authorizes air strikes. strikes would be against islam militants. he will not send in ground troops. lower, and u.s. futures fall. china charges ahead. surplustry's trade surges ahead. welcome. i mark barton.

we have breaking numerbers. beatenquarter has estimates. analysts were estimating 2.5 billion. that is for a target operating euros of 9.5-10.5 billion . last year was 10.1 billion euros. this is the big insurer. it is involved in asset management. it is all about pemco. >> the biggest in the world. >> bill gross has been under scrutiny team. his management style. >> they are not the most harmonious. >> and now he is chief economic advisor.

they are all intertwined. has had withdrawals in july. the smallest monthly redemption since they began in 2013. the redemptions have lasted over a year. i yesterday afternoon, tweeted a pimco tweet to buy bonds. someone said when you have long bonds there is one thing to do with the market. >> they get teased about that. >> it is their business. >> outflows of pimco continued to slow. yes we have had outflows but they are continuing to flow. >> particularly in the united states it has been a volatile investment. >> it includes the global business, allianz as well.

down it is better than expected. they have confirmed that as well. the u.s. president has authorized airstrikes against militants in iraq and the humanitarian operation. >> today i authorized to operations in iraq. targeted air to protect american humanitariand a effort to save thousands of iraqis civilians who are trapped on a mountain without food and water, facing certain death. >> u.s. planes dropped supplies close to the syrian border. 50,000 people have been stranded there after advances by the militant islamic state. president obama says the u.s. will proceed with the strikes against islamic states if they

moved toward the kurdish city of erbil. >> that is the geopolitical situation. let's move along in terms of markets. we are seeing equity markets come under pressure during asian trading. there are no airstrikes yet. just those humanitarian moves. futures are lower. we are seeing the s&p almost wiping out 2014 gains. they are below the 100 day moving average in the u.s. session. you mentionedets, how tough it is for bond. lowest levels and almost a year. bonds arising for the third successive day. bonds in europe, two-year yields going below. >> a haven. >> absolutely. that exit us is overdone.

nickel volatility. seeing a move on the markets. and moneythe dollar, going into the yen. >> overwhelming a good set of data. jobless claims falling again. taking front and center, geopolitics has taken the markets. russia. deal with we could deal with the middle east. suddenly with obama making that call, that has thrown tensions overboard. people want to be selling. >> one of rare occasions when a strong figures of china surging to a record in july. >> are the fact that imports are dropping a bit of a worry about

the domestic side? china is about balancing and purchasing goods. they are not doing it from a broad. >> that is one of the biggest issues. one of the commodities is the euro market. we have west texas engineers. said, these air strikes will happen. if there is further progress by the islamic militants a majority of oil production is not imminently threatened. that doesn't stop the commodity speculator traders jumping on it. the country releasing its trades. how big was the surplus? to $50 billion. in one month. imagine that.

we are talking about a bumper harvest in terms of economic numbers coming out of china. you look at exports. that exploded. year, 14%. if you put a number to that, $210 billion worth of goods shipped out of china. just in july. we did see a slight drop in imports to 165 billion. you put everything together, north of a 47 billion dollars surplus. which country imported from china a lot? they have to ship goods abroad. but we did -- which received the biggest increase? mind ahe majors, keep in third of the china exports go to the u.s. and to europe split equally between the two. we saw a 10.5% jump in trade. 13.3% jump with trade into

europe. you look at the amount of trade between the u.k., that is up close to a quarter. 23% year-over-year. it is about helping boost sentiment. shanghai is the only market that is up. >> there has been some deficit news and inflation data out of japan today. >> es. , a currentficit account deficit. 3.9 billionxpected, dollars, close to $4 billion yen. what they did was expected of them. what is worth noting about this is they have singled out this fairly weak export and production figures. both of which showing weakness.

it shows how easy it would be to derail this progress we have made from japan if they rely solely on exporting out of this. this morning we got comments coming out as far as inflation is concerns. the boj said expectations appeared to be rising. everything is rising as a whole. before we started talking, markets and japan are taking an absolute racking. we are down close to 3% because of safe haven trade. there we go. down 2.7%. back to you. >> see you later. >> geopolitics is being felt across industries. is straight from russia and the ukraine tensions. the last numbers, it is easy to

assume they may be hurt again. is that too easy an assumption? >> it's an easy something to make but an accurate one. , inel has a joint venture travel agency groups based in russia and the ukraine. many are becoming more passionately nationalistic. if you are looking for more russian goods perhaps you're looking to travel less. it is an interesting business. see did seeing -- they did an operating loss. largely it was the unrest in egypt. we are seeing it spread. political instability in theland, tel aviv, not destination of choice

considering the gaza strip. all of this is going to feed into areas that you want to travel to. they have promised a strong summer. when they came out with previous numbers they say they had strong demand for all-inclusive holidays. we really want to dig into this beingy as how they are affected by russian and ukrainian sentiment. they are merging with tui, the german company. tui's largest shareholder. a russian billionaire. alexi mordeshov. we're going to be feeding into all of this. a trading environment has been challenging. >> because of the tourism sector, the combination. >> nearly 14% in terms of price action. it is accelerating at that point

in time when you solve the conflicts earlier in the year. , sevenu have here it buys, 43% of the analysts we surveyed. they are waiting for this second set of data. only 6% have it. 16% up-to-date level on the 8.7% on the year. >> we will have to see how much that deal with tui will help. 18 million euros. how much this is being impacted by the russia and ukraine. >> coming up, russia retaliates. could it backfire? president putin response to sanctions. will it lead to russia's isolation? could russia survive on its own? ♪

>> welcome back. time for the company news. malaysia airlines will be d listed after silver and wealth out,offered to buy

suffered two major disasters this year. some of finland's biggest exporters are in survival mode after russia unveils its food imports. the ban on dairy and cheese is exacerbating finland's second recession in 2008. sam walsh says the world second largest mining company it's on its way to becoming a cash machine. a rise ined dividends. cash machine.s a it enables you to make material increases. that is good news to the organization and investors. crank crisis over the continues to escalate.

vladimir putin has banned food eu and in response to u.s. sanctions. how vulnerable is the russian economy? can it survive? we are joined by a man who predicted the crisis in 1998, john paul smith. they keep. theare structural bear on russian economy. you tould it take for change that? view on's a structural russia. it has been negative on the russian equity market. the reason for that is primarily governance driven. the expansion of state power among which has had advance -- negative consequences. viewsare more technical which looks closely at the level of valuations positioned in the less bearish on

russia than i have been for quite a long time. it has nothing to do with the series of vents in the ukraine. the market has been sold off to a level where you have a dividend yield on markets approaching 5%, which is similar. foreign investors have been driven out of the market. >> where are those opportunities? the you look at not so much food, but the closing down of financial activists, where do you see value with that on the landscape? >> it is over the short-term and the medium-term, the russian economy and rush incorporates generally think they can cope well. sufficient domestic liquidity around. if you look at the hex reserves and the sovereign wealth funds, there is cash available.

there is the potential for putin to put in play stronger measure to crack down on ball flight -- capital flight. you have seen trapped domestic city of markets. it is possible at some point the market will recover largely because of domestic problems. if russia goes into a more mode, andy autocracy technological help, that will have a serious adverse effect on the economy in the long term. investorsdvocating put money into rush on a long-term basis. i think the possession is bearish. but for those with a rush and their benchmark it is a difficult call. >> there has been talk about the

dtb bank being removed from the in sbi index. weyou remove these stocks, would see mass outflows. do you think that is a realistic threat? providers have to construct their indices on the basis of liquidity and people's ability to buy. ,eople's ability to buy stocks they will have to take them out. more active investors run the decisions by the index providers. money that has come out already. stocks are so cheap. i'm skeptical that that isn't already priced in. it shows the folly of benchmark investing in emerging markets. normally when the markets are at their cheapest one they have just been relegated from whatever index they happen to

have been in, it is normally the time that provides the biggest buying opportunity. the hedge funds who have or flexibility to invest in those situations into making money. we sought in argentina and greece. we saw it in argentina and greece. >> do you think they will be relegated? >> i don't know. they do consult on these things. they have signaled what they might do. it is difficult to preempt what their decision may be. they are going to provide indices which still include russia. if you are an emerging market investor i'm not sure what [indiscernible] >> john paul smith. domestic market strategist. more on turkey elections this weekend. a strong china and date today. ♪

>> welcome back. we're rejoined j.p. smith. talk about china. we have just had significant trade data. exports are up more than have been expected. imports are decreasing. is that a worrying? it is difficult to analyze

china. the data tends to be lumpy. the trade data is distorted a lot. economist. i need to get back and read through what people think about this data. u.k. figuree, the was a 25% increase. that is a big number. the u.k. is the destination for capital flow. a be there is distortion in it. the big picture with china is that while we have seen as the financial markets and the economy is this manic sentiment from investors, and the broader financial community, who go from euphoria to despair. we have seen that cycle this year. he polluted china as a sanguine. -- we saw china as sanguine. now we are approaching a

euphoria again. i look at china on a structural basis. i think what is happening there cycling is getting shorter and shorter. falling.ity growth is a growing proportion of credit is going to companies and local governments and towards economic projects and enterprises. on the other hand, there is a lot of foreign domestic investment that can be recycled into the economy. it is a really difficult call. i've been underway in china. one risk with china in emerging markets is the dollar rises. when the dollar rises it sucks liquidity out of the market trade. last year you had the fragile five economies. china was not one of them. it was a safe haven.

this time china is more dependent on foreign flows and it has been in terms of corporate bonds and equity financing. smith, more on the turkey presidential elections, next. ♪

welcome back. it is time for a quick look at the morning exchange. the euro did most of its work yesterday. we will kick off with rem -- doll keeps this on the exchange. strategists are raving the yen forecast. fiveedian view is one of

-- 105-107. it is not as aggressive. 101.ollar yen traded let's have a look at the euro dollar. if you look at comments yesterday, what he is trying to achieve, perhaps it is doing it for him. 1.3360. job owning seems to be the consensus. his takeaway is this. closelyve easing may be on par for us and not just restricted to asset-backed. keep in ion the dollar. >> these are the bloomberg top

headlines. the u.s. president authorized airstrikes against militar -- militants in iraq. dropped aircraft also supplies to iraqis trapped by the fights. iraqisier this week one cried there is no one coming to help. well, today america is coming to help. we are consulting with other countries and the united nations who have called for action to address this crisis. like the announcement of airstrikes and uncertainty causes stocks to draw. climbed.ces u.s. futures are lower. shared arime minister security summit to discuss the

military in iraq. he is expected to win the election. ralliedic market when he won in march elections. on who getsill vote the job. the outgoing prime minister is expected to win. he is cementing his political aspirations. idea of hisnt an ambition, look here. building equipment shovel tons of ash making way for the newest airport. her team billion dollars, one of the biggest airports in the world. one of three infrastructure projects planned for the country's centennial celebration in 2023.

the plan for turkey to become a regional power. >> this government needs infrastructure projects. turkey gdp will accelerate. in the what was the case last 10 years. that will be the case in the next 10 years. these crazy canal projects. there will be many. >> not everybody is happy. s say they have been offered a price for land below market value. they were afraid of repercussions of speaking on camera. last summer a wave of protests erupted across the country. a standoff over the future was met with policeman and tear gas. claiming all social media was a menace to society he tried to

silence online criticism by banning youtube and twitter. to vote this weekend, we will see if his ambitions will give them the residency and secure five more years in power. >> let's take a closer look at the man and what the prime minister said victory could mean for the politics of turkey. by anthonyed skinner. thank you for joining us. you are saying it is a foregone conclusion he will become the president of turkey. what then? does he solidify the polarization? >> that is widely expected. he will perpetuate the polarization we are witnessing currently. it is reflected in ambitions to sweating president, a

president who is hands-on. he will draw on the powers invested in the 1982 constitution which allows them meetings andbinet have a great role in policy. he will exploit that to the maximum. he will exploit other powers that are best in the presidency which others have used, appointing members of the constitutional court. it is the last check on his power. we are going to see a fully fledged presidential system moving ahead. he wants to adopt a new constitution to further solidify the grip he has on turkey. >> he's going to change the constitution. how likely is that? >> that's a good question. it depends on the parliamentary elections in 2015. if we referred to the march

received 46% of the votes in march. and, in addition to the fact that we expect the kurds to cast not inote for him, it is the first round of the presidential elections, a certain portion of the kurds would. there is also a kurdish candidates. he is not going to pass the first round. they will cast their vote for him in the second round. that is 67% of the total vote. forward with the bid to reform the constitution to adopt a new constitution, that would be subject to a peace deal. has onthe grip that he communication, you saw at the end of the piece, trying to ban youtube and variety of things. he has a hold of the this teat

-- he has a hold over the state media. his nearest opposition has had three minutes and 40 seconds. .hat is a vital group >> he has taken advantage of his post as prime minister. during his rallies and communication, you promote his president, he has solidified his grip over the media. it's a fundamental difference in style. campaigns,ig critical of the opposition. the other is a moderate. a keeps a check on the government, which is not polarizing. >> if we look at what he has achieved, the per capita income has risen to $10,000 under his leadership.

why, thenderstand average growth rate is 5.5%. i know it has tapered. he has all of this behind him which makes you understand his populist appeal. >> absolutely. he has achieved more than any other prime minister in turkey's history. this is a fundamental point. now the size of the pie is shrinking. turkey cannot rely on the same growth levels that it has during the first 10 years. individualsngphoto advocating sensible policy. >> what does it mean for europe? >> i would say that relations between europe and turkey have been fraught.

certainly because of the protests of last year. then, he promotes himself and rides off this populist appeal that he generates by being extremely critical of the external players, including the european union. concerned about the erosion of judicial independence to the extent that has existed. >> will the economy shrink if he wins? >> the economy is projected in any case to witness a certain amount of growth, 3.2 percent this year. next year, a contrast with 5% registered over the first 10 years. the key point i would say is his drive to remove the sensible individuals around him, like the deputy prime minister, responsible for the economy from

his inner circle. he has brought individuals, a hothead and a lackey and has interest over the policy. the central bank is under significant pressure to cut rates. >> they have cut rates three times in recent months. what does that mean for inflation? inflation is stubbornly high. >> that is the concern. the governor of the central bank has put up resistance to the drive to cut interest rates. he has relented. the concern is that he will be replaced and have a yes-man installed to the head of the central bank. that would be negative for turkey. like thank you. -- >> thank you. >> coming up, i get fishy.

inside the sushi empire that spans across five continents. this man is a blade cutter. ♪

>> welcome back.

british investigators linked to bribery allegations goes on trial today in shanghai. christine hot is watching this for us. what has been going on? actually just come back from recess 10 minutes ago. the session has just started. we haven't heard much yet. far,e morning session so the prosecution has started questioning of peter humphrey. humphrey has said that he did not buy information. fees tofees, service companies to obtain this information of citizens, which includes data of citizens registration. he stated that he paid anything from a few hundred to a few

thousand yen for services. cases, they were mentioned during the morning, one of them mentioning nine instances where citizens information including registration was obtained. humphrey said that was a year-long project, 4-5 years ago which could be significant. the law states that it is illegal to get citizens information on city registration only came -- only became illegal in 2009. this morning, they are going through the facts of the case. -- theepends on what direction the case goes this afternoon. a should be able to hear summary of what has gone on today. >> christine, thank you. japanese have been enjoying sushi for decades.

-- for centuries. in recent decades it has been enjoyed around the world. a sushito asus see -- genius. sushi is a traditional japanese food with an international appeal. arehe west few associated with it more than this man, nubo. he went from chef to entrepreneur. he opened his own brand of restaurants in new york one years ago. he was backed by a hollywood a-list business partner. >> when was the mama you said i trust him? [inaudible] the first time he said no

thank you. after four years he asked again. a big star. but now i can trust him. he understands my philosophies. gave birth to an international business. 32 restaurants in 28 cities. it hasn't all been easy. i opened it alaska. maybe i didn't give up. i like to try my best. , hevercoming this setback became a celebrity sushi master and a las vegas hotel owner. why do we not do a hotel? what happens in vegas doesn't

necessarily stay in vegas. >> the second one is coming this year in the philippines. and saudi arabia. >> for nubo the skill has been turning raw fish into raw success. youe didn't get to see eating any. were you a master with chopsticks? >> if you go online at bloomberg.com, you will see me deal with chopsticks. he creates the most perfect piece of sushi and lifts it up to the light. it looks beautiful. then you see me mess it up. >> did he frown? what, he is such

a gracious man. he has gone through so many. says of the ultimate ties in life -- ultimate-live to the ultimate lows. to see your business literally burn in the ground in front of you. they suggest that i knit downstairs to the bar. i didn't stay in the bar for long. we had a mild discussion about sushi. >> was a your dancing? >> i thought it was quite good. since iting to nubo opened. they are also on greek islands, all over the world. he is the most gracious man.

hear his relationship with bobby deniro. to new york time and time again trying to convince them to do this. eventually he did. i think, when you have so many crushing moments, trust was something that came through. when he did the team meeting with his staff that was amazing. people have been on the team for --since the restaurant opened. >> amazing. they are a direct rival of the hassan group. they have been looking to go to las vegas as well. what --e --you can stop you can start with one restaurant between brenda is international. >> was that orange? >> that was orange.

there are a range to be had. >> hopefully a different food locations. >> as we go through the seasons and various food experiences, no cardigan. [indiscernible] you have the cuff link of the day. he is nick named cufflinks. he has such an array. they are completely classy. >> i have to announce something. this is a very special day to the person to my right. if he is looking one year younger there is a reason. [laughter] help.ave to have a bit of 13 nine is a vintage year. -- 39 is a vintage year.

>> we are talking golf and those stories next. ♪

welcome back. on this auspicious day, what is your newspaper selection? birthday boy. >> i have to take us to a

serious tone. i love pictures. this is a really stunning image being used on the front of "the independent ukraine." storm clouds gather. a young protester in kiev. it just says it all in terms of where we are. thene can forget as sanctions are applied by both parties that the fighting continues. that is easily forgotten. it is a great day for english sport. england bowled out india for their run. is leading in the pga. we thought it would be mcelroy. good news for northern ireland. >> not so good news for the scottish vote.

we have these celebrities rolling up to say stay with us. mick jagger is among them. celebrity montage saying it is better together. >> who will face it today?

>> obama authorizes airstrikes. he says the strikes would be against islamic militants but he will not send in ground troops. the news sends equities lower. china charges ahead. the trade surplus surges to a record.s exports hit a welcome to "countown," i mark barton joined by manus cranny and caroline hyde. up 21%.ting profit

92 million balance -- pounds. ourselves, tuind venturer in joint russia and ukraine. they did promise a strong summer. we have had a strong summer. group revenue, 3.8 billion pounds. clearly a strong third quarter. this is a company that does not seem to initially be hinting at some of the concerns. that was unrest in egypt put off travelers. they are looking to sell a lot of all-inclusive packages. those are big bucks. better premium with those. as we come to recovery, i traveled in june and have never

seen as many people traveling then. >> packed in mykonos. >> it was 80% occupancy. as you come into recovery mode, in terms of the price and -- pricing structures, whether that still holds up. >> you are right. they say they are delivering the rosacea to deliver that similar to that achieved by a u.k. business. they remain seized with the summer trading. the higher average selling price. a better overall. u.k. and germany, up 17%. >> down slightly in germany compared to the prior year. we have seen a significant increase. this is in germany. berlin, that probably

helps. onlineholidays and bookings up 30%. they have managed to focus in on the way we like to book holidays. tui coming story, together finally. >> is for next week. >> that became derailed. >> 50 say -- 54% held by tui. >> they have been getting around each other. >> whether they would merge or not. now they seem to stack up. in the chief said, i get on better with the head of two-week travel -- tui travel. willing to come together and make synergies. savings.n pounds of

u.k.en they combined the unit with first choice holiday, that is when tui travel came into existence. 13% on the year. interesting when you look at the likes of --. 11%. -- down 11%. the slow erosion of value for tui travel. issues.ng down over 7% for thomas crook. >> there was a russian link. a russian billionaire linked to the parent company. >> he is the biggest shareholder. a billionaire. interesting how that plays out. they have delivered strong

results in the year to date, online holidays continuing to grow. strong trading. trading environment got better according to the commodities space. more competitive. airline capacity continues to increase. in sea be profitable growth. outperform the markets. no nervousness. beside that, i cannot find russia anywhere in the statement. let's talk about what is happening in iraq. u.s. president obama has authorized airstrikes against militants as well as a humanitarian operation. >> today i operate to bank operations in iraq. i authorized to bank operations in iraq. a humanitarian effort to save

thousands of iraqis. u.s. planes dropped supplies to iraq. fighters.hreatened by been strandedhave there after advances by the militant islamic state. president obama says the u.s. would proceed with the strikes against militants if they move towards the kurdish city where the u.s. has diplomatic staff. >> bo xilai top headlines -- those are the top headlines. u.s. equities lower. looking at the threat of obama in gauging. -- engaging. no boots on the ground. s&p also on the move.

equity markets, the second straight week of losses. i have blown my theory out of the water. >> one on the half days. dip -- pleasel give me room. let's have a look at the bond yield market. know inng you need to terms of perspective of risk. if you set the bond market rally was over, this is the very picture you want to look at. >> is all about finding that haven. threatting at takes the to focus minds on political risk >> the sanctions did not do it. we can look to the index that

is the broadest gauge for global equities. it has fallen for nine out of the last 11 days. not just iraq. it has been subtly creeping down eadily creeping down. in the last two weeks. the peak was in july. for a month, we have been off those highs. >> let's have a look at european equity futures. glenda down 44 points. paris down 38. the dax down. despite the china exports rising at double the level. thatyn flag the fact imports have it performed as well as expected. it oil rising despite the the oil is ishere to the south. >> will -- mario draghi highlighted geopolitical risk

for the euro zone economy. >> he focused on emerging-market risk which is tied to the u.s. in terms of youth. fragileweak and recovery in the u.s. >> no trigger point. what is the external shock? how big does it have to be to trigger this unleashing of qe? a stimulus to the european economy? dip, are going to have a more than a dip. you could use the word slide for equity markets. markets atck the fx 6:30. >> china releasing data. a good -- david glisan hong kong -- david in hong kong. how big was the market --

surplus? >> you look at how the math works out. exports exploded. on top of the 7% increase from the previous month. look at the amount. 210 u.s.ng, north of dollars. -- to 10 million u.s. dollars -- $210 u.s. -- went up want up higher than average. the makes up for why we saw drop in overall imports. you put them together, north of $47 billion. it is about the reflection of the state of external demand for china.

the major trading partners, u.s. and europe. them,lit that between more or less. you saw a huge pickup in imports china in the u.s. and europe. you look at double digit growth in terms of trade increase. a 13.3% jump of trade in europe. germany was 13% higher. the netherlands up 15%. 23%.uki -- u.k. up was an see why there bumper harvest. >> a busy day in japan. with the boj keeping policy on hold. they did comment. what was different about the boj this time around, they were expected to do nothing anyway. they had a rest. -- they had record stimulus as is.

did did, and -- they comment on the wiki data we have seen. the productivity numbers. we look at what they have said. they are striking a note of caution. inflationcommented on which they have said appears to be rising as a whole. you look at the data we got this morning. the current account deficit. ¥400 billion. those close to -- reflective of how vulnerable the job -- recovery is in japan. you have the downward pressure on the yen. it is about save haven, which is why we are seeing the yen strength and purity story has been the markets in japan getting hammered down 3%. back to you. ingles inenlace --

hong kong. >> we speak to an investor to help us decide where the quality lies in equities. back after the break. ♪ >> welcome back.

i am manus cranny. time for company moves -- news. asian airlines will be delisted. first agewill be the in restructuring the troubled carrier. malaysian airlines suffered two major disasters. some of finland's exporters are in survival mode after russia import ban. they halted production lines. and the second largest mining company is on its way to becoming a cash machine. rio reported a 21% drop in

earnings and raised dividends. an 18 month cost-cutting drive is starting to bear fruit. >> this doesn't able for you to for you toes enable make material increases in shareholder turn. -- return. it is good news for investors. markets --al stock you should continue to invest in equities. according to our next guest. days, thee last 11 world index is down 4%. time to get worried? >> i am always worried. i look after people's money. it is sensible to be concerned. is it unexpected? no. it presents more opportunity than threat.

that opportunity will grow. >> when you say it is unexpected -- sorry. three years of disaster being predicted. we have -- >> are you surprised the market did not start to shiver earlier? the fact that now it takes obama grandstanding about iraq to up the ante? the search for havens seems to have wrapped up. >> you never know what was the straw that broke the camel's back. whether it is obama saying he is going to start having airstrikes, whether that was the final moment, i was astonished that the lack of reaction to when the airliner came down. for me that was clearly an escalation. the russian sanctions, the choice of puritan -- a prudent

to go to it for tet -- vladimir putin to goat kit for tet -- top for tat. that is unexpected and has real cuts which is for european countries. >> are we just desensitize to -- desensitized to proper corrections? is theremore downside in terms of corrections for the european markets? i would thinkly, you have the opportunity for significant further correction. not that these are bad companies, i just think your desire to pay 25 times earnings may suddenly become a desire to become -- pay 20 times earnings. the stock price goes down. >> you have said there will be

no armageddon in the bond markets. of course they are going to pump their own twitter feed. which said time to buy bonds. >where are you in that debate in terms of bond markets? if you look at the futures, they tell us the world expects base rates in the u.k. and u.s. to be at the 2% level in two years time. raise interest rates to slow down asset bubbles? there is no real asset bubble. we don't have it inflation. the likelihood is rates will remain, short rates will remain very low for next and did time. -- an extended time. >> you are saying they should only raise them five basis points. >> i think maybe they should do a token. >> do you think the bank of

england will do that? >> i don't know. i am not a banker. i say, go visit my friends in japan. there are people who have been waiting 20 years for the bank of japan to raise rates. , russia, ebola, they have the capacity to completely change the landscape of rates and perception. >> absolutely. which is why i'm saying no bond armageddon. you look at what is happening on the streets, people are buying suddenlyonds because 2% does not seem shocking to read >> will they continue to rise? will we see prices rise even though we understand eventually the u.s. economy is improving and they will wind down -- increase rates and set of tapering? >> i have been doing this for 40 years. i have tenure on, tenure off. 10-year on, 10-year off.

we are at the beginning of a 10 year rising.time . but it will be a while before it is meaningful. >> we will be back. ♪ >> welcome back.

investmentn the director. orator.aghi, the master you say you are filled with admiration for him. he is succeeding. it is not a debate whether europe will survive. euro is the drop in the more to do with the dollar than druggy -- draghi? today, itu are seeing is a testament to success. no one is worried about the euro dropping. >> is it rate differentials? >> is what we were talking about earlier. the flight to quality. the eurozone.

the frock withs, russia continues, that is uniquely bad. >> why aren't you sold on digital? >> digital media? >> you say some song -- sa msung -- >> what i'm saying, i don't know how to value them. i use twitter. i think it works and it has changed the world. >> how do we value that? company 100 years ago changed the face of the world. >> tell us what you are going to say. >> we will leave it there. any money. made every city we are in has the elevator. >> thank you very much. summertime, a big travel season.

what are the impact of the geopolitical and global health challenges causing? peter morris joins us to discuss, next.

>> time for a foreign exchange check. yen on the back of the geopolitical issues we have. obama says he is ready to launch airstrikes in iraq. money going into the yen. the overall risk sentiment.

analysts are raving their forecast at the fastest pace. that is down from 10 seven. still a decline but not as aggressive as originally thought. they are calling dollar yen at 99 by march. the reason we were talking about the euro, that is what i pulled up and it caught my eye. it had been declining through the earlier hours. what you have are german -- june experts from germany rising. this is a little bit of a better piece of news. trying tomario draghi job own the currency. expect more than just qe. restrictedoing to be to securities. that took the euro lower. policy divergence and a weaker

currency all about helping policy being ended forward. the euro turns it around on the back of german data. authorizedbama airstrikes against militants in iraq. he says the strikes will happen if militants threaten u.s. personnel at the kurdish city. dropped aircraft also supplies to iraqis threaten the by the fighters. >> one iraq he cried to the cried,-- one iraqi there is no one coming to help. we are also consulting with other nations to address this crisis. . >> the announcement of possible airstrikes and uncertainty in ukraine caused asian strikes to drop you created -- drop. onkish prime minister ariel

security summit with his top generals to read turkey denied injuring iraqi airspace. he's expected to win the presidential elections. the market rallied after his party one in march -- won in ma rch. >> when turkey goes to the polls on sunday, it will be the first time in the nation's history that people will vote for the president. joining us from the stumble -- from the stumble -- from istanbul is a reporter. >> the prime minister is expected to be the first directly elected president. his comments have set off alarms

who say a more authoritarian him is anchallenging academic. the joint candidate of the two main opposition parties. representing the pro-kurdish democratic party is another candidate. as candidacy come as challenge to the prime minister. it has been phenomenal, the amount of air time given to the prime minister throughout the race. amountachieved a fair economically. >> that is right. during his 11 years in power, turkey has seen rapid economic growth with gdp trickling -- tripling. doubleon has fallen from

digits to single, allowing many turks to buy their first homes using a mortgage scheme. >> thanks so much. i know you will be there covering the whole thing over the weekend. the repercussions monday. let's move things on. we want to look at trends in the travel and tourism industries. are we to discuss, buying or spending more? what is sentiment like? peter morris joins us. travel coming out with numbers. this is a company with a joint venturer in russia. but bookings and profits are up. >> it is fragile. at the same time, it is robust. individual destinations and situations can cause people to switch.

ultimately people travel, and travel and tourism minister and himp -- travel into her is tourism is driven by a gdp. some economies have been laggards, like pain -- spain and portugal. >> that is where the robust comes in. if you look at the ones that have been growing at nearly double digit levels, it is spain, portugal, and greece. with the competition for getting euros, spain and portugal have said, what products have we got? travel and tourism. those are the things we can discount. >> the discount airliners are adding capacity. that will be a feature. that is good news for the traveler, in terms of resumable he -- presumably seeing

competition. peopleare seeing traveling in currently -- traveling internally. the forecast must be around 5% -7%. northern europe and southern europe doing well. western europe, not so much. if -- particularthere are geopolitical risks and areas. is it egypt and the middle east that will be unattractive as destinations? everyone's not on top destination. who will be the losers? >> you mentioned previously the kind of benchmark of the euro. as a key factor in terms of the flow of travel and tour is him. -- that is a key factor in terms

of the flow of travel and tourism. how much the pound or euro will buy in terms of travel and tourism >>. that's what i mean about the robust side. they switch to the destinations less concerns -- where there are less concerns with health the political situation. evidence, and carolyn was mentioning this in earlier, people within countries like ukraine and russia try to -- tend to stay at home. is that happening? middleou look at the east, you see a decline of 5% for travel. a time of war, anybody from flowing to and from made money.

but few people did fly. you see the scarcity and the need for migration. 17, whatink after mh you have said is referring back historically. post mh 17, do you think that will be the same? airlines are not prepared to take the same level of risk? that seems to be the new rhetoric coming from them. crocs i would harp on about the economic side. pay passenger would have to 15 pounds extra. divergence come in, and russia closes its airspace, you would see the costs going up a lot. >> how does the geopolitical conflict there? -- fare? is it just annoys or comparable -- is it just noise or comparable to five or 10 years

ago? it byever discount saying, it is just annoys. it is scary noise and people don't want to take risks when traveling for business or pleasure. you see people taking the thing that is good value and does not have a risks. countries that are set to unfairly lose out because of the current situation? the fact that we have a state of emergency for ebola? as ad that taint africa continent? >> it is small on the scale of things. if you look at the big tour is him close, it is within europe. northern europe to southern europe. that will not change unless the cost of traveling to spain and italy and greece went through the roof. while that remains competitive,

you will see mass migrations. the niche markets will change. whether or not the buy will be affected -- dubai will be affected, that is readable. -- debatable. but the noise is getting louder which is what concerns me. >> think you for joining us. an aviation consultant. >> coming up, no more staycation for the brits. than least less anticipated. summer bookings. can the good fortunes hold up through the winter? more on the travel company's earnings next.

>> the financial and his solutions -- the financial institutions this boast -- that are exposed to russia, it is hard to assess what the actual impact will be. with sanctions on one side and counter sanctions on the other side. was mario draghi

speaking at the news conference yesterday. he said the risks of recovery from conflicts including the ukraine are increasing. time for today's company news. is pursuing an alliance with of any. -- vi vendi. vendialks could lead to vi taking on significant stock. talks were underway. losses were bigger than expected for the second quarter. add loanped up provisions as italy fell back into recession. eurosaised to 5 billion in june to reinvest. reported earnings that missed analysts'estimates.

they are struggling in the transition from print to digital. they split from rupert murdoch's fox entertainment a year ago. >> let's look at corporate news. reported earlier this morning. they are doing resolutely well. what about the global tensions that are meant to be hitting us? this is what i am digging into. put russia in the statement or not? >> this is a company with a joint venture with exposure to russia and ukraine, no less. and travel operators four tourups. -- operators and travel agency groups. iny said egypt had hurt them

the first half of the year. the first quarter, they said, we are up. they are pleased with the summer trading and also the winter bookings for 2014 and 2015. a strong start for the u.k. germany and the u.k. is where the company has dominated. germany and u.k. economies looking peachy right now. spending our stronger british pounds >> they are saying over half the sales were online in the third quarter. big increases. from 34%. >> that shows you where we are. buyers of trucks are better equipped. they are better able to transact, both physically and online. >> one other company i am almost fiveye on,

price target cuts. company.an luxury profits down 14%. missedave fallen and est we had toi questionmates. . a lot of the sales are at home. cash in from tourists. european travelers will be going to the south of europe, italy, portugal, greece. >> that was a sentiment that came through. almost, geopolitics. ebola. at the end of the day, it depends whether you have more money in your pocket. perks prop -- >> profits rose in the second quarter by 11%. lower national -- natural

disaster claims. the unit which everyone is interested in. the pimco unit. it's split into two -- it's split into two. 16%. there are are redemptions on the main the bond fund run by -- the big bond fund. they have slowed it down. million in withdrawals. >> i wonder. deals screaming back down to the u.s. suddenly we are worried about geopolitical risk. whether bond star to be a safe haven play. it has been rough all right for bond investors. if that were your main stay is -- is where your mainstay is. >> investors have been declining

the unit -- decline for so -- have been predicting the decline for so long. it is all safe haven talk. >> it is, indeed. one man talks a lot about markets who is mario draghi. coming up, italy has only itself to blame for the third recession since 2008. we will have more on the ecb meeting. ♪ >> welcome back to "countown," i

am manus cranny. >happy birthday. >> how old are you? >> 39. nevermind what age i am. >> 39. >> is a good age, apparently. we have a lot to get through. you did the ecb yesterday. that is priced into the euro. we have politics. what trumps what these morning? -- trumps what this morning? >> everyone saying, really. you see exports up 70% in july. everybody saying, really.

i will leave you with that and what you think about the chinese data. today will be about geopolitical risk and obama authorizing strikes and iraq. really going to hurt sentiment. for me, mario draghi and the ecb -- >> you thought it was an odd meeting. >> it was so bizarre. at one point, he sounded like an epic strategist -- like a strategist. the euro did nothing. aboute did -- talked intensifying efforts. then about hiring a consultant to develop a plan to read how far along are you with the prom -- plan? what is it actually going to come? >> all the market wants to know is if or when there will be quantitive easing. still no timing. he says he could unleash asset purchases to help stabilize the

economy, but we get no trigger point. >> is it too late by then? he was honest when he said we don't know how to assess the geopolitics yet. incredibly early. >> he was tough on italy, john. >> he went off on political tensions about reforms. talked about taxes at one point. >> those countries that have adopted reform like spain, you look at the data, they have shown economic growth. >> it was a little bit incoherent. but everybody can have an off month. italy -- tong on italy for holiday. >> the whole of europe -- >> it is pretty packed. >> maybe they can buy some shoes. they are not looking so good at the moment. >> i feel for them.

>> we had to give a final word to the birthday boy. how do you feel? >> invigorated and ready for "on the move." >> see you tomorrow. have a good weekend. ♪ >> welcome to "on the move."

we are moments away from the start of trading. president obama authorizing oil has been iraq. on snooze for the past few months. is this the wakeup call? what have you got? >> some fairly important news. rise for the third day. you are looking at yields hitting the lowest level in almost a year.

stocks retreat as obama threatens these airstrikes. >> summer trading is going well with higher prices helping to boost that profit. no mention of geopolitical concerns. a bit of a surprise for me. >> that's the big focus. treasury yields go lower. equities go lower as well. the dax down by over one percent. what does this mean for the open? >> we are going to change direction. we are going to look at the bond market. this is perhaps the most important. it is going to bond markets.