>> >> holding steady. this is paving the way for a policy switch. currency crunch. dropping to an almost four year low. a premium. saudi arabia is supposed to have bond rates higher than its neighbors.

a very warm welcome. this is bloomberg daybreak: europe. i am anna edwards. and these are breaking news. intel is disappointing the market. now this morning with third-quarter earnings. the market has maximized at 1.73. does the third quarter of net sales. the guidance they gave will be between 1.7 and 1.8 billion originally the estimate was 1.76. it seems to be they are her -- holding firm to that. they are the chip producers. seven -- semi conductors. when it comes to the margins, there is 46.9%. is for theheadline

fourth quarter. this is europe's largest semiconductor equipment maker. to 1.8. in at 1.7 it is faster and thinner. let's talk about the paint business. it is based over at the netherlands. net income tank -- came in at 285 billion euros. against 448 million for the estimate. attached is below. we have the third-quarter revenue numbers coming in. this is a shade below the estimate. at 3.7 billion. there is lots of details on their outlook.

the currency headwinds are expected to continue. they declare a dividend of 37 euros. remainset environment uncertain that they maintain their financial guidance for to 2018. the stage has been set with some weakness after the tpp. sticking to guidance, getting to the breaking news room. saudi on the sponsor. >> it is from the imf. oil prices tos narrow the budget deficit. we are going to talk much more about the pricing of the bonds. saudi arabianside is 19 -- $97 billion. there and it would be easier going into 2017.

the size of that bond we will talk much more about it. they paid much more to abu dhabi. the credit and the fifth highest grade. did they raised to 10 million? we're going to get all those details. >> much more on saudi. reacted to that very much in line with estimates. very little movement in the currency. stabilization is the word. we apply some of the to the story. to take some action around the risk. still some summers there. he didn't get one.

all of them at the bottom of the screen there. general says there is no possibility that russia would pull out an agreement. actually and it greece of sales to china. let's get to angie lau. china's holdings fell to the lowest level with the world's second-largest economy drop down. hadbiggest foreign holder 1.19 trillion dollars in bonds. it was down over $33 billion. that was the biggest drop since 2013 according to u.s. treasury department data. have arabia is said to reviewed all investors. what they are much more willing to pay.

according to people familiar with the matter, people selling bese same the bonds will offered. saturday is dipping into global market. and john paulson is suffering and deepening loss. this is a sign that it is a positive turn around. it may be out of reach for the billionaire. and the advantage fund. to peoplerding familiar with the matter. and declined to comment irish bookmaker paddy bauer has paid out more than a million dollars on a hillary clinton election win. it makes her the nails on certainty to beat donald trump.

early tocally pay out drop publicity. also to let gamblers parlayed their winners. >> global news 24 hours a day powered by over 2600 journalists. .ou can find more stories i am angie lau, this is bloomberg. back to you. >> thank you very much. let's get into these markets. animate a great point. it sort of faded. it from him. yes, still way you can. a little bit of disappointment coming through. there wasn't anything to blow these markets away. it came through at 10:00 hong kong time. you can see it coming through

and it has recovered a little bit. showing thattually the aussie is possibly do for ace selloff. movement cameency it was a weekend now. it actually held eight sessions. there was a little bit of an uptick coming through. in terms of markets, we have seen this market. we did see weakness coming through in the hong kong market. it was about 2/10 of 1%. by around of 10 to 1% coming through. you could see syl -- still see those energy players.

of oneclose by 4/10 percent. of by a 10th of 1%. most asian markets are looking quite strong. wrapup.lly with a let us get more details. from earlier.ble it all but ensures it. our chief intelligence economist. divide these numbers -- numbers for us. you have this dispute about what is really going on. >> the headline is positive. government is clearly on target

and 6.5-7 percent. if you look at the industrial and the a slight myth stable gdp numbers. andfighting federation slight disappointment. the real menace is where has the stabilization come from. policy driven stimulus feeding into it, feeding into real estate. bubblingporting property prices. long can theis how stabilization built on an unstable foundation. with that as the backdrop, where does this gross figure

leave us? it gives us rim to take action. i think that is the hope. it was going to be a year of easing. that hasn't happened. the latest signs from policymakers suggest that we are not going to get a significant addition. in fact policymakers seem to be making it away to focus on these deep longer-term questions. it is an attempt to deal with the problem. the hope is that it will allow policymakers to continue making those tough decisions to

stabilize the economy. >> tom, thank you very much. our chief asia economist. joining us now in hong kong to discuss china gdp. welcome to the show. straight to the headline numbers. you're concerned about the validity of the recovery. absolutely. it came.that you know that there has been an 18% increase in aggregate financing. the slight upturn is disappointing.

is that it isus still very high. it is certainly not a trend at all. andas been escalating private investment has shrunk. it is very disappointing. anna: you are disappointed in the numbers you have achieved thatre they stable enough the government is able to take some action to try and tackle the bubbles. gdp still the remains. to hit the track targets for this year. focus but theme

thatem is that will a push with all of this talk about reducing the state dominance. we have seen quite the contrary. stay with us. this is something that an a and i look at this morning. these are the conditions index. is expansionary mode. just coming off the boil there. of policywe in terms mix. it is actually booming. apartments.perty

they are moving to a western model. and so doeshigh concern is that they really can't. against the dollar. i would say they are very satisfactory figures. consumption delivered economy. so iis still going strong wanted to make sure that was still on track. you see reason to be a bit more cheerful? it is working? >> it is difficult. it is best not to be a hedgehog.

they make these grand statements in china. you say that they have engineered this stability in the run-up to this drawing. thise not as convinced of going forward. >> my forecast is 6:95. stability at 6.7. since china has returned from the start of october, we have .7n it up through that

level. .he key there we see that trend continuing. >> that has been on running story. is this that gained pace and momentum? that is part of the story as well. i expect that to continue. >> thank you very much. that is the head of asia joining us from hong kong. and higgins is of course our guest host here.

the looks for the day ahead. is brexit related action. testifying today. finale third and 5 -- lynch versus donald trump debate. earnings from metro. exercise, the surprising guidance for its first debt field. cool, and no vote in italy's referendum. this is bloomberg.

>> it is foggy and gray.

1:21 in hong kong. do you look at the industrial production? a quarter of 1%. that is a business flash and we have angie lau. bhp billiton says there are early signs of it balancing out. it is the best place to deliver gains. bhp joins us in increased optimism. with continued strong demand in china. credit suites are starting. this according to a person familiar with the matter. comprised of existing

london based teams. they declined to comment. an intel has given a disappointing broadcast of sales. that runnd the chips them. they backed off an annual forecaster for data centers and corporate networkers. fell more than 5% in extended trading. andy yahoo! has reported third-quarter profits. bit of good news after a large-scale hack of data last month and could threaten the purchase of the main web assets. profit before certain items talked out. higher in were extended trading. your bloomberg --

bloomberg business flash. thank you very much. there's been speculation of change used by central banks. they commented that a high-pressure economy could heal from the recession. for fasteris ready price gains. >> where are you in this great argument? there hasn't been any on the horizon for a long time. japanese cpi and dreaming? all this panic. temporary reprieve. difficultvery economy. there was a mini cycle. it was edging up gradually.

veryis why we have a cautious they are there. 2010 whenking through we last had an inflation spike. they're going to look through it in the u.k.. if the data is strong enough, we withet a tentative timing 60%. build asxpect that to we come to december for a december rate hike. still, it is a strong economy in the u.s. and they want to tighten it a little bit. i knew you wanted to talk about this. it goes back to 2010.

they say this is very low. quite right, when the bond is low. when the bond is high, get ready. it is very interesting. is how expensive put options are on a relative racist. a little bit geeky but what it shows is that people hate this equity rally. buy me some putts. this is an important sentiment. it keeps the same equity but it there'sample there still a lot of fear and equity markets. the underpinning of it. kind of the hidden hand of the market. when it be ridiculous and equities were cheap?

it would be ridiculous. thank you very much. stay with us on the program. he will talk about saudi arabia and their bonds.

>> 1:30 in hong kong. you're looking at a shot there of the emperor's palace. we have breaking news on daybreak. iswill go with metro which the german retailer. at 14e numbers came in .2. metro isrive within best. it is the fourth quarter sales.

full special items. it was prepared for the upcoming prince -- it is the wholesale. the media saturn is impacted i record sales. more pressure to come in that side of the business. it is giving us guidance for the full year. of 4.2l consensus billion. they see that as attainable and it is the breakdown of those bits of the business. in andes number comes that is just a touch ahead.

lookumbers for france decent. 1.2% and brazil is a big focus. it seems to be in line with estimates. drop was actually estimated to be 8.5%. they are looking for that full-year consensus. this has been pushing to modernize stores and they face tough competition at home. in some of their european markets. i was asking if they would stand by that profit target. interesting stuff coming through. i see some breaking news on

the corporate side. let us talk about daybreak. it is here wherever you go. these of the stories that are making the cover. it melts the heart. there are questions around. andheadline number september retail sales. the retail consumer is alive and well. importance tosing balance the story of china. let us talk about what else is coming up, very much the focus on exit. it comes days after a report that he is on the other side of the risk. that he hasn't backed are hard

enough brexit. clues asatch for any to how things have been going. and the renewed pressure on cable this morning. there was some reprieve yesterday. with a caveat.y that parliament may get a vote on brexit. there will be more of a debate around the negotiations. that is later and it will be a negotiated followed by whatever we want to offer you. our daybreak story, this is about the foreign holding of treasuries and it was china that led the client. they are the biggest foreign owners. .eanwhile saudi arabia shrunk the chinese have been trying to move their current around. talking earlier.

>> let's talk about asian stocks. out of china we have taken the lid off. it does seem that the interpretation overall isn't stabilization in the world's biggest economy. hass still gaining but it slightly trend -- trimmed some of the gains. swung into losses because all we have the headline gdp we have thosein strong retail sales and it had an unexpected slowdown. number against the asia-pacific index. how since 2011 we had a decoupling of what it was happening with the gdp.

we're going to talk about the u.n. as well. we have seen reaction today. it has haunted and a day to rock. that is the dollar strengthening of course and that saw it weaken more than 1%. nowll say that has halted after it came in. em currencies and stocks have also been rallying today. if you look at major currencies against the dollar, it has been the taiwanese dollar. and the korean wan. it is headed for its biggest two-day game. it was asia's best-performing quarter. it had a full month winning streak. it is seen as suffering the worst in the region. this is partially down to the samsung note recall. it will have a wider economic

impact and the risks of rate rise. it is dropping 3% to hit 3000 per dollar. you can see this forecast here. much moving. the fed is still holding. week headed for its worst over three days. andave that cool cti number it rose less than forecast. it spurred speculation that even hike, we that rate take a look at gold. it was holding on to two days of gains. andconference happening

gold will rise by about 7% by october, 2017. no japanese stocks are being dumped. it is one reason for $59 billion of outflows. >> joining us now to discuss is tokyo stock reporter. pretty herfor a friend is thrashing. is that the core of it? >> what you are saying is this drastic outflow from funds of foreign investors. what they are saying is they before see proof that they can buy shares again.

>> you mentioned that investors are talking about their position. is this going to continue? they did flow a lot of shares already. the conversations we have had with investors, they are still not convinced that it is time to buy again. they are at least willing to sit on their position or maybe even five. we don't see a huge conviction to buy right now. great story. joining us now from our tokyo stock team. this is the job we were talking about. the number is quite staggering. have you keep it part of the outflow? >> it is a great job.

it gets my contrarian instincts going. in, andmoney going late. has been an interesting talk. they also reduced their equity exposure not unrelated to this bond deal coming today. that is part of it but is generally disappointment with poor performance. have sold into this negative this. you have mentioned this. not a bad time to buy japanese stock. it essentially means that the .arginal buyer

outflow is difficult. this moment was tough. corporate bond yields. security and it is the narrowest for 16 months. continue? is that anyone getting out there? >> there is lot of issuance and a lot of demand. the cost of hedging is too much.

look at the buying opportunity. no less as an opportunity. >> we are in global credit. we may even get involved. it is giving you a better yield. this is an investment grade.

>> thank you. you stay with us for our next story. investors what they are willing to pay. the bonds will be offered at a higher rate than the u.s. treasury the. marketsinto global debt with a budget shortfall. very good to have you on the program. investorsu about how feel. we have the spread over treasuries and from the dcc as well. that is exactly right. happy saudi bond day before we begin. that is what gulf people have been waiting on.

you see this late yesterday. that was slightly higher than .he 153 basis point a little bit of the premium built in here. compensation.for uncertaintyot of saudi arabia is going to be tapping the markets for. there needs to be a bit of a premium for that liquidity. how serious is it?

>> it is all about reform. this comes down to good old fat -- parts of ratios. was it 15 billion? they have reached four years. it is going to drive this bond sale. >> your to talk about how emerging debt. as we are talking, there is probably a lot of easy syndicate bankers making a lot of calls to investors and we could get pricing. we will be looking to see but we're comes in anding at the order books

this price we are discussing. that is the setting there from dubai. let's get back. you suggested, what did you say about saudi arabia? >> maybe we will get involved. it comes at a discount and it is not without its risks. couple of hedge funds have been short so buying protection. there have been quite a few hedge funds. this is almost in syncopation. it is dropping.

would you accept that over five years? >> it is wider than the cbs. compared is lower than that. it is a worrying high today. it is not without its risks. the premium is enough. please treat our orders favorably. >> it is a good question.

lower interest rate duration. of course you're taking saudi risks. it is a bit of a risk for right now. we do own 100 year mexico. we are not new to buying emerging market debts right now. it did spectacularly well. we like the behavioral way to avoid it. well know theners duration is not that long. there is some added value there. play we willfed in

be a bit more cautious. anna: thank you so much. we will keep that up. that is the personification of of -- of debris coming up. -- daybreak coming up. the upcoming referendum for italy would not be as disastrous. and steady asings she goes, the reading takes the country a step closer to hitting its growth target. this is bloomberg.

anna: welcome back, this is daybreak. it is the middle of the night. back to the sound of trading day. let's go straight back to

policy. resident barack obama says he supports referendum in italy. he also said the vote on key constitutional changes in european nations. it could accelerate a path to a more vibrant economy. believe a nodn't vote would be disastrous. that therelieve will be part of these disasters. doubt, ito have no would rather win the referendum. meantime, obama says that donald trump's complaints about the integrity of the election them is unprecedented. >> i would advise donald trump to stop whining and make his

case to get votes. if he got the most votes, it would be my job to welcome donald trump regardless of what he said about me or my differences with him and escort him over to the capital in which there would be a peaceful transfer of power. he is still with us. how do you guys look at this right now? they are very bet on clinton. someone said in the newsroom. overheard in the other room. >> i think they did pay out on remain. a little bit to be cautious but it does look like it's a done deal. everyone tells me that u.s. polling is a lot more accurate then in the u.k.. when we get these political to our office,ng

it looks like it is going to be hillary. that event risk seems to be off the table although that means if it is donald trump, you will have an exciting day in the office. from a market perspective, is thati want to know anna created this. basically we have this flattening. >> a chart that is complicated. the flattening has -- is short and has nowhere else to go.

stream, it still doesn't excite us. thatasic philosophy is stream worth it. it is not part of our for you. -- hopefully. --portfolio. of the team and we think they are the right team. we think there are going to be many bad brexit weeks to come. we think we will see more arebusiness news and we reasonably in the price of sterling. we will have anna: by their.

next, china's gdp takes the country a step closer. we're back very shortly. this is bloomberg.

>> china's growth stabilizes in the third quarter. have to buy consumer spending. paving the way toward reining in financial risks. currency crunch. chinareasury holdings in dropped to almost a four-year low as the second -- world's second largest economy tries to prop up the yuan. thaathan itshigher neighbors. ♪

manus: welcome to bloomberg daybreak europe. our flagship morning program. anna: let's get to some new cake corporate -- u.k. corporate reporting's. the household goods maker and the like coming from their stables. they have given us a revenue number for the third quarter that is in line with estimates. against then estimate of 2.5 5 billion. the like for like net revenue growth looking a little bit shy at the estimate. 2%, the gross number for the third quarter. the estimate was ford 2.5%. the confidence-- that strategic choices are right. this is a business that is run kapoor.h

interesting to see if they say anything about pricing in particular around the u.k. story. going up.pliers of -- when we saw the battle between unilever and tesco. they are saying full-year growth at the end of the target. that is a good -- that could move things around at the start of training. we will dig further into the statement and see if they say anything about their pricing. u.k.: this is one of the construction, there are lots of fights around the u.k., you pick up your cement or would. -- or wood. like sales growth came in at 2% to close.

making more efficiency in terms of the chain and the results will be 40 to 50 million pounds on a yearly basis. i don't know if that is a brexit discussion or if that is a real organization of business and how you do business in that area. a little bit of breaking news. we will keep an eye on the stock. q3 impacted by russia and other developments. . tragic story around korea let's have a look at the futures. they suggest they will be stronger after the trading day. not by an enormous amount but a little bit. manus: there is a couple of different things at play when you look into these markets. the headline number, 6.7% third-quarter growth. when you lift the lid off that, it is the industrial numbers the market seems to be confused about. factory gate prices rising.

i am surprised they did not put in a number -- a better number. sales coming in at 10%. we put the chinese currency in there for you. it has been -- not been moved around much. people asking questions about whether this gross number is enough that the chinese authorities feel comfortable to take out some of the bubbles in -- around housing, that kind of thing. we have seen some cities taking action to reduce the bubbles. the australian dollar not getting much of a boost from this chinese data. the chinese data resulting a little bit of an unwinding in the previously high australian dollar. , its: we have a nice story will be pervasive through the day. tenure government bond yields in the u.s., 1.75%.

that is driving the equity story. china is holding up u.s. treasuries. the lowest level since november 12 -- 2012. that is the world's second-largest economy, the biggest holder of u.s. government debt at 1.9 trillion. down from 33.7. china's holdings of u.s. treasuries fell to the lowest level since november 2012. this is the world's second yuan.t, propping up the the biggest foreign holder of u.s. government debt has one bond one $9 trillion in notes and bills. down over $33 billion for the prior month, the biggest drop since 2013. that according to u.s. treasury department data. an previous figures compiled by bloomberg. saudi arabia has revealed to investors on how much it will pay for international bond sale.

the kingdom is selling dollar-denominated bonds at 5, 10, at 30 year maturities. the bonds will be offered at a higher rate than u.s. treasuries as well as recent offerings from qatar. and deepening losses in two of his hedge funds, this is a sign that the positive turnaround in performance seen by several managers this year may be out of reach for the billionaire. also in and companies advantage fund sold 2.8% this month bringing this year's losses to 18.5%. according to people with knowledge of the matter. the firm declined to comment on that performance. --sh bookmark or -- maker it's as her chance of victory is 86%. a certainty to "

be donald trump. bookmakers pay out early on results they consider a foregone conclusion. also to allow gamblers to parlay their winnings on other bets. global news twice for hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the site.erg little bit ofs a debate as to the veracity of these chinese numbers. what do the markets make of it? >> i read a memo saying boring is good, that is from the chinese economist wei lee. we have seen a switch out of the shanghai composite, tracking app .2 of 1%. pretty flat.

most of the weakness coming through following the numbers was here in hong kong but it had a pretty good rally during yesterday's session. you have seen a little bit of downward rusher in the last few hours of trade off by white one of 1%. it was tracking higher by .1 of 1% before the numbers came through. they gave a pretty good list to the australian sharemarket, closed at its highest levels in a week, up by .5 of 1%. the other major action was in the currency market. if you have a look at the renmie women be it is -- nbi, it is higher. through,wing coming holding at 6.7398. the market was expecting more, 6.7 percent has been widely reported. we have that big slump that has managed to reverse those losses,

76.74. technicals and showing it could be a little overbought. the aussie has been up against ae dollar for six sessions in row. quickly having a look at the movers we saw in the region, rising by 16%. this is on a proposed tie up with another gaming company, trying to take on some of his players you have in europe. ofwne resorts still a lot concern, signaling concern over these employees detained in china and then sharp, the best performer after it came through with a pretty positive outlook setting its share price of almost 11% in tokyo. a busy session but mostly we have seen positive reaction from that china data in equity markets. the regional index at a one-way type. anna: thank you, julia. she mentioned a lot of the chinese data we had out today, let's get more detail.

gdp rose 6.7% from year earlier. manus: that matches the results from a survey and all but ensures the government's growth time will be up. our guest joins us from hong kong. this resilience, is it the rebalancing story, is of the consumer, what did you make? guest: a bit of both of those things but the old economy is holding up better than many thought. still production is up, not down . and property is bouncing back. it has not translated into an all-out developers frenzy but sales activity is very sharp, sharply up. all that affecting the consumer in a positive way. 10.7% sales, spending up from a year earlier in september. investment is the other key driver for china's economy. the state support we have seen all year is kicking in their,

stayed investment up 20% from a year earlier in the third quarter. an encouraging turnaround, some sides of revit investment, it has been heading down all year. it's case just stabilized and perked up slightly in the year through september. some encouraging signs. overall, the economy is stale -- stable at 6.7%. seems to be that word of the day. how durable is the growth picture? always cloudsre in china and many people like to focus on those. the underlying lecture is one of stability. the big clouds come now because the authorities are switching gears a little bit. at least verbally. they are saying you want to rain and some of this excessive credit that is fueling some of trades.bble-like they are switching gears, they are tightening and putting new restrictions on home purchases,

that could put a brake on growth and the global picture still remains pretty tepid. we are not getting any boost on the export side. --n though we do have [indiscernible] certainly clouds hang over the economy. manus: a great round up and interpretation of the day. peter fitzgerald has sat down with us. stability, we crave stability, don't we? this is what is coming through from china. is that what the data say? that worries me more. peter: what economy does not have to put its house in order to some extent, one could say. if you cast your mind back a year ago, people were looking at and arguing for this rebalancing that was magically going to happen in china where there would be a focus on the consumer. on oldan of a focus

industries. we never really bought that story. china will do what is necessary to keep the amount of people that are necessary employed and that was only possible with the old economy running. it isif you don't believe that mean you do not believe it will happen as quickly as they planned or eat you do not believe it will happen? eater: the general trend will be much longer and fraught with greater risk longer-term than people appreciate. from our perspective, you are seeing stability in china. i think that is good for markets and i think it is a welcome thing. markets,is good for china not being a key feature for the fed, for example, gives us an easier to understand path for the u.s. economy perhaps as previously it has been worrisome. the fed was looking for any excuse it could find not to raise rates. china was a convenient item on

the agenda. convenience, there is another story on the terminal talks about u.s. holdings. china's holdings are dropping. this begins to bring alarm bells, does it ring alarm else for fx intervention, what does that story tell you? peter: from our perspective we are not necessarily overly concerned. what you're saying is a gradual depreciation of the chinese currency any managed fashion and part of that goes hand-in-hand with what you're seeing in terms of growth efforts. anna: they are supporting the yuan but that is a stop it falling too fast. rapid if anyone expects a liberalization of the capital account in china, we do not -- we do not necessarily see that. if that work to the chinese

currency would fall. anna: you do not sound too excited. you have to play it somehow. it is the world's second-largest economy. peter: when you get worried, it is something that you have not anticipated. we had a relatively sanguine view on china which was to say it is a potential problem and on a longer timeframe, that is beyond two to three years, there will be challenges but for today, and for what will happen over the next 12 to 24 months, we do not think it is going to thatthe negative impact people seem to predict. manus: i always curious, what is your biggest risk to the great equity rally? peter: the biggest risk there is a large increase of interest rates above and beyond what markets expect. the biggest risk to equity markets is an aggressive selloff

in bond markets, rather than a more gradual decline. anna: that would tell you about interest rates. peter: he becomes more questionable. that is one of the challenges. anna: if we get one fit hike in december, that is not what you're talking about. peter: if you get one fit hike or even two or three fed hikes next year, that is not what we are talking about in that scenario. manus: the one big worry you had was the bond market, the inflation market. someone said we are within a whisker of our target. the five year for the u.s., it is rising but are we missing -- ?isinterpreting they are miles away from the target of 2%. japan, i thinkf i should qualify myself.

peter: they are away from the targets but they are getting closer than they were. 12 months ago or at the beginning of this year. this is one of the charts we 10 year if you look at break evens, inflation is tracking higher. even in europe if you were look -- looking at five-year inflation, that is also tracking higher. anna: thank you for you staying with us here on the program. thingswe will talk all banking, that is an exclusive interview at 10 a.m. london time. next, a little bit more daybreak. more.nnot ever have this is bloomberg. ♪

anna: this is daybreak at 7:20

a.m. in london. just before daybreak. the pound under pressure again. let's get the firm -- bloomberg business flash. says it seeson early signs that commodity markets are rebalancing with oil and natural gas delivering gains in 2018 coming as they beat estimates through the end of september. damell in the wake of the collapse. they continue strong demand in china. twoit suisse is starting hedge funds focused on quantitative strategy in an effort to build the banks assets management unit. is comprised of existing london and new york based change.

given a disappointing forecast for sales in the current quarter. signaling lackluster year and demand for personal computers and the chipset run them. the world's largest semiconductor maker backed off and annual forecast with double-digit revenue group -- growth. 5% in fell more than extended trading. yahoo! has reported third-quarter profits that topped estimates. coming after a large-scale hack of user data was disclosed last month that could threaten the purchase of the company's main web assets by horizon -- verizon. ' averagenalysts predictions. that is your bloomberg business flash. anna: we are getting breaking news from a couple of corporates in asia. , he willissan ceo

become chairman of mitsubishi motors according to people with knowledge of the matter. i have been speaking to bloomberg. let's talk about this discount store retailer. been indicted by south korean prosecutors. also and breach of duty. these are rare headlines from the south korean prosecutors office in a statement on their website. as we get more breaking news, we will, of course, bring that to you. mitsubishi s sharesu -- shares are surging. will take that one down.

let's have a look at futures. we are going to go higher. thes: we have someone on consumer side, someone holding on to their guidance, london and is 10624, just a little bit lower. when you look at everything that is going on with the rally in the u.s., the rally in european equities, or the instrument -- the ensuring rally, where do you want to take the most exposure in the back to months of the year? peter: you may be seeing a rally in european equities on a -- but on a year to date they have not done particularly well. relative to u.s. equities, there is a big differential in terms

of performance. we like to frame our decision-making process in a longer timeframe than what is going to happen between now and the end of december. view of theat world, i certainly think you want to be exposed to emerging markets and also to those bond markets and currencies which have got a relatively high yield. one of the questions we always ask ourselves is, what happens to my portfolio if nothing changes in the world? am i going to get paid while i am waiting question mark i think you can get paid while you are waiting in a number of those emerging markets. we do not think you are paid enough for -- in german bunds. me to the takes question on saudi and saudi debt. we are going to get a higher yield and we just heard that the pricing around this saudi debt issue looks to be offering a premium. is that the kind of area you are

looking in? : this is an attractive asset class if one has the ability to avoid the countries that are going into difficulties. to be the areas you need concerned about is if they have a currency that is pegged to the u.s. dollar and we saw that throughout history, particularly in the asian financial crisis. this countries that we currently have an exposure to within emerging markets are ones that are not necessarily pegged to the u.s. dollar. gilt: do you think the selloff is overdone? peter: you need to look at this in context. they have sold off globally. there are additional risks and worries around that.

given where inflation has gone to or is going to in the u k, i do not think i will be too surprised. that will do it for daybreak europe. this is bloomberg. ♪

>> we have the first trade of the day right here. i am guy johnson alongside caroline hyde. what are we watching? in china stabilizes but when does the delivered to talk rhetoric torom reality? ofan suffers an exit is global money on scene since the 1980's. have investors given up on the world's third used