>> china slowdown. industrial firms deliver their worst in four years. a tumbling stock market. east meets west. obama and putin care for their first face-to-face talks and more than year. russia's president says he wants to cooperate. >> hanging up, vodafone says it has ended discussions with liberty global. the two companies were in talks for a possible asset swap. >> can they help regain credibility? ♪

francine: welcome to the pulse. manus: i am manus cranny. we will be's aiming to peter altmaier we will be speaking to peter altmaier. francine: there is more evidence of the china slowdown this morning. 8.8% in august. that is the most since 2011. nick bottoms is standing by with more. what is driving the downturn? whammyhis is a triple for a lot of these industrial companies. the stock market crashed affected in a very bad way. a lot of their investments and demands are low for a lot of these drivers of the old

economy. you want the valuation coming home to roost. a lot of these companies had lending denominated in dollars. their debt becomes more expensive. you are seeing a confluence of factors and the data showing how hard it is heading china's industrial companies. manus: where we see that evidence. if we look at the broader economy, we have had a raft of measures. drawing conclusions about where we are, whether it is a hysterical slowdown. or whether it is going to be a glide lower. >> the economy is still growing. the government has set a 7%

target. that is still pretty good. how well the government manages this slowdown. go,ecently as if he is growth was at a 10% rate. from that rate it is a significant slowdown. what does that show? is a going to put pressure on the government to level the playing field for chinese companies with their international competitors? china's benchmark rate is more than 4%. there is a lot they can do to make chinese companies more competitive in the international arena. the question is if today's data is going to put more pressure on them. francine: nick, thank you for that. says he is not too worried about the economic slowdown in china. he is going to keep investment in that country. >> we are still opening a few stores in china. less than before.

this year, we opened three new locations. one in cmn. we will be more selective probably in the future. markets, i am that general consumption of chinese consumers but mostlylocally, mainland china, a little more compensated. let's bring in rom in the case of let's bring in ramin nakisa. are droppingofits the most in four months. what is your perspective on the china perspective at the moment?

ramin: we are concerned about the u.s.. we like europe, japan. the biggest impact locally is in the disinflation shock that is spread around the world. that has many consequences. look for the best value are places we have low inflation and a high credit impulse. the two places we find that is destined to places we find that our europe and japan. francine: are you putting the fact that commodities are down to the fact that can that -- that china is consuming less. it is very resiliently negative. the slack in the u.s. labor market which is put pressure on inflation. inflation has become more sticky. it is probably here to stay for a long time. we have change.

low inflation is here to stay. it has many consequences. the percent is lower. -- 3% is lower. open economies which are exposed to inflation. euro.issie versus the manus: you mentioned the euro and the issues. we are going to get an inflation reading and it's probably going to be flat. ecb. does this leave the that'sare unwinding people are wondering why can we they will doeuro? more qe and they are will -- they will do it before the end of the year. we think they will expand

the qe program. side, we thinkte it is going to be an expanded asset. what are they going to buy? the insurance that we have portrait on how much they are buying. francine: do you think it will be corporate bonds? ramin: i think it is a possibility. very positive for the european credit market. manus: if we look at christine lagarde and her comments this morning, preparing to trim the 2015 growth targets. how bad is it on the global basis? citigroup talking about 55%. a global recession. is it priced in? we have had significant moves in the s&p.

ramin: look at spain and the growth. credit impulse. if you look at the ecb lending, that leads the gdp very strongly. the credit impulse in europe is very strong. we think that is a big positive for risky sectors like banking. do you think pricing growth in europe is stronger than what people are led to believe. if you look at the growth we see , it is led by a weaker euro? and lower oil prices. these are not here to stay, especially in the euro. ramin: that is especially true. what needs growth is the impulse. it is increasing very quickly at the moment. that is what people should be looking at. that is what equity markets are

not looking at the moment. there is a possibility that we could see a decoupling between the u.s. and europe. the high yield store in the u.s. and the exposure to the energy sector comes home to roost. we expect to happen quite soon. it will pick up quite briskly in the energy sector. manus: in terms of emerging markets, you said we have worse to come. ramin: we think so. there are currencies that could devalue further. a currency to violation. the credit situation could get worse. turkeys -- a lot of countries like turkey have massive debt. ramin, thank you for coming. here's what else is on our radar.

manus: a landmark vote in spain. one 72 seatsarty out of 175 parliament seats. could independent parties failed to gain a majority of popular votes? -- he seeks to regain policies attacked by many academics as disasters. will outline the opposition's economic plans later today which will involve a radical review of the bank of england. manus: shell will cease further expiration off the shore of alaska. challenging regulatory environment is a reason for that decision.

francine: six french jet fighters have targeted and destroyed training camps in eastern syria. it is been identified by surveillance -- it had been identified by surveillance. manus: the company admitted cheating on u.s. air pollution tests. marcus muller says the carmaker will implement the strictest compliance to government standards. francine: that brings us to the -- theash to the quite twitter question. what should the new ceo do during his first week? ♪

francine: local back to the pulse. live from bloomberg tv and radio. let's get straight to mark barton. mark: welcome back manus. .hares continuing to slide glencore shares down a percent this morning. -- shares down 8% this morning. we had a goldman sachs note saying measures announced by glencore to shore up its balance sheet will not be enough.

both measures slashing dividends, selling shares on friday. it is looking into selling a part of its agricultural this is. coming in close, this is a one-month chart. if i were to show you a chart going back to make 2011, which is when shares were sold to the public, it would be a similar chart. in the month alone, shares that glencore have fallen 39%, since the ipo. shares down 83%. shares never closed higher since the first day of being sold to 2011.blic on may they are a penny stock now. it is a quite extraordinary fall. linked to the concerns about the china economy. linked to concerns about its financial viability. manus: mark, thank you very

much. it is about their ability to make it through with these sliders. let's was gear and talk politics. the pro-independence party. francine: 40% of the popular vote in the election counted as effective vote. leave the does this independent vote? the leader of this both saidt campaign this gives them a democratic mandate to go ahead to madrid and push for independence. they did i get the majority of the popular vote. 40% versus -- 48% versus the percent. 50%.rsus

-- they are going to have to reconcile those differences. this is a party that doesn't want him as a president. your questions over that. then they're going to have to form a government. the pro-independence group, 125 page plan that will include setting up a central bank. moves on those areas are going to be attacked by the constitutional court in madrid if they happened before the election which is where focus turns to now, because we are likely to see a different government. the polls suggest that mariani malloy will not hit the best mariani rajoy will not win.

guy: we see the political will be undeterred. what are the economic implications. pieces seen some of your . european producers present in that region. what are the economic implications at this that's as this political wrangle continues -- as this political wrangle continues? >> we spoke to a number of people over the weekend, pro-independence who have taken their money out. those banks have come out and pro-independence poses a huge economic risk here it -- risk. economy.lion euro

if there was independence, it by no means guarantees that catalonia would be up to use the euro backed by the ecb. there were thousands of foreign companies that invested. the region since more taxes to madrid then he gets back. it would have to borrow money from a dread because it has been closed out of the market. the pressure has eased on spanish bonds. postelection is where we're going to see a clearer picture of where things go from here. tom mackenzie covering the election force. ramin: coming up, this interview -- francine: we speak to the speak of chaff of angela merkel. peter altmaier, he is coming up.

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manus: welcome back to the pulse here it streaming on your tablet, phone and bloomberg.com. francine: to a great interview. having marked a decade as chancellor, as a merkel has had her share of crisis to deal with. the decision of refugees, greece and the imaging scandal. by mrs.hols is joined

merkel's chief of staff, peter altmaier. hans: thank you for joining us. let's start with volkswagen. it is in the news. what do you drive? would you envision yourself ever buying a volkswagen. peter: i have driven several cars. audi, all of them. i can mention driving a volkswagen. i still believe it is a high quality car. is a kind ofacing .nvironmental issue that means how honest the car manufacturers have been with their clients with regard to standards imposed in order to protect the environment. we insist that volkswagen has to verify in every single aspect

what was going wrong, why was a going wrong, how can the damage be repaired. i believe the german cars are .xcellent quality they are environmentally-friendly cars. we cannot afford the lightest out, whether we stick to the commitments that have imposed by law in the several countries where we are exporting. hans: do you suggest that this is bigger than volkswagen? peter: know, i suggest that german cars are the best worldwide. hans: do you think it is going to damage germany's brand? that is why the competent minister in government, why the -- why we in the chancellor's office are working hard to

contain the damage. how can we contain? by clarifying it. by telling the truth. by taking the appropriate measures. the ceo of volkswagen has been replaced. thereression is the guys have been shocked. now they are understanding. there is a perspective of individually -- of individual ability. hans: when we look at what the german state has done toward diesel technology, they have favored it. have they gone too far? -- is germanyfort behind the ball on electric? peter: i've been told all the time diesel technology has some

advantages. i believe this is true. these advantages have to be in line with environmental requirements. no doubt about it. me it is possible. experts told me they can repair the problem. i am optimistic. hans: what about electric vehicles? what is going to be germany's answer to elon musk? year. i met him last an impressive guy. tesla car is an impressive car. i would be very pleased if german carmakers would be up to produce an e car better and cheaper than elon's car.

this must be possible. hans: angela merkel has stick a lot of her reputation on being a climate conscious, environmentally friendly. peter: we are committed to climate protection. we are fighting against climate change. we are fighting for clean technology. that we areclear continuing that path. we are pressing for a good result. convincedheartedly that angela merkel will be seen by her colleagues as a part of the solution. state beenhe german too cozy with the automobile

industry? peter: we have been interesting in a good working automobile industry is a part of the industrial base of germany. at the same time, we made it clear that the industry has to adapt to the environment of challenge that we are facing around the globe. crisistimistic that this will push us to promote even more environmentally friendly policies. refugeeifting to the crisis. merkel's latest popularity seems to be sinking. does she risk losing support over this? is he out of step with the public? peter: angela merkel has been a chancellor for 10 years. she was leading popular to polls for more than two years now. ,hen there are marginal changes

it starts worrying us. we are confronted with a challenge. syriaefugee crisis in that exceeds all expectations. this is a crisis where we have to take our responsibility but other countries have to take their own responsibility as well. that has to bege taken on by other countries worldwide. by arab league. by our american friends. by the europeans. germany is taking and assuming its responsibility. farave accommodated so several hundred thousand refugees, as a part of our humanitarian responsibility. hans: your counterpart and

hungry jews germany of german imperialism -- your counterpart and hungry accused germany of the german imperialism. peter: we have to cultivate because a number of countries are confronted with a challenge. ,t is true for greece, hungary macedonia and others. we will not find solutions by blaming each other. the only way to find solutions -- this is why we are in favor of a common european regime that includes a common asylum system. , we aretime being cooperating with all of the countries in the region and know to make it possible to have -- to help the refugees without losing control. hans: you have lost control of

the process early. have to reimpose border checks. did merkel's initial response miscalculate? merkel's sponsor was given an inner environment where hungary asked european partners. we have responded to that. hans: she didn't miss underestimate the way her response would be received? problem was emerged already. during summer, every day thousands of refugees arrived increase. they moved on to serbia and macedonia. this is something that did not

start at the moment where angela merkel said we have to respond to our humanitarian obligation. no, it was something that emerged already in early summer. it will continue to be a challenge for some time. hans: when we get to the source of the problem, it is syria. mr. weidmann there puking -- mr. vladimir putin is an new york this week. where aenvision a role side stays? assad stays?o situationare in a where conflicting parties are destroying syria. we have to stop isis. we have to come to a more coherent solution in the region. we need talks.

one of the most important talks today is the top between american president barack obama and russian president putin. enroll all partners in that region, saudi arabia, iran, lebanon. we have to see what we can do to that we willle have a perspective in that region as well. hans: you don't see putin's escalation as a problem? peter: we have always insisted on a coherent solution. instead of blaming each other, we should use the possibilities for talking to each other. this is what obama and mr. putin are doing today. let's see what the outcome will be.

us: we will wait for those results. we think he for you time mr. altmaier. i will send it back to london. hans, thank you so much. he's joined by peter altmaier. manish: our top headlines. more evidence of a china slowdown. industrial companies profits --line a plane percent declined 8.8%. the most since at least 2011. gold-mining earnings plunge 65 percent while all and gas profits plunged 67%. partythe main separatist one 72 seats in the 175 parliament seats. prime minister roy's party

trailed. manus: jeremy corbyn welcome thomas to advise his party. attacked by many academics as potentially disastrous. the opposition's economic plan later today. a radical review of the bank of england. francine: we are at the start of an important week. a host of fed officials speaking, including janet yellen. let's second with mark barton. a lot of money flowing into your. -- flowing into the yen. again.t is rising it is a risk off so today. china industrial

profit report. have a look at the yen. this is the bloomberg correlation index. this is the yen against nine developed tears. it is rising today. this is over the last six months. six fed officials speak this week, including janet yellen. last week she paved the way for a rate hike this year. on fridayjobs report before the fed meets in october. this is a nice chart. , made this up for you especially since manus is back. bond market going back to beginning of this year. i have chosen it, because pro-independence parties in catalonia received less than 50% of the vote in a local election. most popular region.

from the beginning of the year through july, the green line, the italian yield was higher than the white line. the spanish yields since july, you can see the italian bonds market has outperformed the spanish on market. the spanish yields high. the italian yield lower. the vote over the weekend would hasten catalonia. the bellwether when it comes to growth this year. the economy grew the fastest pace in eight years in the second quarter. it lessened the haziness of the succession of catalonia. -- the secession of catalonia. volkswagen has a new ceo. he was announced on friday. this is a one-month chart of the preferred shares in the last month. down by 40%. euroseek, 27 billion

walked away from market value. autoloomberg world manufacturers index had its worst weekly last week since made 2012. volkswagen shares died. you for that. vladimir putin is in new york today for the ninth nation's general assembly. he will meet with president it will be their first face-to-face meeting in more than a year. syria is likely to be high on the agenda. solution tono other the syrian crisis then strengthening the government structures and rendering help in fighting terrorism. urging them to engage in positive dialogue with a rational opposition and

conducted reform. francine: ryan chilcote is here with the latest. he is going to be quite tough, but he wants a rough response from the west. brian coke he was to be heard on syria. ryan: he wants to be heard on syria. 11, 213, vladimir putin said russia should be quite rating more closely with united states on syria. his relationship with president obama was marked by increasing personal and professional trust. after atprising snowden. that really upset president asylum to russia gave edward snowden. it is fair to say that their

relationship couldn't be any worse. the guys haven't sat down for more than year. .hat is what's going to happen the conversations going to be about syria or ukraine. they have competing agendas going in. there does seem to be a bit of momentum. president putin might get what he wants, the u.s. military/ russian military setting down to discuss russia's involvement in syria. brescia already has troops -- russia already has troops on the ground. , if presidentorld putin gets what he wants, he the savior coordinator of the effort to put down islamic state. this is not speculation about wooden -- about what putin is going to say. willie laid out that's willie lay out a concrete -- what can

we expect from the speech? think the speech will be too specific, in terms of a roadmap. but he wants to do is point out the utility of having a multilateral, multinational orroach that includes russia has a very important role for russia when it comes to syria. he can appear as someone who is offering a solution. the detail, that is the conversation -- i am not saying this negatively, he is muscling his way into the room. why? everyone wants to get on on it -- wants to get in on it. european leaders are starting to say we have a real problem in syria. is not just a russians, but the french, launching their first airstrike against the islamic state.

us we officials telling want to be a part of the conversation. yet to be a hitter. yet to be -- you have to be a hitter. -- have to be sitting down the future of assad which the russians believe should be continuing. francine: do think that their relationship will come closer? ryan: these guys have a really bad track record of hitting a golf. -- hitting it off. meet,ince they agreed to there's been an argument about who called for the meeting. we should look at this as the beginning of a warming in the relationship. francine: we will take it. next, matthewup moliere begins the new role as

matthew miller big is the numeral as the ceo volkswagen.

francine: welcome back to the polls. live from bloomberg's headquarters. manus: a deal that simply won't be. correspondent matt campbell is here now.

going to do a great deal is all off the table. why? like ais is always look complicated situation. an asset swap of some kind. they are not going to happen. this was always going to be a difficult -- this is always going to be difficult to execute, because of the big egos that play here. is only for now? what does it mean for the two companies? will they eventually merged with someone else? matthew: this is not the last we have heard from these guys. is nothing if not a dealmaker. whether it is something that's whether it is doing something -- whether it is

doing something with vodafone, we have not heard the last from him. this is a company that is look like it may need a bit more direction. it got out of the u.s. at a huge price. that seemed to be a good thing. now it is looking a bit slim compared to its competitors. down to 3.9%. thank you. francine: jeremy corbyn has recruited thomas piketty to advise his party. it comes as he seeks to regain credibility. manus: john mcdonald will outline the opposition's economic plans later today. he is with anna edwards. u.k.s live at the conference. anna, over to you. anna: thank you manus.

thank you very much for joining us. you have been talking this morning about the bank of england. your said you want to keep it independent. what kind of reform are you talking about? john: we want to reassure people. we want to have a debate on the mandate. it is 18 years old now and it focuses on inflation. we want to talk about that mandate to see if it needs to be modernized. want to go wider. consult with his assistant and general population on what the role of the bank of england -- more consideration on prosperous growth. anna: why not take away the take of england's independence? -- why not take away the bank of england's independence?

jon: i have never made a comment about taking way the independence of bank of england. it reassures people that they are independent. what we want to do is make sure -- the mandate will make all of its considerations. that is the debate that is happening in the bank at the moment. i want to ask if we can have access to all of the bank of england. officehave access to the -- all physical parties should have access. when we come into power in 2020 -- anna: what you think of interest rates?

john: i am or and about if there is an increase. concerned about if there is an increase. that is one of the issues we need to debate more effectively. we'll go through all of these issues there. i am worried at the moment that many of the factors that cost the last economic crisis are gathering at the moment. asset prices are still going up. relatively low. consumer credit increasing. there are real issues there. i am fearful at the moment for the short-term future. we need to address those issues. that are you saying that means further quantitative easing in the u.k. echo -- u.k.? john: interest rates are so low. crisis,tes and economic

-- economic cycle, you may want to use quantitative easing again. if you listen to some of the hedge fund managers, quantitative easing saved the banks. if we did quantitative easing again, it would be targeted for a national investment bank. we grow the economy. where learning the lessons of the past. the right tool at the right time. anna: how to stop that from being inflationary? you feed the money into the economy, then you will that money out. john:n't remove -- sign -- john: that is why you need to do it at the right time. you need to judge that.

what i am saying is we are going to test every policy. work, so therey is public support for them as well. i -- you cash or john: we will be looking into detail at that. we will be looking for how they work and how they fit the purpose. announce that our civil servant is good to review the treasury as well. i want to change the treasury and get it back to its original purpose. getting out there and developing the economic structure plans. -- next i anna:

you think the treasury is overstepping its agreement? instant on how this can be transformed. that may mean making sure that the power we are exercising in the treasury with transfer over to the economic department. people must be impressed. i'm pleased they are coming forward. brilliant minds. there going to come with to us with ideas -- they're going to come to us with ideas. i think this could be the most creative economic debate we have had. we are going out to the public. where going to start a discussion on the economy. how does it work? this will be economic construction from the grassroots up. anna: he has concerns.

party at theour we will look at the .olicy and what we will do there are others who have come forward. on all of those options, we will test them. mark will be a part of that process. i want to see mark and talk it through with him. i believe that if we can demonstrate that we have this inclusive discussion, good advice, proper testing, we can bring people with us. transform oure to policy -- our economy. ina: joining us here brighton. mr. mcdonell will be taking to the states later today. he is live on a bloomberg thevision reviewing

operations their undertaking with u.k. treasury. manus: adding clarity to the fact that he never said that he would -- well done, anna. similar isetit is -- -- with the us mueller chris joins us from berlin. what exactly is mr. mueller proposing? is proposing pushing the brand down to the regional level. back 25 years, company is basically centralized with decision-making happening in a wolfsburg. cover-up a culture of

that the people below them to corn -- below winter didn't have a power to push the problems up. task is to empower them to make decisions. it's a big part of the cleanup process. manus: they're going to continue to sell diesel cars in japan. chris: it is a test of whether consumers are really willing to accept diesel now after the scandal? advantages. lot of it has a lot of power. it was considered clean. it will be in sting to see how

consumers except the push by mercedes and other luxury vehicle makers as well. viewers, it isur the second hour of the pulse. ♪

francine: china's slowdown. industrials are the worst level in more than four years as they are hit by a devaluing jan and we meant. obama and putin prepare for their first face-to-face talk in more than a year. the russian president says he wants to cooperate with the fight against the islamic state. liberty global has ended talkssions about ia about asset swaps. glencore warns there is little value for shareholders should low commodity prices recessed. -- prices persist.

welcome to "the pulse," live from london. i'm francine lacqua. tom is in new york. cleare have the streets after the pontiff comes to a successful conclusion in new york. on this weekend, all in time for the united nations. you can see the limousines lined up, two deep, with only one lane passing. that is how big an event it is. the president and mr. putin speak, coming off last night nationwide broadcast on 60 minutes. this really sets the tone for this monday morning. the two presidents will meet later this afternoon in new york. francine: i'm looking forward to it. it's going to be a lesson in diplomacy, mr. putin trying to beat off well getting closer.

tom: i like what wolfgang said, defining international relations of the september monday. francine: absolutely right. we are keeping a close eye on vladimir putin. there is more evidence for china slowdown this morning with industrial profits declining 8.8%, the most since 2011. our beijing bureau chief is standing by with more. nick, what is driving the downturn? nick: i think it is a confluence of factors. one is obviously the stock making investments that turned out badly as the stock market tumbled the summer. another is weak demand. a lot of these companies are suffering from overcapacity, writing industries that have been hardest hit by china's slowdown. the third is the yuan coming home to roost, the government's

decision to devalue the yuan last month. a lot of these companies had that overseas denominated in dollars, and that suddenly became much more expensive. francine: nick, what does it mean for the pboc going forward? can we draw any conclusions about the chinese economy? nick: well, it is the latest in a whole slew of bad data. it has been such a long time since we had a data point where we thought, wow, that is encouraging news for china's economy. clearly, this puts pressure on the government to act. if you look at interest rates in china around 4%, compare that to .s. and. in europe -- u europe. thanks have a ton of money locked up for reserve requirements, more than 15%. what we are seeing is further evidence that will press the government to cut interest rates

as forecasted by the end of the year. francine: nick, thank you so much. let's get to mark barton. glencore is down 17%. mark: the biggest decline ever. this is the intraday chart coming close. what we are seeing is quite astonishing, the worst week ever for glencore last week. is aove in the share price move from investech, warning that there is little room for shareholders in glencore stock should low commodity prices persist. shares are down by 15%, only 23% last week. this is a company that has never risen from its may, 2011 ipo price, but has followed by 83% since then. a couple weeks ago they announced measures to boost the balance sheet by $10 billion. it has a $30 billion debt pile selling shares. it will cut dividends and sell

assets. t thean sachs warned tha measures will be enough. had toto what investech say -- "the challenging environment leads us to question how much value will be left to equity investors of commodity prices don't improve." that is the underlying fear today, sending glencore shares to their biggest intraday drop on records, down by 15%. quite astonishing. francine: mark, thank you. i know you're a lover of charts, and when you look at copper in these commodities, i guess it boils down to a simple question -- is it a production problem? commodity complex centered around industrial metals. what i would suggest is the confusion -- you have the london price, and in america we quote

the chicago price. the price of copper in america 2.29 right now, that is terrible nine for the entire mining group, and particularly glencore. copper has been very soft if not through new weakness. when we get to that, you have a real crisis. but you see what copper is doing, and it is no hope to glencore. francine: it certainly isn't. we all have concerns about production in chile. man not tooe to a worried about the economic slowdown in china. he says he will keep investing and opening shops. >> we are still opening a few stores in china, later than before, but this year we are opening in three new locations. of course we will be more

selective in the future, but on the chinese markets, a few am confident on the general consumption of the chinese consumers, not only locally but also while traveling. of course hong kong macau is little more complicated. francine: for more, we are joined by the chief eurozone economist. great to have you on the program. when you look at glencore in the trouble surrounding commodities, when you look at china, and we are sure for translates to the real economy, how do you assess the economic damage it could do to the eurozone ? antonio: clearly there is an effect that is already happening . when you look at exports out of germany in the first and second quarter of the year, they have

really come down quite significantly. of the story is that exports to the u.s. and other european countries and the u.k. have made up for it. ws were up altogether. it depends on what the currency will do because that will have applications for the year. francine: your take, antonio, depends on whether it becomes a reserve currenc. where do you see it going? antonio: we think this capital outflows likely to push the pboc to let the currency devalue further. in fact, we have projects to weaken by 7% by year end. that is versus the u.s. dollar. 5 percentage points devaluation. -- structure may

we are seeing the central bank and we are leaning too much against it. doctor, when you look at the depreciation you are predicting at barclays, do you assume that janet yellen and mark carney are facing a currency war, where beleaguered emerging markets like china adapt their currencies to support export markets? is that the reality for mark carney? antonio: i think clearly currencies will play a critical role in the world of low inflation. , with expecting the fed all this news from china, to delay as a result of that into march. we do not think the bank of england will hike before that. this --hink, francine,

with what the doctor has written about europe everyone is back to emerging markets in china. francine: and i know, tom, you are looking at the indonesian or rupia. it seems that they certainly can't hike interest rates. they might have to decline them further. antonio, how much should you worry about emerging markets? antonio: i think we're quite worried. if you compare to a couple months ago, there has been nothing from china. the only exception might be in india. i think this confluence of variation from china, mixed with a hike, will come, maybe a bit later than sooner. but it will come. it is a nasty combination for many countries. of course there is variation.

generally, it is a very downbeat world for the yen. francine: talk about downside risks. singapore's index dropped 1.4% and is now entering a bear market. there,e correlations are but back to the european watch -- the correlations we are seeing in asia, are we seeing them as well in europe this morning? europe thereink in has been no major event, therely, for the last -- was this issue about the election in catalonia, so i have for now the markets been relatively quiet and calm. francine: antonio, thank you for now. he stays with us. in the meantime, here's a look at what else is on our radar. manus: catalonia's independence

movement has won a landmark vote in spain. the smaller party have 172 seats in the 135 seat regional parliament. 72 seats in the 135-seat parliament. jeremy corbyn has recruited a to advise hisnner labour party. it comes as he seeks to regain credibility for policies attacked by many academics as a disastrous. the oppositional outline his plan later, involving a radical review of the bank of england. donald trump will lay out his increasing the burden on hedge fund managers,

cut rates for corporations and middle classes. the republican presidential candidate also says he will increase taxes on chinese imports after the country continues to devalue its currency. shell will cease further exploration and offshore alaska for the for seeable future. the energy decided that high cost and challenging and unpredictable regulatory environment were reasons for it. says that sixnde french jetliners have targeted and destroyed the islamic state training camp in eastern syria. it had been identified i french by frenchce -- surveillance and middle eastern states. germany's car regulators have given volkswagen 10 days to come up with a plan to fix its growing emissions scandal. it comes after the company admits cheating on u.s. pollution test.

ceo says the carmaker will develop and implement the industry's strictest compliance standard. fran. francine: that brings us to today's twitter question -- what should the new vw ceo do in his first week? what will he need to regain the confidence of the u.s. consumer? you can tweet us, hashtag #th epulse. still ahead, separatist secure a majority of the seats in catalonia, claiming it is a mandate for secession. we will make sense of the cattle and results coming up after the break. ♪

francine: welcome to "the pulse," live from london. pro-independence parties won a majority in catalonia's regional assembly and 48% of the popular vote. tom mackenzie joins us now from barcelona. where does this leave the independence campaign? the independence campaign is very much still on track in theirnia, despite having wings clipped by the fact that they didn't get a majority in the popular vote, which many saw as key. they wanted over 50% to have a very strong mandate.

they didn't get a parliamentary majority, but at a price. with ad to team up radical left party called c.u .p., who are diametrically opposed to a conservative party. they don't even want to the current president. there will be some difficult negotiations in the hours and days ahead, before the pro-independence group can form a government. then they go on to negotiate with madrid, the we have already heard the leader of the socialist party saying that they do not have a mandate. the popular party are likely to come out with a similar line. so it is going to be very difficult and tensions are focusing now on the december general elections. we will get a very different

makeup and the government here tospain, and that is going be decisive and what happens next for the catalonian independence movement. francine: what i the economic implications of this result, tom? there is a very good reason why spain has fought hard to keep catalonia part of the country. it is a massive contributor to the gdp, around 20%. 200 billion euro economy, roughly the size of portugal. there are many hundreds of thousands of companies that invest in this region, and pays more in taxes and it gets back and that is the sticking point for many here. despite that, the flip side is that the trade is currently upping it because they haven't been able to access the market in the last two years, and much of the success of the economy is penned by the euro. it is by no means certain that

they will be able to stay in the eurozone. those of the financial implications -- the market rallied today, and there is pressure on spain to conduct. picture, and the general election is going to be crucial, the president is a wounded animal now. he is unlikely to back down. he has been attacked on the left and now on the right. francine: tom, thank you so much. antonio pasque is still herel. thank you for sticking around. when you look at the catalonia, noteste we had, spanish dropped five basis points because there is worried at the political uncertainty will continue. antonio: spain is clearly paying

a price for this political uncertainty. you can clearly see that they have been trading, spread wider, there is no macro reason for it to trade more poorly. these elections were what was important. over 77 participation, which is massive. you can really draw some conclusions. the fact that we have such high participation, you still got less than 50% supportive independence, and that is fine the markets are reacting positively, to the fact that less than 50% support independent. still, they did much better in parliament and will continue pushing. probably they will get some concessions -- not now, because it is not politically viable. francine: not secession. how do you model political risk? also parts in europe

and italy, how do you measure political risk? antonio: it is complex to put a probability. toould say in the near- media-term -- low. one is that the costs for catalonia are high. if they cannot remain in the european union, it would be bad to exit. that they is the fact are the main trade partner with spain. third, i do believe that after the elections, there will be no negotiations. there will be some th .secessions . ideal -- there will be some concessions. francine: thank you so much. antonio pasquel.

2.1 millionng that cars are affected globally by the admissions issue. the is according to spokesman, saying 577,000 cars are affected in germany, 13,000 in north america. this ties back to what we heard from volkswagen over the weekend. the new chief wanted a huge shakeup, in the crux of the question is how do you regain confidence from the u.s. consumer? that is quite elusive for volkswagen at the moment and very difficult to get back on track. vladimir putin is in new york today for the united nations general assembly. while he is there he will meet with resident barack obama, their first face-to-face meeting in more than a year. with syria likely to be high on the agenda, putin set out his position in an interview. solutionis no other

for the syrian crisis then strengthening effective government structures and rendering them helpless in fighting terrorism. but at the same time encouraging them to engage in positive dialogue with rational opposition and conducted form. francine: ryan chilcote is here with the latest. what can we expect from vladimir putin? he is going to be tough on the u.s. and at the same time want to get closer to the west. ryan: he is going to say that he has solution for the crisis in syria, and the world and the united states should take them up on it. russian troops are on the ground, they can bolster assad. he is going to argue that the west hasn't worked. years ago,ack two he wrote an editorial in "the new york times," where he said he wanted to have a conversation with the american public and was a cooperate with the united states on syria. he also said he had a good relationship with president obama at the time, which is kind because with the

whole scandal over gay rights and the winter olympics, and ukraine. this is a way for inclusion to change the code -- four putin to change the conversation. it has all been about ukraine. there is little fighting in ukraine right now and he will present himself as a man with a plan for syria. the russian foreign minister met with john kerry. the russians are talking to the syrians and the iraqis. they are trying to be proactive and they will point out that the u.s. approach has failed thus far. putin actually mocked it and said that they have only succeeded in harming 50 guys. francine: he is addressing the general assembly, and his past relationship with barack obama -- will they get warmer? ryan: that is a good question.

there is a specious morning -- president obama will also be speaking, as well as the president of iran, all part of the morning session at today's opening day in the u.n. general assembly. that 5:00 p.m. eastern time, president putin and obama, they will sit down. president obama has called president putin the kid at the back of the class who was annoyed and not being helpful. these guys have a very frosty relationship. that will be the first meeting in more than a year. but the fact that they have agreed to sit down suggests that the united states is prepared to listen. if they agree to sit down, there is an argument about who. initiated the meeting -- about who initiated the meeting. at the end, both will have their own take on what took place. but you can bet they will discuss very specifically what should be done in syria. francine: thank you so much. ryan chilcote.

p next, jeremy corbyn appoint advisers to the labour party, but will he give him credibility to his economic policies? ♪

francine: welcome back to "the pulse," live from london. i'm francine lacqua. tom keene is in new york. there is more evidence that china is it slow down -- since 2011. call mining companies plunged almost 65% in oil and gas profits tumbled more than 67%. catalonia's independence movement has won a landmark vote. the main separatist alliance and

a smaller party have wanted total of 72 seats in the 135 c to regional parliament. it sets the scene for a showdown with spain's richest region breaking away. there was a silent majority of cattle and who wanted to remain part of spain. jeremy corbyn has recruited experts to advise his labour party as he seeks to regain credibility for policies attacked by many academics as potentially disastrous. meanwhile, john mcdonald will outline the opposition's economic plans later, which will involve a radical review of the bank of england's plan. francine: thank you. manus cranny with the headlines. let's check in on the market -- jonathan ferro has the latest. jonathan: good to see you. the top headlines -- chinese

industrial firms have profits down the most in 11. here are the moves across your. .3 .down 1 lift the lid on the index and there is only one thing to talk about -- glencore. the stuff that you buy to get exposure to the china story, you don't want exposure and that is what is happening. glencore is down as much as 17.4%, a record low, and the biggest move lower on record. glencore stock is getting spanked and the ftse is down to a 2008 low. it really is a risk off. if you bought shares from youcore in september 17, are down over a third and a matter of two weeks. here are the moves and the effects market.

a stronger japanese yen this morning. effects, in the sense that equities are selling off. little bitwere a lower this morning, down by three basis points. spanish yields are down almost nine basis points as catalonia and the independence movement all short of getting the majority they needed. back to you. francine: what might we expect from the uk's labour party conference today? the shadow chancellor spoke to anna edwards earlier and she is live for us. anna, i guess we are expecting fireworks. anna: could be. we spoke to john mcdonald earlier on. talked in aeviously very different move. he has been recently been made

shadow chancellor. now he is wanting to reassure investors, reassure the population that he doesn't want to remove independence from the bank of england. that is something that has been even though he denies ever saying that he wanted to. that was one area where he wanted to reassure people. that he did seem happy to enter into a conversation about interest rates and where they are. he says he believes they will go up, because there are signs of future crisis. he is talking about reform in various financial institutions, the tax collection is one of them. we also know he wants to reform the bank of england. he wants to look at whether it should just focus on inflation or other thing, like growth and investment in infrastructure. he also told us that he wants a look at the role of the treasury in relation to other departments. it is something that worries

people like mark foley act. we will hear a little bit more from a man who wants to change the conversation, called all kinds of experts. i was absolutely taken by your interview, riveted by the tone we heard. formuch can the party amend change with the bank of england chooses to do? i was thunderstruck that mr. thennell had the idea that bank of england should work on justice onere, thing, year -- how much can they amend with mark carney does? francine: i think we are having technical difficulties. your answer to the question is

-- it depends on whether the labour party gets into power, because they don't have power to change anything until they get elected. but, and this is something you were talking about bernie of the, the whole shift debate here in the u k will be on equality, or the lack of. tom: i look at what we see in the united states and what we see in the united kingdom, and of course in catalonia. it is one thing is one thing as a discussion point that keeps you and i occupied. it is another thing where it begins to actually affect policy. help me with that. i really didn't inc. we would -- i really didn't think we rugby,eat england in but tell me, when does a policy shift happen? francine: i think we are already, tom, seeing a slight policy shift. jeremy corbyn, who was touted

just a couple days ago as inelectible has hired some pretty smart academics to try policy, and mold his which may be more appealing to the electorate next time around. for more, let's bring in philip rush. he is here to talk to us about the possibility of a market impact by jeremy corbyn's labor leadership. great to have you on the program. when you look at germany corbyn, he is surrounding himself with very smart, academic people. he is trying to appeal more and make his policies to the left a little more palatable. philip: yeah. he needs to form a stronger intellectual base. in the rush to try and form a cabinet, he has had to stretch to some rather unusual characters within the parliamentary labour party, who by and large don't support his agenda.

he has had to give them a lot of free reign to go against the positions he is held for a long time, by reaching out to these academics with strong credentials. he can start to try -- tom: what have you done with your gdp numbers? tell me about the animal spirit of the united kingdom -- is there any theire, has a flatlined? philip: i think the animal spirit is firmly bullish at the moment. we have seen sustained strong fiscal momentum for over a couple years now, and we don't see anything that is likely to derail that. the brexit issue is one that does threaten. it looks like we could get a referendum in september of next year, and that started to look like it has a high probability event, and that could rock the market and confidence in the economy. otherwise, i think we're in pretty good position. francine: how do you model that? tom is sitting in the states,

and for people in paris and rome, they are thinking of the u.k., of their liberal market friendly economy. they are not only voting on a new referendum with no opposition, but with jeremy corbyn, that can shift to a more egalitarian society, one which may spurn for push away big economic companies. philip: it is likely that his tone is going to be dissuading companies for moving here, but that is something that is only likely to come to a head in the 2020 general election. otherwise, his impact on policy is more to the extent that he affects the brexit referendum and he could be leading hard left front, even though he has rolled out the labour party machinery and parts of that campaign. besides that, it is more to the toent to which osborne tries

triangulate an economic policy in between the conservative right and the opposition on the left. francine: do you think that what we have heard from mr. mcdonnell, from jeremy corbyn, that they will become more mainstream? to triangulate an economic policy in between the conservative does he have a chance to get elected in 2020? a lot can happen in five years, that we have already seen a shift in what he is seeing, becoming more plausible. philip: yes, he has become more plausible. they are shaving off the rough edges. but the party as a whole will remain considerably more left-wing than it was even under ed miliband, such that if it starts to look like they are a real possibility of governing. it will be quite concerning for the markets. tom: philip, link in your number economics with the united kingdom. they are down almost to a corrections standpoint your

to date. can you link all this talk of politics and equity market performance? philip: i think most of the hasty market weakness he seen the uk's a reflection of what's going on elsewhere in the world, rather than a specific e additional u.k. premium. at the end of the day, the u.k. will be immune from those things. the extent of the weakness we have seen in equities so far is likely to derail economic performance in the longer-term. unless the parent continues going higher -- how worried are you about sterling? philip: it could will continue to go higher. the market has moved to price out rate hikes for a very long time, not just an absolute terms, of relative to the fed. for us, it is unlikely that the bank of england will be waiting in six months or longer before they start going, as the markets

are still realize that it will be bullish for the pound. even if it is off the back of the fed hike. europe, to continental the u.k. and the pound is looking pretty solid. ident think that will be too negative an impact, and i think it will broadly remain true. but it is a risk to watch. francine: thank you so much. coming up on "the pulse," france begins airstrikes against syria. how should the world feel about bashar al-assad? ♪

francine: welcome back to "the pulse," live from london. russia's president vladimir putin will sit down with barack obama on the fringes of the united nations general assembly today. it is their first face-to-face meeting in more than a year, and the subject of syria is likely to be high on the agenda. in an interview, mr. putin made clear why russia is continuing bashar al-assad. >> more than 2000 fighters are in the territory of syria. there is a threat to their return, so instead of waiting

for the return, we are better off helping assad fight them on syrian territory. this is the most important thing, which encourages us and pushes us to provide assistance, and in general, we want the situation to stabilize. francine: let's speak to our middle east specialist. thank you for joining us. mr. putin is urging the u.s. allies to take a common cause with russia to defeat is. is that going to be enough for the relationship between the u.s. and russia to be a little warmer? >> really. -- not really. there are many areas of possible cooperation in terms of fighting the islamic state itself, at the moment you address that issue, there are all sorts of areas a division opening up immediately. francine: ukraine and how to deal with the syrian president. crispin: absolutely, and how to

deal with the majority of the syrian opposition that isn't islamic state. francine: if you are vladimir putin -- he obviously wants to get closer to the west. ishas to act tough but he also trying to distract the west from what happened in ukraine. c how is he going to play it? in: what he is trying to do is reestablish russia as a is likelyer, and he to target and criticize the u.s. implicitly and explicitly, suggesting that the world needs to work with russia, coordinate with russia, and this u.s.-western antagonism is self-defeating and damaging, particularly in areas like syria, while ignoring the fact of thelarge portion syrian population clearly wanted to get rid of their current president. he actively supports the assad regime. hawes, over the

weekend, americans read important articles in "the washington post" about the flied out chaos in syria. you a true expert on this geography, how would you inform all of our viewers about what is not in those news stories? where is the geographic stability in syria, or the instability of this moment? crispin: i would have to say that there is very little stability anywhere. there are areas that are still controlled by the regime, i would say that they are more stable than most of the rest of the country. most of the rest of the country is either under the control of militias that have their own agenda or is being competed over by different malicious, as well as by the regime. stability for the majority of syrians is a longest in memory. tableau thatthe

you set for syria? what will you listen for for president obama, president putin, about a new u.s. policy in syria? crispin: i think the key thing will be to listen to president obama, to look for areas where in possibilities of cooperation with russian forces in targeting the islamic state. i think it will be difficult for the president and i suspect he has no intention or desire to suggest any further cooperation with russia in syria, because the endgames are so different. francine: mr. putin will go to great lengths to try and appear like he is restoring a relationship with mr. obama. will he bite? crispin: i think the u.s. president will want to take what he wants out of it and make clear what the dividing lines are. making clear that there are

areas of risk you cannot compromise. not least on ukraine. francine: will that be interpreted as successor vladimir putin? -- as a success for vladimir putin? crispin: interpreted by whom? the russian media? i think everything is. interpreted by western powers? i think there will be concerns ist he has made a point that heard by rather more governments at the u.n. than they would like. theink we will see over next few days, weeks a sort of counterargument and a number of different capitals. it begins when he needs angela merkel. francine: will they talk about china? is the question -- will you see a bit of a rapprochement between the u.s. and the infrastructure bank which caused such a headache in the last couple months? does that have an impact on putin's thinking? crispin: i'm sure it does. i think his goal at the u.n.

general assembly over the next few days is very much to reestablish russia as a geopolitical actor, a major actor on the world stage, and he will try to avoid getting dragged into the details of things like the infrastructure bank, while perhaps using slogans that suggest that he has common cause in the way that the chinese are presented and attacked by the west, but not to get dragged into the detail of how international financial systems work. francine: are you expecting the national assembly to be a huge show? shukroff we had mr. branding a shoe to make the point that the u.s. wasn't a friend of russia. what do you expect mr. putin's tone to be? crispin: i think it will be assertive. i think it will be aggressive,

when it comes to the u.s., but with the tone of conciliation. he wants to give the impression that he is a central partner and that is the message. russia is not the enemy, russia is a partner, it should be coordinated with rather than opposed by rote. element that is willing to hear that message. francine: thank you so much for joining us. the middle east specialist. let's get some more of bloomberg's top headlines of manus cranny. manus: francois hollande says that french jets have targeted and destroyed an islamic training camp in eastern syria. that has been identified by the french surveillance. thathas said this morning a total of 2.1 million cars have been affected by the admissions issue. volkswagen's subsidiary says eight of its models are

affected, that it will find a technical solution as soon as possible, which comes as soon as germany's car regulators gave vw ten days to come up with a fix. lit up the skyon last night. it coincided with a lunar eclipse. the last time this was observed was back in 1982. moon won't happen until 2033. francine: now for a look at what we are watching for the rest of the day. let's bring back tom keene. i know you are focused on the lot of the outflow. tom: i think what to watch here, the view forward to friday -- we have an early jobs day, francine. sometimes it is seven or eight days, but that is not the case in october. we get the september jobs report

this friday, so we have wednesday, thursday, friday america labor day to. -- labor data. them before that, we have the international relations, which have been the theme of the program this morning. francine: yeah. thisactually fascinated -- is the first time in almost two years that barack obama and vladimir putin sit down. the has to be finely tuned, close vladimir putin was to be a friend of the west in certain respects but needs to ask tough. tom: when you and i hold court in new york under that beautiful painting, the maxfield parrish painting, that is all we would talk about is that at 5:00 p.m. this afternoon, the meeting of the two presidents. there will be some interesting points, but the real focus has to be on the meeting, given what we have seen in syria. it is remarkable -- over the weekend, almost a news exhaustion in the united

states, moving from the pope to the visit from the chinese president, and now we move on to the united nations. i would say it is very much stacked international relations. away from that is what you said earlier about glencore, and i'm telling you, the copper chart says it all. for me to walk in monday morning and see american copper charts below a 5.3 is remarkable. francine: and again, he goes back to that simple question -- is it on china or a supply problem? i would also like to get your thoughts on john boehner. he resigned on friday -- what does that mean for a possible government shutdown? tom: the shocks are still there. i urge everyone to read republican conservative margaret carlson's bloomberg article on the era of john boehner. she clearly has a

tendency to the democrats but she wrote a very balanced piece on what john boehner meant to the middle ground of the united states. there is huge speculation about the. move forward. i think there are still a lot of nice comments moving forward as people frame the shocking exit. but of course we will move relentlessly on to how the tea party read decisions their politics in the house. question, the tea party and the conservatives will go after the leadership of the republican senate, including mcconnell of kentucky. phil mattingly will join us at 7:00 to give us more. francine: i am looking forward to "surveillance." a lot of the u.s. futures are now negative. it seems we are very risk-averse it isyou look at yen, rising against most of the major counterparts in asia, the best-performing major currency

this quarter as investors moved to havens. this is not what mr. abe wants. keep it here. "surveillance" is up next. ♪

announcer: this is "bloomberg surveillance." tom: they will speak to frene mies, romans, and the countrymen. president obama and vladimir putin -- late this afternoon,

possibly they will speak to each other. it is a jobs week this morning. disinflation report. and life after john boehner in ohio. we will speak to douglas holsey aiken.to douglas holtz i'm tom keene. francine lacqua from london. i thought that the interview was phenomenal. what is john corbin doing in the united kingdom this morning jack? : jeremy corbyn. he wants the labor candidacy, and he wants to speak to the common person. he doesn't have a chance of becoming elected until 2020. the narrative of what he is trying to play at -- equality, the lack of