anna: the next fed chair. president trump is picking jerome powell. the boe governor has laid the groundwork for rate hikes. many times. with the take action today? if he does it will be the first increase in a decade. anna: fallon resigns. the u.k.'s defense secretary is the first casualty of the sexual harassment scandal engulfing westminster. getting credit suisse earnings. investors focusing on its wealth business. we are live in zurich speaking to the ceo.

anna: a very warm welcome. this is "bloomberg daybreak: europe." manus: delivering the numbers. francs,ion swiss penciled in by the market. through, 22.1 percent. global growth will remain strong in the fourth quarter. withue coming in line estimates. in terms of the net income looks to be a bigger force. the global markets division that we will break down.

the trading divisions at parabas and barclays came under pressure. some breaking news. numbers are getting from elsewhere in the financial sector. ing giving first-quarter numbers beating estimates. underlying pretax profits to billion euros, the net income number 1.3 8 billion euros. in the third quarter, that is above the estimate. a ratio of 14 point 5%. this is the biggest debt to lender, ing and the business is cutting costs to ease pressure on revenue because of the low interest rate environment. when you're into the plan they want to achieve 900 million euros annual savings by the end of 2020 one. they are limiting jobs and investing in digital technology. a lot to talk about with the ing , koos timmermans.

we will get an update with that one. beer: b i havee -- i have banks. terms of ofth third-quarter revenuee, they said operating profit will grow 7% to 8% and they see the full year mid single-digit percentage growth and i see total net benefits from the restructuring of 2 billion krone. poor weather in the north of europe part of the issue for them. you are not just seeing a big focus in terms of the cost cutting at carlsberg. the are saying clearly that funding journey, net benefits

not expected to be 2 billion. you have swiss insurance? anna: the second largest reinsured giving us the focus on the buybacks. we want to understand more about that and we are getting that as a mentioned. i mention. they previously announced when billion swiss francs at by bank -- buyback. a lot has happened since then. they were expected to report a loss for nine months and they have done one of the most costly hurricane seasons in history what cap profit. they flagged that would be -- result in 3.3 6 billion dollars worth in claims and people wanted to see if they would change the buyback program as a result of the season. date from them in terms of the nine-month figure, the loss is 468 million u.s. dollars. we put up the numbers. manus: for anyone who is tracking credit suisse, there is a top liv on your bloomberg.

have skin in the game but activism is a big same. ll talk with him at 6:50 a.m. this morning. anna: let's talk about what is going on in markets. thee is a story we are in middle of but we have a lot of talk about the interview and a lot of impact we are saying and markets. not an enormous amount if you look at the treasury amount. the dollar is weaker. the market is busy pricing in that dovishness. perhaps he brings the attitude that perhaps he has the financial services regulation. also a lot of uncertainty around tax time -- tax cuts. phasing in and phasing out tax cuts, what would the rate before

u.s. profits abroad? and is: that seems to be the disappointing aspect about the tax package. that is theropping, mood for the market. is it more of the same? you are seeing flattening in the 2000 curve, narrow since seven. what does that say about the expectation for growth and inflation? sticking to their confidence around inflation yesterday. it was solid growth. we are set for december. mark -- that is the market could -- conclusion from yesterday. here is juliette saly. juliette: the u.k.'s defense secretary has become the first casualty of the sexual harassment scandal. he announced his resignation yesterday referring obliquely to allegations about his private

life. on monday he admitted touching a female journalists leg during a dinner. that was prompted by women speaking up about their light of then harvey weinstein scandal in hollywood. >> i realize in the past i may have fallen below the high standard that we require of the armed forces. that i have the honor to represent. i have reflected my position in government and i am therefore resigning as defense secretary. iniette: the house tax bill the u.s. will impose a one-time tax of 12% on u.s. companies accumulative offshore earnings that are held in cash and 5% for non-cash holdings. according to a republican lawmaker who asked not to be named. the white house and gop leaders framework released last month rateshere would be two for camilla did profits stashed overseas. they did not specify the rates. u.s. president donald trump has

the person [inaudible] earlier, trump called on congress to end a visa program that allowed the suspect to enter the country and said he would consider sending him to guantanamo bay. ?rlos -- the leadership is due in madrid t. officials facing up to 30 years in prison. in a statement from brussels, he called it a political trial withut legal basis and proportionate penalties usually reserved for murder or terrorism. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top .

a little bit of mixed movement in asia. upan closed at the session by .51% on the nikkei holding onto the november -- july 1996 eyes. the hang seng is weaker as is the csi 300. also small caps and tech players dropping. kospi coming off of its highs. in terms of other stocks we're watching in the region, honda rising sharply in japan closing higher been -- higher than more than 5%. we are seeing a big increase in motorbikes and india driving honda sales there. the hong kong airlines or the china airlines based in hong kong rallying strongly. and in interesting story, reversing what it gained during wednesday's session. after it had of 5%

finished its review into harvey norman. it seems investors are dumping the stock. the next fed chair a former private equity executives who favors rate hikes and sympathizes what the white house called the e-financial regulations. said to be president trump's pick for the job. listen to some of the reactions. experience is in private equity as a salesperson rather than investing, i am not sure what he knows about the inner workings of the financial system. >> i do not necessarily agree with bill gross's comments that this guy is coming out of left field area not being an economist is a hindrance to his ability to do the job. >> powell has the the cool enough more than one phd in the financial markets and monetary

policy. given the time he spent around lost -- law street -- wall street and government. >> if we encounter a crisis he would probably have to rely more on advice then bernanke or yellen did. anna: a range of reactions there, the news that powell is tapped for the job. expertise to us if you could. what is he expected to do with monetary policy, he is a relatively known quantity. kathleen: he is at this point. has been with the consensus for the last five years, the consensus that was built up and shepherded by janet yellen. gradual rate hikes, unemployment is falling, inflation is far from target but it will rise. he has been right in there in the middle, never dissented on policy. the question a bit about the phillips curve, is it .roken like other officials had

economics is not his strong point necessarily. five years he picks up a lot, he is not an economist, he is a former investment banker and started as a lawyer. he went to the bush white house in the early 1990's and he was undersecretary of domestic finance. perhaps he has more experience on capital markets than bill gross realizes. when it comes to policy expect somebody to lead the pack but go with the pack and the consensus that it is already there. morning to you. good to see you. bank regulation, the white house would like to see perhaps, i do not know about a lighter touch but some form of deregulation. he comes from the street, from that environment. are we hoping for too much on that side from him if he is appointed? kathleen: i would like to hearken to something else that brad delong said in that interview. he is an economist. he is someone who worked at the

treasury department under bill clinton. he is a democrat and made up distinction, guys that come from private equity are not the kind of people who want to throw away the capital requirements and let banks do with they want. they are concerned about banks not taking on too much risk and being able to do with they do. he will have an intelligent touch, small banks are overburdened, capital requirements need to stay in place, maybe recalibrate it a bit. in terms of the -- anna: joining us here on set, john rett, welcome to the program.

some traditions remain. maybe they will come through in the end. john: you can see from the market reaction or a lack of it that is how it is perceived as well. he does have a fairly long track record at the fed. the middle line in regulation and other areas. it will be seen as a continuity candidate and one the markets have taken a degree of relief. manus: his biggest challenge, this expense -- expansion is the third longest on record and growth has been underwhelming versus previous expansion. it is inflation that has been hit by variety. greenspan, 2.5 percent, yellen 1.1%. is he a believer, is this what we want to know, is he going to pursue the 2% target with gusto?

john: he will do it his mandate tells him to do. that is what other chairman and central bankers have tried to do. it is interesting in all this discussion about him not being a trained economist. this is the time when -- manus: is that a bad thing? circumstances the in which he is operating. it may be is a good thing to have someone who is not so ofused on the minutia macroeconomics and has a view on some of these bigger issues. a candidate, he is the markets will be relieved to see. anna: does the government lead to a steeper yield curve? john: we think it is more continuity then additional dovishness and we think another hike next month and another to next year is the path the fed will pursue on that basis. that is a little more than the

market is pricing in. the yield curve flattened more than it has as the fed pursues this tightening path. manus: that is the five year versus the 30 year, it has been narrow since 2007. there was another event yesterday, the fomc, it did not rock the world but it moved mine. they talked about growth and -- the fed said economic activity has been rising and a solid rate despite a hurricane related disruptions. did they do their job to convince us that december is light? am -- they are convinced about the growth story, are you? john: we are. you have to bear in mind in the third quarter that the print twice flatter than -- in what it tells us about the future. they saidf what yesterday, they clearly remain on track to raise rates in december unless something

unforeseen happens and the interim market is unmoved as a result of what they said last night. a greater than 80% probability which a month before meeting is as convinced as you will see. as we drift toward meeting that have ability we will increase and we think they will go into december. anna: there's another conversation in the u.s. that is very live. close to working out are hearing more about what plan of attack story they have waited for. if you believe in the u.s. recovery, there's a lot of talk about phasing in or out the tax cuts and what form are they going to come, how quickly will we feel the benefit? the talk about it has helped to boost confidence in sentiment and contributed to some of the fairly positive [inaudible] this goes back to the appointment of somebody like

powell as fed president. we are in need of -- we are in uncertain times. fiscal policy is developing in unpredictable ways and the fed's policy response, depends on how accommodative and [inaudible] anna: the yield curve could depend on whether there is this phasing in. john: the policy is stimulated. that will have to adjust courses. manus: we have done the curve and we have done the tax but in terms of financials, these are financials in the u.s. and they are bombing away on the upside. and again, the question for markets is, i did not see any mention or leaning toward a concern about markets in that fed text yesterday evening. it seems they do not seem concerned about bubbles. john: no. ultimately the markets are

reassured when they see policy evolving in a way they think is appropriate and consistent with the narrative so that the central banks or the government -- as line is that happens, the data suggests it they are moving in an appropriate way, you get the reassurance you are seeing in the underlay markets. if it turns out they are over tightening or act unpredictably, or have we be sit -- we've been seeing a fed chair that comes out of left field, that is when you see concern in markets. is whetherdebate this is a moment of reprieve for the dollar. if you get the continuity trade, the dollar has had a nice run. are you a believer in the turn up in the dollar? john: not longer-term. we are not negative on it. the euro, the euro dollar will continue to strengthen over the next year or two. as the fed continues to apply the brakes and that is not

anything to worry about. we do not think that dollar strength will necessarily continue. anna: do you see any bubbles to be concerned about? yesterdaya piece talking about the only thing that crashed in october was volatility. the parallel to 30 years back. , we less concerned about that. john: you have to look at the amount of monetary policy, the amount that is being injected or not yet being removed. there are clearly risks under the surface but that is why reliable, careful moves away from the lower bound are important and any shocks risk vulnerability. manus: live coverage coming, at

7 p.m. u.k. time anna: we have a host of former fred -- dead presidents joining us. plenty of voices to win. have analysis from ing group that beat analyst estimates. fromve the cfo joining us credit suisse. koos timmermans. where was the author in your numbers, where did the beat come through from? : where the beat comes from, 400 thousand clients, that is a good number and we are at 37 million clients, we have 10.5 million clients who don't -- do multiple clients. the other part where we did well

is lone production. the clients did a billion of lending business and others did 4 billion with us. the other part which causes the beat is the risk, extremely low, 15 basis points off risk-weighted assets. if you keep your cost income in check like we did, it is around 53.8 percent rolling four quarters, you get to the number which we have, 1.37 5 billion net profit. we can be quite happy. anna: good morning. one of my colleagues tells me your bank is one of the most geared banks to rising rates. country beating to total revenue. what are your expection -- expectations around rate hikes in europe or tapering from the ecb, how can that help you generate more profits from your lending business? if you ask our we geared

toward higher rates, that is not the case. what we try to do is we are a big deposit taking bank and we always try to make sure we do the investments in such a way that it matches client behavior. we are striving for a stable margin. if we would see interest rates going up, then normally, we would make a bit more margins so it would be beneficial from us. is not very much positioning around it. it is more the case that if rates drop and you cannot drop your savings rate further, the downside is a bit more sensitivity rather than rates going up. that is a scenario we would like. the view you stick to in the market that there is no rate hike from the european until the beginning of 2019, normalization in the fourth quarter toward zero, is that

your base case scenario? koos: yeah. we would be hoping for a gentle rates moving up. in your base case scenario, we are following also [indiscernible] what the is saying. -- what the [indiscernible] is saying. you were saying 900 million in annual savings. you are eliminating jobs to do that. are you on target for those savings are running ahead of target, how do things look? is early stages. we are making the investments in order to come up with the savings rate we had a bit of delay but you are talking about within a quarter. we also needed regulatory approval for a number of that

restructurings. overall, i would say in the bigger picture over the next four years, we are on schedule but if you look at it more with a microscope you could say we are slightly behind because of all the approvals required. there is ample time to catch up. one subject is every cfo and ceo is battered by, capital and regulation. how comfortable are you as the cfo, you have sufficient capital under the new regime, is that uncertainty holding back any kind of dividend payout, where do you settle in terms of the capital you have in your hand versus restraint, is it restrained on regulation, are we waiting for clarity? we definitely need to have that clarity. under the current regime, we have a bit more capital than what is required. under the new regime might say

and state, we do not know if we have enough capital. that makes our capital planning process very difficult. the other thing what we do not know is given the fact that you do not know that required capitals, the question is are we pressing our loans adequate? we have said all the longer-term loans are at a higher capital requirements and the shorter ones given the uncertainty. it would help if we get clarity on this issue. your thank you for responses this morning, great to speak to you, koos timmermans from ing. next, the u.k. central-bank could announce its first interest-rate increase in a decade. we are live with the bank of england, the u.k. equity features indicated lower this morning. what will the impact be?

will the bank of england be one and done? live at the bank of england today. ♪ retail.

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it is 6:30 a.m. in london. this is bloomberg daybreak: europe. the pound higher against the dollar. a dollar weakness story. jerome powell is going to be the fed's next fed chair. we are getting breaking news. manus: headline from sanofi. annual diabetes sales have worsened. this is for the diabetes business, the top line coming through from olivia. he is trying to fight the price pressures in the u.s. and also

the generics that can [indiscernible] dropping 6% to 8% between 2015-2018. net income third-quarter 1.7 one billion, that is down from last year, 1.79. ge above. sales fell by 22%. they are making a comment in to changehe plan their holding in sanofi and sanofi would look at any option to buy back the l'oreal shares. numbers from the banking sector. ,ifting their full-year outlook giving us a breakdown of total income, net interest income looks to be ahead of estimates. net interest income comes that

5.69 billion danish krone. ratio ahead of estimates. we are talking about this is the top pick among nordic banks. fromrength in that update danske bank and the upgrade for their full-year outlook. bloomberg radio is about to sit down with the cfo to discuss the story and that upgrade. listen if you are in the london area or on bloomberg. thes: they have reaffirmed full-year guidance for this year. let's talk about our other central bank story, the bank of england, expected to announce the first interest-rate increase in almost a decade. most analysts see it is a one-timer event rather than a signal at the boe. embracing a more hawkish policy

stance. , joining us from outside the bank. the market pricing in this rate hike today. grilli wholeheartedly. does the boe have much of a choice but to hike to maintain credibility? >> good morning. how mark carney will manage the press conference at what it would mean for his in the bank of england's credibility if we do not get a rate hike. markets pricing in this hike, the first in a decade. it would be a reversal of the cut as they did post-brexit but there is a question of if markets have been getting ahead of themselves, are they racing the expectation on too much of what members have been saying rather than with the data has been saying? that is how markets are positioned and there is a lot of calls for what might happen to sterling and the event if we get a hawkish height, -- hike,

dovish, or none at all. the big question is not asked about today. what happens further down the rate hike path. are we going to get any signals 2018-2019,pened in is the bank of england committing to hikes or is it were to be a one and done? manus: we want to see how everybody votes among this is going to be important in terms of what economists expect. we also have economic for costs -- forecasts. critical and guiding us for 2018. nejra: in terms of the forward guidance -- they are possibly expecting mark carney it has press conference to say that markets are underpricing the risk of further rate hikes. it is the question of what he says and what the bank of england actually does that the

market has to balance. in terms of what economists are expecting the views we will get, 6-3 with possible dissenters. in terms of the inflation forecast, there is an expectation that the bank of england may raise its inflation forecast. inflation is running at 3%. we have third-quarter growth at 0.4%. you could argue that is a reason for the bank of england to hike now. economists questioning where the inflation is coming from. -- isis supplied side supply-side driven. the bank is making a policy mistake. there are a lot of things that mark carney has to answer on that front. a big balance as to what they say. that is what the market is balancing. anna: we will bring you for coverage of the decision and

that inflation report, everything you need to watch out for on the u.k. front at midday u.k. time. et's -- we are interested to hear. you think this is a one and done, you do not expect a dovish hike. ben: i do not -- it would risky and it is a adjustment at the level of rates. the market has priced in more than the hike today. it is expecting a couple of more hikes over the next couple of years. that has been partly what is supported sterling. say we aree to changing the level of rates and going back to neutral, sterling would suffer significantly and the interest rate market would be volatile. that is not the message they want to give out. manus: there is a lovely title, the bank of england will not

easily give up its hard-won optionality. they have moved the yield curve and this is something that will come front and center. they moved the probability of a rate hike. another one in september 2018 and three in 2020. where do you think the terminal rates are, there is the projections we think we will get. what is the terminal rate for the u.k.? john: they will be feeling their way towards and on the -- an unknown level. to a degree as you call it, that is the hard-won battle the bank of england has been fighting but you have to ask yourself why the interest rate curve was set -- so surprised by what happened after the september meeting. it is 90% chance. we have not seen anything on the data front. which justifies a repricing.

a change of narrative. short-term credibility today clearly depends on them following through with the message they have sent out. if they do not raise rates, the market will be shocked and that .ill not be credibility longer-term credibility comes from something we were discussing with the fed, consistent narrative, he to the markets why you are moving in the direction you are in the pace you are and the problem we have is having set seeingconditions like stronger wage inflation, the bank of england seems ready to act before we have seen that stronger wage inflation. that is not credibility, it is inconsistency and it calls that policy and do have to be careful about trying to steer investors reliability -- reliably. that to it significant deputy governors [indiscernible] expectations our

that they will prefer to leave rates where they are for now. since markears carney arrived as governor, there has been none of this dissent from the internal members of the bank of england. it would underline the fact that this is a hike that lacks conviction if they follow through assuming it is 7-2. assuming they have a cautious outlook which they publish alongside it. for us it is a move that represents a risk create it is not necessary. they brought it on themselves by their change in tone when the data did not push them in that direction. the governor's dissenting it will show there is an element [indiscernible] isa: do you figure it weakness in the pound? john: they were trying to support the pound by getting more hawkish. they were getting frustrated that the market had look through earlier warnings which they made this year that rate hikes may come sooner than the market

expects. the market had shrugged that so. it had done so because data was telling them a rate hike was not that likely. the data has not changed but suddenly a rate hike is likely. anus: you mentioned data in couple of ways, one was in wages and the inflation report. that is their expectation. they're not famed for their ability to forecast. this will be the third time in a row that we see a dissipation in terms of the growth numbers. there is a myriad of factors that can play into that. as you look at the economy is it a balance between our ability to take on a 25 basis point hike without quashing growth further, is that the ballots? john: growth has slowed significantly compared to last year. it has done that while other economies, particularly the , have accelerated materially. that is early warning signs that the brexit process is having

some significant and increasing headwind impact on the u.k. economy. from here especially with the rate hike tightening conditions for consumers, leading to higher mortgage rates and more distress for consumers who are high -- hard-pressed by negative rates in loans and savings, it is hard for us to see how growth is going to react so rate if the brexit process continues to be problematic. monetary conditions are tightening. this is a risk. anna: the political establishment is distracted by other matters. we saw that resignation of the u.k. defense secretary. markets is ite all about whether this leads to questions about may's tenure, some of the key members of her s?am or the brexiteer

specifics of what is going on, this government as we know as a result of the election effective majority and therefore, any sort of turbulence within the conservative party, the dynamics around the government, does raise questions about their ability to withstand the next four or five years as the parliamentary term suggests they are going to do. in the context of the brexit negotiations, that is automatic. what it means to us is the government has its hands tied. it has to pursue a path in the negotiation's without a degree of flexibility. whenever it moves in a softer or owner direction, its parliamentarians make it clear they are not happy with that. in almost predetermined's the stance they take into the negotiations with -- which adds -- ourr conviction conviction that any deal will come later in the day.

manus: thank you. from ubs.h [indiscernible] plea for assistance. what is the early market reaction? yusuf: i will start off with some of the core fundamentals of this conversation because we understand the request has been made to saudi arabia, kuwait possibly and the uae. the desperation may be small in the gulf equation but there is enough symbolism tied into the council which bahrain is a member of. they have always been the more vulnerable country in the equation of this part of the world. they need $100es a barrel to balance the budget

and they are far away from that. bondrony is in its last issuance in september last year the prospectus for the bond stated they may struggle to defend it. this is key that bahrain needs to tighten its belt first before they see any money. anna: that is the latest of element in terms of that market reaction. what have we seen so far? f: quite a few reactions. equity markets have priced this -- yet to price this in. the eurobond traded higher in terms of the yield. we are talking about the 2020-20 22. it fell several basis points. i want to show you what is happening for the currency for bahraini dinar. of response.pread this is the bet on devaluation.

this is how traders expect the currency to trade. they have three levels below investment grade and there are a few tricky dynamics. they cannot go ahead and restructure the debt. do that ite to raises the risk of raising the cost of financing for the region. the overall political support in the region, there is support for this, you get the feeling. the base case, that is the expectation. because of the symbolism, history, gulf cooperation council. they has been support in the past but not guaranteed and that is why we are keeping a close eye on this and how this evolves. anna: thank you. joining us for an update with the latest on parade. we sit down with the credit suisse ceo after the earnings announcement coming up next. we get the reactions from

across the market to reports that jerome powell will be the next fed chair. we count down to that official announcement. nothing on twitter just yet. we will wait and see. tradewell the continuity for bonds, equities, and the dollar? ♪

anna: this is bloomberg daybreak: europe. we understand jerome powell is going to be named as fed chair by president trump a little bit later on. the markets pricing and the continuity with the dovish nature there. new money 10.4 billion swiss francs up 8%. income 440 million swiss francs. that was a comfortable beat to what the market had estimated.

profits were dying, they dropped to 71 million. the market had penciled in 99 million. said in aiam statement he expected the global strength to continue. francine caught up with him. tidjane: in october we have not seen a fundamental change compared to conditions in the third quarter. we have seen a pic of inactivity. cautious with all the uncertainties. francine: any cost cuts or layoffs? tidjane: we are getting close to restructuring. around 4.9 billion in savings, we are close. francine: what comes next? next year's concluding the plan.

amu is a. we said we would cost -- cut costs. we were on track to meet the targets. we have cut by 50%. we talked about [indiscernible] the losses are two thirds less. one third of where we were two years ago. the numbers are comparable. we are running one third of the risks of that is good. capital is strong. close sre, ify -- recall, it is down. so double leverage. thene sre goes away

emerges the real credit risk. of derivatives. theaid we would take 11 by end of 18. we are close to it. close to a call, derivatives, long dated derivatives. you need innovation and compression. is awill be left there number of long dated trades and a few lows. we are getting to the end of it. francine: you have a shareholder activist investor with a minimal amount of shares. have you spoken to him? tidjane: we have an in touch. -- been in touch. i have not yet personally met him but we are meeting next week. welcome and we listen to the views of all

shareholders. we have a strong set of numbers in a challenging quarter. you have -- benchmarked what we have achieved in the context of the industry. this is working well so why change? francine: are you refuting the proposal he put in place which is to spin off an investment bank or is this something you are considering? tidjane: we think this plan is where -- working well. there is integration between the asset management, investment bank, and [indiscernible] half [indiscernible] 60% andging markets, 70%. he is a multibillionaire and has several million dollars and he comes to zurich. we sit with the teams to do

asset allocation. factory -- he has a factory he is building somewhere. also in multibillion dollar company. he said you are a one-stop shop and i love it. could record you for my investors. [indiscernible] francine: talk to me please about brexit. when we you make a decision on the european have? tidjane: could record you for my investors. we have not made a decision. we are taking our time. teams are working on this. we are talking to our government to know what is on the table. sources uncertainty, you do

not know what brexit looks like. and you do not sources uncertaio not know -- have not concluded your conversations with governments. conclusionwe reach a on the board we will it you know. francine: is there a sticky point you are trying to figure out with governments are cities? tojane: it goes from states labor lows to taxation [indiscernible] was tidjane thiam speaking to francine lacqua on the subject of earnings and the strategy. you can go on your bloomberg and go function.liv he will meet that activist shareholder next week.

he has not met him personally. a couple of thick stocks to keep an eye on. carlsberg, raising forecasts. they say the asian demand for their beer is quicker than they expected. organic operating profit rises between 7% to eight percent. anna: we have a statement coming through from ing. the helped to beat many of estimates that were out there. we expect -- spoke to the cfo and he said we have to live with lower rates a little longer. this is a key concern for many in the banking sector. manus: sanofi has said annual diabetes sales, the outlook has worsened. they will talk anything to do with l'oreal and the shareholding, they would be interested in discussion. ceo has a strong standing

with the board. anna: and there is the hurricanes. they have a heavy payout. our guest joins us for the first interview of the day. this is bloomberg. ♪

♪ credit suisse serves it -- ceo praises the bank, and asset fund management stroke -- go to a record. margins rose 20% in two years. -- good resilience on the global market. >> the next fed chair, president trump is set to picket jerome powell for the top job at the u.s. central bank. gun's credibility test, the governor has laid the groundwork for a hike many times, but will he take action today? if he does, will it be the first increase in a decade?

the u.k. resigns: secretary becomes the first the sexualasualty of harassment scandals engulfing westminster. ♪ >> meanwhile, bloomberg daybreak: europe -- is right here. . i'm manus cranny. >> i'm anna edwards. reporting numbers strong -- the outlook is being maintained by the business. in terms of how they performed against this comment 9.5 billion, in line with the six billion pounds. 1.1 billion is adjusted for the second quarter, against 1.8. the president says to make sure that the president -- that their

structuring initiative is on track. italy, a scandal in slower business unit with the government and big businesses counting back. perhaps this is an outlook maintained, good news for the meeting. >> futures at the moment indicated slippage. the big test for the market -- will he be confirmed a little bit later on today? that's the question for markets. but what were waiting to find out. we have had a very strong market. let's have a look at the risk , looking very clearly at what's going on. i think it's wonderful. -- it's huge, as a market category. >> its phased in, not phased out. implications for this half greg

projections in the united states. -- have great projections in the united states. we could learn more about patterns result. -- about that as a result. the fed story around jerome powell knocking the dollar down. >> some initial headlines. the dividend comes in at $.47. the just comes at $4.1 billion. it joins the party, it joins , inron and bp in this group terms of -- adjusted profit 4.1 billion. the market depends on 3.6 2 billion. that's comfortable. this time last year, 2.7 billion. $.47 a share. the ceo has been focused on reducing that. to tell posted highest earnings.

that is an absolute barnstorm. in terms of earnings per share, $.50. $.44 adjusted. that gives you a sense of what a good set of numbers this is. can we maintain those kind -- that? -- we had the fed ourerday, subtly upgrading their assessment of the u.s. economy. we did see a little bit of movement and treasury as a result of this, but nothing too definitive. on european bonds -- they had to live with rates a little bit longer. ?julietteat happens chatterley is standing by. is standing by. federal reserve governor juliette: will be -- federal

reserve governor will be nominated to a tough position. the president what announce the decision at 7:00 p.m. u.k. time from the rose garden of the white house. secretary has become a casualty of -- a sexual-harassment scandal. he announced his resignation yesterday, discussing allegations about his private life. on monday, he inappropriately -- touched a female journalist allegedly. in the wake of the harvey weinstein scandal of holly -- hollywood as well. >> in the past, i may have fallen below high standards we required. i have reflected now, my position in government, and i am therefore resigning as defense secretary. in the u.s., the house tax bill will impose a one-time tax of 12% on u.s. companies

accumulated offshore earnings. 5% for non-cash holdings, according to a republican maker, who is not to be named. ratesite house -- has tax last month, and says rates will be accumulated, stash overseas. they do not specify what those would be. he was president donald trump has said the suspect in the deadliest terror attack in new those in since to which be executed. to am --he man asked hang an islamic flag in his hospital room. he said he would consider sending the fallon to -- elected selling to guantanamo bay. --oomberg daybreak: europe" elected set sending the alledge fellon to guantanamo bay. global news 24 hours a day, powered by more than 2700

journalists and analysts, in more than 120 countries. bye 1996, this stock is up one half of 1%. a fairly flat finish on the csi 300 here. byreats of record highs down around 4/10 of 1%. a little bit of profit hiking today. -- honda, up.ock surprise, also with a ¥90 billion share buyback. apparently, a blowback disappointing with its second-quarter earnings, this sent shares up by 8% in tokyo. --re was a big up in china pickup in china earnings this week. today, china southern is the top performer on the eight share index, manus, and i. manus: juliette, think you very much. we've heard the earnings come -- from ringo resources. frost -- profits in the third quarter $52 million.

crystals, the ceo ringo, joins us. good morning. >> we've got a profit -- good morning. manus: with a profit here at $60 million. is good, up 10%. if you look at this, that's what you should look at. across on the numbers, pointing in the right direction. we are head of guidance production, costs and cash. us lacking quarter this quarter from the previous quarter, but similar to the quarter last year. for the last quarter of the year -- or commissioning at the cabal he and drc, they're going to ofe this an africa -- one the first of its time, certainly in africa and probably the world.

>> a fascinating development there. in terms of this, what do you plan to do with it? you paid a record dividend earlier this year. as i go higher?\ -- does that go higher? >> yes. we want to get half $1 billion. after that, the race will go to share dollars. then, continued investment in our future. we had someone from blackrock here yesterday. it is london metals week. through -- you've got the base metals, the new got precious metals. what level of optimism do you have overall about the market?\ bloomberg.com >> gold prices good. gold industry is struggling. the topif you look at 15-20 gold stocks, they haven't beat the gold price even.

whether you have measured them over 3-5-10 years or 20 years. so, the question is, there's a lot of movement into this instead of individual equities. companies are tracking a lot of investment. to be equitygoing markets under pressure. everyone is talking about peak gold. of -- there has been ra-ra that we've seen. gold is not the only one, but is one that has -- are delivering value. gold?do you see peak >> i believe we have gone past peak gold. it's got to materialize now. the industry is undercapitalized. it's got a lot of capacity to process. it's been saved, really, by the higher gold price.

automation about here. we want an update also, in terms of senegal. update?give us an how close are you to giving a green light to build that? >> middle of next year. we look to make $1000 an ounce for gold price long-term. want to invest in projects that have answers. answers,.6-2.7 million just below 20%. >> when you are making than investment decision around automation, what's the sort of time horizon you are looking at? what could that deliver over what time horizon? >> people think africa's is just a place where you employ people,

and everything is manual. not for world-class businesses, and africa is a great place to automate. the people are wireless. we have a full intellectual distribution to go from, with regard to human capital. there's no other competition in countries like mali and senegal. if you want to be efficient, you've got to be certainly at the leading edge, perhaps not at the cutting edge, and africa. >> in terms of the marketplace -- i was thinking of this. highest.-- has the theyhave the highest -- have the highest margin since 1998. do you see a profit for gold, with these kind of prices?we have a new prospect of the fed.

is this a moment to come in and hedge production. ? >> the>> prophet still struggles under debt. to be very careful. some of the more junior companies have put in hedges to survive. this with gold miners do. the future is under threat of the hedge. i don't think so. i believe a lot of people sought royalties. they may be saw streams -- they want to deliver extra gold. he can't wait to that. anna: mark, thank you very much. i was going to ask you about the mining of bitcoins -- but we are out of time. probably, thankfully for you. thank you very much.

manus: credit suisse, we've broken down the numbers, that strategic shift for world management. that, paying off -- back its -- assets. inflows oflows -- $10.4 billion, and a percent increase in the year. >> this was in the banks performance. time.are taking our we are careful. we're talking to see what is on the table. -- two things are certain, and you don't know what brings you haven'te, and concluded your conversations. francine lacqua joins us now. thank you. bullish story on welsh management.

francine: it was a touch below market estimates. the statement, manus, was a little bit will wish. when asked him about the investment bank, i don't know exactly what cautious-optimistic ares, but they said they trading for what the first glimpse of what we get for the third quarter, and -- he wants to know about geopolitics. he said could have been better, but it's going to remain that way for some time. this bank -- we talked about again, he said it's very rare. he says, he is putting out a bank in place, where it can withstand market movements that maybe aren't up to scratch. overall, we talked about fed hike in, and activist investors. creditly have 0.2% of

here. there is a spinoff of the investment bank. i asked if he would at the proposal, he said he would go through all proposals but he is happy with his plan. anna: francine, good morning to you. mi writes, he drafted a three-year plan, and two years through that -- what's next for the business than? francine: this is what we try to get out of himfrancine: they have an investment plan coming up in a couple of months. at the moment, they are still focusing on revenue. they're still focusing on their capital ratio. he said there may be more, but he didn't give me -- an exact plan. moment, two years in, please close to the progress but doesn't want to cry victory yet. it's more of the same next year,

and maybe they reposition and tweak couple of things. >> francine, great job. up next -- nine >> we get powell iss jerome said to be donald trump's next pick as fed chair. this is bloomberg. the announcement next. ♪

manus: 7:20 a.m. in london. good morning. expecting we will open up -- lower this morning. we've got this coming through in dubai. the talk is all about jerome powell.

>> will hear want he be the next leader? >> the federal -- the next pick -- is according to 40 million on the front. this is the net worth -- good morning. >> good morning. people familiar with the matter. trade? the continuity if it is, simon, how does it play out for bonds, stocks, and the dollar? think it is a continuity trade. this is -- there's no change in our expectations for the market. we will get another rate hike in december. it's not just the fed chair. there's a huge amount of change still to come. even though j powell himself as continuity trade, it's not to

say we might not have a shift in overall competition -- anna: so to be about the supporting cast? thatople of talked about when there's some sort of details, what weight -- people of talked about that. we will see when there's details, what we? namethe dovish character we get a different yield curve? whipsawed being against a local environment, when we had taylor first looking like he would become chair, then powell. from here forward, we are not likely to see market reaction, if this is confirmed. the theme we have talked -- touched on several times. when you look at the delivery by 100 -- this is

recoveries ingest history. the markets have been flying. are there any bubbles that all, canaries in the coal mine for bitcoin? [laughter] >> no. we have to take a step back. is and bank policy remains incredibly accommodating -- accommodating. whether we get a fed rate hike, the overall backdrop is accommodating. you look at the economic environment, everywhere in the synchronized fashion it is growing. the overnight, slightly disappointing, but clearly expansionary. then, you look at the earnings outlook. everywhere, we are seeing great earnings in the u.s., best in three years. best revenue, companies on the revenue line for the first time since the second quarter of

2011. this is growing out to 10%, with a 4% earnings for eurozone companies. this is a backdrop earnings for the -- better economic growth accommodating this policy. >> is that based on the fact for you to have confidence in the strong equity story?i say that because there is an expectation around tax. we don't know whether it would be phased in our phased out. we hope to learn more about that this week. what we have of seen in equities is built on expectations that we get a lower tax and the united dates? -- united states? i think >> probably not. think the tax coming through the of further leg up for markets. this is broad-based in terms of

earnings recovery, especially in the tech sector. have't think people would fights because of tax cuts. tax cuts would be a leg up in my view. today, profits produce this. this.have a look at abe said, let's complete this for him. you lookmption is that at this japanese market, it's up 10.5% since the end of august. everything going on in japan, doesn't have a bigger position versus the u.s., versus the european story? >> and a word, no. it's positive news from a financial market perspective. we have abe coming in with a simple majority with a

continuation of this, and earning coming through. earlier in the year, we talked about a move away from taking this, and we can't take a broader base for exposure, which has proved to be with the benefit -- in the benefit of hindsight, the right decision. >> we get a super thursday experience today, a rate decision. are you expecting something dovish or hawkish? what do you think? buildnk people -- will whether this is one or 2 -- one and done, or continuation. we are expecting a 25 basis point hike today. this is likely to have much of the move, and from an economy perspective, a fed basis hike -- >> thank you very much.

the equity sector is slightly softer, but three of the stocks you want to keep an eye on. anna: that's it for bloomberg daybreak: europe this is bloomberg. ♪

♪ guy: you are watching bloomberg markets, the european open. we will bring you the first trade of the cash equities session shortly. i am guy johnson in london. matt miller is off this week. we are watching trump picks powell, he is said to have decided on the fed chair. the announcement as -- is at 7:00 u.k. time. the market sees continuity. investors expect the bank of