emerging markets currencies. commodity currencies that have moved so far. this move, this is an easy by china -- an easing by china. the reaction has been to hit commodity currencies. na, this is easing by chi which should be supportive of assets in the medium-term. francine: interesting. michael mccaul fair from state street global markets. manus: china has released pictures of the new 100 yuan note in circulation from november. the pboc says it would be harder to forge. but easier for machines to read. the design is select to the 2005 series -- is similar to the 2005 series but has security features and is the largest note in chinese currency. francine: here's a look at what else is on our radar this tuesday morning. greece and its creditors have agreed to terms for a third baailout. manus: google is reorganizing into a company called up about. the new strategy gives the main web operations such as its search engine, youtube more independence while offering investors greater visibility in a plan to expand in new businesses. shares jumped. they are of 6%.

are currency wars a myth? my guest says currency wars are myth. yen has fallen so much and you can't devalue your way to growth. marc: given what china has done, people will say this is a currency war. the u.s. and imf both welcome what china did and there has not been any retaliation. the south korean banks have met -- china's currency moves, that same day, australia with those those eggs fell 1.5%. no big crisis. i think we tend to exaggerate these things. it sells newspaper it makes nice headlines, but it's like an arms race. we can make nuclear bombs but we have agreed we can have arms control. countries have agreed not to use their currency for competitive purposes. it is a side effect of pursuing a monetary policy given low-inflation and growth. alix: when you look at what kazakhstan and vietnam did, what is your take on that chart -- what is your take on that? marc: this is the third move by vietnam this year. we know that kazakhstan is having an oil crisis. i think economic forces would dictate the policy. joe: every day, we come in and it

the currency. move came just one day after a record 1.9% cut to the reference rate. the pboc is trying to give market forces more sway in determining the exchange rate. francine: that has affected emerging-market stocks, which have entered a bear market. the msci emerging markets index declined 20%, which is the threshold for a bear market. manus: and a report by the international energy agency forecasting global oil demand to slow to 1.2 billion barrels a day in 2016, down from 1.4 million barrels a day this year. that should mean non-opec supply growth will grind to a halt next year as lower oil prices and spending cuts take their toll. francine: let's take a closer look at the report with our chief energy correspondent and stephen king, our guest for the hour. javier, let's kick it off with you. what we heard doesn't make for a pretty reading. >> no. this is a very grim report indeed. let me give you a couple of highlights that tell the story. in the second quarter of this year, the surplus hit

on.e the currency wars are get have been trying to into this basket of reserve currencies around the world. imf coming out and saying there are cautiously welcoming these market oriented you on fixing -- yuan fixing. shortly after we saw the they were talking about major economic indicators stabilizing and showing good signs for what they are calling a stable currency. it pointed to the fact that china had a trade surplus. they don't point to how that may well be eroded in the future. they want tong support the local economy. that is what we have at the moment. unmoved.similarly that is what we have. back to you in london? guy: thanks very much. the weaker yuan has been seeing stocks stumble. is ite just hearing really that people's bank of china china jet more market? just trying to inject more into the market? trying to kill two birds with one stone. it has been struggling. this has helped a really important sector of the economy. hand, it wants to join. it would be helped if it makes it more market based. it is certainly taking a step in that direction. how much are they willing t

it is not just the dollar versus china's currency. look at the european currency. erik: even more against theu. >> the euro is stronger against the dollar. the swiss is that more than 1%. it really just froze into the trash can all of these risk models that a lot of people had, basing their decisions on and basically, a stable china currency. the question is, does that volatility -- is it just a flash in the pan? the it work itself out and markets will settle or is it strong enough to have an actual impact on the economy in an of itself? but can this much financial inmoil, 150 billion dollars market capital lost from apple since february, is that the type of thing that can jump out of the markets into the real economy? matt: you can have an effect on the fed. two days ago we were looking at 56% chance that janet yellen would raise rates in september and today we're looking at something like 40%. don't we have a chart of said fund futures fed fund futures? i think we do. you should see about a 40 in change percent chance of janet yellen will raise rates. over the la

but that should help when the currency is devalued. that should make it cheaper to sell more but overall, 90% of the sales come in china. it's a very china sen trick company. you will get some indication, i think more than the numbers i think the commentary should give some idea as to what's really coming down the pipe for alibaba and the chinese e-commerce sector. >> if beijing continues to use currency manipulation as a way to stimulate the economy is that good or bad news for alibaba going forward? >> i think overall, i would think it's not very good you don't want any feeling of manipulation anywhere but i think in the near term i don't see any impact for china, for alibaba in particular because of the nature of its business and how focused it is just on china, on just the consumption market in china and consumption is such a small part of the overall chinese economy. it's only 30% of the overall gdp so it's a long run way ahead for them so i don't think they will see an ill pact overall in the currency manipulation. >> we'll see i

big move in currencies. you see this in currencies that have been fixed.he erm crisis, how far did italy move when it went 20%. these are the moves you get when you get markets that are fixed. the problem.rux of the dollar china exchange rate is nine equilibrium and nobody knows where the equilibrium might be and where they have to stop to stabilize the economy. cant stabilizes then they get the exchange rate here. if that level of uncertainty will play these currencies around the world. coming up, which countries have most exports consumed by china? we show you the chart after the break. ♪ alix: before the break we said you would show you a chart on which countries had their experts consumed by china. leading the way is australia, south korea, japan, brazil, and japan. alix: these countries are the most exposed when china stops buying. now we are going to look at charts that you brought that people may be missing. the first one, you want to say something about oil. guest: we had a nice bounce for oil but it was technically still in a steep downtrend. we w

how significant is this chinese currency devaluations. is it desperate attempts to try to stimulate the economy? >> i think it's important to look at this in context of the currency reforms because what you're doing here is a structural move. it's not something you do to fight economic fires on a cyclical basis. this is a very managed exchange rate to one that's much more market driven and once that happens, it's not going to go back generally and so this is very much a long-term structural develop lt that i think is what the imf and the world economists have called for. >> you must admit the timing is a surprise. there's a little bit of desperation there and the telegraphing of these types of moves, clearly not very efficient. we weren't expecting it and it shocked markets globally. >> yeah, it has shocked markets but i suspect that it's not going to actually have that great of an impact on exports if that was the intention. i don't think it was the intention to really use this move to boost exports because at the end of the day you're n

yesterday, cause asked on -- kazakhstan pause currency fell. kazakhstan's currency fell.about global growth overall. matt miller asked, after china and kazakhstan's currency plunge, what country is next? >> the dollar has been plunging against major currencies, and it has been plunging in a risky environment. that is not supposed to happen. there is supposed to be a flight to the dollar, a flight to safety. there are ripple effects in emerging markets. there are two reasons the dollar is weakening. one, it was rising, so now we are on the tail side. that the euro has been used as a funding currency it to hedgere using their bets. it is not just the kazakhstan currency that is down. the dollar is also down. pimm fox: so what is the best trade right now? sure to the dollar, go along -- long on the euro? >> we like the swedish crown right now. it has had a surge in recent days that might be tapering off a little bit. the main thing is things are not going to play out the way you think they are going to play out. fox: so, go long on the swedish krona? >> yes. in the coming mo

currency markets mixed as well to the downside against the greenback, the euro currency right now downyield on the tenure at 2.15%. a well-meaning courtroom sketch artist is taking some heat for her rendering of tom brady at yesterday's deflategate hearing. jane rosenberg said fans don't think she did him justice and she is sorry about it. >> i may not have made in luck as handsome as he really is and i apologize to the fans for that. generic, chiseled, perfect. everything semester away it should be. he's got beautiful shape guys and all that. he's a very good-looking guy. sandra: rosenberg will get another shot when brady is expected back in court. they said he looks like et. she said he never looked to. in other sports, the yankees sun continues. they fell out of the league and i've been there for the two to one decision to the indians. the 10th straight win to take over first i have came. baseball history in seattle. it's not cheaper what could the mariners three do nothing. he struck out seven and walked three as the only japanese born pitcher to accomplish the feat. and here we go

in the currency.don't think we need to see in china is a competitive devaluation or a trend. very important to couch this the way they have. it is aimed at market reform. i think that is very important. going to not suddenly see a lot of central banks making moves on the back of this? asked i don't think so. those currencies are most correlated to this. the most probably move in response. >> thanks very much. we are going to take a break. we look like we have got a deal this morning. >> we have got a new name. it is going to be called off the bed. good that?a good bet? . but claiming global warming is real is rejecting science and matters of set their been noted temperature change for 19 years this nobody responded that this is am really awful thing but women maybe bit parks here arent some top stories. chinathe people bank of loudly held its rate. >> google is reorganizing the company after a new holding company. the structure gives more independence by offering more profitability. reserve president

something we vn seen across europe. >> currency wars have been the main effect of currency easing. will we see more from the chinese as well? the other thing on the other side of the bargain i think is worth mentioning, we haven't talked about it much over the next couple of days is the companies in china going to be hurting from it. so many having borrowed in u.s. dollar and hong kong dollar debt. these guys are going to be suffering. those guy are going to be having to pay a lot more and this might help certain sectors in china but it will be hurting others. so much more to discuss on the china issue. we do want to hear from you on this. should the fed take note of china and delay it's rate hike or are domestic issues more relevant for the u.s.? stock markets reacting negatively in the u.s. and europe. but should the fed be taking note of this as well? join the conversation. get in touch with us, worldwide@cnbc.com or via twitter @cnbcwex. our personal handles on the screen now. let's have a quick look at other movers in europe today less related to the china story. credit suisse

we have seen other currencies going down in what we could call kind of a currency war but i think theese like to keep things and i don't think they'll be the one producing or starting a new round of currency wars. >> let's put the focus back domestically on the u.s. retail sales out today. what are you expecting and how important are the numbers today ahead of a potential rate hike? >> yeah. they are relatively important. last month was very very weak. this month we think that there's a recovery. we have to always remember that these results are nominal so whatever the effects of inflation are are nominal. we could see some take back from gasoline prices that continue to come down. so overall we think that it is going to be a very very positive number. but, again, we have to remember that it is a nominal number. so we have to wait a little bit to see what the real increasing retail sales are. >> and just very quickly, the u.s. dollar enjoyed a boost over the past couple of days because of external factors. has that meant it's a little too strong in the short-term? what's your call for

i'm hearing things like currency crisis, and currency wars. give me the reality check. what is this? markets, the knee-jerk reaction, does it turn out to be much bigger? bill: factor in the month, we are in august. we don't have much volume two take those moves. we have a market which is truly a summer market. if you are talking currency wars, let's be crystal clear -- but that europe down 10%, australia down 10%. if this is china entering a currency war, they brought ap shooter against a canon. that is not the way. ais has all the hallmarks of statement of intent in terms of gradual liberalization of markets which is with the imf has asked for and welcomed. never in mind, china has to walk a fine line. they were accused of being currency manipulators a few years back. this is them taking baby steps towards liberalization regime of their currency. i don't personally see this as being a major devaluation trend. jonathan: a lot of people talking, talking about it cut to the rrr rate. has to gonk the pboc down now? john: they have shown they will use all of the tools avail

of china's currency moves are being felt. international -- it would take 16 months to clear the supply glut. what would that mean for crude prices in the interim? mark: cisco reports quarterly earnings without john chambers at the helm. what to look for as chuck robbins takes over the networking giant. betty: good afternoon, i'm betty liu. mark: i am mark crumpton. thank you for joining us on bloomberg market day. another day, more concerns globally, the ripple effects about china and what the country is doing to its currency, the evaluating -- d valley waiting evaluating --e look at wall street right now. we see a lot of red on the screen, dow industrials down 153 points. nasdaq down as well nearly a full percent. stocks in negative territory for the year. the concerns weighing on some of the other stocks in the s&p 500 and the dow jones industrial average as well. we've had one of those days where the ripple effects are still being felt. falling today, both of them down -- yum! brands down 4%. , alibaba and yahoo! sinking t

>> you saw the currencies in asia, the yen, the yuan, a few other currencies go down overnight.t's logical. you could see more of a currency war then. everyone -- the global economy is not that strong. it sounds like you're getting a lot of growth and there's a bigger pie that everyone can go after. the pie is the same size. everyone is trying to get a piece of it. it's a tough game out there. >> let you get a cat nap before the next session begins. >>> 15 minutes to go in the session here. market not taking it well, the surprise overnight. the dow is down 200 points. we have declines of 1% across the board although we are a little bit off the lows. we've seen some insider trading. we've seen hacking. today the government busting a group that's been doing both. we'll get you that story next. you are watching cnbc, first in business worldwide. let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated ra

asian currencies did not do well and neither did the commodity currencies.ealand's dollar, the australian dollar and also norway's krona. angie: is china entering the currency wars? reporter: not yet. at the moment what china is doing it easing monetary policy and also allowing its currency to deval a little bit. and we can see similar behaviors have taken place in the u.s. by the e.c.b. and also by the bank of japan. right now what china is doing is trying to weaken its currency a bit, to help the exporters, to help boost growth, and to help fight against deflation. that's something that we've seen by many other central banks around the world. angie: ok. they're fighting deflation at home. but they're almost exporting it to the united states. one of its big export partners. so how does this affect the fed think being the rate hike? reporter: this is really interesting because traders are actually expecting that the september rate hike is around -- the probability is around 46% today. that's down from 54% on friday. so you can see that the expectations of th

joe: coming up, which currencies are most at risk?will tell you after the break. ♪ alix: i am alix steel. joe: i am joe weisenthal. "what'd you miss?" alix: before the break, we asked what currencies are most at risk? joe: libya, the gulf of oman -- alix: one of the reasons behind the volatility and the global stock markets is currency. saudi arabia is not immune from this. falling oil prices have put pressure on the country's currency. joe: this week the country came out and said it will maintain the peg. alix: recently we talked to our guest about the chances of the currency becoming undone. >> the probability is very low, but there is a probability now. it is implying and less than percent move at the moment. for that to say, you would have to see much more political tension in saudi arabia, because it's much a pride issue maintaining the currency where it is and they have the resources to do it. joe: emad, why is it so important they maintain their peg? why, for them, is maintaining at such an important part of the economic strate

you look at the indonesian currency and the philippine currency. it is friday. equity markets are mixed. flat, or a bit -- but a bit more calm. caroline: let's check in on the yuan now, in the past week, this is what you are seeing. a little bit of stability as david was saying that we have seen such a selloff. biggest drops that we have seen. the biggest move to devalue since 1894. since 1994. this is the dollar appreciating. 3%.yuan losing some staying in asia, my next guest thinks that the maximum depreciation of the yuan compared to the u.s. dollar will be still a further 3% to 5%. thank you very much indeed for joining us this morning. give us a sense of what you are seeing today. the fact that you are seeing the reference rate being raised ever so slightly higher the first time. thingshe markets hand in , or is this the government trying to give some stability? that -- it is important to see what is the intention of the central bank. as we all know, the u.s. for a number of years wanted to reduce the value in currency between 2009 and 2013. t

currencies. there is no reason to have one. the bottom line, when i look into the future, china, they have grown 10% a year for going on 20 plus years. they have slowed down to seven. they will probably slow down to four or five. if you want a good investment go to india. at least they're a democracy and they have a rule of law. that is where i would rather invest than in china, if you're really into emerging markets. deirdre: all right. points well-taken on both sides. thank you so much. our china bull, brian wesbury, chief economist at first trust advisors. china bear, jonas max ferris, joining us from maxfunds.com. co-founder and editor. >>> asset classes of all kind are adjusting to the volatility. gold included. there is now a five-day rally. fox business's phil flynn is with me from the cme. the five-day rally, is this just pure fear? >> it is but i think there's more to it, deirdre. i think we're seeing a concern about currency war and currency devaluation. as you know many gold bulls have

the currency has been the big bazooka. it's a problem with the artillery and the global demand climate. >> beijing wants to let them dictate and china's central bank is trying to keep concerns of a further side for continued depreciation and the stable and reasonable level saying this is sort of a disguise. everybody look at it, particularly the export numbers to try and give them the currency war for so many years. >> selin and currency across the globe happening right now. a lot of talk about china entry into recession. seen a lot of weakness. >> i'll give you the companies that have exposure to china. sandra: and make it a look at china's economy and the economic slowdown in china's largest e-commerce company reports quarterly results this morning. lauren: this wicked exceptional reasons for those reasons. expect it to decline 57%. first of all are they paying off? $4.5 billion in a physical electronics retailer. and then a billion dollars into the food delivery company. then the reagan military pressure. they been clam

greece needs its own currency. what about china and its currency?s the most to lose from china's slowdown? stay with us. ♪ tom: good morning, everyone. "bloomberg surveillance." what a morning. if you are joining us, i could do a data check right now, but i'm told by karen i cannot. we have got to do top headlines. vonnie: our producer, karen. tom: we are doing headlines, not a data check! vonnie: [laughs] minutes from last month's fed meeting were released yesterday. policymakers are concerned that inflation is below the 2% target. they say the economy is nearly strong enough to stand a rate increase. greece is getting its first portion of its $95 billion bailout. the government will be spending about $14.5 billion today. it is arriving just in time to pay 3.5 billion dollars to the european central bank. and the finance officials say they will send it. the rest of the cash is spoken for by suppliers who have not been paid. jimmy carter is holding a news conference this morning to talk about his cancer treatment. he revealed last week that cancer i

what's next in the currency drama? currencyplus, turkeys -- turkey's currency falls to an all-time low. greek economy grew last quarter, but don't break out the champagne. we've got the charts that show what is really going on. begin with the markets. the dow and s&p 500 little changed, although the dow did swing 140 point today. the dollar bounced off a one-month low, meaning energy and metals prices resuming their decline. today,l getting smashed really ugly. must call my and -- much calm to the week. home depot really doing well, and sort of a flat day, but not really bad. normal august day. scarlet: you have some data on greece you want to show. morning, we got news that the greek gdp actually group, which confounded everyone -- the greek gdp actually g rew, which confounded everyone. look at these two lines. the orange line is real gdp, the headline gdp that you normally get. typically, nominal gdp -- gdp is above suggested -- real gdp. below real gdp. when you're nominal gdp is shrinking, it almost does not matte

we have seen asian currencies hair their commodities. we are seeing some gains coming through in the chinese sharemarket. it was down 1.1% yesterday. just in the last 20 minutes we have seen a pickup in the shanghai composite. let's have a quick look at what is driving some of those gains. the big story id thre -- is the yuan. still a little bit of weakness coming through from other companies. .6%. we have seen some gains coming back into the other markets. especially with those commodity prices. just with quickly mentioning, it is pretty flat at the moment. shery: shares in australia they get telecom provider have slipped. 1%, revenueown growth for mobile also fell. he joins us from sydney. good morning and thank you so much for joining us. breakdown the results for us, how satisfied are you? where do you think you could've done better? your shares are falling today. >> good morning. look at our business, there been a couple of changes in our business. last year we own a mobile phone company in hong kong. looking at the underlying reven

currency falling by the most in 20 years. world's biggest mining company but with the weaker yuan, stronger currency installers makes the dollar denominated commodities more expensive. bht down by 1.3%. as a group the bloomberg commodity index rising by the most since february but the rest bite did not last. the world's biggest provider of temporary work is posting a 22% rise in second quarter profit. that is a slight miss. they are a bellwether for the economy. gamma holdings down by 4%. one of the biggest decliners across europe. it is the swiss asset manager that says it will cost 165 jobs after reporting a drop in first-quarter profit. we know the chief executive of this company and we have spoken to him many times. alexander friedman. took over last year as serving as the global chief investment officer at ubs. he is trying to seek ways to shore up earnings which have been hurt. he has been reducing the value of assets and other currencies. cap is trying to strengthen its markets in the united states. a three-day decline

hiis this them just adjusting their currency to other traded currencies?ens: the dollar is obviously very strong against different currencies. currencies so far have weakened against the dollar, but the chinese currency has actually been quite strong. you could argue this is the catch up for what all the neighbors have been doing. it isnot a big deal, but a big deal because we did not know that they would do it until they announced it. jens: are you going to preannounce it? pimm: i was thinking of that. a slow drip. jens: the bottom line is that a lot of investors were surprised by this. that is why you see big moves in the market today. pimm: if the chinese were allowed to flow freely, it would appreciate and value against the dollar? it isi think short-term in that direction and we could potentially see a meaningful move of 6%. are they going to allow it? that is the key. pimm: special drawing rights. this is the component of a come conglomerationsk of currencies. this has to do with international prestige and finance. jens: this is the symbol of being a

china has an incentive for a week or currency -- way weaker currency.e data that we have seen for the last couple of weeks. i think that we are in a competitive devaluation of currencies, globally and in emerging markets. china has made the first move. we have seen kazakhstan dropping 25%. we are seeing potentially other countries in africa, like nigeria, following this move. globally, it is not just focusing on regional countries. manus: in the very near term, which you see the yuan getting to? weakeningsee the yuan further of the next two or three months. we think that we will see weakening pressure on the chinese currency. manus: we have written an article. 10 currencies that may follow the currencies down. big thinking bubble, the glass bubble, could societies move? could the attention currency come under pressure question mark will the next pressure come from? like the former soviet union. also in africa. like i mentioned before, nigeria. i also think that it is inevitable that nigeria will devalue the currency. it has been around 200 for the last

george washington appears the most on currency. he appears on 10 different types of large sized banknotes, five different denominations. then he appears on all of these fractional banknotes. washington was a very popular figure in this day and of course today on the one dollar bill. do we need to keep going here? oops. the portraits vary quite a bit on the notes of this period. these are all portraits of alexander hamilton that appeared on different banknotes. this is probably the most familiar portrait. here are a couple of notes that are only a few years apart. he looks a lot more fleshy here than he did in this portrait. here is an entirely different view of him in the first issued banknote, the 1861 demand note. here is a couple yet different engravings of alexander hamilton on other banknotes. this was fairly common practice to modify the portraits a it. -- bit. you don't really see that in today's standardized currency. let's go over a number of these historical figures. some familiar, many forgotten. you realize that this cu

regional currencies also slid. the australian dollar hit a six-year low, while the malaysian and indonesian currencies fell to their lowest levels in nearly two decades. that negative trend is continuing on the major european indices. the dax and cac both down over 2%. exporters are seeing big losses as they think chinese purchasing power could dip for the weaker currency. luxury brands and automakers in particular weighing down midday trade. for more on this, we can turn to james foley, a senior currency strategist in london. thanks for speaking to us. we know that the chinese central bank traditionally keeps the occurrence so i a fairly tight rein. how significant a move is this, nd what's behind it? reporter: well, it is very significant. i think there's a couple of factors behind it. we had the news yesterday that we had this new regime. now what this new regime is is to allow market forces to set at the rate, or at least have a greater play. now, like you said, traditionally the people's bank of china keeps a

big move in currencies. you see moves like this, particularly in currencies that have been fixed. erm crisis, how far did italy move when it went 20%. these are the moves you get when you get markets that are fixed. that is the crux of the problem. the dollar china exchange rate is not an equilibrium, and nobody knows where the equilibrium might be and where they have to stop to stabilize the economy. if it stabilizes then they can get the exchange rate here. but it is that level of uncertainty that these will continue to plague currencies around the world. alix: good talk. we have much more to talk about. joe: coming up, which countries have most exports consumed by china? we show you the chart after the break. ♪ alix: i'm alix steel. joe: and i'm joe weisenthal. "what'd you miss?" alix: before the break we said you would show you a chart on which countries had their experts consumed by china. joe: check out this chart. leading the way is australia, south korea, japan, brazil, and malaysia. alix: these countries are the most exposed when china stops buying. joe: bob, now we are g

from a is one benefit weaker currency. there are several currencies also weakening.e have seen several competitors to malaysia have their currencies weaken. the net impact on exports may not be as significant. if the currency weakens too much, you could have to implement other policies that would higher interest rates. any sharp fall is also one welcomed by the authorities. a gradual fall may be beneficial . the pace of weakness is not likely to be welcomed. shery: the central bank governor has ruled out any repacking of the currency, but the environment seems very similar to the 1998 crisis. is that a possibility? -- it would be taking a step back in terms of how the currency is controlled. doing, theld end up pent-up pressures on the currency, it could end up being even worse. there is a possibility, but it would be taking a step that, in our view. shery: the second biggest loser in asia, we have trade data out this week. what should we expect in their currency? perspective, further depreciation likely, but the pace we have seen in recent days across asia is unlike

because the present chinese currency situation is unsustainable. it's not possible to have a mini evaluation and hold that when the whole world is unwinding. market white will we get up your free float echo >> that is difficult to predict but other emerging market currencies are already predicting that this will not hold. mark: when not the knocked down effect echo we've seen the effect on those sectors that are exposed to china in emerging markets, particularly minors, i don't and luxury goods. ae miners have been having tough time since last tuesday. >> and the falling commodity prices hasn't changed behavior. part of that is related to debt so for their existing projects have to keep on producing because at least that with a get some cash flow to pay their debts. that is anew projects different matter. >> from an investor's point of view, one of the really difficult things about emerging markets is the currency side because it is expensive to hedge. the generally your exposed to currencies and the underlying asset and that is actually a double w

but now is the currency almost getting too low? currency futures at the moment.he aussie dollar a little bit higher. -- the above that u.s. dollar yen has been wildly fluctuating as well. fall coming through. if the aussie dollar and k rate dollar -- commodity prices are falling as well. enforcere they going to inflation with the yuan? that is a question to ask as well. checking other headlines this morning. hit afor a bailout has problem with germany withholding support. the plan is incomplete and may not be agreed in time for next week's ecb payment. verizon governments must approve the plan before releasing up to $95 billion in aid. the former finance minister told the bbc that the bailout will not work. the cabinet meets today to ratify the term. news core is rising in extended estimatesite missing last quarter. revenue fell to $2.1 billion. the news division makes up two thirds of its revenue but sales were down 10%. . has been trying to boost earnings as readers prefer their news online. we will be watching telstra. profit of the biggest mobile provider fel

. >> you have to look at the chinese currency in the context of all other currencies. over the last four years yuan appreciated against the dollar and the dollar appreciated against just about anything in the world and we have had say 2011 the brazilian depreciating by 60%. the turkish lira by more than 50% and all the other asian currencies with the exception of the hong kong dollar have been weak over the last 12 months and the chinese yuan has appreciated by 80% over the last two years against the yen. >> joining us live to discuss this further is paul, the managing director and chief economist for asia pacific. thank you for joining us. >> glad to be here. >> over the course of this week do you think that markets have over or underreacted to china's decision to allow the currency to fall. >> it was a surprise so almost by definition has been a little bit of overreaction but it's important to note this is a more market based regime. so rather than having the pboc set the rate every morning and have a 2% band and heavily manage it they're taking the rate the market g

overall, economically it will benefit and let their currency weekend. -- will benefit to let their currencyen. that's going to put pressure on asian currency again. a short-term corrective economy. we have seen so much volatility, and that has created a panic move. the panic move may lead to a negative outlook for the chinese currency and others in the region as well. angie: there is a bit of a negative outlook. , you haveringgit panic among policy members and the governing body there as they continue to see weakness. they are looking at using strategies employed back in 1998. what do you think. the fall for the ring it -- what do you think will stop the fall for the ringgit? greg it: is a difficult situation -- cult: it is a diffi situation they are in at the moment. it is a commodity currency, and plus there is a corruption scandal floating through its government. a bigill continue to be issue for the currency. is it chief and up -- cheap enough, i guess is the question. it is probably not. i can see a short-term corrective move here, but i think the mood around these vague issues will co

localvenues are in currency. they fund in hard currency. so the currency issue is going to become a debt issue. francine: it's unclear to me, because we had this massive rout in september of last year, and i had a lot of economist telling me emerging markets are fine. we always knew it is going to the dollar. it was my understanding we assumed the fed would hike interest rates. so is this why -- this is coming as a surprise? that we understood that china is evaluating in response to the fed? alberto: we have raised the red flag a lot. what we have seen last year and the year before in the taper tantrum is mostly currency volatility in the currency war. but we have not seen any credit crunch in emerging markets. phase of thehird crunch. after the u.s., there is europe, and emerging markets countries and corporate have not delivered. -- delevered. we have seen in its relation a private debt growing by 20% a year since the crisis and before. it has never stopped in em. now we are seeing china trying to control this crunch, making some of the c

currency rate. it is a signal that we are doing it because our exports need it. they're saying we need to take some demand away from the rest of the world to help us help ourselves. that is a currency war-like gesture, although a small one at this point. laura: are they worried that china's economy could be headed for a crash? chinese standards, there's trouble ahead. their economy has slowed to a growth rate of 7%. that is great for everyone else, but slow for chinese standards. he could even be lower, depending on the date it you believe. this is a problem for countries selling to china. countries that are commodity exporters like australia, canada, and brazil. it speaks to a broader concerns that the entire world is in a weak state. china had been one of the last strong countries standing. we are worried by their actions on the currency, but on the stock market from weeks ago. maybe all of us should be more worried. laura: what about the u.s. federal reserve? is it worried by china dropping its c

as one of the currencies the imf seems to -- deems to be a reserve currency and have it included in their basket of different currencies. they only consider that every five years, and this year is one of those five years. so i think they have more reasons to actually try to please the imf. >> what do you think about this idea of a battle of the world currencies? the imf now seems it's quite happy about its evaluation. >> i talked to a couple of people here on wall street, and they don't really see a currency war yet between china and the united states. even politically, hardly anybody is calling out about this point. if you look at china and the united states, economically they are so connected that if you look at the lower you want at this point, the u.s. imports much more from china than they export to china. so there is even a positive effect on the u.s. economy if the yuan appreciates more. there's a lot going on on the commodity side of the market. the stock market got a big white or, but crude oil prices dropped by another 2.5% today, reaching the lowest level in about 6.5 yea

to drive their currency down.t could be a net positive for those exporters. in the near term, could be a lot of volatility as well. jonathan: very true. thank you for joining us. still with us is julian and peter, head of european rates and economic research at rbc capital markets. devaluation,titive they've encouraged this in this market overnight. would that be your takeaway as well? >> yes, but referring to the level of devaluation, we've barely touched the surface. the vociferous that's with which they denied it would be the endgame. in reality, i think there's more to come. the problem with competitive devaluation, we saw it in the 1990's. the race to the bottom is not good for any economy. jonathan: the fallout, i keep hearing these numbers, 1997, 1998. how many conversations have you had about 1997, 1998, and the consequences? >> quite a few. we have lots of people drawing that comparison. it was mainly the sovereigns who suffered. the discussion quickly turns around to what does it mean for us? when i look

falling oil prices have put pressure on the country's currency.: this week the country came out and said it will maintain the peg. our: recently we talked to thet about the chances of currency becoming undone. >> the probability is very low, but there is a probability now. it is implying and less than percent move at the moment. for that to say, you would have to see much more political tension in saudi arabia, because it's much a pride issue maintaining the currency where it is and they have the resources to do it. eman, why is it so important a maintain their pay. why, for them, is maintaining at such an important part of the economic strategy? eman: they need to have some level of stability. for another, saudi arabia imports most of its food, etc., brings, in turn, inflation. finally saudi arabia does not have a yields curb at all -- yields curve at all. they would have the monetary resources to maintain the economy. if we see saudi arabia's budget continue to struggle as we see oil around $40, $50 a barrel? eman: it isabout -- about $260 billi

private currency comes in many forms if you prefer dogs you could use digital currency called dogecoin used to print competing currencies and that helps prevent inflation and deep depression economist rights america once had 1600 private corporations issue with 1,000 variety of banknotes and when they did the economy grew 4% freer with little inflation but then congress banned private currency to create the central bank at the fed was supposed to provide stability but it hasn't 16 years later the great depression began and since then the dollar has lost 96% of its value. government cannot run an economy wisely why is it in charge of the money printing they love to take the bills to stimulate the greater activity is not real wealth creation but more pieces of paper representing the same amount of wealth to create housing bubbles and eventually inflation and that politicians think there would just keep spending. i say let private currency compete not only will we be on firmer ground financially but people will be "free to choose" harriet tubman or dog currency to pay their billsmebody wa

the currency had value around 35%. i think chinese government at least want to devalue 10% of the currency. so the coming days is very, you know, sensitive and very important for the investors in the world. >> so how should we expect the devaluation to continue? will this continue? how long will it continue? >> i don't think the devaluation could be effective in our financial policies. but actually the government has other strategy to support economic development. >> so the, of course, move to chinese economy on the whole slowdown is a bit effect on other markets. without proper strategies behind that, the chinese government will continue to do this devaluation. >> you know, i just want to emphasize how to stabilize chinese economy. this is good news for the region. but if chinese government only devalues the currency, that will damage the regional economy, i think. >> that was a senior fellow at research institute. >>> japanese stocks rebounded on thursday. some investors seemed to have difficult guessed the yuan's de

we manage our currency. the fed is saying we want to move boy from emergency policy settings and get back to a more normal central banking policy -- we want to move away from emergency policy settings. we saw a spike in europe. this is what we need to become accustomed to. markets are going to become more choppy -- we expect more volatility. we have not seen it. now we will begin to see it. what we are also going to see is some diversification across asset class performance. it could be quite a life -- a high level of correlation. it is difficult to create value. that is going to become clear as we proceed from here into the fourth quarter. francine: should we still try and figure out, actually, why this move happened now? it is awful for a lot of emerging markets. is it trying to preempt the fed or is it the chinese worrying that growth is slowing more than they are expecting? niall: it is the latter and our view. do the logic. if you want to liberalize or currency from a soft peg or effective peg mechanism

as one of the currencies the imf seems to -- deems to be a reserve currency and have it included in their basket of different currencies. they only consider that every five years, and this year is one of those five years. so i think they have more reasons to actually try to please the imf. >> what do you think about this idea of a battle of the world currencies? the imf now seems it's quite happy about its evaluation. >> i talked to a couple of people here on wall street, and they don't really see a currency war yet between china and the united states. even politically, hardly anybody is calling out about this point. if you look at china and the united states, economically they are so connected that if you look at the lower you want at this point, the u.s. imports much more from china than they export to china. so there is even a positive effect on the u.s. economy if the yuan appreciates more. there's a lot going on on the commodity side of the market. the stock market got a big white or, but crude oil prices dropped by another 2.5% today, reaching the lowest level in about 6.5 yea

the two currencies that had to do you value to dting -- had 2- evalue with the chinese currency. both of these countries are big exporters. just to take a look at some details, i want to bring you into my terminal here. this is looking at the performance of these various commodity emerging-market currencies. same time last year. let's say oil state at the same price. it would cost 23% more in malaysia to buy the same thing between now and last year. no one has been immune to all this. look at the indian rupee, down 7%. singapore dollar down 11%. ofeal decline in the value these asian emerging-market currencies. let's look at the top stories a -- later today, the federal reserve will release minutes from last month policy makers meeting. investors will be waiting to see whether there was any consensus that september is the right time for the first rate increase in nine years. earlier, we spoke with the chief economist for j.p. morgan securities. >> we have international set of forces, adding worry to the fed not just because inflation but on the growth side, the dollar going up. i

is doing with the dollar currency war. currency is power. china has the reserves to manage its own currency. they are doing this in theory a market from the move but they are doing it because they have the power. tom: it is the $1 million question. how far along do they need to go to some form of normalization? they want to know that in singapore and washington. brandon: once it is normalized, is it going to go both directions in the future? that is real market reform. tom: an historic day. glad you are with us worldwide. we go to beijing. a seismic shift that reverberates across all of asia. china throws in the reserve currency towel. it appears they were moved to a managed flow. we need to go to hong kong and our chief asia economics correspondent. will this boost chinese exports? >> look, good morning. they seem to be killing two birds with one stone. on the one hand, it has -- a reform process. they want the currency to be more international. on the other hand, there exporters are creaking under the pressure of weakening currency -- like

. >> everyone hates emerging market currencies and commodity currencies. the only currency to buy is the u.s. dollar. why isn't it stronger? why haven't we gotten to parity yet? >> it's keeping a lot of the g3 or g4 currencies on the other side. lot of people are looking to the u.s. dollar and looking to the euro to some extent as a potential safety play. keep in mind europe has a large account surface countries in this environment may do better. >> buy the euro, is that your tip? >> i would still say sell the euro but not right now. it's a little bit sideways right now. >> don't like the dollar. thank you, happy birthday alan ruskin the head of g10 foreign exchange at deutsche bank. >> much more on today's big s l sell-o sell-off. the dow down 255 points, steepening there. look at west texas down 4%. the s&p down 1.3%. oil sharply getting near those five-month lows. china hurting u.s. stocks today as we've been talking about. its economy clearly slowing, beijing clearly concerned, so is now a bad time to be building cars to sell in china? that's what merc

avolatile currency is not currency for a reserve currency may want to be considered that way.ant their currency to be very volatile. they want kind of a stable adjustment to a free market driven rate which is what the imf wants from them. if they do this piece by piece, they can control global markets from falling apart in their own market from falling apart. they have a highly levered economy. they don't want their currency to fall off. erik: markets are difficult to control. we have economies around the world that import and export that are being affected. the perceived currency war could be happening in asia where you have economies like korea that compete with china and then you have economies like latin america that export to china. been dealt a huge blow throughout the year. they have been having the worst currency drop since the financial crisis. this comes at a really bad time and a suspicious time for them. we need to see how everybody is reacting. erik: how are they likely to react? what could the korean central bank or the central bank of ofzil do to fight the power