I am Francine Lacqua. Manus it comes in just below the number. 53. 7. The Market Survey was for 54 . This is the market Eurozone Services purchasing Managers Index. That is just a shade lower than we had anticipated. Was about 50 . It is still in expansion mode. It is the industrial prowess of germany we are looking for. It has been called into question after we had the vw scandal. We had concerns about china growing. That is why every single piece of data we had is so powerful. Now, glencore shares have sore this morning. We have reports that the commodities giant is talking to potential buyers. Rocked in hong kong and is up over 10 . The company says it is not aware for any reasons for the movement and chairs. The bloomberg chief energy and commodities responder. Up 70 at one stage. Glencore does not know of any reason why this would ramp u p like this. If you look to us 10 days of the Share Performance of glencore, lets not forget we are talking about a 5100 company. They rarely move more than 5 or 6 . He is in the share price go down more than 50 . Very easily traded. There are about 10 million shares today. It was a very good day of trading. Hong kong got some perspective at last. More than 300 million shares of glencore changed hands in london. With a little money you actually can move the price of glencore a lot in hong kong. Francine it was down 13 30 on monday, and then back up 15 . There is a danger that it may happen again. Javier i think the Company Needs to do a lot of explaining about its business. And what the plans are. The stock is very volatile. That until we see more from the brands of glencore to reduce its debt we will see a lot of volatility. The market will be reacting to a small incremental piece of news in a very large way. Manus exactly. The one please do know, the agriculturals nest. Agricultural business. What proportion of that do they want to sell . Where are we in that piece of information that we do have . Javier glencore is trying to sell a minority. My anderson is glencore with like to sell something between 20 , 40 . Investment banks are putting out the evaluations. We will be assuming that those banks are pointed at anyone who might be interested. What are reported on friday was that glencore had some interest from two particular buyers we mentioned. The Singapore Investment corporation and the japanese trading house. Francine thank you, javier. Manus the omissions scandal could pose in existence threatening crisis. Those are the words for vw. That is the verdict from the companys chairman. Vw has until wednesday to some 2. 8 plan to fix million dollars. Lets be due nichols, who is in berlin. These are really strong words. The question is this. Is this tokenism, or is this a real threat . Hans i think this is a very real threat. This might be an internal presentation. I will put the full quote up there for you. That is in existence threatening crisis for the company. The breadth of a couple potential solutions and another few worries. They are concerned a little bit. Itsncoming chairman concerned about what this will do to their credit rating. They dont have a liquidity problem just yet. You and i can figure this out on the bloomberg terminal. There are a couple keystrokes that can help us. There are 21. 5 billion euros on cash and hand. The compare that to the 78 billion euros that they said they may need to ride out the crisis and then you get a sense of the challenge that vw faces. They have ruled out disposing any brands or units. Nothing will be sold out. We are starting to see is nottire scandal, sector confidence. Markels said yesterday. I believe the reputation of the german industry, the trust in germany as a Business Location has not been so shaken that we will not continue to be seen as a good Business Location. Numbersgot those pmi out. They disappointed a little bit, not a whole lot in germany. In some ways, i am looking to work tomorrow. That is when we get factory numbers for the month of august. That will not have vw in there, but it will give you a sense of where the Manufacturing Industry is in germany. Over the weekend, there was the day of german unity here in germany. There were a lot of ads taken out by vw. They took out fullpage ads and asked for forgiveness. He said, we want to say one thing. We will do anything to win back your trust. Will, you mentioned there be a deadline on wednesday. There are many deadlines coming up for vw and they need to find a technical solution, as well as a policy solution. Manus we will see what they come up with on wednesday. Francine thank you for joining us. It is quite an ominous week because of the fed talkers on gw and german consonants. Are you concerned this will have an impact on growth going forward, that it will have an impact on german fealty . The production in germany is 4 of gdp. That is the strict definition. If we say a broader definition could be at 10 , this could have economic on conditions. It is very early to say where this issue is going. We are drawing quick conclusions that are very difficult. Going toe vw story is be in the backdrop of everything we talk about. The data that we have suggests that there is just that little bit of a slowdown. See athe reason why we negative rating on inflation last week. How concerned are you from the broader perspective for europe . Concern for, the external risk has increased a great deal. I have to say, given all of this concern, the data we have seen so far was actually reasonably robust. The European Data has held up respectively so far. Data lastthe pmi week. It was reasonably solid. Index fromiso germany. Export numbers were up, not down. The European Commission index was up as well. So here, so far, so good. Francine at the same time, you are benefiting from low oil prices. Euro has been creeping up, but not that much. This may turn, but not very quickly. External risk has increased a great deal. You are also right. We have unprecedented policies been. Fiscal austerity is moderating. All of this helps against this background. The disturbances from china are certainly not welcome. We definitely are losing some momentum. That the recovering europe is crumbling all of a sudden. Manus what other story did we have on the germans this morning . Dont bet against the euro. That is essentially what it is. We are seeing the analysts move their predictions. Some are moving to an average for next year. Thehis, if we look at ranking of risks to europe, one is china. Contagion commodity. In three is currency. We regard a hard landing in it is not the best case scenario. It is the risk scenario. One of the key implications of s quantitative policy. Degree if youre a poor to depreciate a lot more from here, it would give the ecb a headache. Francine thank you so much. K government has announced it will sell at least 2 billion shares. The public offered a 5 discount to the market price. The move is part of the plan to exit shareholding in the coming months. Francine the portuguese Prime Minister has won the nations first general election since exiting the bailout program. He lost his majority in parliament and decisively defeated the socialist leader by focusing on the economic progress of the country. The economy is growing again. On implement is dropping. The fiscal deficit is narrowing. The greek Prime Minister will reveal his governments plan. Including a budget for 2016. People debate the measures before holding a vote of confidence. Balance creditors demands. His Campaign Promise to alleviate the effects of austerity. Francine the sunday times says they are trying to avoid upcoming eu regulations. Only 1 5 of the operations will be affected and london remains attractive. Manus Services Remain shot among much of the riviera. Both have been reopened. The Freak Weather dumped almost of rain oners saturday night. That leaves about 27,000 homes without electricity. Francine we have a busy week ahead with bank action. You will be looking ahead to that, next. Francine will come back to the pulse. Later today, we get another read on the u. S. Economy. That drops at 2 45. Francine overnight on tuesday we have a Rate Decision from the reserve bank of australia. On wednesday, the bank of japan announces a Monetary Policy. On thursday, we get a Rate Decision from the bank of england. Manus thursday, we get the s policyrom the fed meeting. We are discussing from europe, the u. S. What do you think you as a chief economist will be focused on in terms of formulating your thoughts . Obviously, the first would be where we get the much harder deceleration and china and the emerging markets. Be, what is the signal for the u. S. Market of Monetary Policy . In an obviously, i want to see the next signal from the European Central bank. Hence, the minutes of the last meeting will be very important for me as well. Francine are you concerned that because of the week data we saw from u. S. On friday, the markets seem to show a positive, meaning the federal probably not hike in october, or this year at all, or is it really a positive . If there i if the u. S. Is weak, there really is no other engine of growth worldwide. We want strong u. S. Growth, but we want goldylocks growth. That would not unsettle the market too badly. First rate hike fight december. That will be followed with four rate hikes next year. Manus we will get minutes from the ecb. Everybody is focused on the nuance of language in terms of will usewhen the ecb the discussion. There is no discussion of the moment. What will drive your thinking in terms of those minutes . Ecb said, after its last meeting, they are following the events in china. Are following the emerging markets very carefully. They stand ready to do more, if needed. They focused and stressed the current program. It is strong and flexible enough in size to make adjustments. Perspective, this fully the mediumterm inflation much lower. That is a clear warning signal that may push them to act more. Un theect the ecb to r program in its current form until september 2016. We dont expect more easing in the shortterm. Francine why . Because of the moment they can sustain strength with the euro and a foam the perk on the euro and it will only work on the euro . E ecb will argue that the q a will argue that it is a huge cannon. Inflation has been stable and hence, more data will be needed in theify more qe shortterm. Manus this is what were focusing on this morning. Relatedd Central Banks, to market credibility. This comes down to 600 break ups. Yetexpectations of qe and there has not, been enough fiscal stimulus. That is true to a certain extent in the european context as well. That is where the ecb dont want to get sucked into that vacuum, where the fed is. Bigurope does not have a deal of fiscal space. Germany does, but most of the other countries do not. We have not seen a Critical Mass and structural reform. That means, if the key aims to lift the structural and out but growth in europe, you can throw as much Monetary Policy at this problem and it will not do the trick. You need proper reforms. You cannot do the trick on its own. Francine we spoke about the ecb and the fed. And then there is the outlook from the imf that is expected. What concerns you the most . If you have weak growth rub the you haveing fed if weak growth around the world and a week fed. Boe does not react in isolation. It would have to react to a growth environment as well. We still expect the first rate hike from the boe by february of next year. So obviously, if we were to see a much slower Economic Outlook lower prospects for the return of inflation, this would be something the boe would have to take on. Manus thank you very much. The u. K. Chancellor, George Osborne, will address the conservative Party Conference in a few hours. 2 billions shares a whistle to the public next spring. What else can we expect from osborne today . Weve already had one of the big announcements. Figuresenior labor party will head to infrastructure will head and infrastructure commission. We can also expect more on tax c redit cuts. We have had a lot of protests yesterday and today. The message from George Osborne is likely to remain clear. Austerity is Still Necessary and there will be more growth patterns to come. Manus a very good day to you. Europe is officially off the agenda. There is no doubt about it. Yesterday, the alarm bells began to ring in terms of the references to what he would seek from his european partners. It is dominating the agenda though, isnt it . Absolutely. There have been at least 20 meetings about the eu referendum. All of this is taking place behind the scenes. This is what cameron is pushing for. He is under a lot of pressure to spell out what he is seeking. They are making good progress. But what they want to hear is concrete evidence that results are going to be shown ready shortly. Shown pretty shortly. Francine think you so much. We were talking about the boe. If you were cameron, do think austerity has worked . Is there danger they will put in too much austerity at this point . He is not seeking a third term and has no real opposition. If we look back four or five years, they were very concerned about the sustainability of u. K. Public finances. These concerned are no longer with us. Has certain degree, there been success. The markets have never questioned the position of the u. K. Going forward, i think, if we have growth, we also have fiscal responsibility. Achieving growth is the most important thing and Everything Else follows. Of theif we look at two biggest issues for the bank of along with oil, prices on the drop. That has been a boost for this economy. That will continue to be there for osborne, as far as his plans for the moment. This is been is one bright spot for the plants in the past couple weeks. The lower oil and Commodity Prices have helped the consumer and given the fact that Household Consumption is within 50 60 and economies, it is very important. Francine what is your biggest concern for the u. K. . It is about currency strength. At the moment, im concerned about the much harder landing of the em and china block. If this were to occur, there would be no place to hide. If we take that as being the biggest risk, china seems to be your central tenant at all times. If that is the case, does money flow directly into the euro . Is that they had went for both of these economies . We might see further outbursts from the em blo and to further markets. Thec key impact for me would be into sentiment. It would be perhaps, on triggering centralbank reactions. From there, it could affect markets again and perhaps bring some money back into the risk markets. Equities, for example. That is key here. The Immediate Exchange rate effect is of a secondary nature. Francine when you look around the world, how much do you worry about the currency war. We have not really called it as such, but if you look at japan, and we may get something from do bank of japan this week, you think this is a race that will hurt everyone at the end of the day . It is a concern we should take seriously, but i dont think we are there yet. The g20 has been very open in avoiding currency war scenarios. In lima later this week, well hear something very similar. It is true though that, from a european perspective, the weaker euro was one of the Great Success stories for the ecbs qe. The ecb was very pleased to see what the euro has done. Francine up next, we talk fortunes and intellect. Francine welcome back to the pulse. Im Francine Lacqua. Manus in im manous cranny. The survey out there was for 56. Francine checking pound. Thats a big move on the back of that worse than expected figure. Services beak the services being the backbone of the economy. The indicators similar to europe but not as dramatic. 1. 5211 at the moment. Francine shares of glencore are trading up and follows a surge of 70 in a hong kong listing. It comes after a report Commodity Traders are talking to potential buyers for its agriculture business. Manus looks like the designated chairman pesh has warned a diesel emission scandal could pose a crisis for the company. The worlds biggest carmaker has seen its market value fall since the first scandal emerged last month. The German Company faces a deadline of wednesday to come up with a plan to fix the cars in its home market. Francine coelho has won another election since the nation gained its sovereignty. He lost his majority in parliament but defeated the socialist leader by focusing on the economic progress underscored by its exit from an international bailout in 2014. Coelhos stewardship the economy is growing again and the fiscal deficit is narrowing. Manus lets break up the data weve broken the headlines. The services p. M. I. Were looking at a reading, the lowest since april 14 on the Services Side of the u. K. We have is a slowdown. And k they are asking it, put paid to the chances of a u. S. Interest rate hike this year. According to the fed fund futures the probability of a hike has slumped to 34 from 64 on september 16. That was the day before the fed kept the rates unchanged in september. Asian stocks are rising for a fourth day. The stock 600 rose earlier as much as 2. 3 . And asian and emerging Market Investors are sighing a huge relief because stocks have fallen in anticipation of a fed rate hike this year. This is the msci emerging markets index the last six months, coming close, emergence stocks gaining for a fourth day. Look at the stat, the best stretch since april. As i said, this index has slumped by 24 since its high in april