are down a little bit lower. decks futures in for a little bit of a rebound. one stock that everyone will be watching as the w. -- is vw. caroline: in europe, it could be a flat day. we saw a rally yesterday and a rally in the u.s.. asia stocks are generally approving today. are now saying the economy is strong enough to late rate height in the year. capital group are saying this morning that the market will remain listless. we will see how the dax opens and whether or not that is related by volkswagen. volatility in fx. we are seeing four year highs.

morgan stanley says that volatility in currencies is entering a new era because we are so dependent on the moves and data. because everyone is going to look at every single spot of data and economics coming out and that will move the market significantly. , consumer confidence is likely to fall. the dollar is getting ever so slightly as we see officials ready to see a rate hike later this year. bank over there is interestingly putting out that the chinese growth forecast ought to be cut. it includes continuing to trade lower. issues about iran. that is what many are considering. down goes boyle as we see supply concerns about iran and copper

down by 1% as the asian banks cut their growth forecasts for china. will volkswagen have opened? you know that germany is sometimes slow. it is down 1.6%. that they have totally screwed up but now asia is starting to weigh in on volkswagen. going to investigate in south korea if they met pollution standards. could the industry be tainted? rsa up 1.4%. remember the big selloff yesterday? hester, sayshen that more bids will come for the rsa insurance group. london stock exchange could see a collapse in its sale of investment to chinese's civics securities. jon: two minutes and 40 seconds

here into the trading day. the ftse 100 down about five points. in asia, the shanghai composite on a bit of a winning streak. david ingles with your asia market wrap. >> volume is razor thin. we are at 50% on average. we are seeing fairly decent gains. it is not as if everyone is joining the party. so how does asia look today? it is mixed more to the upside that you have these bigger markets churning out some gains. the shanghai is up 1% and these markets are already closed. japan is still shut on holiday. a lot of the gains we have seen are down to the buying we are seeing in hong kong and up on the chinese mainland. macro had to pick up

themes, the reason i mention that is because it is fairly quiet. caroline was just pointing out that the adb, the asian development bank, saying that china will grow 8.5% this year and china revising their forecast down as well. 6.8%. the biggest risks are china, india and the slow recovery. the macro seen, more of a local story. house prices up 10% year on year compared to this time last year. and a big one is the county president traveling to the u.s. and expect that to dominate the headlines. and being said, let me just on this. we were talking about the w there. >> asian carmakers are really lacking. look at asian autos. up 2.3%. japan is close and we will see

how the story develops throughout the course of this week. jon: thank you very much. here is what is happening in this show. right now, the latest on volkswagen's emissions scandal as probes open from the u.s. to south korea and welcome to team 2015. tour.hina on we take you through president xi 's first official u.s. visit. but the here and now, volkswagen. volkswagen is said to be facing a criminal investigation by the u.s. department of justice at home and abroad after cheating on emission test. yesterday volkswagen said the scandal is the company's top

priority. and this, this matter is common sense, is the first priority for him personally and the entire management. let's be clear. withompany was dishonest, the epa and the california air resources board, and with all of you. in my german words, we have totally screwed up. jon: that is also the position that investors took sending the stock on its worst fall since 2008. hans nichols is in berlin. volkswagen's woes are snowballing. hans: here is what we know, there is a criminal investigation taking place in the state by the department of justice. there are also a couple whatessional committees. is interesting about

congressional hearings is how quickly they arrive and how nimble companies have to be. here in germany, we have three separate developments. we have the environment ministry saying that they want answers. they have fallen short calling for a formal investigation. a lot of reporters try to push them on whether there would be an investigation, however the financial regulator here has said they will look into matters and separately, we have an interview from the transport minister. he is saying that he wants to --eck all the w diesel stash v vw diesels. >> we have seen a reaction from across the suppliers as well. you look at who is selling a lot of diesel and you have to wonder what calculation are they going through? what are their relation strategist saying?

what is their board saying? diesel is mostly in the states. the story of volkswagen. then bmw and general motors. it is only 1% of north american sales. the question is what happens in all these other regulations. that is really what i am watching for the rest of the day. all of these individual regulators, what about all the other auto companies? are they running their own tests. have they figure out whether or not they have done anything? those are some questions we will be watching. we have a board meeting for volkswagen on wednesday. mr. venter corn's -- mr. winter

corn's contract is supposed to be renewed. jon: will he get a contract extension? hans: he went through a bruising board battle a few months ago and at that point we got a sense for how the board works. there are some family members. then you have the state of lower saxony which controls 20% and then these work councils which also have a strong representation. but they tend to vote together. we heard some strong leg which from the premier of lower saxony saying he wants answers. nterkorn were to lose support in lower saxony, that could be a challenge. jon: thank you very much for joining us. that is still the top corporate story. more on volkswagen after the break and why they might be regretting a new series of audi

adds featuring kermit. >> it's not that easy being green. >> it is now. >> i didn't mean anything about skin color. i meant green like good environmental. >> right, no problem. i get it all the time. >> this is a plug-in hybrid. i'm not a racist. >> i understand, thank you for that.

jon: let's bring you up to speed. pingchinese president xi jin visits the u.s. today. scheduled to meet with top u.s. executives tomorrow and in new york city. he will address the united nations for the first time. dennis walcott joint three other fed officials suggesting that rates will rise in 2015. he remains confident that the central bank will raise interest rates this year. shares of alibaba fell yesterday as trading restrictions ended. the lockup on 63% of shares ended saturday and the stock fell by almost 3%. fromba is down almost 45% a november high.

14 minutes into the session. equity markets are a little bit lower and we are down by 2/10 of 1%. the dax is a much dead flat and volkswagen is declining for a second day after yesterday's monster drop. switch up the board and we will bring out the fx market. the weaker euro this morning down by 2/10 of 1%. ecb to extend qb at the december meeting. euros-dollar. is weaker. dollar-yen stays above 120. story hasock dominated the headlines, volkswagen. the stock is down by almost 4% after an 18% fault yesterday following the news of a cheating scandal cheating in missions tests in the u.s.. ofare joined by hans, head

automated global research. great to have you with us. first question, what are we pricing in? >> that is a difficult question but when you see an 18% drop followed by a 4% drop that is -- what are we pricing in? the fines or much bigger? >> we have a limited about 15 billion euros of market cap. a maximumlking of potential fine of up to $18 billion so we are pricing that in. we don't really price in any contagion effects to other regions or engines outside the diesel range. it is still early days. we don't have enough details and we don't even know the decisions made by management. jon: do we know for sure and can we ever know for sure that this was just the united states? >> it seems like it to me because the u.s. has the strictest emissions globally.

in the u.s. they have to comply with 31 milligram per kilometer compared to 80 milligram and europe. 30 -- 80it -- milligram in europe. it makes it incredibly hard to comply. is in a special situation because they have been pushing smaller engines into the market. investing all of their money for technology in small cars. it gets you to the edge of making money with these products. jon: the other big question is how much worse this could get for management? corn -- winterkorn get an extension? >> i think it is almost impossible for a supervisory board to renew or extend the contract in a situation like this. it is unclear who knew what within the company.

the ceo cannot remain. jon: will they allow him to >> i think this is really about the supervisory board. it is the highest group of people that control management keeping their face we have. we have politicians sitting there from lower saxony. it is difficult for these people to stick with someone who is the chief engineer and who has to take responsibility if things should have been well aware within the company. jon: this is a company that spends an absolute fortune on research and development. i have heard some people call this the lance armstrong moment for the car industry. do you think there is a case of grand contagion? that this becomes an industry issue? investing more and r&d than any company globally. if they can't afford it, how could anyone else?

but they dominate more than 50% of the u.s. diesel market. i think it is really isolated to volkswagen. the next big thing and europe will be that europe will change the test cycles to real world testing and that will make it more difficult for european companies to comply. the companies have to invest more on powertrain technologies which at the end of the day is good news for suppliers but bad news for oem. out almost 17iped billion euros off the market cap of volkswagen. what does this mean for the price target? can you even have one right now? >> in these situations it is really tough for an analyst. i have a buy on the stock. it is tougher for shareholders who are invested. we have no clarity. we need management to come up

with a plan and to take the right consequences in management . volkswagen is a big changeover story and restructuring story. we have and the battle between the chairman and the ceo all of this year and all of this stuff has to come to an end. is extremely painful. jon: i just want a bit of insight into the life of an analyst. news like this trap's over the weekend and you maintain a buy on the stock. how do you do that? >> you know that you get into the office monday morning and the stock will be down. you don't know if it will be 10% or 20%. you say is this an interesting entry point or do i have to revise my investment case. mine is that they will use this investment this year to change management and restructure the company.

w -- vw is aat the turnaround story and this is an extreme one. i do think that they will get their act together. jon: thank you very much for joining us. rates, another voice within the federal reserve joins the 2015 team. after the break. ♪ jon: good morning and welcome

back. another fed official has joined team 2015. yesterday the atlanta fed president joined jeffrey lacquered, jim bullard and john williamson it chorus for the first u.s. rate hike that will probably come before the end of the year. recentt says that well volatility poses risks, he remains confident that the central bank will hike interest rates this year. paolini,ined by luca the chief management strategist where he helps manage about -- great to have you with us. then we just get this stream of regional fed resident saying the hike is on. have you learned anything new.

>> we have learned that the fed is creating a lot of uncertainty and confusion. this uncertainty is not going to help and i think it will not help markets. blowoutn credit spreads in the federal reserve doesn't like tight financial conditions, is there a case to be made that the fed just said i credit again deco >> it is a close call because in our view there is still good value in our yield. but we have seen a lot of inflows in the last few years so theally think that overall economy is improving and for credit it would be pretty good. jon: for credit specifically, is there a case that after six years the dominant theme for credit was that the federal reserve kept global financial conditions easy. do we get to a stage with they start to lose their ability to do that.

we want to turn to chapter 10 and we see where rates finish. is there a case where we lose control? >> what is important for us is that we want to see growth. there is too much focus on the fed but you need to see growth and i think this will also move. jon: for an investor, does it make a difference to you if they move in december or the month after or three months after that? >> it doesn't make any difference but what is critical is the guidance and it is clear that the fed will be very cautious and i think this was clear from the last meeting and this will not change in the next meeting. jon: for a lot of people we did not get clarity from janet yellen and the fed or any of the regional fed residents. what do i look like -- look at between now and the end of the year? do i look at payrolls

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30 minutes into the trading day and let's get you up to speed. the stock 600 done by 0.6%. anglo american, the biggest loser this morning. and glencore stock a new all-time low. the single currency is doing this. one point $1185 -- $1.1185.

caroline: it is a car company, not volkswagen but i want to focus on aa. ais is the biggest fall for a since it listed in june 2014. the reason is the numbers are not looking so pretty. revenue decline and trading margin decline as well. they seat restructuring savings starting to be pulled into the tune of 40 million pounds per year. and a boost dividends but not enough to allay investor theerns and they say industry remains challenging. meanwhile, the miners are dragging the indexes lower. they said to cut your holdings on antofagasta. we also have a plethora of negative headlines with copper miners.

you have the asian development bank's reducing chinese growth once again. likes of number era saying they are slowing copper construction. and lest we go to a green note. china doesn't hurt everyone. it up slowly helps those dealing and ig group. former -- performer on the stocks 600. their first quarter revenue up 24%. geographic regions, everyone does better. highest in the second half of august when we really saw the route hit. they are starting to bring in new clients as well. jon: let's take you back to china, the nation's president

has departed for its first official u.s. visit. he lands in seattle well or -- businesswill meet with officials including tim cook and warren buffett. issues thate big you will be looking at is the issue of cyber. that plays into the meetings he will have in seattle with technology leaders and is this leaders in general. espionage, massive issues that could overshadow the entire summit. the thing that they need to sort out there is, what is acceptable? that is the kind of spying that countries have traditionally done for millennia. i'm talking about military secrets and political secrets so they can get a leg up on the competition.

isn'the u.s. said acceptable is industrial espionage, like an army, who during in -- hoovering information from private companies and distributing it to their own companies to get an advantage in the commercial realm. the uss that is not on and obama just last week him out and said the u.s. is preparing a lot of measures and will put them in place if it can't come up with some kind of agreement with other countries namely china. jon: the president of course is meeting with several u.s. businesses what will be the overall message to u.s. business? this is a message about market access and he will try to reassure you that business is absolutely fine with china but the problem is that is not what we are seeing when you look on the ground.

ever since edward snowden's revelations that the u.s. has been doing what the u.s. probably calls legitimate espionage the chinese have been cracking down and saying we don't want to take all the products of american technology companies and have them coming into the government agencies or the banking system so they have been actively trying to cut down on the amount of u.s. technology coming into china which is why so many companies are quite concerned. there is alsoand, restrictions on chinese companies going into the u.s. markets. be the forum where some of these problems are worked out. jon: thank you for breaking that down. let's welcome back luca paolini. at the center of this discussion, hanging over all of this will be this exchange rate.

take me into that room. what do we get at the other end? >> i think the renminbi is still too high. on the other side, the u.s. is not willing to leave much so i think it is going to be difficult negotiations. but we feel that we will go a little bit lower before we see stabilization. mored politics get intelligent or is this a stupid as ever. >> what i mean by that is the chinese have been trying to support their currency over the last month and not allow it to go to freefall. do you think there is a technology that along the political sites? >> it is very difficult to say. i think there are obviously two different sides. the chinese economy definitely needs a much cheaper exchange rate. but we are also getting this big

residential election and we know that the exchange rate is always a difficult topic to talk about. >> economic data may point to a slowdown but numbers from china's most used search engine and the biggest online outlet signaling otherwise. bloomberg's malcom scott has more in hong kong. tell us about these indicators. i am always looking for new proxies to get a grip on chinese growth what do they tell us? >> they tell us there are signs of stabilization at this new slower rate. these proxies give us a read on some of the less well covered areas. consumption related stuff. small and medium business related areas. google or 6a's billion web hits a day on that online it looks at the interest in small to medium-sized businesses and has a bit of a rebound so far.

the other one which is effectively amazon and ebay all wrapped up into one. in augustthe prices of about 7.4% in contrast to far more muted numbers on the official cpi which suggests that maybe messick demand is more robust than thought. and this union measure also showed some interesting rebound in the all-important property categories. so signals of some stabilization which the official data doesn't show. jon: why do we have that contrast? all the data tells me that there is a slowdown. reasons.le of there could be a bit of a turn after interest-rate cuts. but also they are measuring newer parts of the economy that are harder to count. china's economy has been an

industrial, export-led economy. that is easier to count. containers and exports and the domestic drivers of property were easier to count, too. bese service indicators can harder to measure and the economy is transitioning to a bigger reliance on services. the services pmi, which does not get many headlines compared to the factory pmi, the services pmi has been holding up better than the factory pmi. certain areasat are doing a bit better. jon: the piece of data that you and i happen talking about -- the chinese facebook says that estimates of is divorced from reality. what does this mean for the outlook in china at the pboc? >> there are growth gaffes

emerging. the 7% growth target challenge for 2015. want to geters there -- on the monetary front it is becoming more positive. ands now below the cpi rate authorities will not want to erode the returns to savers. for industrial companies the lending rate is quite high. for fiscalto room response. economist says there will be more spending on infrastructure which is basically how china does its stimulus and that is needed. it remains a big drag on the economy. let's get some final

thoughts from luca paolini. china is goodin there off and a host of people who want to prove that it is bad. and the chinese beige book is to do that and now the data is not so good and you get people coming out of the woodwork saying to ignore the data that things are better than the data might suggest. which one is it? >> the general consensus is that chinese growth is much weaker than what is reported. when you look at the consumption they seem very solid. the new economy is doing well and the old economy is not doing well so i suspect that investors are too bearish. having said that, the momentum maybe a little bit weaker before it gets better but it is not a disaster. ?> how do you invest in that, do i want to go anywhere near that market? >> for now we are a little bit cautious on emerging markets in if we see some improvement in global growth the

valuation is very competitive, so we may think about adding to some exposure in the next few months. jon: have you been doing that? >> not yet. we're just waiting for the fed to move. >> we have just small exposure -- just as much exposure to chinese equities as emerging markets in general. jon: has that put you off chinese stocks? the way we look at the chinese market toward the last couple of hours of trading? do you see this push higher? you >> theeter you problem we have -- does that deter you. >> the problem in china is that it is very erratic. jon: great to have you with us this morning. still to come, a tweet from hillary clinton and buy a text stocks -- biotech stocks thumping yesterday.

after the break. ♪

jon: let's get straight to your top stories. china's president first u.s. visit. he is scheduled to meet with top u.s. executives tomorrow and in new york city he will address the united nations for the first time.

joint threeart other fed officials in suggesting that rates will rise in 2015. he says that while recent volatility poses risks to the economic outlook he remains confident that the fed will raise interest rates this year. department isce said to be conducting a criminal investigation after they admit to cheating air emission tests. south korea will test the diesel models. vw's top u.s. executive has apologized saying we have totally screwed up. welcome back. i am jonathan ferro, live from the city of london. we are 46 minutes into the session. the session low down by almost one full percentage point. miners leading the losses once again this morning. glencore trading at an all-time low and south of that 125 pence per share just last week.

if you but into that, you are in the red. over in the u.s., the democratic presidential candidate sent th biotech-- sent the index down 5% after saying she would combat the cost of hypertension drugs. this after the pharmaceutical company came under fire for boosting the cost of a medication from $13.50 per pill to $750. the ceo defended the move on bloomberg tv yesterday. price to save your life was only $1000 and these days they cost $100,000 or more whereas these drugs can cost half a million dollars and so it is still underpriced relative to its peers. dispute, we not a new thing but this new twist,

significant? >> you and i talked about this before. this has been going on for a while and we should dispute the phrase used by clinton called specialty drugs. you have some diseases that are quite rare, 2000 patients or 10,000 patients. some pharma companies are lucky are very good at researching drugs. they have no competition and it saves lives so they price it freely and nobody can push on that because the patient groups are advocating use of the drugs, etc.. it is in that area where the free market breaks down. in a normal world, pressures on at phil, -- on advil, there are alternatives. so the insurance company says if you don't give it to me at this price i will take it from your competitor and there is almost always a competitor willing to drop the price. so in this particular case it is

an abuse of the situation but that is really what is going on. the? of can you continue to price specialty drugs at astronomic prices? jon: that is not just biotech but broader health care. >> exactly. a lot of times biotech has trouble selling drugs because they need access to large physicians but sometimes they partner with the pharma company. but pharma companies have these kind of drugs. they are also benefiting from those risings. -- prices. jon: the stock market moves because you are anticipating that maybe hillary clinton becomes the next president and does something about it. i would ask, what comes next? does it become a democratic issue or a broader political issue? >> i think it will eventually happen but the issue is this is not the first time that the

political game has been played. trying to push on drug prices or exact money out of the pharma industry. 90's, don'tthe forget that the democrats are already trying to push through a law to give medicare and medicaid pricing negotiation capability. at the moment they cannot negotiate prices, they go with the market. that is already a bill going through that will go to congress. this is an emotive subject. i think quinton has found good timing for this because there -- clinton has found good timing for this because there is also with the room in the market share the you wish in. jon: i was looking at the biggest losers this morning, mining stocks on the footsie and health care stocks as well.

i was asked the question whether this is really just a political issue or broader health care. does it reach europe? >> oh yes. the u.s. is the biggest pharmaceutical market in the world, if you cannot sell your drugs there you are stuffed in europe as well. touches every pharma company that has business in the u.s.. jon: who is most exposed? company that is driving high drug prices, the one that comes to everyone's mind is fee -- sanofee has -- every company has rare disease products priced at high levels. i would say that if there is going to be any pressure, those are the areas and products that would be particularly under the

microscope. jon: thank you for joining us. on this show, emerging markets in focus. all of the data that you need to watch for for the rest of the day, after the break. ♪

jon: welcome back to "on the move." if you are in the city of london, the picture outside your

window does not look as pity -- pretty as hong kong. it looks like a beautiful painting. another beautiful painting is francine lacqua. first up in the show we will get a rate decision from the turkish central bank and then we get cpi data out of brazil where they were cut to junk this month. and we get consumer confidence data in the eurozone. that is almost it. "the pulse" is coming up next. that picture was just for you. francine: so poetic. [laughter] we will talk about china. i know you have spoken about it at length. it is trying to figure out how you deal with it, as an investor, how you get consumption or whether you look at alibaba. then we talk a little bit of luxury. what i think you will be tuning in for is michael moore's.

he has just written a book about owning management and being the right leader for the last 38 years and will again apply it to the seo's that we know -- to the co's that we know. i will ask him, does somebody need the job over this. this is the kind of thing we will be trying to explore and what is it mean for the rest of the car industry? is it a whole big sham? jon: that is it for me. if you want to talk markets i am on twitter. stocks are lower this morning. on the footsie it is the miners leading the losses. rest of luck on the rest of your day. ♪

francine: east meets west. the chinese president makes his first visit to the u.s. top u.s. executives says sorry for the cheating scandal. american authorities are said to be launching a criminal probe into the carmaker. holdinisters are set to an emergency meeting on the refugee crisis. welcome to "the