tv On the Move Bloomberg January 11, 2016 2:30am-4:01am EST
guy: welcome to "on the move." we are counting you down to the european open. i am guy johnson. here is your morning brief. as dataoff continues fails to reassure investors. the hang seng is below 20,000 for the first time since 2013. oil is also under pressure. wti hitting and 11-year low. saudi is preparing an aramco ipo. and a manic monday for the rant. south africa's currency plunges as much as 9% in a volatile hitting 17 against the
dollar for the first time ever. it is it is a morning. you need to be up to speed. caroline hyde has your bloomberg news. : chinese stocks have extended last week's plunge after concern about the slowdown deepening. the producer price index slumped 5.9% in december, sending declines to a record 46 months. the cost of borrowing the yuan has jumped by the most on record. tightened supply of the currency following intervention by the chinese national bank. ubs will double its staff in china over five years. their chief executive says that a time of volatile markets is as good a time as any for wrapping up operations. china is not on its own with
those challenges. we have to expect some adjustments for 2016. those are also good times to plan for the future. that is the reason why we are starting to implement our strategy plan in the next five years. we think we are going to double our account in this region. crude has extended its slide from an 11-year low, confirming the view of hedge funds that prices are lowest since 2010. the bad data fueled concern over further weakness from the world's biggest energy user. and david bowie has died at the age of 69 according to his publicist. a message on the singer's official facebook page says he died peacefully today, surrounded by his family, after a courageous 18-month battle with cancer. he had just released his latest album, called black star, on friday. , headre on those stories
to topgo. guy: we have seen a significant once again.sia how is that going to be reflected in the european story. the bloomberg terminal fair value calculation has the euro stocks down by point durant this stage. the ftse down by .2. the dax down by .6%. the dax is once again the other performer as china is under pressure. some of the big stocks have a rant reflection in them. it's like old mutual could be a we seehis morning as london open later on. it looks like we will see a softer opener acted in europe as well. the data coming through fueling concern and economic slowdown is deepening. joins us now.
walk us through the market action we have seen this morning. at also what has happened with the currency as well. the stock market is once again under pressure. compare and contrast what is happening in those two markets. robin: china is finally beginning to trade like an emerging market after months of stability. they were seen for years as a ,aven in the middle of chaos even when the u.s. started paring back. things have really changed it now. in the offshore u.n. market and offoffshore u.n. market -- shor and onshore yuan market, they can limit it to 2%. they cannot do that in the stock
market. so it is all up in the air right now. we do not know what is going on. a fair idea of what they are trying to achieve at the end of all this. it is still early days. there is a lot of uncertainty in asia. how worried should we be that we are seeing interbank aren costs jumping in hong kong? robin: i would not be extremely concerned about that. it is worrisome that this is happening. it shows that china does not have much regard for other asset classes when it wants to push through a policy initiative that is to narrow the gap between the offshore and the onshore yuan. the hong kong yuan borrowing rates has been volatile of late. a matter of concern and probably
rates as ithibor tries to push of a currency against the dollar. guy: always good to hear your voice. thank you for taking the time to join us this morning. let's welcome the chief investment officer at -- good morning. surprised to see another week starting this way? >> not totally. we saw week data over the over the- weak data weekend out of china. investors are more aware that the chinese domestic market is quite retail-driven. the authorities are waking up to the concept that you cannot really manage a market. last week was ineffectual. guy: the rant hitting 17 against
the dollar. dr. under pressure. wti getting crushed again. is that you are seeing a stronger dollar. people are worried that a slowdown in china will impact a withr of commodity markets demand featured by the price of oil. consequently, it heightens the volatility and puts further pressure on these markets guy:. how do i invest? >> i think you stay in the developed world and remain quite cautious. the degree of risk aversion is undoubtedly required of this sort of time. guy: i am selling equities and buying bonds? >> i do not think you need to be that extreme. do not need to take on board too much risk in terms of equity investment. au need to look and see
margin of safety. what is it that you are buying into? is the earnings stream good? is cash flow going to be generated by these equity investments? will that produce protection in these volatile markets? guy: but i do not step out and just do only cash? i have another week or the ftse is trading down. people are cutting their forecasts for the year. last year was not great. why am i not sitting this one out? >> cash return is not high. guy: not negative, though. >> having been involved in the markets for over 30 years. i've have never time to the entry and exit into the next market. i think you have to take a longer view. this is not a market for trading. i would emphasize totally. guy: plenty more to come from
guy: welcome back. 42 minutes past the hour. let's get you up to speed at what has already been a busy morning. electrolux chief executive officer is to retire. he will be replaced by jonas samson -- samuelson. he is leaving after the collapse of the swedish manufacturer's deal to buy general electric's household goods business. ubs will double its staff in china after five years, adding about 600 people. aat is as their ceo bets volatile market is as good a
time for ramping up operations as any. >> china is not on its own with those challenges. those are the good times to planet -- plan for the future. we are starting to implement our strategy and in the next i've years -- the next five years. ceo says volkswagens the carmaker is sticking to investment plans. it continues to view the united states as a core market. this comes ahead of critical meetings with u.s. government officials after the emissions cheating scandal. he was speaking at the north american international auto show in detroit. >> we know that we have let down customers, authorities, regulators, and the general public here in america, too. we are, i am truly sorry for that. i would like to apologize once
again for what went wrong with volkswagen. caroline: investment banks are lining up for what could be the biggest-ever ipo. hsbc, jpmorgan, and deutsche bank are in position to win a role if saudi arabia goes ahead with its ipo of aramco. it is considering selling part of its business or a state in a subsidiary. much.hank you very the recent market volatility coming out of china is not cataclysmic according to joseph stiglitz. >> it is not cataclysmic. it is a slow process of slowing down. there is no real news. what this does remind us is market rules matter. the way you structure those market rules can either diminish the volatility or increase the volatility.
what we are seeing here, in a sense, is a consequence of some market rules that were not as well-designed as they could be. joseph stiglitz saying do not panic. we are not seeing a cataclysm happen in china. that is a different view than the one being taken in our morning must-read today. larry summers, treasury secretary -- former treasury secretary says -- guy: larry summers saying, pay attention. politicians send -- tend to ignore market signals at their peril.
is that a fair point, that policymakers need to listen a little bit more? the noise coming from markets at the moment is incredibly downbeat. >> in the short-term, it is downbeat. areade the point that we going through a massive change in the chinese economy, which is reflected back on the rest of the world. that is over 5, 6 years. returning to policymakers, i am sure they are listening. a bounce back from george osborne when he was speaking about being more cautious. allspect they are taking on depreciation. in the short-term, these market moves can hit sentiment. we have got to make sure that people realize that the developed world is still functioning very well. oil has been down for a wild. china is going to be exporting
deflation for quite some time. at four times this year. that is against the backdrop of a global economy that they say they do not pay that much attention to, but is very from china,wing flowing from the emerging markets, incredibly powerful. you wonder if the markets have it right rather than policymakers. >> i think we have to wait and see in the next 12 months. particular this reserve board has been more receptive to listening to the markets. i think janet yellen is sensitive to the noise that comes out of the market. if you are a policymaker, you have to interpret noise and moved through that noise and look at longer-term as well. it is balancing those two together. if you expect the fed is not going to do what it has said it is going to do, then maybe
treasuries are a good option. people believe that we will see some spike in yields. it simply has not come through >> i think it is interesting that larry summers forecast inflation. one should not underestimate where you are looking at high levels of them are in the u.s. and the u.k., that wage inflation will not be more than it should guy: again, it has not shown up. it seems to be turning into sideways for a very long time. >> we will see. there are indications in the u.k. and certain industries that there are still some shortages coming through. particularly people entering the workforce. i think you will see pressure in 2016. guy: julian chillingworth is going to stay with us. we are minutes away from the open. european equities are firming into the open.
we now have a positive read when it comes to the fair value. it looks like european equities could open a little bit higher. not much, a flat open. up next, a look at some of the corporate news as well. is going to bess stepping down. we will talk more about that when we returned to -- when we return. ♪
the hour.nutes past we are eight minutes away from the market open. let's figure out which stocks are likely to be moving. caroline: we have to keep in mind the market implications and their effect on certain stocks. the south african rand at one point slipping as much as 9%. that affects companies like old mutual. as well.ye on investec these are two companies that will be trading on the back of the rand slumping. south africa is where the company was founded. once again, front and center
when it comes to emerging markets selloff. meanwhile, electrolux, a new ceo. electrolux chief executive is the one to bow out. he will retire on the first of february. jonas samson -- samuelson will take over. it seems as though the collapse of the $3.3 billion deal to buy general electric's household goods has been a nail in the coffin. he will depart, but he will remain on a consultancy basis. watch for that stock to move on the open as well. i want to keep an eye on some of the stocks to watch in the united kingdom. they are related to our continued concession that his property in the u.k.. wimpey announced a record operating profit margin of more than 20%. compensation prices are up,
sterling is up. 2015 results ahead of previous expectations. also made some significant disposals last year, boosting profitability. amongsome, once again, many others to follow. guy: thank you very much indeed. will there be a point in 2016 where i have to say emerging markets are so beaten up that i have to start rotating into them? : i think there will come opportunities. if we use china as an example, the old economy is not the idea you should be looking at. you should be looking at the new economy in that area. etf inople by an emerging markets. would say that perhaps the etf is not the answer for emerging markets and you need to
buy a fund that is looking to select stocks for you in that area. that will give you a much better opportunity of finding some real bargains. i think there will be some real bargains, but not possibly buying the market wholesale. guy: do you have to be country selective? julian: yes. there is a big difference between the commodity emerging markets, brazil and russia, and those that are much more consumer-based economies. you need to differentiate between those. you can include south africa in the commodity area more so than the service sector area. you need to drill down where they really are. guy: when does the correlation start to unwind? julian: there is a genuine concern, as we were chatting at the break, you have companies with high dollar debt. you need the dollar to stabilize. a number of these currencies will not come under pressure
guy: "on the move." good morning and welcome to "on the move." good morning and welcome to "on the move." here is your morning brief. the selloff continues. dipping below 20,000 for the first time since 2013. oil is also sliding. ipo.audi's prepare an a manic monday with a rant. the currency plunges as much as 9%. it is hit 17 against the dollar .or the first time ever european equities look like
they're going open fairly flat. underperformer. let's find out what is going on. let's find out what the story looks like with caroline hyde. caroline: new week, same old problem. we are likely to see a job in european stocks. upt week, the stoxx 600 give 640 billion euros worth. is, it turnsere it into the red. china, front and center. a 46 month of the. -- of drop in producer prices. cataclysmic. it is not that much of a worry but clearly the market thinks it is. down goes a. we are currently trading in the red. .25%.se 100 up by
we are seeing the euro it deteriorate ahead of that number. that phenomenal number in terms of u.s. jobs on friday? a vague memory now as a look at the risk aversion. people worried about the u.s. reacting to wage is not increasing. it is a risk aversion when it comes to commodities. oil down a 2%. you think copper selloff, that is up by 2%. again, china and the slowdown in the world's second-biggest economy at the forefront of investors minds. getting into gold, again. yen.getting into gold, the odd stock you should be watching and what has come out. if you changes in management. the effects of market moves. the rand taking 17 for the first time ever.
affects old mutual. electrolux cleaning up. up .05%. the ceo will retire on the first of february after that gm deal. by .2%.impey down record operating profit margin. obsession -- guy? guy: we just had industrial output, very strong. certainly versus what we were looking for versus the prior month. markets are open. broadly flat i would argue here in europe -- roughly flat here in europe. we are going to talk china.
the random record good shot -- south african currency weakened 9%. we are going to go live to joe berg -- to johannesburg. we're going to get the latest from the company selling shares in its refining assets. ♪ guy: so, turning stock markets. inhave seen an extension default that we saw throughout the week. nobel prize-winning economists told bloomberg china needs to boost demand to avoid a deeper downturn. >> i am of the view that you have to have both. on justpush too much the supply measures and not enough on the demand measures, then you could see a deeper
downturn. guy: joseph stiglitz. emerging markets currency editor, china keeping the reference rate changed over a second day. how are the managing it? it?ow are they managing china losingon is the plot? is the party losing control of the markets? is it not being able to control the markets as it would want to. what we are seeing is today for the second day they stabilized the fixing. their firms buying back the firm's last week. worked.ng hasn't today we have stocks dropping 5%. that is unheard of over the last
year and a half. china was seen as a rock in asia , in emerging markets. really lose too much money, but things are looking quite somber. guy: robert, have heard a lot of people talking about the chinese stock market is not the chinese economy, and we should not equate the two. for instance, we are seeing the cost of interbank borrowing jumping sharply by the most on record. that has got to be something of a concern. robert: it is. the concerns are that it is going to get worse. the bbc -- the pboc continues stepping into the yuan market, buying its currency and starving the market of liquidity. this goes on to affect not just the currency, it affects hans,
money markets, rates. bonds, money markets, rates. this is no saying when will let up. guy: robert, nice to get your thoughts. let's go to south africa now, where the chinese turbulence has a certain effect on domestic factors. fallen the most in seven years. ammo boxer.ow is cooks -- >> very sharp. we saw the random foall.
almost reaching that 18 rant to the dollar mark. the sharp drop of 9%. saw the rand going through that 14 rand to the dollar mark just a few months ago, that was during asian trading. just showing you that liquidity is very thin. guy: are we going to see the authorities stepping in? are we going to see possibly rate hikes coming through? this is going to have a huge impact on inflation. it has an economy that is on its knees. >> we have an economy that is struggling in south africa good we saw the rand. that coming from the lack of growth. a slump in commodity prices. as well as the setup and emerging-market currencies coming off the usa kicking off its rate hiking cycle. merrill lynch saying they are expecting south african reserve
bank may have pressure to increase rates by 50 basis points later on this month when it meets. that pressure coming through, especially if the rand continues at its current levels. guy: great to give your desk great to get your thoughts. let's bring back in julian chillingworth. that is the dollar index spiking. you're in the right place to be if you're in the u.s. equity market. a lot of people think euro is the place to be. julian: overall we still see the u.s. being the driver of global growth. although people have been in termsraining back of u.s. growth. the point we were talking about earlier, the fed is indicating to markets they believe growth continues to be on the up trend. that is why they are raising
rates throughout the year. we will probably see the u.s. economy continue to grow recently. he can simmer -- the consumer will continue to benefit. we talk about market prices but it works the other way as well. final point about the u.s. is this is a much more stock specificoint -- stock got a white've opportunity to invest and find some interesting opportunities. guy: the market was fine last year. facebook's, the amazons that actually delivered. if shipped those out, the market was weaker. julian: i expect in the short-term, until we see
acceleration in growth through problemswe expect balance out in china and emerging markets as well. that narrowing will continue medium-term, we see as economists again to prosper globally, we will begin to see that stock market widened out again. there will be opportunities. guy: how much is based on the dollar index. how much is based on a currency kicker. least you've got a tailwind. go six to 12u months out, our own view is the dollar is face out. we could see the other currencies, particularly the cyclically bias currencies begin to improve.
the euro is different. a doll investor, i suspect it will be a zero-sum game in 2016. for a sterling investor, the politics will creep in. david cameron is talking about brexit this morning. this is going to be a theme that people will center on. guy: julian, stay with us. joining us from rathbone. gdp is, the u.k. threatened if the u.k. -- if britain leaves. coming up next. ♪
guy: welcome back. a fairly flat opening for european equities. nejra cehic. itsa: u.s. exports double -- in china. the time a volatile market is as good as any for wrapping up markets. >> i think we have to expect some kind of adjustment for 2016. those are also the good times to plan for the future. that is the reason why we are starting to implement our plan in the next five years. i think we are good to double our accounts in this region.
crude has extended its slide from an 11 year low. the lowest since 2010. the rout in china fueled concerns of further weakness. at the age has died of 69. a message on the singer's official facebook page says he died he's fully today surrounded by his family after a courageous 18 month battle with cancer. he just released his latest out of on friday. -- his latest album on friday. guy? data.wiss 2.1%. again more problems growing for the swiss economy. it was this week he saw last year the smb acting in such dramatic fashion.
another place. david cameron's him to reach a deal on britain's membership on the european union next month. he says he hopes a brexit can be averted. >> i'm determined to fulfill what we put into our manifesto. i think the best answer for britain is staying in a reformed european union. as i've said, if we don't get them, i will rule nothing out. guy: let's bring back julian chilean. how big are you thinking? think in the short-term, as we run up to the referendum, there will be a lot of volatility around the currency and in the bond market. stock wise, it is specific
around certain areas. people will worry about changes in legislation. how that affected his this models. affectthat might business models. the ftse borrowing the rest. ftseyou think it is the tackle or do you think it is the 250? julian: what is hard to judge is how overseas investors read this . whether the flows go in or out of the u.k. if they believe cameron can afford it incredible case -- can afford an incredible case and come back to the electorate maybe the markets will not be that high. guy: the bank needs survey. the bank of england.
can you see any scenario in which they raise rates this year? brexit still is a factor. there don't seem to be a number of reasons for the bank to stay in. julian: in the initial term i would agree. let's see how the year pans out. what happens with commodity prices. if we begin to see an improvement, they drop out the numbers as they go throughout the year. in theee what happens employment market. as i mentioned, there are things. shortages coming through your there could be pressure there are other driving force is what the government decides what to do over its own employment policy. i price this in the eurozone? if we were to see the u.k. leaving, that would have a
huge effect on the european economy. another had went that europe has to -- another headwind that europe has to deal with. juliette: it is -- julian: it is hard to price in. the german saying they would be very despondent if the u.k. were to leave. what their position would be will be interesting. moment, let's ignore the they do not tell you a lot. if you were to go down to the bookies, a much better indicator, they would suggest we will stay in the eu. it would be about two thirds or one thirds. we will see. guy: julian, thank you very much. up next, along the road to
he visits the country where volkswagen trades begin to battle with regulators. let's go to our special correspondent hans nichols in berlin. we are going to get into the story a little bit later on this closer to agen technical solution. are they going to deliver this week? hans: they may deliver. will their solution be accepted by the epa? over the weekend, local press reported that volkswagen had a new catalytic converter for four to 30,000 vehicles in the states that are affected. a little shy of the 480,000. that is what they're going to go to the epa initially with. estimate he is smaller said in detroit in some ways the challenges greater than a
technical fix. >> the most important task in 2016 is to win back trust. it is not only our cars we have to fix, we know we have to repair our credibility. fix that willy probably fix about 8.5 million european vehicles, they are differences in terms of regulation. another thing he needs to be concerned about, market share and what sales are doing it look at what volkswagen sales for the year, down almost 5%. that is 5.6 million vehicles. as a group they dipped below the entire mark. looking -- you look at what they are doing month on month. december was a bad month, 7.9%. is betting on- he electronic technology here it
there to come forward with hybrid models by 2020. that is four years time. the cost a lot of money. they think the future is going to be electric. guy: does it make a difference it that he is there? there have been reports that maybe the authorities at the w are not seeing eye to eye -- at vw are not seeing eye to eye. hans: there is a theater aspect to this. story,beginning of the the beginning of the end starts when these ceos get hauled in front of congress and they are rated. -- they are berated. they say they get it and then they move on. he is not appearing in front of capitol hill. he will be meeting with regulators. the idea is there was a sense in the states that they wanted to see matisse mueller make an apology.
you can criticize volkswagen a lot. you can't apology -- you can criticize them on apologizing. guy: let's switch gears and talk about politics here it -- politics. hans: i don't want to disparage anyone's earnings. merkel said that report is simply not true. she is not going to die posts in the past -- hasn't gone to davos in the past. we are clear that we have a political crisis. they will be having a conversation. what they are talking about is strengthening the ability to export or deport any refugees that have caused problems. guy? guy: thanks very much
so your business can get back to business. sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. guy: welcome back. you are watching "on the move." be a littleg out to more positive here in europe than it was maybe in asia. the stoxx 600 trading higher. ftse is down. the south african story. the dax is trading higher as well. the cac is up by .2%. let's go for the stock market. caroline hyde will give us those details. i will show you this board. the south african rand has been pummeled overnight. we got near -- brent is trading loader
trading lower. copper is trading lower. moment.ld on for just a fixing our graphics. overnight, the news out of china has not been positive. we are drops and that has been a story that is been going on for quite some time here it are authorities losing control of the market. that in just a moment. we are good to go with caroline. caroline: we rushed them through. i can focus on the worst performer of the stoxx 600. up by a .5%. draghi the entire health care industry -- dragging the entire health care industry lower. of -- this is the maker of diagnostic tools. fourth quarter was a mess.
2016 below market expectations. doubles., that not as strong as analysts have kalman sayingr. the fourth quarter results and guidance are below expectations. keep an eye on that stock. the ripple effects coming from the market volatility. mutual reallyld feeling the pain of the south african rand. by 4.3%.ws there, down note, the oil and gas industry. most of the industry is down today but there are a couple of outliers. italian outliers. , why? the leaders they could be playing a role in
a gas project with russia. this is being reported by local press. they could be helping with the gas project. -- it looksnister as if the a role helping to push up the italian oil companies. guy: caroline, think you very much. the boss at cbs says the volatility is a good time as any for wrapping up in china. -- for ramping up in china. doubling staff in china. he was pretty coy when asked investment bankers. >> it is difficult to forecast a whole year. i am pleased with our stock performance in 2015. i think we clearly outperformed our peers. when i look at the performance in the first few days of the
year, i think we have to put things into context. risk aversion distillate thing. negative rates in switzerland and europe. on the other hand, we are expecting higher ends from the u.s. to compensate. it is going to be a challenging well-positioned. we achieved our target in terms -- we areg out our prepared to tackle those challenges. we will also exploit the opportunities that volatility creates. >> what are the key opportunities tackle >> opportunities, clients are looking for advice. stay close to clients and building long-term relationships very important for us. client risk appetite is very low. but we try to do is stay close
to our clients -- what we try to do is stay close to our clients. >> what is still outstanding for you this year? >> went to complete the migration to in the u.s. -- we have to complete the migration to the u.s.. of preparingrms inselves for the faults 2018, we are confident. >> you have a few investment bankers watching now. how does the composition pull look this year -- how does the compensation pool look this year? >> i don't like to comment on compensation.
competitively pay for performance, between the interest of our shareholders and the employees. >> how about room for dividend growth? >> our policy is a policy of progressive and dividend growth. it is clear we say to our shareholders we are going to pay 50%. we have the intention to fulfill our commitments. to: the boss of ubs speaking bloomberg television. european equities are positive which is interesting given that we saw the chinese market closing down 5%. the theme thisty morning. our next guest says breakers have been a magnifier of turbulence in the chinese markets.
good morning, welcome. what you make of the market this morning? suspended -- after a brief technical rebound on friday, we continue to see very severe pressure. it is because last week when we have circuit breaker when the market was slowing down, the reason the market was going down was because of fundamental of the chinese economy has been very weak. people wanted a chance to reflect that into the stock price. we have a very thin trading wall. pessimistica opinion on the chinese economy. we basically stop people from expressing it with the circuit breaker system. now we don't have it anymore.
day when we first don't have the national teams money trading into the market. the first chance to express the view on the economy. guy: is what you are saying, the chinese authority cannot control this market? time and time again, the market has proven them wrong. we have seen it moving before. for now, the market is starting to come back. have stopped substantially our curb back on lending. here is the market that is free to express its view on china. over the weekend we have seen substantial lower ppi. the deflationary pressure in
china has been rising quite intense. severe day.other guy: ok. i would argue that maybe we are not in the realms of a real market yet. are we in need of a complete step back by the authorities to allow a cathartic moment to happen in these markets? or is that what is happening now in your view? >> at the moment, valuation is still very high. board, 60 times. on the shenzhen, 50 times as well. people have been saying that once the market starts to flourish, we'll see money coming
in. probably that is not good news. ine the national money comes , to stop the market from pressing in negativities -- from pricing in negativities. i would say but the market is its reactionaring to a very weak economy. guy: what does the rest of the year look like? how do you profit through? r&b depreciation can stabilize itself, it is difficult to say. for now the market has not made up its mind where the depreciation is going to be. for now, i would say the art and be exchange rate is the key
here and i am guy johnson. let's get you up to speed. ceo is toctrolux .etire did he will be replaced he is leaving after the collapse of the swedish manufacturers report $3 billion deal to buy general electric. ubs will double its staff in china over five years, adding 600 people. a time for wrapping up operations. to expect we have some kind of adjustment. those are the good times to plan for the future. that is the reason why we are to implement our strategy plan in the next five years. we are going to double our account in this region. volkswagen ceo says the
carmaker is sticking to its plans to continue to qe united states as a core market -- to continue to view the united states as a core market. that we have let our customers, authorities, regulators and the general public here in america. i am truly sorry. i would like to apologize once again for what went wrong. bloomberg'sis your desk that is your bloomberg business flash. nara bringing us the latest. let's talk volatility in china. i love the v stocks.
anything you can show off, fear, volatility. volatility. this shows the amounts it spike up in recent weeks. where the highest since september. the white line is what you want to see towards the end. the historical ten-day volatility. we're currently reaching, not since august levels yet. we are near the highest. near -- we're not near cataclysmic slowdown levels. clearly they are looking at this data. they are concerned. in the short-term basis, -- guy: was the take away from this? what -- what should i take away from this?
is not as bad as it was back in august. the fact that we saw a significant move over in asia. yes, we are seeing volatility ramped up. ourselves back to the turbulence we saw back in august, we are not nearly at those levels. perhaps we need to take it from a longer-term perspective. guy: caroline hyde. let's turn our attention back to what is happening in the oil markets. ipo.otential saudi -- maybe what we thought we were getting, maybe we are not. elliott: the deputy crown prince said in number of investment bankers desk the potential for an ipo which could be worth
trillions of dollars. he did point out, it might be in of some of its subsidiaries, that'smple the refinery the refinery company. -- the refinery company. it is not too shabby a business. we are talking about a company that refines the process of 3 million barrels of oil a day. million barrels of oil a day by 2025. some of these new refineries have contracts in place so that ,hey mostly use saudi oil helping to maintain saudi market share. valero. finally called
-- it is only worth 35 billion dollars. experience -- the decline in oil prices have made that not so happy investments for many. guy: elliott, great stuff. thank you very much indeed. next, the bank of england in focus as it decides on rates at this moment. we will talk about central banks up next. i want to show you is happening with european stocks. european equities are on the forefront this morning. the ftse 100 is up by .2%. the dax, a real leg up this morning. off --strutting
of some of these automakers. completely ignoring what happened overnight out in asia. the asian chinese market -- the chinese market that pummeled. details need to know about later today. president dennis lockhart gives his view on the u.s. economy. we are going to hear from robert kaplan. president obama delivers the state of the union tomorrow. gun-control a big part of the story. thursday, we get a rate decision from the bank of england. we hear from the ecb as well. jones --ng in reach rich jones. us through the last 24 hours. the roller coaster ride. asian markets getting stomped once again. copper getting punched a low as
well. richard: a tough one to explain. oil is lower. we know oil is lower. the chinese stocks were considerably lower. there is almost sellers fatigue going on in the european equity markets. perhaps a bit of a short squeeze. guy: that would fit with the vw story. around -- thecked grand got knocked around. japan was close. i believe you hit it on the head, what happened was very early in the asian session. liquidityo japanese being that it is a public holiday there. reversed a chunk of those,
but it was down to pretty poor liquidity. it is going to continue to be interesting. the overarching risk sentiment tonebe what will set the good going into the bank of seennd this week, we have where theyt week outperformed u.s. treasuries and bunds.- and of a late 2016 lift off are below one and three now. priced for inully november lift off. guy: how much of that is economics? big concern is the global environment.
volatility, market dispense are looking at the bank and saying it is going to be difficult for them to hike anytime soon. guy: look at what it is doing to its currency. it is going to be hard to say we got an inflation problem. richard: the interesting thing for friday's payroll number was that you look at the headline number, it was a pretty good figure. you look at the hourly earnings, they were flat. that is going to be concern for the fed. guy: thank you very much indeed. richard jones joining us. let me run you through what is happening with the markets. it has been a fascinating session. what is going on here? we saw asia getting stomped. we come in, and europe from the get-go is turning it around. the dax is up over 8% this