keep an eye on the euro currently flat against the euro. goldman sachs says that will go down as much as $.10. 9% weakening? because of more quantitative easing, we may not even finish until may 2017. have bnpy agree, we paribas calling for parity. we could see further weakening. copper having a little bit of a reprieve. let's have a look on what is an m&a deal cooling down as much as a percent. london, zurich insurance having problems with its own general back ofe unit on the issues of that port explosion in china. u.s. auto exposure down 3% and rsa say they will not be buying it for more than 5 billion pounds. i wish i could give you volkswagen's numbers. it could fall as much as 10%, it is all about admitting ditch eking on u.s. air pollution tests for years. where does that leave the chief executive? volkswagen could be down as much as 10%. will bring that stock open when it opens. let's get your asia market wrap with zeb eckert in hong kong. zeb: another down day in the asia-pacific. look at the boards following on that 1% decline on w

you mentioned the stronger euro. euro is up in the last few weeks but it is down considerably if you look over the last year. are you making too much out of this recent strengthening of the euro? is there a risk that central banks around the world focus too much on the exchange rate? thereond question is, seems to be a lot of anxiety around the world about developed .ountries getting 2% inflation given what is going on, demographics, technological change, is it possible major central banks are aiming at the wrong target? maybe 2% inflation is not the appropriate target in this current environment and you are printing all of this money to achieve a target that is not really attainable or appropriate anymore? mr. draghi: thank you. on the first question, i have said several times, the exchange rate is very important for growth for price stability. it is not a policy target but diverging effect of recovery paths across the major jurisdictions and the effect of diverging monetary policies across the major jurisdictions.

-- the euro is up by 4%.yen is beating in the past three months. the ecb willid, actually use words, and the japanese lee's actions. francine: eurogroup's meeting in luxembourg so we will follow that closely and talk about oil next. ♪ great time for a shiny floor wax, no? not if you just put the finishing touches on your latest masterpiece. timing's important. comcast business knows that. that's why you can schedule an installation at a time that works for you. even late at night, or on the weekend, if that's what you need. because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. francine: welcome back to "the pulse," live from london. manus: let's get you up to speed on the top headlines. the yuan traded in hong kong set for its biggest weekly advance since march despite giving up some ground this morning. the week's game came as they were taking the unusual step of maintaining currenc

estimates are at 6.5 billion euros.t recently, we have "manager magazine" reporting that up to the fullofficials at second group will be suspended. that is according to "manager magazine." but do a quick take on the jurisdictions. spin, sweden, italy, and denmark, all of them have volkswagen vehicles, at least the diesel models, suspended. jonathan: we get the sense this will not get any better. when you good a look at -- when you get a look at the texan lawsuit, you get the sense it is part of a bigger legal issue the company will have to deal with. in the months, and possibly years, to come. 'sns: the nice thing for bp they can consolidate the claims. italy much more difficult for volkswagen to do that. there are already 27 state attorney general talking about suits. there are a variety of different civil claim staking palace. -- taking place. i don't have the good prosecutors in harris county arrived at this number of $25,000 per day, or 6000 vehicles. they back that out and get a nice number of $100 million. here's

the cost, 10.5 billion euros. this project was meant to be 3.3 billion euros.ot having a good morning. jonathan: caroline hyde, thank you very much. let's wrap up some of numbers top stories right here. china, says it plans to cut its army personnel, the biggest reduction since 1997. he made the announcement at the start of a military parade in beijing to mark the end of the second world war. hundreds of military hardware is on display. is -- hasip fund fallen below -- investors pulled $1.8 billion last month. it now manages about one third of the money it did in 2013. u.s. economy expanded across most regions and industries in july and august, that is a court -- that is according to the fed page book -- the feds face paint -- the fed's next announcement is two weeks away. big announcement today, we have one of our own, the ecb deciding. how dovish will mario draghi be. 40% chanceest says the ecb president will step up to the today. we are joined by nick kounis from amsterdam. no, great to have you with us this morning. i know it is not your best case scenario.

the euro was trading at a much higher level. yes, the euro has moved a little bit.n is the next opportunity? when is the next opportunity for mario draghi to do something? hans: i thought you were going to ask me on janet yellen's next opportunity. she has a speech in amherst, massachusetts. we are going to do a pre-college tour. draghi's next -- i don't believe he has anything in october. nextieve november is the one. francine: it is in the next couple of weeks. hans nichols in berlin. a piecek, he wrote titled "a fed rate hike -- only if you believe in magic cure co it seems he was right. >> i had a lot of feedback from readers suggesting that the argument is along the lines of quantum physics that spooky things start happening. if the fed is telling you it is extremely nervous and it is keeping rates of zero, there may be a negative cycle of feedback which becomes a self-fulfilling prophecy. businesses don't invest, consumers don't spend. that hurts growth and keeps inflation at deflationary levels. ' point, itwo hans what is explained and adjust with the markets

for will the euro bp used -- euro be used for? it will be a funding currency.ou could move back into dollars, or sterling, maybe it could move back into eastern european countries. they are not commodity producers. currencies might do well, in this environment it will be difficult for the euro to get that momentum, even if there is a lot of qe. anna: we have been talking about parity for a long time between the euro and the dollar. >> we never had parity on the table, we never thought that the fed would wait to hike until december. we still have the same forecast. differentials could still drive the dollar lower. the set exchange rate, that will be different. that will hold up for the carry trade. anna: thank you. let's return to an exclusive sound for you. we have been speaking to the spanish bank. my colleague francine lacqua set down with the chair. it is say two of the investor meeting taking place this week. francine lacqua spoke exclusively to her in her first television interview since becoming chairwoman. she started by asking her about global growth. >

something like 1% growth this year and the euro zone and 1.5. second it is the first month where we see an increase of the credit provided to corporates for the full euro zone area. so it seems to me there's a clear improvement of the financing conditions. credit is flowing better at the lower rate so i don't see a reason to intervene today and i don't think the market turbulence is enough to justify anything. >> you said we're seeing improvement in the credit standards. i just wonder to what extent that is actually down to the ecb because a lot of people here in germany at least are saying well, you know what, ecb qe isn't helping now. we're not seeing the desire tick up in inflation as we had expected but then there's so many criteria we could judge it by. do you think that by and large it's been successful? >> yes in limiting and reusing the interest rate across the euro zone which means helping banks also to lend at lower rates and we've seen the improvement in countries like spain and italy. with lower interest rate to the economy and we've

euros. a delay in building a next generation nuclear reactor in france. it will not be ready until the end of 2018 and will cost another $2 billion -- 2 billion euros more than previously estimated. that issue and a -- that is shares.electric twitter ran 100,000 active advertisements, up 74% this year. genie: let's turn out to the smart phone market and tony that is hoping -- sony, that is hoping to regain ground. -- divisions been has been leading an estimated million dollars as it faces competition in the market. apple is set to unveil its newest iphone next. sony -- for sony, high definition is the key to future sales. >> the world's first four k smartphone giving you the ultimate viewing experience. >> on top of a two day battery life, it hopes to show off its display on the market, a concerted effort to compete against industry leaders. >> samsung and apple are ahead. it seems to be another one, whether they can really grab that market share back from the big giant, difficult to say. ap

now let's talk about 1 billion euros.ds like a whole lot of money because that's how much the eu will give in aid payments to help tackle the on going migrant crisis but with political risk escalating between nations, is money really enough? we'll cross over live to brussels and hadley gamble joins us next. >>> it will do something in the short to medium term for folks living in camps in jordan and turkey and fled the conflict in iraq but that can't be a long-term solution because when you look at this in a basic level how many people would decide to live in a refugee camp if the promise of the european union is feasible for them. that won't be stopping the migrant movement to europe any time soon though it may help in the short to medium term. the other question is how they're finding a conciliatory message after days of very very tough rhetoric at least from the eastern european countries. i got a chance to speak to the prime minister. i asked him how he sees the situation going forward. >> it has taken several months f

the euro-dollar has shifted holler yesterday. -- shifted higher yesterday.r-yen moved as well. -- the ecbn we ask and the boj, will they have to do more? that is coming up after the break. in the meantime, i'm on twitter. best of luck for the rest of your day and have a great weekend. ♪ francine: the hike is on hold. janet yellen points to global risk, and softer inflation forces as the reason why the fed it didn't move. markets react -- the dollar drops -- emerging markets breathe a sigh of relief. on a veryides again close vote in the likelihood of yet another coalition as greeks prepare to cast their ballots on sunday. welcome to "the pulse," live from london. time francine lacqua. coming up,

the euro, the market is still net short all the major currencies, including the euro. joe: something you brought up, the fed is looking at market-based measures of inflation, if you point out -- two days after yellen spoke, the san francisco said came out with a note that said there is no predictive value in that. do you agree with that? >> that is -- listen to what mario draghi says. the break evens, but there is a lot of noise as well as a signal. there is an assumption that the fed hits its target, a better predictor of future inflation than market based. because there is so much noise. the best guesstimate is what it was last month. watchesave -- the fed core inflation because it is a true signal. i think -- it reminds me of a time earlier in our careers, paul volcker was the chairman of the federal reserve and he was tightening interest rates, tightening monetary policy despite having double-digit unemployment. i do not really want to do this, but these rules i am using makes me do it. the federal reserve wanted to make. they were scrambling for excuses. excuses.v

this is the intraday euro chart. the euro is up by .1%. the euro one of the better performing major currencies in the last month because of it's deemed a haven currency along with a yen because of the account surplus that the euro area enjoys. it is back to the late 1990's, when we were contemplating, focusing on things like currency -- recently, it is all about low interest rates. i like the late 1990's. francine: the ecb makes a statement today. not likely to increase interest rates. the pressure is -- stagnating deflation. investorsecting -- looking for indicator of the slowdown in china and market volatility. hans, what exactly can we expect from the announcement today? ans: well, we will get updated view of what the ecb thinks it is happening with deflation. in june, their expectation was for 0.3%. since then, we've seen the price of oil drop by $20 a barrel. if you think oil is a big factor in inflation. is if youxt question do think inflation expectations are not being met, what can mario draghi do about it? "about it. he can hit th

with the euro down, swiss bank rallying versus the euro.ittle bit of a move there as we are seeing no change to the rate. euro dropping versus swiss franc. remember, what a significant move we have seen over the last few months. starting to see a move in the swiss franc as has been noted. a little bit of a strengthening against the euro. jonathan: euro swiss pushing back to 1.10. that has done the s&p a couple of favors. snb a couple of favors. they maintain they will remain active in the fx markets. snb.problems still for the federal reserve decision later this evening. dalia has urged the fed not to raise rates. here are some of his reasons. do you think qe works? ray: it is going to work a lot less. i am saying that we cannot have term rate rise for the structure. what the dis-inflationary pressures exist around. we will have a downturn. the downturn should be worrisome because we don't have these spreads asset prices. qe, whether it will work. qe is the purchase of those assets to get those premiums up. when you keep pushing, if there i

volkswagen spent over $3 million on lobbying last euro loan. as your highlighted, the german industries, the german car manufacturers are amongst the biggest and most powerful. this leads to high-level meetings, high levels of access with commissioners and others, seats and influential advisory groups, and ultimately, having a hand in seeing what legislation passes. unfortunately for the public, the main intention, as we've seen, of these industries, is to attack, we can, watered-down environmental climate legislation, which is seen as unfortunately getting in the way of the bottom line or seems costly, and they've been very successful at it from the 1990's -- >> one in six jobs in germany depend on the car industry. doesn't germany protect jobs? >> the nber of jobs created could be even increased if we went to a more environmentally friendly way of reducing cars through technological innovations. i think that does not get past the problem of how transparent this lobbying and in whose interest is this lobbying. are they lobbying for me and you?

see the euro at 112 up against the u.s. dollar this morning. the euro, u.k.anese yen against the greenback and here is the yield in the 10 year treasury. 2.16%. a lot of action this morning. a good time to go to maria bartiromo with "mornings with maria." great to see you. maria: thank you so much. breaking news this morning. another seller for global markets in the u.s. market to open slightly lower. good morning, everybody. happy tuesday, september 1. with me, this hour, dagen mcdowell, todd horvitz of average joe and arianna johnson of the national review. it is shaping up to be a tough day for the market this morning. those of you on the radio, future showing the u.s. market is primed for a triple digit loss in the dow industrials talking 350-point at the get go this morning. a month of losses wiped out in the oil market meanwhile. we are in install mode this morning down as much as 4%. looking at a 2% decline right now. a rush to buy gold as a safety play this morning. pulled up almost $9 an ounce. right now you can see it is that ninth 60, almost 1%. a

mark: those measures include 6 billion euros worth of spending cuts and about 9.9 billion euros worth of tax increases. among the areas affected, government salaries, infrastructure investments, and agricultural subsidies. almost a quarter of the country's ministries dissolved, and an unpopular tax on financial transactions revive. standard & poor's unexpectedly downgraded the country better rating to junk status last week. that is largely due to the knock on effect from the slowing chinese economy, a major customer for brazil's once booming commodities exports. >> it has become obvious to all that the need for such an effort , and in the coming months i think we will have 2 or 3 months to convert these measures into reality. the economy and the government are also being weighed down by a corruption scandal at state-owned oil from petrobras. many of the arrested either belong to president dilma rousseff's party or are considered allies. markus: we are going to take it to the stock market. we are seeing a bull that -- a little bit of a bounce for american shares this session with the d

reporter: a trip to europe can cost up to 5000 euros. most transferred the money while still in syria to avoid being robbed on the way. anchor: thousands have reached the serbian capital of belgrade. what happens to some of those people we saw, once they reach serbia? reporter: so, as soon as they aid agencies were there to offer water and food. they started immediately walking across the serbian border, and then they have to go and register themselves. you cannot go to syria -- ser crucial piece of paper you need, to get on other transport, take a train or a bus or check into a hotel, which many people are doing. were this morning at a registration center on the border, where they first go. it is chaos. in an old tobacco factory. it's not built for these numbers. they are adding facilities. the sheer amount of people, it's not built for that, so many have to wait outside. there is a sort of campsite, people pitching tents, waiting to get a piece of paper to continue the journey. anchor: things don't get any easier for these people after

so you have euro buying. it's been a little bit of a safe haven currency but if we're going to see this more easing from the ecb and fed get started you'll see it. we have seen the low in march. i don't think we'll go back to 105. it's more around the 108, 110 range. but the broad dollar strength, at least against the majors i think is coming close to that cycle. >> thomas, thank you so much. head of fx and commodities research. now let's show you what's happening on our cnbc web page because you want to get more on the third quarter. how it is played out and what to expect for the rest of the year. don't forget to head to cnbc.com. >> emerging markets should head for a increase in corporate failures as they analyze monetary policy. it says indebted companies in emerging market nations are likely to struggle significantly from high borrowing costs and stagnant growth. stay tuned to cnbc. our colleagues will be speaking exclusively to christine lagarde later. don't want to miss it. >> speaking of don't want to

not the dollar but the euro right here and a strong euro is what the industrials need. our drug companies need it, consumer package good companies needs it to name a few groups if the darn dollar were to come down. take a look at this weekly chart of ifxe, the etf that measures the strength of the euro versus the dollar. all we hear about is a strong dollar but this isn't saying that! remember higher on the fxe means the dollar is weaker. lower means stronger. when you zoom out to this weekly view of the euro ux see that the european currency seemed to have bottomed. in other words, fxe, euro getting stroenger. euro getting stronger and it's been climbing slowly but steadily ever since this bottom. some that have is because europe's been improving with good auto registration numbers this week and if the fed doesn't tighten this week or puts the idea of a rate hike on hold you can expect to see the fxe fly. lange likes the relative strength index, or the rsi, which is is up here. it's been working its way higher plus the moving average convergence/divergence line, anothe

they put aside about a billion euros.process all of these people, here is a quote from over the weekend. here is what he said. we still have a little bit to spare and we will desperately needed to cope with the tasks that arise in 2016 and in subsequent years. .o one quite knows it is clear there is a need for processes. behind me, this line is barely moving. every once in a while, you will hear a cheer and that is when someone is allowed to register. they take your passport and they give you a piece of paper. the process is slow. he said he wanted to get his passport back so he could go back to syria. guy: is angela merkel on the right side of public opinion on this one? hans: she may be on the wrong side within her own party. you are seeing some real dissent among her sister party in bavaria. one member of parliament has even taken in a refugee family. it is worth noting, a lot of welcoming signs, a lot of humanitarian groups. germans are trying to make refugees feel welcome. is the structure in place to handle them? ar

stocks rose, the euro fell, government bonds are rising.r.taking a no trading in china today and tomorrow. , cutting intentional the inflation forecast, cutting the gdp forecast as well, citing the emerging market, rousing a threat. european stocks rising for the second consecutive day. the euro fared in a was telling us how the east tv has taken on the new flexibility when it comes to buying each member's debt. that.t the euro falling against the .ollar, now down an astonishing fall today. i have been telling you about sterling's performance. it is down by .4%. it is the worst losing run six -- since october last year. u.k. service a report showing the slow space in more than two years. it underscores that this economy right here is slowing in the third quarter. how did the bond market take mario draghi's birthday? gifts as heiver of adjusted bond purchases. yield falling ins hasten italy and france and in germany as well. it is all about the ecb raising the limits on its bond buying program. there is no need to save you. when you always i

the euro is flat on the day. it's been up and down either side of when the french and german data came out but none of this data too far from consensus. overall it's just below expectations and the euro is flat. >> a lot of volatility in shares of vw. currently we're higher by 1.4% but over the last week the stock has lost 36% in the last two trading days alone it's lost some 15% in market cap or 26 billion euros. i also want to show you what the dax is doing. that's shown you a turn around as well. it's down over 6%. we're up marginally this morning. that despite advising it's target lower on the index on the back of the scandal. the contribution is 35% in terms of eps and roughly 25% in terms of market cap. >> it is germany's largest corporation. they cut the price target to 130 euros. also cutting it with a price target of 179 euros. diesel penetration may see fall out from the scandal across europe but they think that the market reaction is overdone in their words and it sees some modest share opportunity for

chancellor angela merkel's government pledged 6 billion euros to accommodate a record number of eurosrossing its borders. nearly 20,000 refugees arrived this past weekend alone. a number that the chancellor today described as breathtaking. merkel added that a european, not just german, response is needed. this as the influx of people shows no end in site. >> thousands more asylum-seekers are expected to arrive today, just past the estimated 800,000 that the government says will come to germany this year. big came up with the most comprehensive plan yet to deal with the new arrivals. >> what we are now going to resulting that our country will continue to deal with over the next few years and it will change our country. we want this to be a change for the better and we believe that we can do it. >> the german federal government will provide an additional 6 billion euros for the exception of asylum seekers. applications are to be processed more quickly the before. more countries of origin are to be declared safe. and the new arrivals are to be distributed more evenly across europe, possi

we've seen the euro rebound upwards and european equities come down. is that going to continue you think? is that something that mario draghi will be concerned about as he's seen the euro bounce back over the last four to six weeks? >> we think that they are interested in the exchange rate and draghi made it quite clear that they would do more. they were at the same levels prior to the beginning of the year and they basically promised to extend the balance sheet significantly since then and there's the potential that they can do more as well. the euro can go a bit lower and it's positive for the equities. >> is that why you like european equities? we're at the same point we were at in january 2015. >> in many ways that's exactly right. you're back with why you were in january. you have the potential to do more but they have already done a lot. that's not in the price. you've seen the euro come down since then and the equities are back where they were. also lower borrowing costs. improvement in credit demand which is fundamental if you think of credit a

chancellor angela merkel's government pledged 6 billion euros to accommodate a record number of eurosrossing its borders. nearly 20,000 refugees arrived this past weekend alone. a number that the chancellor today described as breathtaking. merkel added that a european, not just german, response is needed. this as the influx of people shows no end i in site. >> thousands more asylum-seekers are expected to arrive today, just past the estimated 800,000 that the government says will come to germany this year. big came up with the most comprehensive plan yet to deal with the new arrivals. >> what we are now going to resulting that our country will continue to deal with over the next few years and it will change our country. we want this to be a change for the better and we believe that we can do it. >> the german federal government will provide an additional 6 billion euros for the exception of asylum seekers. applications are to be processed more quickly the before. more countries of origin are to be declared safe. and the new arrivals are to be distributed more evenly across europe, pos

anna: ryanair has raised its forecast to one point three 5 billion euros. 5 billion euros. expected to unveil its newest incarnation of his most important product -- a new iphone. that is what we're looking forward to later on. a bigger ipad and new operating mobile operating system which will have more capabilities. let's talk about how the european equity market story is developing. 42 and it's the go until -- until we go into trading. a quick heads up on what is higher, 2.2%2.5% for the euro stocks. the dax is up. the fair value peculation we can give you. the calculation is up. 7%.nikkei is up by spectacular. anna: outside of the japanese authorities, even outside of that, it is coming through in asia. guy: the iphone -- have to feel little outdated today. apple is unveiling it in san francisco today. let's talk to nate who is here with more. fashion andlower of a need to have my latest iphone, what will i get today? nate: hopefully, a gold one if you are following fashion. anna: they have done that? nate: they have. we are really looking for two new iphone models, impr

trying to buy the electronics chain for more than 700 billion euros. the board is considering the proposal. shares of the company have jumped more than 15% at the offer. the chinese technology company four away is making -- it is producing the new nexus six p phone, which unveils on tuesday. china struggled to make inroads in the american market after its activities were limited in the u.s. up, something good from long-winded people like myself. it turns out 140 characters might not be the limit anymore on twitter? stephen: this is a project being examined by twitter's cofounder, jack dorsey, to increase the length of tweets. very controversial. the team are examining options for maybe changing the brevity that has become the trademark of the social network. they have allowed people to post links and photos by having them include in the character account that in the character count. it is one of those things that investors had been worried about , lincoln to advertising and how much money they make. genie: thank you for that. stephen carroll with that

-- 300 million euros.s there a limit? is there a figure whereby you simply stop spending money on your football club? >> yes, it was never my intention to invest so much. ofid not fit -- set limits 100 50 million, i must admit i never intended on 300 million. , andorts of things came up the end i actually needed to keep the club balanced. first week, i the made investments which were higher than expected. we have reached a point now where we, the club can stand on its own two feet. it is not dependent on me come a so therefore there is no real question of me investing more. >> you wake up one morning and you spend 350 million euros, what an amazing story. isk: do watch the special it 5:00 p.m. saturday. an amazing story. if you grew up in a village like i did and if you are a soccer fan. anna: thank you very much. guy: plenty coming up over the weekend. rugby i suspect, increasingly mark's next focus. let's take a look at some of the top stories on bloomberg.com. european leaders are starting to change pol

with the euro than rise against the dollar? we are seeing that as french pmi is beating expectations. companiese on the oil today. .3%, but over a two day trajectory it has been painful but we have been seeing. back and theally front and center of invested minds this morning. we see china, their manufacturing data missing. contractionhere was for the sixth straight month in china. let's look at how glencorp opens up. again on, volkswagen the downside. the chief executive looks at his fate later today. auto currently lower -- mark: third year of decline for volkswagen. french manufacturing is going -- growing once again. you planarian september figure. the estimate was 48.6, the previous figure 48.3. of 51.4, which is up from 50.2, it is not all good news because private sector employment is declining at the fastest pace in 10 months. factory orders fell also, so the economic recovery in france remains lackluster, you would have to say. let's go over to david inglis in hong kong. david: high mark, a good morning mark, good morni

rates having cycled lower euro. on the ceb cycle. >> we just heard the chancellor talking about the definite referendum, how important will be as an event for you as were you factor that? >> i think so. as a key event, the first focus of the markets will be look at the volatility curve. so we're likely to see volatility become elevated in and around a particular event which will be the referendum. but i think what's going to be crucial is how the opinion polls develop through the poll as you quite rightly pointed out shows one of the first signs that the no vote is in the lead. that will be the major focus for the markets, how do the opinion polls develop through the actual referendum date. >> and you mentioned you expect the boe to hike in february. what's you're latest expectation for the fed? >> fed is still september. having said that, if we don't see a meaningful move lower in volatility. >> and ahead of following friday's nfp numbers, the sellout and what the the consensus, are you early saying september? >> w

about 20 million euro were already lost. rise.gures likely to >> many migrants entering europe are fleeing the war in syria. homeowners from angela merkel suggesting a change of approach on the syrian conflict. she said that president bashar al-assad should be involved in peace talks.ies >> angela merkel and her allies have not budge on the bottom line. bashar al-assad must leave power. the german chancellor first demanded that he must've down in 2007, along with her french and british counterparts. now, however, merkel says negotiating with his side could bring an end to the conflict that started four years ago. angela merkel: we have to speak with many actors, including a ssad but others as well. also in sunni countries like saudi arabia. >> other governments are also softening their stance on the syrian regime. saturday, secretary of state john kerry said the timing of a shar al-assad's departure have to be decided during negotiations. said a sod could play a ite for transition for france's president disagrees, and mainta

the euro zone growth coming in could change the story a bit suggesting that hey you're in the euro zone doing well despite china slowing down. >> you have to ask, though, what's fundamentally changed apart from china over the last month, month and a half. >> greece. >> well, greece supposedly has become better. >> supposedly. >> but fundamentally the data hasn't changed that much over the last month. >> it has ben encouraging and manufacturing data is compelling and that lending growth data last week suggesting that qe is feeding through to the real economy as richard kelly eluded to. >> if that's the case they shouldn't be using more then. >> that's the question. >> if it's really the case that the underlying fundamentals are better then maybe the china volatility is just something we need to get used to. that the chinese growth story is slowing a little bit. that we can't have growth out of china constantly. >> there's the consensus that the fundamental picture is improving but it's still fragile and that's why i didn't of these other developments overseas, even the chance of them imp

as we are seeing with euro-dollar, perhaps some euro strength and rivers carry it.nna: how do we see the authorities responding? what is the most likely reaction. richard: i think they have to be careful with stimulus. from g-20thing is they committed to be transparent about currency intervention. to be cautious, the u.s. has a close eye on this because the import figures. world exports of china only account for 1% of their gdp. guy: will have more of an impact on europe? they are more exposed from an economic point of view than the u.s.. the u.s. is not likely to feel it. richard: true. setting aside a direct response in the dollar because there is a historic relationship between the dollar and china. impact it will have an purely because of where we are in terms of talking about the fed and interest rate hikes as soon as next week. anna: what about emerging markets? we saw a great piece by simon thatdy about the role china plays in the global economy. he points out that only 2.5% of global gdp is exported to china. but some emerging market currencies have way bigg

the euro, increase in size. joe: looking at market-based measures of inflation, you see declines. if you point out that the san francisco fed came out a note that said inflations are garbage. do you agree, should the fed pay attention? >> this is just the fed talking about market inflation, market-based measure inflation. there is something that will break even, but this is noise more than a signal. that assumption that the fed hit its target is a bit of editor of future inflation. there is so much noise there. because this is auto correlated. have big data as your forecast. the fed watches inflation, not because we pay for food or energy, because it is a true signal. you want to look at headline inflation coming to use core inflation. those are better than the market-based measures again, the fed earlier in our careers, ofre is -- as the chairman the reserve it was tightening. there was double-digit unemployment. he would say, i don't want to do this, but these numbers i'm using make me do it. , there'santed to

the euro fell. stocks rose. green across the screen.lear what happened because of mario draghi. awaiting the u.s. jobs report friday. here are some of the big individual movers. europe's discount carrier raise the full-year guidance. another company in the news. according to a french newspaper, considering starting a low-cost carrier to be a competitor of the stock right here. apparently bank, cutting at least 10,000 jobs. when will we hear more details about that? that is according to people familiar with the discussion. the stoxx 600 up by 2.4%. i wanted to show you the mario draghi impact. he cut and nation forecasting growth forecast, but he adjusted the qe program. that is different for the birthday boy. back to you. mark: in asia tanks rolled through to commemorate the end of world war ii. the chinese president told the world the nation was committed to peas that announced the biggest cut the biggest cut in decades. >> i am here reporting outside of the square and the heart of beijing with a victory parade is literally rolling by

that was 13 billion euros.another 10% today, which brings the two-day decline to over 25%. the stock has not fallen this much since november, 2008. the loss in market value in the last two days is now 19 billion euros. now, it was thought that up to 20 billion euros in fine, doll ars in fines could be imposed on volkswagen. a, fines are related to the epa. it can impose penalties up to 37 and a half thousand thousand -- $37,500. bloomberg intelligence says if you include lawsuits, which is just getting started, the ultimate figure could be $20 billion. they have put aside 6.5 billion. makes you think of bp. is there going to be a situation where it will have to keep announcing provisions in coming quarters because we know the doj has started this investigation which could lead to executives going to jail. that itself could lead to fines. , criminal investigation could last months or could last year's. equals uncertainty for the stock and uncertainty for volkswagen. which brings us back to tomorrow. martin winte

selling banking operations in for 112 to bankinter million euros.ors thoughts from thsom. smith sin -- smi how were you navigating this transition? how are your investments performing in that environment? t: the outlook we have seen is a pretty positive one. we continue to see a great deal of earnings, all of the major european industries are seeing q2 numbers substantially up. the reason for that is we are beginning to see operating leverage kick in in europe. operating margins are running 30% or 40% where in the u.s. margins are at an all-time high. the cyclical economic upside in europe continues, we see strong earnings. on the one hand, the ecb and how with a response to china because inflation remain stubbornly low, but on the other hand is a more positive story about the growth environment. robert: absolutely. if you look around the european markets in terms of where you are seeing strength in the pm the corporateand earnings, the economist at the reform like spain and to a lesser extent italy are beginning to see growth return. those countrie

he said the ecb can buy a higher proportion of each euro numbers that -- you're a member pot's each euror's debt. the euro fell, stocks rose. it's clear what happened because of mario draghi. here are some of the big individual movers. has raised its full-year guidance up by 5.4%. air france, another company in the news. considering starting a low-cost carrier to be a competitor of this stop right here, unicredit. jobs.utting 10,000 when will we hear more detail about that? this is the stock 600, up by 2.4%. i want to show you the mario draghi impact. he cut growth forecasts, but what he did was he adjusted the qe program. that is different for the birthday boy. brendan: you will be the only person allowed to pronounce -- on television. the biggestt says investment opportunity is in europe. let's take a look at what happened today. marioump from draghi. is that the demand story in china or the monetary story in frankfurt. chris: what's driving interest in europe is the same issue that's been important for more than 12 months now. suffered 4-5 years of earnings downgrade. i think earnings

alix: it's not about the euro, it's about the dollar. >> the yen and euro or both appreciating simultaneouslyarlet: so is it the carry ifde being unwound, and that's case, how much more that is left? >> they were funding currencies against the rest of the world. once that short is completely eliminated, we could go back to the carry trade. be dollarsay not against euros or dollars against yen, even though that's what we think about every morning and we wake up. againstck moving commodity currencies, because in a sense, those are relatively safe havens, diversified economy. it is exogenous to the rest of the world and that puts them in a better position. will have the pleasure of speaking with our guest once again after this. alix: where could you get an on yourld -- return investment, especially if you like fish? the answer, when we come back. ♪ we ask what is the investment that's just returned 800%? scarlet: the answer is fish from the north atlantic. soaring.h exports are 800% sinceeturned 2011. globale're back with the head of currency strategy at citigroup. stephen, you were looking at t

more than 27 billion euros wiped over its value. we have to chief executive martin winterkorn in front of the supervisory board. you will be speaking about that a lot more with hans nichols. how far thisut could go, the impact on other industry companies being hit today. francine: they give so much with the very latest on the markets. let's stay with china. president xi jingping beget a weeklong u.s. visit yesterday with a trip to seattle. speaking to a gathering of business owners including bill gates he says that china will not devalue the yuan. >> given the economic and financial situation at home and abroad, there is no basis for continuous depreciation of the renmimbi. but we will stick to the plan to have the exchange rate -- and have the market flow those ways. we are against currency war. we will not lower interest rates to boost exports. francine: david tweed joins us with the latest. david is in hong kong for us. can you take xi's words that there will not be for the devaluation? david: when you consider what happened in a

it will affect 8 million french households to the cost of 2 billion euros. those will help low income workers mainly and aim to reduce the number of households that pay income tax in france to the same level they were in 2010. it has been rising steadily since. he also addressed the issue of how the tax cut be paid for. >> it will be done through cutting expenses. we cannot cut income taxes by raising other taxes. deficitt worsen our because we are trying to bring it down. 3.8% of gdp in 2015, 3.3% in 2016, that is our goal. that is my responsibility, so that in 2017 we will be under 3%. annette: he also touched on that very sensitive subject of the country's 35 hour working week. stephen: he did say the maximum working week would not change but it could be adapted under certain circumstances. he said a new law will be passed to allow more flexibility in france's labor laws through agreements negotiated sector by sector or employer by employer. he says new labor laws need to be -- meet the needs of workers. annette: new figures on gross in china. stephen: th

that's 40 euros. 40 euros for refugees on the move is a lot of money.e're seeing children being bathed by their parents with water. it is extremely dirty, a lot of people have complained that there's no toilets in this place. this scene exists all over the town, and you can also find it on the road between here and the coast where they land initially. so it's certainly extremely difficult conditions, it's slightly better in the sense that there are less people, because a little more than 8,000 have already left the island. 2,000 are due to leave very soon this afternoon. that's the ferry that will take them to athens, but as you said more and more are doing all the time, and at the moment there is no real reception center for them. is there is a camp outside of the town, but it is really in very poor living conditions. a couple of days ago, i was talking to one of the men here on the ground trying to work, and he said unless we have these people leave and deacon guest the island there is no way we could put in place more facilities to the newcomers. tha

it was full swag and's biggest one-day drop. 20%, a 15 billion euro hit for the company. they warned europe's biggest carmaker could be fined up to 16 billion euros and that could only be the tip of the iceberg. they will investigate whether the data falsification scheme to place in europe also. >> automobile companies must work closely with u.s. authorities to clear this up. we expect the car companies to pass on reliable information so the german federal motor transport authority can investigate whether similar manipulations to place with the omissions systems in germany and europe. revelations the german company used fraudulent software to circumvent clean-air rules in the u.s. rep it over the weekend. over the weekend. books like and marketed its diesel power vehicles as being better for the environment but the companies as it was cheating on emissions tests in the scandal has damaged the company's image and could reflect badly on germans -- on german industry as a whole. >> made in germany is a sign of quality worldwide. that is why it is so important this incident b

hans: we have a euro figure. for 2016.euro someow there's going to be sort of final budget.lear there is a need. receiving arean here in berlin. we have been here all morning. what's clear is that more refugees are coming in this morning. 17,000e weekend, we saw come into germany from hungary. it is clear that that number seems to be accelerating. the study number was 10,000. the saturday number was 7000. 10,000.unday number was he saturday number was 7000. angela merkel wants to stay within their budget. right now, they have a surplus for 2015. we will see where they come in at. what is it going to cost for 800,000 refugees. up.e was wrapping things we have a little bit to spare. we will definitely needed to cope. mark, this is a long-term problem. as you can see, with these lines forming, they gave away. increasethey need to their registration process. the lines are moving slow. out, it ises break mostly people. there's a lot of work in these be done. mark: you said there is some frustration. give us a sense what it is like their. how are the refugees responding to the way

the euro is 11188. >> the chinese president begins his state visit to the u.s. he'll be meeting with various ceo. he defends his government's stewardship of the economy saying slowing growth and market volatility won't deter needed reforms. hank paulson organized the summit. cnbc has an an exclusive interview today. that's on closing bell at 3:00 p.m. eastern. it isn't a mild irritation. it's an economic and national security concern to the united states. let's discuss his visit. joining us now is head of asia at risk consultantcy. what are you expecting from the visit? there will be a lot of differences. specifically over cyber espiongae. >> they remain stable and positive. there's a lot of talks on commercial and business corporations and there will be of course discussion on tough issues like cyber security. like trade imbalance. china's economy but we expect these discussions will be held in a manner that is manageable and will not have a detrimental impact on the relations. >> but then we already heard from the u.s. officials from the white house that they'

the euro stoxx 600 down .5%. the ftse down 3.1%.er, which was on fire the company announced it agreed to buy cablevision. at $17.7 billion deal. it shares have risen 12%. they are trading over 2%. a lot of momentum coming out of the market right there. what i really want to show you is what we care about today and that is this. what is the fed going to do? these right here are fed funds futures contracts. the next six months. on the right hand side, you have what the fed fund traders out there think the fed will lend to banks. in the month of september, for example, they think the fed will be leading to the banks at 17 basis points. 26 basis points in november. february is key. that is when the think the fed 38l be lending to banks at basis points. why is that important? the fed is targeting a rate rates. 0 and 25 basis at the moment, the actual rate is 14. so the midrange between 25 and 50 basis points is 37.5. that is what 38 tells you. what that tells you right there is that traders out there are pricing in that first rate hike i

the second punch is the euro. euro has turned out to be a haven.o what marriott draghi wanted when he kicked off quantitative easing. when you talk to business, does the conversation about the euro and its strength get discussed? paolo: yes, the because the strength of the euro has been a surprise. the euro gained 4% against the dollar in the last month. crisis course, the greek being somewhat behind us has helped. that the the fact increasing interest rates and america is going probably not going to happen this year. the the two factors being engines behind the euro strength. still, the euro today is much weaker than a year ago. francine: we also have been following closely what jean-claude juncker was saying in his you address talking about the refugee crisis and how it should be europe's number one's priority. dealt former ceo, you with these war-torn countries. and i know you take a keen interest in the refugee crisis. paolo: i took a keen interest as far as libya is concerned because libya was very much an italian issue, it still is. and any i

they're talking about 6000 euros per refugee per country. 500 euros for the country that receives them, the point of entry. there are five on top of that for every country that did not abide by the quota system. there are additional 125 thousand resettlement, bringing 160,000 to the goal. looking at individual countries, 31,000 for germany, u.k., , 15,000.pain that is giving you a sense with the burden sharing for refugees for the smaller countries will be. the arguments in the east is that these are migrants not refugees and to many people are coming here for economic reasons, not leaving a war-torn country. they would classify refugee. that is the argument from the east. we will see how the plan is presented how the plan falls out. which way is poland heading? if they vote with the western countries, the plan could be muscled through, even though you have a great deal of dissent from the eastern countries. even in the face of that dissent they could face penalties if did the eu take what decides as their share of the refugees. it will be a

is announced or whether he'll talk down the euro. data out of china raise further fear about slowdown as output misses forecasts. the news caused the shanghai index to drop the most in three weeks and raised the prospect of more stimulus from chinese authorities as they try to cushion the slowdown in the world's second biggest economy. w the chief asia economist joins us. china has done so much to stimulate, why hasn't it gained more traction? , a couple of reasons, really. one is the pressures on growth re really quite intense. we've large amounts of overbuilding in the real estate sector and large ranges of overcapacity in the industrial sector. china is already the world's largest exporter so there is diminished growth to sell more sport shoes or flat screen televisions to the world consumers. all that means even if you cut rates mull "time" and inject funds to reserve cuts, it will be tough to incentivize firms to start borrowing and investing more. francine: what are the next steps for china's policymakers, tom? tom: they've don