes from the new governors first meetings. one key challenge for him is generating inflation in the economy. rba chief underscored the flexibility available in the inflation target. >> we have never thought about our job as keeping the rate of inflation between 2% and 3% all of the time.

then the uncertainties in world, it is neither possible nor desirable. scholz is still with us. he previously talked about inflation. -- yesllion minutes australian minister previously used words like reasonable. being buoyed? the stabilization in growth in many of the asian export markets or perhaps the avoidance of the worst to case in the case of china, a hard landing, all add up to a more benign picture economy which was based on commodity exports and everything that comes up with

it. in terms of the domestic economy, i am not sure how much progress you can get in that short space of time. generate a very different mix of a growth components going forward. manus: a flirty and slip. fundamentally, you are a european at hearts. what we have for you here -- we have a look at the relationship. there are big moose going on in the world. this is the australian dollar correlated to the bloomberg nearly lockstep. hasou look at triples, ore gone up by a third. there are some challenges in terms of the us trillion economy. this takes us back to a global story which is about a global and ignition of a change in the commodity complex. the oil price came down

and the commodity prices came down, we said globally for the global economy that is a good thing because it effectively removes a tax on businesses. when it fell further, we realized that those countries which live off of exporting , we hadings recessionary tendencies in global trade which is now improving. so those countries exporting are now benefiting including australia. are alsoting once benefiting from the stabilization of oil prices because they can export more of these manufactured goods. of to a certain point. if commodity prices were to rise all the way back up to 2014 levels, i think we would be in a different situation. at the moment, it looks pretty positive, a balance of these factors which is positive for growth. anna: what are you suggesting

for oil prices? we are at around $50 for wti. >> our commodity experts have been spot on. rising oil for prices from the start of the year. theirhough economists had doubts. they are now predicting more than $60 for the end of next year. that is still in the benign balance that i described before. rising oil prices and rising inflation going forward. manus: how concerned are you about china? they have demonstrated that they can control growth in the short-term but they do it at the expense of shifting out the long, necessary shift towards a more consumption type of economy. if things go really wrong, they

will go really wrong. badly. anna: thank you. to a compromise five years in the making but one belgian region is not on board with the eu-canada trade pact. we will talk more about that. this is bloomberg. ♪

manus: a glorious shot there. 0.5%.ssie dollar is up we have a little bit of breaking news coming across the bloomberg terminal. results. tipple?uy the table -- second-quarter sales coming in 294.8 million euros. that beats the estimates. lakers and spirits are the other side of the business and it has grown into sent. a significant shift up from the

estimates. for liquor ands spirit to grow by 5% and the theirrevenue beating overall targets. the analysts are saying that the u.s. is where you see the largest market and that market is the one that is critically important. chain last week with their overall numbers. second-quarter sales rising by 9.3%. a very comfortable heat on the estimates. on the comfortable beat estimates. anna: not so good for the french, the world largest -- the world's largest yogurt maker. the estimate was an increase of 1.4 for the -- 1.4%. russian dairy sales are also below estimate. the estimate was 2.5%. yourare confirming the for

target that many people will be diving into the details to see where the sluggishness came from . was it around baby food or the sluggishness in europe? this is something that the industry has been dealing with after concerns over product safety created a room on online foreign purchases. rulese are revamping the and trying to level the playing field once again. ocking goingst on. organic food and drink. morgan stanley warning that could be delayed. they have confirmed therefore your target despite this miss on the sales numbers from dan and -- dannon. quattro -- the u.s.

having remarkable growth in comparison to the rest of the world. that is quite a strong language used. remarkable growth over the first half. those are george numbers. from yogurt to cognac -- those are your numbers. from yogurt to cognac. anna: we will continue to watch that one. a new edition of daybreak is now available. let us take a look at some of the top stories that has made it into this days edition. --us: it is all about brexit the legal challenge which concludes today. the high court will continue the legality of theresa may's plan to trigger article 50 without consulting lawmakers. a ruling is expected. the whole contention about what happens in parliament.

we are a parliamentary democracy. what role does parliament play in terms of deciding the triggering of article 50? this debate raged over the weekend on sunday programs. anna: we spoke with one of the lead complainers in the case. the next or is barclays bullish call on your. stocks in the region have scope to rally this year even if the fed raises rates. interesting that they a over at barclays that if corporate earnings in europe manage to maintain their current levels, they see european equities as a good purchase. focusing on the bank of england. 70%. 70% of the economists surveyed by bloomberg believe that mark would probably cut rates next month but the futures, the marketplace says there is just

5% chance of a reduction next month. anna: we will look at that inflation data later. asian stocks ever is in the most in two weeks and the dollar is down. does seem that a lot of the backdrop here to the --kets is a slightly leading weakening dollar extending losses from yesterday. there are expectations in the market of a slower hiking michael beyond december. i will get to the data in a second but let me show you what happened here with the mst i asia-pacific index. it is up 0.7%. rising by the most in two weeks. and some of the best performers are raw materials producers and energy stocks as well. the weaker dollar giving a lift to commodities in the asian cents shipped -- asian session. i have the bloomberg index. it is extending yesterday's retreat from a seven-month high.

we had reports showing new york manufacturing unexpectedly shrank and u.s. factory output barely grew. yesterday, the bloomberg u.s. eco-surprise index fell below zero for the first time in two weeks. that is the white line. showing thato mark the data is falling short of estimates. the citigroup economic surprise was already below zero. after janet yellen's comments on friday that she might be willing to let the economy hot as well we had the fed vice chairman warning yesterday of the risks pressureg a too high of economy. this is all feeding in here. if we move over to see what else is happening in the currency market. new zealand dollar leading the gains, up 0.7 percent after third quarter inflation came in higher it and forecast. the aussie touching a two-week high. seeing in its minutes reasonable growth prospects.

stirling is also up 0.4%. finally, i wanted to show you the treasury yield curve. we had a lot of focus on this yesterday after janet yellen's comments. ever so slightly. third year treasury bonds have tumbled almost 4% in october, having for its worst month in almost a year. economists predicting that inflation will accelerate. they are expecting the biggest increase in more than two years. that 30 year bond very much sensitive to inflation expectations. arabia puts together a roadshow+ for its first international bond sale. it once raised more than $10 billion from bonds. in dubaicy alloway is for us. good to have you on the program. you are in the region coming live us a sense of the excitement and the importance around this deal.

i can confidently say that i am not the only one who is very excited about this bond sale. the reason it is such a big deal in the middle east is the cause it is a first-time saudi arabia is tapping the international bond market in about a decade. relatively unusual for that basis. the reason it has to go internationally for this funding is twofold. oil is down a lot. audi arabia generates a huge amount of its income from oil at the less obvious reason is because the traditional buyers of saudi arabia and debt is saudi arabia and banks and they are not able to take it on anymore. they are under liquidity pressures. they are upping provision. they cannot buy these bonds and with the deficit growing larger, saudi arabia needs to issue more of those bonds and it is going to the international market. manus: let us talk about pricing. how will we judge success?

what are the benchmarks for success? tracy: those would be the two obvious once, pring. the lowest end of the pricing expectations is about 130 basis points. it goes as high as 330 basis points for the 30 year that we are anticipating. and then if they get a huge amount of orders from investors, that could signify something that i think pricing is going to end up being the thing that people talk about in this bond. remember, investors have not had to deal with saudi arabia and debt for quite some time. it. will be looking at it is new for them. they need to weigh the risks. we are getting some interesting insights into what those risks are on the roadshow this week. anna: kiwi, tracy alloway. if i've your process to cement a trade deal between the european union and canada has hit a elginock with a southern

region opposing the pact. manus: a meeting of the trade ministers in luxembourg today had been expected to endorse a comprehensive trade agreement which would be the eu's trade deal with a fellow member of the g7. anna: joining us to discuss is ian in brussels. is the deal going to get signed today? many people increasingly watching with interest what happens betwn the eu and canada. look like itnot will get approved today. everyone had high hopes that it would be. trade ministers after five years being able to put the seal on it but there is this problem with this tiny regional government in the region of belgium. they do not like the pact. they say they are not going to sign up to it. acause the pact needs

unanimous agreement, it cannot go any further forward if there is no green light from this region. they are in a real bind. it is not clear what the opposition is so they have got put pressure on the region to say -- we will give you safeguards or whatever you want but we need to get this pushed through. manus: it bodes well for the brexit negotiations in terms of trade deals with your. -- with europe. ian: everyone is looking a few years ahead at the brexit deal. any trade deal has got to get this type of unanimous support and people are saying -- if you cannot get this trade deal with canada, what can you do? if they are finding all of these problems with a canadian deal after five years of negotiation, this is really going to cause complications when you come

round to negotiating with the u.k. able are looking at this and seeing the significance and saying -- this is a real litmus test. if you cannot do it with canada, it will cause absolute have it in the brexit negotiations come around. anna: thank you. still with us in the studio is christian schulz. from citigroup. i am really interested in the timing. we have had a lot of forecasts. a lot of people talking about how long it will take to do any kind of trade deal and you put something interesting in your notes having to do with uncertainty and when it might bike. if we see article 50 triggered that startst year, to look really tense knowing how to negotiations can go down to the wire. >> it did not have to have the government decided on a transition deal from the start

than 2019 would be a nonevent because we would have a fallback option. we will not have that. it will be very triggered -- it will be very difficult once article 50 is triggered. that means that in 2019, when we know that the goal is to take care of everything at the last have the choice between whatever has been negotiated and nothing at all. would be very all damaging, especially for the u.k. economy as well as for the eu economy. manus: challenges abound for the u.k. economy. switching from brexit to the immediacy of the results of brexit including inflation. we are waiting for cpi. pantheon macros say that u.k. year,ion will hit 3% next to reply 5% by the end of next year. would you agree with that?

is it overly aggressive? here is the trajectory of real inflation. less cpi. there was a prodigious drop last year. we are moving sideways in terms of inflation expectations. 27 .20. i was very surprised in august when the bank of england came out with inflation peaking at two by 4%, hardly above target. that is what we would've predicted without breaks it. more than 3% at the end of next year and into 2018 is highly likely. way above wage growth. real incomes, real spending power will be shrinking. downward pressure on consumers. the impact, not just short-term impact but the medium-term impact of brexit will be felt strongly. perhaps at the very moment that we have been talking about. anna: in terms of the optics on

how this appears, do we anticipate in early november when we next year from the bank of england, that they could increase their inflation forecast at the same time as cutting interest rates? we know that the governor is suggesting to look through some of the inflation. >> the reason for the increase and inflation is because they would revise up the growth forecast because it has not been as bad as they feared. higher growth, lower exchange rate means lower inflation. that is temporary. around new uncertainties since the conference and the bank of england will still consider doing what they said in august they would do which would be cutting rates to the effective lower boundary. manus: thank you, christian. let us see what that november meeting will bring us. christian scholz from citigroup. up, fixes -- tricks

of the trade. how should british diplomats negotiate a new deal post-brexit. manus: could a weaker pound give luxury goods maker that brexit boost? anna: too hot to handle. stanley fischer warns of the limits of a too hot economy. this is bloomberg. ♪

manus: it has just gone to 1:49 a.m. in new york. futures are up. is the fed really divided? u.s. futures, that is the focus today. anna: netflix rocketed in trade. we saw netflix shares surge more than 20% in extended trading if it holds those gains

today, it will erase a 13% loss for the year. we are talking about the world biggest online tv network. there had been some concerns because three month ago investor confidence was shaken when subscriber growth faltered. they signed up more than 3.5 million subscribers in the first quarter vanquishing investor concerns about that slowing growth. and the outlook for subscriber gains in the current quarter exceeded analyst estimates. that seems to be what drove the share price higher but the company's hill faces hurdles. subscriber growth -- there are still some concerns. the company generates little to no profit. it's programming budget is still burning through funds. it did say it plans to increase spending on programming by 20% in 2017 and basically, in order to finance those new shows, it plans a debt sale in the coming

weeks. anna: all about the content. it could take the u.k. five or six years to establish fresh trade deals with fellow members of the geneva-based body once it has left the eu. anna: the wto's official says it will have to submit its own schedule for terrorists. any other members could flag issues that could take years to resolve. manus: our next guest is from the wto with mexico. he provided trade matter advice on more than 10 agreements signed i mexico. -- by mexico. anna: great to have you on the program. we have had that warning from the wto about how long negotiations could take. membershiptting the

of the wto right could take. what are your expectations about the type of deal signed by the u.k. and that yield -- and the eu? isit is clear that the u.k. leaving theunion, single market and it will not join nafta. as a result, it will not be part of the european economic area. the model for the future trade relationship will be a free-trade trade agreement plus, plus, plus. indicate elements that that will be a best option. acknowledges the trade flow and investments between the two sides. manus: when you look at the story of canada and the

protracted discussions for five years and one small state anchoring the entire deal. is it doable in two years or will there be a hybrid deal done? is it achievable in two years given the history? >> i think it is highly unlikely int we can negotiate a fta two years. there are many external factors, political factors that will make it a bit more complicated. i do not think that it will take five years because what we have learned is that we are adopting eu law in u.k. legislation. and the government wants maxima possible access to european market. when you have the same regulations which is different from all of the countries, when you have the same regulations,

including regulatory convergence, it makes it in principle to negotiate. perhaps not toat years but four years of negotiating a fta. anna: what happens after two years? years until we see the end of the article 50 negotiation. what happens to that period in between? do we fall back on the wto or are there transitional arrangements? >> it is extremely important to besttransitioned very transition -- transition arrangements. it is important for the regulators them of the governments, and businesses and transitionalhave arrangements.

trading goods, a transitional arrangement could be to remain in the customs union. that would allow the government 's withtiate some fta third countries. the worst possible outcome would be to end up in wto terms. that would be a big jump. behave if both sides rationally in the negotiation, i would anticipate a concessional arrangement. in the same way when you access members, becoming a member of the eu, there is a transitional arrangement. the same way should apply when you leave the eu. 10us: you have negotiated free trade deals on behalf of mexico. advice to the negotiators? what are the biggest pitfalls?

advice to the negotiators. >> the most important thing is to have at an early stage a clear chain of command on the negotiating team. the industry needs to know who to address, who to talk to because the first negotiation is the internal negotiation with your industry. what the industry wants and how far you can go. and then you can share your negotiating position. that is very important to establish at the early stage. and obviously, you really need to have a clear idea right now of who is going to be the chief negotiator of financial services, market access, rules of origin. anna: do you think financial services can maintain access? passporting into the eu? from a legal, technical, and

sensible perspective, yes because the most difficult thing when you negotiate a free trade agreement is not so much market access. it is a consequence of regulatory convergence. anna: thank you so much for your time. ♪

warns withissues high risk of running the economy. bullish bets. banks say european stocks are a buy in toy 16 with or without a fed height. 20% afterares jumped international subscribers helped the company beat wall street estimates. ♪

welcome to daybreak europe in london. anna: very warm welcome to everybody. we are getting numbers from corporate to this morning, but also getting a statement from ryanair. manus: you have the burberry numbers. for 1.7 billion pounds for the estimate. total revenue, 1.5 billion. in terms of revenue, that looks like a small smill. miss. the first half retailevenue comes in at 859 million. the estimate was 858 million. in the first quarter, they had a nice boost from sterling. a of people are looking at the u.k. of balancing that over softer europe and u.s. the travelers coming to the united kingdom.

first half trading comes in just 1.16 total revenue at below the estimate of 1.17. 9irst half retail revenue at 85 million. anna, you have some other numbers. let's see what they say on china but take it away. anna: here is other news. we have numbers coming from hayes. reporting growth at 3%. three month net fees in u.k. and ireland down by 3%. wasp consultant head count up 2% year on year. we will get more information on that. the director of hays will be joining us momentarily in the studio to talk through those latest numbers. numbers coming from ryanair. this could move the stock at the open. ryanair reduces its four-year

guidance by 4%. it is expected to grow 7%. growth hitar profit by the sterling decline. the weakness in the pound we have seen affects some businesses, not all.this is something ryanair is doing. william hill will no longer pursue a potential hi gher. ue a merger. purs william hill was in talks with amaya. they are expecting operating profit for this year to be at the top end. vindicating them from stepping back from this. william hill will have a share buyback program. the talks were there. the deal is off the table for amaya.

sterling is the focus for ryanair. burberry, the top line is pretty much in line. remy talked about a remarkable run in china. we will dig deeper into those numbers. let's talk about the futures. a rising equity market. commodities move a little higher. oil is above $50 a barrel. the paris market up 6/10 of 1%. the dax up. despite all these talks around inflation, is all about the cpi in the united states. anna: let's bring up the risk rate. a big focus on inflation today. a big focus on what the fed does at the end of the year. this is the yields on the u.s. 30 year. we see the yields rising. a shrinking in the negativity

of yields bonds. a decrease for 10 weeks now. wti is there as well. the price of a barrel of oil is 50.22. we will struggle to see what opec will agree to or not. manus: let's get across to rosalind with your first news. saysind: barclay's investors should buy european equities. european to the strategy in london, support and central banks from around the globe, it is very supportive of stock markets. australia's central bank says prospects for maintaining growth menial.u that is according to the first meeting.

one of the challenges is to generate inflation. the rba chief underscored the availability of the targets. year-ender thought of inflation of 2% over time. given the uncertainties of the world, and has made it possible and more t desirable. melania: milani a trump defended her husband. she made a personal appeal to voters to focus on issues other than sexual misconduct allegations. she said that do not feel sorry for me, i can handle everything. jpmorgan ceo jamie dimon has signaled he wants hillary clinton to be the next president of the usa. his comment was largely addictive and fell short --

largely predictive and felt sort of an endorsement. at the conference of what advice he would say to u.s. leaders. hope the next president, she reaches across the aisle. chief economist at a could take years. saysto's robert cookman the eu leaving the bloc would require trade partners. any of the other members can flight issues with talks that could take years to resolve. global news 24 hours a day in more than 120 countries. this is bloomberg. anna: thank you. let's checked the latest market action. juliette, we have seen the

australian and new zealand dollars on the move today because of some domestic factors. give us the overall scene. juliette: that is right. we are seeing a strongand also deals on the australian 10 year, as well as the aussie dollar which was the best-performing. the new zealand market has underperformed. a three-month low. all of these on the back of new zealand's inflation holding back the chance of another rate cut in the near term. you are seeing a lot of conviction across asian markets, particularly in. hong kong casino stocks have come up. development is looking pretty good. 2%,philippine is up by ahead of the president's visit to china. there is a lot of focus on whether or not there could be some filipino-chinese relations based on trade. the shanghai composite up by

1.1%. a come back in the b-listed shares which plunged to a nine-month low. the nikkei closing higher by 4/10 of 1%. that is as we see the yen weaken. korea up by half of 1%. the aussie in focus. the rba saying reasonable prospects for growth coming through as the economy transitions from mining to other sectors. the high aussie dollar has a bit of an impact like tourism and education but it is stronger today. the kiwi dollar also a strong outperformer. manus: thank you very much. we have the hays number at 7:00 a.m. increase year for the 14th consecutive quarter.

rises quite nicely on the basis. europe and the rest of the world up 33%. they started the new financial year well. let's welcome the cfo to the show. it is paul, the finance director. good to see you. we are beyond the three-month mark in terms of brexit. what has changed since the last time we sat down? the: outside the u.k., thinking continues to be strong. an all-time record in germany. europe on the back of not a lot of economic growth. it is a combination of people getting along with their lives and we see a lot of structural opportunity. the asia-pacific, it is the third-largest business.

growth accelerated to 8%. the americas look good. it is down ink., this quarter. one of the ways of looking at it, we were 7% down in the previous quarter. we talk on this program about the process slowing in the u.k. and declining going into brexit. all the businesses came back to the u.k. in september. they have replaced the leavers. london is the hardest hit. understandably, financial services, there is a much lower level of hiring and cost control. the market has the best control. construction and property. after a real etc. related -- a real accelerated run, we are seeing growth. anna: a lot of people looking for signs as to whether

businesses are holding back on investments or investing in their people and talent. looking for signs of whether they are holding back on that. are you seeing businesses is holding back or are they talking to you about it? paul: 90% of the take is continuing to do what you were doing. continuing. we are seeing little cancellation of any capital projects. what we are seeing across the u.k. is much more cautious on new capital investments. what we are seeing is what we see another economic activity and data. i think that is very understandable. wordess loves the magic called certainty and we don't have that at all. we should not be surprised. in the previous economic downturn, everything stopped.

we are not in that position. verybusinesses are being tight on where to spend their money. they are looking for things that will give them return in the next 6, 12 and 24 months rather than what will help them in 10 years time. manus: just to reaffirm for our cutting profit guidance by 5%. boon or is undeniably a bane. it depends on who you are. is the demise of sterling overdone? how do you look at that? paul: it is other than the sign of the uncertainty in the u.k. and the long-term prospects of the u.k. the u.k. is our largest business. 25% i joined 10 years ago, of our group's business was in the u.k. and it is 27%. so, back to our underlying growth in portugal was 5% and it

is 3%. it was the eye of the storm for brexit. what i don't expect is significant improvement in the u.k. there will be very tight control for the next two years. none of know what the final trade deals will be. that will determine what is the long-term impact for any potential damage on the u.k. economy. when you go away from larger businesses, you are coming to small businesses and it is almost like nothing has happened. which is a positive. anna: you care about what happens the financial services because you supply those services and you care about access. what about from a hays business perspective? and whether it matters much to you that the trading relationship -- paul: it makes it much easier.

we don't want restrictions let's slow the pace of your business. if a client in the u.k. says we need to hire 25 engineers, and some of those need to come from abroad, you need to know if you can deliver that. 98% of all people we place are nationals in that country being placed in that country. the issue about trade is more about the future on confidence unconfidence of the u.k. there is strong uniform growth across the u.k. around 1%. we are seeing very strong growth in europe. 30%, which is almost 50% of our business and that marketplace which continues to be very strong. we need the u.s. to continue to grow and for europe to continue to grow to hold this together. manus: we need china and the u.s. to grow.

you talk about significant potential when you first wrapped up the work. i'm curious as you look to balance the basket, are there deals to be done for you overseas? when you continue organic or look at potential dealings? paul: there are no acquisitions to do and that marketplace. when you are number one by miles in australia, why would you acquisition out? we are very successful because we do so very few. pound, about 80 million u.k. sterling in germany. why not double up for the next five years? we are growing up at about 30%. that would more than double profitability. it is a massive opportunity for us. the u.s. is a good opportunity. germany, largest market opportunity. it produces all the goods the world wants and it is

significant in outsourcing and that adds opportunities. anna: specific business is looking around. paul: we continue to be organic. we went from a business with 30 million euros net fees to 240 million right now. anna: thank you for joining us, paul. stanley fisher warns of the high-pressure economy. this is bloomberg. ♪

anna: welcome back. isit daybreak europe -- this daybreak europe. up have to percent for the u.k. currency -- half a percent for the u.k. currency. let's get the business

flash. >> netflix rise of 3% in extended trading after they gain more subscribers in the third-quarter which helped settle investor concerns about slowing growth of the world's largest online tv network. thateo told shareholders stranger things and narcos will make it more profitable in the next year. the's lowest third-quarter sales growth in more than decade. says revenueiggest increased 2.1% on a basis. total sales fell as volume dropped for the first time in six quarters. a slowdown in baby food, traditionally one of the company's fastest-growing businesses. mark swartz, the asia-pacific chairman of goldman sachs, will step down and be in advisor to the form -- be an advisor to the

firm. goldman sachs is due to release third-quarter earnings later today. that is your bloomberg business flash. manus: thank you very much. the federal bank chair stanley fischer warned of risks to running a high-pressure economy. anna: speaking at the economic club of new york, he says how far the u.s. central bank can push inflation higher. manus: joining us is nick, the managing director for european managing. perhaps it is a stress to say the fed has some division in it, but janet yellen is talking about running it hot. fischer morning we have reached the limits -- warning we have reached the limits. what do you make of the chairman -- the vice chair potentially at odds? nick: it is a spread of views

across the committee, clearly. we think they will raise rates in december. it has been relatively well telegraphed. the second rate hiking over a year and two next year. a very gradual process. basically, you are seeing the labor market tightening and running average annual earnings at 2.5%. the fed's core number that they are looking at is pushing up as well. it is not exactly a booning economy, but you are seeing signs of moderating the labor market and inflation coming through moderately. anna: where does that leave you in investment strategy then? if we are talking about fed that athat remains, is fair description and where does that leave you to invest? nick: i think it supports it. a disaster would be if there was

a need for them to tighten aggressively and a strong dollar which would put pressure on commodities and emerging markets, but that has not been the case. it has steadied. that is one of the reasons you have seen it do better this year. what we are looking at in europe, european companies with emerging market exposure. manus: it is interesting that you tie in europe. as we saw this morning, you should by european stocks. they are the second most bullish that we have. you just came back from the u.s. and as far as i understand -- we were talking about u.s. investors and pushing towards europe. has that changed? nick: not yet. we have had nine months in a row of net selling by european

equity. if you look at it as a whole, $36 million coming out of europe and $80 billion going to the u.s. a very widespread of u.s. being favored and europe being the unfavored. what we are seeing now is valuations that are reasonable and you can see that on the chart. 14.5 times. if you take it back to longer period, 20 years, the average is about 14. we are not a million miles away from that particular reading. the key for us is when earnings turn. that is when we think we will see the flows come back in. the u.s. has two large issues with europe -- one is the banks, bank capital. litigation, etc.. two is politics and we have a jampacked -- when you think about the italian referendum, a dutch election, the french

election, german election. and brexit, of course. all the big economies are in there with political issues. anna: talking about brexit, beneficiaries of stimulus is one of the themes. is that in the u.k.? nick: that is right. we have had fiscal a stare that has been ripped up. we are assuming that this will have a bit more leeway on the fiscal front, less austerity. infrastructure and this could be a theme across europe as well, unless there is a grand master plan. maybements are thinking we will spend a little bit of money and try to support the economy. we have gone so far, maybe we will look at physical. anna: nick, thank you so much. "daybreakt is it for

europe." the european open is up next. keep an eye on burberry. it has been up 34% since brexit. ♪

♪ guy: welcome to bloomberg markets, the european open. we will bring you the first trade of the day. caroline hyde is in berlin. we are watching carnies conundrum. will be tumbling pound stop the boe from delivering another rate cut. stanley fischer warns there