what is the story and mainland europe? it is all about the equity movers. caroline: could it be a third day of losses, indeed. the federal reserve held steady in terms of the rate decision and the markets became worried about global growth. global growth is once again front and center. pretty much flat but we will keep a close eye on the dax. major equity on that particular stock index. things are basically flat this morning at the moment and there is a little bit of caution for the moment. there is a little bit of recalibration as to what we are likely to see going forward and whether we will see the ecb stimulate more. keep an eye on the euro currently flat against the euro. goldman sachs says that will go

down as much as $.10. 9% weakening? because of more quantitative easing, we may not even finish until may 2017. have bnpy agree, we paribas calling for parity. we could see further weakening. copper having a little bit of a reprieve. let's have a look on what is an m&a deal cooling down as much as a percent. london, zurich insurance having problems with its own general back ofe unit on the issues of that port explosion in china. u.s. auto exposure down 3% and rsa say they will not be buying it for more than 5 billion

pounds. i wish i could give you volkswagen's numbers. it could fall as much as 10%, it is all about admitting ditch eking on u.s. air pollution tests for years. where does that leave the chief executive? volkswagen could be down as much as 10%. will bring that stock open when it opens. let's get your asia market wrap with zeb eckert in hong kong. zeb: another down day in the asia-pacific. look at the boards following on that 1% decline on wall street as investors interpret the federal reserve decision. the health of the global economy and china in particular. those concerns are driving markets lower.

it is unclear exactly why stocks are rising. perhaps investors are betting on additional stimulus. the concern in the wider market in this part of the world is, is the chinese slowdown deeper? oft fed decision race a lot eyebrows. emerging market currencies are falling and getting hit hard as investors pile in to risk-free assets. get out of risks into government bonds. we should know that japan closed for a holiday through wednesday. the yen is one of those safe haven assets where watching. quickly checking in on some stock movers. this is a real-world world example of how investors are concerned about the economy. macau's casino sector falling today.

china as well falling on concerns that gamblers will stay away. we will send it back to you. the big corporate story, volkswagen admits to systematically cheating u.s. air pollution tests. it opens lower by 14%. opening them up to five and criminal allegations. this could be a big mover and the stock reflects that. and europe and asia as well, here is what is coming up. first up, we will be live in athens. we speak to the ceo of one of the nation's battered banks. then, the story we have already been discussing, damage control

at vw. the company looks to $18 billion in fines. the prime minister once more. alexis tsipras secured a strong wind after the polls suggested it was too close to call. withnt almost undiminished 35.5% of votes. the former greek finance minister said this was good news for greece. >> there are a lot of opportunities increase and we need stability. we have to tell investors to be more sympathetic because to invest you also need stability. you need to deal with tax evasion. you need to get rid of corruption.

jon: tom mackenzie joins us now. does this signal a new stability of chapter for greece? do we need to rip that up, what we thought we knew? for the time being, at least. you can never quite take that out here. but the essentially backed the bailout. the likes of the eurogroup president saying he looks forward to working with new governments to work through these reforms. both groups saying this takes some of the political risk at out of the greek story. ultimately there are tough times ahead. of wigglesome areas room that they want to work on.

the syriza party think that they now have a mandate to push back on some of those. they also know that the creditors are not going to budge much. we have that recapitalization of 25 billion euros up to 50 billion euros. then we have the ecb doing its review. it will be a fine balancing act. reforms, reforms. how soon can we expect them to take effect? andime is of the essence very shortly, alexis tsipras will be meeting with the president about forming a government. he will have to get to work straight away.

we have this review by the creditors at the end of the year. crucial and the ecb president i pointed to as well. watch out for appointments. it will be crucial to see who syriza appoints. will they have the experience to push these reforms through? jon: thank you, very much. we are joined by mark burgess, the chief investment officer who helps more than 340 billion pounds in assets. does anyone really understand the politics of europe? a government would come in and would trigger a recession and push a country toward financial collapse and then get reelected? would you expect it? >> you cannot make it up. the firstn elected time around pushing back on

austerity, he clearly has understood that the only way forward is to push through the reforms. summer we didn't see much of the market impact from greece to peripheral bond markets. i spoke to pimco and they said there is a risk premium based on the outcome because people came out and openly discussed the grexit. do you see that reflected in the equity's of italy? >> i think the equities are different and in all markets you are seeing the comfort blanket of qe which is watching over everything. companies that we meet tell us that eurozone demand is improving and we see a fall in the euro and the oil price. generally the euro looks to be one of the more positive points. >> back in august, did you buy into it? >> we did not.

in theects of falling chinese economy have yet to work through in terms of what it means for the global economy. some risk premium has opened up in terms of what the downside might look like. i think we are still predisposed to stay that way. >> when we talk about stocks, we talk about fundamentals. do you just reach for the u.s. playbook? look what happened in qe? >> we have been more positive on eurozone stocks. we are raising asset prices and getting the eurozone down, it's a positive for the stock markets. it will play out different way because of their other dynamics. jon: up next, a busy week for china. nping's first visit to the united states.

for now, 10 or 11 minutes into the session. check out the shares after the company admits to cheating emissions tests. tradingt rsa as well much lower this morning. after zurich insurance dropped its bid for the company. the drop is pretty much vertical. join us after the break.

jon: the u.s. will take in more syrian refugees. john kerry said the u.s. will admit at least 10,000 more refugees next year which brings the total number of refugees to 1000 in 2017. the volkswagen ceo apologized for cheating on smog tests. company has ordered an external investigation and said they will cooperate more fully. downtock is currently 13.5%. of alibabaof 63% shares ended. that is five times the amount raised in the record-breaking ipo. on to china, the u.k. cancel or,

george osborne -- u.k. chancellor, george osborne is hoping to increase ties. the bloomberg news reporter david sweet is standing by. osborne's main message for china? >> best friend in the west. that has been coined by osborne and jim o'neill. they are talking about how they really want to integrate into china. what is key here is the delegation being taken to china. was,i thought was key where the people are coming from. he is taking leaders from the northern u.k. cities, all represented. and then they're going to shanghai and beijing. they are also going to cities in the interior, one that many

probably haven't heard of. at least that is what osborne and o'neill think is going to be happening which is why they are so keen to integrate not just the city of london or industry but all of the united kingdom into the growth story that is china. look at the cultural institutions coming as well, the head of the british museum and the national theater are also part of the delegation. for five days they will be traveling in china. jon: thank you for joining us this morning. let's welcome back mark burgess. , a notchnd in the west or he will agree to that before he heads to d.c. to meet with obama but it reminded me of times where the officials in the u.k. stressed the importance of china and then on the data it isn't important at all. should we be listening? >> it is not important for the

u.k. economy but it is an important primer. one of the reasons why markets have been so concerned by what they are seeing from china is the fact that western gdp is relatively modest -- modest in terms of growth. in termsbe significant of its impact. jon: for a big asset manager, is this a story? stay away from the ftse 100 and go for the domestic stories? >> they have certainly been performing well and the domestic economy has done very well. as you know the ftse 100 is dominated by large energy resources which have and massively impacted by the fault we see in commodity prices. why we think that could outperform to the mid-two 50's -- mid-250's. jon: for the bond market, there

has been so much concern about e.m., but the nordics, australia, you like them. why? values emerging in some areas. forced into some of the more esoteric areas to get their leads to justify being in the area. jon: how brave do you need to be? to be bold,ou have not so much brave but i think that yield premium will come -- continue to demand a bid. jon: you don't like energy or materials but you like the industrials? why is that? >> one of the things we hear consistently is that european demand is genuinely improving.

down ande currency domestic europe is in much better shape than it was and we are seeing that in terms of profit growth from more domestically focused european companies. you and i get the pleasure of catching up every single quarter. but some are saying the pessimism is overdone. when you and i sit here again, or kind of china are we talking about? >> if we have learned one thing it is not to believe the official data and some have suggested that the chinese economy is slowing quite sharply. if that continues, that is potentially bad news. for joining us. coming up, it could be the $18 billion break. how cheating a pollution test could prove very expensive for

volkswagen. break. after this short

jon: good morning and welcome back to bloomberg tv. i am jonathan ferro from the city of london. let's get a check on the market. by 0.5%.100 up the dax is lower by one quarter

of 1%. zurich abandons an offer for rsa. switch up the board very quickly and i will whip through the fx market. will not bring you down apparently so i will get it up on the terminal. me one dollar 13. dollar yen back through 120. another big mover this morning, volkswagen has admitted to systematically cheating on u.s. air pollution tests to apologies from the ceo have done little to reassure investors. much muchis trading lower. let's go to hans nichols and berlin. act right to get away with this? hans: we know this had been in

place from 2009 to 2015. they have now said you can no longer buy diesel vehicles in the states for 2015. is down anywhere from 14-15%. we have the ceo in crisis mode. which hasallegations referred it to the justice department. installedthey have devices on their cars to cheat the auto emission standards. limit.0 times the legal on itou have that device opens up the throttle and that's what is fun. it just so happens it did not meet emissions standards. here is the quote from over the

weekend, he said i am personally sorry that we have broken the trust of our customers and we withcooperate fully transparency and urgency to clearly, openly and completely establish all the facts in this are the cars effected. beatle, and audi a3. 26% of their july sales were models.l the criticism is that he has not gone electric fast enough and has not done enough for the u.s. market. commentary int of the german press saying, maybe european regulators could be looking at what volkswagen has done. there could also be driving this downward pressure on the prices. to the ceo just

last week, any hint with hindsight that they were expecting this announcement? hans: none. they were full steam ahead and optimistic about china. dr. martin winterkorn gave nothing away in terms that they were facing something that could cost $18 billion. that is if the epa assesses a $3700 per vehicle. that would be big even if we were talking about a german bank. jon: this is big. the stock is lower by 16.5%. the biggest one-day move lower since november of 2008. officials still see a 2015 liftoff. more on the latest comments from

within the federal reserve after the break. .

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perks are nice. but the best thing you can give your business is comcast business. comcast business. built for business. jonathan: good morning. welcome back to "on the move ." i am jonathan ferro. we are about 30 minutes into the trading day. the stoxx 600 back over the week of marginal losses. down by all about 0.3%. the ftse 100 higher up by 20 points. a big move on the dax. we will get your stock moves in a moment. through the fx market. one currency pair. your role buys you -- euro 1.17.ou

mario draghi on wednesday to the parliament. do not miss that. janet yellen also speaking. the stock moves with caroline hyde. i to bring those dramatic falls of crop -- caroline: the dramatic falls we are seeing across. one of the key followers is rsa. m&a deal. making sure it will not be snapping up insurance wide. having issues with the general insurance unit, posting a loss, significant exposure to china. will notsaying they returned out 5 billion pounds to buy rsa. the biggest deal on record for rsa insurance group. where been talking about this all marking. -- all morning. volkswagen, 12 billion euros wiped off of vw market value. down by 15%. , accused ofer

cheating when it comes to the american air pollution tests for years. hans nichols has been doing a great story. roll is what many people are asking themselves. an m&a story. this is a real estate company in germany. analyzing the buying germany's second-largest residential by market value. the biggest a real estate transaction ever for germany. 5% higher on the back of m&a. caroline, thank you. we will keep you up-to-date. the big story for the rest of the world and global financial markets is the federal. so long september. some say 2015 is at a to move. on saturday, john williams said last week's decision was a close

one. john williams: in my view, it was a close call and conflicting signals. on one side, the u.s. economy is strengthening a getting close to full employment. on the other hand, headwinds from the global economy and risk to achieving our goals from that. the natural next step is to gradually start raising interest rates. i view the appropriate time for us to begin that process is later this year. we also heard from bank of richmond president and said "it increase in our interest rate target is needed giving economic conditions." jim bullard said the case for normalization is quite strong and argues against the decision. let's get a view on how it effects of the currency markets. unicreditst at the joins us pretty great to have

you with us. williams and lacquer talking about a hike in 2015. do you buy the talk? guest: these are hawkish side. in that sense, i do not really think it adds a lot of information into what we already know. i think of there are 2 things quite important. first i think the communication issue because it has though market guessing if the function of the fed has changed. it is a big issue and contributing to uncertainty. and the second thing and i been saying this for some time, even if they move into its 15 wages is our scenario, will it make an impact in the currency market? my view it is not. what really matters is the hike. fully pricedit is in, it tells me an action is not

priced in. remarkable ise happening not only at those said but the bank of england. how much it should we pay attention to it? the fed president did not have a vote and was protesting. the bank of england chief economist also talking about a prospect that we need a lower rates. what do you make of the division not only with the federal reserve but the bank of england? vasileios gkionakis: it is indicative of that central banks have the diverse number of views. and the same time, probably confused. this is a message we are getting from the ecb and the fed as well. story --ac the china in that as they see the slow down. they understand right now filtering through inflation as largely supply-side driven. not 100% certain. they feel the need to step up

and say we need to respond. jonathan: for anybody in the fx market to grow that so grabbed a market, the dollar bull what will it take to reignite that dollar bull market? icing forgkionakis: the dollar to justify a higher level as you mentioned, it would have to be the market stops pricing it in at a much steeper for the fed interest rates. the only thing is if we start seeing wage pressure, outside wage pressure in the u.s. which is going to start hitting to the market than inflation buildup in the pipeline and the fed will have to react strongly. jonathan: day your role is behaving more like the japanese yen. -- the euro is behaving more like the japanese yen. are we going to a weak dollar world? id: i -- vasileios gkionakis:

am not entirely sure. i am not entirely certain. i do not have a very strong feeling of whether the euro is behaving like a safe haven. on the surface, it looks like that. i suspect it has to do with the unwinding of currency hedges for global equity investors. now, whether this will continue remains to be seen. dailyms of correlation of returns, we remain negative risk in europe. it is falling a bit. 1.0 7 -- we are at 1.07. we go toward parity call. where does the unicredit sit? the goldman to view, where are you? vasileios gkionakis: we have been saying that there are signs that the euro has bottomed. changed our

forecast. we still see euro at 1.17 at the end of this year and 1.22 four the end of next year. the fundamental case is there and can be made in terms of differentials and balance sheets. i think the main risk to our forecast does not stem from the dollar. i think largely stems from the ecb staffing up evidentially potentially doing more qe. jonathan: do we overstep the sensitivity of the ecb? is the fx that much important than the bond market in credit? vasileios gkionakis: these are basically 2 questions. how does the ecb perceive what is going on into the fx market? him. glick, the importance of the fx channel -- him. ically, the

importance of the fx channel. it is lower now. not only capture the expert side. i do not the ecb, think it has a particular level in mind. what a maybe worrying them is it the depreciation. whenever you see a sharp higher in the euro, these guys step in and make noise. jonathan: i have to ask you about degrees. i was asking a -- ask you about degrees. -- ask you about greece. austerity in greece or something more political? vasileios gkionakis: it will always be about austerity. people do not lie fiscal tightening. think theretime, i was definitely an element of -- people showing their opposition to the previous .olitical party in greece

having said all of that, obviously the outcome showed at the polls were a disaster. and i do not think it's really changes as much as neither for the market or greek prospects. jet the bank the u.k. -- a jonathan: the u.k. know something about bad polls. that is vasileios gkionakis. talk abouttain to greece. greece banking after prime minister tsipras got a decisive victory. we will speak to a ceo of a great the bank. stay tuned to bloomberg tv for that. ♪

jonathan: 43 minutes past the hour. apologizing for devices installed on cars. internaldered an investigation and said it will cooperate with u.s. regulators. the environmental protection agency said as they could face $18 billion in fines. according to a private survey by cvd, china's economy is not as weak as it may look. myth that the nation slowdown is intensifying. perceptions and may be thoroughly divorced from facts on the ground. alexis tsipras back in power. his syriza party won.

he will enter a coalition with the same party that helped it before. where do greek banks stand after the election? we spoke to a former finance minister as set a greek banks could be in good shape by the start of next year. can besaid greek banks in good shape by the start of next year. >> as long as people see we could have a discussion on debt. people will start letting money back into the bank and i think the bank should be on their feet. i am quite optimistic it -- optimistic. just the bank let's hear from the ceo of -- jonathan: let's hear from a ceo of a greek bank. reporter: thank you, jonathan. [indiscernible] know, icase you want to am very pleased to say joining

us is anthimos thomopolous, a bank. pereaus thank you for joining us for what is your reaction? anthimos thomopolous: i think the critical message is almost of -- it is a completely new day for greece. huge and things facing the new government. not at least as recapitalization. where are we? anthimos thomopoulous: we are in the process. [indiscernible] capital for systemic banks. end october.e this is progression.

and i do not think political programs, start talking to investors. euros toillion recapitalization from investors. it is overly conservative number. anthimos thomopoulous: i would agree with that first. it is an excessive amount of capital. i would agree that [indiscernible] off the table. always a concern. the confidence of the depositors and the bond market to get under capital controls as soon as possible. i think we need to strike a balance. money to the banks and money kept. it doesn't [indiscernible]

to let bank to go into this. tom: how much will piraeus draw down on? anthimos thomopoulous: it is an assessment. the damage that has been caused by the first seven months of is -- it turmoil, it can be addressed. i really hope [indiscernible] a lot of people surprised to hear that. you do not have to go far to havee for people to say we not been able to pay back our loans. we know they are around $100 billion. what is the number? anthimos thomopoulous: about 80 billion euros. of five years. it does been the subject of three independent assessments.

one every year. to address a lot of this problem. what were trying to address in the incremental problem re-created in 2015 and possibly in a position. it has beening is created. the banks have been recapitalized three times. it will be the fourth in reality. maybe not as big. the problem is being. tom: once recapitalization happens, you will hit of the road. how will you persuade people? : i will beomopoulous talking to existing investors and new investors week. is greeceoing to say is now moving out of the long period of political turmoil. we have a stable government and

a solution. i would say this program is lighter than the one implemented before. time with the pneumonic money, the big banks will know it is making toward this problem. , around this program, it will be the last plan. everybody is looking for recovery. this is not going to continue. thank you very much for your time. where the banking sector stands. recapitalization agreement. and lifting cap the controls is number one. back to you. just again bank all i can hear is rain. good luck -- jonathan: all i can hear is rain. good luck staying dry.

that is not it for the show. after the break. ♪

jonathan: good morning and welcome back to "on the move." i am jonathan ferro. big news in germany. volkswagen admitted to systematically cheating on american air test and could face fines of up to $18 billion.

the stock is down. let's get out to hans nichols in berlin. $18 billion off fines. put that in context. hans: an extraordinary amount of money for an auto company. when were talking about billion euro fines, usually a bank. deutsche bank, in the billion range. what will not see it deutsche bank earnings, setting us out this type of cash, legal provisions. ofk at 2014 earnings, north 200 billion u.s. dollars. a fine if it comes through. speculation in everybody is doing the math. suggested, they have they could find them $37,500 for each venoco. that gets you to $18 billion. -- for each of the alkyl. it is about 10% of their 2014

global revenue. this is a massive company. they have more than 500,000 workers all across the globe. laste spoke to a guest week, they are optimistic for their prospects of china. they are focused on the northwest part of china and have factories as they are. they see a strong demand in china. that has ampany global pr problem and they will be facing scrutiny probably not just from the u.s. where regulators found the problem. a lot of speculation they confiscatory on whether or not iny installed "the devices" other jurisdictions in the eu and else world. volkswagen has a difficult few days ahead of them. when you look at share price, investors are very concerned area jonathan: it reflects a that hans nichols, thank you. -- it reflects that. hans nichols, thank you.

his first begins state visit to the u.s. of this week. he could off in seattle and to washington, d.c. on thursday. wednesday, preliminary pmi numbers for the euro area. on friday, second-quarter gdp for the united states. this is almost it for the first hour of trading. we are joined by francine lacqua. two big stock stories. rsa and a vw. welcome the a difficult chapter. have around 10 million cars worldwide. they are stuck in a digit growth factor in the u.s. it is crucial. this kind of reputation -- damage of a reputation is a disaster. the stock is down 15%. a little bit of a personal story. the ceo fighting with his former mentor area he finally won the

fight. another disaster he has to deal with. we will take a human angle. jonathan: looking forward to that. what else? francine: we will be talking about the fed and chinese beta book. you focused on that. and to tom mackenzie in athens. we have a former lawmaker and chamber of commerce. we talked about this paradox on friday. somebody the western powers like. very austerity. how he will crackdown on the black market remains to be seen. he has a the market's confidence. jonathan: more on that. coming up on "the pulse." marcus, up 0.1% on the ftse. rick stockstill watch. rsa. the dax is down by 0.9%. -- more stocks to watch.

i am on twitter @ferrotv. good luck the rest of your day and the rest of your trading week. ♪

>> tsipras a surprise. the breakdown of the greek financial system. a stronger than expected mandate. carmaker plunge as the cheated air pollution tests. facts as a newhe survey suggests that the china slowdown has been massively overhyped. ♪ welcome to the polls, live from your