>> and stabilization. chinese markets reopened with the pboc saying that the worst is over. more girls emergency migration summit in berlin is said to be preparing to add 6 billion euros to the federal budget to deal with the crisis. the french president will appear on national television later today as it approval rating stands at just 19%. welcome to countdown. i am guy johnson. anna edwards is off today. in the meantime, let's talk

about what you need to note this morning. chinese markets have reopened but remember that the u.s. is closed. it is labor day. no action stateside today. friday that was probably a little inconclusive. on therkets closing downside. not as much as the european markets did but nevertheless lowered. the payroll data was weaker but was it really conclusive enough to drive us either way when it comes to making a decision on what the fed will do. i think that was a markets conclusion as well. we ended up softer but there was not enough action around the payroll number. it did not change the argument very much part let's talk about what is happening over in asia. ist we have seen over there the chinese market is reopening. the pboc stating clearly that the worst is over. the question is, is the worst over?

that is our twitter question of the day. if the chinese turmoil nearly over. i want to look at this chart. we talk a lot about charts here at bloomberg. here is when you want to pay attention to. we often refer to this. this is the 50 day moving average. the orange line crossing the 200 day moving average. have made life quite difficult for the pboc's expectations that the worst is nearly over. let's go to asia and find out what is happening. it is a volatile day for asian stocks. swinging between gains and losses all morning. not surprising given the chinese markets are back online after a holiday. the shanghai composite, the things i is in -- are in positive cap -- territory. that horth pointing out shares in hong kong are gaining for the first time in six days.

the shanghai composite rising 9/10 of 1%. japanese stocks lacking clear direction as well. rising 1/10 of 1%. the japanese yen is weakening all morning after three weeks of youngth and remember -- mentioned the death cross for the shanghai composite. the index is climbing unchanged but it has formed a bearish indicator suggesting we could see further downsides. we are seeing declines in energy stocks there as well as in australia. it is filing for 10th of 1%. what is interesting is in australia the aussie dollar. i want to show you that because the australian dollar has been moving on this in lockstep with -- almost in lockstep with the chinese economy. when chinese stocks failed to turn positive, even with authorities trying to prop up prices. today, the aussie gaining slightly today.

the shanghai composite is losing momentum. it is still at 69.20. below the seven cents march. i want to look at the shanghai composite because we had a news report finding chinese cost.tors that it may analyst saying that loses stocks in early trading around 32.16. 10 minutes into trading. it is currently losing some of that momentum. i want to take you through some of the chinese stocks that have been making headlines today. one of them, byob is an automaker. while they surge in morning trading they are currently up by thereause they signed -- was a contract for 10,000 units. we are seeing some operators saying that the macau vip market

may never fully come back. hong kong property prices have been soaring recently although the jp morgan advisers say they may be corrected. joining us on what is happening in asia. it is interesting to see the chinese button-down on rating. let's turn our attention back to europe. invoked the emergency measures that has allowed more than 12,000 people into the country and through to germany. the migration issue taking center stage over the weekend. policy makers struggling to deal with this ongoing crisis. let's give you a taste of this weekend's discussions. >> the time for games is open. it is time for making decisions and turning decisions into actions and doing it united. as europeans. >> it makes no sense to have a

public debate about who gets how many billions for what. this will not reinforce but disturb the salivary -- the solidarity. >> we absolutely need to have a european response to this humanitarian crisis which is not acceptable. not thel nationalism is answer. the no phobia is not the answer. closing the borders is not the answer. >> we will continue our approach of taking them from the refugee camps. a safervides them with route to the united kingdom rather than risking the hazardous journey which is tragically cost so many lives. >> the imf is trying to do what it can when we are asked. guy: a busy weekend for leaders as they grapple with this crisis . in germany, angela merkel's government held an emergency

summit last night that followed the influx of refugees into germany over the weekend. continental's joins us now from the main refugee crisis center in berlin. what do we know about this summit and the plants that may emerge? we know that they had a meeting and they are trying to figure out the mass of this. they want to make these numbers work because no one denies you will need a lot more money to process and integrate these refugees into german society. there is a welcome mat out and that has been one of the main tories but over the weekend you started the year especially from merkel's sister party, concerns about the number of refugees coming in and the cost. and you take a look at what happened over this weekend. over 17,000 arrived. here, at the main processing center, you can see that the queue is starting to line. families have been arriving. people are waiting to put their first application for asylum in. here is where we have a sense , they are reports

trying to figure out how much it is going to cost for 2015 and 2016. what merkel's government has said is they will spend more. billions is what they have said that they have not been specific. they also said that they want to stay within their balanced budget goals and that gives them a question of about 5 billion to then. the challenge is, when you look at what they spent last year, no one knows what the price tag is going to be for this year. that is one of the reasons there has been some defense within the coalition trying to figure out how the math will work. there are some estimates that for 2015 it will cost an additional 10 billion euros. said.s what an official have al need -- we still little despair and we will desperately needed in order to cope with these tasks and cut -- and subsequent years. the concern is that you are

going to do nothing but invite more refugees here to germany with this open arms policy. merkel's government is hope -- is holding firm that they need to keep the arms open. ofre is an outpouring support from germans. volunteers have been here throughout the weekend making sure that the refugees are taken care of and kept warm. or is a shortage of beds in berlin and that is why we see some people sleeping outside. this is a difficult moment for german political system. they are trying to work through it. that is internally. the overall european response is going to be more difficult. but how does angela merkel what she is doing at home onto a european platform? how do she convince others that the german approach is the right one? the hard part when you look at the map.

when you look at the budget. merkel in some ways talked about the importance of staying within the budgetary rules and that has freed up money to take care of this problem but at the same time, they cannot to that they cannot go too far overboard because they may lose their credibility in terms of their fiscal austerity. their fiscal prudence. in some ways, no one knows how big this crisis is going to get because the numbers, right now we are talking about 160,000 resettlement for a pan-european plan. they expect this year, 800,000 refugees to seek asylum here in germany. when idea that merkel's government has been pushing is to reclassify certain countries as safe countries and others as war-torn countries to exit but i the process of getting these refugees integrated into german society. put them into the workforce come up with the children into school and find permanent housing. it is a difficult task for germany and even more difficult across europe. it will be interesting to

see what the french president says in france. stay with us on countdown. a busy week ahead. we will bring you all of the story that you need to know this morning and look ahead to what you should be watching this week. bank of england rate decision later this week as well as apple's latest iphone. it is going to be a busy week. -- the greekrrick leader is back with less than two weeks to go for elections in greece. financeer greek minister has not ruled out a comeback. someonee services of who insists that there is a problem that needs to be implemented may be harsh, but it should be an answer that works. ministeringd it

bitter medicine, i mind administering poison. if the government is interested in bitter medicine than i am on board. in the hot seat. it looks comfortable there. coming up as well, we will have more on that interview plus the french president in the hot seat. he fields questions from the press. we will tell you what he is expected to say. that is coming up after this break. ♪

guy: good morning. it is 7:15 a.m. in frankfurt. china has revised its 2014 gdp figure lower. they have lowered it by 1/10 of 1%. second biggest

economy. austria is going to close its borders again as it rolls back measures allowing migrants to cross into its border from hungary. the prime minister's of the czech republic, slovakia, and austria will meet later today to discuss the crisis. this all comes before wednesday when the european commission will put forward a proposal about the redistribution of migrants across europe. the french president is set to hold its press conference today. it -- he is expected to take questions about europe's ivory crisis and the french economy. his approval rating starts at 19%. it is six points behind his rival. france feeling the economic squeeze and that is agriculture. gary prices are down. prices are down.

let's get more on what this means for the french economy and the european economy. good morning. process is moving to brussels today. this is a european issue. we tend to look at this through the french lens. give us a pan-european picture. vocal,french farmers are the most vocal in the european union in terms of falling prices that we have seen. particularly for dairy. a bige seeing demonstration in brussels today following a demonstration in paris last week. the farmers are gathering because the european council is meeting to discuss the downturn in prices and a number of sectors. guy: how bad is it? --farmers are using money losing money in a number of sectors. the gary farmers are quite vocal at this is also happening in a number of livestock industries,

cattle and beef, farmers are facing losses as well as some fruit and vegetable farmers. a lot of this has to do with the russian ban on european food exports. guy: there is a political basis for it. >> yes. are of the sectors that prohibited from trading in russia at the moment are the ones that are worst affected. those are the ones that are going to be in brussels today trying to get some attention. guy: when you think about agriculture come you think about the policy and the french .ssistance about maintaining what kinds of policies in brussels and in paris could put in place that will alleviate the suffering? >> there are a number of things on the table that people will be discussing today. on the dairy side, there is stockpiling in europe and their are buying programs so that when prices reach a certain level, farmers and producers can sell

into european stockpiles. that price is low. many farmers want that to be raised so that the european buying would kick in at a higher level. you could see something like that kick into effect. also marketing within the eu and exports. guy: how expensive will this be? how much would this cost? >> that is the issue. we are not exactly flush with money in the european union at the moment. there are calls for more support programs. there are also questions about where the money will come from. the european union does have an emergency fund for agriculture. i believe that is at 400 million euros. once that money is gone, it is gone. they are tightfisted. thank you very much indy.

-- indeed. we suspect the agricultural story will feature the french president discussion with the press. he will be on national television. this happens twice a year. is migration crisis, what happening with terrorism and the problems surrounding the french economy is very much front and center. his approval rating is 19%. he is significantly behind his opponent. they are trying to keep the party together. we have a europe analyst with the eurasia group. good morning. nice to see you. hollande use this morning to help himself? what does he need to say? >> he needs to make a clear

announcement about how he intends to finish his mandate which last until may 2017. we are moving into the second half now and he needs to be very clear about his intentions. is he going to continue reforming. what types of reforms will he do? is he going to reduce taxes? what is his plan for the electorate between now and elections? guy: france is open for business. he has ruled out changing out the 35 week. francois hollande is struggling to keep together his party over the economy. when they divided the socialists, how can they provide forward moment him on reinvigorating the economy? >> that is the most difficult issue because there are certain elements within the socialist party that are happy to reform and want to do the reforms but they have to take into account parts of the socialist party that are much more skeptical and against the government reforms

against more austerity. that part of the party does not want to support those reforms ahead of elections. presidential elections in 2017. the most important point for the president is staying united with his party. public, do general they care about the economy? is playing in france right now where is the migration crisis what is playing or terrorism? >> i think it is a combination of these issues. what is very important is the unemployment levels. that is ultimately what people feel on election day. are they employed? how has it been going since hollande has been in power since 2012? ultimately, that will be his most important indicator for

him. will he be able to argue that he turned unemployment levels around? so far, it looks very difficult. guy: you said it would be good to keep the party together. you talked about the fact that you are elements within the party that would like to do something. are we going to see anything? that are easycies to pull the trigger on that will make a difference in the near term, before december and before the elections of next year? will be extremely difficult to do anything in terms of economic reform. willnk president hollande focus more on more traditionally socialist reforms that address more issues. i believe that will be his strategy. and the way he will try to deal with the waters ahead. did sarkozy do in this environment? did they stay away from them?

>> for the pen it was relatively easy because she attacked mainstream parties. the republicans are not doing well either. for her, it was easy. she does not even have to talk about her own program. she can just attack with the other two parties are doing. over this weekend, she was very clear. she was arguing that she is representing the french population. for the republicans, it will not be difficult either. they still have primaries in november 2016 so they do not know who will run for presidency in 2017. they will have to get a coherent party behind that one person that will lead the party to the election. migration, issue of

is president hold on on the right side of public opinion in the approach he is taken on the migration story given the unemployment backdrop? majority of the french are against taking in more immigrants. they are relatively afraid of the consequences that could happen in terms of security. guy: what does he say on that today? he has this issue of unemployment and migration he pushed by the germans. to stand shoulder to shoulder on the migration story. looking at domestic politics, how does he cope with that? >> a logical way to do it is for him to say that he is the head of the country, it is a massive crisis, he needs to deal with that. he is doing it together with his german partner. as their notit being a choice for him to deal with this crisis. guy: he is above the politics.

we will bring you more of that coverage of that press conference throughout the morning. it starts at 10:00 a.m. u.k. time. headg up on countdown, i of that, a dramatic week for the central banks. tosia's central bank is due make a decision on freddie gray new zealand, peru, and malaysia to mention just a few also out this week area we will have a look ahead at the macro story v. we will take a break. we will see you in a moment. ♪

welcome back. it is 6:30 a.m. here in london. let me tell you about the story you need to know this morning. china has revised its 2014 gdp figure lower than the statistics. of 1%.t it by 1/10 does not sound like much but it is significant. the second-biggest world economy has dropped slower than originally reported. austria to start re-closing its borders again. allowingack measures migrants to come into the country from hungary over the weekend. the prime minister's of the

czech republic, slovakia, and austria will meet to discuss the crisis. all of this comes ahead of wednesday when european -- when the european commission will put forward a new proposal for immigration. the french president is set to hold one of his press conferences today. he is expected to take questions about europe migration crisis and the french economy. his approval rating stances -- stands at 19%. six point behind his rival. ,s oil continues to drive low the speculation is that saudi arabia will drop its peg from the dollar. saudi arabia dismissed its calls -- that call. there.ilcote was commodity that is so linked to the dollar, the

peg seems fairly firm but speculation has been on the rise. ryan: when you look at the one-year forward contract with the rial, and they are at the highest they have been in 12 years. the reason for that is the speculation as an indicator that more than ever, in the last decade, investors think they will abandon the peg. we spoke with the central banker of saudi arabia who was at the conference and he really wanted to talk because his message is that the peg is actually here to stay. have a listen. oure are sticking to exchange policy of peg to the dollar and the exchange rate of 3.75 because it has served our economy well over the 30 years and continues to serve our economy well. and it is intility the speculative forward twelve-month market. volatility had been

.ith the chinese currency speculators bought to speculate on the forward at -- forward market in the economy. ryan: the reason for all of the speculation has been the drop in the oil price. nearly 50% of where was a year ago. you heard the central banker there is a it is precisely because their economy is so dependent on oil that they will keep the peg and not do like kuwait. he went from a pegged to the dollar with a basque -- to a basket of currencies. her strategy is straightforward in terms of the finances. they are allowing their reserves to burn down a little bit.

they have dropped about 10% since where they were last year. they has started to issue debt domestically. he thinks that is enough in the meantime to keep them going. of them are still pegged to the dollar. thank you very much. let us move on. let us talk about the implications of what they have learned -- what we have learned from the g-20. the chinese are scanning very sanguine. the story is starting to stabilize. we have had the payrolls on friday. there is something in there for everyone. you could argue it predates all of the recent turmoil. let's get to the analysis. let's start up with the g-20. was there anything there that changed the dial? withme of these snippets comments on friday. nothing hugely surprising for the markets. it is the case of the g-20

trying to restore confidence, reassure the markets, and say, don't worry, everything is ok. that is certainly a risky strategy. we have a wave of economic data from china this week and very quickly, we could see the today with a message from the g-20. if the data continues to show the slowdown down in trade, global trade growth, that is going to continue to worry the market. guy: we are nearing the end of this turbulence. the data is going to be interesting. it could show a significant slowdown. are we nearer to the yen or are we still nearer to the beginning of the process? >> in the practice of what the governor said with the equity markets. seenat case, yes, we have nearly all of that move up higher to the highest.

most of that has been reversed. there is an argument to be made that perhaps we are close to the end in terms of the correction there. i think there is greater credibility on that side then there is on that -- don't worry about china slowing, it won't be the problem side. it will take more to convince the markets of that than just a statement from g-20. guy: payrolls. i did not think it was particularly conclusive. whether it will be september or december. it was -- it predated some of the turbulence. are we any further forward this monday morning on what exactly happened stateside? >> i think we are. i thought the report generally was good. -- we were bank online. if you put on top of that the unemployment rate is now in the asdle of what the feds view

employed. 5.5%. most significantly, was the wages. if you look at the annual growth not of wages, the story has changed. but you have to look at it at a shorter. -- shorter period. we have taken the first eight months of this year and we've annualized that and on an annualized basis, so far this year, wages are growing at 2.9%. sinces the strongest 2008. we are there. the evidence of wage inflation is there to see. guy: that is what janet yellen likes to focus on. why have you guys moved from september to december? >> i think the composition of the fmo c. they are not completely convinced that there is wiggle room to waste. more specifically, what we're

focused on is the fmo see from july. it stated that nearly all voters wanted to see further evidence that to give them the confidence in believing that the inflation rate would move towards target. since then, we have had a fairly substantial deflationary shock in terms of what has happened in the financial markets. i think from that perspective specifically, the inflation perspective, perhaps they feel there is time to wait. i think they should be going. i think they should've gone before. i think that they probably will wait. there he close. guy: what if -- what is the market reaction if they do not move in september? >> we are still at around 30%. go,hat case, if they do not i do not think there will be a huge reaction in the markets. a much eager reaction if they do go. guy: what are the chances of

them doing a 12 basis point hike or a 20 basis point hike? something that pleases everyone. --s the fact that it started is it almost irrelevant how many basis points there are? >> in this timing cycle, it will be different because of the scale of liquidity in the market. they are effectively acknowledging that they cannot pinpoint exactly where the fed funds rate will be and that is why we have a range. with smaller amounts than 25 basis point would be nearly to the delight of the market. guy: gradual. >> it would but i think that the press conference looking at the way the markets priced anyway at the moment, it is already telling us that they believe that the cautious fed

projections are too much. i think it is already in their that it will be a very slow tightening cycle. guy: plenty more to still talk about. up, the greek snap elections are too close to call. could this man win? new democracies leader. varoufakis talked about his ambitions for greece. he spoke exclusively with bloomberg. stay with us. ♪

guy: it is 6:43 a.m. in london. let me tell you about the stories you need to know about. china has revised its 2014 gdp figure lower. 1/10 of 1%. the figure shows the second biggest economy grew by 7.3%. is re-closing its

borders again as it rolls back measures allowing migrants to across the country from hungry. the prime ministers of the czech republic, slovakia, and austria will meet later today to talk about the migrant crisis. all of this comes before the meeting on wednesday with a new regarding migrants across europe. the french president is set to once a yearhis press conference today live on television. he is expected to face questions about the european migrant crisis and the french economy. his approval rating is down to 19%. six points behind his rival. well that weou as are seeing softbank in the chinese markets. when i got in this morning, they were trading to the upside. we are now down over 1% in shanghai. mark mobius, a man who knows a

little bit about the emerging markets has some advice for the authorities in china. theys advice is that should let the stock market fall. he is not alone in this opinion. the story talks about other saying that this effort is futile and the government should let the stock market fall. they are saying 15% is where it should decline from these levels. guy: should they stabilize at that point? or get out of the way completely? >> no one is bigger than the market. even though the chinese market -- chinese government is pretty big. everett historically would tell you probably not. guy: are the markets right? >> where the markets are going to bottom is where you have buyers come back in. they will only come back in when they believe there is confidence -- when they have confidence in the value. in theu have distortions

government being an active buyer and not knowing at any moment they may pull away, you're not going to instill confidence in the broader markets. therefore, you could see further declines. guy: how can you have a controlled economy in a managed market? do they fit together? >> you mentioned the word value. one of the things the story talks about is the median price-to-earnings ratio that the multitudes are trading on in shanghai is 45 times. twice more than other major indexes. guy:? had you price the stuff? no one believes the chinese growth numbers. how do you guys are market when some of the metrics, some of the normal things that you would put into a market to value it i.e. the future macro picture looks like, what the state is going to put those numbers into a model and come up with a reasonable valuation when you're looking at so many variables?

>> they have to do it at the micro level. at theve to look corporate earnings figures, you look aty, if the broader macro picture and you do not believe the data, you have to find other metrics in which to determine whether you think you should buy or sell. only going at the detailed microlevel is the way to do that. guy: 20% down. that is where we will find value. they think there is value to be found but it is a long way south of where we are. >> they are saying that the -- we need a bigger bargain. maybe they are a lead indicator. talkingeframe are we because the pboc of the weekend

says they believe we are getting closer to the end when it comes to the market volatility. do they anticipate that this will happen over a long. of time? will this happen in the next few days? i don't think they specify. it will probably be a more gradual process. the government has shown that they do not want dramatic reversals or anything that would really upset the cart. -- i wonder how >> i think fx is important in this. when you look at what the trigger was in august, it was the devaluation. at the moment are nervous about the extent of capital outflows that are leaving the country. i think the reserve data will be important. if the markets are sensing that

the devaluation was not large enough, then these capital outflows will continue and that will be difficult for broader investor confidence to come back. i think if we can get some confidence in regard to the relative stability of the renminbi, i think that could help restore confidence. plenty more still to come on this show. let's talk about what is happening in greece. two weeks until the snap elections. , his syriza party is leading in the polls but that lead is increasingly narrow. we spoke exclusively to the leader of one of his main rival parties, new democracy. that he does not want to play games with greece and that grexit is still a very real process. think the danger of grexit

has not have to. if we end up with a government that will not bring about stability, these dangers will become more imminent. since we do not want to play games with greece, we want a government led by new democracy and the european powers. it does not mean we surrender completely. it means we go into negotiations with strong arguments. varoufakis speaking there. they are beginning to make some significant gains. bureaualk to our athens chief. can we believe the polling and what are the chances of new democracy getting into office? >> they are definitely the comeback kids in this election campaign. in july, mr. tsipras was dominating the political landscape. creditorstulating to

demands and signing the bailout deal, it is now clear that he is paying the political price of his broken promises to end austerity. the fallout from capital controls closed banks and the --summer tragedy that caused that cost greek economy dearly. they are the underdogs. he was supposed to manage the transition to new leadership. but he is known for his informal style and strong language. he is a party veteran. polls show that voters do like this style. they consider it authentic. to have a strong chance of unseating mr. tsipras. two pulls published over the weekend shows that tsipras has a very small lead. a third pole shows that he has the lead and the new democracy

party has the lead over mr. tsipras. the undecided voters are the key. ,f they decide to stay home then the new democracy leader will be prime minister for greece two weeks from today. guy: if that happens, does he then have to fully implement the policies that were put into place as a result of the deal that was struck with creditors? where does that leave us on the grexit story? more likely or less likely? that as a result that government would be inherently unstable. --would face internal assent dissent if he wins the election. a new democracy led government would be much more stable.

remember, the new democracy back to the bailout. when a quarter of the lawmakers staged a mutiny. going toing that he is seek consensus and as for the corporation of other pro-european parties including syriza and mr. tsipras to implement a bailout agreement that mr. tsipras struck with creditors. on the other hand, tsipras says he does not want to cooperate with the new democracy party. that he is part of the establishment and he does not want to form a coalition with him. given that polls show that no party will gain an outright majority in this election, we may be bracing for coalition talks and even more uncertainty. guy: nice to see you. back to the bank of

tokyo, derek. which is more important to the direction of the euro-dollar right now? how much the chinese sell in terms of their reserves? has gone offeece with this new election because in the short-term, it is more about china and the global growth situation. crucially, when we talk about euro-dollars specifically, about said policy and what happens over the next couple of weeks and that french. are if the chinese whittling down their reserves, -- reservea broader situation, the fact that we have seen substantial declines in fx reserves, globally it is about thosellion since july,

are the figures we are talking about since the devaluation in china. you're talking about perhaps by the end of the year a trillion dollar decline. when you look at the imf wizard data, what has been happening is emerging-market developing central banks have been reducing quite aggressively their euro holdings. decline,f the dollar because reserves are coming down overall, you need to be selling your euros as well if you want to keep your euro competition stable. that might not be happening as of yet but at some point, if reserves continue to decline, there is going to have to be euros selling if you assume that the central banks want to keep their euro composition stable at lower levels. the figures show that definitely on the emc, central bank there are a lot more sensitive about the level of yields that they are getting on the securities. costs,ancing domestically are higher and

therefore there is a negative carry and if you have low yields in europe, there is more likely to be a desire to get out of euros and into the dollars. guy: how does draghi handle this? does he make more noise is about further qe? >> i think druggie did a good job -- draghi did a good job. risk intensifies. i think he has put out a very strong signal that for now, we are not willing to make a bet that this volatility undermines our price stability but if it continues, it will. i think that is likely to break that correlation that we have had. i think we have seen that actually in recent days in terms of price action. this brings us to the japanese yen and why the bank of japan needs to change their tune because if there is going to be

another safe haven in fx it will be the yen that will get the slow and not the euro. guy: we will talk about that in just a moment. we will also talk more about the migrants. details about the chinese economy as well. ♪

guy: chinese markets reopen. shanghai market currently trading softer. preparingsaid to be to add 6 billion to the federal budget. the french president will run national television, his approval rating stands at just 19%. welcome to "countdown." let's talk about what we are getting. we will get some news on the

south korean unit. let me tell you what is happening in germany. last week, we saw some softer data. datae now seeing some july that is coming through on the manufacturing side, plus 0.3% month on month. the news is just hitting the tape. tesco to sell the unit home plus. it is a hypermarket unit. billion, that.2 is on a cash on debt-free basis. that means there is a tax consideration of around 4 billion. we will get the reaction to the

share price as we work our way toward the open. flagged lasty week, we did not know what the price was going to be. -- 6 billion.e let me tell you what is happening with futures. shanghai has softened, a very negative session on friday. , dax by about 1% as well. a positive start to european equity trading. up liftings may end the ftse 100. unit.selling its korea looks like 4.2 billion.

interesting.uite let me see if i can give you the shanghai story. we are waiting to see whether this happens. this is the 50-day moving average and this is the 200-day average. the pboc telling us we are going toward the end of the recent volatility we are seeing in the equity markets. we have a story on our website. mark mobius suggesting the market has further to fall in the chinese authorities should step out of the way. check out that story. the twitter question, is the pboc right? that is something we will watch very closely as well. glencore is beginning to touch the tape. -- thee is going to

suspension of its 2015 final dividend. that is quite interesting. issuance ofquity 2.5 billion. for thisactor business, which is part mining and part trading. the trading part of the business has been having problems with the credit rating story. we will get you some more details in a few minutes time. shery ahn is standing by. shery: asian stocks heading for its lowest since november 2012, extending seven consecutive weeks of losses. it has been pretty challenging to gauge the direction of the markets this morning. let me start with the shanghai composite, just a few minutes ago, it turned into negative

territory. falling 1.5%. the housing index also turning .5%.ive, down each of the markets when into positive territory during their lunch break. the gdp growth was devised to 7.3% from 7.4%. managed tonikkei and end higher. all morning, gains and losses in japan. -- cost the index closing kospi index closing down. energy stocks leading the declines in south korea as well as in australia. the asx 200 down .4%. mixed seeing quite a market this morning. i want to take you through some of the movers and the asian markets -- in the asian markets.

japan, toshiba rising 2%. they closed up 2%, after gaining 5% after reporting delayed earnings after facing an accounting scandal. denaso had hsaseko and surging in trading in tokyo today. korea, fell by more than 4% today. the two koreas could hold talks on family reunions today. kia motors gained more than 1.5% fell the south korean yuan for the first time since 2011.

kumho tires finishing the session lower by .6%. guy: thank you for the update. austria has close down its emergencyvoking the measures that will allow more than 12,000 people into the country. the migration issue taking center stage over the weekend as policymakers struggled to deal with the crisis. isthe time for blame games over. it is time for making decisions, turning decisions into actions. >> it makes no sense to have a public debate about who gets how many billions for what because this would not reinforce, but disturbed, the spontaneous solidarity with the migrants and the understanding by the german people. responseolutely need a

to this humanitarian crisis. closing borders is not the answer. >> we will continue with our approach, taking them from refugee camps provides them with a more direct and say fruit to the direct -- safe route to the united kingdom. >> we tried to do what we can when we are asked. guy: angela merkel's government held an emergency summit last night. usmany -- hans nichols joins from the main refugee processing center. what do we know about the summit? hans: we are starting to hear a little bit more about the

meeting. they are trying to figure out how to process these refugees and a more -- in a more efficient manner. probably close to a thousand people standing in this line, they have been trickling in all morning. some of them slept here. this is them main registration point. this is the first port of call. weekend,,000 over the you can hear the sounds of children all around me. austria shut down the border. the agreement that was hashed out friday night was a contravention of eu rules. the rules say people need to be processed within the very country they first landed in. they circumvented those. angela merkel's government saying they are welcome.

she was criticized i members of her sister companies saying it is simply not tenable. they expect to have 5 billion extra in their coffers, but they do not want to go above and beyond that. coste quite knows what the will be 42015. they put aside about a billion euros. how to process all of these people, here is a quote from over the weekend. here is what he said. we still have a little bit to spare and we will desperately needed to cope with the tasks that arise in 2016 and in subsequent years. .o one quite knows it is clear there is a need for processes. behind me, this line is barely

moving. every once in a while, you will hear a cheer and that is when someone is allowed to register. they take your passport and they give you a piece of paper. the process is slow. he said he wanted to get his passport back so he could go back to syria. guy: is angela merkel on the right side of public opinion on this one? hans: she may be on the wrong side within her own party. you are seeing some real dissent among her sister party in bavaria. one member of parliament has even taken in a refugee family. it is worth noting, a lot of

welcoming signs, a lot of humanitarian groups. germans are trying to make refugees feel welcome. is the structure in place to handle them? are there enough programs to teach them german and to find them jobs? look at the scene behind me and it does not indicate this process is running smoothly. guy: thank you very much. that conversation will carry on in france later on. the french president very much in the hot seat. he is fielding questions from the press. that happens around 10:00 london time, 11:00 paris time. we will break it down when we come back. ♪

guy: it is 7:15 a.m. in london.

let me tell you about the stories you need to know about this morning. 2014 --s devised its revised its 2014 gdp figure. the world'showed second-biggest economy growing at 10.3% last year. the shanghai market has reopened and is trading softer. austria is closing its borders again. ministers will meet later to discuss the crisis. the european commission will put forward a new proposal. set tonch president is hold one of his 20 -- one of his press conferences today. he will face questions about

europe's migrant crisis. his approval rating stands at just 19%. that is six points behind nicolas sarkozy. what does he say today that will help him deal with that incredibly low rating? greg: probably not talk about the economy. much a much -- he is on stronger ground when he talks about foreign affairs. be happierwill talking more about the migrant crisis. france has not looked as generous as germany, but he has been out there with merkel. he will talk about syria. there have been various leaks that the french are carrying out airstrikes in iraq, might extend those airstrikes or

reconnaissance fights or some kind of military effort. he will have to face questions unemployment, about economic growth in france and he will do his best to keep putting off his promise to return to a lower unemployment rate. he will want to talk about international affairs. guy: how does he deal with that story without playing into the hands of marine le pen? be may be tapping into this concern about unemployment and migration and terrorism and linking all of those three issues together. upg: that has been the case to now. she tries to make a link, unemployment because you have these undocumented foreigners. of migrant issue took a kind

rapid turn after the photos of that little boy were published. right now, she is probably not on the right side of things. even she has tried to show some kind of humanity. bit she is a little perturbed by the turn of events last week. as long as he is talking about syria and refugees, he is pretty safe in trying to present a generous france. they have taken in fewer than the germans and italians and a lot more than the british, spanish, or polish. long-term, there is no question that marine le pen does play into fears of too many foreigners coming into france. he will be able to hit her quite

hard on the pure question of france having to show generosity to persecuted syrians. guy: he will face questions on unemployment and the economy. given the internal politics of the socialist party, and we have elections coming up in december, what does he say about it? does he have anything in the toolbox he can do in the near term? does it translate into any kind of economic reality? greg: i think there are two things he will try to push. there has been a deduction in taxes for some people -- not for all. there were some tax cuts that went through recently. the tax bills are coming in right now in france. there are people who make lower amounts of money who will see a little extra money in their paychecks.

he will push that and say this will help provide domestic spending. he has hinted there is some type of reform of france's labor code coming up. for some type seven to use, a win-win situation is how you try to present it. -- he hasays bring always been soft on details. there is a chance he will announce some sort of initiative to loosen up france's labor laws. electionpresidential is in 2017, but next or will be taken up with pre-campaigning -- next year will be taken up with pre-campaigning. guy: thank you. out of france,

horrendous at the moment. along with like -- francois hollande would like not to talk about it. months, the last 49 jobless number has gone up. the labor market is crucial. we had this strong growth in the first quarter driven by personal consumption, the strongest and 10 years. that was the temporary impact of energy prices, in particular. it is about getting sustainable growth going. the regulatory burden on french companies and their reluctance to expand because of the surge and cost as the numbers go up. there are 2.5 times the number of companies with 49 individuals working in them than there are 50. the cost for the company is

huge. they are trying to address that, but doing it in baby steps. that is the political problems that hollande has. -- todifficult that envision that it will change before the presidential election. guy: how does that affect the relationship between germany and france? the view is that we need reform elsewhere. they are concerned that if the ecb does more on that, it will send the wrong message. : the ecb has to pursue that. there is not a whole lot they can do, to be honest. from a financial markets perspective, it is something

that is always watched and spoken about. the divergence has not become impair onh to start confidence. there are risks going forward. there is a real problem at the core of europe and that could become an issue for investor confidence further down the line. perhaps it is to the bond market, you would start to see investors becoming more and more concerned because of the unsustainable levels of debt. compare and contrast what the ecb does next and what the bank of japan does next. derek: i mentioned earlier that mario draghi did a good job. rhetoric, don't worry, we will reach the inflation goal around september 2016.

when you look at the growth figures and you look at what is happening in commodity prices in terms of the currency, there is a real risk the markets come back to asking the very broad fundamental question, what is abe-nomics? became prime he minister is up 1%. in germany, 3%. in the u k and u.s., it is 6%. if the yen continues to boj'sthen, because of the stance that they do not do anymore, there is a risk we could see some fairly substantial moves. guy: this is euro-yen. we have seen softening of late. derek: it is about what is in

the price. the market is thinking the ecb could do some more, but the boj could not do anything. there is a risk we could see some further yen strength. japan has a current account surplus. historically, it has done well near risk aversion. the boj needs to change its tune in regards -- guy: give us a sense of the timeline. derek: very soon, they will have to change the rhetoric. the argument has been we will start to see evidence of inflation moving in the second half of the year. given what has happened recently, that will happen to some degree, but not to the extent the boj wanted. they will have to signal to the market over the next month or

two. guy: thank you for your time this morning. mitsubishi -- we will get you updated on the corporate news. tesco and glencore. ♪

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guy: welcome back. it is 7:30 in london which means it is a: 30 in frankfurt and berlin. to closing itse borders again as it rolls back measures to keep migrants from rolling over its borders. leaders will meet to discuss the crisis. the european commission will put forward a new proposal on the redistribution of migrants across europe. they passed a deal to sell to nbk partners.

includes canada's pension plan investment board. publicly's largest traded commodity supplier glencore plans to cut $10.2 billion in net debt. glencore halted its stock in hong kong. it posted its weekly incline in london trading. that was last week. an update on how we are trading in asia. shery ahn has the details. >> the shanghai composite reversing gains in the morning. let me get you started with some asian currencies. dropped to the lowest level in years.

there is growing concern that the country's export outlook is lowering. shipments in august fell the most since 2009. the japanese yen is currently weakening. this comes after three consecutive weeks of gains. .3% there. we are seeing hedge funds and other large speculators cutting back on the yen at the fastest pace since 2007. yes trillion dollar, we are seeing some interesting movement there. $.70.below ast week, when they fell to six-year low as the shanghai composite failed to turn positive. today, although the aussie dollar is gaining, the shanghai

composite just a few moments ago turned negative. giving up earlier gains. 3216 and about 10 minutes after trading started. it is now falling about 1%. here in asia, we are heading ton stocks their lowest close. that horth mentioning in hong kong are in positive territory. in china, the big news is that authorities have downgraded growth.14 gdp .4%.ost be ended down

they have formed that bearish indicator. we could see further downside. down .2% today. the nikkei, it was unclear between positive and negative territory. it did manage to end up higher, maybe helped by a weaker japanese yen. guy: that is the story out in asia. we are 26 minutes away from the european market open. new york is closed today because it is labor day. back,kind of a two steps one step forward today. 100, expect a number around .9%. twocore and tesco are

stories we need to watch for. dax is up about 1%. look forward to that one a little later on. oil prices continuing to go softer. we will watch what is happening with the dollar. in south america could drop next to the greenback. the biggest oil producer over the weekend very much dismissed those calls. it happened at the g-20 summit over the weekend. the man in that conversation on the other side of it. effectively, saudi arabia is an oil play which is priced in dollars. >> you look at one year forward contracts.

pegt arabia might drop a following what china did, following what the cosmetics did. highe close to a 12-year in the bets against the rial. my spoke with him, i said that there is no chance. g is here to stay. >> we are sticking to our exchange policy. the exchange rate of 2.75. it has been that situation for over 30 years. it has served our economy well. volatility mainly in the foreign markets. come down, the highest volatility is within the chinese

currency's and some of the developing countries have had issues with their currency. we are definitely confident that this is a good policy for our exchange rate. this, guy, itout is very cheap to bet against the rial. they can make a big out of the money that. -- bet. ryan: as he said there, as long as they are dependent, it will keep the peg. context they're politically speaking is that they would all want to do it together. kh you look at the kaza

situation and the chinese situation, they have a lot of exports that would benefit. l, which wereave oi not benefit. they import nearly everything they need other than oil. they would have to pay more for those exports. some speculating against the a conversation with the banker of saudi arabia over the weekend. guy: also on the agenda was the recent market turmoil following the devaluation of the yuan by china's central bank. it believes that the recent market turmoil we have seen in equities is getting close to being over. it has dropped recently. maybe it is out of templeton.

that chinese authorities should get out of the way and stop messing with it. wrap up the g-20 news over the weekend. we look ahead to what is coming up from the bank of england in the context of what is happening with the head as well. atormer member of the mpc the bank of england very kindly joins us now. good morning. >> good morning. guy: when you look at the economic backdrop at the moment, china, the feds, is there anything out there that is disturbing you? do the g-20 leaders have it right when they say that we should not be worried? >> the g-20 leaders are making an effort to build confidence. you want them to be planning positively. quite difficult

.or the g-20 to make a case as far as monetary policy is concerned, there are not many bullets left. in theas a real issue middle of that statement when they talked about the fact that we do not have any more evaluations. we just had a run where country after country had devaluation, a good way to get itself out of a hole. fundamentally, i think the global economy is somewhat weaker. that is something that we have to adjust to. how when you say weaker, much weaker? kate: not that much weaker. whenever you have a crisis, everybody says terrible. when you look back at it, you can hardly see it from the data. the trouble with that is that

they sometimes come when everything else is resilient. everything else is not resilient now. there is still a lot of financial market uncertainty. still a lot of fragility. we can see that. there is still in enormous concern about what will happen when the fed raises its rate. how, we are also worried about liquidity that a small rise may affect. guy: would you be voting for a rate hike now? would you be saying, let's wait back and see how this develops? kate: i'd might sit back and wait and see. the american economy is pretty strong. there is a good case for rate rising in the u.s. putting it off will not make the

tensions easier. guy: you can make the argument that unemployment is at 5%. wages are rising. are very low. we never thought when we cut rates that they would stay low for so long. guy: it is going to be interesting to watch. it depends on what seat you are sitting in. you have had a seat at the mpc. they are very comfortable to go after the fed. what isu do not look at going on elsewhere. it would be easy to go after the fed has gone. there is no particular reason for them to go on september following the inflation reporting. u.k. economy has been weaker. unemployment up a little bit. the housing market is slowing down. still think there will be a

case to move over the next 6-9 months. months, iyou say 6-9 assume you think it will be closer to the backend of that time horizon? kate: not necessarily. we can see the economy survive that and we see wages continue. there are certainly skill shortages. guy: i think it is much stronger than the headline. kate: domestic inflation is what you care about. that is where you see the danger coming from. the other issue is how everybody reacts to the spending rounds coming up. i will like to see how that goes and how the business actually takes it. talks about it,

that is when they will start talking about rate rises. sterling?mportant is kate: sterling can be overplayed. everybody is trying a cultural devaluation. if it strengthens against the euro, that might be a problem. the key thing is that the euro keeps growing. going?owing or kate: growing. the ecb made it very clear, it will continue to support a difficult situation in europe. much, kateyou very barker, senior advisor at credit squeeze. up, the biggest commodity supplier has the plans. we will

tell you how glencore will cut its net debt.

guy: it is 7:47 in london, 8:47 in paris. china has released a year lower. they cut the figure by .1%. the second against economy grew 2.2%, slower than originally reported. isna downgrading, anything worth paying attention to. austria is closing its borders again as it rolls back measures that allowed migrants to cross its borders from hungary over the weekend. they will meet to discuss the crisis. puteuropean commission will

forward a new proposal on the redistribution of migrants across europe. plans to --glencore -- 10.2 onion dollars from $10.2 billion from its net debt. the company posted its biggest decline in london trading last week. good morning. we have the numbers not the only ago. we have the expected ones. what has changed? grexit the share prices continue to tumble. week, we saw s&p put a credit rating on negative outlook. that is a problem. if it is an investment grade rating, it will be much more expensive to run. guy: is that enough to keep the

credit rating happy? will: it is pretty dramatic based on what happened today. will put things to bed. guy: do you think the market will be happy about this? go, dividendarket please? will: extremely tough to call on that. the one thing to say about glencore in the last few weeks is astonishing volatility. see movement in either direction, i am sure. guy: credibility? will: it is a really, really good question. company.is a special ivan is a special ceo.

he is the one of the bigger shareholders. guy: when you look forward, when you think about what glencore says about the rest of the mining sector what conclusions can i make? was more invested than their competitors. you can say that this is a special situation. if you look at copper -- wor'ld's most important copper miner. there is a story you can tell. it all depends on china. guy: this is a chinese story. when you think about where glencore goes next, it is hunkered down now? went into public markets to change the industry. not working out.

nice to see you. the editing director for commodities here in europe. l mentioning what is happening in china. is china story this morning not as positive as when i first came in this morning. we have the markets in shanghai. we are now down by 2.5%. that is fairly interesting considering the pboc over the weekend. let me show you what is happening with the fair value calcs. still fairly firm.

this market was down nearly 3% on friday. dax was down by 1%. we did see a sharp selloff on friday. u.s. markets closed today. you will not see liquidity today. one story that we will certainly be watching as we talk about the european market open is tesco. it is getting out of south korea. we knew that was happening. dollar deal. let's talk about what we do and do not know. right? inevitable, >> i think so. it was the highest valued unit. they needed to reduce debt.

they were probably looking at south korea as margins halved against south korea. they probably needed to invest to get it back. guy: will the markets be happy with this? we sort of knew it was going to be this level. it surprises us that there is a little bit more capital gains than perhaps some had thought. guy: what to do with that little bit of money? >> they have been explicit in a statement. a have got to pay back some assets in the next 18 months. they cannot afford to refinance, given where their credit rating is at the moment. in, one has to remember that rents are too high.

ownership down to close to 40%. the next closest competitor is in the 60's. definitely a competitive disadvantage. guy: i will leave that question for another time. thank you very much. lots and lots more. we are very close to the european market open now. we are four minutes away from that market open. we look like we are going to get a positive open. up about 1%. watch glencore. watch tesco. that is it. mark barton is up next with "on the move."

mark: good morning and welcome to on the move. i am mark barton. but here in the city of london. we are just moments away from the start of european trading pit markets in the u.s. closed for labor day. let's get straight to your morning brief. china's slowdown. the nation revises last year growth, lower as a senior officials say the markets of volatility will decide. this selloff continues and -- selloff continues as the shanghai composite reopens. the plans to sell assets. what is next for the worst-performing stock on the ftse this year. europe's migrants -- migrant

crisis. angela merkel is prepared to add 6 billion euros to germany's budget to deal with the influx of refugees. that is what we are watching. a quick reminder of what is happening on the future. it looks like stocks could open higher today. american markets are closed today for labor day. footie futures up by 7/10 of 1%. -- up by .7%. a decline in china. not as big as many would have imagined. let's have a look at how the equity markets fared in the region. shanghai composite finishing down by 2.5%. lower today. don't forget it was closed on thursday, and friday to commemorate the end of world war ii. we had officials in the g-20 to soothe