hi, everybody. good morning. welcome. you're watching worldwide exchange. >> here are your headlines from around the world. >> major indices end the session with a bang. investors eyeing the ecb meeting amid calls for the imf to consider further quantitative easing. >> syngenta returns more than 2 million to shareholders. the ceo tells cnbc exclusively

he has not ruled out an m&a deal in the future. >> vivendi cuts the stock despite full year targets. >> economic woes so one side as it marks the anniversary of its victory over japan in world war ii. hi, everybody. welcome to the show. glad that you're with us today. we have a lot to get to and i want to start off with breaking data hitting our wires. euro zone august composite pmi data coming through. the final composite pmi 54.3. that's a four year high. a lot stronger than anticipated. the highest since may of 2011. the final output prices 50.1. expansion is higher than the flash estimate and the july

final reading. the highest since march of 2012. the euro zone final services pmi 54.4. higher than the previous estimates out there as well. they're looking at the final services employment pmi. sonnet-net we have the august business growth at a four year high although still slightly weaker than what could be hoped for. we're just above 50. >> important to point out germany was a bright spot. private sector in germany. it's growth accelerating in august at the fastest pace in five months being driven by the up tick in the conferring and services sector. we have the ecb meeting coming up. what is mario draghi going to say about this data. >> and whether we're data dependent on this side. there's a lot of analysts calling for some indication about whether or not we should be considering on with

quantitative easing longer. >> exactly. >> the u. s. markets yesterday. the volatility is just continuing. >> absolutely. volatility can work in favor of the bulls and the bears and that's what we saw in yesterday's trade. the dow has seen ten triple digit sessions in the past 11 but pimco was telling us on cnbc that this volatility in the markets should not worry us. this is normal in a rising rate environment which we're technically in given that the fed is expected to raise rates this year. yes. nasdaq, it feels like just from the people that come through our doors, it feels like there's not a sense of panic. we were talk about how the vicks jumped the other day and we were seeing these moves on a at aly basis here and there and even though it's called a fear indicator i'm wondering if it's a volatility indicator or

there's more of this to come as opposed to the good old fashioned panic. >> i wonder how the wild swings will impact investor and consumer confidence because psychologically it has an impact. will it result in spending less? delaying purchases of big ticket items, autos, houses and it's something to watch to see if corporations see that they're delaying investments because of the market volatility. >> and more of them are saying we're sitting on cash. we're sitting on more than in the past. >> loads of guests lined up. let's get stuck in it and look at our european markets this morning. if you're watching from somewhere else out of europe, this is what we're seeing. the stoxx europe 600 higher by around 1.5%. reversal from the other sessions we've seen but the ftse, the dax, the cac all higher. a bit of an outperformance

coming through and stronger than anticipated pmi showings across the board. especially for germany here in europe. >> that ecb policy meeting coming up and a lot has changed since the government counsel met in july. they sparked market turmoil across the globe and crude prices have slumped and a broad slow down in emerging markets. there will be a great deal to talk about in today's policy meeting. a new set of staff projections with most expecting a downward revision to the inflation outlook. draghi will strike a dovish tone with easing measures in the near term. >> what could further ecb action look like. the central bank chief could extend beyond september 2016 and up the place of its buying program now. he could also change the competition or cut the deposit rate as well.

richard kelly is with us at the top of the hour. head of global strategies at t.d. securities. what tow think we'll hear from mario draghi today? >> i think it's still too early for them to announce a major change in qe. so i think it's more likely that they have aggressive change in the language but there's probably at least a 25% chance of easing. you can't rule out a rate cut and that's one that even though draghi said we're at the lower bound we've seen that maybe they weren't and some of the language they used through the volatility and much of this was directed toward greece at the last meeting but continued because of china reasons, the unwarranted tightening has been rate cuts so you can't rule out anything going into the day. >> why not let markets settle a bit and be thinking we have to come out of this at some point and it's going to be harder to

unwind. >> it's hard to translate one month of market volatility to any sustained draw down of the economy. by buying themselves another two meetings they can see what exactly is this. you do get early trade data out of asia early in the month. it suggests that some of the chinese data, for the trade numbers next week, could be some of the worst since the global financial crisis in terms of the pull back we see there. we saw a pull back in u.s. trade as well. industrial production in emerging markets may have contracted by 1% which would be the most since the global financial crisis so there's rough trackings to suggest that august was a bad month but there's also the port issues that went on and the shutdowns that went into the world war ii parades for china. nothing is going to confirm that there was no impact but nothing is going to confirm an issue the ecb has to have a knee jerk

reaction to now. >> will the strength of the euro be addressed by draghi in today's meeting? >> i think they're trying not to talk about the currency side of things. they want to talk about the currency as an after effect of all the currencies going in. it's certainly on their mind and it factors in. it is a reason their inflation forecast will go lower but the big picture from the market's perspective is you have a lot of expectations of further easing to get in here. you have the flows of people rotating out of euros to dollars and if all draghi says is we're more pessimistic on the inflation and growth outlook but we're not doing anything about it now you're going to see the dax lose and euro squeeze higher. >> that's been illustrated in the stock market. i have been watching the lending data close la because my big question is when does it actually feed through to the real economy. but the euro zone money supply

tracked by the european central bank came in higher than expected in the month of july but is still below precrisis rates. >> it's one of the data points suggesting the ecb is on the right track. when you look at the mfi lending data for what's going on you had lending to households. you're not going to get right back to precrisis levels now but the trend continues to improve and that's an argument to say qe is working. we're not seeing this volatility but that doesn't necessarily argue it's going to continue over the next 12 months. that's when the ecb steps in and says should we do more now. >> you're staying with us for the time being. get involved at the top of the hour. you can find us on e-mail worldwide@cnbc.com or on twitter as well. stay tuned of course because

we'll be speaking exclusively to the ceo at 10:40 cet. >> and our special programming starts account 12:45 cet and you're hosting that. >> i'll will b doing that with wilfred and i know you'll be watching. >> i will. >> sygenta announced a share repurchase program worth $2 million and will set off it's vegetable seeds business. this as shareholders are upset over rejection of monsanto takeover option. he insisted the company is fine without monsanto's cash. >> all you have to do is look at the deal landscape and there hanlt been a l hasn't been a lot of sellers. we don't believe we need that capital to further invest in our

business. syngenta is a company with good free cash flow and the announcement this morning says with the shares undervalued this is an opportunity to buy and show that our strong, free cash flow can support the purchase. >> would you rule out m&a? any other further options? would you say yes if the price is right? if it's much higher than what syngenta offered you? >> the business of reopening any conversation with monsanto isn't what's on offer today of course. what we're saying is our shares are under valued. it doesn't support the core business we have.

ample balance sheet to support debt we would do that. but this opportunity to return cash to shareholders which is what they're asking for is what we announced this morning. >> carolyn is in frankfurt with more. good to see you again carolyn. good morning. with what is the overall message in this, do you think? >> we have to please our shareholders and the wall street journal after that failed bid ran a good piece on how disappointed shareholders in syngenta were. the stock fell 18% that day and that was the biggest drop ever and one analyst said management at syngenta is throwing away 15 to $20 billion in shareholder money. so it was clear that they have to do something to placate those investors. what are they doing today? announcing that $2 billion initial share buy back and

selling their vegetable seeds business. that said though, a lot of people have said why are they selling it. it's a good business. it has good growth. good margin but as you heard the ceo there he said it simply is noncore. another topic we talked about is the future and management questions because there's been a lot of pressure on the board and on the ceo as well. now the entire board will be up for election once again next april and i wanted to know from mike mack whether he thought the board would be reelected and whether there were any questions about his ceo position. he said i'm intent in staying on as the ceo and he's very confident that the entire board will get reelected. so you have to wonder whether what syngenta is offering their investors now is going to be enough to overcome the investor disappointment with that failed

bid and whether any future bid in the future comes from monsanto or any other company will actually materialize. back to you. >> thank you very much. we'll cross back out to you later on. syngenta making headlines higher by around 3% as you saw. easy jet up by almost 6.5% taking off after it raised the full year profit outlook to 21%. it's on the back of record august passenger numbers. the founder has unexpectedly re-signed ahead of the firm's merger with yuox. that's according to reuters. vivendi trading lower under pressure. a slight bit of pressure in paris after a slew of banks downgraded on this stock. it's a pretty green morning but this despite the 34% jump seen in the second quarter profit. now stefen has more from paris.

good morning, at first glance the numbers were strong for the first half of the year. 34% rise for the net profit in the second quarter. this is due to the good performance from the music vision. universal music had 19% increase in sales in the second quarter to compare with 9% for the group level. universal music benefitted from the good performance of the streaming music activity. however in term of outlook this activity will face the new competition from apple music even if vivendi claims it's too early to assess the impact of am music on the streaming industry. for now it's on track to meet it's full year target including a slight increase of its revenue on the growth of 10% of the adjusted net profit and it also indicated that vivendi is looking at important cash pile

billion euros the company has after the last two years. the chairman didn't mention a specific target but says that vivendi was not interested in short-term strategy. now the market reaction was negative. you mention the downgrade in term of price target from plenty of brokers is also negative because the adjusted profit for the first half of the year was slightly below expectation. >> thank you so much. coming up on worldwide exchange, smartphone wars reignited. we hear from china and how they plan to take on the cell phone market. plus the first electric car. find out about the dent in your pocket. planet fitness rides a roller

coaster since going public. we'll get you the full story after this break.

>> hi, everybody. welcome back. you're watching worldwide exchange this morning.

you're watching live pictures coming from the hungarian prime minister holding a press conference with the european parliament after a meeting to discuss the migrant crisis and it's just extraordinary. we're waking up here in london to very very graphic pictures on the front page of the independent. it's a picture of a small child looks like has been washed up on the shores of europe. you can go online and find the picture if you want. incredibly graphic picture. it is just extraordinary. the entire crisis and also the use of the word migrant has been discussed too. how can they be refugees when they're in syria and cross the europe and become migrants. they're fleeing for a reason. but most of them coming here are coming for a good reason. germany taking in four times the amount in 2014 than what the

entire eu has combined. berlin and brussels are calling for more of a coordinated system and how to deal with the issues. >> that's a big question. what kind of united front will european leaders take to this migrant crisis taking place. there's been an influx of millions of people. >> definitely and something has to be done. they decided that something has to be done. we'll take in 50 people. 5-0 and instead she went online via facebook and said make your voices heard and maybe we can make the government do more and the government has said look i can take somebody in. i have an extra room. i have an extra couch. so 10,000 people came out with an outcry and now they're looking to see if they can do more. britain is doing very little. >> it's a developing story. one that you can see on the front page of the developing

newspapers. head online if you want to see the picture and i'm talking about on twitter as well so you can find the article on twitter if you want. it's been a less volatile day. they were closed. all closing slightly higher. for more on the asian markets let's head straight out to sri that joins us with more on that. >> you're quite right to point out the market closures on the mainland. you will remain closed on friday. the hang seng is closed as well. it's taken out a major form of volatility. that's why we have a degree of stability out here in asia and also the two%. plus on wall street overnight helped as well. the only fly in the ointment was the australian equities market

down by 1.4%. it was a big drag on the index up by 17% because of discounted share placement. bargain hunters above this 18,000 level and this is where we closed out fairly flat for the nikkei at about 87 points to the good. that's where we stand. back to you. >> thank you so much. china put on a lavish display of military might as the country holds it's first ever parade to mark the victory over japan in world war ii. eunice has more on that story. over to you. >> thank you so much. this was a major event for the chinese to be able to show case their growing military confidence. it's taken months of planning but comes at a critical time for the chinese president but authority versus faced a loss of confidence over the way they

have been handling the stock market plunge, the change in port explosions as well as the currency devaluations so this was really an opportunity for the leadership to assure up it's political support domestically and also to project power. military power to the region as well as beyond. we saw 12,000 troops march through central beijing and about a thousand foreign troops as well from 17 different countries including russia. the russian president was here and we also saw some new war he dwipment, new weapons that have never been seen before by the chinese public. in particular there's one antiaircraft carrier missile that many military experts say is aimed at the u.s. aircraft carrier in the pacific ocean. now the international support is

relatively thin. many dignitaries were in attendance. part of that is because of the tone of the parade. a lot of the press and propaganda around it has been openly hostile toward the japanese and many are uncomfortable with that. a lot of that feuding, concerns among the neighbors in the region about what a rising china means for this part of the world. the president spoke in the military parade and he was very clear about the message he wanted to send. that is that china's rise was peaceful and he was also emphasizing that the country was going to down size it's military. the army was going to cut about 13% of its 2.3 million strong pla or people's liberation army and that means 300,000 people all together and part of that we

learned in the past hour from the defense ministry is part of an overall reform of the military as well. back to you. >> eunice yoon, thank you. >> worsening fears of the slow down in china is one of the reasons stocks have been in sell off mode. richard, china concerns amply identified by the recent move to devalue their currency and also that weak manufacturing print that we got earlier this week also raising fears but the question is, are those fears overdone? that us gdp print much higher than expected. the u.s. economy can expand despite the slow down that we're seeing in china. >> so far it's been done in what's come across as a more hap hazard fashion. there's a significant

deleveraging going on. there's been a significant amount of credit that a large number of people has talked about and you're seeing a significant shift in flows and the chinese are having to intervene a lot less. selling off their reserves and issuinging liquidity. that is exacerbating a lot of this indigestion so overall it's more the fear and the uncertainty factor than the fundamental issues of the china fears. >> what about the use of the short-term liquidity operations. something introduced back in 2013 but rehe emerged as a financial tool used by the central bank of china. can they reverse slowing economic growth? >> they're about unwarranted tightening in the financial system. they don't generate growth. they just reduce the drags coming in from the rest of the economy. >> what else is left in the

pboc's tool box? we've seen a number of liquidity injections in the last couple of weeks. the devaluations of the currency and not to mention five rate cuts. what else can they do? >> you'll have to see a lot more support in helping nonfinancial corporates rollover their debt. we're seeing that from a lot of the local governments. a lot was delayed because of the volatility this year. you'll have more issuance than you typically would. it's less about stimulus and more about reducing the cost of rolling over debt because that's where it is. >> would you buy or sell at chinese equities here. >> if you have access you're still selling. we're not at the bottom yet. >> i'll leave it there. thank you for joining us here on worldwide exchange. head of global strategies. >> keep your e-mails coming in.

worldwide@cnbc.com. you can find us on twitter. still to come here on the program we'll be hearing from the ceo of sony as he talks hacking, new smartphones, business strategy among other things. stay with us. we'll get more on trading ideas coming up too here on the show.

welcome back. major indices closed the session out with a bang. investors are eyeing the ecb meeting amid calls for the central bank to consider further quantitative easing. >> syngenta in a bid of pursuit. he has not ruled out an m&a deal in the future. >> vivendi shares falling in paris after a number of banks cut the stock. >> a show of military might. china puts it's economic woes to one side as it holds the largest parade ever to mark the anniversary of its victory over japan in world war ii.

>> hi, everybody. listen half an hour ago we had the euro zone august business growth at a four year high and now we're looking at the u.k. growth set to fall after service sectors showing some weakening. 55.6. that's down from july as 57.4. it's also quite a bit lower than the reuters poll of 57.6. the lowest since may of 2014 according to market. the business component 57.2, the lowest since april of 2013. composite pmi coming in at the lowest level since may of 2013. also disappointing, the pmi surveys showing us .5% quarter on quarter. >> some analysts point out that uncertainty about the scale of china slow down could be priced into that number. that's something to keep in mind.

as you pointed out this services sector coming in much lower than expectations. recording it's weakest growth in more than two years last month. keen eye on the services sector here in the u.k. let's take a look. we're higher following the positive session overseas in asia as well as on wall street. the dow gaining better than 300 points in yesterday's trade. the ftse 100 up by 1.8%. xetra dax up 1.7% and similar gains in france and italy as well. remember as you were just pointing out that euro zone services number coming in at a four year high. quite reassuring ahead of the european central bank policy meeting in a couple of hours. >> the bank of england is saying their net lending -- the net lending rather by participants to smes is 500 million pounds.

and at the same time just while you're glancing at some of these boards we're just hearing that the press conference between the hungarian prime minister and other european leaders talking about the crisis taking place. this is after a meeting with the eu leaders to discuss the refugee crisis and some of the things they're saying are interesting. without strict border control the eu migrant quotas are are to come. the migration problem isn't european. it's a german one. it's not a european problem. it's a german one. i'm wondering whether or not he's going to get flak for that basically. he's saying it's under threat at this moment. migration problem is not

european it's german. on the morning where we wake up to newspapers where you're looking at a child that's been washed on shore on the european shores. washed on shore in europe. it's extraordinary. >> hungary responded by erecting a fence. when you take a look at the migrant crisis across europe hungary has been one of the countries hit the hardest. >> but this is a humanitarian crisis. it's about helping people in need and figuring out how do do that best. germany taking in four times the amount of the entire eu and other countries sitting on their hands. iceland saying they'll take in 50 people. it's extraordinary from a humanitarian point of view. you have people dying and children being washed up on the shores, you have to be really desperate in order to put your entire family at risk in small boats to try to get to a better life. >> at the same time they need to figure out on the economic front

how they handle the influx of migrants coming in and that's the commentary we're looking for across europe. >> u.s. treasury secretary jack lew is criticizing the way china announced changes in it's currency policy last month. in an exclusive interview lew adds that china needs to continue reforms aimed at shifting from an export to a consumer-based economy. >> there's an economic and political reality to things like exchange rates. and they need to understand that they signal their intentions by the actions they take and the way they announce them and they have to be very clear that they're continuing to move in a positive direction and we're going to hold them accountable. >> now jack lew and his chinese koun counter part are attending meetings on friday. you can see the exclusive

interview at squawk box today at 6:00 a.m. eastern. >> the imf is also offering some advice to china and the world's most powerful central bankers. the fund has called for monetary policy to remain acocommodative in the face of slowing growth. to the fed the imf urged the board to keep it's decisions data dependent. to the bank of japan, he is advised to stand ready for further easing. this coming from the imf. some advice from them and to the ecb, the imf is saying it should extend quantitative easing unless inflation picks up sufficiently. i wonder if mario draghi is mentioning to the imf at this point. >> that's the big question. >> usually they don't. >> at least one central banker has shown he does not agree with the imf. earlier this morning bank of japan board member said further easing would have only a limited impact on the economy and warned of the long-term consequences of

maintaining the bank's bond buying program. we want to know from you what advice would you give the world's major central banks given that there's a lot of advice. knowledge exchange taking place between the imf and various central bankers and vice versa. join in on the conversation here on worldwide exchange. what advice do you have? where ever you're sitting? in japan, in europe or the u.s. what advice would i give? i think it's clear that the fed is not just data dependent. they are market dependent given the commentary we got from jackson hole over the weekend where various fed members said that china and these external developments like the market volatility could indeed impede growth and have an impact on the picture. if that's the case the fed in general needs to make it known that they're not data dependent but market dependent as well. >> if they were to say that then you're giving the market free

reign to run the fed. you could have big block trades put on and massive moves and know that the fed would be reacting. >> not necessarily saying that traders have -- they have a seat at the table but i think it's important for them to acknowledge the fact that these events that are taking place overseas have an impact on the u.s. economic policy and fiscal policy. >> i think they already are. >> who is owning up to it and saying we are considering it? >> sure. i want to say they already are. >> what would your advice be? >> i'm thinking more kind of don't act unless it's really necessary and don't feel you have to hike unless it's really necessary. we keep talking about we need to normalize things but who says normal is normal. the environment changes. the environment that we're in now. the world that we're in now. the trading that we're in now. everything is very different than in 1960 and 1940. it will be different in 40 years time. i'm not sure we have to get back

to where we are but you might want to think about how do you unwind with the least pain. >> earlier today cnbc spoke her and she says there's still questions that need to be answered. >> people tend to throw the baby out with the bath water when it comes to em. no matter how much good news is coming out of india you'll see a caution because of how aggregated people's investments in em tended to be. that said we're starting to see more of a country by country focus. india it's all about mody and his reforms. can he keep up the pace? can he keep up the changes? will we see the shift to smartphones that will drive the e-commerce that's been a huge boom to many businesses in places like china or will the

bureaucracy tie him up. one of the interesting things to feel they continue to be on pace is the recent headlines about the tax issues. foreign investors have faced it and the retroactive nature of some of those actions and the announcement that india will step back from that and allow investors to look forward rather than backward. >> to sheila's point simplifying india's tax structure has been a big problem for the prime minister of india. but the chief economic advisor said despite the political instability they'll still be able to see gdp growth of around 8% this year which is just way too high. extremely optimistic. >> even though we saw the print of 7% last time and we were anticipating 7.5%. we're inching lower whether it be china or india. >> exactly. but there's a rival competitive factor between china and india. now that china is slowing down india feels a pressure to

rebound and show that they can be the growth engine, if you will. >> no, definitely. >> we'll talk now about one specific company. sony. sony pictured reached a settlement with nine former employees that filed a lawsuit claiming their personal data was stolen in last year's hacking attack tied to the movie the interview. it exposed information of thousands of current and former employees. it had embarrassing e-mails to executives leading to the exit of the head of the studio. sony has unveiled the world's first ultrahigh definition smartphone in berlin. it boasts a display with more than 4,000 pixels. comments from sony lead some to believe it was exiting the smartphone business. karen asked the ceo if that's what he meant.

>> we need to be more smart and it's about a profitable business. >> what are you doing with the pricing? because there's been a lot of criticism that you've gone after the mid range where it's fiercely competitive. some people say you should take the fight to am's door. will you do that? >> what we have done with all of our flag ship models is that we have always been shooting for the mid to higher range end of the market where, you know, because we believe that our products can command a premium in the market. >> there was no reference today to sony pictures and the recent numbers are 12% sales slump. is this a hang over from the cyberattack last year and what can you do to try to arrest the slide. >> this is not really something that is trivial to the cyberattack per se. it's just a pipeline issue and

we have recently brought in new management in the sony pictures studio to make sure that we have a fresh pair of eyes to take a look at the studio operations going forward. >> so you're confident that a hack of a similar size couldn't happen again? >> well, we beef up security every time and look at this all the time. there's nothing perfect in that space but we try to do everything to make sure that our information and all the assets that we have are well protected. >> i wanted to ask you about the overall strategy because you're halfway through this turn around. is sony still going to be a very strong consumer products brand or do you see it going down fact of being innovator solutions. >> we pride ourself on the fact that we have strong businesses in the b to b space. but at the same time we believe we can make innovations and

products that really provide not just creative input but just a lot of emotional value to our customers in the electronics space as well. we're committed to the b to b space but consumer electronics space as well. >> now the world's third largest smartphone maker trying to muscle in on the high end market. phil spoke to the ceo at the trade fair in berlin about breaking america. >> we have more than samsung. so globally we grew very fast. we are the top of the smartphone supplier but every month and every year we're increasing and also you know that's huawei, i think that's this year, only 40%

of growth but up until now we have over 70% of growth. >> huge growth numbers in china and parts of the world and you want to compete to become i'm guessing the number one smartphone manufacturer in the world but is that possible if you can't have the american market. >> the american market we definitely need and we on the face of change and transformation. >> now you can read more about huawei's new device and smartphone wars and all the latest from the trade fair in berlin. head to our tech transformer special page on cnbc.com. a lot of great tech content on the site. be sure to get on there but clearly the smartphone wars heating up. i find it fascinating that players like huawei and others

are trying to aggressively expand outside of their respective markets and into the u.s. but without that brand appeal can they actually win? >> it depends on what they offer in the end, doesn't it? and i wonder what the consumer wants as well. i'm looking at the sony smartphone with a 4k screen, new camera module. we're getting more pixels right? it's all about the apps. whether or not it's integrated. but they have a good chance. why not. >> coming up, central banks and bankers in the spotlight. we speak exclusively to the ceo in the next 30 minutes or so. >> plus tractors in paris. we get the latest from the french capital as farmers gather to protest falling food prices. don't go away. you're watching worldwide exchange.

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welcome back. mario draghi is expected to strike a dovish tone today when the governing counsel meets later on. this has some saying that more easing could be on the way. carolyn joins us from frankfurt.

will they really ease at this point? >> that's the big question. they're going to sound very dovish but will they announce an extension of the current bond buying program past september 2016, that's what a lot of people could be hoping for. whether we actually get it, that's the big question. but if you take a look at oil prices and look at the euro dollar exchange rate and then the stronger risks of china, well, yes, there is actually reason to be dovish. i want to get to my next guest, a very important one. he is the ceo of the french banking giant, thank you for joining us here at the conference in frankfurt. i just mentioned china and for two months or so we have been grappling with the question, how bad is this china slow down? have the markets found a bottom? what are your views? >> it's not a surprise. we personally saw early signs of slow down in certain sectors and the property sector beginning of this year and i think it's more

the macro economic situation which is important and the market turbulences as much. probably the sign of this complex transition of the chinese economy. the need to address the overcapacity in certain sectors. it might take some time. going forward, i think china can address the issue. second we don't think it will derail. the progressive improvement in the euro zone economies in one hand and secondly the robust growth we see in the u.s. >> in the meantime though it's certainly giving us a lot of market volatility and that's been really good for your business and any other banks. in the second quarter we saw a good trading revenue result from you. do you welcome more volatility? >> if there's too much uncertainty and volatility

people won't issue. we have in this period of time where there's a question mark on the fed decision, china, fundamentally i remain positive as i have said on the euro zone economy and on the asset class of europe and equities. >> i think you made a really important point about there coming a point when market volatility becomes destructive to client confidence rather than constructive. do you think after that flash crash that we saw in the dow last week when the dow dropped 1,000 points, do you think market confidence has really turned a corner where it is destructive rather than constructive? >> it's a question mark. >> it's one of the most quite months of the year. people from to digest the whole thing and see what the fed is doing. there's fundamental drivers which support the economies. low energy price. low rates. i would guess for the ecb but

also the japanese central bank might have qe policy for sometime an overall i would say a rebuilding of confidence so i remain relatively positive for the next 12 to 18 months. >> you just mentioned the ecb and we'll get the ecb decision and the press conference. we're expecting dovish talk because some of the factors i just mentioned there a couple of minutes ago some people are speculating whether we get an extension of the bond buying program. is that something you would welcome at this point? >> i don't think so. again. our scenario is a moderate progressive improvement of the growth in euro zone area. knowing that our scenario is slightly lower than the assumptions made by the european commission of the ecb by something like 50 basis points. something like 1% growth this year and the euro zone and 1.5. second it is the first month where we see an increase of the credit provided to corporates

for the full euro zone area. so it seems to me there's a clear improvement of the financing conditions. credit is flowing better at the lower rate so i don't see a reason to intervene today and i don't think the market turbulence is enough to justify anything. >> you said we're seeing improvement in the credit standards. i just wonder to what extent that is actually down to the ecb because a lot of people here in germany at least are saying well, you know what, ecb qe isn't helping now. we're not seeing the desire tick up in inflation as we had expected but then there's so many criteria we could judge it by. do you think that by and large it's been successful? >> yes in limiting and reusing the interest rate across the euro zone which means helping banks also to lend at lower rates and we've seen the improvement in countries like spain and italy. with lower interest rate to the economy and we've also, the

implementation of the banking union with the strengthening of the banking system in europe. i think we see also bank which is are more able to get balance sheets. what is important now, what is very important now is there's not an overcalibration of the final decisions on regulation because it would be a shame to cut and to stop this progressive improvement and not enable europe to do better in the next two to three years but i think it's been successful. the inflation outlook i think you need to wait more to see that and probably 2016 would be a better year from that perspective. >> how do you feel about your home market, france? for a long time its been called the sick man in europe. now we're seeing credit pick up a little bit. pmi numbers are looking patchy. growth weakened from the first quarter compared to the second quarter. where are we? >> first of all, france is a

character. we have them to be implemented. we have a gdp that did not go down like in other countries. the reground is progressive. we stick to 1% gdp growth. 1.5 next year. on one hand, yes, we have not seen the pick up of investments and we've seen an improvement of the business climate. we see more investment projects so we are seeing this points higher guessi-- progressive improvement. it's more business friendly and to remain consistent in support of the community in terms of reduction of taxes so they can improve corporate margins and then consider investments. >> and the current government is giving you that trust. >> yes. >> when you take a look around the world, when you take a look

at all the businesses and you're a globally operating bank, what is the single biggest risk that you're facing right now? is it china? is it the volatility or rate hike? >> russia is under control. the question whether there would be an increase in september or december isn't a big deal. >> it doesn't matter to you. >> as the ceo of a bank i look at the long-term. the next ten year. how can i build a resilient business model in this world that is uncertain, volatile and our role is to take risk so i can ensure the risk i'm taking today will not be problematic in three or five years time. not just for the next quarter. two elements i would say which are that we have to factor which are actually the main challen s

challenges. on the one hand the rules of the game are not clear. we would like to have clarity and more importantly avoid an overcalibration because again our commitment is to finance the economy. we want to do that. we have good businesses. we want the regulatory frame work which remains reasonably balanced. second the impact of the digital technology. in particular on the activity, for me, from an aversional point of view it's the biggest challenge. it's not something for the next quarter. it will take a few years but we need to address now the whole thing and in order to be successful in this new economy we need to be agile, innovative, there's a lot to be done. we're doing it. comfortable with what we're doing but it's a very important ch challenge. >> the outgoing co-ceo said here at the conference i think the bank best positioned is the one that can anticipate capital and