policymakers have fears about raising rates before inflation picks up. the dollar and the e stocks drop as investigators downgrade. over here in europe, bailout bills to be paid. greece is due to make a 3.2 billion payment to the ecb. >> good morning, i'm guy johnson. a lot of news overnight. concern about the dollar, concern about inflation. yet, the employment story is on track.

need to thinkthey about, they definitely represented those in the minutes. market moved on the back of it. i want to show you where we think on certain metrics the implied probability of a september hike is. we think it has been discredited. of doing a number ways it. down to 38%, this is the chart. let me get the camera to pan down a bit. off of the sort of move the september increase, as the market has pride back out. last night, they were off the hooks -- looking at what is happening here. edging markets around the world, paying great attention to it. let's take a quick look at the u.s. close. and i want to show you the emerging market reaction overnight.

mostly the main averages and indices in the states faded last of 1%.down 9/10 let me show you the emerging market reaction, a number of voice of looking at it. this is the turkish lira. the dollar has been rising. the fed story -- this is interesting. you have a spike here. we pushed down to record lows on the turkish lira. a number of politics playing onto that, but the manifestati is across the whole market. a little bit more front and center than it was before the dollar, more front and center. let us show you what we learned tonight with mike. mike: it is all about inflation now. when fed officials met three weeks ago, most adjudged that the conditions had not yet been

achieved. but they noted conditions were approaching that point. what was missing? confidence, prices were continuing to move up. some members continue to seek andsize risks to inflation declines in commodity prices. notedition, several tighter labor markets and not yet pushed up prices. they agreed to continue to monitor the inflation closely, almost all members indicating they would need to see more evidence that economic growth was sufficiently strong. for them to feel confident inflation would return to their 2% target. again, this was three weeks ago -- before the latest plunge in oil and the chinese evaluation question higher. at that time, some emphasized the economy have made significant progress, and they felt that conditions for a rate increase as having been met or were confident that it would be met shortly. one member however indicated a readiness to take that step at that meeting.

but was willing to wait for additional data. and there will be a lot of it between the september 17 meeting, including numbers on jobs and inflation. the minutes are now focused on a december liftoff. but the only thing you can really say is that a data-dependent fed remains so. michael mckee, bloomberg new york. all plays out in asia, let's take a look at the hong kong market. >> good morning to you, guy. we are seeing asian stocks down on the back of the weakness you mentioned. prices,plunging oil really affecting a lot of the energy prices -- australian market is down 1.4%. some of the energy players like origin, also in japan being sold off. .6 ofin the red down by

1%. they have been focusing on china ong kong. we saw inrom the 20% april. we also had malaysia continuing to be sold off, down .6 of 1%. the lowest close since june 2012. and of course, the shanghai market yesterday had that while spring coming through on the close rising by about 2%. down by .6 of 1% today. interesting commentary suggesting that government intervention comes around the 3500 point level on the shanghai composite, rather than the 4000 point level. i also want to show you the enterprise index, entering what they are calling a cross. this is the 50-day moves across the 200-day, in february 2014, a

lot of selling coming through in in hongt shares listed kong. you can see consumer services down 4%. basic materials being sold by 2.6%. the weaker oil price weighing into the asian region. sold off across the board across today. guy: juliet joining us from hong kong. a big sell off from overnight, we have what is happening in ia to factor in as well. chief international economist at img, he joins us now to talk about all of this. rob, let's talk about what your take is on the minutes weras. expectationsraded to 38% probability of a

september hike at that point. is that right? rob: i do not know. the direction is right. there is clearly division in the minutes. the ones we read last night, there is less of a chance for rate hike in september. i still like it, i think it is more 50-50. how do we read these numbers? i found a discontinuity in a contradiction at the ways you look at them, the difficulty with this especially for the zero.hey are moving off but it is 14 basis points, into that range, i do not know whether the markets have factor that in -- just assume they are smack in the middle of the range. i don't think that will happen when the fed does raise the target. futures are giving you a better indicator of the timing of these things. that will probably tell you september is not in, in terms of

pricing. but it is more and in some of the other measures. dollar increasingly part of the thinking. about thedo not talk dollar unless they are concerned. we had a couple of mentions in the minutes. they are concerned at what they might go in do, push the dollar forward. the problem with that of course is they have been saying for a very long time now, do not worry about the data. it is what we do afterwards. a company that with a diagram that is so massively more hawkish than anything the market is surprising. the markets have been cautious and reticent and what they are 2017.g for 2016, we will get there a couple of years. you have to change the message on that. stay cautious, but then deliver on the diagram. guy: where would the dollar go if we believe the dots? rob: it will keep on going.

where it stops, i do not know. but we might get there on the dot diagram. guy: this is what he dreams about tonight. rob: he will not get it based on the minutes from yesterday. guy: how to you raise rates when oil is doing this? another big move last night. and it kind of -- where is the inflation the central banks worry about? is it down the road? rob: this is more of a pr problem. it is difficult when you are moving off zero to say, we are doing it just because of the job search. don't worry about inflation, i know it is negative. it will come back. beenumbers we have focusing on our study. we had a reading yesterday of 1.8%. it is within spitting distance. i know they focus on the different measure, but it is close to where it should be. that is very firm. this is all oil. you could very indirectly blame

what is happening to oil on the fears of the fed and what is happening in china. but it is a fairly indirect story that one. don't think you can really say raising the rates is putting disinflation or dee flation. oil, or chinese activity than anything else. guy: do we understand the feedback loop? emerging markets which are already priced into a certain extent, but not all. story another leg on that and start to see -- how do they model that? that feedback. rob: the best thing you could possibly do to model this is that if you have perfect foresight where the dollar was going. that is the dollar. on the basis of that, this is less about the dollar. crude should be heading up about up on that.

on the supply side, some of the fundamentals might possibly acting at them. forn't think they have quite sometime. at these levels, it does start to become a feature again. up until now, the price of oil has been whatever anyone is willing to pay for it. it is a sentiment more than anything that is supply-demand driven. guy: janet yellen likes to focus on the labor market. to shiftis it for her her gaze away from that as an indicator? rob: i think she has made it the big thing for fed policy, all about labor markets. 23 different measures how they measure that. i think they should stick with that. side story.ly a as i say, it is a tangential thing. this is really not what it is about. inflation is bigger than what is happening to crude oil prices. only a few months ago, they were saying this is positive economy.

it is great. the problem is, that hasn't happened. we have not seen the big spending and uptake, that is why people are worried. gainsre taking windfall from gasoline. they are relatively in debt, indebtedness and household is quite high. not an extreme lows, the normal end. we will have more money inside to pay that when rates go up. maybe that is part of the story? it is not hard to determine. guy: rob, stay with us. we have many more to decide. chief international economist at img. the twitter question, will the fed hike in september? some indicators seem to suggest that that sort of possibility is going down. do you believe that? how do you place that in? we have to take a break. after that, we will talk about china taking a $100 billion hit

in the shanghai composite and the bear market. but august might have just has been worse. we will break down china must be as billionaires and the 3.2 billion payment for the bailout yesterday. the german press is asking what reforms the troika will impose on germany. downll break that story with hans nichols a little later in the program. ♪

london, that in makes it a: 16 and istanbul. the reason i mention an ankara, we did see the turkish lira -- this is the dollar versus the lira. we have a touch and we have retreated off of it, as you see

the mood back down. -- we cametrading at off of it. we did come off of three. continue to monitor it. it is interesting right now. you see the turkish lira, the fallout on the fed and maybe number of other things coming into effect. the policy decisions not all taken. that is one of the main stories that you need to know. let me take you through the others. the meeting in july, officials are concerned about low inflation. that seems to indicate the improving job market is bringing them close to the first interest rate increase in a decade. whenis the last meeting economists forecasted 38% probability for the hike in september now. the money has been released to greece after the bailout. it will be used or other things, as well as the $3.2 billion debt

to the ecb. to in france, asking folks support both countries in a bid instop illegal migrants coming to the country to the tunnel. off on theill sign deal in a meeting in the french port town later today. let us get back to the greek story, talk you through what is happening. angela merkel contained the rebellion. she ended up losing 63 of the votes in the boat i. sometime today there will be a payment transfer. our international correspondent hans nichols is standing by in berlin. hans, how does this all work? hans: the money will be transferred today from greece to the european central bank.

that is an important thing. we will flash that when it happens when we get the movement. there is not any doubt on that because we have a deal. let us to the outlines come a we know about $86 billion is the headline. 92 billion is what the german press is reporting, they're counting privatizations just a bit differently. i think the most important access is the length of the maturity, the average length is 32.5 years. that is on the new part of the bailout, they can use that for recapitalizations -- budget financing and clearances. this is what is going to be released, it can be used as of today as soon as the electronic stuff cleared. here is what we know. $10 billion for the banks, 13 billions dispersed by august 20. and $3 billion dispersed i the end of november. there was a bit of a doubt, it is interesting that angela

merkel contained rebellion. in the netherlands, the cabinet actually decided they can approve it. then a motion was introduced to disapprove the notion, that failed 52-81. there was a vote of no-confidence against the government, that also failed 13-120. it is all but done, now we have to have the argument about what happened for the imf to become involved? and what you do to the length of maturities to the old debt. guy: the germans do have a sense of humor. was soccer on the menu? falling upegel also on what the troika would do in berlin. troikaaking sort of principles to the economy, how you liberalize it. myy sustained the ad on to right. for starters, they might liberalize sunday shopping. very difficult to do any of it

on sunday. they might liberalize pharmacy laws so you can buy over-the-counter drugs outside of a pharmacy, not in a pharmacy. governmentn what the sell their stake in deutsche post? the government still has a stake. what would they do to liberalize labor reforms, would you need title if you are going to be a baker or plumber? they still have strict labor laws. what would they do in terms of social welfare payments? germany has a remarkable, and i say this as a beneficiary, payments to parents. you get 14 months worth of pay divided by the co-caregiver and yourself over the first 14 months of the child's birth. all of could be by the wayside. a funny article, it is interesting they are turning their sort of analysis on the german economy. one other thing, guy, so many

vat rates. the hotel has 7%. the highest is 19%. they will try to harmonize that as well. germany not the economy the troika may want to see. guy: this to come back to the menu yesterday, with soccer as the special -- hans: there are three or four dishes every day. i go there because there is not a lot to eat, unless you like tourist food. or is a vegetarian special, $2.75. it must have been vegetarian mousakka. the cheapest is always under six euros. clearly it is subsidized. and i am a beneficiary. guy: our subsidized vegetarian. let's get more on the greek story now, joining us is our chief euro economist david

powell. alexis tsipras is a good politician. he knows how to spin a story. but you have advice for him. david: you can point to this as a major victory for the government. that is the fact that the primary surpluses that are considerably lower for the years 2015 and later when he came to office. is thing of most importance the amount of national income set aside to service the debt's, being sent abroad to foreign creditors. he has been able to reduce that. guy: let's bring you into the conversation. can alexis tsipras claim a victory here? rob: only if he has a very short memory and forgets. would have just carried on what the previous administration was doing, he would have left greece and much better

position than the one he got. he made it worse, then he made a slightly better. it is a brilliant victory. he is ae, as you say, politician. he will claim one. guy: david, he was always going to be the guy voted into authority -- the representation the greek people were not happy with the deal. lesse current deal austere, more austere? when you run the numbers across the primary, one metric you look at is how do the deal stack up side-by-side? david: generally speaking, we talk about austerity and the shift in the budget of the government, extending it. and certainly that is not going to be under the previous agreement. they have to cut the budget less than they would have in order to service those debts under the previous agreement. and really when you talk about the damage that has been done by

the capital controls, etc. in the end, european creditors have had to pick up the bill at least in the short terms by additional loans coming to them. sense, who is getting the better end of the deal? suchreece leaving the euro a bad thing that you needed -- what is a price tag of greece in the euro? rob: i think the right way of answering this is to say this is not the end. and i very much anticipate that ths from now, a number i would just make up for now, we will be returning to this and looking at the end limitation -- how close greece got to making the targets. and this is all in installments. you have to keep hitting goals. my guess is that we will see slippage and return to this over

and over again. guy: is the big victory that alexis tsipras need, we can do an analysis on the primary surface, but the debt re-profiling, is that the victory he ultimately needs. ? that is what he consistently talks about. really mostis important is how much money you are setting aside to service the debt. it is a small amount of money at a high interest rate. as opposed to a large amount at a small rate. now that they have determined a surplus target, they have to figure out how they can meet that -- the debt in order to make sure the amount of money requires the services that does not exceed the threat. that will be happening in the months ahead. guy: things to look forward to. thank you very much. european

intelligence officer. we will tell you what china mobile is doing right with its 800 million subscribers. ♪

♪ ♪ ♪ get excited for the 1989 world tour with exclusive behind the scenes footage, all of taylor swift's music videos, interviews, and more. xfinity is the destination for all things taylor swift.

6:30 in london. let us tell you the stories you need to know. the imf has pushed back the earliest date that china can join the reserve currency. the imf made a decision last tuesday, the day the china markets fell the most in a decade. the u.k. and france are set to create a joint command center with police and border officials for both countries to stop illegal migrants trying to enter through the tunnel. it will be located in calle. our president will sign off on it later today.

and toyota has extended a shutdown at its biggest source of production in china. another plant will lose output after the explosion. it emerged as one of the hardest hit carmakers from the blast, after the warehouse holding oxic chemicals killed hundreds. while the shanghai composite has gone between rallies and slums, there is one company that seems a little immune to the volatility. china mobile, the world's largest carrier. they posted profits today, the market seem to like it. shares of around 2%. tim, weg the story, look at what china mobile has experienced the last few years, some steady story we should highlight in a world that has seen anything but.

tim: you are exactly right. it was a surprise increase in net income, the first time in two years they have been able to grow the bottom line. of course that is good news. you pointed out that shareholders really enjoying the news. it has been a tough two years for the mobile markets, it is huge. and they are getting millions of new subscribers at her every month, every quarter, every year, but that has not translated in the bottom line. that is because of a few different things. it is very expensive to roll out a 4g network to cover more than a billion people. the government is very, very involved in the chinese telephone market. just this year, they have basically said you need to cut tariffs. 4gey have only just gotten going, and at the same time there is a mixed blessing that the government came in and said we want you to cut the amount of money you are spending on marketing and sales. that are the subsidies they

spend on handsets. those of happened, a bit of a mixed blessing, but any we see in the market right now is considered good news. and shares are reacting accordingly. storyow does the 4g highlight the level of involvement? sort of making the company -- give us a sense of how it compares with competitors. our other companies doing this? cost controls and the government's level of involvement? tim: that is actually an interesting point. because yes they are forced to cut tariffs. and they have been forced to cut subsidies. everybody has been forced to cut it. it is a level playing field. in one way, it is a sigh of relief. when the government came down and said we do not want you to spend all of his money on

subsidies, which also was going out the door to apple or samsung or overseas companies that were sending the more expensive handsets, they breathed a sigh of relief. they don't have to compete with each other. like we see in markets around the world. they all have to cut the subsidies. that is good news for them. and so in the end, what happens is consumers go out and basically by their own phone. and if they are paying full price for the phone, they go for the cheaper model. that means often a chinese model. on the other side, the tariffs cuts -- may have to cut it by the same amount. 35% a few months ago, a large amount. they have to cut by the same amount. so yes it is not a nice thing to experience, but it is a level playing field. that means they can all compete on the same level. and it is things like expanding the tariffs, expanding the offerings, giving out all sorts of incentives to get consumers on that is really the area they can compete.

china mobile, the largest in the market -- they are the largest in the world. more than 800 million subscribers, they do have a lot of competitive advantage. guy: tim, great work. really interesting reporting. joining us on the china mobile numbers earlier on. let's talk more about what is happening in china. stephen is the chairman of the capital investing committee. good morning to you. i ready you last night, the soft landing is off the table. it is either a hard landing or a crash. stephen: this is a bursting of a substantial bubble. it goes back years, even longer. whether it is in real estate or manufacturing, we have some very serious problems. the point about a hard landing, you cannot control it. leverslanding you have that you can adjust. you can glide an economy or a

stock market with a hard landing. you lose control. guy: they are pulling the levers for the heart of the moment. they're making things happen. one of the other guests described the efforts to control the economy. are we in that territory now? stephen: i'm afraid you are right. what they have done by releasing the link between the dollar is to effectively undermine the stability of the market. all of the debts that people wanted to borrow, international investors are now getting more cautious. at the same time, the devaluation is very small. and the chinese desperately need to become more competitive against the asian counterparts that have had substantial currency devaluation. places like south korea. that is a problem. guy: do we understand fully the ramifications of this? you have seen big currency news,

i'm still hearing people talking about the chinese currency overvalued. stephen: they have a lot of foreign exchange reserves. obviously, by the fact that the devaluation was relatively unsure what to do, if they gave a fully free float, i believe the currency could be valued by 10%. that would be sinking fast. we are in a managed decline. pressures in the economy increase in the next few months, that will accelerate. but as you said, it is not absolutely clear how fast it will be. guy: how do i invest in the banks? blow.ics, this is a major how do the japanese respond to this? how far through the reaction function are we with the emerging markets? tell me what the investment cases are? stephen: this is a major headache for all markets. another wave of deflation is spreading rapidly across the

globe. we are getting into the ice age. i subscribe to that idea, decades, this is secular deflation. the point about deflation is that it makes it more difficult to sustain things like high coupon payments or dividends. the value of sales is going down. i think this is pretty concerning for all western markets, as well as the others. -- we have been stuck in a microwave economy in the u.s.. it has been artificially heated up by the fed. it is too hot, it does not taste good. in: are we going to go ping september? does that sound comfort when the fed starts hiking rates? stephen: they will not hike rates. they were three weeks away, and we had drama since then. the fed mentioned a couple of

key issues as the reason why they put in the word some delay. and those were china, the strong dollar, and they talked about inflation -- which surprised me. if you go back to late last year when the oil price first collapse, the fed and other central banks, they thought this was a temporary problem. they were prepared to see it through. even if inflation dropped down because we had a big change in the oil market, they thought it was a transmission that should not be read too much into. this is common sense. this is not a one-off commodity. they look to be set to maintain the low levels for quite some time. the fed is understanding that. we will discuss the implications, rippling out and assete global fx market. one thing that has changed is the number of chinese billionaires out there and their

assets. let's talk about the devaluation slowdown certainly affecting the richest billionaires. rob joins us now. we spent the last couple of years talking about the billionaires. every time i see you, you have a few more in your pocket. you have a few out there now. rob: you talk about government intervention in china mobile, there is one active class out there that is exposed completely without a safety net. they pretty much operate in a free market, more than anyone else. but if you look at the 42 billionaires on the daily ranking, they are up about 50% this year. that is an indicator of just how high the market got. about acollectively at net worth summer around the end of may, but they are down since then. they're having a really good year if you look a the numbers. -- the middleyear

of the year, they have plummeted. they recovered in the first half, but the new billionaires that were created in the heat of the market, more than half of those people are no longer billionaires. it is a volatile market. and you really have to have a tough stomach if you're going to play in the game. guy: they went up and came down fast. are they affected the most? is it the guys at the top? up as ay all popped markets rose, but now they are down $500 million. take a look at the other extreme, at one point, john lynch was the richest person. in the richest woman came out with a lens technology that makes glass grains are iphones. big business, right? she jumped up with the ipo to $13 billion, where her net worth pete. it has been up and down like

this every day for the last four months. it is tough if you are trying to make long-term planning based on net worth, i would not do it. guy: the numbers are still fairly big. the fall has not quite taken away the gains yet. in they real shocks numbers? anybody really suffering? rob: there is a guy, i will but to the name and i apologize to theyone -- i will butcher name and i apologize to everyone. the early part of the year, the shenzhen index was just on fire. they lostit gains, all of that game now. guy: rob, always a pleasure to see you. us, he isco joining the editor. before we head to the break, let's take a look at the

emerging market currency. he saw the turkish lira and the details going on. three per dollar for the first time ever. another record low, six successive days. ins is from the fallout china. but in turkey, you have the emerging market and the increase in political violence, political instability. asmight now have elections early as october, as the active prime minister and the bank declined to raise interest rates. raising them to 1.75%. and you have the federal reserve as well, rising interest rates in the u.s. will suck out the money in turkey which needs the money to finance accounts. you see the turkish lira hitting new lows, though it did come back from three. it is back below three per dollar, though we heard from the president's top advisor the past

few days saying that a level of three per dollar would actually be competitive for the turkish lira. i also want to talk about another currency. it is not just borat. it has plunged as much as 30% today. against the u.s. dollar, that is very much a record low. this chart is a two-day chart. you can see the extreme jump weakness, and extreme jump in that currency here. if you want to get another perspective, this has what it has done for most of the past 12 months. just today, rocketing up today. azahkstan relying on those partners. brightare not looking so

for the economy right now. guy: elliott on the action. to a number of factors, china, the fed. let's talk about the fed. what you think about the fed? the market is increasingly pricing out the idea we will get a hike. there is now a 38% that that will happen. it has fallen sharply over the past few days. the minutes last night, inflationary concerns. dollar concerns, will we have to wait until september? let us know what you will think. if you're on the terminal and a bloomberg client, you can find me easily. join the conversation that way. we will be back in a few minutes. ♪

guide: it is 7:48 in paris. fed meeting.the

officials are concerned about the low inflation, even as they indicated the improving job market. firstng ever closer the rate increase in a decade. a lot has happened between then and now. but nevertheless, a big story this morning. greece is due to receive 30 million euros, it has been released after the parliament agreed to the bailout. it will be used to pay the $3.2 billion debt to the ecb. as, the of other area ou as well. border officials in both france and the u.k. set up a border in calle. the secretary from the u.k. and the french minister will sign off on it during a meeting later today. concerns about the chinese economy and a number of markets

in recent weeks, how has it impacted the shipping sector? containersst leases across the globe. he is the ceo of the u.s. listed global ship lease company. good morning. is,ess the first question china is worried about it. you honored the results of that. you are on the end of the story, what is going on? >> we are indeed at the pointy end. china is very important to global trade. it drove the massive expansion in the early 2000's, leading to the global container trade in different rates. in a more stable, perhaps more sustainable growth rate -- five or 6% a year. we are open down region to region. there are ups and downs in china on the exports to the u.s. at least the first half in the year, they grew stronger. imports into europe from china

however have been week. ship trade, we will like it to see a long-term lease model. we have $900 million of revenue contracted over the next five years. that introduces a lot of stability, in fact, second quarter of 2015 results which we announced last week were at the highest level in our eight-year history. guy: any sources to be negotiated? >> no, they are fixed rate contracts. our longest one runs for another 12 years. of factors think about, one of the derivative of facts, one of the causes of what is happening in china, low fuel prices. how does that affect the shipping industry?

you are losing over here, winning over here. there is less demand, but it is cheaper to move the stuff around. >> that is a really good way to put it. losing over here, winning over there. we do not -- guy: it a direct affect on you. >> our customers are saving massively on their fuel bill. if you think about a big ship burning 100 tons of fuel a day, with prices down by $300 a ton, that is a huge savings. and it offsets the weakness and perhaps freight rates people are saying. is that net financial result just about holding up. guy: is it cheaper to buy ships at the moment? acquiring more assets, is now a good time to do that? >> that is the big question. asset values to you to be at lowe's. they have moved off before recently. a good time to invest if you have investment capital, which we do have.

guy: you have your year to the ground, i'm curious to know your take. a couple of quick comments, what happened in shenzhen, will that affect the disastrous industry? >> shenzhen is a very important port. as i understand it, operations are getting back to normal. and there are other ports that could take up the slack. i think the real affect will be local manufacturers, local factories -- perhaps not being able to resume as quickly as possible. but for the industry overall, i think it is just a little blip that we will deal with. guy: i nearly made it to the suez canal for the opening. is there an issue, of the egyptians optimistic about how many ships going through? i'm hearing you talk about what is going on, talking about low fuel prices. i find it hard to go around the long way. what are your views on that, as an escapade in engineering?

is fantastic. they have achieved what they said they would do. and they did it. what is great. for container ships, the harshness of the suez us, the widening of the panama canal is important. today, the biggest ship that can go through is around 5000 into containers. with a new can now tomorrow, it goes around 40,000. half a dozen ships they cannot go through the now. in the future, they can. that increases the value long-term. guy: thanks for joining us. thank you very much. morning, the derivative story coming off china and the fed and everything else, tim is here with us.

and elliott was talking about kazahkstan, the currency. this is a story that has been incredibly stable for incredibly long time. tim: it is the competitive valuation across the world. he saw in china, vietnam, now it khstan's turn. we had an interesting story about the nigerian currency, defending that how long? which one is next? guy: which one you think is next? tim: i don't know. euro.he that is the ultimate one. guy: if you believe the fed dots

, how they will raise rates, you will probably spot a lot. by the team we should call him ig, he is a very small violin. tim: he does. said day. glencore ipo minted six billionaires. it is now down to three, sadly. to 2.8 billion. but the classic glencore fall yesterday was amazing. another fallout from the markets. guy: what do you take out of the numbers yesterday? stephen: even the smartest people get it wrong. i am interested -- guy: he says he has no visibility. stephen: it is not just about china.

it is about the spillover effects globally. they will tell you much more about what is really going on in china. and i think the explosion, call me a cynic, does that again show the pressures of safety standards? guy: we will leave it there. ♪ .

policy makers fears about raising rates before inflation picks up. the dollar and stocks have been dropping. they have been downgrading their expectations for the september move for the fomc. greece making a payment later today. it is 7:00 in london. good morning, everybody. so with the fed front and center still, what's happening in emerging markets still very much being talked about as well. but the fed, let's talk about that. let's show you the u.s. close.

let's show you what happened on the markets last night and give you a sense of what the story is. at the u.s. close last night. we are down. asia has been reacting to that. the fed talks about inflation and its concerns about inflation and it talks about the dollar. the fed's story really is the umbrella story that you need to think about. it pretty much is over everything at the moment. over the commodity story. over what's happening in emerging markets. over what's happening in china as well. inflation front and center. a little bit more than we thought it was. let's hear what bloomberg's economics editor mike mckee had of the july minutes. mike: it is all about inflation now. when fed officials met three weeks ago, policy confirming had not been achieved but they noted that conditions were approaching that point. what wasing? confidence. prices would continue to move up. some members continued to see downside risks to inflation.

in addition, several labor markets hasn't yet pushed up wages and prices. they agreed to monitor inflation developments closely with almost all members indicating that they would need to see more evidence that economic growth was sufficiently strong for them to feel confident inflation would return to their 2% target. again, this was three weeks ago before the latest plunge in oil and china's devaluation pushed the dollar yet higher. at that time, some emphasized that the economy had made significant progress over the past few years and they felt conditions for a rate increase has having been met or were confident they would be met shortly. one member however indicated a readiness to take that step at that meeting but was willing to wait for additional data. and there will be a lot of it between now and the fed's september 17 meeting including more numbers on jobs and

inflation. investors reath reading the minutes, are focused on a december liftoff. only the thing you can really say is that a date-independent ed remains so. guy: ripple effects are being felt around the world. let's take a look at what's happening with the turkish lira. this is the turkish lira over the last few days. you can see this is territory we haven't been in. there are a boufrpbl problems. we'll deal with the details later. they sold off before retreating a little bit. what is the story in asia? let's find out with julia. she is standing by in hong kong. >> not another great day here in asia. we are seeing stocks down for a fifth session of course as you mentioned those fed minutes and the weakness in the u.s. weighing on sentiments here. we had an exo dump s coming from

the china mainland shares. the hang seng down by 1.6% in bear market territory. down 20% from the peak that we saw in april. the shanghai market down another 1.5% in late trade and there has been some speculation from bloomberg research that they have injectsed the most funds since february which could explain a little bit of that rebound that we started to see yesterday. bear in mind that all happened around this time yesterday. watch this space. it is in the red at the moment. you never know what is going to happen with shanghai. in malaysia, looking like it is going to close at its lowest level since july 2012. the ringette. mainly due to the -- i want to show you some of the stocks we're watching. crude fouling to that 6

1/2-month low having a bigfect on the energy players. here are some of the companies that have done ok. south korea up by almost 5% on the close. the biggest gain in four months. australia up 6.5% as we start to see that flight to safety. qantas was at a seven-year high on the back of its result today. the first time the airline has profit since the new c.e.o. if we look at some of the energy players, power stocks in hong kong also under pressure. santos, one of australia's highest offshore oil producers down as well. a lot of that sentiment from the fed all playing into the markets. quite a day of selling here in asia. guy: quite a lot of snelling a number of asset classes.

we're seeing a big move in oil overnight. slightly countersbute i in some ways thinking -- counter combutive what is going on with the fed. brent now trading at 4691. more selling pressure coming into the energy complex. when you look at that and the fact that we're still going through this process like how much lower buzz brink go? what is the derivative effect of that? >> when the chinese devalue, your biggest consumer, you have a big problem. it takes away any natural -- you can take away $30, i don't know. it still has considerable downside risk i'm afraid. guy: more iranian supplies coming into the market?

>> that sort of slight curveball that can come. all of the producers are fighting for market share. there is a lot of downside negative feedback as prices drop then your rever knew reduces. we have to produce more to maintain your own social spending. the saudi arabia tapped the bond market recently and shows you how critical their cash flow position is. >> the consumers in the states are some of the most geared to this price move anywhere on the planet. they don't have the taxes that we have in europe. filling up my car is fairly cheap but filling up our car in the states is significantly cheaper. why don't get this money being spent? this has to be something fed is thinking about. >> gas line in north america is at an eight-year high. if you look at wal-mart's results, wal-mart is a big company. the world's largest retailer and

the largest retailer in north meck america obviously. its growth was 1%. bottom line growth was poor. earnings were actually down. the reason for that is they had to pay more for their workers. this squeeze at this stage in the economic cycle when labor markets are tighter, it is not so easy for companies to carry on. just squeezing more earnings out of it. guy: so henry ford classically decided he was going to pay his workers twice the amount because he understood that if he paid more he got better productivity. are we going to start seeing better productivity because people are more engaged with the labor market and as people start being paid more, isn't there a cycle that they start spending it and in an economy like the states, that should be good. >> there are incremental moves in productivity.

is there a major game changer? mass manufacturing the model t gave ford a long time ago. i'm not so sure. silicon valley is a classic example. can that work across a large economy with 300 million workers and where there is mass immigration? the problem of immigration, the donald has been upfront in mentioning is that it depresses wages. it is a problem not just for the u.s. but also for europe. guy: hard to grow an economy as we're beginning to figure out in the u.k. without it, though. >> that is a political question that i'll leave for other people to comment on. it was interesting comment in germany. the chancellor. flagging the number of asylum seekers has been revised up to over 8 noont germany. that is the forecast for this year. nice little present from the

greeks sending their people straight through. merkel said this was a bigger issue for germans than the greek bailout. this is a concern. can the accord survive this unprecedented movement in people? if it doesn't, we think it is hanging by a thread. that is not good for european growth, is it? guy: no. so which is the bigger risk? dealing with greece? when you look at at what's happening in greece, you look at what's happening in the wired european economy, was saving greece worth it? >> well, it was a sticking -- which at the time was deemed necessary. i think they will carry on. the notion that greece is we paying 3 billion is a little bit of a joke because it is a circular trade. good luck to the european politicians. that is the decision they took.

the migration crisis is a much more political, a hotter potato for a number of politicians but i think it will spill over into the zphe the free movement of people within the european union, which is one of the key drivers, the expectations of growth, if that is genuinely a threat. guy: the implication is that it implies movement of labor is good. we need movement of labor to be part and parcel of our economy. we have an aging population here in europe. we have a demographic working against us. we need immigration. how do you manage immigration in a world where you have headlines. we talked about -- when you have that -- >> that is a political question. guy: it is an economic question as well. >> it is but it is a long-term economic problem. as the japanese have showed, they have been dealing without immigration for quite sometime with adverse demographics.

they have been able to queeze productivity for greater female participation and changing the retirement age. a lot of migrants helps you to have competitive wages but at the same time it creates the very competition from your local workforce that perhaps undermines demand. it is a dill question to answer. i'm particularly fingering this issue of -- and just concerned that one of the key drivers for the success of the european union was a con sovept open borders. if that is genuinely at risk because of these unpleasant realities then that is a course of concern. guy: we'll carry on the conversation. plenty more to discuss. join us on twitter. join us on the terminal. today's twitter question, will the fed hike in september? we'll talk about that. join us on twitter at guy journey tv. find us on the terminal.

you know where to find us. we're going to take break. china's richest taking $100 billion hit in july. august might well have been worse. we're going to break down what the devaluation might mean for china's billionaires. ♪

guy: it is 7:16 in london. 8:16 in frankfurt. let me tell you about the story you need to know this morning. concern about the stubbornly low inflation rate. they are closer to the first ib crease in the interest rate in a decade. economists sukt suggest that we could see a hike. certain metrics put it at 38% that we'll hike in september. that number is down.

pay a debt to the e.c.b. and a few other outstanding arrears. china last week shifted to a more market-determined exchange rate. one way of looking it a at it. moving towards a freely floating currency. a surprise profit growth in the markets. shares up around 2%. we're following the story. this is a very, very big company. it hasn't seen the kind of volatility that other companies have seen in china. what are the big takeaways from the numbers today? >> you're right. it is a big company. the largest mobile phone company with more than 800 million subscribers. we know that china itself has had some maker economic

difficulties. a teleko is certainly no stranger to that. there are a lot of other things going on. they have been spending a lot of money to build up their 4 g network. this is costing billions of dollars because they have to cover more than a billion people. they have reached the 1 billion coverage mark this year so far. that is costing a lot of money but they are saving in other areas in terms of subsidsies. they have been able to cut back there. that has been a significant help to them. they have been able to get some benefits from this 4 g rollout. more and more chinese are using their cell phones for watching videos and taking videos and so on and so forth just like everyone else around the world. mobile data usage growing. more than doubled year-on-year. compared to a year ago. that has been a big benefit to

china mobile. what we're seeing is top line growth for the quarter and the first time in two years that the bottom line net income has grown for the second quarter of this year. guy: thanks for update. let's continue the china story. what does the slowdown in china mean for china's richest? it is not good. how bad is it? >> well, it is getting kind of dizzying to watch what is going on in china. the chairman of glencore said please find me the guy who can explain to us what's happening in china. it is baffling. the richest people in china, there are 42 of them on our index of the 400 richest people in the world. they are up a little more than 50%. that looks pretty good but if you look at it from the on the other hand may, june, where the market peaked, it is down 50%

and the volatility throughout that entire period has been extreme. it is stomach-wrenching to watch. guy: where does this come from? is it commodities selling off? is it people selling off? is it tech companies? where is the pain most? >> from our data, it is across the board. they ranged from the maker of smart phones. a budget airline. companies across the board created billionaires. half of who who whom are no longer billionaires. there was this enthusiasm. it was fueled as well by people pledging shares. people who had equity in some kind of asset were leveraging that, purchasing more. clearly a frothy market. it was across board. everybody wanted a piece of this. now we're seeing where the wealthy, the traders are taking their money of the market, kind

of like what happened in the u.s. in the dot.com boom. the smart people get out. they put their money into more solid asset classes. i don't know if there is one in china anymore. there are elsewhere. you have a lot of rich chinese who are buying in. rich russians, etc., paying cash for real estate in the u.s. or western europe. that has been going on for quite a while. guy: you talked about the option is not for a soft landing but a hard landing. a really hard landing. rob is running this through what it means as far as pain for the rich. is it a big factor for them? >> rob's report is absolutely fascinating to give you a measure of how much money is at stake. and that concerns me because let's face it. this is not a stable democracy.

his is an autsocksi. -- autocracy. you get 20 years hard labor or worse. the risks are very high for the people at the top of this pyramid. let's face it. this year, the early part of the year was a huge boom which was encourage bid the government. the government wanted to use a burjonning asset crisis to try and restart the economy. unfortunately it hasn't worked. the risks are very high and the instability jble what the her tos are concerned about. guy: if you look at russia, is it the same story in china? >> not quite the same story. putin has a unique situation. he has singular controlling over russia. it is a different situation. those guys in russia of

accumulated their wealth back in the boris yeltsin days. the autocracy that we're talking about here had a big role. it is not a singular person that controls it. there is a lot of corruption clouds that surrounds a lot of these stories. the government control everything there. you're absolutely right. when things go bad, these guys end up in jail for a long time. there is a connection. it is not quite the same as what's happening in russia. it is a little bit more extreme and a little bit more individual. tianjin lked about earlier. people taking risks maybe they wouldn't have done. having to push harder because of the economic situation. >> understand that the insurance market here in london is going to take a fairly big hit on this.

there are claims. it is the classic insurance flyer. when a company is in trouble and it burns down its warehouse and claims to insure it. guy: there is no indication that it is leeling from that point of view. >> i have no idea. i don't want to cause assertions. i'm just making the comment that it stresses and trains. comments lead to a forge in claims. manifestationbe a of risks being taken. we'll rap it up there. now the focus on the fed minutes, the ftse lies really high at the moment. everybody is trying to decide what the fed is thinking. policy makers concerned about low inflation. here is what some of bloomberg's guests have been saying about that story.

>> as you get closer and closer to dates, you know, they continue to find ways to back away. for example, in this -- these minutes, what i've been able to pick up is they -- there was, you know, even some lack of deciding this in terms of the wage pressures and some of the linkages between the tightness in the labor market, the unplole employment and the jobless claims and the like. they need to see whether they are confident in the medium term. they are finding ways to wiggling away from pulling the trigger pment >> we think the fed will go this year, whether in september is a coin flip. there is this drop in inflation expectations. if the fed goes in september or october or december, we're still facing an environment in which the monetary regime is starting to change. >> the probably is still very high that the fed raises rates in september although it was really kind of like the statement itself with a lot of

openings to do whatever they needed to do. they just edged themselves a little closer. like putting their toe in cold water. they are continuing to move to that point where they sort of get into very gently, as gently as possible and i think there is really nothing new to me in these mince although i think markets are looking for some clear sign, the fed is not going to give it. they are sige saying we need a couple of more months. they have one more month of good employment. core inflation looks stable and they have been heartened by that. so i think these minutes don't tell me you should bet against september. i think september is right on the table. >> three weeks ago they thought it was a good chance but not a certainty they would raise rates in september. clearly the news since then would push a little bit away from that. but not by a huge amount. tezz getting pretty close that

they would start to raise rates in september. guy: the views on the fed. we're going to take break. coming up on "countdown" we'll look at european equities, they are going to open softer this morning. ♪

♪ ♪ ♪ get excited for the 1989 world tour

with exclusive behind the scenes footage, all of taylor swift's music videos, interviews, and more. xfinity is the destination for all things taylor swift. guy: it is 7:30 in london. 8:30 in frankfurt. here are the stories that you need to know this morning. officials concerned about suddenly low inflation. the job supermarket bringing the interest rate closer to the first interest rate increase in a decade. greece is due receive 30 billion euros today. the money has been released after backing the term of a third bailout. it will be used to pay a debt to the e.c.b. and kazakhstan's king.

-- plunge bid 23% after the country relinquished control of its exchange rate. turkish lira very much on the move as well this morning. >> good morning, guy. it has been a great day here in asia. stocks closed lower for the fifth session. we had australia heavily weighed down by mining and energy players down 1.7% on the close. japan's nikkei also weaker and south korea's index. we still have the hong kong and china markets still trading. a lot of the action seems to happen in the last 30 or 40 minutes in china. half an hour ago, the shanghai market was down 1%. now it is down by 2.3%.

the hang seng here in hong kong down 2.3%. it has entered into bear market territory. you can see cathay pacific which came through with its number a.f.c. the bell yesterday not doing well. down 1.5%. we are seeing a lot of i guess disappointing results. foreign investors moving out. the hang seng china enterprise index entering what is so-called a -- by the 50-day moving average has crossed below the 200-day moving average. quite a lot of selling coming through in those markets. we'll be watching those in the next half-hour to see if there is a bigger selloff. the oil price, this is the s&p oil and gas sector in australia. all 10 stocks lower. with that sector down more than h%.

you can see what that weaker -- 4%. oil surged down more than 4%. woodside petroleum and santos among the big leaders. we saw some bright spots in some of the gulf players. -- gold players. the gold price rebounding from the three-month lows. up 4% over 30 days. today's chart, you can see that big selloff that we have seen in oil in emerging market currencies and particularly in the weakness in the dollar, we have a flight to safety in gold holding at $1139 u.s. at the moment. back to you, guy. guy: thank you very much indeed. the fed focus, very much the market focus today. mike mckee is here to break down what we learned last night. >> it is all about inflation now. when fed officials met three

weeks ago, most judged that the conditions for policy firming had not yet been achieved but they noted that conditions were approaching that point. what was missing? confidence. prices would continue to move up. some members continue to see downside risks to inflation from possibility of further dollar appreciation and declines in commodity prices. in addition, several noted tighter labor markets hasn't yet pushed up labor and prices. they agreed to monitor developments closely with almost all members indicating that they would need to see more evidence that economic growth was sufficiently strong for them to feel confident inflation would return to their 2% target. again, this was three weeks ago, before the latest plunge in oil and before china's devaluation pushed the dollar yet higher. at that time, some emphasized that the economy had made significant progress over the past few years and they felt conditions for a rate increase as having been met or were

confident that they would be met shortly. one member however indicated a rediness to take that step at that meeting but was willing to wait for additional data. and there will be a lot of it between now and the fed's september 17 meeting including more numbers on jobs and inflation. investors reading the minutes focused on a december liftoff. the only thing you can really say is that a dates-independent fed remains so. guy: the fed in focus. inflation in focus. the dollar in focus. u.s. markets sold off last night. looks like a similar story in europe. let me show you the cal delagse congratlations this morning. the ftse down .5%. the dax is down by .8%. the cac performing a little bit better. those are the futures.

all the other calculations bolted on. i want to show you another chart as well where it really kind of tells the story of what's happening here in europe. this is the dax, i have put on the day moving average which is the line here. i want to show you at this point here. we have broken below the 200-day moving average. don't get too excited. it is not the most reliable. there is all kind s of other things you need to think about. it is something to bear in mind as the dax breaks below that line. certainly some people paying attention to that. julia mentioning some of the others in asia. less than 24 minutes away from the market open. another soft day. looks like it is going to merge from the european equity story. when you look at what happened during august and you i think about what is going to happen in september, august sometimes not the best indicator of a real sentiment but actually a lot has

happened in august. >> yeah. some big themes kicking around. interest rates, dollars, merging markets, china. thin markets. it would not take a great deal of cash to move these things around. i think i mentioned on this show a few weeks ago, i thought the global economy was a bit of a mess. i think events have tpwhoorn out. what we have seen in china is symptomatic that they are having difficulty rebalancing the world's second large economy. i felt for a considerable time they needed to pull that deval lever. as we have seen it ripple through asian fx and the impact on commodity prices and commodity stocks, of course it is going to have global implication. guy: what should we make of the fed? what are the implications for investors from the fed?

>> july 29 is when they made the decision they are more worried on both counts now. the data coming in from the u.s. is a little bit firmer. if you look at the objective bench benchmarks in terms of 2% benchmark target this year. it looks like they are going to beat that in terms of the unemployment rate. 5 tony 25% rate. they are more or less there. i think the market is still a little bit circumspect dialing down to a 40% probability of a hike. again, you know, looking at the bigger picture, you know, i think we're actually looking at this stagnation, this horrible phrase in the face. we are incrementally getting there. and i think 2% inflation targets may not be appropriate for central banks anymore. guy: what is appropriate? what should be appropriate? >> probably 1.25%. 1.5% arguably.

it is difficult to say in the rear view mirror as it were. you have seen a big step down in potential growth in the global economy. pretty much everywhere. i think you have a situation where trying to go for these 2% inflation targets is actually consistent with financial market stability. the argument and debate over fed rate rises or not has become quite confused. surely the argument is not well, should we have a rate rise. if you frame it in that respect, the answer is no. but you're in the seventh year of expansion in the u.s. it is not doing that badly. does that warrant rates remaining at zero and if rates don't rise now, then when? guy: we have got very low global growth rates at the moment. why -- if potential growth is

lower than we thought it was, then presumably interest rates should be lower than we thought they were and as a result of which we're getting closer to zero as being a realistic rate. maybe it is not zero. maybe it is 150 basis points but all of those numbers gets crunched down. >> ultimately, lower and flatter, ultimately. at the start of last year, it was all right, well, it is going to. dependent happen. dependent happen this year either. i think the bond markets are on to something. the b.i.s..it outside recently central banks are not giving themselves any ammunition. we can't expect -- certainly western economies, much help from fiscal policy. guy: i guess the question, we should ask on this is why won't the u.s. consumers spend and is

that spending going to start soon? we have very low gas prices. wages are starting to pick up. employment within the realms or touching distance of the fed's definition of full employment. you should have a consumer-driven economy at the moment yet you're not getting it. do you feel all of the pieces are in place to make that happen? >> the commodity price shockers you had globally, the inflation impact is front loaded. 90% or so is realized within the first year. we're starting to get the flip side of that. obviously it was the second half of last year that we saw these commodity prices plunge. the consumer impact is very much end loaded. these are models but it is 20% in year one and then the remaining 18% in years two and three. that is why we had this slump in oil prices in the mid 1980's. they were expecting a consumer boom in the u.s.

that didn't happen. he boom arrived in 1986, 1987. guy: when you look at consumer prices and how i make money, what are you clients do doing? >> there is some capitulation out there. i thought for a while it felt like a low -- market. despite the commentary we hear about buying on debts, etc. a lot of people -- guy: what are they concerned about? are they worried that actually corporate earnings are not coming through? what is it that is bugging them? >> a whole host of things. corporate earnings are in the mix. the nair ravet that -- narrative one interesting fact for europe is that if you ook at year end 2015, 2016

estimates, they are tracking down year to date. this is despite the headwind you had from cheaper oil. the tail wind from a cheaper euro. the macro forecast. the only ironically, the major index within europe are earnings have beat expectations have been the dax. everybody else is looking pretty bad. guy: we're going to take a break. coming up on "countdown," the fed in focus. we're going to look at the impact of the coming rate hike and the slowdown in china on those markets when we come back. ♪

guy: it is 7:46 in london. that means it is 8:46 in paris. let me tell you about the stories you need to know this morning. minutes from the fed's fomc meeting in july.

it is bringing them closer to the first interest rate increase in almost a decade. greece is due to receive 30 billion euros today. the money has been released. it will be used to pay a 3.2 billion euro debt and to clear a few other outstanding arrears. and the u.k. and france are set to create a joint solution for officials from both downs stop illegal migrants from entering britain. they will sign off on it during a meeting later today. now with the fed in focus and that china slowdown weighing on global markets, it is nerging market curn -- emerging market currencies that are really

feeling the pain. this selloff is being felt everywhere. we talked about turkey this morning. there is a whole range of them there. the dollar index. kazakhstan. turkey one of the bigger ones this morning. we have retreated a little bit from that. >> i think overall in emerging markets there is probably more pain to come in the next few month bus i think a lot -- but i think a lot of the evaluations are starting to look stretched. e're facing a long-term facing point. for me it is a big part of it. there is a lot of uncertainty around the fed as we saw yesterday from from the minutes. the emerging markets want that certainty. and also the pace. they want to see what the reaction function is when that first hike comes. guy: who is most exposed to

this? traditionally the countrys with the current account deficits. south africa, turkey, etc. is that where we think the story is going to be or elsewhere? >> in the context this is a fed hike issue, it is still one of the main concerns. that context, you have latin america, colombia, brazil. they have also got the commodity problem as well and they have slow growth. to me latin america is the region that is most vulnerable. guy: how big a factor is the commodities? >> i think it is a very big factor. >> it might mitigate each other a little bit but latin america is exposed. does that mean africa is exposed as well? >> africa absolutely has issues. the currency markets are more controlled. most of the region is dependent on metal exports or energy exports.

as a result they are also impacted. the stories in africa vary a bit more than africa but it is still in trouble as well. guy: how big of a factor is china in all of this? >> china is a massive factor but i think a lot of the bearishness is priced in already. we have seen that in commodities and currencies and emerging markets and the slowdown in global growth. the bearishness is priced into a very large extent. i think it will continue to be a drag but it is hard to get a negative surprise shock. i think the more likely negative shock is around the fed hike and reaction to that. guy: how vulnerable are those pegs? >> there is a lot of focus, in light of the vietnam dong moving. i think a lot of the major currencies have moved away from them. in reality most of the pegs are too vulnerable.

nigeria maybe the next most vulnerable. they kept it at 1.99 to the dollar. that may change later in year. i think the speculation around the middle east pegs is probably not warranted. guy: i guess the middle east, the gulf pegs, it is an oil story. mark, nice to see you. looking at those merging markets, fx stories, still a lot of news to come out of there. let's carry on the conversation with philip. man u lio manager at life. what have we learned and what do we still need to learn? >> that the world is relatively slow. there are probably less pressures rather than more. whether rate goes up in september or december is still open. the impact on markets remains quite profound.

the sooner get to the point where we start moving forward, the better. markets do not like uncertainty. guy: when you look at where the biggest exposure lies in this story, i was looking at how energy materials, these are the kind of areas that most lodgely are exposed to this. exposed to expose this. >> one has to separate the very, very short term and volatile markets that keep our hearts beating every day with the medium to longer term realities. many of the problems, whether it be overproduction in commodities and response the a world that is only ever going to get faster which we know obviously is unsustainable play out over a much longer period of time. the rebalancing n the practical sense in my world in terms of equities and that operate a much longer time frame takes longer to work its way through. we're probably 2/3 of the way through some of this. when i think about emerging

market evaluations. guy: that's what i'm getting to. >> they are looking very attractive. guy: when do you pull the trigger on that? does the fed make you think about that? how do you get to the point where you say the evaluations look good. i'm going to execute that trade? >> it is very interesting. there are parallels with what we saw in 2004, 2003, 2004. china, crash landing, no landing went on for weeks and months. at that stage, u.s. interest rates were very low. people worried about the impact of them rising. te reality was rates started going up and wenlt up for several years in small increments. china and many of the emerging markets performed strongly. there is a -- the short and long-term doesn't necessarily intersect and provide you the inflection point. we are getting there. there is going to be i believe not a particular moment in time

where things just change overnight. guy: which asset looks the most mispriced right now? if you were to just pull out one and say thrts where i think this is the most mispriced asset. can you do that? >> i think it is very difficult at this time. i fear commodities still have some way to go. not necessarily down but they are not going to rebound. there is a lot of emotional capital invested in the commolt trade. commodities in equity markets still dominate. they are much smaller impact than they used to be. the u.k. yesterday stock market down hugely becausor energy prices and results in the commodity space. i think we're going to take some time and start to see commodities performing better in that area. there are certainly some markets getting to be oversold, in my world and the emerging markets, it is fairly bifurcated. latin markets being stretched and stretched.

in chinaing some of the marks look much stronger. guy: thank you. we're minutes away from the start of the european trading session. five mince away. mark barton is going to be taking you through that. i just want to show you what the picture is right now. looks like we have the ftse down by .7%. we saw a bad session yesterday. dax down .7% as well. cac .3%. another soft open now predicted for the european equity markets this morning. we're going to take a break. "on the move" is coming up next. the market open is coming up next. we'll see you tomorrow. ♪ mark: good morning i am mark

barton and for jonathan ferro. from thet moments away start of european trading. let's get straight to your morning brief. fomcinutes from the meeting revealed continue concerns over sluggish inflation. long to a to say so september rate hike jacob -- hike? the people's bank of china continues to pour money into stabilizing the yuan. our currency -- your problem.

emerging market currencies get hammered as the chinese ripple effect continues to rip through the fx market. that is what we are watching today. have a quick peek at our futures. like we could see another day of decline with stocks in europe falling to the lowest since early july. yesterday euro stoxx 50 futures down by one half of 1%. cac 40 futures lower and dax futures lower. let's check in with carolina the touchscreen. caroline: we are 10 seconds in and risk aversion is going to be filtering and from asia. it's going to be going toward greece. getting their first installment up to 23 billion euros today. this isn't enough to fuel the fire low the overall equity sentiment. it is the u.s. dragging it down. guess they