>> big trouble in china. are set to call an emergency meeting. downgradesd bank 2016 global world forecast. over significant concern prices as the fed raised rates in december. >> and heading for $30. analysts see crude falling further as the glut deepens. welcome to countdown.

>> let's talk about what's happening in china. big trouble in china it seems overnight. bank fixingentral the yuan a strange -- exchange rate at a lower rate than estimated and that caused ripples of nervousness overnight. that caused the chinese currency to fall. , it's point you're making a five-year low again. interventione's and that's what they're saying in the marketplace. billion, that's what they are betting that the yuan will fall further. 79% probability it will weaken further and 33% that the yuan will trade above seven for the first time since 2008. latest data is due out

thisina at some point morning. or watching for what it will do to international markets. globalken the edge off equities since we started this year. 1.5%.s. equity market down in yesterday's trading session. weus: more aggressive than saw this time yesterday. globally $2 trillion worked off global equity markets. the dow jones lost 250 points and there's a reverberation. gaining as you might have expected. the australian dollar having its worst start for the year and the yen having it strongest level since august. 2.56% and aown by lot of concern about china. on treasuries 2.15%.

streak ont winning treasuries in 13 months in the , the price oflp oil is not going to help either. caroline: the worst start for chinese markets in two decades shows no signs of letting up. trading halted for the first toppling- after billions in 15 minutes. the regulator has called an emergency meeting. the china economic slowdown among the reasons given by the world bank for cutting its itbal growth forecast saying will be just 2.9% down from 3.3% in june. the federal reserve decision to raise interest rates last month was a close call for some policymakers according to the

minutes from last month's meeting. to lowre worried about inflation. oil has extended losses following the lowest close in seven years. nomura seat brent crude plunging to $30 in the next few days. david cameron has appealed to germans to back his attempt to renegotiate british membership in the european union. he said the reforms he is seeking will benefit germany and the rest of the eu. the latest installment of star wars saga is now the highest grossing film ever in north america. has raked inkens more than $760 million. pocketed $800 million in international sales and open in china this weekend.

anna: we have numbers coming , down from 200il billion yen. once again the weather seems to be an issue. john lewis bucking the trend. they are saying the u.s. closed up but they have are more business outside of japan than in japan. unseasonably high temperatures in japan were the issue. heidi is standing by to take us through these markets. what comes next, a huge overhang of stock? it's all well and good

for the chinese but the rest of the markets still have to struggle through the remainder of the trading day. this is where we are looking in the afternoon, asia has some steep losses. australia and new zealand are heavily exposed, the chinese currency as well. quite a lot of jitters there. the afx really getting dragged down. do in the chinese markets close? chinese companies listed in hong kong heading for the lowest close in about four years. a pretty dismal session overall. , a stronger again as investors tried to get out of risk into safe havens. a lot of movement in the afx

today. ,e have this recovery here perhaps a stealthy move to try to stem declines in the yuan but it resumed the weakening trajectory. this has had a contagion effect across the rest of the region. the aussie dollar coming down have renewedlso .en, weighing on the stop japan will continue being sold off. the day was all about china again. the chinese going home after 14 minutes, you've got to sell everything else. anna: staying with asia, china

stock regulator is said to called and unscheduled meeting at the worst start for the chinese market in two decades that shows no sign of letting up. manus: the selloff in stocks close local exchanges to early. .et's go straight to hong kong there is that skepticism in the yuan market, the biggest cut since august. the chinese are challenging the market, aren't they? on, the day this goes credibility gets more and more diminished. we have an emergency meeting underway today and what's going to come out of that, more intervention by the state. same -- the the

message china is sending its one that is not yet ready to embrace a free market. as long as that continues, i don't think the global investor base will have much confidence in china's market. that's really the message this year. at the beginning of this week, many people were putting the cause of this selloff in chinese style at the door of the regulations that had been put in place back in august or september saying they're going to expire on january 8, that was causing a lot of nervousness. regulations being put in. they still show a great deal of involvement from the state and by the state. think the selling pressure will end any time soon, even with intervention by the authorities.

there is no end in sight just yet. i think the overhang that was mentioned at the top of the show will continue to be here for some time. largell have a ban on shareholders. it's hard to see where the circuit breaker is to get things off. underneath all of that there is a disconnect with the real economy. we're seeing signs that underlying fundamentals are stabilizing. that is one silver lining out of china at the moment. manus: i hope you have the silver lining in terms of that disconnect. let's bring in our guest. great to have you with us. happy new year and welcome to rocky markets week.

what should i concern myself more with, the stock market or the yuan plummeting? is china ready to free up the yuan? is it overvalued? talk abouts lots of this when they brought it down in august. they are just going ahead. as for as your correspondent saying is it a free market or is the state still in control, the communist party is still in control. there trying to reduce the yuan limit and they want to the stock market because that influences help people heal. but they wanted down, that is what they are trying to do. it.uld rather get on with i recognize this is not a normal market. for a long time china has been a controlled market. you expect this to be done in

stages and expected to be controlled. the underlying data is beginning to show -- let's remind will row at 4%a or 5%. look at the reserves today, it's going to be in order. it will show that china's reserve decline for the first time on record. trillion harris could go broke. it's taking a little too far to say that china will go broke, but the point being, what is in the ammunition bucket that the going to use, the currency and not the reserves? what is in the ammunition bucket for 2016? >> you're right, the half $3.5 trillion.

it can eventually eat into the reserve and they will try very hard not to let go of that. anna: but they might still be using son of those -- some of those reserves. work.just does not the trouble with all these rules that are sent to calm the markets, do they ever work? or do they just allay reality? >> if your chinese retail investor and you've seen this, you want to sell. all it does is stop the big theanies -- a large part of market is retail space.

they want it to go down in a controlled fashion. the chinese investor knows it's going down. so you wanted to go down at a slow and measured pace. manus: thanks reserve dropping, money coming out of the yuan, where does the capital go to? jpmorgan volatility graph for foreign exchange. the money flows out of the yuan but it has the flow somewhere. what i want to know is, where does it flow to? begin is really moving at the moment. >> clearly it is slowing to the again locally. small interest rates, a trajectory and a strong safe haven. think the weaker

yuan will deliver for the chinese what they wanted to deliver? commodity prices are falling admittedly. do they only see the upside? think they see the necessity of a weaker recovery to help -- they just have to get through the pain of the stock market. at $32. we will talk more about that very shortly. it's a big morning for the eurozone. we will bring you all the consumerncluding confidence, unemployment, and retail sales. anna: i've been reading in various research reports about inflation. crucial minutes of the

ratesetting meeting reveal about the mindset. stay with us. ♪

anna: welcome back. we have live pictures coming into us from seoul. the south korean capital where protesters are gathering near to city hall to protest against what north korea called a hydrogen bomb test on wednesday. have a look at equity markets, set for lower opening. ,ou have u.s. equity futures the dow lost 250 points last night. global equity moments with the worst start for the year.

we started the session at 2.15% but treasuries rising for the six-day in a row. that's the state of the markets. let's get across to caroline. caroline: fast retailing has cut its operating forecast by 10%. since and warm weather in the japanese market hurt sales of winter clothes and its outlet. , greatutive shakeup flaming exit comes as a new president was named. pain continues for hedge funds. second successive annual decline. a spokesman declined to comment. netflix shares jumped by more than 9% as the online streaming

service went live in 100 30 new countries including india, russia, and sing of war. it was the best-performing stock last year, gaining more than 130%. billabong's president of the americas is packing it in for the beach. he said he's quitting the company to spend more time surfing. he will step down at the end of the month. anna: manus is never far from a surfboard himself. a close call for some policymakers, a orting to the minute from the last meeting. manus: they show that some are worried about to low-inflation. brandon has more from washington. >> in december the federal markets committee agreed unanimously to hike rates. the unanimity we thought we had

seen in that decision is not quite there. several members said it was a close call to even hike at all. what are they worried about? inflation. what jon out is the word credibility. it means the members are looking at market expectations of -- inflation that are much lower than their own prediction. the other thing they're worried about his inflation expectations that it might have been anchored lower which means it is harder to get the inflation back up to the 2% target which is where the feds wanted to go. some willingness to run the economy a little hot. but they talked about is keeping tomployment unnaturally low get the inflation up to target. the memo from the fomc to the markets, what about the word gradual do you not understand?

in washington, i'm brendan greeley. anna: the world bank in june oppose the prospect of a red rate hike. it has lowered its forecast for the year. growth wills 2016 be just 2.9% from the projection of last summer. manus: day for into the trading year. love what brandon sent there at the end, what part of gradual do you not understand? this is the point from the fed, a say in terms of its unanimous decision, i find that fascinating, the words close call because of course it was the unanimous vote. it will take a long time. this will be a very gradual

cycle. the interesting thing is they are willing to keep unemployment lower than normal. , thely what is happening market says inflation will in. it pushes inflation down. even longer than the gradual the talked about back in the late summer. smaller banksthe -- if the fedld is at the mercy of something going on that it cannot control. >> the whole thing ties together. on one hand there is a thing about the fact that the globalization -- what happens in , thatand the middle east

will affect the fed. banks will bel affected. the way people spend their money is changing. central banks cannot predict how it's going to be spent. all these things do matter. at the end of the day the fed will have to wait and see the effects of its policy. stage they will want an increased rate, but slowly. manus: the fed is in the to,park, and the market is talking about the difference between hikes in the market and the fed. if they don't hike in february, are we going to get a wobble? where to go in these treasuries? there's a fear we're not going to end up with lower treasury yields this year. >> i think the fed will try to

raise them. it's the traveling direction that we know we are going. markets have been used to low interest rates for a very long time. they've got to get used to the fact that the world is changing. for all these years we've been living in a world that was highly correlated. we are beginning to see massive divergence and volatility that will make the job of people like me harder. anna: thank you very much. keywordolatility is the . up next, oil. if you're looking for a volatile market, have a look at this. the china rise rattles the commodity markets. anna: it seems like everything that happens in china overnight has an impact on all the asset classes. wti down by 30% last year.

no decision on action. tomorrow is the expiration date for stock overhang. ♪

manus: let's get the bloomberg first word with caroline. caroline: the worst start for chinese markets in two decades. trading was halted for the second time in four days after $640 billion were wiped off stock rockets in 15 minutes. ended an emergency meeting without deciding on action. he thinks 2016 growth will be 2.9% which is below the 3.3% the federal june

reserve extra decision to raise interest rate was a close call. that is according to minutes from last month's fomc meeting. losses goingded below the lowest close in seven years. in some say that brent crude could slump to $30 in 10 days. the u.k. chancellor george 2016 is ays mission-critical year for the british economy. that as a dangerous cocktail of threats threaten the economy. is sending legislation

to barack obama that would appeal obamacare. the house passed the measure yesterday following action by the senate. president obama has said he will veto the bill and republicans do not have enough to override. anna: stay with us, you have been watching these roller coaster markets. caroline: we have to put this in perspective. $2 trillion have been white -- wiped out of market valuation since we started 2016. that is in excess of the canadian gdp. on an annualrussia basis. and just 27 -- 29 minutes they lost that much. george soros is saying that global markets are facing a crisis.

he says it is looking like 2008 all over again. one asset manager says this is insane. they have liquidated their socks -- stocks. the minute worries of assault happened everyone worries about the halt coming. regulator just comes out and says they have made no decision. concern front and center on chinese stocks. it seems to centralize on chinese currency volatility. offshore sinks lower but then suddenly rises. .olatility has analysts undock ramifications across the entire market.

meanwhile, we will be seeing the ftse 100 open lower. we're looking at futures and seeing the s&p 500 traded lower you are about to be talking about oil more but we could see oil at $30 in the next 10 days. rsa, theecked the relative strength index. it is oversold. manus: let's see whether the markets are behaving themselves. chilcotering in ryan now. go to bloomberg.com. you can pick up our top oil story. this is about china. where are we in this story? caroline says we're getting

closer to $30 and canadian oil is already at sub $20. >> the story today is china which is that something would say every day. if you look at you have to face going on. one is with the people's bank of china knows that we don't have led them to weaken their currency. there's concern about demand for oil going or what. second aspect -- we talk but this all the time is as soon as you get a currency we can come enough to spend more of their own currency to buy the same oil. that's why he was out there saying in the next 10 days we will see oil dropping to $30 a barrel. we're already at $33 which is not that much of a call. in the last two days oil has fallen nearly 10%.

we have to go back to the summer of 2007, maybe 2008. we were at $146. we are now more than four times lower than that. the price of oil has fallen further and faster than anybody thought possible which is why there are some who say it will come back with the same kind of furor. >> we spoke to a number of people in the latter art of december who said things are a little bit more stable in the oil market will stop perhaps we're -- manus: and uncomfortable base. anna: that doesn't seem to be happening. >> there is a glut in production and others are fighting with each other's as the saudi's are fighting with iraq so they will agree with opec.

so china will make it even worse and oil remains weak. manus: some of us have been around for lower prices of oil, but the $10 oil -- the dysfunction of opec bloomberg.com $30 -- opec. $30 is neither here nor that. how much potential downside is there? it's oil really set for a big drop? i am of the view that the chinese devaluation has still been planned. the expect it to go down. oil at this level seems reasonably priced. politically, it can be botched. >> it would take a move from the saudi's. real concern from the largest exporter of oil -- they would have to be comfortable with oil moving into the $10 range.

the reality is they have a world of reserves. the day they need a breakeven price of close to $90 per barrel. when you start getting to $10 per barrel it is very uncomfortable for them. it remains to be seen whether they would not subtly begin to try to move the market upward. anna: that is what the opec numbers are doing. in terms of the global glut, what do we know? p.m. we got the big number in terms of u.s. inventories. cushing is a number we do not look at all the time. that is a small town in oklahoma with a population of 7000. what we learned there is that the supply in the inventory is rising. for the ninth week in a row. run-up ine biggest the inventory since april.

that's why when we already had the price of oil falling it continued to fall. despite the fact that the total number of inventories actually fell a little bit. still well over a hundred million barrels over the daily average. there is a world of oil out there and everyone is looking what is happening in china and saying, do i want to buy this? anna: thank you very much. let's talk about what is happening in europe. the key numbers are probably going to be at 10:00 a.m.. that will include the consumer confidence, the unemployment, and the retail sales. anna: will get all of those data points out of the eurozone. to bank of america merrill lynch. some of the pmi data or -- howturing has been ok

can a laugh in the face of negativity, such as in china or elsewhere? >> the problem with europe is that europe is essentially an exporting economy. we have seen the asian side of the economy take a dip. the people you talk to are saying is that southern europe has gone through so much pain. we also face headwind. manus: you have george osborne morning about the headwind and he will make that speech later today. continues to have a fragile upturn. that is the word from the bank of europe. what a want to get a sense of from you is that in the u.s. are

in lockstep. tick for tick at the moment. it has been an inauspicious start. world inlook at the terms of that fragile upturn from an investment perspective how do you position? >> i think that correlation will break. as i said the big thing we will see is a break in the world's population. some european countries are doing very well but we are in a different part of the cycle in mainland europe then the united states and that will the verge. matterents are going to in what currency were based in. one was negative in one was positive.

going back 20 years, d correlated economies and d correlated currencies -- d decorrelated currencies. anna: you mention the u.k. doesn't have quite the same headwinds but short osborne will be speaking in wales later today he will be talking about headwinds coming from china and sang it is mission-critical on the economy. because of these global winds. in some ways the europeans have more to play with because the central bank has a lot of ammunition to use. we are now waiting to hike interest rate. we are in a slightly more precarious position. >> that seems to be really building up in terms of rhetoric from all sides. next we will talk about the weather.

is a very british thing to do. and ireland. anna: the unseasonably warm temperatures have hit retailers around the world. ♪

anna: welcome back to count known -- countdown. let's get to caroline hyde. caroline: morgan stanley has announced an executive shakeup. the pain continues for hedge funds. in howard main funds lost 2% 2016. netflix shares jumped more than 9% in new york trading.

the service went live in more than 130 new countries. netflix was the best-performing stock in the u.s. getting more than 130%. this with spank used by the conmen the wealth of wall street has agreed to pay $188 million to avoid prosecution for helping u.s. clients avoid taxes. hide assetsp them by keeping them in gold bars. headore on those stories, to bloomberg.com. anna: now the top ceos discussing the future of technology. manus: let's talk about the trends caroline, what are they? what do i need to buy? caroline: i know that you are a man who quite likes his vehicles. we have had the faraday electric

car. now, gm have been opening a new electric bolt vehicle. what stole my point of view was how much ford is talking about the future of the company. not just a car company anymore. we spoke to the chief executive talking about autonomous vehicles and driverless vehicles. we announced is a show that we are tripling our fleet from 10 cars to 30 cars. what you are seeing is the sensor technology, the camera softwarey, even the algorithms moving very fast. >> we have far more test vehicles motoring around and

testing out the concept. this is a company also looking at sharing a vehicle. the threat that everyone feels that over will wreak havoc going forward. it seems that ford has kind of got it. they are already trying right sharing. ide sharing. people are saying we don't really want cars on our own, we want access to cars. ofy realize the data value auto companies. they don't want apple and google to win this fight, they want the car companies. it's an interesting move that ford is making. anna: another key area of tech development is virtual reality and gaming. taking it to the consumer quickly. caroline: we are all thinking of the long-term utopia. there could be a real uplift

from a live point of view but gaming is where it is at the moment. you have oculus finally bringing the consumer version of the headset that you can buy for a cool 400 pounds or $599. but there was apparently an hour-long wait to test it out. but the yarn is front and center for the rival gaming companies. the sony chief executive talking about the playstation rollout. >> playstation vr is the virtual reality experience that we will be bringing to the playstation format later this we're -- this year. the most important content fueling it is the game content. just to give you context, we have 400 developer signed up and about 100 titles are in active development at this time. uplifte: it has been an

that retailers are hoping for. let's realize how important the ces is. 130 -- in 130 more countries. in this passenger plane unveiled in las vegas. anna: -- manus: me in a drone -- just got a vision. never mind. it is unseasonably warm. it has affected global retail sales. we look at christmas numbers shortly. paul following on from winter -- poor winter clothing sales, joining us now is the consumer writer at bloomberg's i, andrea selzer -- bloomberg gaslight. andrea selzer. they are already struggling a general merchandise without the headache of the weather. >> the consensus for a 2% fall, some analysts said it could be

as bad as 5.5%. the key thing will be whether they held the margin. the story for the last year or so has been all about stagnating sales and driving that margin up. and whether they have been able to retain that with so much discounting on the high street. anna: taking a leaf out of the next book? >> indeed because he did say the profit would be within expectations. the,: when we refer to winning market share in general merchandise but losing it to the warning our habits in terms of their directory and the online. the whole thing is in a state of flux. >> we are seeing that there may be changes in the way consumers behave. >> they're better than they used to be but people watch movies now online.

-- 18tally my children and 20, most of what they bought was online and not in shops. with that kind of change in buying habits, traditional retailers get hurt. >> let's talk about one on the high street which is pound land. manus: she loves this story. >> how does a business like this perform? have theiously recovering economy but there is another thing going on. we have this vicious rice war for the last couple of years among the supermarket trying to buy off mainly there could be some collateral damage in the pound shop because they are lowering prices. you go to pound land to get a good deal. if you can get that in your supermarket while shopping, why go to pound land? that is another issue for them

>> at the start of this global crisis we saw some major casualties. perspective, how healthy is the high streets, could there be damage or casualties? >> or could definitely be casualty. the women's fashion has been hit not just by that warm weather but there is another big trend going on. we want to spend money and other ways. you mentioned technology we like to spend it on entertainment, on holiday. stuff not buying so much in one thing we are not buying so much of his clothing. we also have bhs sold a year ago. been helped wee are struggling already come a it cannot have been helped. manus: this is the question. a lot of the ceos have promised

and promised. keep promising he will make address that you will buy. [laughter] >> the margin has really helped him getting those profits up. recentlye been cuts but getting that margin up has really helped him and really bought him some time. >> it's an interesting point you made about how the competitive environment is not just below the retailers, but this warm weather trend was a global thing. is this happening to global retailers as well. .> we have fast retailing today we will be looking to see the likes of h&m, intertec and others close to the u.k. and europe. it could well be a global thing that we see over the next two weeks. welcome to the

house, welcome to the team. part of our gadfly team and thank you to the investment management. >> shall we check in what's happening now. we saw the chinese markets open for a short time today. circuit breakers were triggered and essentially trading had to be halted for the second time this week and as you might understand that is a downdraft to the futures market. you can see they are expected to open significantly weaker. that was after some losses slightly less than that. manus: $2 trillion wiped off global equity markets. flick the board across and have a look at yen. money going into yen and treasuries. you are seeing dollar-yen. that is the key beneficiary. the longest winning streak in 13 months. talk in china.

chinese stocks are halted again. twoworst start to a year in decades. we look at the impact coming up on the other side. ♪

asus: big trouble in china circuit breakers halt trading for the second time this week. regulators are said to have left an emergency meeting with no rescission on policy action. >> the china slowdown ways of the world bank is it downgrades its global growth forecast. >> inflation flares, fomc minutes show there is significant concern over rice is as the fed raised rates in december. heading for $30, analysts see crude falling further. >> welcome to countdown, i am manus cranny.

>> i am anna edwards. it is just gone 7:00 here in london. manus: we have the german data. you are checking out martin spencers. in november -- the market was looking for 0.1%. germany powering ahead. they are on the up in terms of manufacturing. anna: mark bolland intends to retire in 2016. he is the ceo of this business and has been there for a number of years. they are describing these numbers as excellent saying the results were a strong performance of the market. that theeem let -- general merchandise number is a little disappointing. general merchandise with like for like sales down by 5.8% will stop the estimate was a cut of 2% down. we saw a drop in the same period

so itear of 5.8% stop seems that disruption continues. >> that's what andrea was telling us on our gadfly team was that this is something that gave support to island. i asked her if he would survive. performance is the of the marks and dispensers ceo? this is how we rate and compare the performance of various chief executives on the terminal. if you go to your des page you can pull up the performance of the ceo. he has been there 5.6 years. he joined and stepped up to the plate in 2010. he delivered a total return of 8.2%. you may demolish what is going on in terms of the general relative to his peers, in terms of total performance he has outperformed his peers. >> they're also going on to say

that food operations had their best ever christmas. they fell short unavailability which is interesting because next also said that they had issues with having the right stock available at the right time. a lot of interesting stuff coming through. they are saying that their sales were up 17% christmas week. top ofguidance up at the the rate. that is critical. there was a lot of talk that maybe they might sacrifice something on the overall level of sales. >> he will retire. steve will take over we will quickly bring them viewers futures. futures indicate it is opening 1.7% lower in london. we understand the chinese market as we see the yuan hit a five-year low. chinese stocks drop by 7%. another torturous day.

dax also indicated down 2.5%. anna: would also need to understand china let's get that now with caroline. >> the worth -- were start for chinese markets in two decades shows no sign of letting up. trading was halted for the second time in four days after $640 billion or wiped off the stock market in 15 minutes. bloomberg says that the securities regulator has ended an emergency meeting without deciding action. the chinese economic slowdown is among the reasons given for the bank cutting its global growth forecast. it is now estimated that it will be just 2.9% down from 3.3% projections in june. we will be speaking to the world here onnomist bloomberg. the federal reserve decision to raise interest rates was a close call for some policymakers. they show that some were worried about too low-inflation.

oil has extended losses following the lowest close in seven years. that's as china's central bank has weakened the currency rate. ubs can see an oversupply pushing prices even lower. david cameron has appealed the germans to back his attempts to renegotiate british attempts of the european union. says that a bill he the reforms he is seeking will benefit germany and the rest of the eu all stop the latest installment in the star wars saga is the highest grossing film ever. the force awakens has raked in more than $760 million to overtake 2009's avatar. in the 20 day since its release star wars has pocketed $800 million in two national sales. for more on those stories, terminal customers can head to topcoat. anna: they haven't even opened

in china yet. manus: phenomenal. speaking of openings and closings. it is a short bet but i know one woman who has taken umbrage that they had a short trading day. it is our very own heidi. it is sort of adding insult to injury. not only did i get to go home early during a bear market the rest of us have to suffer through these extensive declines as we head to the close of the asian trading day. we have really extensive losses in particular for the aussie stocks over the kiwis. there exposed to a slowdown in the currency effect, we had the aussie dollar taking quite a beating. playing outrency for tokyo stocks, very much waiting on sentiment there. the cfi called an emergency meeting. we do know there is quite a lot

going on in the background. i have come out with this new rule saying large shareholders being able to sell their stake cap get 1% of the total and they need to give 15 days advance notice before they do that all stop i think it is worth pointing out that what is spooky across the region is not so much the volatility in equities but audibly china's economic fundamentals and where the yuan is going. this gap just continues to widen. has suspended certain yuan transaction settlements when it comes to banks like dbs. deutsche bank is said to be the third one and they are saying there are many others affected as well all stop we have turmoil there across the fx market here in asia and it is really all down to china again. anna: haidi lun joining us from

hong kong. let's stay with asia because the chinese stocks regular has scheduled and unscheduled meeting as the were start for chinese markets in two decades. we know that they call that meeting and we know that they finished it without deciding much. rate by theerence most since august has forced the market to shut early for the second time this week. let's go to our asian bureau chief. what stood out for you this morning? there is so much news to digest on the market moves and this meeting by the regulator. >> there are two things. one is what is the pboc up to. everyone is curious to know why it was lowered by so much. is the pboc guiding the one lower or are they responding to market pressures. but whatally unclear is happening there and what you're seeing is a lot of uncertainty about why they are

moving that reference rate. the second thing is the cbr see meeting. the circuit breaker that has been instituted will need some tweaks. there is a halt of 15 minutes after the market falls and trading is suspended for the day at 7%. but as soon as you start to get to 3% to 4% down the market starts to panic. everybody wants to unload shares before it gets suspended for the day so there is a snowball effect that makes that circuit breaker cut off inevitable. there will need to be some changes their and we are all waiting to hear the results from that meeting. let's see what those results actually bring to the market. chief nick bureau wadhams, let's bring in patrick armstrong. he's the chief investment officer. what a week. >> what a dirty start to the year. information -- intervention everywhere abounds.

>> the like volatility. >> the market is overreacting. that's the big driver of the selloff. the numbers haven't been strong but it is the rebalancing of their economy. they are moving from a manufacturing economy to a much more services driven economy. in terms of imports they are terribly weak but if you look at job creation and services that is very strong and you get more robust and sustainable spending power from the services than manufacturing. dojust like september, international investors have to work out what is driving china. decide whether they need to get over excited or not? >> we are staying away from the chinese market because what is happening there makes it difficult to look at fundamentals. stillre top evaluations

in the equity market but the way the rest of the world is reacting there is some overreaction and people drawing conclusions that are not necessarily fair. if you look at the yuan revaluation it is stronger versus the euro and stronger versus the other currencies despite the weakening versus the u.s. dollar. manus: i like your moderately phlegmatic approach. >> a lot of people are making a great deal about the yuan offshore or onshore. trade value of the yuan. the special drawing changes the perspective. highonly 4% off its record we are all getting overly focused on this offshore yuan will stop is that an understatement? >> it is an overreaction. it is moving towards more of a floating currency. it will probably expand and be less u.s. dollar centric.

the risk it has as there are a lot of corporations in china that have debt in dollars. that is a risk because you may have credit contagion. but it is something we are doing steadily and slowly. they are not holding the market's hand. the market hates that it overreacts because they like to be told what is happening and why. anna: this is a lack of communication? that is white we are seeing the view.l? >> that is my i don't think this is an indication of a hard landing. i don't think there's anything in the numbers indicative of that. just at the chinese authorities are not telling the market what they are doing. >> you think that is the case not that the chinese authorities note more than we do about the stakes of the hard landing and that's why other investors might get worried? >> i think business makers in china still know what they want to do and how they will do it. it's just a lack of handholding.

>> it is learning to be more efficient with its like which. >> in the yuan, $140 billion worth of debt. 79% probability you will see more. a 33% from ability that we move beyond seven. view in terms of that yuan, it's the talk of the town this week. where do you see that yuan? >> s the top-performing emerging market currency. just because it is linked to the dollar. you have to put it in the perspective against the global trade weighted basket. it still very strong. >> give us your experience with regards to the circuit rakers and the role with -- that this kind of dynamic has you said there could be things in place to calm everybody's nerves and they do the opposite. x a time you put a threat that your liquidity will disappear that will create volatility. it is designed to stop selloffs

at 7% but it provokes them because people are panicking that liquidity will disappear. whenever you put a limit it acts as gravity and it pulls the market to that level. >> i saw one investor saying we need a change in the regulators and positive 30 minutes but that is just tinkering. >> it might help it i don't take it solves it. the best way to solve things and give confidence is markets that provide liquidity. manus: well the fed was a close call. crucial minutes of the december rate setting reveal by the fomc mindset. >> is streaming important to me? it's connecting to someone on a global level. i meet ambitious single professionals looking for something meaningful. x register today on elite

singles.com. >> your chair scuffs scratches scarring your floors causing expensive damage. ordinary felt pads wear out and fall off and in no time you scratches all over your floor. furniture introducing

anna: bally's parting through into a negative expectation for european equity markets. >> let's switch up the boards. looking at those u.s. equity futures, globally $2 trillion have been wiped off the global stock market. lost 250 points last night. you are beginning to see the un-picking in terms of china exporting its risk around. take us through it and you have yet on the move. of a we are seeing a bit rich rate into that perceived place. as we see the yen strengthening the china asked causing the yen to go up in the aussie dollar to go down. the strongest since august. in terms of crude oil once again having an impact. nymex.wn on

longesthis is the winning streak for the 13th month. we haven't seen it since almost 2014. >> let's get all the headlines you need to be aware of. caroline: mark boland is to retire. he will be succeeded -- succeeded by steve rowe. the announcement came at the same time as nsa third quarter like for like sales declined 5.8%. much worse than analyst estimates of a 2% fall. morgan stanley has announced an executive shakeup will stop greg fleming's exit comes as keller was named president. 9% as theares jumped online streaming service went live in 130 new countries. netflix was the best-performing stock in the u.s. gaining around 130%.

billabong's president for the americas was packing it in. the aptly named and leisure says he is quitting the company to spend more time serving -- surfing. customers can head to top go. manus: the federal reserve's decision to raise for straights last month was a close call. that is the topline line of our story. >> according to minutes and last month's fomc meeting. too lowe worried about inflation. >> meanwhile the world bank which in june opposed the prospect of the fed rate hike has lowered its forecast for this year that as china's economic woes really pray upon the markets. 3.9% for global growth, that is what they thought last summer. let's bring in our guest. the world bank is downgrading

growth worried about europe, how worried are you? >> 2.9% is not much to worry about. the average global growth is to point percent to 5%. environmenta normal . we are in an environment where the fed is hiking and the rest of the world is very accommodative and showing no signs of letting up with more stimulus coming out of the eurozone postop it is a downgrade from where they were ast summer but i think it is realistic target. >> we will be talking to the world bank little bit later and what a seem to be worried about in particular is the extent of the slowdown we might see in that seems to be a change from five years ago. thehe height of the crisis development relied on emerging markets but to your point, i suppose it is better to have when reorienting economy the u.s. is growing as fast as it is then some other time. >> i don't even think it is the

china worry. it is commodity exporters that have the real big issues. have issues with current accounts and debt levels. i think it is the other emerging markets that are the drag on the economy rather than china slowing from plus seven to less six. manus: day four. it is volatility. aussie dollar with the worst start to trading ever on record. european equities are getting spanked to say the least. that is a technical term. that is not a bloomberg way term. help us tell our viewers how you look at the world with this amount of risk being slapped at them. >> unfortunately i think this is the only way you will make money. i don't think you will have a big direction but you have lots of trading opportunities. there will be a lot of things that provoke fear that is when he should be tried -- buying.

the markets enter the year at fairly full valuations. market ishat u.s. overvalued, europe is very slightly undervalued and asia is fairly valued. get worry to push the and down and you can buy them if you think the market is overreacting. that characterizes what we are seeing this year which is an overreaction to things that in a few months will not be that material. i think korea does not have a hydrogen bomb will stop if you can take risk at times when things are cheaper take small profits that is a good way to play. >> we were talking just a bit about what the fed is saying and inflation you think we will see inflation in 2016. >> i think you'll probably get close to 2% by the time we get to q4 and you will see higher oil prices by q4 of this year. anna: what magic crystal ball to you have?

above spot about 23% prices right now so they are already pricing in higher oil prices by the time we get to december. manus: what does that do to the fed? they could you say the market is wrong. >> i think it will be three hikes. i don't think we will have one in march but i think we'll get three and maybe four. >> patrick armstrong joining us there. now, mark boland is said to step down after the company's reported worse than expected closing sales. buying thet addresses. anna: i take no responsibility. caroline, break down the numbers. >> the numbers were pretty painful but the news that the chief executive is stepping down after six years will be ringing in investors ears. general merchandise is not looking pretty.

like for like sales down 5.8%. analysts had been expecting to .8%. estimates.w estimates were for 0.5% growth. it is this unseasonal weather hurting general merchandise but also their own issues. they have problems with supply so once again, mea culpa coming mark spencer's. but margins is where the improvement is. missed what mark boland can hang his hat on as he leaves the business. he managed to improve profitability and the fact that sales are looking pretty for he is still managing to reduce his cost base and improve overall profitability. those are the numbers but let's look at what mark boland has achieved. the ceo has actually managed to drive up the share price about 33%. he has added one third to their

value in six years as he steps down all stop and the intricacies of his handover. he hands over the reins to steve rowe. the man who knows it inside and out because he has been there for five years. this is a man they say chosen after vigorous assessment of their selection process but he has been the head of food where he drove up sales for 12 straight quarters. he took over general merchandise and now he just needs to turn that around. he takes over as ceo in april but mark boland does not leave until june. you very much for the latest on martin spencers. next we have these nubbers from an s. manus: it is a pretty tortured open. i like what patrick did there. he prayed to my excitement in all the doom and gloom and said global growth not to go bad. move.down 2.6% oil on the

>> we have to retreat to some of the safe haven assets. european equities expected to open lower. on the move is next.

we live in a pick and choose world.

choose, choose, choose. but at bedtime? ...why settle for this? enter sleep number, and the lowest prices of the season. sleepiq technology tells you how well you slept and what adjustments you can make. you like the bed soft. he's more hardcore. so your sleep goes from good to great to wow! only at a sleep number store... find the lowest prices of the season, going on now. save $600 on the #1 rated i8 bed. know better sleep with sleep number.

anna: we are counting down to the european open. i am anna edwards along with jonathan ferro. 2:30 in newoo -- york. circuit breakers halt trading for the second time this week. regulators hold an emergency meeting but make no decision on action. oil falling to $30 a barrel as brent dips below 2004 lows. marks & spencer steps down as ceo.