anna: china's stocks rise as they scrap the circuit breaker, as the fed intervened again. --us: jobs they in the usa jobs day in the usa following the fed rate hike and the volatility. anna: wrong number, samsung mrs. misses numbers -- profits numbers. is friday. anna: welcome to the program. has in the morning, china removed circuit breakers.

and we have a trading day that is a lot longer than a half-hour. manus: i am pleased with that. anna: knows the prizes today, friday morning seems like a good thing. doesn't it? let's have a look at where we have been. manus: no shock at all. but i did find the bloomberg world market capitalization, how much has the world lost? $3 trillion in one story, this is the market value. i can tell you this -- a trillion dollars of that came from china. we have gone from $64 trillion to 60 trillion dollars. that is a trillion dollars a day. anna: that is careless. let's talk about what is happening right now, some context so far this week. we have a chart where oil has been, and where the chinese index has been so far this week. what is interesting is that oil

has been falling, and the again has been gaining. chinese stocks have been falling over the past four days. they are different today. this is a week picture. but the japanese yen is down. from the 12-year low, paring the world's best performers this year. manus: by removing the circuit breakers, we will hear from a variety of voices later, the timing -- whether that works in terms of the markets we have show you. yen is the strongest since january of 2015. the aussie and new zealand dollars have been crushed relative to the yen. futures, let's check in with those before we get to caroline. anna: i think the volumes are pretty decent. even compared to yesterday. byus: we saw volumes traded six times the volumes. today, it is on the upside. volumes are storming.

50% above their 30-day average fared anna: good morning. caroline: after a to multiplicity, chinese markets are up after state controls intervened again. according to bloomberg sources, yesterday, regulators scrapped their four-day old experiment with circuit breakers. the central bank is moving to stabilize. sayshile, a top hedge fund chinese authorities should have waited before suspending the circuit breaker roles. management chief investment officer says the key fundamentals have not to tea deteriorated markedly. we have the latest jobs data from the u.s. later grade market turmoil plunging greed and the strong effects of the dollar, a report will be closely watched. payroll gains at or near $200,000 will probably provide

assurance, but a lackluster performance will certainly provide worry over the financial markets this week. kimh korea will mark jong-un's birthday at the board . in response to the north's claimed hydrogen bomb test this week. and martin has put up his e*trade account to secure a $5 million bail. that is after federal authorities arrested him on fraud charges last month. prosecutors say he lied to investors. he pleaded not guilty and was released on bond. for more on those stories, head to bloomberg. manus: caroline, think. the chinese and had to work a little more today. are you happier today? circuit breakers are taking away, are you happy? is friday.py it

one week down, i guess. trading in 2016, up 51 to go. not as volatile this week, but we have seen some pretty wild swings for the chinese market. mostly to the upside, let me give you an example in the first few minutes of trading this morning. we saw the shanghai trading direction eight times. seems like we have found a footing, the afternoon session is up by about 1%. we are seeing a recovery in hong kong. having said that, there is more state intervention -- buying up stocks in shanghai, mostly names readncials also around the region, we saw a recovery for south korean shares. they cannot hold on to the gains, down about 7% so far this year for that first week. we also saw continued declines across australia, the oil price and energy story there.

what it take you through the numbers there, when it comes to shanghai, what a difference a day makes. about double what we saw today. in that truncated session, but by the numbers, we have over 1000 stocks trading in the green at the moment. out of about 1100. 70 of those are limited at 10% or pretty close to it. there is not a single sector in the red when it comes to the chinese market. and a lot of it is down, not just that circuit breaker being removed. but some sense of stability returning to the market. snapping those eight days of the trajectory that is weaker, that seems to have soothed nerves somewhat. a little bit of strength on shore. pretty muchhore flat at the moment. which after the roller coaster of this event, that pretty much comes as early. before i go, we have had reports of intervention, particularly for on sore yen.

playing their hand it to try and support the currency there again. manus: thank you very much. have a great weekend. anna: with china dominating markets and headlines, there has been no shortage of commentary from some of the biggest names in finance. >> based upon the united states, china is predicted to be down five or 6%. it depends on whether the chinese are good to their word, in terms of letting markets clear. they have opened to the extent that it goes down more than five or 6%. knows? >> the economy is slowing, but it is not collapsing. it is important to make that distinction. moreover, the government has lot of instruments that can soft land the economy. the risk is that they lose control of the financial side. >> unless you believe this is going to turn into a gut wrenching financial event, there is not a chance in hell that it looks anything like 2008.

>> what drove actually economic activity in china, and by the markets, iterging is by and large capital spending. when capital spending slows down, it has a very negative multiplier and accelerator impact on the economy. and so, i think a recession is actually not unlikely. more with us get into our beijing chief. nick, china trying to achieve a little bit of stability. said to be intervening in the equity markets. we saw the cost in terms of reserves yesterday. in terms of china trying to stabilize things. what is the latest? net: what we have seen is an apparent attempt at trying to keep things a bit caller today. they set the reference rate for the yuan largely in line with yesterday, yesterday morning they had set the reference rate

much lower -- about half a percentage point. overnight, they removed the circuit breaker after just a few days. it seems like a bit of a retrenchment. they have introduced new policies, and then quickly apparently realized that maybe things were not working out the way they intended. so they have retrenched. we are told they intervened in the equity markets. really to keep things stable, so not really to create the pop up again, but really to prevent the fall. what you are seeing is probably a government imposed sort of sense of calm today. to give people a bit of a respite from the chaos in the last few days. anna: government imposed, perhaps. what about transparency from the chinese? the of conversations and imf, a lot of talk about transparency. keeping things calm, really.

is china living up to its word? well, there are a couple of things going on. issued intentions, a week or two ago, they said they would widen the fiscal deficit. so we were expecting more on the fiscal side. and they do say that they want to maintain a sort of stability of the currency. they do expect a rise and fall, no substantial swing. they had telegraphed that. the broader question, they make decisions and announce them late at night? whether it is an interest rate or reserve requirement cut, or changing the reference rate of the currency, they don't really tell us why they are doing those things. that leaves a lot of people scrambling. the big issue is credibility. you introduce a circuit breaker, and less than a week later, you suspend that circuit breaker. there are a lot of questions about intention and the ability

to manage an economy of this size and complexity. that is really the question now that the government would need to address to reassure the markets. anna: thank you very much. joining us there from beijing. manus: let us bring simon goodfellow, head of equities. help us make sense, we have a global crisis on our hands. as you heard mohammed say, we have a financial crisis. but we have not had a problem. where is china? simon: china is still dominated by the exchange rate. we have been bashing on for months now. the whole point driving is to sort of manage the exchange rate against the currency. and the big thing with the dollar, it exploded against the yen and everything else. if you are china, you find importing the other way around. you do not want to sort of

manage the currency down. you want to remove some of the massive uplift that you have had. because you were pegged to the dollar, which was going up. you therefore say as part of the process, we get a little broad -- not an index -- a narrow basket comprising the four other major currencies of the world. you conduct a rebalancing exercise. 682,kes a dollar to about through that. that is where it was. the 2008-2010 peg, you challenge that immediately. if you go all the way through on rebalancing exercise, you wind up nasty. think you actually get that far. i think you get back to the 682 and you have a long hard look about it. but a way to get a credible narrative is to explain what the policy is. which is, i think when you are tracking a basket of currencies,

rather than just the dollar. anna: do you think that maybe more communication -- simon: this is the bizarre thing. you change the reference process. and you do not a knowledge the rate applications. it is a simple as that. it is a credibility issue. it is the right policy. but they have not explained it. i am just staggered that the rest of the world thinks this is a surprise. manus: it is a surprise for some people in the commodities. we're trying to make sense, we ran through big numbers at the top. we want to show the viewers this commodity rate which is going on. some of the stocks have really been bombed out in terms of what is happening. this is the impact of china. this is the impact on the mining stocks. help us here. what is your phrase yesterday, we call it something of an uneasy base in terms of commodities and oil? this is having a huge impact on everybody's portfolio. make sense for this.

simon: we have been out of the miners, completely out, for 2.5 years. we just haven't had anything. and we haven't had anything in oil for a year now. because the risks are too high. there are some balances out there. but i don't think there is a stable base, to use your phrase. i don't think we may see a low, but i don't think we have actually got stability every at these prices. anna: what you make of the gross story in itself? do you recognize any signs of stability, some people point to the data and the services signs of things. others say no. simon: it is an extraordinarily different scenario they're trying to run, a multi-year transition. therefore, to try and claim support for markets or say the markets are going to tank on the

basis of one quarter number, it is frankly silly. but it is really a difficult transition. annan: simon stays with us. manus: the economic data is all better than anticipated factory yield. germany delivering industrial production and the trade balance. anna: nearly 45 minutes later, we will get the industrial production and trade balance out of france. then at 1:30 u.k. time, drumroll! look, a busy day. it is 15 minutes past 6:00, and we have not mentioned that. the expectations are that the world's biggest economy added 200,000 jobs. we will have analysis. all of that coming up, after the break. ♪

anna: welcome back.

6:18 in london. let us get the bloomberg business flash. the global smartphone market is losing steam. that is after samsung profits missed estimates. as the marketsg mature. apple close below $100 yesterday. that is the first time in more than a year. meanwhile, apple has brought artificial intelligence startup -- a facial recognition technology. it interprets emotions, as they watch videos and other media. important area, as they seek to build soft's hardware. back tens of thousands of diesel cars, in an attempt to placate regulators. according to a bloomberg source, they expect to purchase about 50,000 vehicles. that is after concluding it would be cheaper to do so than

fix them. meanwhile, embattled volkswagen boss is meeting u.s. environmental regulators next week to discuss the fallout of the emissions scandal. he asked for the meeting after the justice department filed a lawsuit seeking tens of billions of dollars. todi arabia is considering take its state oil company public, according to a source in the economist. times as many reserves as exxon mobil, eclipsing apple's largest company in the world. for more on those stories, terminal customers can head there. manus: thank you. turning attention to payroll reports, the strength of the .s. economy. offering some insights of the fed. president charles

evans had this to say on china and inflation. charles: to the extent that problems in china are slowing growth, other emerging markets demand -- that the take that into account. but even with that, the analogy iswhat happened in 1998-99 apt. it is very easy to overestimate the effect of slowing asian growth on u.s. economic prospects. and so i think we need to be cautious. >> i am not really expecting that we are going to be seeing a period of deflation. that is negative, right? i am not looking for that. we might be challenge to get inflation up. turmoils,se market that is what you're looking at

right now. monday, fed futures show better than 50% chance after the april meeting. anna: but they do not cross it it percent until june, pushing back that a. simon goodfellow, head of equities at harlan research is still with us. let us get that jobs report. how do you see the trajectory for interest rates in the u.s.? simon: well, i think i am inclined to be in the 2 rather than the 4 rate hike can't. there is also a camp that says you can be in the not camp. this is what is happening to the s&p 500, i think there is no doubt that the earnings are going to be down there again this year. and again, i am surprised that the consensus has not realize that. market earnings are down. and you would hope that the real economy in the u.s. continues to grow.

now, that actually sort of happened in the u.k. back in the 2003 period. it can be done. to i think the fed is right say there is no obvious reason as to why the u.s. economy should implode or anything like that. but i don't think that the s&p producers will increase corporate profits. and to that extent, it is difficult to see how to hike interest rates. manus: if we look at what is happening at the dollar, this is the key issue that i have been bringing up each day this week. but if china, and global contagion or slowdown comes along, it could stymie the fed's ability to raise rates. onimately, putting a cap the dollar. simon: i agree. what are that puts pressure on

the euro, that is another matter. do you think the feds will do, you clearly think that the fed officials have a very different view of the world. they think they can do four rate hikes to make a time when it might not do any. simon: this is where i just wonder why they are so far behind the curve. they should've started hiking rates a year and a half ago, not last month. they are just way, way behind. yesterday saidt that the fed would prefer to run a hawk and be by the behind, they can do more, they want us to believe it will be gradual tightening. that is what they are trying to intimate to us. simon: even more gradual than they are, in that sense, i. i think there is a real chance coming. it is in the corporate sector, not actually in the economy. with the exception of what may happen in china. bearishean, i am not

but the u.s. economy at all. anna: we have the jobs were coming out later, could be a lot of noise from the weather in theire. gdp has been growing in the u.s., more slowly than job seven growing. this is raise questions about productivity. is this a big issue? simon: i think it is another interpretation of what is going on there. it would be to say that corporate profits come as a share of gdp, are going to go down. in september,k the same one in 2007. manus: a little bit of breaking news from the national bank read we are expecting numbers. they came out with a loss of $23 billion. the market back in 2010, the central bank lost $20 billion. this is bigger than 2010. that is the headline. anna: that was the last record

loss. this sounds like a new record in that case. this new report comes just a week away from the anniversary of when they dropped the peg. on theopped the cap swiss bank against the euro. they had a lot to deal with over the past year. this has implications for the swiss economy, so much money from the implication. hass: the watch business been under pressure. i want to show you what the swiss franc did against the major currencies. swiss national holdings, depreciated by 10%. you see the major currencies all dropped against the swiss, the swiss rose against a virtually everything except the dollar and the yen. anna: they will make a distribution, which is interesting. more numbers coming through on the swiss national bank this morning. up next on the program, weak

signal. samsung noticing that the market is going flat. we had concerns over the period for the sales as some of the high tech products to cold. we will talk about that, when we come back. ♪

manus: it is 6:30 in london. let us get the bloomberg first were news with caroline hyde. after a to mull to as we come a chinese markets are up this morning, after state-controlled funds intervened again to support the starks, according to bloomberg sources. scrapping the four-day old experiment with circuit breakers from the central bank moved to stabilize the currency. meanwhile, a top hedge fund says chinese authorities should have waited before suspending the circuit breaker roles, because return investors will learn to deal with them. asset management said that the economic fundamentals have not

deteriorated markedly in the past week. we get the latest u.s. jobs data today. and with the market turmoil plunging commodity prices, the global effects of the strong dollar, the report will be closely watched. payroll gains at or near 200,000 would provide some reassurance. the lackluster report would certainly add to that worry that washed over the financial markets this week. south korea will mark kim jong-un's birthday today by turning up the volume of the heavily fortified order. they will review propaganda and music broadcasts come in response to the claimed hydrogen bomb test this week. and martin has put up his $45 million e*trade account to secure a $5 million bail. that is after federal authorities arrested him on fraud charges last month read bosses say he lied to investors, and he pleaded not guilty and was released. and for more on those stories, terminal customers can head to top go.

anna: stay with us, caroline. you are watching the markets. caroline: one to watch, finally, a bit of a reprieve -- a bounceback read you are seeing the rally today, only about 2%. it has been down 9% over the week, the worst week for chinese stocks since august. you're looking at the shanghai composite read a phenomenal selloff that we are seeing. and the volatility seem to be eased by the chinese making dramatic moves once again to step in and support the markets, as we are hearing about suspending that controversial circuit breaker. also looking to buy up some equities, some state-controlled funds during that. and after eight days of weakening yuan to get support, basically a similar reading for at 636.ency some sort of relief it would seem. but look at the fx, it is not

really helping australian stocks today. example,he topics for up more $300 billion over the course of the week. meanwhile, they are down 4/10 of a percent today. the hang seng is managing to galvanize itself. but i think also look at the futures. we are seeing some optimism when it comes to u.k. and u.s. futures. trading slightly on the green, just clinging on there. citigroup just cut their overall view from where the 6100 will end this year. therly worried about volatility this year, so much so that they cut their entire outlook for 2016. fx is one i want to china light on their. the australian dollar, the kiwi dollar, has been the worst performers this week. they are up 3% against the dollar. overall, you are starting to see how much of a move. a haven and out of the key we into the yen.

today, it is the opposite. fallingling lower, yen lower. money being pushed back into the australian and kiwi dollar. more optimism out there. one interesting point, i want to focus on oil of course. this has been one significant week coming down 7%. today, we drive higher. wti could be upy 60% by the end of the year. they think wti ending the year at about $43 a barrel. manus: that is a heck of a call. caroline hyde on the markets. let's turn our attention to smart phones. expectations,nder assigned the market is running out of traction. the world's largest maker reported fourth-quarter profits of $5 billion. anna: that is below estimates. we are joined alive by samsung's

electronics reporter. good to see you. samsung missed estimates there. is this part of a global trend, is it samsung-specific? tell us what happened. isobviously, this report reporting profits -- which is sharply less than what the market consensus of 6.6 trillion was. that is largely because of falling prices of the key components such as memory and crystal displays. on top of that, demand for the galaxy smartphone waned during the shopping season. what worries me now is that samsung has been increasing reliance on the key components business, after smartphones and tvs. mand for the products are taking a toll on the suppliers, which is samsung,

key question now is what can they do to overcome the slowdown and keep the ball rolling? expect,hat can we recovery this year? we had stories this week that producer cutting their production this quarter. what can we expect for samsung? will it recover this year? >> well, i think nobody can really promise a brighter future at this point, even as the ceo said earlier this week that economic downturns will probably persist this year. while competition for the key products, smartphones and memory chips, will only intensify. the share price over the past few years, it posted a third-straight annual decline in 2015. they even started the new year and negative territory. the company announced a huge

buyback and cancellation plan last year. that sort of implies the market is forecasting doubt, because outlook going forward for some analysts are telling me that samsung has to wait until the global demand picks up. or samsung can bring out really innovative devices to wow the consumer. anna: thank you very much. electronics reporter joining us there from seoul. manus: this week has seen the manufacturers vying for the consumer. caroline hyde has been keeping her eye on everything. what caught your eye this week? caroline: the array of products in las vegas, drones, virtual reality, baby technology. some phenomenally perhaps not so useful products, winning prizes. you have the smart water bottle. it has won an award.

it has five interchangeable fuel pds. they can tailor your activity, providing products and flavors should you so wish. that is what i kept my eye on. another award-winner, smart animals. everything is smart. a dog-entertained smart game got basically a treat dispenser that the dog has to hit certain lights at certain time. you can even voice program it to test your pooch while you are out. this is an award-winner. everything is wi-fi enabled, to make cocktails. get that read or even print images on your phone of your coffee. not all of them desperately necessary. i might want my next margarita made by a cocktail maker. everything needs the network. we have been seeing chief executives out in las vegas. erickson really talking up their only presents going forward, considering how much of our

network connections are. company,is a music another consumer element, whatever it is, all of them would have wireless. and of course but they need to answer how they can of all this? so that is important for us. caroline: that was the chief executive of erickson, of course. the amazing array, you can see exactly. caroline: do you have a smart watch yet? do they give you too much data? anna: i think they might. i don't own one. caroline: what about a fitbit? anna: i have not quite turned the corner from the festive period into 2016.

caroline: it is january, manus. fitbit is talking how much potentially they have been overwhelmed by too much data. the really want a smart watch to tell you every individual piece of data? they feel that wraps too much data is not so good for you. have a listen to the chief executive officer. james: i think the general knock against smart watches as they do too much. for us to the focus is on fitness. this is part of our overall strategy to create a digital health platform, combining both hardware and software to reach a goal. have a fitbit that only tells you about your own fitness levels. of course on their going to feel the challenges from the likes of apple smart watch coming forward, and all the other products we have monitoring how many calories and how much exercise we have agreed still common interesting point.

maybe not all data is good data. anna: i am certainly overwhelmed. but it is always fitness apps. i forget to turn them on. caroline hyde with the latest from technology. manus: i don't need a fitbit to tell me to eat less, exercise more, sleep more. drink a few less margaritas. let us bring simon back in. he is the head of equities at harland research. if you are just tuning in, equities are rising again -- a bit of a rally. we her caroline talk about the innovation. how do you value tech? simon: well, we are cutting it. that is the short answer. -- we werenot slightly forced back into tech in the third quarter. when health care had its accident because we were still going growth. and the software has a problem cannot forces you into tech. anna: you are worried about valuation?

simon: well, i now. it is really an interesting thing. if tech earnings hold, than they are not overvalued. so you actually end up having to make the case that tech earnings are going to go down, possibly by quite a lot. in order to find out that they are overvalued. there are a lot of things in the u.s. market that are overvalued on flat earnings, and the current forecast, if you think the forecasts are going to go down because smartphones are peaking, there is actually no defense. manus: the probability of superior returns relative to the s&p have rolled over. you're making me very nervous he agreed having gotten close to the 1999 hi, i have memories of that particular day. simon: i equate it with that because i went to that period as in -- thethink we are story that is emerging, there is between the product

smartphones and the internet of things, the conductivity really being ready for the market rate in which case, we have a gap. the future is still fantastic read but in terms of the cash flow delivered quarter by quarter, we have a gap emerging. tech meanwhile, u.s. struggles with a strong dollar? simon: that is true. but it is an argument that earnings will go down. electrolux, and you might not necessarily want to mention individual names, you have electrolux all predicated along the home. you have old tech, which is microsoft and intel. you have new tech, 50 people. apple just bought an artificial intelligence company with 50 people in it. world soout 1999, the

the differentiation in tech. and the point about pharma, there was no differentiation in the third quarter. windows cracking after years of strong performance, they all crack together. only later do you then say that some of this is being oversold, directly oversold. anna: simon, thank you for joining us. the ceo and head of equities at harland. of next, china, china! i am not donald trump. china, china, china. what we learned about the global market equity rout. the worst start to the year ever. ♪

anna: welcome back. 6:47 in london.

let us get the bloomberg business flash. caroline: the swiss national bank expect to see a record loss for 2015. the central bank said the loss on the currency amounted to 20 billion francs. bond holdings fell by 4 billion. the global smartphone market is losing steam. after samsung missed estimates, as the markets that your. apple close below $100 if they, for the first time in more than a year. meantime, apple has bought an artificial intelligence start up. they specialize in facial recognition, interpreting expression as they watch videos and other media. it has become an extremely important area for apple, as it builds software to tie together its numerous products. volkswagen made by back tens of

thousands of diesel cars in the u.s. in an attempt to placate regulators. the german carmaker expects to purchase around 60,000 vehicles, after concluding it would be cheaper to do so then fix. for more on the stories, terminal customers can head there. manus: i think we should check in on futures. up 150, justow picking up there. anna: focusing on the u.s. futures, the volume this time of day, they are showing we would be higher. this day is different than the last four. the overarching point, looking at the markets, a lot less risk aversion. markets, youuity have seen oil, that is one thing before he came on area volume is about six times the average and equity futures in asia. it is a similar story, full

volumes this morning. anna: reassuring because it makes you think there is as much conviction as there was about the selloff yesterday. china removing the circuit breakers, that is one thing that developed. they surprised nobody with the fx fixing. manus: we looked at the top of the show, showing the yen. money coming out of it. 2%a: we are up by more than and also wti. they have fallen, but they are back up in this trading session this morning. you see the chinese equity market also up. manus: a little bit of a reprieve this friday. it has been a dramatic year for currency. china might have moved to stabilize the yuan reference rate. anna: the pound suffered, and the australian dollar make its worst ever start to a year. joining us now to make sense of all of this is richard jones, fx

and rate strategists. and on the china be, douglas morton. good to see you. both. let us come to you first, douglas. you are not overly worried about what is happening, are you? douglas: you have to make a distinction. we start the year with global positioning come as polar as it has been, since the financial crisis. volatility is high, people are sensitive following the 2015 that was very difficult. as it happens now, a key risk indicator globally has been attribute it to the r&b. the reality of markets is that this is where the markets are focusing right now. having said that, the markets are concerned about whether they are telling us this will be a one-time devaluation, which will lead to a currency war across the region. we think the likelihood of that is very low at the moment. manus: this is a critical thing. aven the volatility am

setting eight days in a row where they reduced the rate. -- sorry. not i'm speaking my own personal opinion here. when they really risk that kind of global repercussion buy another one-off of it? douglas: i think not. we break it to the strategic likelihood at what is happening. they haven't moved by the offshore market. that is the first point to make. isategically, chinese growth decreasing enough to warrant another depreciation. markets actually looking ok in china. that is despite the fact that is relative depreciation still winning market share versus the asian shares in high-volume manufacturing. monti's are not seeing any stress and the credit to support that. needegically, there is no

to devalue any further. it comes to outflows. and i could talk about that forever. anna: later on, i will be to our guests. richard, what is driving the chinese currency at the moment? is it the fixing of the market, watching what the regulars do the government does? said, the as douglas go outflow of capital? richard: i think it is both. if you look at the global macro perspective, i focus on the western european and northern american market street we have one episode in august. we had a second one now great it would not surprise me if we call him down a bit. and we get another episode in late spring or early summer. it is an iterative ongoing process.

it is also the weakening of the currency, as part of a broader easing. and by doing that perhaps they look to ease conditions a little bit. manus: new zealand will be quite happy if they draw a line under this. the west started to trade under the aussie dollar since it went free float back in the 80's. you are watching money flow into the yen at an ambitious rate of what is going on. douglas, when we look at the markets, china's actions have repercussions for every central bank read and the anniversary is next week. the games that shove last year. a stronger ones. the japanese are in this battle, as well. --glas: the key risk actually, it does not matter as much as people think it does from the chinese perspective. they have a lot of other levers to pull. but the key risk is the yen.

the japanese are not in a position -- they are running out of options to further strengthen that. actually, looking at the potential, both competitive positioning, and japan is improving. did.: that is what kuroda a lot moreere is not they can do. we are seeing huge risk in japan from what is going on. one last point on that. you look at outflows with the fx reserves that china has the money have been selling u.s. dollar assets to basically keep and mitigate the currency, but as they start to sell the euro, which is the next largest reserve, it is a big divergence between the euro and the japanese yen. the applications for the further weakening, versus not that happening for the yen, is even worse. i am very nervous right now for japan.

anna: very nervous about the economy yesterday, despite singing the achievements. what did we learn yesterday on the pound? it seems to get caught up in a lot of market volatility. richard: what is going on with sterling right now, we are seeing a really big shift in u.k. yields being lower so far this year. and i think that is playing into the currency. because we have sort of -- we have been on and off the liftoff for the bank of england. that is now a firm 2017 story. we have seen a lot of flows into the haven, filtered into the short and pricing. and the pound is very much suffering, i think, this week from a shift in differential. manus: douglas, great to bring some christmas cheer. at the end of this week. next year, the drop could be there. thank you very much. douglas morton, partner at asia

grade anna: talking about germany, what is the impact. we get data from germany. that is next. ♪

manus: china stocks rise as authorities scrap their conversion circuit breaker, and if they control funds, the fed is set to intervene again. pharm payroll records are set to be scrutinized following the rate hikes. manus: samsung mrs. profits -- andung misses profits, they are running out of steam. you are welcome to "countdown." i'm manus cranny. anna: i'm anna edwards. we will get to futures in just a moment and see what they are

telling us for the rest of the week. let's have a look at the data we are just getting through from the german economy. some of it doesn't look that good. manus: down on industrial production. this is the seasonally adjusted figure, declining 3/10 of 1%. we have seen a couple notes saying that germany's relationship with china, there isn't much innovation -- but this industrial production significantly lowers the estimate. numbers, that of -- we were looking for a rise of 5/10 of 1%. i suspect it benefits from a jump. it's a hard story to make clear. anna: we got some better data yesterday out of germany, orders increasing, the biggest increase since 2011. brazilian domestic demand seems to be the story, but then again the industrial production number

is coming in below forecast. let's have a look at where the futures are. today looks very different, you'll be pleased to now, from the last four days. manus: you've got europe opening, those miners got trounced yesterday, looking at the bloomberg mining index going 15 years. london fed open higher, paris up. i want to draw your attention to the u.s. equity futures. volume in the asia session yesterday was trashed, and volumes rose by six times the average. this morning on the rally, volumes up by six times higher than normal. anna: and today looks different than the last four days. today,got oil rebounding the japanese currency pairing the world's best performance so far this year. it went up versus a few other currencies.

and now it is going down against all of them. manus: the dollar-yet as the strongest since january and this week it rallied by 2%. the aussie dollar and new zealand dollar have been pasted this week. anna: chinese equity markets bouncing. let's get the first word of caroline hyde. caroline: after a tumultuous week, chinese markets are up after state-controlled funds intervened to support stocks. yesterday, regulators is scrapped their four-day-old deal with circuit breakers. they have also moved to stabilize the yuan. meanwhile, a top hedge fund says chinese authorities should have considered before getting rid of the circuit breaker rule. nation's economic fundamentals have not deteriorated markedly in the past week. we get the latest u.s. jobs data today, and with the market

turmoil plunging, commodity prices in the global sector will be closely watched. 200,000gains at or near will probably provide some reassurance about those prospects, by the lackluster report will almost certainly add to the wall of worry that has washed over the financial markets. south korea will mark kim jong-un's birthday by turning up the volume at the heavenl heaviy fortified border. they will resume propaganda in results to the claims that it tested an h-bomb. and martin skhreli has put up his account to secure a $5 million bail after federal authorities arrested him on four charges last month. prosecutors say he lied to investors. for more on those stories, head to bloomberg.com. anna: let's check in on the asian markets. haidi lun is standing by.

the session lasted less than half an hour today has been a long day. haidi: yes. was the actual length of trading we had yesterday before the markets closed up shop. by that metric, we are doing a lot better, in that we have actually managed to wake it all the way through the trading day. mainland markets close a couple minutes ago, shanghai ending the day up by 2%. a much more stable afternoon session, because we saw quite a lot of oscillation, changing directions, almost a dozen times in just a few minutes in the early session. coal miners in steelmakers gaining, the industry's really plagued by overcapacity, but we did have more government rhetoric saying that they would be supporting those sectors as they try and rebalance. really, it was down to the yuan. the pboc restored some sense of calm when it set the reference

rate a little stronger. you can see the next picture across the region. markets,of these investors are still trying to scrapping ofthe the circuit breaker mechanism just the latest in a series of knee-jerk, badly handled policy missteps we have seen out of china? not restoring much in the way of confidence but certainly a little bit of calm. let's take a look at currencies, the driver in today's regional recovery rally. not much of a move, which is good news after the recent way it let go. in terms of onshore yuan, the official trading rate is sitting putting an at 6.682, end to eight days of that weakening trajectory for the currency. where we go from now, we have today p coming up next week.

if that number is a miss, i expect it would be a poor reaction around the region. manus: haidi, thank you very much. anna: let's stick with the china theme, with china dominating markets and headlines. there has been no shortage of commentary from some of the biggest names in finance. states,tf in the united china addicted to be down by 6%. it depends on whether the chinese are good to their workers in terms of markets. they have been to the sense that it goes down more than 5% or 6%, who knows. >> this is mainly a financial issue in china. the economy is slowing, but it is not collapsing, and i think it is important to make that distinction. the chinese government has lots of policy instruments that can soft land the economy. the risk is that they lose control of the financial side. >> unless you believe this is going to turn into a gutwrenching financial event, there is not a snowball's chance in hell that you will see

activity like 2008. >> what drove economic activity in china -- and by the way, in emerging markets -- by and large is capital spending. down,l spending slowed and it had a very negative multiplier and accelerator impact on the economy. so i think recession is not unlikely. anna: let's get more on this story and talk about china with our shanghai bureau chief. greg, what is china trying to achieve right now? we have to remove the circuit breakers but today looks different from yesterday. bring us up to speed. like they wereks clearly taken off guard by the circuit breaker, and when markets started plunging, the circuit breaker clicked in and made matters worse. it took another trading session

noted, where you markets close down even faster than they did on monday to convince them that they had to suspend the program and try something else. greg, after all of the stability promises and pledges for transparency -- the whole wouldwas that thery be more transparent, they would clear out the leveraged players. that's a load of tosh, isn't it? >> well, the market is confused for sure. if you are talking about the yen market and whether that is more transparent, it's hard to say. they extended the trading hours, but they aren't really pegging the closing rate for those trading hours to the next day

fixing rate, so the market is confused on that front. in terms of the stock market, there is a lot a state buying that follows the pattern after monday's plunge. we are seeing it again today. clearly an intervention to try and stabilize the market, but it is not really the lighting a free market. anna: thank you very much. they might be watching at the pboc. we shouldn't say a load of tosh. manus: i'm trying to use very technical and grandiose language. but if i am suffering from confusion about what they are doing, i should resort to -- maybe it is a little disrespectful, so apologies to anyone who finds that overbearing. nick bring in somebody -- nelson. i'm deflecting.

he's ubs's head of european equity strategies. i use the very colloquial word there. it sort of encapsulates it, doesn't it? >> it has been messy, very messy. the problem we have here is that when you look at the chinese entre markets, is dominated by retail investors. so it's media less mature market than other markets, a different demographic, different types of investors. it's not pensions or insurers, it's people who are newer to markets, and maybe there is more speculation. think the problem with the circuit breakers, as we all now, is that if you get to a period where you know there will be a stop in the ability to sell a stock, maybe try and get your cell order's in first. we can certainly see people changing their trading behavior tryingek by effectively

to get the sell orders are sell strategies through earlier before the door came closed. anna: it's interesting the way the u.s. market traded on this news yesterday. we got asia higher today, and the chinese market is certainly bouncing. the way the u.s. market interpreted -- they were down, and then they got the news that circuit breakers would be removed, and it bounced. it sold off on the latter part of the day because people said -- is this a credibility gap? are they making things up, testing things out as we go along? learning on the job in terms of how to regulate? >> there is a bit of that going on, certainly. and i think it is better news to have these takinen away. i think to remove them is the central thing. when you look at the correlation the equity market and has been very high. look at the u.s. or europe -- the correlation between the stoxx 600 and the shanghai

composite is back up to the high it was that in august last year. but is the stock market, what is interesting is the economies are clearly moving in routes,ferent especially when the data has been better. anna: and that is the problem in the currency is pegged, isn't it? manus: i have some wallpaper for us. what you have -- this is the last rout in china, back in august. and you saw that rally in the oil market. here we are -- the oil is in blue, the global equities in white, and we have the csi. you're saying there is great opportunity in europe. you look through the european prism. did you respect a repeat reprieve in terms of commodities, in terms of oil? how do you look at the world with those three big pointers? >> good question. i think you can see the correlation we are talking about

if you look at the yellow and white over the last few weeks. that is very much the stock market. if you look at the chinese manufacturing pmi against the european pmi, we had those on monday, first day of the week, this terrible trading session. those pmi's were at a 20 month high. europe and china are diverging in terms of the macro data. as for oil, clearly it is being affected by the broader commodity group, but i would say that it seems much more supply than demand. example, we have very strong demand and one points and percent growth, much higher than the long-run average. oil seems to be more supply. anna: we know you see opportunities in europe and we will talk about those the next conversation. nick nelson stays with us. us, such a busy week. job stay in the u.s. -- what to

expect. manus: they are out at 1:30 london time. the ratehat validate hike from the federal reserve? ♪

anna: welcome back, this is "countdown." let's get the bloomberg business flash with caroline. caroline: thank you. signs are mounting that the global smartphone market is losing steam, after samsung the profits missed estimates. they have waned as the markets mature in china's economy slows. shares in apple closed below 100 yesterday for the first time in more than a year. meanwhile, apple has bought artificial intelligence. they bought a company that specializes in facial recognition, and interprets emotions as they watch media. artificial intelligence has become a strategically important area for apple, that seeks to

build smart software, tying together numerous products. vw may buy back tens of thousands of diesel powered cars in the u.s. in an attempt play came regulators. expects tocarmaker repurchase around 50,000 vehicles after concluding it would be good to do so. anna, manus. manus: thank you. as investors turned their attention to today's payroll numbers, reports for signs of strength of the u.s. economy, comments from policymakers offered some insight into the current thinking of the fed. anna: jeffrey lacher and charles evans had this to say on matters ranging from china to inflation. >> there is some spillover effects, to the extent that problems in china, the slow growth effects other emerging -- but, in that affects

even with that, with the analogy that happened to 1999 is apt. i think we learned that it is easy to overestimate the slowing asian growth on u.s. economic prospects. so i think we need to be cautious. expecting thatly we will be seeing a period of prolonged deflation. i'm not looking for that. i think we might be challenged to get inflation up. turmoil,d the market traders have been pushing back on when the fed. will next hike rates on monday -- when the fed will next hike rates. 56.2% atok at that -- the start. slumping 50-50. let's bring in the head of ubs

equity strategies. nick, the three of us were chatting, and you said the debate in ubs is whether it is a good or a bad number. what with a good number be and what would a bad number be to you? >> i think it is quite a narrow path. if you saw an incredibly weak --mber, like 100,000, manus: there has been a mild miss. miss,but if you had a big people would make the connection with china, and we saw also weaker industrial data. this is infecting somehow the u.s. economy. it is always a quite a closed economy. would be a negative. but on the counter side, you saw a huge blowout number.

saw a huge blowout number, that would bring the fed hike back into people's mind, maybe the concern about what that would mean. what we need is a reasonably strong number. as mentioned previously, i do think the economies in europe and the u.s. are in different directions. anna: el niño made everything warm. so we will see if that has had an impact. let's talk about europe. everyone here will be watching what's going on with the fed. there are some very interesting investment opportunities that relate very much to europe. >> exactly. when we look at europe, we are seeing this ias the first time we've had double digits earning growth. obviously decoupled from the u.s. in terms of profit cycle. we think now nominal gdp is coming back. lead indicators are moving quite nicely and we think we will be close to 2%, maybe 3% or above nominal gdp.

they haven't had that for five years. with that topline growth, we think we will get margin expansion. manus: and you made some upgrades -- you look at the consumption -- you had an interesting ride -- anna: upgrading to just mutual. >> it has been in the works for a long time and at the end of last year we took them up to neutral because we decided, look, they weren't pricing in such an aggressive recovery in profits. intentions to buy a car in europe rather 10 year high. but the domestic europe story still quite interesting. anna: one of the risks as european politics. we see big questions raised about showin schengen. does it raise big questions like that and threaten the investment case? >> i think there are a few issues here. we had this refugee crisis go on and that has affected the schengen's potential in the eu.

initially that will probably give a boost to growth, 10 or 20 basis points this year, because of the fiscal spending that allow this. but in the longer term, clearly the fraction is appearing, and we see a second round affect. we are expecting the referendum vote this year, and we will see what that will bring. but clearly it may boost the lead camp if you were to see this intention of immigration. always great to get your opinions. nick nelson. anna: fresh data out of germany showing industrial production on a signcted befalling, that the slowdown in emerging markets in china and brazil may weigh on economic growth. let's get to hans nichols in berlin. breakdown the data for us -- good morning. hans: you did the headline for me, that we have a big miss in industrial production. this is a lagging indicator, november numbers. in some ways it is the more

volatile reading. yesterday we got factory orders and they surprised on the upside. for more real-time reading, let's take a look at how the dax has been doing with china concerns, auto sale concerns. take a look at the dax and compare it to some of its peers. it's been till thursday one of the worst weeks, down 7.1%. worse even than greece. gives you an indication of how exposed germany is to exports. when you look at germany's big export partners, we also have trade numbers, and they were on the upside. if you look at germany's export numbers, you see they are exposed to china. it is there third-biggest writing partner. but in some ways, the softening and weakening in the dax can be explained by the auto story. take a look at some of the biggest losers on the dax this week's. the three auto companies leading the top -- i should say lagging. andswagen down, bmw down,

even daimler. they seems to be weathering the china's slowdown, and they are down 11%. i mentioned those trade numbers came in and i think the trade surplus was 20.6. estimate was for 20.3. clearly it is a rebound after some week october numbers. but all these figures are telling to stories. we are looking at the dax, reacting in real-time, lagging economic data from november that does show there is some headwinds for the german economy. manus: hans, thank you very much. hans nichols breaking down the german data, and the view is whether germany is contagious. four dollars wet up equity markets this week -- what a stunning week. anna: it looks very different from the last four days, doesn't it? we had the yen gaining over the last four days, giving us all the 31 major currency pair s. manus: brent trading up, that

will give a lift. equities are slightly bigger, stronger opening. anna: and u.s. futures showing a positive start. "on the move" is next. ♪

anna: welcome to "on the move," 7:30 in london. we are counting down to the european open. i'm edwards along with jonathan ferro in new york. good morning. jonathan: good morning. let's get everyone updated. the china flip-flop. authorities scrap the circuit breakers after less than a week of use. another volatile trading session as state-controlled funds are buying stocks. production run over. china has an eight-day streak of cuts in the yuan reference rate, sending shockwaves through global markets. jobs day. the december payroll report is said to be scrutinized following the rate hikes, amid intense market volatility.