>> the iphone 10. apple unveils its most expensive phone ever. e $999 device features a new screen, augmented reality and facial recognition technology. breaking negotiations. the next round of discussions. an important strategy speech. the state of the union address. expected to down play brexit and push for further free trade deals. we sit down with the u.b.s. investment bank president for an exclusive interview.

>> let's put it this way. it will be challenging and it will be rocky. meaning there are contrasting orces. >> a very warm welcome everybody todaybreak europe. i'm anna edwards. >> i'm matt miller here in berlin. back in berlin after a week in frankfurt.d in speak about v.w. but for the moment let's start with equity markets and investors need to be protected against drop in equity markets.

there was a strong performance yesterday in the u.s. all three major stock indexes closed at record highs in the united states yesterday. this is important. have you taken out protection against a sharp fall in markets? the number of investors taking protection increased the most in 14 months. in early september, around the time we saw the north korea nuclear tests. the most powerful nuclear test wes have seen from north korea. hat has focused minds on being a tail risk to be concerned about. >> investors had more underweight in u.s. stocks than in 10 years which i think is a massive signal to the market. take a look at what we're seeing happen in equities first off.

off ee the nneka index about half a percent near the last trade. s&p 500 futures are down right now. kind of mixed signals you're getting from the overseas trade s to how we can trade today. typically when you see euro strength and pound strength, you see negative movement in the underlying equity indexes. you see dollar weakness across the board. i want to get to our first word news. >> u.s. president trump will visit china in november as tensions flair on the cren peninsula. - caribbean peninsula.

meanwhile, donald trump has hosted three democratic senators at a white house dinner as he attempts to win their support for a tax overhaul vill. there are only three democrats senator who is have not signed on to the list of conditions. jpmorgan's c.e.o. said he would fire any employee trading bitcoins for being "stupid." jamie dimon said it is a fraud that won't end well. >> what happens this quarter is not related to the business you run. you try to have a good trade.

we have an exceptional business. it would be down about analysts estimate around 20%, something like that, this quarter. last year it was a particularly good quarter. to four people miliar with the government's schaeiblewill keep his job f merkel is elected -- re-elected. the cost for the government to protect crude exports against a drastic drop in prices will be about the same. > it is likely to be higher. we don't have the tchooverpling

we used to have. we almost export as much as we import. it is also true that the -- markets are exposed to changes in the price has been reduced as well. were due to meet in brussels for the fourth time since june but will now gather on september 25. the delay is adding to signs that theresa may is planning a public speech on her latest strategy. global news 24 hours a day powered by more than 2700 analysts. >> we saw that strength in the u.k. a couple of minutes ago. still holding on to december 2007 highs. a bit of a switchout of chinese

stocks today. watching the taiex pretty closely. this is where a lot of the apple suppliers are. if we have a look at some of those apple suppliers, you are eeing strength coming through. you will start to see early sales of the iphone start to lift these parts suppliers. hat is interesting, though, is a stock most analysts thouth would do quite well on the ackor the apple announcement because it has wires that are sed for the battery charger. president trump saying a meeting went well even though that was cloud over whether or not there would be speculation or talk or tension about the u.s. justice

department investigation into alleged money laundering or embezzlement. the two are going to continue their relationship being elevated by that blue line there. malaysia with a $3 billion deal for airplanes. by all accounts and donald trump's tweet, a pretty good meat meeting there. >> thank you. apple has unveiled its most expensive phone yet. the iphone 10. a decade after it first launched the iconic device. emily chang has details. >> it all happened here at the steve jobs theater. this is the first time the theater was opened to the public m. i have to say it is a breath taking sight. the glass walls.

the elevator, you walk down four storys into the theater itself. they opened today's presentation ith the voice of steve jobses. his widow was in the audience. it is about closing a chapter on a prior era of apple and opening a new one. tim cook introduced what will be a new era, a new decade in the technology over the iphone. take a look at what he had to say. >> first iphone revolutionized a decade of technology and changed the world in the process. now 10 years later, it is only fitting that we have here in this place on this day to reveal a product that will set the path for technology for the next decade. >> apple of course unveiled three new iphones.

the 8, the 8-plus and the much-anticipated 10. the 8 and the 8-plus look a lot like the iphone 7. the 10 has facial recognition technology starting at $999. big question is how many people will spring for that phone at that $1,000 price tag. they also unveiled a new apple watch and cut the price of the other apple watches. spent a lot of time talking about the watch and the healthcare, health management evice. and another has 4 k video but you can only use it if you have a 4 k tv. it is about continuing to drive 2/3 of apple revenue and it is the beginning of a new decade

for apple. lot remains to be seen. >> let's pick up that conversation with the global director of strategy at b.n.p. paribas. let's pick up where emily left off there. talking about the reliance of apple on the iphone. this shows you the pace of revenue growth in the yellow and the portion of that revenue that has come from iphone. this is part of the challenge. 63% of 2016 sales reliant on this product. they are celebrating the new innovations and say it is something incredibly new. this is year 10 to have iphone we're in now. >> that's right, anna. let's face it. f you going to -- in the app store, the ultimate goal of apple, you need to sell -- one

relies on another. i must admit i have an iphone for work. i'm a little bit skeptical. when i look at companies like -- they had a property warning recently. their property warning was about people not wanting to upgrade as quickly. is it becoming more expensive in the u.k. to do that? >> part. there was a move of people not sticking to the usual two-year upgrade cycles. that is going to be the challenge. people are saying what can you offer me? you're going to have this wonderful marketing blitz but the reality, what does the phone really do now that my current phone doesn't do? >> what value is facial recognition then? matt miller? >> first i want to point out to

viewers around the world that dixon's car phone is a phone retailer in the u.k. it used to be carphone warehouse. i want to point out, this is year over year revenue growth and it shows the rate of change. i think this illustrates the picture better. each bar is a quarter and shows how much iphone sales have increased over the same quarter the previous year. they have not had the kind of growth that they had obviously in the beginninging of the life cycle of this product. do you see another product out there that could headache the reigns of the iphone for apple? >> many suffer from their inability to predict new innovation. it is true apple will be investing hard. the latest new, completely new product line, i would argue, it hasn't really taken off as perhaps they would have hoped.

that whole wearable segment is a slow growth segment. this for me has to be the next area. i think the stress on healthcare and health monitoring is absolutely correct. one thing we do not do enough in the western world is preventtive healthcare. the whole idea is a stitch in time saves nine. catch it before it becomes so bad you have to go to hospital. that is what for me the real potential of the apple watch is about. mention.ot very little a lot of people talked about how that was going to be the next big thing. big technologies, a.i., the machine learning. what makes you most excited in the technology space, anything to do with healthcare from what you just said. >> absolutely. i think we have huge benefits to come from healthcare the u.s.

economy spent an norm out amount of healthcare. yet people are not living any longer in the u.s. how is it we're spending so much more money, breakthroughs in new drugs yet longevity is not increasing any more. don't just depend on drugs. you have to go further upstream and health monitoring. using wearables is one way. >> thank you. we'll get further thoughts from him throughout the hour. unprecedented access to the alibaba group and jack ma. you can catch our half-hour program, alibaba, the global disruptor friday at 8:00 p.m. in

new york. coming up, we bring you our exclusive interview with the u.b.s., andrea orcel. ♪

anna: welcome back, everybody. this is bloomberg daybreak. asian equity markets making some modest gains today. most of them in positive territory. e nikkei up by just shy of .5%. >> filed for bankruptcy protection after working out a deal with almost all of its senior lenders to inject new oney into the company. no payments will be due until 2020. it is controlled by billionaire

john fredrickson. they must get court permission o sign the proposal. satisfied with its wealth management strategy and the confidential market. that is your bloomberg business flash. anna, matt? matt: thanks very much. u.b.s. sees bank profits under pressure as lenders are forced o charge for research. u.b.s. investment bank president andrea orcel spoke to erik schatzker in new york. >> it will be challenging and it will be rocky. meaning, there are contrasting forces. the first force is if i need to pay separately, i'm going to start saying i don't want to pay for this or i want to pay less for this.

>> of course. that's what every client should do. >> exactly. the second thing, something going in the opposite direction is before because of a strong relationship and bundling, i was buying a service from operator a which actually is not -- when you look at the facts, top quality. now i can't justify buying that service from competitor a. i need to justify that i'm paying something for that service. competitor b and c, who are much better than competitor a, should gain in those segments. how is that going to land? lots of this location and movement. lots of reaction as everybody adjusts to that. that is just one scenario. the problem is as i stand here in september, i think everybody has run scenarios. i don't think anybody in an

investment bank or their client will tell you i have it all figured out and i know exactly how i'm going to approach it. there will be some adjustments throughout the beginning of next year. nna: our guest is still with us. this is one challenge the banking sector is facing. another area of focus at the moment in the banking sector, a lot of executives were hit in the second quarter by weak trading revenues and what we heard yesterday from jpmorgan, bank of america, over the last 24 hours. >> i think that is right, anna. what we really look at when we look at revenues for investment banks is volatility. we as investment banks -- what we do not like is basically seeing volatility at historic lows as they are today.

people trading in and out. there is no incentive at the moment for the majority to do anything which is great for them, awful for an investment bank who needs to thrive on revenues. that is the ultimate question. when is volatility going to rise? at that point, investment banks should finally be able to profit. matt: jamie dimon made some strong comments at the barclays conference where he stands on bitcoin. listen in. >> it will blow up. china kicked them out. don't ask me to short it. it could be 20,000 before this happens. it is eventually blow up. it is a fraud. we have a trader who trades bitcoin, i will fire them in a second. for two reasons. it is against our rules and they are stupid.

matt: so what puzzles me and partially the remark was meant in a flippant way. if there is volatility and there are signals that help a trader make a profit, does it matter what the underlying asset is? >> in the case of bitcoin, yes. because the thing, is, matt, for an investment trader to make money, you need to be able to take both sides of the trade, the short as well as long. the problem with bitcoin is it s very difficult to go choice. you can spread the accounts and they are allowing trading on bitcoin. the problem is the cost of that trading is high when you look at it on an annual basis. there is no easy way to short bitcoin or any other crypto currency at the moment.

when we see liquid futures and options that allow you to go short, then we'll see where bitcoin ends up. anna: that is interesting. we showed the chart which is the bitcoin.y of jamie dimon said the chinese have thrown them out. this is all in connection with chinese regulatory changes. does its very existence live and die from being under the radar? >> i think that is absolutely right. when you think about who might possibly use bitcoin for anything other than speculation, it cops down to usual things. people use it in the same way people before used cash except that cash is become manager and more difficult to use. it is an anonymous way to transfer money around the globe and to hide it from the

authorities. that might be -- there are many different illegal reasons whether it be drug smuggling or just simply trying to avoid paying tax. the majority of it is people wanting to avoid paying tax. where they would have used switzerland in the past, they no longer can. what they are trying to do is use these other forms such as bitcoin to transfer money around the world in a tax-free format. matt: i have to take issue. i feel like there are probably some legitimate reasons to use bitcoin as well. i lived on it for a couple of weeks as an experiment, which was fun but obviously difficult. some may see a different future ahead for bitcoin than just illicit gain games. >> i think that is true. when you ask yourself at the moment, who owns bitcoin? purely speculators. matt: got it.

you're going to stay with us with. we have a more to go through. brexit talks take a breather. divorce negotiations are delayed for a week. what is theresa may's strategy? this is bloomberg. ♪

anna: welcome back, everybody. this is "bloomberg daybreak europe." the dollar against yen is pretty stable. we saw money coming back at n at the start of this week. not as devastating as the worst estimate anticipated. the stock market in the u.s. closing at record highs once again. guy johnson joins us this morning. good morning. guy: let's talk about european equity stories this morning. asia has had a reasonably solid day. that may turn when get to europe. the ftse at the moment is a

small dip lower. the ftse may change as we track what happens later on. it looks as if we're down by /10 of 1%. is the british pound continues its decent run. will that continue into today with decent data and then tomorrow with the bank of england. trading 1.3306 on the cable rate. talking of the dollar. i want to talk about this chart here. one of the best predictors of the direction of travel for the bloomberg dollar index. it has tracked down once again. this is a long-term chart. the models are suggesting maybe the israeli position is a little

bit stretched. this has been a very, very good predictor of exactly where the dollar index ultimately ends up going. staying with the currency theme. bitcoin is continuing to drop on the jamie dimon skepticism. you'll see this move is actually relatively small. anna: he didn't minutes his words. -- mincehis words. et's get some breaking news. five month sales numbers up 12%. at estimate was 10% increase richemont. the question is whether the was of cartier jewelry going to increase. they are buying at home in asia,

according to the numbers we're getting, the regional breakdown versus the estimates. the five-month sales number up just 3% in europe. the estimate was 11%. asia pacific sales up 3%. really outperforming estimates over in the asia pacific region. they reported this five-month sales figure to coincide with their annual general meeting. the swiss watch industry recovering. exports have risen for the past four months out of five. that is part of story. we're getting some breaking news coming through. matt: toshiba is signing a memorandum with bane. he private equity company. non-binding memorandum, memo of understanding.

it can continue talks with other potential buyers but it aims to sell the chip business by the end of the this month. bane has signed that memorandum with toshiba. some very interesting breaking news. w we also have news today on brexit. britain and the e.u. have postponed the next round of talks until september 25. the week-long delay suggests theresa may is planning a public speech on her strategy. the u.k. prime minister is preparing to make an important intervention that might require rescheduling. our guest is still with us. edmond, is there time for this, more more delays here? aren't the britains already a little bit behind schedule as

far as the brexit negotiations go? >> well, matt, i think the u.k. is already a long way behind in what was already -- which is always going to be an extremely ambitious two-year timetable. no, we can't really afford further delays but honestly, given the confusion over the u.k.'s brexit strategy, it is probably an excellent idea for theresa may outlining exactly where the government stands precisely. i'm a little bit confused and i'm sure a lot of other people are as well at the moment. anna: a lot of people are confuseed. are you confused at where the bank of england is going to go at the moment? able to take on the dollar, not the pound. we saw a surge in the pound that as resulted in inflation data. some saying the bank of england -- it is going to have effects,

affecting clothing sales. >> i think the bank of england's monetary policy committee will be split and i think that is exactly what you see reflected in the chart. i think that b.n.p. paribas, we're quite clear where we are which is that the bank of england will not raise rates until late next year. there is in our view no real reason to raise rates any sooner than that. they will look through current inflation data. they are not rising. the fact that current inflation is going up is not making people feel inflation will continue to go up. a lot of people understand it is currency related. wage grolte is no accelerating de-- growth is not accelerating despite the rate of unemployment we have in the u.k. i don't know if i'll be working once brexit is done.

anna: announcer 2: a concern. >> don't get me started. anna: won't dwell on it. matt? matt: you bring up a good point as far as who is behind the eight-ball here. is it as important for the e.u. as it is for the u.k.? >> it is as important, yes, but i would argue the e.u. really that is upper hand at the moment over the u.k.. one of the main reasons for that in my view is the northern irish question. really, the u.k.'s current position of say, we don't want customs with the e.u. but on the other hand, we want to maintain pretty much the current border, pretty much no border with southern ireland, the only land border between the u.k. and the e.u. seems inconsistent. this is one of the areas that theresa may may need to clear up.

they don't want to endanger the northern irish economy in any way, shape or form. anna: talk me through the next few weeks in the brexit target. citizens will be interested to see stage manager to the next three weeks. theresa may set to make a speech where she resets or retakes her thoughts around brexit. quickly follow bid the conservative policy conference where the wording could be of a slightly different nature. how will global markets respond to that mixed messaging, if that is what we're getting. >> i think we know theresa smay treading a very fine line. with the minority government and threats to her leadership from within her own party, clearly she cannot move her stance too quickly towards the e.u.,

towards the brexit. learly the hard brexit is in torrey party. one of the problems for the conservative party is who would replace her? it is in the clear that there is an outstanding candidate who would do any better than her, in my view. i think that is one issue. you're right. i think she really has to on the one hand, pay heed to her own party and not move too much to stop brexit but at the same time you have to move to some form of compromise because you need to get on with the negotiations. the e.u. are not in the mood for giving up too much ground at the moment. matt: definitely not. one place where we might not see brexit speculation. juncker's state of the union speech coming out later this morning. according to officials, we won't see any mention of brexit. instead he will push for free trade deals with australia and

new zealand and a system for screening foreign takeovers and deeper euro area banking integration. how important is this banking integration theme here for the european union and how much political will do you think is behind it across the 27 nations? >> i think it is crucial, matt, to go for deeper banking integration. particularly on the regulatory side. i think what is amazing to me, 10 years after the financial crisis, we in europe are still dealing with the after affecteds. the whole banking situation is still one of those questions. we're still dealing with bad banks and tighter regulations. quite incredible. now i think in terms of derisking the sector, this is very, very important. i do feel, i work for a bank. i would feel this. i feel that regulation has gone

a very, very long way. this being one of the many steps. really what we want to look at is the derisking, retail and universal banking. that is crucial. it can only be a good thing not only for banks but more importantly for the entire economy and the flow of credit. anna: when you look at other things that might be part of juncker's speech, screening of foreign investments, at e.u. levels. maybe this is a bit of a thank you to macron. how is this going to be scrutinized, do you think? >> very ll to know. it is not just blah blah blah. i would argue that emannuel

macron and other elections have helped push back the tide of populism for the moment. the european union between brexit and populism needs to understand they need to communicate to their populists why it is good for them. europe's growth is actually strong. anna: do you see a good example of doing that? standing in the way of dwhrobal financial flows, looking like they are not open for business, to may give confidence workers who are worried about china. >> let's be honest. europe as a whole benefited from globalization. the e.u. regulators would do well to communicate that. matt: the fact fact that you

can't do very much about it doesn't stop many governments from attempting protectionist measures. with us. going to stay the bank of england policy decision is tomorrow at noon london time. definitely tune in for that or you can watch us on your bloomberg tv. gasoline prices, we'll bring you our exclusive interview with the finance minister. this is bloomberg. ♪

>> good morning from london. it is 6:46 here in the british capital. this is a live shot of new york, the city that never sleeps at 1:46 in the morning.

merrill lynch survey shows the number of investors taking protection against sharp drop in stock markets, all three indexes closed at record highs. > toshiba has signed a memorandum on the sale of its memory chip business. they hope to reach definitive agreement by the end of the month. their joint venture partner has filed for arbitration in the united states. has filed for bankruptcy protection. turned proposal lenders will extend the maturity on $5.7 billion in debt with no amortizeation payments due until 2020.

they must get court permission to sign the lender proposal. malaysia airlines has agreed a deal with boeing. they have signed a memoranda of understanding for eight dream liners. the announcement came as the prime minister visited u.s. president donald trump. anna, matt? matt: thanks very much for that. jose antonio meadesays they will oil in 2018. he said his company was less reliant on oil revenues. >> first there is the fact that more and more we use information for us to set the level that we set forth to congress. it is roughly where the futures

would have the price of oil. that gives us an element of servitude. we will establish a stability front within the budget that allows us to have a fund that is there in case there is a shortfall in our budgetry income because of taxes. that's a good amount to have and that allows us more flexibility when we access the market in term turnovers prices that we're looking at so that the combination of the two, the recovery in the market, and the rice we set in the budget. we're in the process of finishing the coverage program. at this stage we're pretty confident that it gives good and

adequate support. >> would you say you 90% complete of that program? 80%? completely done, we'll give the full details. it has good support. > comparing to previous years, gasoline prices are liberalized. will you have to increase a little bit of the volume 12347 >> there is that element to it. that played a role in terms of looking at how much we would cover. the platform is smaller and the price is significantly lower

than it was in the past. rely on to which we oil revenues has decreased. the impact it would have on our finances has been reduced. marginaly higher in terms of we don't have the natural coverage that we used to have. we export almost as much as we import. we export oil and import gasoline. it ises are also true that the markets are exposed to changes the price of oil, just in 2012, 36% to 37% of our rev tpwhures oil related. that number went down to 16%. na: that was jose antonio meade.

edmond, i put up a chart that shows evaluations, developed market. developed economies. are you buying in at the moment? >> i think e.m. is still an interesting story but it depends on the dollar. if you look, e.t.f. flows in the u.s. have been in merging markets. they look fantastic right now. currencies, like to rupee have been gaining against the dollar. if you buy e.m. as a developed market investors, it is not only the local market equity, it is currency return as well. matt: do you see any chance of the dollar putting up a big bounce in the relatively near future? we have seen a little bit more strength but over the beginning of the week, but do you see my

real dollar strength coming up? >> i really don't see any obvious reason for that, matt. i think, yes, we could get a bounce because when you look at positioning, our f.x. -- look at positioning very careful. people are very negatively positioned on the dollar and positively positioned on currencies like to euro. we're a long way through the dollar bear move in the short-term. my ultimate feeling is that with the balance of issue payments that the u.s. has, the dollar could be headed lower over the medium term. matt: all right, edmond. thanks very much for that. we're going to continue talking about important issues that i've been covering over the last couple of days. one of them electric cars. as china joins a growing list of countries planning on fazing out internal con bugs engine.

we're focusing on that. we welcome jewel y atwood who covers technology and metals for bloomberg energy and finance. julia, is the world producing enough to have materials negotiation, the lithium, the cobalt for the battery demand that you might expect given the popularity of power trains? >> i would say for now, yes. and even in the long-term, we don't really see that many problems because even the quantities that we're talking about are a very small fraction of global reserve. the squeeze could come when we're forecasting a huge ramp up in the mid 2020's. that's where you could see supply bottlenecks. by 2030, just to supply the market, yum production would have to increase by 300% over today.

co-bault battle production -- cobalt production would have to increase by 120%. it can take anything from two to 15 years to get to production. anna: if you were looking at this sector, what is the best way? do you get involved with the, e.n.'s and hope they pivot at the right speed or do you get involved in batteries? are you buying some of those ommodities like cobalt and lithium? >> i would short the producers. it is going to cost a bucket load of money and we're at the end of an eight-year global upcycle. lithium i am skeptical about because there is a ton of it in chile. i don't see there being an issue in the next two or three years

at least. i would buy rarer metals. that is very much controlled by china. i would buy that. matt: metals prices do spike, we have seen it in lithium and cobalt. what effect does that have on the metals spike price of batteries? >> in short not a lot. edmond hit the nail on the head when he said these are present in very small amounts. we have done analysis of this. even if the price of lithium quadruples, that would only feen 2% increase in overall battery prices. cobalt has more of anfect but if it doubled or tripled in price, it is a 10% increase in price of batteries. everything else is dropping so fast that it would probably just be absorbed. anna: thank you. for joining usch for

over the past hour.

matt: apple unveils its most expensive phone of all time. the $999 features recognition technology. divorce talks daily. brexit negotiators postpone the next round of discussion as theresa may there's an important strategy speech. jean-claude uecker delivers his state of the european union address, he is expected to downplay brexit and push for free trade deals. it will pressure bank

products. we will sit down for an exclusive interview. >> brexit will be challenging and it will be rocky. there are contrasting forces. ♪ matt: welcome to bloomberg daybreak europe. anna: i am anna edwards in london. let's talk about where we go at the start of the year he and equity trading day. u.s. equity markets, the big three indexes closed at record highs yesterday. what does that mean for the european session? features suggest we could be weaker at the start of the trading day. we could be down one or two -- of 1%.2 we had gains of an eighth of a

percent coming through in asia. we talked about this at the top of the hour and we will get the thoughts of our guest. cash of investors seeking protection against the sharp falling agree market increase the most in 14 months. if you want to ask questions about how long the strength and equities can must hurry at -- can last. you see a gain of half a percent that would bode well for typical european equities. futures on the s&p 500, down a little bit as well. typically a good indicator as to how equities are going to do in europe especially in the u.k. is looking at the currencies. i look at for example the pound and i see some strength there, poorly -- normally vote for european equities. and some euro strength. what we are seeing is a weak dollar. dollar weakness against the end and across the board, some

dollar weakness today. that may not have as much of a bearing as it typically does on the european stock trade. anna: let's step the bond prices and you can have a look at where we are in german bunds. tand oat's. the s&p has gains to come. that sometimes is a simplistic sense. seeing futures are not suggesting that, they are suggesting you will be a little bit weaker. let's get a bloomberg first word news update with juliette saly. juliette: u.s. president donald trump will visit china in november as tensions flare on the korean peninsula after pyongyang's nuclear and missile tests according to a person familiar. trump is expected to attend the asian corporation, and association of summits in intnam and the philippines

november. white house officials declined to comment. donald trump has hosted three democratic senators at a white house dinner as he attempts to win their support for an unreleased tax call -- overhaul. they are the only three democratic senators who have not signed on to a list of conditions for supporting tax legislation. jpmorgan's ceo said he would fire any employee trading bitcoins for being stupid. jamie dimon told an investor conference that the cryptocurrencies a frond -- is a fraud. they are on pace to drop 30% from the year-earlier. 15%our decline than the forecast by citigroup. >> what happens this quarter is not related to the business you are running so you are having -- trying to have a good trade, we have an exceptional business and 20%,uld eat down about

something like that this quarter. last quarter for us a year ago was a good quarter. germany, -- in winsny, angela merkel reelection. he has signaled his interest in paying the -- keeping the post and merkel would be willing to pay a high lyrical press to extend his tenure. mexico will liberalize gasoline prices. said thate minister costs for the government to protect crude exports against a drastic drop in prices will be about the same as for this year. is likely to be marginally higher in terms of the fact that we do not have the natural [inaudible] we used to have. we export oil and

import gasoline. it is true that the margin to it -- we are exposed to has dramatically been reduced as well. juliette: negotiators have postponed the scheduled round of divorce talks by week. they were you two meet in brussels on monday but will gather on september 25. theresa may is planning a public speech on her latest strategy. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . it has been japan lifting the overall regional benchmark index, the msci could -- asia-pacific index is higher as we see the nikkei close-out the session by .51%. it has been higher all week. australia closing out the session fairly flat. s which out in the hong kong market. watch the taiex.

we have seen quantitative weakness from apple's of players following the apple launch overnight. if we look at the other suppliers in the region, lg electronics looking good, up by 6%. and coming through with a note that said the smartphone suppliers will benefit from the sales as we have early [inaudible] this is the company that is the sole winner of the wireless charging benefits that apple is going to use words latest battery charger. we heard a lot of what donald trump has been up to, also meeting with malaysia's prime minister at the white house. the meeting went well and they continue to talk about the u.s.-malaysia trade relationship. malaysia had to agree to a billion dollars boeing plane deal and pledge the pension fund will invest two support

infrastructure redevelopment in the u.s. we are seeing a growing trade deficit from the u.s. with more asia -- with malaysia. thank you very much from singapore. apple has unveiled its most expensive phone of all time, the iphone can a decade after it first launched the iconic device. from apple's headquarters, bloomberg's emily chang has the details. here att all happened the steve jobs theater on apple's brand-new $5 billion campus. this is the first time the theater was opened to the public and i have to say it is a breathtaking site. the multistory glass walls, the spinning elevator, he walked down for stories into the theater and the open -- they opened with the voice of steve jobs. his widow was in the audience and tim cook came on stage and took a moment to remember steve

but ironically, it is about closing a chapter on a prior year of apple and opening a new one. tim cook introduced what will be a new era, a new decade in the technology of the iphone. take a listen to what he had to say. >> the first iphone revolutionized a decade of technology and change the world in the process. now, 10 years later, it is only fitting that we are here in this place, on this day to reveal a that will set the path for technology for the next decade. emily: apple unveiled three new iphones, the eight, the plus and the must -- much anticipated iphone x. has the edge to edge screen and facial

recognition technology. it will open for you in the dark if it is lying on a table. starting at 990 nine dollars. how many people will spring for that phone at that one dollars and -- 1000 dollars price tag? they unveiled a new apple watch and they cut the price of the over -- the other apple watches. they talked about the watches out health care management a four kd unveiled video. it could be the beginning of significant new market for apple. 10,s all about the iphone the iphone continuing to drive two thirds of apple revenue and this is the beginning of a new decade for apple, a new decade when it comes to the iphone and a lot remains to be seen. emily chang, bloomberg, cupertino, california. and: jonathan bell joins us this morning in london.

very good morning to you. i pulled up a chart that shows apple and its performance against the tech sector in the u.s. and more broadly, against the s&p. run. had a pretty decent this was a year and a half or a year's performance. what is your appetite for this apple? jonathan: the -- it underperformed previously for a while. it has made up the difference but it is a 50% rise, a good increase. around 18 times so it is not hugely expensive. it has earnings growth coming through nine times. it is continuing to dominate the top end of the smartphone outfit. the problem they have is where aty volume is, it is not a

the top end. it does not capture the same market share as it does at the top end. that is the problem you have got. reliant onhey are they iphone. matt: you can do this with any company, just type in the ticker c, and you see the supply chain. when i have done here for the european open is i have limited the companies that supply the products to apple and the companies to which apple supplies products. you can see the three-month price change on the left column, that is the supply side. what i have is dialogue semiconductor, 74% of its revenue comes from apple. ams ag, toy percent of its revenue comes from apple. scroll down and a company like imagination technology, 45% of

its revenue comes from apple. there is a lot riding on this product for some and he of these companies and you can see it in the bloomberg with sdlc. -- s plc. how important is this trillion dollar company to the economy? is significant and one of the issues you have got with smart phones is the cost of manufacturing at the top end is not falling, it is going up and the costs is to manufacturing is twice that of the iphone 6. as they develop, it is not enhanced technology that is reducing the cost. the cost of manufacturing is going up and you are seeing that follow through to the suppliers who are able to get good profit margins. size of thes the market cap behind this business. put overarket cap was

$900 billion. the largest company waiting on the s&p. we started the program and our and 13 minutes ago talking about whether we have gone too far on global stocks and u.s. stocks in particular closing at records on the big indexes. they had -- whether they have gone too far. the survey suggests the amount of investors taking protection has increased the most in the last 14 months. investors are nervous. jonathan: you have a low discount rate, rejections of interest rate increases falling longerple, it will take for rate rises to come through so that has worked well and you have gdp growth without inflation and earnings growth has been coming in in the u.s. at 10%. really good news and the political worries we have had recently, the debt ceiling, north korea, seem to have gone away and even the hurricane what

-- was not as bad. the problem you have got is the prices you are paying are expensive. the forward pe for the u.s. market is around 19 times and the cyclically adjusted is over 30 times and you are paying a lot. if you see interest rates go up, that would hit. we have this following wind of quantitative easing and that is coming to an end and we are moving to quantitative tightening. there are a number of reasons to be concerned about someone like the u.s.. matt: the political aspects, does that concern you? we talk all the time about the possibility of regulatory reform , of tax reform, we just heard from steve mnuchin a little bit about that possible tax reform but it is not ever seemed to come to fruition. do you expect anything out of the u.s. administration or congress? jonathan: we have a little bit

of improvement dealing the debt ceiling but it is delaying until december. the problem with these political reforms as you feel the tax reform ongoing -- is not going to be as big as everyone had hoped. something will come through, it probably will not give the suit of use that people are expecting at the beginning of this year. politics could always offset anyets with a shock news at point that at the moment we are going to continue with slight disappointments on politics. that probably does not have a big impact on markets. anna: investors are talking about the biggest risk is north korea. the biggest risks is the geopolitical situation. is that something that is up against that political stalemate and the tensions on the korean peninsula, the underlying performance give you

performance? jonathan: to do -- 2% gdp growth is not great. -- 2% is fine. inflation is low and we have minutes to keep peak inflation load despite low unemployment. i am worried that wage inflation might pick up and that is why i think that the interest rate forecast, people are too optimistic and they are likely to see rate prices earlier than markets are forecasting at the moment. anna: charging ahead as bw of itss electro versions models. what the shift means for the carmaker. this is bloomberg. ♪

anna: good morning from london, 7:30 a.m. in london. this is lumbered daybreak europe.

-- bloomberg daybreak: europe. introducing -- easyjet are introducing a new this is called world why -- worldwide by easyjet. matt: when i book full cost airlines through other airlines it never bodes well so i am not sure how well it is going to work with easyjet. we will see it sometime in the near future. let's talk about cars right now. the world's largest carmaker electric -- offers an version of all of its models by 2030. what will the shift away from fossil fuels mean for volkswagen? joining us from the frankfurt motor show. that is an ambitious goal, 300 models including porsche 911,

the ducati, lamborghini, are we going to see electric versions of all of these cars? basically i am representing volkswagen rands. -- brands. for every car you know of our brand, the key models and any other models that are representative of l brands today, we'll have the full electric equivalent and you see cars behind me that are no longer real show cars. they are -- the volkswagen brand is full stay monde the electric march. we have dedicated a lot of our research and annulment, a lot of our financial resources to bring to life our dream of becoming world leader. basically from the start in 2020. it is true for the volkswagen passenger cars. you can have a volkswagen electric in all sizes it and all body types.

was lucky enough to come by your stand yesterday. i saw some really cool new products from the tea rocks to -rock. t we be able to get an electric bw bus by 2020? commitment since pebble beach two weeks ago is to bring this vision of the bus to life so we have committed ourselves to produce the car. it is a global attraction because we have shown it the first time. it brings back the spirit of the original from the 1960's. it was created in the spirit in california where the west coast dream. it is doable in an electric form because you need to get the portions right for the car. if the car is committed, it is a real plan, we bring it to life. the first car that comes to life

compact car and the gulf size for european roads and we will try to bring it to life as the price of the golf today. obviously is the car everyone wants to have will be launched shortly after. it will be a sequence of many cars coming in a short timeframe after the beginning of 2020 to make sure that everybody understands the volkswagen brand electric -- on the electric wave. anna: good morning to you. what is your estimate of how the -- consumers will replace electric vehicles? people will replace them less frequently and there will be less work to do in repairing them as well. have good knowledge

from the norwegian market which is the experienced electric market and we are benchmarking ourselves with norway all the time. volkswagen is market leader in the electric cars there today. we know the frequency of changes the same as regular cars. cars, want used, new fresh design, something interesting to talk about on a regular basis. the normal frequency especially with the financing scheme which is three to four years and people are intended to trade their car. or if people live in their car and want to keep the car, it will be a 10 year term but we do not estimate a big change in the frequency of changes in electric cars. sure -- change cars because they are breaking. they want to be seen and the latest modeled design, that is the key reason for changing a car. we will make sure that the cars are lasting, they will have good capacity, even after nine or 10

years in service. we treat electric mobility as normal and when we get to this stage that people think electric as a normal car than we have achieved our goal. it is fantastic to drive but it should not be something extremely special. about companywide you are going to boost capex by 20 billion and you have orders at 450 billion euros worth of goods. are you going to have to take that from somewhere else, will you have less of a focus on smaller diesel cars? said ishat you have volkswagen is doing two or three things at the same time. we are investing into suvs because the world wants suvs. the body type that people want -rock so you saw the t we are focusing on those cars that are in demand today. we're taking our chance of

having less complexity. anna: we are out of time. the brand sales chief of volkswagen. this is bloomberg.

♪ guy: good morning. cash equity starts trading and 30 minutes time in europe. we will bring you the first trade of the day. i am guy johnson, imf in london. matt miller is back in berlin. what are we watching this wednesday morning? the state of the union. jean-claude juncker lays out his version -- vision of europe. with a recovery underway, can the present of the commission claim credit for the success question mark