mr. draghi. manus: wrapping up all the news on the market and what happened next.llance" is up next. francine: bloomberg is the first word for our radio listeners is up next. it is indeed surveillance. join me and tom kean in new york. this is what we'll be talking about, china and the pound and what we saw in turkey with great guests coming up. one of my guests is james and he'll give you a lowdown on what stocks he thinks he is buying and selling off as we count down to super thursday. francine: strong majority in turkey, president erdogan's party sweeping back in power. the lire soars as people ask for stability. banking beat, the e.c.b. reports better than expected profits and investors await whether hsbc will move abroad. the official p.m.i. data shows a slowdown and what does it mean for world growth as we await u.s. jobs later this week. good morning, this is bloomberg's "surveillance" with tom

mr. draghi needs to do more of that and they're import a work force she hopes will boost the economy in the long-term. >> do you think mr. carney has been unfairly given a hard time for raising this issue when clearly you feel passionately about it? >> i think mr. carney said exactly the right thing and has shown leadership. we passed the 1 degree warming yesterday this is about the valuation of assets and he understands that the failure of 2008 was that investors did not take into account all the risks inherent within the system. we know there is environmental risk. are we taking it into account and asking companies to think and are we as investors factoring that into our investment models? >> we have still to come mario draghi. what would you like to hear? there's still confusion as to where we're going on interest rate policy and also on further monetary easing. >> mr. draghi has to say if he wants the markets to be sustainable that he's willing to ease more and pump in more liquidity. in some ways the u.s. is finished. here in the u.s. we're almost done but not quite. they need to do a

mr. draghi and the to sufficient incentive continue their quantitative easing, maybe to expand it. to further cut in rates. so because of that we have a very favorable environment in europe for equities regardless of what happens today. erik.let's bring in erik: as you pointed out it is a fundamental story that is is what is going on. weakening demand in china and emerging markets and a production glut on the supply side. how much supply destruction does there need to be to bring these markets back into balance with existing demand? obviously, it varies from market to market. the situation that was brought to our attention today is about oil. as long as opec, it was pointed out, is not willing to take more serious measures to reduce production, we will not have a reduction in the glut of oil. in this particular case of a the intention is to hurt the suppliers of alternative sources of energy. the are willing to absorb somene in prices for members of opec. but it will vary from sector to sector. it will mean a reduction in supply for some of the commodities, which is already taking

mr. draghi. he has put us on notice that more stimulus is almost certainly coming.u very much, mark barton in london. we have an important statement, p on "bloomberg markets." president obama will be speaking in a few minutes time after meeting with his national security team this morning. ♪ mark: welcome back to "bloomberg markets," live from london and new york. this is the virgin i'm mark barton. -- european close. i'm mark barton. erik: i'm erik schatzker. right now time for a look at the bloomberg business flash. cheap gas is putting more americans on the road for the holiday. americans will travel 50 miles from home this weekend, the most since 2007. the average price for gasoline, $2.14, down $.70 from a year ago. the parent of united airlines's offering was a 15% raise next year, according to people familiar with the matter. it would make united pilots close to the highest paid in the u.s. airline industry. united says it has an agreement in principle with the pilots union. theaters are looking to boost revenue anyway they can when the new "star wars" movie

mr. draghi said recently, he then we have to get inflation of his ugly as possible. really worried about this area and continuing slack in the economy. jonathon: you said almost the exact same thing 12 months ago so maybe it is a sign of more to come. >> he did say the same thing. jonathon: great to have you with us. next, they've just enough the biggest acquisition of the year. so why has pfizer and allergan wallin so much. so much. we will be exploring that next. ♪ jonathon: good morning from the city of london. i'm jonathan ferro. 42 minutes into the session. let us get up to speed. by one full percentage point from leading the losses, travel and leisure down almost 2% on the session. the ftse here in london up by 54 points, down by 9/10 of 1%. similar in the dax. top market stories this morning. other top to the stories. russell has extended its highest level of terror alert into next planwarning i.s. terrace to attack highly populated areas. metros will be open tomorrow. one of the 16 people arrested has been charged in connection with the paris attacks. meanwhi

mr. draghi saying, more qe is coming. then we've got the fed starting to raise rates. think that divergence in monetary policy is something we haven't ever seen before. i wouldn't because it about looking at history as a good guide to what's going to happen. say in fatal thing to any interview, but the facts this time are different and the consequences could be different as well. jonathan: we look at the dollar and the fx market, stocks, commodities. manager, areequity you taking any notice of the fx markets? andy: absolutely. a lot of companies across europe have got either a lot of foreign earnings, or if they are a clothing retailer, they've got a lot of dollar-based import costs . for someone like that, a rising dollar is bad news. if they can't increase prices to you and i, they are going to face a margin squeeze. if you are a european exporter, it is great news for you. you have the choice of earning more profit or taking more market share. jonathan: the execs come on this program. i asked them what are they doing. they say, we diversify because we have such wide

mr. draghi springing surprises. >> and the opposite point is how long will the fed allow a very strengthening u.s. dollar to go on before they intervene and verbally say something? >> i think, you know, they'll be talking much more in their language about the overall strength of the dollar. so not just about the euro. so far the dollar's rally is enough to take something off growth. it's not enough to derail an economic cycle but all of this, the divergence in policy and the div div div div divergence in growth is a slower pace of dollar appreciation through 2015. the bit i'm trying to reconcile is slower pace of dollar appreciation and we have done a very fast move in the last six weeks. >> i have been eyeing the aussie dollar on the sidelines while all of this is going on with the fed and the ecb. you think there's potentially more upside? >> i think there's a little bit in the near term just because the monetary policy has changed. if i have to choose to get a short-term bounce when the fed has finally raised rates. we priced in a lot of commodities weakness and chinese weakness. this has

mr. draghi himself -- those are for most on his mind. have at the moment is a narrow focus on inflation. commodity stories that play into that. at the turn of the year, we will have a different actor. an uptick in headline inflation. does it move the dial? >> i wonder how bigfx will be. i am not an oil expert. i am not a technical analyst. every time i see wti get down to 40 and tried to balance, it does not bounce very much. it strikes me that we have all fields want to go lower and wga -- wti could trade lower. jonathon: manus cranny joins us on set. you have to take responsibility for your own bad calls and decisions. venezuela, they see oil down at $20 a barrel. manus what you have: there is the never ending decline, copper below 4500. whatever word you want to use, there is no doubt about it at this cycle does not look -- i thought your panel was fascinating. one guest said it was time to buy and step down. is that how you make money? trying to be contrary. no doubt about it. there is a series of options. the euro is under pressure

mr. draghi on banking supervision and regulation.e in at 1600 cet time. >> marks and spencer shares jumping after the british retailer raises it's dividend and it's margin guidance despite a drop when it comes to profits. signed, sealed and delivered. shares in japan post a close nearly 30% higher on their first day of trade in the world's largest ipo of the year. >> okay. more breaking pmi figures to share be you. this time services september pmi for the u.s. we're higher by 5.3. 5.33 is the read. so we're still in expansion mode. meantime the forecast is informed because this looks ahead. the october services pmi is looking at improvement of maybe 54.9 or so. that is the forecast right now. interesting. so let's check in on other services pmi data because china is pretty important. china is more of a services oriented economy than manufacturing. more than 50% -- over 50% is now coming from services and we saw that pmi rising to 52 in october from 50.5 in september. there is improvement there. now the reading also supports claims th

mr. draghi but they have dissipated. similar percentage losses for the xetra dax and cac 40. in terms of u.s. futures, a little soft this morning. the s&p 500 off by roughly 3 points. dow jones could fall by 20 points and this is after u.s. markets were down again yesterday off by .3% each and closing at session lows. >> well, i'm very pleased now because we'll be able to round off the show in a really nice way. joining us is the president and ceo at the jp morgan chase institute. welcome. >> thank you for having me. >> thank you for being with us. first of all, what is the jp morgan institute? >> it's a research organization. it's a think tank that's really dedicated to the next generation of economic research. so big data, technology meets behavioral science against very large new data sets that are daily activity and transactions around the world. >> so it's a think tank and what are some of the trends that you're seeing at the moment? the people that you talk to? >> among the most important ones we have started is focussing on what's happening with u.s. consumers generall

mr. draghi had to say was quite drastic. i want to show you what happened to the euro dollar. we dropped like a stone trading back below the 107 level but we're off the session lows now but still off by a quarter of 1%. currently changing hands at 10717. also we saw a big move higher on the back of the dovish comments but again we have come off those highs. the ftse 100 still in negative territory. the zetra dax which was positive is now back in negative territory off by a quarter of 1%. the cac 40 up half of 1%. the comments that we heard were dovish. just to point out a few of them. signs of a turnaround in core inflation, they have weakened downside risks are clearly visible for the economy. >> we saw that drop below 107 and then once again you say just now so it's almost as if the market is anticipating this speech today or it was anticipating after we had the speech yesterday where he said absolutely nothing. >> nothing. >> we were sitting here watching the whole thing from here in london and it was all about banking regulation yesterday. so today we have more and it defi

mr. draghi is saying inflation or lack of it is very clear. we're sitting here at $41.5 in crude oil and fed thinks they're fighting inflation. little nutty if you ask me, there's no inflation, no wage price. how much of the labor was temporary people hired for the holidays and they'll be gone right after the second, third week of january. so i think we need this next four weeks to get a handle on things, and as we do, that pressure will come into the market, and it will flip-flop and somebody says we should weigh the market, will start the other way. back and forth, it's going to be a wild four weeks. >> okay, as people are sitting at home and looking at td ameritrade accounts or charles schwab, you look at what's going on here and you say now we are about to touch the lows of the session, we just did. down 214 points for the dow jones industrials. >> a buying opportunity, you want to know what you're buying. open your window and do the research. do you want to avoid the big caps and the s&p 500? the economy is doing just fine which is a just

mr. draghi: price pressures, such as producer prices remained very subdued. signs of a sustained turnaround in core inflation have somewhat weakened. while theeconomy -- recovery will gradually strengthen the impulse underlining the inflation process, the protracted economic weakness of the past years continues to weigh on nominal wage growth, and this could moderate price pressures as we move forward. simon, if the ecb does, in fact, in december add more stimulus or cut the deposit rate even further, what is the likely impact? what are the reverberations? simon: i think it is the opposite. the dollar goes up, the euro goes down. that would be the easiest trade. citigroup is looking at the divergence as well, and staying the same, a yield curve flattening in the u.s., and european stocks outpacing u.s. once. that would be the play mario draghi would be hoping for -- a weaker euro would help to boost his economy a little more, and augment what he is doing with monetary policy. betty: will there be, right away, again, speculation that there could be more stimul

mr. draghi -- it is very hard to do the ballet of quantitive easing given the lack of real demand.ctly. and how can they counter deflationary pressure? let's get the first word news. vonnie: thank you. an islamic state executioner may be dead after being targeted by a drone. officials say they were aiming for "jihadi john," seen beheading captives and videos. sources there is a high degree of certainty he was killed. the hellfire missiles were launched toward the islamic state. john was shown in videos released by the militants beheading a half dozen hostages. the u.s. and its allies are stepping up attacks on oil fields. airstrikes that started the year and a half ago haven't stopped them from producing and selling oil. the u.s. says it generates millions for the islamic state throughout eastern syria. on another front, kurds are reporting a victory over the militants today. are in control of sinjar in northwest iraq. for the first time in a half century, myanmar is ruled by a civilian government. the opposition was confirmed are in control of sinjar intoday to be the majorin parl

mr. draghi. infinity,oing qe where is he a year from now other than under a stagnant economy western mark --? alberto: we are having a political crisis and the migrant crisis. there is a chance there could be a fiscal response. growth could increase. it's not enough. there is a chance something could go right. tom: alberto gallo is with us. we have good annual review. one of our themes this week is we are in london and then on to paris. it's the co-mingling of economics and investment. in our next hour, l weinberg will join us. we will speak on the remember the. ♪ tom: it is beautiful in london. we had pouring rain yesterday. i was out of that bridge yesterday. i was waving to francine. it was plus three. it's the millennium bridge. it is beautiful. let's go to new york city and here is vonnie quinn. vonnie: it's a little lonely here i have to say. the jailed billionaire has resigned at the investment bank. he was arrested in a corruption probe last week. he will be in jail indefinitely. they are

mr. draghi push the euro down further? what impact will that have on your business?: at the moment, the weak euro is a negative for the industry. guy: for you are the industry? michael: we are in a very luxurious position. we've hedged our dollar capex to the euro. we are in a very strong position. euro isly, the weak probably a negative because so much of our costs are in dollars. so we would like to see the euro recover somewhat. but we are insulated from it for the next two or three years. anna: you mentioned the u.k. markets. there's a big political uncertainty right now because of brexit. is that something you are contingency planning around? michael: you would waste far too much time contingency planning. very important to us, yes. the referendum is going to be very important to ryanair as a business. and to the economy generally. we believe the u.k. should be part of europe. we support the government's position that there's a lot of rubbish that needs reform. so a reformed europe would be a much better market for us all to be in. i continue to believe in the s

mr. draghi sees. this is the most important chart in the world right now.man path -- negative yields and we have taken a new leg down. you have got a negative convexity within a negative space. a negative negative convexity on the german two-year now. vonnie: even as u.s. yields get up to six -- hat i get my dolla dollar in my every time i say convexity. julian emanuel is at ubs. he describes the thoughtful analysis of his notes. russ koesterich will join us a little bit later. what a wonderful intellectual, ater -- do you look as discretewo year to europe or does it say something about the rest of lagarde's new mediocre? julian: it says something about the biggest issue facing markets -- diversions and economic performance, this diversions in asset prices and rats around the world -- and rates around the world. even though the implied probability is 68% for the fed in december, the commodity markets are going to bounce back. tom: you are dead on about this. how do you strap the commodity ghakness over to the tou decision that these fed speakers today have?

mr. draghi has said he will do whatever is necessary at this stage so the market starts looking for moreem. i consider quantitative easing is comfortable best comparable to a type of drug addiction. we went through that for many years in the united states without being able to get off. we stopped qb, but then we had to resume again. now we are at zero interest rate and that has become an addiction. side, mr.opean draghi's went to find out that he cannot get off the situation. he has to keep increasing qb more and more and push interest rates to more negative levels without improvement in the economy or a pickup in the inflation rate. keri: this is keri geiger in your. on whatad a wish list you could ask mario draghi and janet yellen to do over the next 30-90 days and what you think needs to be done in order to kickstart both the european and the u.s. and the global economy in general, if you think it is lagging of course, what would that be? you have a lot a specific use that yellen is behind the curve on this and that drug you should not have been aggressive on qe. if you had advice, wh

mr. draghi did say at his last meeting that they were interested in providing additional stimulus as themy may need it, especially as their inflation target may need it, and i think that if they do see weakness, if they do see the consumer pull back at this point, even if it's short-term, that could be another impetus to keep that expected inflation number from falling further, so, yes, you might see additional stimulus. >> yeah, and, paul, this is probably going to sound a little distasteful because i understand the subject matter but we talk about stimulus, there's direct stimulus like q esmth but you also have remilitarization and if we start to see a ramp up in remilitarization in parts of europe, especially a major country like france, there could be actually a positive gdp uptick because of the money being spent, could there not? >> absolutely. in fact, when our travel team was in europe last month visiting some of these capitals, we heard more than once that they were expecting that just the refugee and asylum seeker crisis would probably prompt brussels to ease some of the restri

mr. president, for facilitating this opportunity for us to put these questions. president draghie welcome, and i recognize --manus -- manus: that was mario draghi making a number of statements in terms of policy and how he sees the word. we return to that as the q&a picks up through the next 30 minutes. in the meantime, let's welcome richard johnson for the first word. nothing terribly new. richard: no, i would say it is a continuation of what we heard after the governing council meeting. i think what was interesting is that we had the comments overnight -- heus: the comments where said the decision hasn't been taken. richard: correct. draghi didn't commit but i thought it was a fairly dovish testimony. gone from 10 basis point deposit rate cuts in december being almost priced, to now where we are fully priced for that. if you look at the curve on the ecb data, the only swaps were pricing in another 10 basis point by september next year. participants,et there is a lot of easing coming before the end of the year. manus: i don't know whether you heard the conversation i was having

mr. stiglitz earlier, joseph stiglitz they nobel prize-winning economist. he said that when mario draghihe will do whatever it over, that only papered the cracks caused by the faulty design of the currency bloc. was savedaid europe by draghi's statement. call "ahat i confidence trick." he said there will be nothing behind that assertion. he goes on to say there's a real risk. the likely they muddle through is very high. joseph stiglitz has spoken. manus: mark, thank you very much. mark barton charting the markets. let's get to anna. she is standing by. chuka umunna. anna, take it away. anna: thanks very much. let's get straight to our guest, mr. chuka umunna, former shadow business secretary. thanks for joining us. let's talk a little bit about the big picture here. we are wondering whether george osborne is going to step away from this commitment to create a 10 billion pounds surplus by 2020. is that going to be one of the big focuses? mr. umunna: that will be a focus. we've got a situation in the u.k. where the public have been offered this ridiculous choice between, if i was to compar

then you have this contradiction with the fed wanting to tighten, mario draghi in the japanese continually -- guy: when do we do it? mr fact is, life changed. we were talking last night about how long this is going to go on for, this low growth world. which, by the way, is tolerable, but the animal spirits -- you talk to central bankers all the time or treasury secretaries or finance ministers, but when you talk to them, you get the opportunity -- none of them can explain why it is that companies are not investing in opec. they are just buying back their stock and when they run out of production opportunity they do m&a. and you lot are to blame. you capitalize the cost energies. anybody who pulls that revenue synergies -- [laughter] anna: thank you very much. martin sorrell, thank you so much. see you on monday. ♪ jonathan: a very good morning to you. with me,on the move" jonathan ferro. let's get straight to your morning brief. we have concern about chinese demand. the u.s. stock future is a mix as europe goes to the open. making a case for draghi. after walking away from $47 billion, there is a new suitor for syngen

mr. fisher speaking. the consensus is december is on. it is when the second hike will happen. looking at fund futures, a chart for the second hike in 2016. despite draghi there would be more stimulus in december. have a look at the hang seng index. before today, it had fallen for five days. today it is the best-performing asian stock market. rising for the first time in six days. has been dragged down by weaker than expected china data. the third worst performing global benchmark, sinking 21%. have a look at the us p yesterday we were talking about the kiwi. the new zealand dollar peter today -- the new zealand dollar. jobs we had some strong figures. the on rate unexpectedly fell in october providing pressure. -- the unemployment rate unexpectedly fell in october providing pressure. swaps prices put the odds of a reduction by june at 50% before the release of the jobs report. they were at 62%. 13% againstas done its u.s. counterpart this year p or check out this stock, wow. it is not every day you see a stock losing a fifth of its value. 2 billion pounds of market value falling. it, by the way, is rolls-royce holdings. we not talking about the motorca

draghi. but tell me how you have stability within switzerland as we go through a sovereign full faith in credit deleveraging? hans: you are absolutely right. am much closer to what mrglitz has to say. but this is force used for funding purposes. but the balance sheet of swiss banks became too big and therefore you have to move close to parity. land, it can create a significant problem. therefore, the process of normalizing is so much more difficult than the process of adding liquidity to the market. tom: thank you so much. what a treat this is. will be here later today. mr.nt to talk to him about packard. what a time to talk to him. with a new business plan in hp. look for that later today. ♪ francine: welcome back, this is "bloomberg surveillance," i am in london and tom keene is in new york city. it is a good time to reflect on what china's president has been saying. policymakers will accept slower growth but not much slower than 6.5% that we have had so far. so what that means is what we are trying to figure out. the vw scandal is widening. they have widen the --estigation to include saying that they have altered their system. hans redeker has joining us from be

mr. vinci securities -- from mitsubishi securities. up next, we will run you through everything you need to know for the start of the trading jay -- trading day. mario draghiin frankfurt. what clues might give about race. ♪ . . . ♪ (ee-e-e-oh-mum-oh-weh) (hush my darling...) (don't fear my darling...) (the lion sleeps tonight.) (hush my darling...) man snoring (don't fear my darling...) (the lion sleeps tonight.) woman snoring take the roar out of snore. yet another innovation only at a sleep number store. the: draghi's dilemma, will ecb president drop hints about policy as he speaks? we hear from him in an hour. the french prime minister says the paris killers use the refugee crisis to slip into the country. this war will be long and we need to be ready. but we will fight, absolutely. ipo: and going dutch, an as the3.3 billion euros government recoup some of the money that is spent bailing out banks. welcome to "countdown." i'm anna edwards. the second hour of the program, just after 7:00 here in england. the futures markets suggest we will be fairly flat at the start of european trading, european stocks expected to be down just a touch. not much of a mov

mr. constancio. how concerned are you about risk? marvin: i think risk is reasonably priced at this stage. a goodk they have done job of telegraphing where they are going, certainly at the ecb. president draghin clear about what is going on. continuing to emphasize that while they do see lebron markets given the downside of inflation that they have experienced, it will be a very slow and gradual process. that is what we should expect. emerging markets are more concerned on themselves. emerging markets, not all of them, but they are concerned about outflows. i know we have known about the fed hikes, but it will catch some countries by surprise? somen: it may catch companies by surprise. most of the foreign debt is corporate debt, unlike in previous episodes of foreign market -- of emerging market distress. in the case of china, where a lot of the foreign dollar debt was held, they are holding the women in the -- they are holding the run and be -- they are holding the stable.cally you cannot discount there will be an odd corporation that has not prepared well. tom: a rather grim view on 2016. equity sachs with a flat view as well. is currency is the only place to play at next year. is the only