bnp have their own transformation plan as well. their 2020 transformation drive.s hand in hand with improving their technological offering and reducing costs. what we see is that the operating expenses are up 4% year on year so i sat down with the cfo yesterday and i asked him about those two points what is going on on the cost side of things, why are they going up and not down? and the second, should we be worried about the investment banking business >> two reasons, indeed, we are doing this transformation. we're having already this half year, a half billion of investments which will probably ramp up to 1 billion those costs should be ending next year. you have to look through this. we should take that out. costs are showing two different trends there's one trend in the businesses which are impacted by the low interest rates and the like where you have the costs coming down. on the businesses which are focused on the growth, like specialized business that i talked about, we have cost evolutions so, yes, we're doing investment for transforming the bank. we are ac

bnp just reported second-quarter profits, beating estimates.oining us now from paris, the cfo of bnp. a real pleasure to have you with us. thank you very much for joining us. let's talk a little bit about the performance of the bank over the last quarter. are you disappointed with the performance in the fixed income side of the business? lars: good morning, anna. bnpe take a generic look, posted solid results. this in the context of a generic pickup, economically across europe, which can be also seen and creditness outstanding going up by 3.7% year on year. this also delivering the bank or allowing the bank to deliver equity of 11.2%. this growth in europe is best seen in our specialized businesses, for example, international financial services, which are really picking up well. our domestic market is also picking up, even if faced with persistence of low interest rates. when it comes to the point that you mentioned, you have to take into account a negative effect. compared to a year ago, the economic context is less favorable for cap, particul

bnp paribas are -- bnp parabar is trading higher. such a tough trade. i can't believe we still talk about banks after a global recovery trade. they're not a sector we get very excited about. the smaller peripheral banks are still the problem of nonperforming exposures and trying to drive those down as capital requirements rise. for the big ones, where is the growth? we talked about they would be fixed income revenues. pretty hard forecast quarter to quarter, let alone a group story over the next two to three years. there are a lot more exciting stories out there. a little bit of yield chasing. underlined, nothing much to get excited about. i don't want to get on the bad side of bankers here, but it seems to me if you want to earn a ton of money, you go work for a bank. as an investor, you are saying that is not the place to get returns. is a cost problem? andrew: i think it is a combination of lack of topline competitioneased into this mediation, rising costs with regulation, capital requirements. at the end of the day, the banking system only grows mon

michael simi,'s as it strategist at bnp paribas. asset strategist at bnp paribas. there will be a lot of focus on the political dimension. we heard from esther george. the political pressure will have no impact on their decision-making. is that the messaging you were expecting to hear? michael: the markets built up a lot of focus on this after trump tweets earlier in the week. i think what is really important going and it's kind of weather markets expectations have now got to. there is the case that the panel needs to outright dismiss those comments or is it if he says nothing at all, people might view that that he is viewing towards being more dovish? over-interpret the recent news flow. the panel will be optimistic. maybe a little bit cautious on the outlook. probably going to be pointing towards two more rate hikes this year. as esther george said, that is not a commitment. they need to see the data for the rest of this year before they would look to raise rates in december in addition to the one in september. in terms of market expectations, this chart very sim

pnmarie: i'm looking at bnp arribas. these banks are exposed to turkey.report in the financial times that the ecb is said to be concerned about their exposure. the ecb saying they don't see that situation critical yet, but concern that these turkish borrowers may not be ahead of this week is in the lira. said before, steve is one of the few to profit on that subprime mortgage crisis. he spoke to bloomberg tv just last week about his bets on turkey. we do about the tape. >> there turkey, which everybody knows about. this is not a systemic problem, but there are two banks in europe that have a fairly large exposure to turkey. those would be bbva and unicredit. annmarie: fairly large is right. bbva owns over half. unicredit earns about 40% of another turkish bank. much.thanks very we are going to keep an eye on those assets and everything related to turkey. joining us now from ingres -- anchora. the lira taking a battering. what is the latest on the turkish response to this. are the institutions like the central bank or the president willing to do something

bnp paribas off 3.38%. the report did say the ecb did not view the situation as critical speaking to cnbc, i had a chance to speak to the cfo and he talked about the exposure to turkey >> i think the new government can still be proactive addressing the two biggest witnesses the country has, inflation and current account deficit. we hope they do. in the case of guarantee, the performance of the bank was very strong, top line growth was significant. we wanted to play it safe. with that we were able to increase the bottom line on a year-on-year basis so we will continue to play it safe, act defensively, and we think we can weather the storm well >> for more i'm pleased to say we're joined by peter kinsella, rate strategist at the commonwealth bank of australia pleasure to have you join us on the phone today. it seems the concern is about the risk of turkish borrowers facing the risk of default how real is that given your view to what's going on with the lira >> i think it's a justified concern. if you look at

. >>> let's bring in stephen friedman from bnp paribas. we will talk about eurozone gdp.have to first start with turkey your bank is not only covering this but is also involved in this your stock has come down as well what has your team established as the possible contagion risk from turkey globally >> at this point it seems like a local event that should be contained to turkey. clearly when you have a situation like this, investors naturally look around to see if there's other countries that share characteristics that turkey has while that may be true with high levels of public debt, the fact that u.s. and turkey are engaged in a period of political tensions makes the situation with turkey worse. >> it's like the situation with greece when the situation was going down, people were like why do we care about greece? it's the high levels of debt ratio to gdp and the current account deficit. how confident are you this will be then contained? >> fairly confident. it's understandable why investors are taking a more cautious approach. that might contain until turkey engages in

edmund shing bnp paribas is still with us.quity point of view, the ftse 100 -- even the ftse 250 are doing pretty well relative to their european peer group. has been a big dow performer but in euro adjusted terms, the ftse is doing similar numbers to the dax, i.e. negative. not a great performance, but you like u.k. assets. edmund: we do like u.k. assets and partly because of the sector breakdown. if you think of the biggest sectors, you are talking oil, pharmaceutical, and the mining sector. pharmaceutical sector has been performing well everywhere and we continue to like that because it is still a long-term demographic story. oil, i think the impact of u.s. sanctions in iran will continue to be hard and our oil strategist think sprint will creep higher toward $85 a barrel sometime early next year. we are well below 80 at the --ent, so that implies 80% 8% to the upside. are these oil companies going to have to worry about price drops anytime soon from the demand side? when you look at the demand curve, does it ever start goi

you've got the former head of the bnp, nick griffin, praisingjeremy former head of the bnp, nick griffin the clue klux klan chiefs also coming out in support of him. -- klu. this is also coming out in support of him. —— klu. this is a man, one of the greats tenets of his identity, he says, is that he has campaigned against racism his whole political life. nick griffin is arguably the man who has posed a real threat to british politics with his divisive racist attitude. as you said, it has beena racist attitude. as you said, it has been a really difficult time for the labour party when it comes to this issue. why have they not managed to get a handle on this, do you think? this has gone round and round of new developments all the time, this story. i think partly it is a case of, i know mr corbyn never thought he would be labour party leader. he never was ambitious in that way. and so never was ambitious in that way. and so he has always spoken very freely. and he is somebody who has campaigned for the cause of the palestinians whose whole political life. —— his whole political life. you c

the -- bnp paribas and others.ct on emerging markets where you are, what effect is this having there? you're already seeing an impact, we've seen some of the emerging market currencies under pressure, notjust because of this but because of the ongoing trade trends and is, as i mentioned, and the us dollar has strengthened and as a result south—eastern asian currencies in particular have been weakening —— trade tensions. there's always the worry when something like this happens here, the spillover effect in asia, it brings back memories of the asian financial crisis. nobody is saying that's where we're at at this point in time. two analysts i've been talking to say any long—term effect is likely to be contained. here's what one said from civ contained. here's what one said from c iv bag said earlier today. going forward it is strong, the fundamentals. they are vulnerable but they are not in the same situation as we saw in 1998 when we had the asian financial crisis when the exchange rates were fixed at thisjuncture.

you have the head of the bnp and ku klux klan chiefs showing support for comments he made, and thesecomments, let me just make sure i get this, i don't want to misquote, but he said that zionists having lived in this country for a very long time, probably all their lives, they don't understand english. he has since said he was talking specifically about people who believe in zionism as a political belief, but that word has become so difficult and it often is conflated with meaning jewish, that i think it has insulted a lot of people. it does seem like we have been talking about anti—semitism in labour for a long time now, and it is interesting how this keeps running as a story. it won't go away. in a normal political cycle, jeremy corbyn of anyone else would be toast, but i think because of the backdrop of brexit and everything else he survives. the other thing about this whole story is that you have had the former head of the four home affairs select committee say i am not prepared to support the racist anti—semite period, it is overfor me, incredibly explosive. this is a labourmp,

we're already seeing some big global banks unicredit, bnp paribas, those stock prices have taken hitshey're some of the biggest banks in their country if their capital goes down, one wonders if they will lend less which could spill over to their growth economies and this thing we talked about with tariffs watch the trade war. not a lot of heavy hitters in trade between the u.s. and turkey, but it's symbolic. five reasons why you need to watch and pay attention to the turkey story let's bring in james lew from clear n clearanomics when you look at your models, how closely are you paying attention to the story. >> we're watching the contagion effect all the investors are worried that turkey could spill over to emerging markets >> do you think it will? >> we think it will be contained. we seeing some contagion effects with fragile emerging market currencies, but the economic impact is limited. this is not greece or brexit we're not calling into question the solvency of eurozone players. this is not china like we had scares in 2015 we're not talking about the broader fragile five complex

italy's unicredit, the netherlands‘ ing, and france's bnp paribas are also on the hook.burak guven is from birkbeck university of london. first of all, tell me what you think is the main cause of what's going on in turkey right now. what is behind the financial turmoil that i think you summarise it fairly well. turkey has had a fairly unsustainable growth model for many years now based on high current—account deficits, consumption —based growth which made a very foreign capital to panic, and on top of that we have had some political strain in recent months. having said that, for a long time this was not an existential issue for turkey, the growth model itself, because turkey stuck to fiscal discipline, it had a very predictable policies that, in the international markets were flush with liquidity. all those preconditions have now fully shifted and that exposes turkey to all sorts of problems. that shift, how do you think we can re—calibrate things? what you of the potential medium—term measures for stabilisation and recovery of the turkish economy? i i think i policymake

bnp paribas is one. unicredit shares were halted.had some big exposure of course over from italy. what we know generally from r.b.i. analyst is that bank plans on turkey total $223 billion. two thirds of those are those three banks. they are really highly exposed. julie: it looks like unicredit has opened back up and italian trading. i'm looking at the bloomberg here. it is down about 5.5% after that halt that we saw earlier. definitely some broad pain among those european banks. thanks, taylor riggs. appreciate it with our stock of the hour. caroline? caroline: sticking with that theme because as the european close coming up. we will be chatting with mark barton and a look at how we see the lira affecting today. the dollar up almost 14% versus the lira, at a record low. the japanese yen is the only major currency up. it's the search for havens. the euro spawning -- responding to moves with concerns about the banks. really we are seeing a selloff across the board in europe. we are seeing the worst day in about a month since the stoxx

and deutsche bank. >> bnp was a bit disappointing, good equities with fixed income.fficult to say. you bear in mind the u.s. was up here on your. still trailing in terms of fixed income. very strong. european banks have been underperformers, is there any numbers that we are starting to turn the tide? >> consensus seems to fit with reality. we have small beats rather than misses and there were lots of disappointments. capital is going the right way. i think if anything, the cuts to revenues which is what happened, they would come to an end. we're not fully there yet. guiding urine year. in aggregate we are seeing the wiset of 3% or 4% revenue over the past 12 months. that should stop. warnings from big industrial companies related to the trump trade tariffs. are these banks being affected at all yet or are they also warning that a trade war could hurt their business in the second half? jonathan: if anything they have been sanguine. standard charter is not saying anything yet and if you look at credit costs, they are at record lows. we have had the new implementation w

that is our guest host, chief economist at bnp paribas.o have you back in the seat even though it is a bank holiday monday. the yuan, did they want to stabilize it or ticket higher? do they want to see what we saw on the crowd 2015? i think the mexican peso is reluctantly rallying. according to the resources. -- according to three sources. anna: interesting what you say about china. our colleague on the mliv blog saying this tilt is positive for imports, could be a good spot for president trump. what does it tell us about opening the chinese economy? that's it for daybreak europe. "bloomberg markets: european open" is next. ♪ this isn't just any moving day. this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi exp

if you only had a bad scenario priced in, bnp paribas, you're talking about the most safe, sound bank the jpmorgan of europe you're talking about somewhat of a territorial market for bnp, turkey is probably the fourth, fifth most important market if you think of bbva -- they're up more than turkey it is going to be bad for the banks themselves i can't think of it as lehman brothers for the global economy. >> thanks for your perspective, vince. >> thank you >>> coming up, lessons from the crisis author james freeman takes a closer look at the lessons from what happened in 2008, ten years ago. and previous crashes as well through the lens of citi group >>> plus, tesla's board meeting to discuss taking the company private. we'll talk aut tbohe possible outcome. stay tuned you're watching "squawk box" on cnbc when my hot water heater failed, she was pregnant, in-laws were coming, a little bit of water, it really- it rocked our world. i had no idea the amount of damage that water could do. we called usaa. and they greeted me as they always do. sergeant baker, how are you? they were on it.

when bnp paribas looks at that, how critical is it?ou can assume if we and the yuan depreciation from the dollar, around 6%, if you had a 10% tariff on chinese imports, a lot of that has been offset. it is difficult to imagine the chinese government to allow deteriorate 25%. it is difficult to offset the impact on chinese growth. if they allowed such a big depreciation, you would wonder about capital flight. it is a significantly bigger step than the 10%. we can adjust to that. 25%? not so much. more to talkmuch about. central banks and the bank of england as well. brian up, we talk to johnson from barclays as we look at tesla and the automobile economy. stay with us. this is bloomberg. ♪ ♪ this isn't just any moving day. this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving... simpl

among them, bbva, unicredit and bnp paribas.ets, including asian stocks, amid turkey's currency crisis. that's all the business news. i'll be back with more throughout the afternoon. a killer whale has stopped carrying her dead newborn calf, 17 days since she was first spotted off the coast of vancouver island. the mother, known as j35, covered 1,000 miles during this record breaking mourning period. killer whales have been known to carry their dead for a week. we've been hearing from richard sabin, principal curator of mammals at the natural history museum, who told us about the importance of the bond between a female killer whale and her child. we are finding out more and more about killer whales as the years go by. they are incredibly complicated in terms of their behaviour. genetically, they are different. across the ocean, they have different patterns of feeding, communication, the way that they transmit information from one generation to the next. we are learning things all the time about killer whales that, actually, some

paribast, bnp particularly exposed after the currency lost one third of its value this year.'s supervisory measure has begun to look more closely at european banks tied to the country. the watchdog does not see the situation is critical, but turkey contagion felt across all of the sectors on the stoxx 600, every single one of them declining. gains as a whole down by 1%, the biggest drop since july. let's move on and talk about the u.k. economy, which we will talk about in a second, dancing back -- bouncing back. on a quarterly basis, rose by .4% between april and june. for the month of june, output rose .1%, the weakest performance since march. sterling falling for a seventh consecutive day against the dollar, worst run since may the fourth, lowest level since june 27, 2017. also heading for a fifth weekly drop against the dollar. that is the worst run since january 2015, biggest weekly decline in one month, 1.6%. options markets signal investors are -- in the absence of tangible process -- progress in brexit talks. the cost of hedging against the collapse in the pound agains

bnp paribas reported second-quarter profit, beating estimates. revenue falling 17%.re you disappointed with the performance and fixed-income side of the business? >> you have to take into account a negative effect and also the fact that compared to a year ago, the economic context is in particularly in europe. continuess, the bank its transformation plant wrapping up -- plan ramping up to 2020 and continuing sustainable finance. >> standard chartered, one of the biggest financiers of global trade has reported a 34% increase in pretax profits for the first half of the year, beating analyst estimates. the chairman also played down the trade war thread. its statement, saying direct exposure to the risk of u.s.-china trade tensions is limited. talk to me about cost. this is what investors are worried about. where will you spend the money in the future? >> cost is a second order issue. we are improving the profitability of the business. , which is where we wanted to be carried the costs were up about 7% year on year, a little less than the constant foreign exchange basis

and off a quarter percentage point, this is not as bad as we saw, but numbers not looking good for bnparibas. we see equities looking pretty good. at a three-year high, 12% increase in revenue. and let's take a look at what is happening in gnn. this is what i want to show in terms of assets. down across the board in terms of bonds. we are seeing a global selloff. yields hit three percentage points in the u.s., but it started in japan with more volatile trading being allowed. yields push higher. yields push tight in europe as well -- higher in europe as well. so we see the sentiment, even as risk aversion is not plowing into the usual havens like gold, gold is not up, metals down. let's take a look at the fx market. i want to keep an eye on wcrs. generally, it is a strong day for the u.s. dollar. we got numbers out and we have been digging into them in terms of debt, the deficit rising, more debt sales in the next quarter for the u.s. the canadian dollar is trading up. the british pound is flat. and we hear from theresa may, no rest for the weekend -- for the wicked. she is cutting her

. >> bbva and bnp paribas suffering fears over turkey.grading the stocks. >>> bayer at the u.s. low. popular weed killer can cause cancer >> shares in gam holdings falling as the swiss fund group announces it will liquidate nine bond funds following the suspension of the manager who ran them >>> turkey stock market hit the lowest level in dollar terms since march 2009 as the lira meltdown continues to gain pace and diplomatic spat between washington and policy of home. what you've got, 3.2% slide in the market 2.5% of the open it improved and now it's going back in the opposite direction volatile trade is playing out. if you look at the pressure points, one of the banks there, down close to 10%. another big bank@the top of the charts the banks, as you can see, under more selling pressure. the turkish central bank announced it will provide liq d liquidity as required. it will monitor market and prices and take all necessary measures to maintain stability announced climate ratios have been lowered 6.76 we were down 7 at one stage, which is

reporting that the european central bank is getting worried about ecb exposure to turkey unicredit and bnparibas among the biggest banks with operations in turkey both of those bank shares are down both off more than 3%. let's turn back to the u.s. markets and your money this is the one number you need to focus on today. that's the nasdaq. the nasdaq is up for eight straight sessions as we noted, the longest winning streak of the year ten stocks are up more than 11% in the last month. let's bring in jeff hirsh from probabilities fund management. what was the probability that the nasdaq was going to have this kind of -- everybody said tech is over rotate out how surprised are you? >> i'm a bit surprised it shows what's going on with trump, everybody is on the seasonal bandwagon how weak august is to expect more volatility. >> low volume, blah, blah, blah. >> didn't happen seasonality is not perfect sometime there's are other forces that trump the -- >> pun intended. >> pun intended. but if you look underneath nasdaq, the advance/decline line is dipping the broad strength is not there. it's

i think maybe there's a 5% impact, worst case scenario the market is down 10%, the capital ratio of bnp a safe bank probably being hit too hard now i wouldn't chase the spanish banks yet. but the french banks are more of a sweet spot >> might have been a case of sell first, think later. i want to focus on one country specifically all the major markets today rose except for one, italy. the country has structural, political problems, debt problems they continually change administrations. italy falling 1% today while everything else rose are you worried at all about italy? italy unlike turkey is a massive global economy eighth biggest in the world. >> it's a significant european economy. i don't think the tail risks will come to fruition. you have a party that's popular now in place that has got different agendas. the market doesn't like uncertainty. i think they'll come to a deal where they say the deficit will be x the deficit will be bigger than that the european union will let them get away with that for a while we're not buying italy just yet. the tail risk people are worried about pr

unicredit, ing and bnp paribas have had losses this week but are now enjoying a resurgence.are a turkish specialist i have found out thank you very much for joining us what is your take on this crisis i know your take it's a liquidity crisis, yeah? >> we started off 2018 thinking that the u.s. federal reserve was drawing quantitative easing. we have rate hikes there as well we have an oil price rising steadily throughout the year that means liquidity is shorter. so we're seeing, yes, it's a specific turkey problem at the moment when we look at it, you know, you had a relatively small economic catalyst initially. you had the sanctions against two-named individuals in the turkish government that's kind of snowballed to where we are granted, erdogan has done little to support the market or give the markets much confidence. really at its core it's a liquidity crisis >> erdogan says literally as of the last minute we have been taking necessary measures regarding the economy. it's important we keep a firm political stance on the first point, would you disagree they've been taking

just like the muslim bnp like the separation and caging of families. like immigration raids, state sponsored forms of hate. but in many cases, state violence actually leads to hate violence. so later in her story, jeanette actually talks about when she took sanctuary at a church in denver. people threatened to blow up the church. because they had given her sanctuary. this is the end of her testimonial. as i continued this work in the years ahead, i knew i would experience racism and hate. but i will press on because i want a better future for my children. i also know that one day, i may be forced to leave this country. but it won't be without a fight. i will protect whatever earned and built. i will protect my family and the love and community we enjoy. and if i am deported i will hold my head up high. from the day i arrived more than 20 years ago, i fought for what i believe. my children will continue long after i am gone this is our home. the next story i'm going to read from is alexandra brodsky. a civil rights attorney who was viciously cyber troll

so santander is active in the market bnp, european banks, so the sector will consolidate around six players bank is a good bank, but we have come to the conclusion given where we are in the global macro cycle, given where we are locally, given the fact we have exposure mostly on cash loans and we could not agree on a good exchange ratio for shareholders, we have decided not to do the merger this time around. >> you have said you're not opposed to non-organic growth so you're willing to look at other m&a options down the road. you mentioned significant consolidation in polish banking over the years do you expect further consolidation the next two, three years and will you be a part of that >> yes, of course, but we'll be picky about the targets we choose something we have been looking at is the digital bank in europe there are 10 million poles living outside of poland, 2 million to 3 million in the united kingdom they all seek to have mortgages back home in poland or advanced transfers. we have been looking closely where we should and entering the eu market through a digital pocket bank. >>

unicredit and bnp paribas were flat and of concern of the ecb last week.he of turkey and on the fx side. this is year-to-date normalized of the lira and the rain. what is important to remember is that although we have seen outside moves in the last few days, this is a problem people have told me have been boiling under the surface of turkey for a long time, current account deficit, and the concerns around central bank independence and the diplomatic spat with the u.s., it has become a perfect storm. if you look at the rest of em, there was an interesting chart tracking it with the dollar. the question becomes how much spillover effect is there to the rest of emerging markets? as the dollar much more important? tom: i want to bring this up, jason, if you would. we are keeping you abreast of headlines. this is a turkish official. the u.s. should see it will not gain anything with sanctions. just an example of the stream of headlines in real-time. this is the foreign minister speaking. far more importantly is the response from the president of turkey. mr. erd

bnp paribas down nearly 5%, hsbc hitting multiyear lows in the trading. deutsche bank down 5.5%. a pretty picture. let's take it to latin america. are you getting the story now? still feeling the sting. ishares latin america, this is an exchange-traded fund with some of the best and brightest blue chips down in latin america has been hammered as a markets in the economies of mexico, brazil and argentina slide. argentina in particular, their currency also getting slapped. how is this affecting our currency? we'll get to that with our traders in just a second. let me get to tesla for a moment, trying to shift into higher gear after skidding in the final hour of trading yesterday. we do have tesla shares currently flat at the moment. literally bouncing in and out of red like a ping-pong ball in just the last two minutes. session highs today were all the way up to $359 a share, we're at $352.40. maybe it's on this. fox business has learned that the board of the electric vehicle headache -- maker was left in the park pretty much like the rest of us when ceo elon musk tweeted out he ha

bnp paribas came up short in debt trading this last quarter.ys revenue from fixed income fell 70%, trailing the biggest wall street firms. equities -- 17%, trailing the biggest wall street firms. bank's cfo.the inwe are operating in europe this new interest rate environment, so that is a point we have to be careful of. it is a point that we compensate by focusing on value-added services. are digitalization plan is also , so that is the overall element that we keep on focusing on. taylor: wealth management left profit at italy's largest publicly traded investment bank. the bank is proposing a dividend at the high end of its target range. shares of air france klm are rising. the struggling carrier posted second-quarter profits that beat estimates despite uncertainty and the search for a ceo. bloomberg spoke with the company's cfo. >> [indiscernible] -- which is good news, but of course we also have to keep in there is an effect -- quite a negative impact. francine: thanks so much. apple shares jumped in extended trade after the world's most viabl

. >> french bank bnp paribas just posted second-quarter profit, beating estimates. revenue falling 17%. are you disappointed with the performance in the fixed income side of the business? >> if you look at the result, of course, you have to take into effect andegative 4x also compared to a year ago, the economic context is less favorable in particularly in europe. but nevertheless, the bank keeps on continuing its transformation plan, ramping up to 2020 and continuing its sustainable finance as well. >> standard chartered, one of the biggest financiers of global trade, has reported a 34% increase in pretax profits for the first half of the year, that beat analyst estimates. the company's chairman also played down the trade war threat. of course, in a statement, saying its direct exposure to the risks of u.s.-china trade tensions is actually limited. talk to me about cost. this is what investors are worried about. where will you spend the money in the future? >> i think cost is sort of a second order issue. we are significantly improving the profitability of the busi

the financial times reported the sees bbva, bnp paribas has particularly exposed to the lira's plungeish lira fret -- plunged to a fresh low with concern about souring relations with the u.s. and runaway inflation outweighing a market route. the government said a groep -- set a growth target of less than 4%, down from 5.5%. lost around one third of its value against the u.s. this year. in japan, capital investment drove a strong rebound in japan's economy in the second quarter as companies turn to technology to cope with a labor shortage. -- grossrowth domestic domestic product expanded at an annual rate beating forecast. jumped 1.3%nding from the first quarter, the biggest increase since the fourth quarter of 2016. donald trump's lawyers continue negotiating with robert mueller over being interviewed. two topics remain off the table. fbi director james comey and trump's comments to comey about his investigation of michael flynn. the president's lawyer said if asked, trump would say he didn't urge comey to stop investigating his former national top security advisor and didn't fire com

it makes it more expensive to pay back all the loans to the banks that are priced in other currency bnparibas and others have seen the stocks hit in the last number of days those are stocks that we are certainly watching >>> we're watching other markets as well overseas if you're not paying attention, you should be. there are five major global markets that have tumbled into or are near a bear market, which is down 20% from it highs. look at this the chinese nasdaq, if you will, the shenzhen index down 25% from its 52-week high the argentinean -- down 23%. the shanghai composite in china, down 22% turkey, we just mentioned it, down over 21%. the russian rsx close, not quite into but close to a bear market. down nearly 19% from its 52-week highs. lets bring in tim seymour a cnbc contributor as well. this is your -- >> good morning. >> good morning. this is your space, buddy. many of those markets had been down big before. the turkey news started to ratchet up do you think this provides them another leg down >> i think so, brian the etf that tracks the emerging markets, msci, it's going to

often it is usually the same three countries, bnp paribas, spain, france, italy, those are the threeost hit because of their bank exposure but i think overall it may be blown out of proportion only if other currencies don't begin to fall. i think that is the concern right now, because you saw reaction yesterday with indonesia, with india and so forth. trish: all right. good stuff. kristina, thank you so much. scott, good to see you. >>> more analysis on the selloff throughout the hour, everyone. do not go anywhere. the market is down 258 points at 25,040. later in the show, elizabeth warren wants companies accountable not just to the shareholders but to the employees and local communities but does this mean even more red tape? president trump is defending meanwhile his tough trade stance saying our country was built on tariffs. congressman andy biggs on trade tensions. that's coming up next. ♪ you shouldn't be rushed into booking a hotel. with expedia's add-on advantage, booking a flight unlocks discounts on select hotels until the day you leave for your trip. add-on advantage. only

don't have the choice. , if you look at bank exposure outside of turkey, ing, you seexample unicredit, bnp a lot of exposure to turkey. they will want to reduce that. is that going to be also problematic for the turkish economy? delphine: absolutely. beenr, what has always scathing to some extent is that turkey has very high rollover ratios when it comes to those lines with european banks. they were getting into trouble trying to run new those lines. obviously, that would add pressure on the whole system. seen reservesy coming down quite sharply. the current account is almost entirely financed by fx reserves and some net errors in a mission. if that trend continues, we will be looking at some default or crisis potentially down the line. , thanks verye: much. delphine arrighi is the portfolio manager at old mutual global investors, joining us on this developing story. it was bad on friday, continues to be bad today. another story that is going to be difficult today is bayer. shareholders are seeing their wealth in this stock absolutely decimated. it is down right now 10.7% after 00jury awar

views.t an expert on his alix: mark howard bnp paribas, thank you for joining us.: for more on a trade negotiations, we are talking about the negotiations going on right now between robert lighthizer, meeting with canada's foreign minister as we speak to try to reach an agreement before friday's deadline. this is after reaching a preliminary deal. with mexico. here is what wilbur ross had to say on the subject. nafta to clearly wants be trilateral, and that has been a process we have been engaged in in the last year. asking canada to consider joining the agreement that we already have with mexico. david: ok, we have three countries involved. now we will bring in people who can tell us about all three of those countries and all three of those areas are joining us from rafael moises kalach mizrahi, grupo kaltex sa de cv. we also have dale moore, american farm bureau federation. and from new york, we're andy novakovic, cornell university professor. how is this being seen from the mexican point of view? will this deal, if it goes through, because from mexico business?

haslinda: peter, looking at bnp well,s, social banking as how much more upside are you intending to increasels? peter: we have been overweight in banks for the past few years in that sector is now trading at a premium. mean we can't identify a citigroup or capital one say where you are still trading much closer to tangible book. yuan is still trading at a 20% capital balked. . l bulk.tal they are a diversified bank and have shown themselves very resilient. we could well increase the financial services further. as we move away from qe and other markets -- we have moved furthest away in the u.s. but the ecb hasn't moved away, the bank of japan hasn't moved away, korean rates can go higher. think that financials overall represent a pretty attractive value opportunity globally. peter wilmshurst, thank you for your inside. still to come we have another big interview this week. we will be joined by warren buffett late on thursday in hong kong. 11:30 a.m. on the eastern seaboard. don't miss that one, this is bloomberg. haslinda: prime minister of australia scott morrison has been faced with a crush

nejra: on the curve, the 2s/10s now at 20 basis points, i was talking to michael from bnp paribas and he said one thing that could come up in chairman powell's speech would be to do with the balance sheet and moving toward short duration. some reverse operation twist. is that a possibility? james: it is possible. the fed has multiple options. it can raise rates or just wanted to tightening. if you are worried about the curve going inverted, you can unwind the balance sheet pfister -- faster. there is room for the fed to do that. that justure they do yet. the debate at the moment is on how far we go with policy. maybe next year, we start to worry about the curve and tweak it then. nejra: on the yield curve inversion, we heard from raphael he wasn't too concerned about the yield curve at the moment. other fed officials have different views. are you concerned about where we are on the old curve? 2s/10s at 20 basis points? marie: it has been in the past a very efficient indicator of upcoming recessions when the curve actually inverts. just flattening is not enough to signal an upcoming re

reporting that the european central bank is getting worried about ecb exposure to turkey unicredit and bnp paribas among the biggest banks with operations in turkey both of those bank shares are down the euro falling against the dollar after that ft report. the fear is that you could see contagion. at least that's the worry this morning as we look at turkey >> not necessarily contagion with these other currencies? they're not related? iran, the ruble? kind of weird. we have three, four different currency situations happening. can makes you think maybe it is related or at least not totally separate a lot of times the end of the world, when we start worrying about it, it starts with weird currencies >> is that your explanation for the futures? >> yeah. not down much. we had an unbelievable run back to 25,600, 25,700 we would be high weroer withoute tariffs. s&p near an all-time high. we had a good run. we wouldn't think the lira would cause the united states nasdaq to go down >> big corporate story of the morning that we're following, the story of tesla the company planning to meet with fina

bnp is a significant european bank but a lower tier bank.ll end up going away after a few day, the voice of reason from david there, settling all of us there. well-done, david. the market is still down 228 points, however. >>> i have what i think is a positive trade headline for you, david. china is not going to impose tariffs on oil they buy from america. i think that's positive, isn't it? >> it is a huge positive but it's even bigger positive for what i think it indicates. and the president of our country is holding the card now. we have the ability to narrow this trade deficit he so desperately wants narrowed with massive increase of exporting oil and natural gas to china. there is no lower hanging fruit than that. they need it. it isn't economic cosmetics. it would give a great political victory to the president. that's the way. you will only lower the trade deficit one of three ways. the way i'm suggesting or by more tariffs which is more taxes, which is the worst way to do it. or from a recession. we obviously don't want that. if you e