>> over to you. deliver more to stimulus. putting pressure on the government in tokyo. >> the eu fails to agree on how to shelter refugees. as some eastern european countries continue to object to a quota system. >> heading the brakes. slow thewill china auto sector. we are live at the frankfurt motor show with an exclusive interview with the ceo of vw. guy: i am guy johnson.

anna: a warm welcome to the program. it is 6:00 a.m. in london. guy: shanghai was down pretty hard overnight. -- move these the dial. shanghai continuing to fall following that poor data over the weekend. anna: that has had an impact on the sentiment. this is a picture over shanghai for three days and in the future. guy: the futures are indicating -- let's get a read on what is happening in europe. let's show you what is happening to u.s. futures at the moment. the dow was down by about half of 1%. firm up overwill the next hour and a we will get to the european trading sector. yesterday, a negative section. anna: it is hard to imagine that we are in anything but a holding pattern until thursday with the fed. we will talk about cars elected a.

-- a lot today. we will start with jim farley. when will they be profitable in europe considering all of the trouble they have had in russia. they have had to back away from their targets. bmw is another interview. guy: this is where we get into the china conversation. there are two things i want to know about these global manufacturers. what is happening in china and are they worried about the fed? how are the very wealthy doing in the face of all of that turmoil about china? that will be part of the conversation with the rolls-royce motor ceo. he will be with us as well. that is what we are talking about. luxury cars. guy: porsche is producing a battery card. that sounds like something for a small child but this is the real thing and it was very fast.

we're looking forward to those conversations a little bit later on. we will speak to all of the leaders. that is a busy morning we will have. two minutes past 6:00 a.m. here in london. let's get an update to what is happening in the asia trading days. in the drivers seat, taking a look at shares across the region. a lot of events happening with the central banks after the political change in austria today. given the fact that we had new leadership there. malcolm turnbull. let's take a look at the equity session there. is dragging it down. look at the shanghai composite hearing it is on course for the biggest two-day loss in three weeks. here are some economic numbers from over the weekend. they are continuing to roil the areets because investors

wondering how much further they will see these numbers decline. having an impact on the hang seng. in hongstock movers kong right now. you are seeing insurers doing well. but the property stocks are not doing that well. major developer here along with a flagship company, one of asia's richest men. looking at japan, the bank of japan is holding steady as you noted in your introduction. taking it back to the government. the doj is saying to the government that it should figure it out. perhaps they are waiting to see what the federal reserve does and after that they can react to that. and the nikkei 225, we are seeing a modest move in that session. a number of movers including the telecom stocks. they were down yesterday on that news of shinzo abe seeking to change the pricing for mobile. let's take a look at australia. to the rba due to

report that came out. the latest meeting minutes. the report from the chinese economy. know is the you biggest developed market exposure to the chinese story. media stocks are doing well. some resource related shares were declining. at the-- a quick check currency market. this is what we have on the japanese yen. we are seeing a trade at 119 .95. a significant move there. it is about a quarter of 1%. watch this move with the japanese yen in the wake of the bank of japan's decision. talking -- checking in on the aussie dollar. we see a reaction to the significant leadership change. yesterday'ss to news as well. thank you very much. guy: to the car show now. the world's biggest car show

kicks off in frankfurt today. 200 world premieres of new car models. international automakers plan to outdo one another to make market inroads. our international correspondent is behind the wheel. hans nichols joins us now from this event. china is the big dark cloud. it is a dark cloud but , the ceopoke to martin of volkswagen, he says he expects a normalization in the situation of china. listen to how he catches it. a normalization process underway in china. we are convinced that china will , no longer into ditches always but it will continue to grow particularly in the west. we are getting ready for this. coast, china is saturated but there is still growth. that is why in the northwest we have set up a new factory two

years ago. is to build a budget car especially for the west of china. there are over 200 new models that we are talking about here. it is remarkably difficult to steal any of them and if you can drive them off of the floor, this place is a fortress. i had to sprint here. that is why i am so sweaty. it is a massive auto show. we have all of these ceos lined up to speak with. we will be talking to them about china. it is a momentary blip or is there something more fundamental. and also brazil. how much concern is there regarding brazil. you mentioned the fed. if it puts off that rate hike, that would mean a stronger europe. i will try not to talk over this. this is my summons telling me i'm going on too long. anna: someone is trying to tell you that you're missing your breakfast. perhaps that is what is going on in the background. against --ll fight

car manufacturing is a major component of the german economy. have any of the automakers you up and talking to had anything to say about the refugee crisis and whether that will reshape the labor market germany or change it in any way? hans: it will. i think a lot of the car companies here see an opportunity with the refugee am again as potential workers or builders of the next generation of these cars. we are surrounded by remarkable vehicles of luxury at the mercedes ceo went out of the way to talk about the importance and the opportunity of welcoming into german -- society and what they can offer the workforce. >> there are many people who are having been in danger and in need of support. that is an obligation. on the other hand, it is a great opportunity for our country as we have a demographic of a declining population.

we need people to support our growth. ago, we saw -- we can see something similar now as people come here from syria and other places. it can be a win-win. we heard similar comments from the volkswagen ceo. talking about having a training program for refugees. i am surprised at how quickly it has been absorbed by what is mostly a luxury segment here. talking about the need to do something about refugees and the opportunity. we will get back to cars later today. as always, i will be picking out new vehicles that i think suit your personality. suit you asrs that well. i am warning you, i may be a little bit insulting this morning. anna: we would expect nothing

less. thank you very much. it sounds like a dangerous pursuit. he is very much in the driving seat. anna: and staying in frankfurt, for its suv makes its debut at of its european release next year. it has struggled in europe in recent years. it had a 3% fall in china. joined at the company's ceo, jim farley. great to have you on the program. inc. you for joining us. you began scaling back your expectation regarding profitability in europe about a year ago. a lot of that had to do with russia. tell us how europe's chance for you right now. progress. significant we are near breakeven in the second quarter. as you said, the top line revenue continues to grow

because of our new models. really solid progress. we are absolutely right on track to improve our results here. anna: will you be back in the black in 2016 in europe? we are not giving a specific timeframe for that but obviously, the whole team is completely committed to improving our year-over-year results and we can see real evidence of that in the business. we are now the number one brand for commercial vehicles in europe. key to our profit. we're launching a lot of new suvs which are also key to our profitability. does that worry you? renault? really is key for us is building a vibrant business and a profitable business, sustaining that profitability in good and bad times. that is the most important thing

for us here in europe. to have models and products and services that people love. that is the key. to have that vibrant business. as far as where that works out as far as brand sales, that is not key. anna: how will that play out for you in russia? troubles you face there. how much pain is too much pain in russia? we you be there if you did not have a joint venture partner. other competitors are pulling out. >> we really think that russia provides a great long-term growth opportunity for us in europe. even this year, at 1.6 million units, russia will be among the top five markets in europe. we are well-positioned. we watched four new products. in our-- we have seven lineup. we're working on localization. a lot of adjustments to the business based on the current environment. we really believe in russia as the market. you have an suv behind you.

the oil price has gone from $100 a barrel this time last year to less than $50 a barrel where we are now. taxation in europe muddies the pond a little bit. oil barrel price change your view? butt does in the short-term the utility trend has been growing in europe for a long time and we have seen it up or. of competencya for us globally. in europe, we will be introducing five new products to compete in this space over the next few years. -- a real growth opportunity. looking at millennials. the fact that the co2 is competitive now. a lot of utility in the product. it is also the imagery. people want to own something that is special and utilities give you that option as a consumer. demand continuing even if oil prices reversed.

the people at ford have complained about discounting in the european autozone market. are you victims of that or are you perpetrators? i understand that you and the french carmakers have been discounting. where does the blame lie if that is the right word for this discounting phenomenon that we see in europe? is no doubt about it. europe is one of the most competitive markets in the mainstream segments. ford is very well-positioned. we have brand-new products. this is probably our freshest lineup that we have had in europe and that positions us well for that competitive market. pricing pressures in europe, and a lot of different orcs. not only in discounts to the consumers but also the channels where the products are sold and ford has made significant progress in our rent to own dealer demo channel mix. we are much better than the

overall industry now. that is a key part to our profitability. metricst are the key europeans are buying cars? when they make their decisions, what are the key decision parameters at the moment? is it price, is a product? walk us through how you are looking at the market right now. it is coming out of a different area code. has it changed from where it was before? give us a top-down picture. >> clearly, what a difference a year makes. europe continues to grow especially in southern europe. the segmentation, the kinds of vehicles that people are buying are different than a year ago. utilities are growing and frankly, something we do not talk about is commercial vehicles. commercial vehicles are very important. they are indicative of the economic activity and we are business really grow solidly in europe. it is not something that we talk

about when we should focus on it. in terms of purchase reasons for customers, it has not changed a lot. what is exciting is to see the importance of technology. a brand's reputation around technology innovation. that is why we are launching c2 and a lot of connective vehicle services. that will become more important for customers in europe. anna: thank you very much jim for joining us. ceo for the ford motor company. we are carrying on with the car conversation. we will speak to the bmw ceo on the challenges ahead in his industry. we will be talking a little bit about china. ♪

anna: welcome back. you're watching countdown. it is 6:19 a.m.. [foreign language] guy: deciding against adding to

the country's unprecedented ¥80 trillion stimulus program. japanese policymakers says the economy is continuing to grow at a moderate pace. welcome turnbull has been sworn in as us trillions prime minister as he ousted tony abbott following a leadership challenge. re-thatledged to revitalized the australian economy that has been -- by the chinese economy. tax increases that are designed to close -- to slow the budget down and protected from further credit downgrades. trimmingent includes social programs and introducing a levy on financial transactions. anna: 20 minutes at 6:00 a.m. here in london. back to hans nichols who is at the auto show in frankfurt. to talk to the head of sales at bmw. hans: the head of sales, good morning.

mr. ian robinson. he has been trying to sell me on something all morning and he has a layaway program for me. thank you for joining us. we have what can only be described as a sleek, sexy automobile. tell us about the new seven series. >> six generations with a lot of history. everyone has been more successful than the last. 13 new technologies on this vehicle. it is a very simple one like gesture controlled or that you can make the radio go up or the radio go down. hans: i am the driver. >> you can do everything from a tablet. it can self park itself so that you can get out of the car. you can use your key and move it into a very narrow space. previouster than the generation. 130 kilos lighter. 300 pounds if you want to turn it a different way. that is a full grown adult. and all of the luggage in the boot. very sporty and dynamic. when we talk about what is

happening in china, what is going to happen for the next two or three months. we have seen what is described as normalization. >> we always expected china to normalize. during 2014, we thought it would rate and lower growth we ended last year with 70% and 450,000 sales. at the end of august, we are just shy of 1% growth. it is still an enormous market. it is still the largest car market in the world. as you say, it is not the heady double-digit growth it probably will end up flat. slightly negative. having said all of that, clearly, there is a head when in the economy there which is depressing some of the confidence in the consumer. but, every month, we are selling 37,000 cars. a headwindad with --

in china is at a clip in brazil? -- a cliff in brazil. >> we have invested in brazil recently so we brought a new plant online about seven months ago. the economy is definitely seeing some strains. that is washing through into consumer sentiment. overall, both the brazilian economy and the chinese economy in the longer-term are still great car markets. we are invested for the long-term. in 2016, youil sell more or less than 2015. >> slightly less. that gives you a sense of what is happening on the macro position. at thehen you look federal reserve and what may happen there, is that something you look at? look at economic performance all over the world. we look at what the fed is doing in the bank of england. they have emotional effects on the market.

customers do take a lead from it. having said that, we always want to have a global active and there are very few times in history where everything is moving in the same direction that every -- as in every quarter of the world. hans: i have been waiting to see this, it is not mission impossible. which part will we see in mission impossible and which ones are affordable? >> it is a great movie. tom cruise uses our vehicles. you see in the movie the m3 which is a very sporty car. x five plug-in hybrid. zero emissions. that is going into the marketplace. ,ou will see the motorcycle which see some pretty rough things in the film. hans: what i did not hear you say was something that could compete with the tesla. when his bmw link to have some

sort of tesla keller on the market? we have the eye three and the i-8. hans: they are not suvs. i mentioned the plug-in. it has zero emissions and about 35 kilometers and a co2 footprint that just a few years ago would have been unheard of in a large vehicle. we think the plug-in hybrids really do have a role to play because you get the best of both worlds. you can drive in the city with zero emissions and you can drive out in the countryside for as long as you wish and you have all of the performance. --s: it is a little bit via bigger. >> x one has been a great success. we did 730,000 of them. the new car is a little bit bigger. a little bit higher seating position. very flexible. a fantastic piece of design. hans: i'm sure our anchors ethics -- are excited as well.

i was going to send you the seven series behind me but it's self parks but as we know you're the best park or within zones one through five of london. this is not your vehicle although i could see guy johnson behind those wheels. anna: are you suggesting that guy needs help with his parking because that is another dangers of vein of conversation. i cannot believe your memory that you remember the conversations about my parking. guy: he is commenting on my driving. thank you very much to hans nichols and ian robinson. we have plenty more exciting interviews coming up. anna: coming up on the program we are going to tackle some other stories as well as a car show. europe's migrant crisis being one of them. begins to seal its borders as european leaders fail to meet an agreement regarding sheltering refugees.

a state of crisis is being considered that would allow the use of troops along its borders. we will have more details on that developing story when we come back. ♪

guy: it is 6:30 a.m. in london, 7:30 a.m. in brussels in frankfurt. let me tell you about the stories you need to know about this way. anna: japan's central bank has left monetary policy unchanged. japanese policymakers said the economy is continuing to grow at a moderate pace and that the current easing is having the intended effect. malcolm turnbull has been sworn in as australia's six prime minister eight years aft he ousted tony abbott following a leadership council. he has pledged to revitalize the austrian economy. brazilian finance

minister has proposed a new round of spending cuts and tax increases that are designed to close a budget gap and protect herself from further credit downgrades. the news include capping salaries of civil servants, trimming social programs and introducing a levy on financial transactions. guy: job cuts. here with more is caroline hyde. deutsche bank. let's start there. caroline: firings and finds. we are anticipating deutsche bank to make some big moves. it could cut as many as 23,000 jobs. equivalent of a quarter of all of their employees. this will come i selling a compete -- a consumer segment. that could be sold off. but also 15,000 jobs. fromther 8000 could come getting rid of your general administrative jobs.

including technology jobs as well. this is the area that has been focused on by the new co-chief executive. john kline has been at the helm since to -- since july taking over. he has been pushing to continue the plan that he inherited to reduce expenses, cut back the business overall. the plan is to reduce expenses by about 50% by 2020. and shrink assets by about 17%. by the end to divest of next year but one job that has gone that they were not planning on was the head of equities trading. that was a big move yesterday. he has quit after 20 years at deutsche bank. this is an area that they are trying to beef up, the equities element of think to offset the side ofthe fixed income

the business which has been hit by regulations. an interesting tact there. this was all within the plan that is deutsche bank. let's look at another company that is also changing it strategy. credit suisse was in the headlines yesterday. anticipate a new strategy to be unveiled by october but we are also going to be hit by fines. credit suisse. this has to do with its dark pool. accused of not fully disclosing how it operated its dark pool. 80 million is the -- $80 million is the alleged to find. that is a record fine for them in terms of dark pool. $30 million to the new york attorney general. remember, dark pool, it is all about equity market activity but getting it off-line. not going to the general public exchanges, like the new york stock exchange. it is taken more into the

private areas. market to move the such an extent. it keeps it more private. a private for them. it is huge. 20% of all trading in the u.s. trillion is3 dominated by dark pool. credit suisse is the biggest. the largest alternative trading system in the united states. it is a huge player. no wonder it has such a big price tag when it comes to a fine. interestingly, there are a lot of first coming forward. the record size of the sec when it comes to dark pool area is a first for the new york attorney general, eric schneiderman. 18 month has been the length of this particular investigation. the flurry of activity that we had -- the book that came out by michael lewis. everyone was looking at these high-speed frequency traders and

what they were doing to the market. whether they were getting an unfair advantage. thisulmination has been largest fine. anna: no firm decision was met yesterday when you ministers met -- met yesterday. negotiations will continue ahead of another meeting set for next month. more, let's bring in ryan chilcote who is following the story for us. higgins has also joined us. he is the chief investment officer. come to you on the migrant story. what did your it managed to agree on? meeting wasm of the to agree on a law of the distribution of the 100 60,000 refugees that are sitting in italy and greece.

they agreed on how 40,000 would be district -- distributed among countries. what they fail to agree on what the other 120,000 that they were hoping to address. how to distribute them with quotas. they wanted to get consensus. they wanted unanimity among the 28 members of the european union and they got a majority to agree. they agreed that they will meet again on october the eighth which is quite a while from now. if they feel that they need to, luxembourg, which is holding the presidency of the eu right now, they have said they can't do this without unanimity. have a super majority or a qualified majority. that gets at the whole issue of unity within the european union and would be losing face for the block as a group. init of a political setback particular with the eastern european countries like hungary and slovakia and the czech

republic. guy: there are key countries at the epicenter. when we talk about division within europe. ryan: i would say hungary is out there as a big critic of this idea of this refugee distribution plan. ownary moving on its unilaterally quite quickly. you know that they build the fence along the border with serbia and now they are bringing and razor wire. late last night, the prime minister of hungary said they are likely to declare a state of crisis today in the country and that is something the cabinet would do. if they do that, that would give the military, which is being moved to the border, even more of a mandate. practically speaking what that means is that the refugees are migrants that are trying to come across the border from serbia into hungary would have to walk about 110 kilometers down the border to another country and then try to cross in from there. they are just making it much

more difficult. and now, what use saw yesterday with a lot of refugees or migrants basically cutting through the fence. in one stretch, i read that there were about 17 breaches of the fence that the hungarians just built. now, it will be a crime punishable by a prison sentence or by deportation if you try to cut through the razor wire fence. anna: thank you very much. move the conversation to talk about what is happening in the wider world. let's bring in our guest host for the next hour. allen higgins is the chief investment officer. good morning. wake -- fed week. dovish houseen a for a long time and we think it is going to continue. it is a close call. because if the

fed does raise rates, we will get such dovish words out of yellen that will calm the market so we could see an interesting anke but overall, from being amateur fed watcher, but very that when, we view you look at the range of employment, especially wages, the key one is the quarterly that came out of month ago. very low. the reason is that includes health care as opposed to the one that comes from the non-payroll. tour -- the turmoil that we have in the markets, we just expects a more -- treasury and pricing require some sort of action. they want to get one hike in. the interesting point is that the record of almost any country

raising rates at the financial crisis. it is the seven-year anniversary. rates have gone up and come back down. message on these ultra low long-term rates is that the market knows rates will not go up very much at all. the market knows the resilience of the economy is not there to higher rates. generally short run. i was thinking about this in terms of -- you have five months of real pain. longer-term investors. we invest -- we represent a longer-term. longer-term investors. lehman. looking back in history, we did well to buy.

we have been putting some money into the market over the last few months. we do believe that to go against the trend in markets, rebalancing the portfolios. put any money into e.m.. we do have some modest positions in e.m. and that has not worked. we have not put any more money in there. it is hard to read encouraging news out of brazil. recognize that they really do need to sort things out terms of their budget. that was interesting because it looks very cheap. but it is very hard to understand what is going on in china. that is why i think -- i like are auto interviews -- they interesting in terms of a barometer in japan and china. buy will you be selling to

european equities? we looked great in april. we sold some equities and april. quite a bit. -- we have been putting more money in. the big trend is what to do on the bond per -- the bond component of the portfolio. that is hard work. it is a special situation. equity risk. we bought tesco bonds. where you can get close to 6%. they are junk of course. you?pset someone, didn't anna: i try not to. >> these are special situations. when of the real challenges when you manage a portfolio is that it is easy to add a -- to add equity. what can you do that is more stable.

some special situations may be. some people talk about greek bonds because they have been quite stable. we have not gone there yet. we are looking at all kinds of interesting market neutral or as close to market neutral as we can get. thank you for that introduction to your thoughts. we will talk about mexican bonds no doubt. special subject. we're going to carry on with the car conversations when we come back. frankfurtfrom the auto show including jaguar. will their efforts be enough to turn around their fortunes in china? we will be speaking with the cia -- with the ceo when we return. ♪

anna: welcome back. you're watching countdown. here are the stories you need to know. guy: japan's central bank has

left monetary policy unchanged deciding to not add to the stimulus program. japanese policymakers saying that the economy continues to grow at a moderate pace and that the current easing is having the intended effect. anna: malcolm turnbull has been sworn in as the six prime minister for all scalia in eight years. to promise toaid revitalize the australian economy that has been battered by the chinese slowdown. guy: a new round of spending cuts and tax increases to slow the budget gap. programs andal introducing a levy on financial transactions. anna: let's have a look at some of the top stories on bloomberg.com right now. alan hagan's chief investment officer at kuntz is still with

us. good morning. scene this morning coming our way from frankfurt. one of them is the new jaguar suv. the competition for the suv market continues to intensify. this is not quite the competitor to the bentley that was pulled up the other day but they are getting into the market like everyone else. or set came into the suv market a few years ago to much controversy and now jaguar has joined that. if you look at bentley, inside vw come to see who was allowed to build one. lamborghini. there were all kinds of sites. we will leave that one. -- all kinds of sites. the price of fuel has come down so much. >> it has not come down that much in europe. remember the taxes. that is a big component. in the u.s., yes.

people i know who drive as who drive suvs say it is making quite a difference. anna: how is your car doing? >> i don't have an suv. an old ford capri. i'm am trying to single-handedly get the oil price up. the old three liter engine. guy: how much does it cost now to fill up with petrol versus a year ago? >> i should say it is a bit like asking a politician -- too much passion for my card. i put the petrol in and pay the bill. cheaper.tten a lot

there is so much tax here involved. very annoying. anna: let's return to frank for. jack -- frankfurt. jaguar is trying to reassert itself in the luxury space. can it turn its fortunes around in china where still seven falling. jaguar landd by rover ceo. thank you very much for joining us. let's talk a little bit about china. we have that commentary from various carmaking ceo's this morning talking about just how quickly things are slowing in china. give us your thoughts. predictll, no one could this kind of new normal. nevertheless, china is still the biggest market for the automobile -- for the automotive business. 5%, itgdp goes down to

million soound 500 it is the size of belgium which can be added year-by-year for the chinese economy. therefore, we will sell a lot of vehicles in china in the near term. guy: in the near term, how are you managing it? long-term great but short-term? short-term, we have a very new and fantastic product line. we are just building up at this moment our local production in the new plant in china so we have a good opportunity raised on our small market share. we are a niche player but we are the genuine alternative. anna: you have launched a jack a jaguar suv. you wish you had done it sooner? >> yes.

it is the first jaguar crossover with the complete dna of a jaguar. very sporty. at the end of the day, very safe. how do you think that is going to sell in the states? do you worry about what is going to happen in the u.s. market which has been doing so strongly? you have built a card for it and now it could slow down. >> absolutely. canu.s. is strong and we also grow there. we have a good product lineup for the u.s. and therefore we are quite sure that we can attract customers in the u.s. anna: how will you do that because it is a crowded market? the suv market is crowded in the u.s. as an elsewhere. crowded butarket is it is the fastest-growing

segment in the automotive industry. but wea niche player really offer something different. something special. therefore, not just a product. customers ar our lifestyle. that will make a difference. guy: what happens if the federal reserve starts to raise interest rates. u.s. car buyers tend to finance them. does that concern you? is it built into your numbers right now? >> we do not know how customers will react. no one can predict the future. based on a very strong product portfolio, we can continue our way in the u.s. technology in cars has been something talked about for a few years at these auto shows. are you tempted to go into growth -- into joint ventures? some of the big technology players may be interested in that. customer attitude, the

customer demand is changing permanently. have on this change, we acted proactively to bring in new technology. our new entertainment system. twice the code of lines. you can see the power of the new entertainment system. just the entertainment system. twice the power. isn't that fantastic? guy: assuming i can figure out how that works, that is probably the case. i always struggle with those. why would i buy an suv from jaguar when you have a really good one that has been around

for quite a long time and it is called the range rover? >> by the way, you get the very best suvs on the range rover side. that goes without question. now, we have an alternative. there is no competition in between. there is hardly an overlap and you get the dna crossover from jaguar. a fantastic product. are there to sell your own cars, but have you seen anything else that has caught your eye? the motor show is going to close in a few hours and so i have not seen anything so far but i can show you on our stand, you can see the range rover from our special operations.

you can see a very stunning suv. guy: ok. thank you very much. ceo of jaguar, land rover. in london.a.m. here we are going to take a short break here on countdown. we are going to work our way towards thursday. we have some conversations around the fed and we will bring you more from the auto show as well. guy: we will talk to rolls-royce in a little while. what do they have cooking? and porsche is really going head-to-head with tesla, the new ev coming out from this carmaker. we will find out exactly what it can do. anna: interesting commentary around china from these automakers. the ceo from volkswagen talking about normalization. and that they are still growing in the chinese market.

and also talk about a new normal. trying to get things to normal is where the type -- is where these automakers want to turn the conversation. guy: we will return in a moment. ♪

guy: overview. the boj fails to deliver more stimulus putting more pressure on the government in tokyo to find new ways for japanese growth. anna: the consensus. the eu fails on an agreement on how to shelter refugees. hungary is shutting its borders and is continuing declaring a state of crisis. how much it well china slow the auto sector. we are live in for an effort at the motor show with the ceo of vw. guy: welcome to countdown. anna: warm welcome to the second hour of the program.

we are slightly obsessed about cars this morning. things to are worse be assessed about. you could talk abouthina and the fed and the price of petrol. markets of the performance thus far, shanghai is off again. we are down by about 3% plus. that is a three-day chart you're looking at. a big three-day move from the weekend. into today. you can see we are just continuing. anna: it continues to worsen as we go through the session. guy: let's move that out and show you what is happening with the fair values this morning. it looks like we will get a software hearing europe this morning. that will be interesting to watch out for. u.s. tax, down by 4/10 of 1%. packed down by seven cent of 1%. that is interesting. it looks like the deck may open a little bit higher. to figure out if that

will correct and if there is a specific reason why the german market looks like it is going to be a little bit firmer this morning then you may have anticipated looking at the other markets. maybe it is a frankfurt motor show. anna: cars can do that to people. have some headlights coming through on the numbers of cars that were registered here in your plasma. caroline hyde has the details. according to the industry organization, we are seeing an 11% gain for august overall. this is european car sales. units being sold. if you dig into who is doing well, it is the m w. they are selling in excess of 21% higher year on year. mercedesthe owner of are also doing well. up by 25%. the smart vehicle posting significant growth. g doing well. rover, up bynd almost 40% in terms of year on

year growth very continuous improvement when it comes to growth within european car sales. august they say was the economy helping. renault and bmw. chinae the slowdown in and the volatility that we saw in the stock market overall, we are seeing an improvement of close to 12% in august. the second fastest gain this month and they say it is the rising economic confidence that really helped the french manufacturer's in particular including renault and citroen. and daimler and mercedes. guy: thank you very much caroline. this comes on a day when we are watching that carefully. let me take you back because i made a small error. let me show you what is happening on the fair values. i did not click a particular box. the stoxx 600 up by 3/10 of 1%. the ftse is up by 2/10 of 1%.

the dac is up by 4/10 of 1%. those things right and i apologize for the earlier number. that was the non-fair value calculation. it is higher by about half percent. interesting that we are higher given that we have a mixed picture coming in from the asian session. let's go back to step was telling us what can happen in hong kong. zeb: i like the optimism that is starting your day there in europe. that is not the case here if you're looking at the chinese working. let's take a look at what is happening across asia-pacific because chinese stocks are heading towards the biggest two-day loss in three weeks. is from general economic data regarding industrial output. the continues to impact the markets. investors see this underlying slowing growth the story in china is not a month-to-month story but a structural issue that will take a lot of work to fix in one that the stimulus by has not yet fully

addressed. that is reflected in this decline today. 3.5% on the shanghai composite. having an impact on in -- in hong kong. those are the a shares trading lower. the chinese companies listing here. tech stocks, in hong kong, they are advancing nearly 2%. of 1.7%. -- property shares have been quite active today. japan, the nikkei 225 advancing in this session. it has been an interesting move today for the yen. we have been watching that closely at the bank of japan kept its policy-setting on hold telling shinzo abe's government that it is his turn to come up with a new policy.

we will check in on the japanese yen because this is where we stand. 119.87. there has been quite a move there in the wake of that boj decision. it looks like the governor and colleagues are waiting to see what happens with the federal reserve this week and certainly how that will determine their policy calibration in japan going forward. no doubt, china's slowdown is having a key impact there as well. guy: great to hear from you. thank you for that update from hong kong. the world's biggest car show kicks off in frankfurt today with over 200 world premieres as car models. international automakers are andng to outdo one another make market inroads. hans nichols joins us live from the event. signs of growth. how hopeful are carmakers about car sales in china?

it seems that they are not that concerned about china. most of the ceos that are here believe there has been a slow down but they are not overly concerned about it. we have not spoken to the ultraluxury. we will speak to the ceo from rolls-royce in a second. in general, when we spoke to the autorom the world largest manufacturer, he said he expected the situation in china to normalize. we see an -- we see a normalization process in china under way. we are convinced that china will continue to grow, no longer into digits always, but it will continue to grow particularly in the west. we are getting ready for this. the coast of china is saturated but there is still growth which is why in the northwest we have

set up a new factory. two years ago. build a budget car especially for the west of china. dr. venture corn was even more concerned about brazil. that is a theme we have seen this morning. mr. ian robinson from bmw was saying that in china we have headwinds but in brazil we have a cliff. if you are going to be in a rolls-royce, which is now a convertible. now guy, you can covet the convertible. those billionaires that used to populate the world. there are fewer of them. we will ask the ceo of he is concerned about the declining ranks of billionaires. i suspect he is not concerned because he has a beautiful product. they have unveiled this digitally. confidently say that i am the first journalists to touch one of these and i think it will be the only time i can touch this. i am wondering what will

happen in this interview. i am looking forward to that. let's take you back to what is happening in germany. rolls-royce. -- rolls-royce is german owned. what are they saying about this refugee story and angela merkel's plan to admit 800,000 migrants. germany has an agent -- an aging population. hans: the carmakers want to do their part on the refugee crisis. there is a real demographic crisis in germany along with the short-term refugee situation. mr. ventured from corn last night as well as the daimler ceo saying that this is an opportunity for germany to repopulate its ranks with skilled workers to till the next generation of cars. have a listen as to how the daimler ceo cap stick. it.- couched >> there are many people in

danger and in need of support. that is part of our obligation. there is great opportunity on the other end for our country. the demographics of our country are declining. we need people to support our growth. saw the germane market being fueled by billions of people coming from italy, spain, and turkey. we can see something similar now where people are coming from syria and other places and they can help us in our future. hans: that is a reminder that the auto sector is so exposed and is not immune to the global story. they are not immune to what will happen in the federal reserve on thursday. we will do our own survey with the ceos. we will see if we can move marketeer and this next interview as well as but the top up on that convertible. like thatll of the

's -- on janet yellen you think that is one that she watches closely? it could be. janet yeller likes data points. our next guest and give you a sense because he messages with them all day but he knows how much they are willing to spend for this premium auto. i think she should have a new index. how many of those es?ls-royce at the car sector and what it is telling you about the global economy, the european car sales this morning -- it is inching down a little bit. regions aroundat

the world trying to figure out where the growth is going to come from and where the value will come from. is that a piece of data that you will pay attention to? european data looks reasonably robust right now. it confirms the recovery in the european of -- european recovery. the last twoina, years with 20% growth and 10% growth in the chinese market. if you are a carmaker, that is a huge growth market. it seems like they come to terms with 4-5. a macro perspective. boomed, having gone from a boom and growing 5% in a huge economy is still good numbers for them. that was the story for a

few years. buy those same carmakers now because of exposure to europe or do by other carmakers like french ones? areome of the french names having a link with russia even. a lot of buy would be the chinese are priced in an pretty reasonable value, though price-earnings ratio. that will be a reason to get involved. -- china you pay including is not our central scenario. it is hard to read. people feel like they can read the u.s. or europe economy by reading the china economy is very tough indeed. how it is very hard to know

consumers will respond to the fed. the financial markets have been used to the idea for quite a while but we still have quite a lot of volatility surrounding this event. when you read, when you talk to people, and you go to the states, do you get an understanding of how the consumer over there will react. the consumer has not spent the dividend from the low gas prices. what is the storied you think post fed with the consumer? >> you are onto something. to sum up post-lehman, deleveraging. particular,utos in they work on a five-year treasury. that is typically what they work on. they are at a five-year low. it is amazing how many people in the u.s. get leasing or loans. they prefer to lease their carbon own them. -- to lease their car then own them.

five-year treasuries going back to the pre-crisis five or six for the highs. that will be problematic. the message of the markets is that both individuals and corporations cannot with stand higher rates. anna: thank you very much. to frankfurt. rolls-royce. hans nichols. the top is down. we are here with the ceo of rolls-royce. we do have the convertible behind us. we are going to do a victory lap. tell us about this beautiful vehicle. >> she really is a beauty. that is our newly launched vehicle. we watched it last week online. now, it is the moment here at the front auto -- the frankfurt auto show. we have been waiting this for the younger customers. the most sociable convertible we

have ever done. and the sexiest rolls-royce ever built. hans: i will not dispute the sexy aspect of the point of a rolls-royce is to have your chauffeur driving you. the point of a convertible is a younger wife and you are in a midlife crisis. you do not what to say here in the back. it is lovely to sit in the back but you mentioned your self driving this car down the pacific coast highway. does that mean most of your growth from you look at the states for most of your growth. china is getting hammered. where do you see the macro picture? >> we have seen a remarkable year in all regions worldwide.

particularly in the united states. we are doing good business there as well as a middle eastern markets. hans: even with the price of oil, you are still selling these expensive vehicles in the middle east. >> yes. the middle east is our second biggest region worldwide. that is a remarkable achievement. what we have seen coming back from our customers is especially atar. hans: you do not see that reflected in lower sales? >> we see that. i would never say we are immune to any market downturns. we have seen that from time to time. but as we are globally well-balanced, and we are not putting all of our eggs in one basket, you will always see other markets going up and some going down. so we feel there is some headwind in china. hans: 4000 vehicles. will you sell more next year?

>> next year definitely. to waitingit is due to see what will happen in china. hans: you have some competitors. mercedes. bentley has unveiled something new here. how much competition to you feel from the bentleys of the world? >> honestly, i am not impressed by competition in the other areas. our competition lies in completely different fields. it all depends on where we spend our money. you are more in competition with arabian horses then a different vehicle. >> it might be jewelry or precious watches or a chalet in the swiss outs. it may be that you go for a new

company jet. that is more what i would call our competition in the true sense. it is all about where you spend your lovely money. it is not so much whether you should go for a different card. not -- my lease has expired where should i go next? our customers are in comfortable positions. when we look at where your potential competition is, you do not think it is autos. when you look at what rolls-royce may offer in the future, you have a convertible. and we see an suv? --when do we see an suv? give me a year. >> not before the end of 2018. we are working on it currently and it is something we are on. in the end ofly the design phase for that. we have 30 seconds.

toare not going to use this waste. we are going to drop our microphones and go inside these vehicles. -- this vehicle. i will try not to sully anything anna:. and they are off. guy: a wide-ranging interview. the subjects of wardrobe choices and your younger wife choice. i cannot believe he is letting him behind the wheel. are we in short for this -- insured for this? he said the ceo of rolls-royce may not speak to him after this. i have to say that the ceo

looked a bit surprised by some of hans nichols questions. we will leave off from that conversation. let's have a quick check in on the markets. shanghai beginning to perk up a little bit near the close. like we are a little bit off of our lows. we were down nearly 4% earlier on. in terms of the european futures, we are up by around 2/10 of 1%. london lagging a little bit. quick ratell take a here on countdown and we will see you in two minutes. ♪

724 a.m. here in london. here are the stories you need to know this many. anna: japan's central bank has left monetary policy unchanged deciding to not add to the stimulus program. the economy is continuing to grow at a moderate pace and the current easing is having the intended effect. beenmalcolm turnbull has

installed at the six prime minister in eight years rostral yet following a leadership challenge. it -- he has promised to revitalize the australian economy. anna: the brazilian financement finance minister has proposed new budget changes. trimming social programs and introducing a levy on financial transactions. a television debate in graseck yesterday. -- in greece yesterday. debates, the former prime minister tsipras told voters that a coalition with his archrival would be a natural. doubt that no immediately after elections, there will be a government in

the country. what concerns me is that i am aiming to have a majority in the next parliament and i believe it is possible but nevertheless, i have stated that when the president of the republic calls me again for an exploratory mandate i will respect the results and try to form a government. there will be a government. there will be no unnatural government. what he is calling upon me to form together is an unnatural coalition. the countrynt -- ought to have a progressive government. anna: getting the final thoughts from allen higgins. 30 seconds left. do you approach your investments? how? are you approaching thursday with the fed? you don't expect any change. we have actually got 30 year debt because the idea is that eventually the rates will rise.

the fed isrong, and more hawkish and it causes problems with the market, that area of the market will hold it much better. ♪

anna: welcome back. you're watching countdown. it is 8:30 a.m. in frankfurt. japan's central bank has left policy unchanged deciding against adding to the country's unprecedented ¥80 trillion stimulus program. japanese policymakers said the economy is continuing to grow at a moderate pace and that the current easing is having the intended effect. been swornnbull has in as us joy is six prime minister in eight years coming after he ousted tony abbott halloween a leadership challenge. revitalize theto australian economy which has been battered by the slowdown in china.

a brazilian finance minister has proposed a new round of bending cuts and tax increases that are designed to close the budget gap and protect herself from further credit downgrade. capping include salaries of civil servants, trimming social services. let's get an update on what is happening in the asian equity trading day. that is in hong kong. today as you are noted we are seeing quite a move in the currency markets in response to the boj's decision holding there. and tossing the ball to the prime minister. to make arnment needs move in terms of fiscal stimulus to revive the economy. is's take a look at what happening elsewhere. australian stocks are moving lower. this is not in response to malcolm turnbull swearing-in is prime minister it has more to do with the fact that the reserve bank earlier today warned that chinese -- the china's slowdown

is having a big impact on their country. that is driving down shares in shanghai. the dismal economic data over the weekend -- those numbers came in below expectations driving forward this fear that the chinese government may not be able to arrest a wider slowdown in the economy with all of the told that they have so far put forth. the shanghai composite is moving and having an impact on shares in hong kong. the hang seng is now trading slower. china life is advancing the session among the insurers and tech stocks have been a good theme today. some selling of those tech shares in shanghai. areproperty stocks something we are also watching. -- therency markets japanese yen has been fluctuating throughout today. here's the today chart. here is where it was yesterday.

120.23. now we are trading at 119.74. the yen is strengthening in the wake of this boj decision. deciding to not add to the ¥80 trillion bond purchase program, the monetary base that we have seen. we will watch this closely to see how monetary policy plays out. the reserve bank of australia is weighing in today with its latest event. minutes from september. they warn about the impact of china's slowdown and the federal reserve meeting. the aussie giving up some of its earlier gains. it is trading at 7114. interesting to see how that asian session leads into the european one or doesn't. we are seeing things look a little bit positive as we head to the beginning of the european trading day. 3/10 of 1% higher.

let's talk to the managing partner who joins us on set. troubled -- very volatile through the month of august. we had a great deal of concern about china. and the greek story. how do you look? at that? -- how do you look back at that? beevery time there looked to in interest-rate move, conveniently a crisis would blow up somewhere in the world whether it was periphery. each time that was enough to pool bond markets back into proper behavior and restart equity growth. we kept having a situation of

two negatives making a positive. two negativesse were rather large including china and commodities. that pushed a deflationary fear through the markets. bond markets could not respond to. equity investors crash their damaged said -- this the earnings and we could have to start to put some downgrade in which it triggered volatility. anna: downgrade to earnings -- do you think that will be a theme? >> i think we have done most of the rotation in terms of market movements to reflect the earnings. i think most of that is now

reflected in markets. they have quite efficiently in the last few weeks three rated all of the sectors. anna: how do you feel about the auto sector? it is quite an interesting one to look at with what happened in august in mind. so many of the auto makers were strong in china in recent years which that investors quite excited about those names yard and now the question about chinese growth exists and it has everyone reevaluating what people think about the auto sector. >> it is the apex. know.not there is so much there. projecting 3-5 earnings is difficult.

the stocks are cheap and their well-capitalized. the falloff in oil prices will mitigate some of the slowdown. new technology will keep the upgrade run going. anna: you like to invest around some longer-term themes sometimes and you have mentioned self drive automation in the auto sector. is that the key the matter that you're looking at in the more immediate term to get you excited about autos? they -- when do these carmakers start to do interesting things in those arenas? >> i think it will happen much faster than predicted. beginning ofe insurance and the technology industry all coming together. it is veryicles --

exciting but i think you'll have to play it not with the main car companies but with some of the key technology providers. colleague hans nichols is on the ground and frank for he has been talking to ceos about whether the federal reserve should put up interest-rate. that is a consumer take on whether the u.s. consumer can take higher interest rate or if the chinese consumer can take higher interest rates from the u.s.. is this something that ripples? through? into these consumer brands that we are talking about when we space?bout the auto it is a risk -- arithmetically insignificant. it has had an effect on pushing down commodity prices which has

meant less debt and that is why the bond market did not rally as much as we thought it would. i think a lot of that is passed now. when you focus on consumer economies especially in europe and the u.s., i don't think this interest-rate is to significant. it does not damage consumer demand. it is a buying opportunity. anna: thank you very much. we have mentioned frankfurt and the auto show and it opens to the public on thursday. hans nichols is there now and he is speaking to the ceo of porsche. we are joined by the ceo of porsche. thank you very much for joining us. we have an suv behind us that you have unveiled. your new 9/11. tell us what is different. changed the engine technology. whichhe turbo technology

has a long tradition with porsche. we have been successful with this. demand ofve fulfilled ecology which means we have to reduce the co2. it means we can do it by 12%. and at the same time, we have a better performance. hans: a more carbon friendly performance vehicle. >> of course. hans:? when we look at the global market, how much of a slowdown have you seen in china? we have no slowdown because we did our homework. we have a very attractive product for chinese customers. network.ed our dealer that means that we are looking to fight against the

problems they have in their economy. hans: what about 2016 in china? >> that should also be increasing because we will have next year the new generation of launch of well as the other products. we are looking forward to the chinese market growing. hans: new product offering. new sales. what about the middle east? we have seen the price of oil take a beating. do middle eastern customers feel less what the -- less wealthy and are they buying fewer cars? >> we will see. hans: when you look at your competition in the luxury space, who are you concerned about? >> we are concerned about every competition. we are self-conscious, and we

are a brand which is very proud and has a long tradition. we look for the competition that we are not anxious. hans: what we talk about carbon friendly cars and reducing emissions, at what point do the regulators in brussels or in --atngton, at one point what point will they go too far? >> the challenge is to reduce , so that they should be to give new orders for 25 because it is a huge a challenge for the car industry to fulfill the targets for 2020. hans: there is a danger that regulators go too far. when we look at growth in europe, you see any prospects for selling more vehicles in europe or is europe at capacity? >> at porsche, we have a

situation where we sell cars in restca, in asia, and the of the world as well as in europe. we can change between all of these markets if necessary. hans: a lot of changing. we have some anchors in london who are looking for new cars. anna, i think i have found your car. .t is the 911 it is not this one behind me. you deserve a fancy, zippy car. little bit better when you get your groceries in your porsche. easy.i can sleep you are incredibly generous finding these guests. just a tell you, we are monitoring what is coming out of japan this money. leaving its quantitative easing plan unchanged. the boj's governor is talking in japan this morning.

talking about the ability to bring back inflation in the japanese economy. talking about inflationary expectations increasing. sync the chinese economy continues to grow in a stable slowdownd to expect a and.e emerging markets to interesting comments coming out of japan this morning. we will take a short down -- we will take a short break here on cancer. ♪

anna: welcome back. it is 747 a.m. here in london. here the stories you need to know. japan's a central bank left monetary policy unchanged deciding adding against the country's unprecedented 80 trillion yen stimulus program. the current easing is having the intended effect. sworne internal has been in as else trillion six prime minister in eight years coming after he ousted tony abbott

following a leadership challenge. he has promised to revitalize the australian economy which is been battered by the slowdown in china. the brazilian finance minister has proposed a new round of spending cuts of -- and tax increases designed to close the budget gap. the moves include capping the salaries of civil service, trimming social programs and introducing a levy on financial transactions. still with us as we head towards the start of the european trading day is a guide. before the break, we were talking a little bit about the bank of japan governor and what he was saying and he seemed to be talking about a fairly positive story in terms of china. he expects theat slowdown in emerging markets to end and he set the chinese economy is continuing to grow in a stable manner. does that time with what we are learning about japan? >> i think his comments about

japan are not unreasonable. it is the rate of decline, the month-to-month fall. there is some signs of stability. i think a slightly call merge you on china is reasonable. on japan, i think they are covering up the fact that the bank of japan is concerned about the balance sheet. i wouldn't be surprised if we tools coming in rather than increasing the balance sheet size. that is pumping liquidity out of the system and against the nikkei which i think is reasonably priced today. that is what we hear from our corporate. commentshink his undermine the attractiveness. anna: you like japanese equities at the moment. >> that is correct. we are believers in the third arrow. we believe there is a restructuring agenda.

we think evidence will rise. we would be worried about an aggressive yen appreciation again, i think against -- anna: let's talk about the dollar. the dollar rising like the 1980's again. how much of a game changer is that for you in terms of thinking about your asset allocation? is it something that takes the edge from the international businesses in the u.s.? i think it is behind a huge amount of what we have seen this year. more significant than china. what you're seeing is a tightening in global policy. you are seeing it undermine commodity markets around the world. you are seeing it transmit a thane shot far in excess the interest rates that we may

or may not see this week. we think that that will continue a little longer. tremendousting up a profit story and the rest of the world that is operating outside of the dollar region. we have yet to see that. anna: where will that show itself? >> in the continued strong outperformance of europe and japan. it will show in enormous fx gains. it will finally show itself in a bond market that does not selloff aggressively even if we do get an economic growth pickup in 2016. anna: in terms of the emerging markets right, you have mentioned how china has contributed to the turmoil over the summer. you have some optimism around the emerging markets. >> there are some enormous value out there. falls, the currency

there are some wonderful windfall opportunities for exporters. we have looked at the surpluses exporters.argest oil i think there will be a dividend in terms of consumption. i think the manic nervousness today really masks what is a generational opportunity to buy your long-term. anna: somewhere like brazil? the actions of the brazilian government to try to stave off any further downgrades to its credit rating. >> that is good news. a fiscal position. fiscal credibility. thered make modest moves because at the edge with the downgrade of credibility in the financial sector there, i would be looking at china and india especially some of the chinese state owned enterprises.

that reform story that we talked about yesterday regarding the state owned enterprise. fine line the government is trying to walk there because they want the government to change -- to stay in charge. more market mechanisms to guide these businesses and try to get rid of some of the overcapacity. you believe in that reform story. >> i believe that what they are aiming for is right which is more market forces in price setting. going to let go of total control. we note that the journey they are on is a fine line but ultimately dividends have always been a key part of state on enterprise. just minutes away from the start of today's european equity trading day, on the move is up next. jonathan is here. jonathan: the bank of japan is

on hold and inflation there is running a 0%. a lot of economists believe they will move next month. we will talk about japan and the japanese economy through the lens of japanese is this. hot nichols at the frankfurt auto show will be catching up with the toyota head of product. do not miss that interview. we will be talking things japan and all things china as well. the shanghai composite this morning to buy 4%. at 8:15 a.m., reconcile these things for me. the whole week we are going to be debating the timing cycle of the federal reserve. citigroup is predicting a global recession in 2016. what strikes me is the debate or the division between economists between what they think the fed will do and the -- and what will happen to the global economy. there have been some hot stocks this year, guy johnson will be catching up with one of the at 8:30 a.m. s

don't miss that. we are coming up in just a couple of minutes. anna: plenty of different views out there regarding the chinese slowdown. the global recovery remains intact despite the crisis of confidence in the chinese policy response. just time to check in on the futures. set for like we are something very slightly positive across european equity markets. small gains coming through here in europe. we will continue to keep you abreast of all of the developments in the frankfurt auto show. opals ceo will also be joining us. i will see you tomorrow. ♪

jonathan: good morning. and welcome to on the move. i am jonathan ferro from bloomberg's european headquarters. moments away from the start of european trading. let's get to your morning brief. the japan -- the bank of japan keeps monetary easing unchanged. citigroup -- and taking a break. -- we speakl china to head of product at the frankfurt auto show. shanghai slides. the chinese stock market drops 4%. the biggest two-day drop in three weeks. ahead of the open eared 20 seconds away this tuesday morning.

but the 100 down by 15 points. dax points down by three points. i'll be going to step back? let's get our market open with caroline hyde. caroline: nervousness creeping in ahead of the federal reserve meeting. will they decided to hike the rates? less than one in three believe there could be a rate hike. ahead of that, cautious trading. green.0 edging into the we will wait and see how germany opens. down for three straight days. at the forecast. bullish on european stocks. they could climb as much as 18% over the course of the year. that is the average forecast. thinkingost bullish,