china's manufacturing myths slumps to a three-year low. stocks have their biggest two-month slide since 2008. the biggest three-day rally and a quarter of a century. chancellor holds a news conference this hour on the crisis facing europe. welcome to "the pulse," live from bloomberg's european headquarters. i'm francine lacqua. chinese shared went down again

extending the biggest two-month tumble since 2008. the purchasing managers index was 49.7, down from 50 in july. anything below 50 indicates a contraction. let's get straight to the chief asia economics correspondent, in hong kong. what does this data tell us? >> i guess it shows that there is no autumn out just yet in china's slowing economy. i will say that these figures have been distorted because factories around beijing in particular have been shut down to try and clear skies ahead of a very important military commemoration this week. there was a big athletics championship run in beijing also over the last few weeks. a fair bit of distortion on these numbers, but at the same time, it illustrates that the policy -- the rate cuts -- aren't really getting traction

just yet from china. the slowdown that is gripping the factory continues. that thisany sign figure has to be taken with a pinch of salt because it has been distorted? they are trying to second-guess whether the economy is going to get better? edna: we have -- just look at exports. soft, they continue to soften, and we look at china's big external markets. europe and japan are not buying chinese goods. look at the price the factories are getting. factories are mired in deflation in china. all these combined suggest that one key engine of the economy isn't doing so well. if we look at the other side of the economy, the service industry, there are tens of thousands of weaknesses, especially in the employment side. taken together, it suggests that the third quarter hasn't been going to well. they will be hoping that the fourth quarter will really pick up, and the measures will pick

up. francine: what are the chances of a turnaround in china? -- theell, it will central bank will probably have to do more, on the monetary policy side, but there will have to be more innovation and trying to get more ways of flooding money into the economy. side of things, maybe it will come into play more by getting the local government under control. if that does start to get traction, then yes, the fourth quarter might have a better look to it, a gloss on the overall performance for the year. francine: thank you so much. enda, are chief asian economics correspondent. an asian journalist confessed to causing panic in the stock market. he was held after writing his story in july saying the chinese securities regulator was

considering ending government interventions. >> i am sorry for what i have done. i should not have done this just to be sensationalist and catch people's lives and caused such great damaged the country and its stock investors. francine: reporting the news's is dangerous business in some countries. we are getting some news in terms of euro area manufacturing following the pmi. it is pretty much in line -- we are still in expansion territory. 10 minutes ago we had that driven unemployment dropping. it seems that the german economy, the biggest in europe, is brushing off a global slowdown. australia is more exposed to china's economy than any other developed country, and this morning it central bank announced it will not be raising interest rates with reference to volatile equity markets in china. let's get straight to bloomberg's michael in sydney.

china is proving contagious for an economy that is very reliant on commodities. yes, that is exactly right. australia is the most china dependent economy in the world. the central bank today was fairly circumspect. mentioned a further softening in china's economic conditions. it also made reference to the volatility in the equity markets. but it was more descriptive and prescriptive. -- than prescriptive. it was looking at potential fallout for australia. the other piece of data we got today, the payments for the second quarter, gives you an insight into the headwinds australia is facing. the current account deficit blue to the widest since 2009, the year of the global recession.

basically, that large deficit with trade, which came from low commodity prices and low volumes. one thing they did say today was that he commodity prices are much lower, and that is in part due to increase of supply. the part they left out was in part due to decreased demand, which i think underscores just how much impact china has on australia. in general, they paid fairly straight with china's situation, but otherwise it is a hugely important issue. francine: thank you so much. let's bring in the head of european strategy at barclays. thank you for coming in. for the last two or three weeks we have had enormous volatility the fallen commodity prices or the resurgence of oil? marvin: i think it comes back to china's decision to change

its currency regime and the potential signal it sends about what is going on in china and growth and whether this is just about reforming the currency toward a more market-oriented --rent the in the hopes oriented currency, or whether it is an underlying signal of growth. this morning we saw the pmi, suggesting that maybe there are some significant growth concerns, and that seems to have been the key driver for a lot of different markets. oil has also been one of the key fundamental variables in telling us there is weakness. we do have a lot coming online but we have also clearly had a shortfall in demand and a lot of that comes out of china. francine: everything is underpaying, whether we are pessimistic or optimistic. -- manufacturing data today because of the parade, the fact that they shut down industries -- are you fundamentally optimistic that you will see

6%, or would or you because this? marvin: you need to be cautious. we have been calling for chinese growth to be below forecast numbers, near the bottom. we see downside risks to that growth. not just today's data, the manufacturing pmi, you also saw softening in the service and pmi. it is still expansionary, but it testifies to the fact that across the board, chinese growth is suspect. we continue to think it will be sustainable growth, that the chinese authorities will manage. the situation. -- will manage the situation. that is what we are seeing -- verizon risk premium. francine: if they see it like you do, they would hold off, increasing interest rate in september. if you were the ecb, you would add to qe. marvin: let's break those into

two pieces. i think we heard very clearly from a variety of different and officials over the weekend that while they are concerned about long-term trends and inflation, the u.s. economy is ready for a rate hike. certainly chinese fears play into that, something they are going to monitor --francine: acknowledge it. -- montior. francine: they acknowledge it. marvin: but they aren't saying they are going to let a determine their policy. payrolls are going to be much more important. what's going on, the strong orders we got. all those things are suggesting that we still have a live meeting in september. we have pushed back our call to march precisely because we do think that these things are going to weigh on the marginal voter in a way that will draw that. but this shifts the focus to the

ecb, especially for those of us in currency land, where it is a relative value game. there we see that the ecb has been a significant rise in its currency. downward pressure from oil -- yes, we size way 5% rebound in the last three days, but that is for very low levels. inflation expectations have fallen in europe if you look at breakeven measures. all those things are likely to set the ecb on a policy of further easing. we expect them to extend their qe program the minimum time commitment. they make it is sense that they will go to negative rights. francine: what do you expect euro-dollar by the end of the year? marvin: low parity. 98, actually. francine: interesting. thank you so much. head of european fx strategies at barclays. here's a look at what i else's on our radar.

the biggest rally in 25 years -- oil rallies, and data will show an increase in valves. 27% in therged previous three days, after opec said it is ready to talk to other global producers to achieve a fair and reasonable price. francine: angela merkel and the spanish prime minister are due to hold a news conference on migration near berlin. it comes after merkel called the european union to take a united stand on the crisis. you are watching live pictures of hungarian authorities leading a protest in an effort to prevent migrants from leaving. that itss hoping newest smart watch will create a revival of fortune. it boasts a longer battery life than the apple watch, but samsung is yet to announce plans

for apps. they have been struggling with full in profits and shares. prices dropped for the fifth straight month in august, extending the longest losing streak and decade. samsung has lost $45 billion in market value since april. users will soon be able to link an android device to their smart watches. the software that powers google friendly smart watches will not integrate with iphones. we have heard a lot about market volatility lately, so how are the world's richest investors dealing with the challenges in the fallout? let's cross over to manus in surrey, southeast england, joined by the president of you be soft. -- of ubisoft. manus: thank you very much. than $2 managed more trillion -- how do you manage in a crisis?

great to have you -- what a spectacular setting we are in. the debate will take place later. what i want to get to is this -- the critical thing to you is growth. global growth and the impact china will have. give me your take -- are we in for a hard landing? >> no, we believe we are in for a soft landing. the cycle in asia is still intact. the corrections we see in the market were sort of expected. maybe not the volatility, maybe not the level of pain. but we should look through all of that noise and have a long-term perspective. asia is still the engine of growth. manus: a lot of people are writing about frenzy, panic. are your clients panicking? are you seeing a move to cash? i divested from markets? i'm not just talking about the chinese. >> no, people are still in the

mode of asset protection. most people did have asset allocations in place. the question for most of our clients all around the globe is, is at the moment to take benefits? know -- cash doesn't yield any money forever, and people are worried about missing an opportunity to go back. i think fortune is the name of the game. manus: but you have got to see opportunities from a cio perspective. are they still in america? it is not -- >> may have been on the way in china but for now we are neutral. we saw the correction and it depends on what you have as an individual. it should senior risk-return expectations. you can't just have a general remark of where to go in terms of investment. if you take a step back, we still believe that it is the

right place to be. there are places you can take benefits from. we like credit, the high-yield market, equities that are me -- ito the cycle has never been better so it is for us to be on top and have good ideas so they can take benefits. manus: where are your growth target and ambitions? 7%-8%.e growing at about canhe president of wealth, you really stick with those ambitious growth targets or do we need to dial back what we can expect? >> no, the underlying trend is still there. -- it is growing around 7%.

we with our size can still have an aspiration to grow in the market, which brings us -- manus: can you deliver that? >> if you look over the last couple quarters, it speaks for itself. manus: you talk about growth and opportunities. your name is associated with postal savings banks, and potentially could acquire assets. is this an opportunity -- is there a window for going out and in? are you in the market for postal savings? >> our dna is for expensive growth. being present in older markets -- that is the healthiest way to do it, the best quality for growth. that is where we focus. you look at opportunities all around the globe, you see people who struggle more than we do, but the name of the game is to use our growth. of thethe other facet

markets and europeans is this, that we go towards havens -- you have a bit of the business going in switzerland. i got together at the start of the year -- is it going to be another headwind? >> it is low capital is -- they look for places where the money is safe. so yes, it has opportunities. manus: where -- this is a spectacular venue -- give me a sense of what we are going to debate. what is your message going to be -- we have 200 people coming through the door -- what do you want to get? want to expose our

clients the experts around the globe. we have access to the smartest people in the world and we want to make sure our clients have access, too. we want to do team up with this thought leadership. we want our clients to experience what it is all about. there will be a couple topics around education and medicine, about infrastructure, about energy. all of these speakers will look through the window over the next couple years, and that has huge of occasions. you know today is all about volatility. there are very long-term and we may have to change how we are operating. that is what we want to do. we want our clients to see the very best, to be challenged, to have a dialogue with the smartest people in the globe. it is a fantastic opportunity. manus: we look forward to it. thank you very much for your time.

francine, back to you. looks like it is slowing down in china, but that creates opportunities, the volatility in the frenzy we have talked about. francine: opportunities. thanks so much. manus at the mclaren thought center in surrey. marvin is still here -- thank you for sticking around. you are saying that we have to be cautious about what's going on in china. you are expecting the dollar to be below parity by the end of the year. what is your best play? marvin: we have just put out a new recommendation to be short with the dollar. a similar recommendation would be the one that man is associated with the dollar swiss. it is an overvalued currency but we think it is the clearest play. we think the ecb will come through with easing by the end of the year. francine: qe?

marvin: by the end of the year, we think they will extend the period of their commitment to qe, and they may actually do that as early as this week. probably not, but maybe as early as this week. we think it will ultimately be more effective for domestic policy and for their exchange rate if they move to more negative rates. that is not our base case call but we don't rule it out. we think it is possible to come out and qe. francine: thank you so much for all that. marvin, head of european affect strategies at barclays. up next, more on the crisis facing the european nations. ♪

francine: welcome back live on bloomberg tv, bloomberg.com streaming on your tablet, phone, and bloomberg.com. if we say banks in crisis we can save refugees. that is the stands of angela merkel. she has warned that failure to work together could put the travel zone at risk. she is holding a news conference with the spanish prime minister right now. hans nichols joins us from berlin. how is angela merkel making her argument? hans: night, she really leaned into this idea that unless you have some sort of distribution

system, you could have commerce consequences. you could have consequences for trade. other times she has made the humanitarian argument. in germany, she made the historical argument that germany has an obligation to help those in need. at this press conference, so far they have been focusing on the reforms that spain has made in terms of their economy. they will quickly shift to action talk. she wants to see concrete plans. she will have her own plans up to 24. the news has been dominated up to the last 38 hours about the refugee crisis. late last night, a train pulled in -- five trains pulled into munich from the austrian hungarian border and went straight through austria. that is what is receiving the most asylum applications. take a look at these asylum numbers. this is for the first half of 2015 -- the number of applications in germany -- already at 180,000. you compare that to other countries through the eu, much bigger.

take a look at greece -- 6000. spain -- 4700. reflection of the idea that they are hospitable society of strong economy. german politicians are saying you need to make a distinction between economic migrants and war refugees. the war refugees they say they have an obligation to. for economic migrants, they need to send them back -- they need to spend more resources on the war refugees. take a look at the countries of origin or germany and spain. this gives you a sense as syria is on top of the list. that is where most of these migrants are coming from. after that it becomes more muddled. you see countries on both those less that have more economic hardships as opposed to outright political hardships. here are merkel's comments last night. "if europe fails on this question of refugees, it

threatens to fall apart. europe as a whole must move on the current situation." let's see in a little bit how harsh, firm, stern angela merkel is when she stands by, and what she says to her other countries. francine: thank you so much, hans nichols in berlin. that brings us to today's twitter question -- can migration be good for the european economy? you can tweet me right now. we have some very interesting economists arguing that migration in most cases has been essential to the european economy, in fact it brings in more tax revenues. up next, after the biggest 3-d rally in the quarter of a century, we will tell you more after the break. and you can also talk about markets and china. we also have that employment it is in germany --

expected that the biggest economy in europe may be quite resilient. tweet us some more and we will figure out the answers. ♪

francine: welcome back to "the pulse," live from london. we are just getting the nikkei manufacturing data. a little bit weaker than expected. mark barton has all the details. mark, figure -- it is lower-than-expected. mark: it is -- the index is inpping to 51.5 august from 51.9 in july. 50 indicates growth. u.k. manufacturing growth is cooling in august, export orders falling for her fifth month. in its monthly factory report

was today, market economics is saying that companies are blaming the decline in foreign demand on the strong pound, weak sales in the euro area, and the chinese economic slowdown. this report, francine, highlights the potential risks trade economy after net boosted economic growth by the most in four years. mark carney has said that the time for a rate increase is approaching. he has also warned of external risks to britain's economy. this report makes things a little bit more difficult when it comes to assessing if we are closer to the bank of england's next rate hike. other data -- u.k. mortgage approvals are rising more than economists forecasted in july, and that lending on property increasing the most in seven years. lots for the boe to consider. francine: thanks so much. there is a lot for them to

consider -- specifically the pound. extended china have the market's biggest two-month tumble since 2008. the official factory gauge wants to a three-year low. the pmi for august was 49.7. anything below 50 indicates contraction. meanwhile, australia, which has more exposure to the chinese economy than any other developed nation, has left interest rate unchanged. a cushion the impact of lower commodity prices and a weaker outlook for china. after its biggest three-day rally at 25 years, oil has stalled amidst figures that it will show an increase in crude stockpiles. slid as much as 4% to new york after surging 27% in the previous three days. let's get more on that with our european oil editor, james herron. oil glut -- we have a massive supply. is it over?

james: no, no. it is not. we just published an interview with the world's biggest independent oil trader. he is saying that the excess supply is not going to clear until 2017. he sees oil trading at the 40's $40-$50 range. he doesn't see any sudden reversal right now. francine: there is a lot that we have in our supply. there was an emergency meeting called. will opec have to cut production? james: some members would like to, especially with venezuela and algeria. but the big problem is iran . it was to increase production. they have to get other members to agree to cut. and of course, saudi arabia -- it is the only member that could realistically cut venezuela, and they won't do it.

saudi arabia is showing no signs of changing strategy. the next step is opec trying to agree with other producers, so they don't lose too much market share? james: that is an idea that has been around for a while. they had talks last year back in november, when they first announced their new strategy. again, nothing has really happened since then. they managed to get russia and mexico in again. iran saying it is going to increase production. francine: thank you so much. tech giant google has teamed up with the french drugmaker, aiming to find new ways to tackle diabetes. nejra is here with the details -- what are we expecting? ejra: they are trying come up with a new way of managing diabetes.

google says it is moving about moving from the reactive to the proactive. a number of things they will be working on with the french drugmaker -- smart insulin delivery devices, start measurement devices, devices that upload data to a cloud. this is about patients and doctors being able to better control treatment of diabetes. google has already paired up with other pharmaceutical companies in different ways, working on contact lenses that use tiny sensors to read blood sugar levels from tears. it is also working on a bandage that connects to the cloud. they are also working on nsuetooth enabled pe that let doctors monitor how much insulin a patient is using. so while this focus on diabetes? well, it is an illness that affects 382 million people worldwide. that is expected to rise to 600

million over the next 20 years. cost, in loste productivity, in the u.s. alone -- $245 billion per year. francine: nejra, what is this we hear about google breaking down the wall between android and iphone? it is taking on apple watch on its home turf? nejra: that is exactly it. , the newear service, will allow customers to use that with iphones. andou are an iphone user you don't want apple watch, you will have other options. you could care with the smart watch from lg electronics, and the new survey aims to use some of the most popular features from android, including providing alert to e-mails, calendar items, fitness updates. but it won't have some of the

features available on other android devices, like google maps and wi-fi connectivity. ist this is about, francine, that google is really looking for new ways to make its android wear software more popular. despite some people not liking the apple watch, apple managed to sell two thirds of smart wearables in the second quarter, compared with android wear taking just 10%. this is about trying to move more aggressively to the market. francine: thanks so much. nejra with the latest on google. up next, angela merkel has called for the european union state to take on a united stance on the migrant crisis. but his migration good for the european economy? that is our twitter question. we will be speaking to the international migration division after the break. ♪ before we go to break, we want

to bring you live pictures from budapest. hungarian protesters are stopping trains leaving budapest's main train terminal in an effort to prevent migrants for leaving. some pretty bold pictures. this is the question we want to talk about -- this is a human story and we will have plenty more of that, next. ♪

francine: welcome back to "the pulse," live from bloomberg's london headquarters. the chinese slowdown appears to be deepening. manufacturing has slumped to a three-year low. let's check in with mark barton. mark: china is continuing to dictate how the markets are feeling on the first day of a new month. newmont, same old china. that gauge of chinese manufacturing falling to the lowest level in three years. stocks are selling off as they dated august following the yuan devaluation. have a look at the chart i've chosen -- this is the mfci asia-pacific index. in august, it had its biggest monthly drop. it says it on the tin. the shanghai composite today fell as much as 5% after that manufacturing report. they finished the day down by 1.2% and it is believed that state backed funds are using afternoon share prices to boost

the market before this week's world war ii victory parade. don't forget -- $5.7 trillion was wiped off the value of global equities in august because of events in china. the s&p 500 fell by 6%, the biggest drop in three years. 8.5% --x 600 is down by the biggest monthly drop in four years. the is the data point to date -- the australia's central bank is keeping interest rates unchanged. get in here, because the australian dollar has sunk to a 2009er. the following currency is a plus, by the way -- cushioning the impact of lower commodity prices, and a weak outlook for china, which is its key trading partner. this is oil -- have you seen what has happened to oil in the last four days? today, down 4%. on monday, on friday, and on

thursday, oil rose a combined 27%. that is the biggest three-day jump in 25 years. that move wiped out all of august declines and leaving crude, francine, at the highest level since july 23. the monthly gain was the first monthly increase since may. what a crazy market. francine: crazy market -- that could be said about a lot of markets. german chancellor angela merkel in the spanish prime minister are holding a news conference on immigration right now. fairl is calling for treatment of refugees and the eu. let's go live to paris, where we are joined by the international migration division. mr. dumont, thank you for joining us. you put out a note that argues that migration has been good for the european economy

because it adds more flexible workers and decreases the aging population. can you give me a sense of -- is this refugee crisis different from what we have seen in the last 10 years? mr. dumont: yes, it is absolutely true. europe has benefited from migration, delivering growth in the workforce. 70% of the growth is due to migration. it has brought skills to the european labor force and markets. one in two immigrants in the and it isfected, making a net positive fiscal impact. crisis, theh this situation might be different because it is hard to integrate withees that come difficulties to integrate into the labor market, that don't or don'tuage skills,

have skills fully recognized. but in the long run, we have seen from previous refugee crises that refugees can integrate and contravene to the economy. let's turn it into an opportunity for europe. francine: i wanted to go through some of the points you are making in your note. over the last 10 years, migrants contribution socially more than they receive. they also have a net positive impact -- i know this has in hard to quantify, but how difficult is it to make people aware of this, that i can't be a burden if we want to resolve this crisis in a civilized and human way? mr. dumont: yes. it is a challenge. when looking at the image that you see in the media every day, it seems that these are poor people with very little skills coming here to take benefits, but this is not the reality. most of these people are not

only coming from syria, they are people from the middle class, with skills. they need to settle in the european countries -- we need to find them, we need to help them to upgrade their skills and to get the language skills that will make them employable in the labor market, but these people -- they can people contribute to the european economy if we apply the right policies. francine: what would be the right policy? spoke to a lot of ceos on "the pulse," and some of them, especially italian oil majors dealing with the situation, say it would be cost of all if we had the money and spending power to have some kind of in syria to try and choose the refugees that could come to your. what do you make of that? clearly, itwell,

makes things much more difficult when people take this very dangerous journey, and resettlement programs in place , most notably in canada and the united states, also helps, in a way, for people to integrate into their destination country. when people have to go through this smuggling networks, they have to face very dangerous situations. when they arrive in their destination country, it takes that much more time to settle. it's part of the solution, but we also need to think about ways to enable these people to come to europe in better conditions. francine: we heard from angela merkel yesterday, saying that we have to make sure we aren't sent that they will

help. if you were to advise the european union as a whole, or at least the commission, about how we can make this better quicker so that people don't die in the immediate, what would be your number one advice? mr. dumont: well, obviously, this is a very complex issue, and nobody is entirely has a solution. as for what we can say, we need a global strategy. we need a global strategy in the sense that it should imply all european countries and probably beyond, but we also knew global strategy in the sense of an holistic policy approach. we need to welcome people, we need to fight against smuggling, we need to cooperate with the origin company. approach that was taken in may in the proposal. that is the right approach, and europe should get together and find ways to make it happen.

francine: thank you so much. cristophe dumont. today's twitter question -- can immigration be good for the european economy? hans nichols is in berlin. here are some more of bloomberg's top headlines. the ukrainian policeman has died in clashes with protesters in kiev. the protests left 122 people injured. the slowdown in india's economy is going to add to the pressure for reform. gdp rose 7% between april and june. minister has faced a tough battle to keep policy changes in parliament. earlier this week, he backs away from one reform after facing opposition. japan's defense ministry has

asked for its biggest ever budget on the $42 billion amid concerns about china's growth. china wants to build new submarines and buy more american warplanes and helicopters. it would be the fourth budget increase under the prime minister. yesterday, thousands took to the streets against the strengthening of the japanese military. step closer toa getting a new flag after a long list of 40 alternative designs. kiwis will vote next year on whether the new designs will replace the current. in the foothills in the himalayas, we made a man who dumped his highflying career in five or of us -- in favor of the a simpler life. ♪

francine: welcome back to "the pulse," live. if ever you think there is no way out of a boring 95, think again. a man whoe story of not only found a new career in a rarefied industry but is helping the local community in the process. shery-ahn has more. and glamour ofz the city can never come close to

this -- the glory of nature among the himalayas. that is what he thought when he turned his back on the $150,000 career to herd goats. >> there is something which is not true about me -- even though i think a good salary and a good accommodation, good food and good friends, there was something missing in my life. i was not able to pinpoint that. shery: back in his homeland, e-mail handle some of the most expensive passion of scarves in the world. the overseas cashmere overseen being woven into scarves far away. >> if you train the people locally in spinning and weaving, how it should be done, there is a lot of possibility to implement. shery: it now describes himself

as an artisan businessman. he intends to give 7% from each sale back to the community. >> and health care, we need the health care kits to be provided to the community. we need ambulances. we need to create schools. training and education is a very to growt part for them, up in the valley chain of cashmere. shery: and with a traditional industry in danger of dying out, his plan would be a boost. >> when children get education and are exposed to the city, it is hard to come back. now accounts for less than 1% of the 15,000 tons of global annual passion mean a production. china makes up 17%. the plan involves cutting out the middleman and giving the nomads a bigger slice of the pie. that in turn should make the

business more appealing to the next generation. saysormer i.t. analyst that living with the shepherds has opened up a new chapter in his life. he has just negotiated a deal to sell them in mumbai, but has bigger plans for the future -- paris, the capital of fashion. just a reminder -- you can follow us on twitter. in terms of the selloff, we have had a little bit of a deepening amongst european equities, plunged that led them to their biggest loss since 2011. is showing no signs of easing. overall -- this is the picture of the euro-dollar. the pound is falling against the dollar, after that u.k. manufacturing output. overall, this is the stoxx 600 -- it is down+++

francine: china's manufacturing miss. factory gains slumped to a three-year low. chinese stocks slump, european equities selloff. wti is back in a bull market. merkel takes on migration, to take a eu states united stands on the crisis facing europe. good morning to our viewers in europe, good evening those in asia, and welcome to those waking up in the u.s.

i am francine lacqua. we are getting some eurozone unemployment rates, falling to 10.9%, the lowest since 2012. we were expecting a better than expected rate against germany surprised on the upside an hour ago. despite the troubles worldwide, unemployment seems to be heading steady. in the set countries, it is still a disaster zone, especially for the under 25 in greece.taly and .uropean shares are down the purchasing managers index for august was 49.7. anything below 50 indicates

contraction. let's look at the european markets with mark barton. mark: is a continuation of what happened last month. luation inf the deva the chinese currencies. all 19 in the red. resources 4.5% lower after the chinese manufacturing gauge fell. the best performing industry's utilities, it is down by 2%. miner falling today. 5% lower, anglo-american down by 5.8%, bh billiton down 4.8%. 27 billion euros off the value of miners in august.

asian stocks also sinking today. asia-pacificsci index. the chinese gauge sending the shanghai compass it down 4.5%. it finished the day 1.2% lower. that state backed funds are using afternoon share purchases to boost the market before the world war ii victory parade. last month andi, august, we had the biggest monthly drop in three years. today, the selloff continues ing in% after fall august. one of the more astounding charts, oil in the last four days. oil rising 27%. the most in 25 years.

incredible. today, coming back a little. data coming out of the u.s. could show inventory rose by 700,000 barrels, that could put downward pressure on oil. biggest three-day increase you cannot stop saying it, a great statistic, in 25 years. francine: thank you so much. we are joined by our beijing bureau chief nick wadhams. what, in terms of the figures we saw from china, what does that say about the broader chinese economy, many fracturing data and services pmi? nick: a boost to the economy in recent months. they have cut interest rates, rate.ave cut the reserve

another contraction that is the latest in a slew of that data. it would seem that the efforts the government has taken have not kicked in. that will because for concern for beijing. francine: what measures do ?olicymakers have amountf you look at the of money banks are required to hold in reserve, there is so much there. 18% of assets. can unlock.ey they interest rates are still above 4%. you look at the comparison with the u.s.. the government still has many tools to boost the economy. they are looking at the latest numbers with some concern.

we are expecting another interest rate cut by the end of the year. francine: nick wadhams, thank you so much. journalists have confessed to causing panic. he was held after writing a story saying chinese regulators were considering ending regulations stabilizing the market. >> i should not have done this just to be sensationalist and catch people's eyes and cause damage to the country and its stock investors. francine: meanwhile, australia, which has more exposure to the developed nations is left unchanged. the impact of lower commodity prices and a weaker outlook for china. the reserve bank of australia governor and his board kept cash

rate at a record low of 2% following may and february. let's bring in gabriel stein, asset manager at economics. we are not starting september well. is this a correction that was due? markets but just by .lso by chinese authorities growing far slower than authorities say. francine: what is far slower? gabriel: less than 4%. the chinese authorities, as far as they know, -- we know, they do not have other numbers. they realize it is much weaker. markets are realizing that, the

authorities are also realizing that the measures since november, cuts in the ror, devaluation of the currency, none of it has had an effect. they do not know what to do about this. there are things they can do. this is part of the wrenching ,hift from one economic mobile which leads to a lot of miss investment, to another one based on domestic demand and household consumption. francine: what does that mean for investors? worried, this is a time to get out of markets altogether.

gabriel: whether it is a case to get out of all markets, that is not the case. francine: commodities? gabriel: commodities, agreed. is it time to get out of equities, we do not think so. equities.attractive eurozone and japanese, for instance. week china, if it does mean the rest of the world is weakening, that means fixed income may discover attractiveness. commodities, time to get out. that time was some time ago. china is the key consumer of a lot of commodities and a marginal consumer of a lot of others. the commodities super cycle is over. francine: stockpicking, as an asset manager you have to earn your money. gabriel: stockpicking and country picking. francine: what is your favorite country? is it too dangerous to pick a stock that may be subject m&a?

gabriel: i'm not going to talk about individual stockpicking. favorite country is probably japan. admittedly, there's an issue with japan being exposed to china. japaneseentals, equities look more fundamental than anywhere else, probably followed by eurozone. , broadly, i'm still trying to understand the cycle. are we in a catch only two, china is slower than expected and people freak out. as a ceo you do not buy, or does it spur into more m&a to keep shareholders happy? gabriel: obviously it means that companies that were not as attractive as takeover or merger targets become more attractive. you can also have another

reaction, people say i'm not going to do anything. it is a difficult thing to say right now. let me remind you and let me restate, on economic fundamentals, the u.s. economy is doing well. the euro zone economy is beginning to do well. you mentioned unemployment figures. unemployment is a lagging indicator, but that still was a good side. world economy is still in reasonably good shape. china is important and china does have an impact. likeaustralia as looking notching up further growth. this is the economy most exposed to china. how important is a slowdown in china. a slowdown which was long overdue. francine: thank you so much. gabriel of oxford economics.

its biggest three-day rally in 25 years, oil has stalled amid fears u.s. government data due wednesday will show an increase in crude stockpiles. futures slid 4% in new york having surged twice and present in the previous three days. angela merkel and mariano rivera rajoy are hosting a news conference. has reiterated her call for fair distribution of refugees. samsung hoping it's smart watch will herald a revival of its fortune. samsung has yet to announce plans for apps. the company has been struggling with falling profits and shares. profits dropped in august, extending their longest losing streak in decades. samsung has lost market value. iphone users will be able to link their device to android

smart watches. software that powers google smart watches will integrate with apple. our next guest was the chief technology office of obama's campaign and founded a company recently acquired by paypal. caroline: talking about tech and we going to stick with the tech theme. cto for obama for america and now builds paradigm shifting technology. i love the fact that on your website it says, "probably one of the coolest guys ever. >> it is true. i only deal in facts. going to beu are

talking to the audience. they are high net worth individuals and they want to know about the future of technology. what is the key issue? to keepnk data is going being the huge issue within technology. usage.a lot of data the future is going to be crazy. companies are doing good stuff. it isinteresting now, going to be amazing in the future. data is the important thing. it adds to our efficiency in terms of our way of life. this is on a background of google negotiating with the eu, who is responsible at the moment? >> it is next. in many things it is the individual.

also, the companies holding the data. and then various utilities transacting with data, whether it is financial data or social data. these kinds of individuals or corporations need for the dataible they hold. i'm waiting for the day when the organizations holding the data are taking responsibility for their data instead of just kind , i don't know what they are abandoning. as soon as they get hacked or have a problem, they are like, not our problem. that is frustrating. caroline: what barriers could they put in place? >> it has to be more than just reacting when they are hacked. it has to be before they are hacked. it has to be about security. is like data usage. the same way we expect someone aiving a truck around to be

safe driver delivering our goods. we need to have the people be safe users of our data. caroline: the hackers keep anding more and more ways means of being able to hack our data. how can they keep up with the new ways in which they are managing to break down barriers. >> it will always be a cat and mouse game. it is a cat and mouse game we have to play in this world. playlternative is to not it and i don't think that is a good alternative. we have to engage. we have to invest in technology to solve these problems. in the u.s., you see all sorts of companies getting hacked because they have legacy technology. you see government organizations getting hacked. they have not invested technology to save and protect data. caroline: what companies should we be looking to that are pushing the envelope in terms of

building cyber security? >> that is a very hard question to answer. i look at a lot of companies doing distinct things. is doing interesting things. facebook and google, the ones we would expect. i'm interested in the small companies, snapchat has been very reactive. those are the companies that i think will push the limit in how we use data and how they protect it. the alternative is very scary. caroline: we talk about the efficiency for big data. what did you glean. obama for america, you were cto. know if i gleaned anything using the data. ist i did glean is that it all about people. it is all about the amazing volunteers that work with us. andpeople we reach out to

are able to turn into voters. caroline: when we had the u.k. election, the labour party eventually lost, they were doing a lot in social media. is sometimes social media not enough. using social media the best in the u.s.? >> i have kind of not paid attention because i've been busy running my company. do really, i guess the key thing is that technology will not win an election. without a good candidate, without a good party, if you do not have a good party it does not matter what you are tweeting about. you have to couple those two

things together. it is early to say who is doing a good job in the u.s. donald trump is prolific. forary has a very good game tweeting, building very good and relevant content. would social media be relevant? >> it depends on your audience. tumblr is for a certain demographic, twitter, facebook as well. it is not as if there is a silver bullet. you have to find the teen for your target -- the thing for your target. if your target is young people, tumblr is perfect. it changes so quickly. i am excited about how people will be using snapchat stories. i think that is a unique content for -- forum and has a huge audience. caroline: thank you. talking about the trends in

social media and how we can protect big data. back to you. the global leadership thought project. francine: thank you so much. , angela merkel called for european union states to take a stance on migrants and the migrant crisis. is migration good? hans nichols is in berlin and i am @flacqua. a look at what european stocks are doing. 6%.x 600 down two point the plunge that led to europe's equities, their biggest monthly loss since 2011, is showing no signs of easing. the dax in germany the biggest to sell off. down almost 3% and down 2.7%. miners resuming their retreat. back in two. ♪

francine: welcome back to "the .ulse," live on bloomberg tv german chancellor angela merkel is calling a news conference with the spanish prime minister rajoy. merkel reiterated her call for a fair just to be should but ra

will not increase quotas. hans nichols joins us from berlin. hans: we just heard something interesting from angela merkel. or are parts of the german economy that has labor shortages. she said this in the context of the refugee crisis. you can see where merkel is trying to eat her country, they have a need for workers and should have open borders. more broadly speaking. she wants to have some sort of distribution system across the entire continent. making the economic argument, the humanitarian argument. these are the number of asylum applications in the first half of 2015, germany leaving the fact at 188,000. you see greece, italy, spain. when you look at where a lot of applicants are coming from,

syria is at the top of the list. in germany it has been accelerated in the last 24-40 hours, the argument that because challenges, you are going to be harsher on economic migrants, the balkans. people coming from those parts are going to have a harder time because merkel wants to clear up space. francine: there have been attacks on refugee centers. how does merkel navigate the politics? hans: she has tried to condemn the attacks. to some critics, she has not been condemning them enough. she wants to make this a pan-european discussion and talk about the effects on commerce if you do not have some sort of distribution system. someyou look at applications coming through, you look at countries sharing the burden, germany and sweden at

the top. merkel wants to have a bigger plan. news has dominated, all throughout the night, trains have been arriving in munich. some are coming straight from the austria-hungary border in to munich. that is where a lot of refugees want to come. the debate here is about do they want to offer them tents or schools. merkel is trying to offer them schools, not simply tense, have a longer-term solution. francine: thank you so much, hans nichols and berlin. 10 migration be good for the european economy? the oecd put a note out saying there are advantages to this. tweet me, i am @flacqua. on the grounds discussion these issues. after the biggest three-day rally in a quarter of a century, oil comes off the boil,

before we get to break, let's have a look at the markets. the selloff has intensified, led by miners. back in two. ♪

francine: welcome back to "the pulse concurrent live from london. here are the next top headlines. after it's biggest three-day has stalled amid fears u.s. data will show an increase in crude stockpiles. 4% having surged in the previous days. have extendedna the biggest two-month tumble since 2008. purchasing managers index for august was 49.7, anything below

50 indicates contraction. u.s. index futures are retreating this morning. contracts on the s&p 500 and the dow jones are down more than 2%. down 6%ended the month after its steepest monthly drop since 2012. this selloffets, is continuing. jonathan ferro has the latest. jonathan: china, china, china. if you are going to pick one fueling losses, you would point to chinese pmi. manufacturing slipped into a three-year low. the dax down by three percentage points. on the periphery, losses of other 2%. in london, the ftse gets back to 2.6% of anyone exposed to china. looking at south korean exports,

plunging. here's the stock story on the ftse, every stock on the ftse 100 trading lower. it is the miners, glencore down 5.5%. i willties in a rout, get back to that in a second. let's not complicate it. a risk off day. treasuries finally get a build -- a bid. treasuries lower. what is it mean in the fx market? dollar-yen south. dropping below 1.20. a stronger japanese yen. off scenario from asset classes, whether it is equities, bonds or fx. in commodities, here is what it means for wti. marketboth in a bull after a three-day surge of over 27% and south of $50 a barrel.

who saw that coming 12 months ago? the supply story, we have highlighted that are chinese emi data highlight how fragile the demand picture could be as well. francine: thank you so much. 25 minutes from now, it is "surveillance" with tom keene. the market selloff and treasuries climbing. tom: listening to jon ferro's data check really shows how markets are correlated and have become more correlated in the last half hour. join us, head of economics for europe for morgan stanley. she is now cohead of global economics at ms. another guest will talk about the europe migrant issues. lowcall for low u.s. and u.k. inflation, that is an outlier call.

we have jacob frankel with us, the former governor of the bank of israel. he will be with us the entire 7:00 a.m. hour. we will talk about the ghosts of 1998. francine: thank you so much, tom keene with "surveillance." announced it is teaming up with french drugmaker sanofi to tackle diabetes. the deal follows google's agreement with novartis. google is breaking down walls between android smart watches and iphones. for more, we're joined by ariadne capital ceo julie meyer. given a lot of news in the tech space today, what do you think is the most interesting development. in terms of trends for some companies you are following. you mentioned google, it is not the old tech companies powering new industries. the choice of google to do that is a choice of a digital platform that basically is going

to help sanofi open up. there are other companies here in the u k going after diabetes and have brought the clinical trial world into the internet. what i think is the difference between a trial reach working with drug companies going after google going say, after sanofi is a question of size and power. who is going to own the data and of the data?ion i can tell you about a farm a company that works with a digital enabler like a trial h with a super well-funded team, the economics are going to be more shared between the startup and a farm a company than if google is engaging. this is going to be what we are going to see. francine: in the health care space. industries.n new tech companies, google, facebook, amazon, apple and

existing industry. digital enablers are going to distribute the economics and help industry, help the empire strikes back and a more powerful way then some big new digital platforms. big in the sense of the apple, facebook, amazon brigade. francine: what do you make of google? sharing the iphone and not only android as well. this will force others to do the same. julie: open systems trump closed systems. apple is a closed empire even pass the app store. google is saying our trump card is we are going to be cross-platform. for those of us in the tech sector for 25 years, you go back to winning, why did apple not win in the early 1990's? it was a closed empire. open all this trumps closed. google and android are driving that.

symbian was doing that but they did not have the right model. francine: closed never works, open means they are going to win. who are going to benefit the most? are we going to have some of your tech startups? how much more money will they create? the teche way startups, we call them digital enablers, the opportunities are to partner with big guys. take any industry, those are large distribution basis. they have assets and they need tech startups. if david and goliath can dance, if they incentivize consumer data, there is troika between david, to goliath, and julie's data. francine: do you think it will happen? julie: that is the dialogue that needs to happen. u.s. digital tech

platform companies controlling the economics of existing -- they intend to take over every industry. the big prize is not to be in the tech industry, tech is not an industry, it's a layer through all industries. the prize is to control the economics of all the traditional nontechnology industries. that is the next 10 years. francine: wearables, where are they going? julie: they are right next to your body. it is the smartphone, the watch, all of this equipment on your body that has an opportunity to be just as powerful as a smartphone. francine: is it too soon to tell win.s going to we had the unveiling of the smart watch by samsung. still unclear whether it will gain market share. julie: a lot of consumer preference has not been sorted out. we're looking at companies going over the mountain.

inre is a lot of experience consumer preference that is being sorted out. francine: content is king. apple hooking up with hollywood. there's a great company in the u.k. working with some of the most important publishers in the world. helping them bring their content to the ipad and the app store on apple. the big problem is they do not know which ones of us are reading. they know that 2 million copies have been sold. they do not know how much of the book that you read. they do not know that i opened the book and did not read it. francine: what space is netflix in? is there anything, you have a big conference friday. julie: that is right.

francine: give me ideas you have not talked about. we go back. is there anything we have not thought about. julie: we had our investor summit at the four seasons on friday. we have people talking about the future of storytelling. netflix, hollywood and so forth are vehicles for telling stories. we have people talking about the future of publishing. orson publishing, a partner at dwt is in town. michael jacobson, all about backing the creative industry. that is just the final going into the big massive media entertainment industry. we had people talking about the future of banking, energy, all sorts of industries. we put the best entrepreneurs onstage talking about their industry. the money in the room, 200 investors in the room.

we will the live streaming it. francine: julie meyer from ariadne capital. after the biggest three-day rally in a quarter of a century, oil comes off the boil. ♪

francine: welcome back to "the pulse," live from london. oil back in a bull market.

opec signals it might cut production in the future. the u.s. lowered out put estimates. james joins us. deke let does not seem to be over. it has risen 27% -- the glut does not seem to be over. it has risen 27%. >> opec talking to other oil producers like russia. until saudi arabia and its allies change their position, which they are not signaling they will do, that will not happen. and opec cut is not on the cards anytime soon. in the u.s., the data show production is falling. data tomorrow is expected to increase. demand will be lower for the next few months. there is a lot of bearish data out of the u.s..

opec, theyn terms of have a meeting scheduled for december. we have not had an extraordinary meeting get, why? saudi arabia does not want to cut. there is no reason why you would meet. james: it is an organization operated entirely by consensus. the saudis and their allies would have to be on board and they are showing no sign they want that. even if they would let it happen, no signs they would change the course of the meeting . francine: i've covered oil for many years. they would never give a price. if you look at brent, what makes sense?t if the price goes to local man and not of their infrastructure spending does not make sense. james: there's plenty of goldilocks pricing.

some countries like venezuela need oil to balance their budget at $100. the heads at will see that that is not coming back. that era is over. they are trying to find the stronger price. francine: we have inventories tomorrow in the u.s.. sanctions.n james: once the sanctions are

could addan said it half a million barrels. it depends on the state of the industry inside the country. no one has been there. most people have not been able to inspect the pipelines. it seems the consensus in the industry is that they can add a few hundred thousand barrels a day. whether they can hit their most ambitious target is skeptical. francine: thank you for that. a ukrainiandlines, policeman has died in clashes outside parliament in kiev. the demonstration against giving more authority to regions held by russian separatists left 122 people injured. the slowdown in india's economy is going to add to the pressure for reform or gdp grows 7% between april and june, below the median estimate of 7.4%. india is expanding at a faster

pace than other world economies, prime minister modi's government said it can do better. japan's defense ministry has asked for its biggest ever budget, almost $42 billion, admit concern about china's growing military power. japan wants to buy more american warplanes. if approved, it would be the fourth biggest budget increase under prime minister abe. nnew zealand a step closer to getting a new flag. .iwis will vote next year the current flag is confused with australia's. germany's find it manufacturing beats. we look ahead to u.s. data out later. ♪

francine: welcome back to "the bloombergve on tv. if ever you think there is no way out of the boring 9:00 to 5:00. ofan who found his way out the industry and has hopes of helping the community. shery: the glory of nature amid the soaring peaks of the himalaya. that is what babar thought when he turned his back on mckinsey

to herd goats. >> even though everything is good, good salaries, good accommodations, good food, good friends and traveling all over the world. missing inome truth my life and i was not able to pinpoint that. cashmerebar overseas produced by some of india's poorest being woven into shawls and scarves destined to be sold in boutiques. the entire theme, all the local people -- the entire community gets to benefit. shery: babar describes himself as an artisan businessman. from each to give 7%

sale back to the community. >> we need health care kits, ambulances, we need to create schools for the nomadic community. training and education is an important part for them. also to grow in the value chain of pashmina. shery: with the industry in danger of dying out, his plan would be a boost. >> when our children go to the city and get education, it is hard to come back. a dark future for sheep herding. shery: india accounts for less of global pashmina production. mongolia makes a 20% and china 70%. babar's plan involves cutting out the middleman, making the business more appealing to the next generation. the former i.t. analyst says living with shepherds has opened a new chapter in his life.

he has just negotiated a deal to and pashmina's in new delhi plans that has bigger for the future, paris, the capital of fashion. francine: for a look at what we are watching, we are joined by hans nichols. a little bit of data out of the eu. expecting a couple things from the u.s. hans: we get the pmi data out of the u.s.. the expectation is 52.3. last month it was 52.4. right oneo get it thing about the u.s. numbers, even though it is on a decent trajectory, it is a full percentage point not just below germany but also spain and italy. what we saw this morning, diversions. france continues to miss expectations, continues to be in negative territory. the u.s. has gone down slightly. they are still above the crucial reading of 50.

i will be looking at the pmi number out of the u.s. context matters, some peripheral economies in europe are doing, at least on the pmi aspect, that are than expected. francine: thank you so much, hans nichols with the latest on what to watch. before we go, let's take a look at the european selloff. in terms of some stocks lovening the rout, and commodities stocks are pulling the stoxx 600 lower, down 2.5% overall. dax 2.7% lower. the plunge that led european equities to their lowest lost since 2011 is showing no signs of easing. the stoxx 600 down almost 3%. slumping after the report from china's factory gauge dropping to a three-year low. manufacturing in the euro area shrinking more than initially

forecast. miners sliding 4.5%. futures in the u.s. lower. live pictures, hungarian authorities stopping trains from leaving budapest's main terminal in an effort to prevent migrants from using it to leave for austria and germany. we are watching those live pictures. our debate was about immigration. tweet me, @flacqua. hans nichols was on this story. depends on whether politicians like angela merkel can convince their populations in certain places that migration is good for the economy. we had an oecd person saying migrants accounted for 70% in europe of the workforce over the past 10 years. the oecd arguing it can fill niches in fast-growing and declining sectors. is migration good for the european economy? that is it for "the pulse," stay

tuned for "surveillance," coming up next, live from new york. see you tomorrow, everyone. ♪

announcer: this is "bloomberg surveillance." tom: this morning, u.s. equity futures signal a retest of august lows. data,dds on weak economic this chinese stock market the

sense we receive key economic data this september 1. lower and slower. morgan stanley looks for minimal inflation. they agreed to disagree with the vice-chairman. this is "bloomberg surveillance ," live from our world headquarters in new york. what an august it was. i'm tom keene. join to me, vonnie quinn. direct from jackson hole, the former governor of the bank of israel as well. tom: jacob frenkel, the former governor of the bank of israel, truly one of the world's leading academics on foreign exchange, economics. right now, a busy morning. let's have our top headlines with vonnie quinn. vonnie: it was the worst month for u.s. stocks and more than three years, and it looks like the slump will keep going. the dow and the s&p 500 lost 6%. the news from china did not